Accenture Earnings Beat Estimates in Q3, Revenues Increase Y/Y
Accenture plc ACN has reported impressive third-quarter fiscal 2025 results, wherein earnings and revenues surpassed the Zacks Consensus Estimates.
ACN's earnings were $3.49 per share, beating the Zacks Consensus Estimate by 5.8%. The metric increased 11.5% from the year-ago quarter. Total revenues of $17.7 billion beat the consensus estimate by 2.6% and rose 7.7% on a year-over-year basis.
The company's shares have declined marginally in the past year compared with the industry's and Zacks S&P 500 composite's 8.3% and 10.3% growth, respectively.
Accenture PLC price-consensus-eps-surprise-chart | Accenture PLC Quote
Based on the type of work, managed services' revenues of $8.7 billion increased 9% from the year-ago quarter on a reported basis and in local currency, surpassing our estimate of $8.5 billion. Consulting revenues gained 7% year over year on a reported basis and 6% in local currency to $9 billion, beating our estimate of $8.7 billion.
Segment-wise, health and public service revenues of $3.8 billion grew 7% from the year-ago quarter on a reported basis and in local currency. The figure beat our estimation of $3.7 billion. Revenues from the resources segment amounted to $2.4 billion, rising 5% from the year-ago quarter on a reported and 4% on a local currency basis. The figure met our estimate. Revenues from the product segment amounted to $5.3 billion, increasing 7% year over year on a reported basis and a local currency basis. The figure outpaced our estimation of $5.2 billion.
Communications, media and technology revenues of $2.9 billion increased 5% year over year on a reported basis and in terms of local currency, outpacing our estimate of $2.8 billion. Financial services revenues of $3 billion grew 13% from the year-ago quarter on a reported basis and in local currency. The figure met our projected figure.
Geographically, revenues of $8.9 billion from the Americas rose 8% from the year-ago quarter on a reported basis and 9% on a local currency basis. The figure beat our estimation of $8.7 billion. Revenues of $6.2 billion from the EMEA gained 8% on a reported basis and 6% in local currency, beating our estimate of $6 billion. Revenues of $2.5 billion from the Asia Pacific increased 5% year over year on a reported basis and gained 4% in local currency, surpassing our estimate of $2.4 billion.
The company reported bookings worth $19.7 billion in the third quarter of fiscal 2025, decreasing 6% from the year-ago quarter on a reported basis and 7% in local currency. Consulting bookings were $9.1 billion and managed services bookings were $10.6 billion.
The gross margin (gross profit as a percentage of net revenues) for the third quarter of fiscal 2025 was 32.9%, down 50 basis points (bps) from the year-ago quarter. Adjusted operating income was $2.2 billion, flat with the year-ago quarter. The adjusted operating margin of 16.8% moved down 40 bps from third-quarter fiscal 2025.
ACN exited third-quarter fiscal 2025 with cash and cash equivalents of $9.6 billion compared with $8.5 billion at the end of first-quarter fiscal 2025. The company generated $3.7 billion in cash from operating activities. Capital expenditure in the reported quarter was $169.1 million.
The free cash flow was $3.5 billion. Accenture repurchased 6 million shares for $1.8 billion, including 5.7 million shares repurchased in the open market. The company paid out a dividend of $924 million in the third quarter of fiscal 2025.
For the fourth quarter of fiscal 2025, the company hiked its revenue guidance to $17-$17.6 billion from the preceding quarter's view of $16.9-$17.5 billion. The mid-point ($17.3 billion) of the guided range is higher than the Zacks Consensus Estimate of $17.1 billion.
For fiscal 2025, ACN updated its revenue growth guidance to 6-7% compared with the preceding quarter's view of 5-7% in local currency. The company's expectation for operating cash flow is raised to $9.6 billion to $10.3 billion from the previous quarter's view of $9.4-$10.1 billion. The free cash flow expectation is raised to $9 billion to $9.7 billion compared with the preceding quarter's view of $8.8 billion and $9.5 billion.
Accenture carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Fiserv, Inc. FI posted mixed first-quarter 2025 results.
FI's adjusted earnings per share of $2.14 beat the consensus mark by 2.9% and gained 13.8% year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Adjusted revenues of $4.8 billion missed the consensus estimate by 1.6% but gained 5.5% on a year-over-year basis.
Corpay, Inc. CPAY reported mixed first-quarter 2025 results.
CPAY's earnings per share of $4.51 surpassed the consensus estimate by a slight margin and increased 10% year over year. The total revenues of $1 billion missed the consensus estimate by a slight margin but gained 7.5% from the year-ago quarter.
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