Financial Data and Key Metrics Changes - In fiscal year 2025, the company achieved a revenue growth of 7%, adding $5 billion in revenue, with over $80 billion in bookings [5][22] - Adjusted earnings per share (EPS) for Q4 was $3.03, reflecting a 9% growth compared to the previous year [15][21] - Free cash flow for Q4 was $3.8 billion, and for the full year, it was $10.9 billion, up 26% year over year [15][23] Business Line Data and Key Metrics Changes - Consulting revenues for Q4 were $8.8 billion, up 6% in U.S. dollars and 3% in local currency [17] - Managed services revenues for Q4 were also $8.8 billion, reflecting an 8% increase in U.S. dollars and 6% in local currency [18][23] - The capital projects business grew 49% year on year, reaching $1.2 billion [9] Market Data and Key Metrics Changes - In the Americas, revenue grew 5% in local currency, with significant contributions from banking and capital markets [18] - EMEA delivered 3% growth in local currency, driven by insurance and life sciences [18] - Asia Pacific revenues grew 6% in local currency, led by banking and capital markets [19] Company Strategy and Development Direction - The company aims to be the number one partner for the tech ecosystem, with 60% of revenue coming from partnerships with top technology companies [7] - A significant investment of $3 billion in Gen AI is expected to drive future growth, with revenue from advanced AI reaching $2.7 billion in FY25 [8][9] - The company is focusing on a three-pronged talent strategy to upskill its workforce and enhance operational efficiency [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for FY26, citing strong bookings and a solid pipeline for large transformation deals [46] - The overall market conditions have not shown significant changes, and the company remains focused on delivering results [25][26] - The management highlighted the importance of AI in driving growth and productivity, emphasizing that AI is seen as expansionary rather than deflationary [48][49] Other Important Information - The company initiated a business optimization program with an expected total cost of approximately $865 million, aimed at talent rotation and divestiture of non-aligned acquisitions [16] - The company plans to return at least $9.3 billion to shareholders through dividends and share repurchases in FY26, reflecting a 12% increase from FY25 [43] Q&A Session Summary Question: Visibility on revenue growth and discretionary spending - Management indicated strong demand for large transformation deals and a solid backlog, with guidance for FY26 reflecting a range of 2% to 5% growth [46] Question: Thoughts on AI-driven productivity and potential deflationary effects - Management does not see AI as deflationary but rather as expansionary, with savings being reinvested into new priorities [48][49] Question: Balance between Gen AI and managed services - Both consulting and managed services are expected to grow in the low to mid-single-digit range, with managed services becoming increasingly strategic [54][56] Question: Details on CapEx investments - The company expects about $1 billion in CapEx for FY26, primarily for expanding real estate and leasehold improvements [63] Question: Client behavior in using Gen AI - Many clients initially attempted to implement Gen AI independently but later sought assistance for scaling, highlighting the need for change management and process reinvention [78] Question: Expected savings from the business optimization program - The company anticipates savings of over $1 billion from the optimization program, which will be reinvested in the business and workforce [81]

Financial Data and Key Metrics Changes - In fiscal year 2025, the company achieved a revenue growth of 7%, adding $5 billion in revenue, with over $80 billion in bookings [5][23] - Adjusted earnings per share (EPS) for Q4 was $3.03, reflecting a 9% growth compared to the previous year [15][24] - Free cash flow for the quarter was $3.8 billion, and for the full year, it was $10.9 billion, up 26% year over year [22][24] Business Line Data and Key Metrics Changes - Consulting revenues for Q4 were $8.8 billion, up 6% in U.S. dollars and 3% in local currency [19] - Managed services revenues for Q4 were also $8.8 billion, reflecting an 8% increase in U.S. dollars and 6% in local currency [20] - The capital projects business grew 49% year on year, reaching $1.2 billion [10] Market Data and Key Metrics Changes - Revenue growth in the Americas was 5% in local currency, driven by banking and capital markets, while EMEA saw 3% growth led by insurance and life sciences [20] - Asia Pacific revenues grew 6% in local currency, with significant contributions from banking and capital markets [21] Company Strategy and Development Direction - The company aims to be the number one partner for the tech ecosystem, with 60% of revenue coming from partnerships with top technology companies [7] - A significant investment of $3 billion in Gen AI is expected to drive future growth, with revenue from advanced AI reaching $2.7 billion in FY25 [9][10] - The company is focusing on reinvention services to streamline operations and enhance service delivery [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for FY26, citing strong bookings and a solid pipeline for large transformation deals [44] - The company anticipates revenue growth of 2% to 5% in FY26, with an estimated 1% to 1.5% impact from federal business [39][40] - Management highlighted