Latest news with #AccenturePlc
Yahoo
2 days ago
- Business
- Yahoo
Accenture: Growth Despite Headwinds
Accenture posted expectation-beating revenue and EPS growth. The management company battled through corporate and government headwinds to produce strong results. The company's new bookings number was below expectations, a sign of the difficulty in closing new deals in this economic environment. 10 stocks we like better than Accenture Plc › Here's our initial take on Accenture's (NYSE: ACN) fiscal 2025 third-quarter financial report. Metric Q3 FY24 Q3 FY25 Change vs. Expectations Revenue $16.5 billion $17.7 billion 7.6% Beat Earnings per share $3.04 $3.49 15% Beat Free cash flow $3.0 billion $3.5 billion 17% Missed New bookings $21.1 billion $19.7 billion -6% n/a Accenture posted solid growth in a difficult period for consulting companies. Corporate customers are scaling back due to macroeconomic uncertainty, and the U.S. federal contracting environment is bogged down by efforts to cut government spending. Yet Accenture still was able to grow revenue by 7.6% and earnings per share by 15% in the quarter, topping Wall Street estimates. Financial services was the standout segment based on performance, up 13% year over year, and Accenture saw better strength in the Americas (up 9%) than it did in Europe (up 6%) or Asia (up 4%). Companywide operating margin improved by 80 basis points to 16.8%. But the results are unlikely to be enough to quell investor fears about the macro economy taking its toll. New bookings for the quarter came in at $19.7 billion, down 6% year over year. Included in that is about $1.5 billion in generative AI new bookings. Accenture remains a cash generation machine, reporting $3.5 billion in free cash flow in the quarter. The company paid $924 million in dividends and repurchased $1.8 billion of its shares in the quarter, increasing its dividend by 15% compared to fiscal 2024. Investors appear to be focusing on the bookings weakness. Accenture shares were down 5% in premarket trading ahead of the opening bell in New York. Accenture is now 75% through its fiscal year, and has seen enough to firm up some of its guidance. The company now sees full-year fiscal 2025 revenue up by 6% to 7%, compared to the previous forecast for 5% to 7% growth, and boosted its full-year earnings per share guidance to $12.77 to $12.89, from $12.55 to $12.79. Accenture expects to return "at least" $8.3 billion in capital to shareholders. There's a lot of uncertainty in the near-term guidance, with the bookings number reflecting the turbulence in the federal contracting market and uncertainty among corporate clients. But for long-term focused investors, the need for Accenture's assistance in areas such as IT modernization remains as strong as ever, and Accenture appears to be having success establishing itself as a go-to vendor to help clients incorporate artificial intelligence (AI) into their businesses. Accenture still has a lot of ways to win. Full earnings report Investor relations page Before you buy stock in Accenture Plc, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Accenture Plc wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $891,722!* Now, it's worth noting Stock Advisor's total average return is 995% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Accenture Plc. The Motley Fool has a disclosure policy. Accenture: Growth Despite Headwinds was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Mint
2 days ago
- Business
- Mint
'Not just one challenge; Accenture clients are facing everything, all at once'
Accenture Plc. on Friday said Fortune 500 companies unnerved by global conflicts and tariff wars are holding back technology spending, prompting it to issue a muted guidance for the current quarter. The subdued guidance rattled investors, with shares of the world's largest information technology outsourcer trading 7.6% at $283 at 8:30pm Indian time. The guidance could signal further challenges for India's $283 billion IT services companies, which started their fiscal year on a weak note. Accenture recorded revenue growth—6% sequentially and 7.7% annually—to $17.73 billion, but the company expects slower days ahead. The company expects revenue of $17-17.6 billion in the fourth quarter (March to May). Accenture follows a September-August financial year while Indian IT firms follow an April-March calendar. The company cut its headcount by 10,000 to end with 790,000 employees last quarter. Accenture flagged the threat to businesses from US president Donald Trump's tariffs and policy flip-flops, coupled with the Iran-Israel conflict. This implies that new business might be harder to get for Indian IT outsourcers, who issue their quarterly earnings next month. 