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Accenture: Growth Despite Headwinds
The Motley Foolยท 2025-06-20 15:50
Core Insights - Accenture reported solid growth in Q3 FY25 despite a challenging macroeconomic environment, with revenue increasing by 7.6% and earnings per share rising by 15%, surpassing Wall Street expectations [3][4]. Financial Performance - Revenue for Q3 FY25 was $17.7 billion, compared to $16.5 billion in Q3 FY24, reflecting a 7.6% increase [2]. - Earnings per share rose to $3.49 from $3.04, marking a 15% increase [2]. - Free cash flow was reported at $3.5 billion, up from $3.0 billion, although this was below expectations [2][6]. - New bookings totaled $19.7 billion, a decrease of 6% year over year [2][5]. Segment Performance - The financial services segment showed the strongest performance, growing by 13% year over year [4]. - Regional performance varied, with the Americas up 9%, Europe up 6%, and Asia up 4% [4]. - Companywide operating margin improved by 80 basis points to 16.8% [4]. Market Reaction - Investors reacted negatively to the decline in new bookings, leading to a 5% drop in Accenture's shares in premarket trading [7]. Future Outlook - Accenture has revised its full-year fiscal 2025 revenue growth forecast to 6% to 7%, up from the previous 5% to 7% [8]. - The company increased its earnings per share guidance to a range of $12.77 to $12.89, from $12.55 to $12.79 [8]. - Accenture plans to return at least $8.3 billion in capital to shareholders [8]. Strategic Positioning - Despite short-term uncertainties, the demand for Accenture's services in IT modernization and AI integration remains strong, positioning the company favorably for long-term growth [9].