Accenture(ACN) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For FY '24, Accenture reported revenues of $65 billion, reflecting a 2% growth in local currency, with adjusted EPS growth of 2% to$ 11.95 [10][23] - The company achieved full fiscal year bookings of $81 billion, representing a 14% growth in local currency [9][22] - Adjusted operating margin expanded by 10 basis points to 15.5% for FY '24 [10][23] - Free cash flow for FY '24 was$ 8.6 billion, with $7.8 billion returned to shareholders [10][23] Business Line Data and Key Metrics Changes - In Q4, revenue grew 5% in local currency, with consulting revenues at$ 8.3 billion (up 3% in local currency) and managed services at $8.1 billion (up 7% in local currency) [15][17] - New bookings for Q4 were$ 20.1 billion, with consulting bookings at $8.6 billion and managed services at$ 11.6 billion [16][17] - For the full fiscal year, GenAI bookings reached $3 billion, with nearly$ 900 million in revenue, a significant increase from FY '23 [11][22] Market Data and Key Metrics Changes - Revenue growth in North America was 6% in local currency, driven by public service and industrial sectors [18] - EMEA revenue grew 2% in local currency, led by public service and life sciences, while growth markets saw a 9% increase [18] - Security revenue reached $9 billion, representing a 23% growth [31] Company Strategy and Development Direction - The company aims to be the reinvention partner for clients, focusing on large-scale transformations and investments in GenAI [9][24] - Accenture's strategy includes enhancing its digital core and leveraging AI to drive productivity and growth [24][26] - The company plans to invest approximately$ 3 billion in acquisitions for FY '25, with a focus on scaling in growth areas [44][70] Management's Comments on Operating Environment and Future Outlook - Management noted a cautious macroeconomic environment, with no significant changes in discretionary spending expected [67] - The company anticipates continued growth in cloud services and digital transformation projects [59][24] - Management expressed confidence in the company's positioning for FY '25, with expectations of 3% to 6% revenue growth in local currency [44][45] Other Important Information - Accenture has been recognized for its diversity and inclusion efforts, ranking number one on the FTSE Global Diversity and Inclusion Index [13] - The company completed business optimization actions to reduce structural costs, impacting operating margin and EPS [19][22] Q&A Session Summary Question: How does Accenture view the relationship between ACV and TCV? - Management indicated that the strategy to secure larger deals positions the company better for revenue visibility going into FY '25 [48][52] Question: What is the outlook for cloud migration projects? - Management noted ongoing migration trends, with significant opportunities in high-performance compute applications and modernization efforts [56][59] Question: What is the hiring strategy and geographic focus? - The company plans to hire primarily in India, focusing on technology roles and refreshing its talent pool [61][62] Question: What is the outlook for consulting and discretionary spending? - Management expects low to mid-single digit growth in consulting, reflecting a cautious discretionary spending environment [64][66]