'As we shared last quarter, we continue to see a significantly elevated level of uncertainty in the global economic and geopolitical environment as compared to calendar year 2024,' said Julie Sweet, chair and chief executive of Accenture, during the company's post-earnings conference call. The IT services company did not raise the upper end of its growth guidance of 7% for the full year, reflecting its views on the macroeconomic environment. Accenture expects to spend up to $1.5 billion on acquisitions during this fiscal. The management said that about 3% of its full-year growth of 7% is expected from acquisitions. Sweet added that clients were faced with multiple challenges at once. 'In every boardroom and every industry, our clients are not facing a single challenge—They are facing everything at once, economic volatility, geopolitical complexity, major shifts in customer behavior,' she said. Accenture's dim outlook stokes further uncertainty for India's five largest software service providers including Tata Consultancy Services Ltd, Infosys Ltd, HCL Technologies Ltd, Wipro Ltd and Tech Mahindra Ltd, which struggled to bag deals valued at over $1 billion last fiscal. A dwindling large order book is further expected to raise questions on the readiness of Indian IT to weather the macroeconomic storm. A third of Accenture's quarterly revenue came from its software products business. Sweet added that the pause in tech spending was short and that clients wanted to be the first to adopt artificial intelligence (AI). 'I am talking to CEOs every day, and you know, there was this whole narrative about a pause and sitting on the sidelines. And I would tell you, it was very short. Our clients have moved from pause to focus and leapfrog,' said Sweet. Earlier, an analyst said Accenture could face difficulty in bagging deals in the second half of the fiscal. 'Additionally, we believe Accenture faces difficult bookings compares in 2HFY25, which creates a tricky setup in a tepid backdrop,' said BMO Capital Markets analyst Keith Bachman, in a note dated 18 June. Bachman added that 'the economic environment has modestly weakened in aggregate,' signalling that times might be tougher for IT outsourcers as clients hold back their tech spending. However, a bright spot in the company's report card was its GenAI (generative artificial intelligence) order book. Accenture secured $1.5 billion in new GenAI bookings in the quarter, which comprised almost 8% of its overall order bookings of $19.7 billion for the quarter. In the same quarter, Accenture got revenues of $700 million from Gen AI projects. So far, since September 2023, the company has taken its total tally of orders in Gen AI to $7.1 billion. For context, Accenture's total order bookings from GenAI alone is more than the FY25 revenue of Tech Mahindra Ltd, India's fifth-largest software services company. Tech Mahindra ended last fiscal with $6.26 billion in revenue. Accenture was the first software services company to state its Gen AI deal value. This is in contrast to homegrown IT service providers, who are yet to spell out revenue or confirmed orders from the new technology.
Irish Examiner
21-05-2025
- Business
- Irish Examiner
Accenture to promote 50,000 staff after six-month delay
Accenture Plc will promote almost 50,000 people worldwide in June as the company tries to boost morale after a six-month delay to weather a slump in demand for consulting services. The Dublin-based technology giant told staff Tuesday that the promotions will include 15,000 in India, 11,000 in the Europe, Middle East and Africa region, and 10,000 across the Americas, according to internal memos seen by Bloomberg News. The move comes as the New York-listed company grapples with a pullback in client spending and greater scrutiny of US government contracts under President Donald Trump, who wants to prove taxpayers are getting value for their money. Accenture abandoned its diversity targets after Trump ordered his administration to push firms to end such practices. The company employs about 801,000 people, according to its latest earnings statement, meaning the promotions in June will include about 6% of its total workforce. The firm didn't respond to a request for comment. Accenture had already pushed the bulk of promotions to June, rather than the usual month of December. Like rivals McKinsey Plc and Ernst & Young LLP, the firm went on a pandemic-era hiring spree in response to a surge in demand. But a slowdown in business led it to cut 19,000 roles from 2023. Deloitte LLP is planning to lay off employees on its government consulting team, Bloomberg News reported in April. Last year, 'our operating margin — how we measure profitability as a percentage of revenue — contracted compared to adjusted operating margin for the second quarter last year,' Accenture said in the memos. 'We are also seeing an elevated level of uncertainty in the global economic and geopolitical environment.' It added there will be some base pay increases in core growth areas, which are based on current market conditions, while bonus and performance equity decisions will be made in December. Bloomberg
