Accenture (NYSE: ACN) has reported its Q2FY25 earnings, showcasing resilience in outsourcing and a slight upgrade to its full-year guidance. While consulting remained under pressure, the company delivered solid revenue growth, exceeding street expectations.;Share Down Accenture Down 3% in Pre Market Opening
Key Highlights from Accenture’s Q2FY25 Earnings Report
Revenue Performance
Accenture’s revenue stood at $16.7 billion, reflecting a 5.4% year-over-year (YoY) growth (+8.5% in local currency).The revenue figure slightly surpassed market expectations of $16.6 billion and was within the company’s own guidance range of $16.2 billion to $16.8 billion.However, quarter-over-quarter (QoQ), revenue declined by 5.8%.
Segmental Performance: Outsourcing Drives Growth
Consulting Revenue: $10.3 billion, up 3.3% YoY (-8.4% QoQ in USD, +6% YoY in constant currency).Outsourcing Revenue: $6.4 billion, up 7.7% YoY (-3.1% QoQ in USD, +11% YoY in constant currency).The outsourcing business remains a key growth driver, showing stronger performance than consulting.
Bookings & Generative AI Demand
Total bookings: $20.9 billion (-3% YoY, +11.8% QoQ).
Consulting bookings: $10.47 billion (-0.5% YoY, +13.6% QoQ).
Outsourcing bookings: $10.4 billion (-5.6% YoY, +10.1% QoQ).
Generative AI new bookings stood at $1.4 billion, indicating robust demand for AI-driven solutions.
Profitability & Margins
Operating margin: 13.5%, up 50 basis points (bps) YoY, but down 20 bps compared to adjusted operating margin.
Adjusted EBIT margin: 13.7%, below market expectations of 14.2%.
Diluted earnings per share (EPS): $2.82, up 7% YoY and 2% higher than adjusted EPS.
Cash Flow & Dividend
Free cash flow: $2.68 billion.
Quarterly cash dividend: $1.48 per share, maintaining shareholder returns.
Guidance Update: Positive Outlook for FY25
Accenture has raised the lower end of its FY25 guidance, signaling confidence in its growth trajectory.
Q3FY25 Guidance: Revenue expected to be $16.9 billion to $17.5 billion, with a 3% to 7% YoY growth in constant currency.
FY25 Full-Year Guidance: The company now expects 5% to 7% YoY growth in constant currency, up from the previous 4% to 7% range.
Accenture’s Q2FY25 results indicate continued strength in outsourcing, despite some pressure in consulting. The slight upgrade in FY25 guidance reflects management’s optimism. However, the lower-than-expected adjusted EBIT margin could be a concern for investors. The company’s strong focus on generative AI and digital transformation positions it well for future growth.
Disclaimer
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