Accenture(US:ACN)2025-12-18 14:02Financial Data and Key Metrics Changes - Revenue for the quarter was $18.7 billion, reflecting a 5% growth in local currency and a 6% increase in U.S. dollars, at the top of the guided range [17][19] - Adjusted operating margin expanded by 30 basis points year over year to 17% [18][22] - Adjusted EPS grew by 10% year over year to $3.94 [18][22] - Free cash flow for the quarter was $1.5 billion, with a cash balance of $9.6 billion [23] Business Line Data and Key Metrics Changes - New bookings totaled $20.9 billion, representing a 12% growth in U.S. dollars and a 10% growth in local currency [18][19] - Consulting revenues were $9.4 billion, growing 4% in U.S. dollars and 3% in local currency [19] - Managed services revenues reached $9.3 billion, with an 8% increase in U.S. dollars and 7% in local currency [19] Market Data and Key Metrics Changes - In the Americas, revenue grew 4% in local currency, with a 6% growth excluding federal business impacts [20] - EMEA saw a 4% growth in local currency, driven by banking and capital markets [20] - Asia-Pacific revenue grew 9% in local currency, led by banking and capital markets [21] Company Strategy and Development Direction - The company focuses on being a reinvention partner for clients, emphasizing large-scale transformational programs [25] - Advanced AI is increasingly embedded in solutions, with a significant focus on data management and modernization [26][36] - The partnership strategy is crucial, with 60% of revenue coming from top ecosystem partners, which is expected to continue driving growth [12][14] Management's Comments on Operating Environment and Future Outlook - Management noted that clients are prioritizing strategic transformational programs despite a lack of change in discretionary spending [72] - The demand for advanced AI is growing, with expectations for significant market expansion in the coming years [34] - The company anticipates revenue growth of 2-5% in local currency for fiscal 2026, with a focus on maintaining strong cash returns to shareholders [39][40] Other Important Information - The company recorded $308 million in business optimization costs, impacting operating margin and EPS [21] - The company plans to invest approximately $3 billion in acquisitions for fiscal 2026 [39] Q&A Session Questions and Answers Question: Shift in consulting industry's role in AI - Management acknowledged a shift in perception, emphasizing that enterprise AI adoption requires foundational work around data and processes [43][44] Question: Timing for AI partnerships to impact revenue - Management indicated that the impact of AI partnerships on revenue is tied to enterprise adoption, which is expected to evolve over time [51][52] Question: Sustainability of revenue growth outpacing headcount growth - Management confirmed that revenue per person grew 7%, driven by talent rotation, and expects this trend to moderate [56][57] Question: Discretionary spending outlook - Management stated that they are not waiting for discretionary spending to return, focusing instead on delivering results through large transformational deals [72] Question: Fixed-price work growth potential - Management expressed confidence in the competitive advantage of fixed-price deals, noting that they provide clients with certainty in outcomes [74][75]