Time of India
21-05-2025
- Business
- Time of India
Accenture to promote 50,000 staff after six-month delay
The move comes as the New York-listed company grapples with a pullback in client spending and greater scrutiny of US government contracts under President Donald Trump, who wants to prove taxpayers are getting value for their money. Accenture abandoned its diversity targets after Trump ordered his administration to push firms to end such practices. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Accenture Plc will promote almost 50,000 people worldwide in June as the company tries to boost morale after a six-month delay to weather a slump in demand for consulting Dublin-based technology giant told staff Tuesday that the promotions will include 15,000 in India, 11,000 in the Europe, Middle East and Africa region, and 10,000 across the Americas, according to internal memos seen by Bloomberg move comes as the New York-listed company grapples with a pullback in client spending and greater scrutiny of US government contracts under President Donald Trump, who wants to prove taxpayers are getting value for their money. Accenture abandoned its diversity targets after Trump ordered his administration to push firms to end such company employs about 801,000 people, according to its latest earnings statement, meaning the promotions in June will include about 6% of its total workforce. The firm didn't respond to a request for had already pushed the bulk of promotions to June, rather than the usual month of December. Like rivals McKinsey Plc and Ernst & Young LLP, the firm went on a pandemic-era hiring spree in response to a surge in demand. But a slowdown in business led it to cut 19,000 roles from 2023. Deloitte LLP is planning to lay off employees on its government consulting team, Bloomberg News reported in year 'our operating margin — how we measure profitability as a percentage of revenue — contracted compared to adjusted operating margin for the second quarter last year,' Accenture said in the memos. 'We are also seeing an elevated level of uncertainty in the global economic and geopolitical environment.'It added there will be some base pay increases in core growth areas, which are based on current market conditions, while bonus and performance equity decisions will be made in December.
Mint
22-04-2025
- Business
- Mint
Clients in wait and watch mode, will take a quarter to gauge impact of tariffs: Accenture
It will take about a quarter for clients, who have now hopped on to the fence, to understand the impact of tariffs brought in by the US administration, two top officials of Accenture Plc told Mint in an interview. Pointing out that the current volatility may actually provide impetus for artificial intelligence (AI)-led transformation by companies, they added that companies are moving more than a quarter of their annual technology spends to AI-led solutions, especially generative AI or GenAI. Also Read | What Accenture's hiring spree means for Indian IT industry Ryoji Sekido, chief executive officer (CEO) for Asia Oceania at Accenture, the global IT services market leader, said it's a bit early to have any speculative discussion, but uncertainty and volatility are definitely increasing. 'That's why clients are seeking more compelling business cases and very tangible solutions, whether we can deliver the outcome of whatever transformation they try to start or even based on even AI." To be sure, the reciprocal tariffs were paused for 90 days on 9 April by US President Donald Trump. Sekido agrees that has given industry some time to prepare. 'At the same time, my point of view is this kind of volatility is going to be more of a tailwind to accelerate AI transformation by clients, because AI at the end of the day is seeking more efficiency, more agility and also more velocity for the client." Also Read | Accenture flags macroeconomic fears, casts shadow over global and Indian IT 'Maybe it will take about a quarter to really understand the implications and then there will be better clarity," said Saurabh Kumar Sahu, managing director and lead for the company's India business, adding that while clients are likely to wait and watch before opening their purse strings, technology spends will continue to remain relevant. According to Sahu, clients are increasingly moving IT spends towards GenAI amid increasing interest in the benefits of the new technology. 