the importance of AI in driving growth and productivity, emphasizing that AI is seen as expansionary rather than deflationary [46][47] Other Important Information - The company initiated a business optimization program with an expected total charge of approximately $865 million, aimed at talent rotation and divestiture of non-strategic acquisitions [18] - The board declared a quarterly cash dividend of $1.63 per share, a 10% increase over the previous year [41] Q&A Session Summary Question: Visibility on revenue growth and discretionary spending - Management noted strong bookings of $80.6 billion in FY25 and a solid pipeline for large transformation deals, with discretionary spending assumptions allowing for potential deterioration [44] Question: Thoughts on AI-driven productivity and potential deflationary effects - Management does not see AI as deflationary but rather as expansionary, with savings being reinvested into new priorities [46][47] Question: Balance between Gen AI and managed services - Both consulting and managed services are expected to grow in the low to mid-single-digit range in FY26, with managed services becoming increasingly strategic [52][54] Question: Details on CapEx investments - The company expects about $1 billion in CapEx for FY26, primarily for expanding real estate and leasehold improvements [57] Question: Client behavior in seeking Gen AI solutions - Many clients initially attempted to implement Gen AI independently but later sought assistance for scaling, highlighting the need for change management and process reinvention [71]

Financial Data and Key Metrics Changes - Average daily sales (ADS) for the fiscal third quarter declined 0.8% year over year but improved 7% quarter over quarter, exceeding historical sequential averages [8][24] - Gross margins were reported at 41%, improving 10 basis points year over year, while adjusted operating margins were at 9%, down 240 basis points compared to the prior year [9][29] - Reported operating margin for the quarter was 8.5%, compared to 10.9% in the prior year quarter [29] Business Line Data and Key Metrics Changes - Core customer daily sales were down 0.8% year over year, while public sector sales improved 2.4% year over year [10][25] - The installed base of vending machines increased to over 28,700, with average daily sales through vending up approximately 8% year over year [26] - Sales to customers with an implant program grew 10% year over year, also representing approximately 19% of total company net sales [26] Market Data and Key Metrics Changes - Conditions in primary end markets remain subdued, particularly in automotive and fabricated metals, while aerospace continues to show growth [14] - The manufacturing business sentiment has fluctuated, with readings returning to negative numbers in April and May, reflecting customer caution around tariffs [15] Company Strategy and Development Direction - The company is focused on three critical areas: reenergizing the core customer, maintaining momentum in high-touch solutions, and optimizing cost to serve [7] - The company is implementing a sales optimization initiative and productivity efforts to lower costs, alongside a tariff management plan [6][20] - The company aims to deliver $10 million to $15 million in annualized savings by fiscal year 2026 through network optimization initiatives [22] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding future production levels, despite current macroeconomic uncertainties [15] - The company remains committed to its strategic initiatives and is confident in the opportunities ahead, despite the subdued manufacturing environment [15][16] Other Important Information - The company repurchased approximately 117,000 shares during the quarter, returning approximately $56 million to shareholders [30] - Free cash flow conversion is expected to be approximately 120% for the full year, an increase from prior expectations of 100% [32] Q&A Session Summary Question: Price outlook for Q4 and next year - Management indicated that recent price increases would likely contribute low single digits to revenue, with ongoing inflationary pressures from suppliers [41][42] Question: Q4 margin outlook - Management expects operating margins to be flat to down 50 basis points quarter over quarter, with better gross margin performance anticipated [46][48] Question: Supplier price increases - Discussions with suppliers are ongoing and fluid, with general inflationary pressures being observed across the supply chain [55] Question: Core account growth potential - Management is encouraged by progress in core accounts and aims for growth consistent with company averages, focusing on marketing and web pricing [75][76] Question: Website metrics and marketing effectiveness - The company has seen consistent improvements in website traffic and conversion rates, driven by a combination of digital and personal outreach marketing efforts [90][91] Question: Digital Core initiative - The Digital Core initiative is being reactivated to enhance core order-to-cash systems, aimed at unlocking productivity [97] Question: Trends through June - Sales trends in June were reported as fairly consistent throughout the month [98]