'Very clearly, close to about 25-30% of technology spends today are gravitating towards AI and GenAI because companies are seeing that value in the allocation in terms of RoI (returns on investment)." Also Read | How Accenture leapt ahead of Indian IT firms with large deals Notably, Accenture has been leading deals in the GenAI space. Its new order bookings of $39.6 billion in the first two quarters of FY25 (September-February) had GenAI deals worth $2.6 billion. In the previous fiscal, it had bagged new GenAI deals worth $3 billion, making it an aggregate of $5.6 billion in GenAI deals in a year and a half. Meanwhile, Tata Consultancy Services (TCS) disclosed in its FY24 annual report that it had closed more than 130 deals, and 20 new customers went live in the fiscal with AI and GenAI use cases. The growth alert from Accenture comes at a time when the IT services industry is grappling with slowing business in recent years and quarters. Mumbai-headquartered TCS, India's biggest IT services company, grew its January-March quarter revenue 1.4% y-o-y in dollar terms to $7.5 billion, while Bengaluru-headquartered Wipro Ltd's revenues in the same quarter fell 1.2% y-o-y to $2.6 billion. However, India's second-biggest IT services company, Infosys Ltd, reported better numbers for Q4, growing its topline 4.8% in constant currency terms to $4.7 billion. Meanwhile, Accenture, which follows a September-August financial year, grew its revenues 5% year-on-year (y-o-y) in its second quarter (December-February) to $16.7 billion in US dollar terms. The company also revised its full-year revenue growth outlook for FY25 from 4-7% to 5-7%, and projected March-May (third) quarter revenue growth at 3-7%, even as Infosys estimated FY26 revenue growth at 0-3%, and Wipro estimated a 1.5-3.5% fall in revenue in its April-June quarter. TCS does not provide future revenue estimates. Analysts see clear slowdown in growth for the industry over the next couple of years. 'While both earnings (less so) and PE multiple (more so) have corrected since 1 January 2025, we suspect that there are further cuts possible for both FY26 and FY27 earnings under the current macro conditions, which we believe could last longer than companies' sanguine commentary," brokerage BoB Capital Markets said in a note on 18 April after Infosys announced its results. 'We believe the industry's structural USD organic revenue growth from here on will be lower than the ~7% CAGR seen during FY15-FY20, possibly ~5% CAGR over FY25-FY30 in constant currency (CC) terms," the brokerage added. 'Indian Tier-1 companies now face higher competition from Accenture (especially as it loses business due to DOGE), tier-2 players, and Cognizant, likely slowing their growth compared to FY15-FY20." Notably, Accenture and other consulting firms were at the receiving end of the US administration's cuts in federal spending. Despite its decent numbers, Accenture, too, is facing growth pangs. In a 6 April report, Incred Equities pointed to the fact that new bookings in the first half (September-February) of FY25 for the company had slid 1% y-o-y, a first since H1FY15. To be sure, Accenture's new bookings for Q2 alone slid 3% y-o-y to $20.9 billion, reflecting the challenge in getting deals from clients that are tightening discretionary spends. 'While CY25F IT spending commentary remains unknown, industry discussions suggest the sense of urgency is less and that project starts could shift right," noted Abhishek Shindadkar, research analyst at Incred, in the report. 'As for the demand trend, most verticals appear to be in a wait-and-watch mode with industry-specific challenges appearing in manufacturing (especially automotive), hi-tech (especially hyperscalers) verticals, and healthcare (early noises)." Both officials of Accenture were of the view that even as GenAI continues to automate tasks, engineers will remain relevant, although the nature of engineers in demand will change. 'Everything today is more software defined, not just on the enterprise side, but also machines, infrastructure, cars, everything," said Sekido. 'So, we're going to have a serious supply issue with engineering resources. That's why my view is GenAI will not reduce that (demand)." 'Coders as such will not go away at all," Sahu said. 'A different type of engineering is going to come into place. GenAI will need a lot of prompt engineers, which is the next version of coders... That's a lot of science, and that is where we are going to gravitate towards in terms of our skill sets and hiring." Sahu remained non-committal on the company's hiring plans for Indian, saying hiring will be done according to market demand and also said GenAI will not impact the company's hiring. 'If the market demand for GenAI technologies increases, we will need to have more people who understand GenAI or AI technology better," Sahu said. 'It can be a combination of people who are there today, who will be reskilled, plus new people that we hire from the market. So I don't see any kind of a deviation from our hiring strategy because of GenAI."