Financial Data and Key Metrics Changes - Revenue for the quarter was $16.7 billion, reflecting an 8.5% growth in local currency and a 5% increase in U.S. dollars [20][24] - Operating margin was 13.5%, a decrease of 20 basis points compared to the adjusted operating margin from the previous year [21][29] - Diluted earnings per share (EPS) were $2.82, representing a 2% growth over adjusted EPS from the same quarter last year [21][29] - Free cash flow for the quarter was $2.7 billion, with a cash balance of $8.5 billion at the end of the quarter [30][31] Business Line Data and Key Metrics Changes - Consulting revenues were $8.3 billion, up 3% in U.S. dollars and 6% in local currency [24] - Managed Services revenue was $8.4 billion, up 8% in U.S. dollars and 11% in local currency, driven by double-digit growth in technology managed services [24] - New bookings totaled $20.9 billion, with consulting bookings at $10.5 billion and managed services bookings at $10.4 billion [23] Market Data and Key Metrics Changes - In the Americas, revenues grew 11% in local currency, led by banking and capital markets, industrial, health, and consumer goods [26] - EMEA revenues grew 8% in local currency, driven by public service, life sciences, and consumer goods [26] - Asia-Pacific revenue grew 1% in local currency, with growth in insurance and utilities, partially offset by declines in chemicals and natural resources [27] Company Strategy and Development Direction - The company continues to focus on large-scale transformations and has positioned itself as a partner of choice for clients, particularly in Gen AI, with $1.4 billion in new bookings [10][11] - Significant investments were made in strategic areas, including over $250 million across six acquisitions and approximately 15 million training hours for employees [11][12] - The company aims to increase its data and AI workforce to approximately 80,000 by the end of FY 2026 [11] Management's Comments on Operating Environment and Future Outlook - Management noted an elevated level of uncertainty in the global economic and geopolitical environment but remains confident in the fundamentals of the industry [16][17] - The company anticipates ongoing uncertainty in its federal business due to new procurement actions slowing down [15][16] - For the third quarter of fiscal '25, the company expects revenues in the range of $16.9 billion to $17.5 billion, reflecting an estimated 3% to 7% growth in local currency [58] Other Important Information - The company has been recognized as one of the World's Most Ethical Companies for the 18th consecutive year and ranked number one in its industry [13] - The company plans to return at least $8.3 billion through dividends and share repurchases [61] Q&A Session Summary Question: Are clients hitting the pause button on new initiatives? - Management indicated that there has been no overall change in client activity, with some discussions focusing on accelerating cost discussions [66][68] Question: What was the growth rate in U.S. Federal revenue? - Management did not provide specific growth rates for U.S. Federal revenue but emphasized that the overall guidance reflects potential impacts from federal procurement actions [70][72] Question: What is the margin outlook and cost of execution? - Management noted a decrease in gross margins due to higher subcontractor costs and business optimization actions, but expects a 10 to 20 basis point expansion in operating margin for the year [78][80] Question: How are budgets set and how have conversations changed? - Management observed that there was no meaningful increase in budgets for services, with discretionary spending remaining constrained [90][93] Question: How is the company managing its workforce mix? - Management stated that the mix of subcontractors can fluctuate based on client work, with a focus on maintaining a utilization rate of 91% [125]

Financial Data and Key Metrics Changes - Revenue for the quarter was $16.7 billion, reflecting an 8.5% increase in local currency and a 5% increase in U.S. dollars [7][17] - Operating margin was 13.5%, a decrease of 20 basis points compared to the adjusted operating margin from the previous year [15][20] - Diluted earnings per share (EPS) were $2.82, representing a 2% growth over the adjusted EPS from the same quarter last year [21] - Free cash flow for the quarter was $2.7 billion, with a cash balance of $8.5 billion at the end of the quarter [21][22] Business Line Data and Key Metrics Changes - Consulting revenues were $8.3 billion, up 3% in U.S. dollars and 6% in local currency [17] - Managed services revenue was $8.4 billion, up 8% in U.S. dollars and 11% in local currency, driven by double-digit growth in technology managed services [18] - New bookings totaled $20.9 billion, with consulting bookings at $10.5 billion and managed services bookings at $10.4 billion [16][91] Market Data and Key Metrics Changes - In the Americas, revenues grew 11% in local currency, led by banking and capital markets, industrial, health, and consumer goods retail [18] - EMEA saw 8% growth in local currency, driven by public service and life sciences [19] - Asia Pacific revenue grew 1% in local currency, with growth in insurance and utilities, but offset by declines in chemicals and natural resources [19] Company Strategy and Development Direction - The company is focused on reinvention through Gen AI, with significant investments in technology and training [8][24] - A transformative hospitality skilling program was launched in India to prepare disadvantaged youth for jobs in the hospitality sector [8] - The company aims to maintain a diversified portfolio across markets and industries to adapt to changing market conditions [12] Management's Comments on Operating Environment and Future Outlook - Management noted an elevated level of uncertainty in the global economic and geopolitical environment, but remains confident in the fundamentals of the industry [11] - The company expects revenue growth in the range of 5% to 7% in local currency for the full fiscal year 2025 [41] - Operating margin is expected to expand by 10 to 20 basis points for the fiscal year [42] Other Important Information - The company plans to invest $2 billion to $3 billion in acquisitions during the fiscal year [42] - The effective tax rate is expected to be in the range of 22.5% to 24.5% for the fiscal year [42] - The company has been recognized as one of the world's most ethical companies for the eighteenth consecutive year [8] Q&A Session Summary Question: Can you clarify the extent of clients pausing new initiatives? - Management indicated no overall change in client activity, with some discussions about accelerating projects [46][47] Question: What was the growth rate in U.S. Federal revenue? - Specific growth rates for U.S. Federal revenue were not provided, but management expressed confidence in their positioning for larger deals [48][49] Question: How is the margin outlook changing? - The decrease in gross margin was attributed to higher subcontractor costs, but operating margin is expected to expand for the year [55][56] Question: How are budgets set and conversations changing? - Management noted that there was no significant increase in budgets, with clients continuing to prioritize larger transformation projects [65][67] Question: Can you provide insights on the slowdown in recent weeks? - Management clarified that while there is significant uncertainty, they have not seen a slowdown in business activity [81][82]

Financial Data and Key Metrics Changes - Revenue for the quarter was $16.7 billion, reflecting an 8.5% increase in local currency and a 5% increase in U.S. dollars [17][14] - Operating margin was 13.5%, a decrease of 20 basis points compared to the adjusted operating margin from the previous year [20][15] - Diluted earnings per share (EPS) were $2.82, representing a 2% growth over the adjusted EPS from the same quarter last year [21][15] - Free cash flow for the quarter was $2.7 billion, with a cash balance of $8.5 billion at the end of the quarter [21][22] Business Line Data and Key Metrics Changes - Consulting revenues were $8.3 billion, up 3% in U.S. dollars and 6% in local currency [17] - Managed services revenue was $8.4 billion, reflecting an 8% increase in U.S. dollars and 11% in local currency, driven by double-digit growth in technology managed services [18][17] - New bookings totaled $20.9 billion, with consulting bookings at $10.5 billion and managed services bookings at $10.4 billion [16][15] Market Data and Key Metrics Changes - In the Americas, revenues grew 11% in local currency, led by banking and capital markets, industrial, health, and consumer goods retail [18] - EMEA revenues increased by 8% in local currency, driven by public service, life sciences, and consumer goods [19] - Asia Pacific revenue grew 1% in local currency, with growth in insurance and utilities, partially offset by declines in chemicals and natural resources [19] Company Strategy and Development Direction - The company continues to focus on large-scale transformations for clients, with a strong emphasis on Gen AI as a catalyst for reinvention [6][23] - Significant investments were made in strategic areas, including over $250 million across six strategic acquisitions [8] - The company aims to increase its data and AI workforce to approximately 80,000 by the end of FY 2026 [8] Management's Comments on Operating Environment and Future Outlook - Management noted an elevated level of uncertainty in the global economic and geopolitical environment, but remains confident in the fundamentals of the industry [11][12] - The company expects revenue growth in the range of 5% to 7% in local currency for the full fiscal year 2025 [39] - Operating margin is expected to expand by 10 to 20 basis points for the fiscal year [40] Other Important Information - The company has been recognized as one of the world's most ethical companies for the eighteenth consecutive year [8] - A transformative hospitality skilling program was launched in India in collaboration with Marriott International [8] Q&A Session Summary Question: Are clients hitting the pause button on new initiatives? - Management indicated that there has been no overall change in client activity, with some discussions focusing on accelerating initiatives [45][46] Question: What was the growth rate in U.S. Federal revenue? - Specific growth rates for U.S. Federal revenue were not provided, but management expressed confidence in the overall positioning of the business [47][48] Question: How is the margin outlook changing? - The decrease in gross margin was attributed to higher subcontractor costs and business optimization actions, with expectations for a slight expansion in operating margin for the year [54][55] Question: How are budgets being set in the current environment? - Management noted that there has not been a meaningful increase in budgets for services, with discretionary spending remaining constrained [64][66] Question: How is the company managing its workforce mix? - The company added over 2,000 employees in Q2 and continues to manage its supply and demand effectively, maintaining a utilization rate of 91% [92]