01—Abstract
Summary
Summary of the 10-Q filed March 24, 2016. Cited figures are marked; the original filing is the authoritative source.
Accenture plc (ACN) reported its second quarter fiscal year 2016 results, demonstrating solid top-line growth driven by strong demand across its consulting and outsourcing services.
Net revenues increased 6%a in U.S. dollars and 12% in local currency, with particularly robust growth in the Health & Public Service, Products, and Communications, Media & Technology segments. This growth was supported by a significant increase in headcount and a stable utilization rate. A notable event during the quarter was the gain on the sale of the Navitaire business, which substantially boosted net income and earnings per share.
However, excluding this one-time gain, the company showed steady operational performance with improved effective tax rates contributing positively to diluted earnings per share. The company also continued its capital return program through share repurchases and dividends, underscoring its commitment to shareholder value.
02—Key points
Key Highlights
- Net revenues grew 6% in U.S. dollars and 12% in local currency for the second quarter of fiscal 2016, indicating strong client demand.
- The Health & Public Service segment saw a notable 15% local currency revenue increase, alongside strong performance in Products (14%) and Communications, Media & Technology (13%).
- Diluted earnings per share significantly increased to $2.08 from $1.08 in the prior year, largely due to a $554 million gain from the Navitaire divestiture.
- Excluding the Navitaire gain, diluted earnings per share were $1.34, up from $1.08, primarily driven by a lower effective tax rate and revenue growth.
- The company's headcount increased to approximately 373,000 as of February 29, 2016, reflecting continued investment in talent to meet demand.
- Operating cash flow decreased to $929 million from $1,174 million in the prior year period, influenced by changes in working capital and higher compensation payments.
- Accenture maintained a strong balance sheet with $3.0 billion in cash and cash equivalents as of February 29, 2016, and had $1.6 billion in undrawn borrowing facilities.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2016, Accenture plc kept $0.16.
- Revenue$8.40B100.0%
- Cost of revenue−$6.03B71.8%
- Gross profit$2.37B28.2%
- Operating costs−$1.28B15.3%
- Operating income$1.09B13.0%
- Interest, other & tax$238.5M2.8%
- Net income$1.33B15.8%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2016filed March 24, 2016Financial Statements
Q2 FY2016 against Q2 FY2015
| Line item | Q2 FY2016Q2 FY2015 | Change |
|---|---|---|
| Revenue | $8.40B$7.93B | +5.9% |
| Cost of Revenue | $6.03B$5.69B | +5.9% |
| Gross Profit | $2.37B$2.24B | +5.8% |
| Operating Expenses | $7.31B$6.91B | +5.8% |
| Operating Income | $1.09B$1.02B | +6.6% |
| Interest Expense | $4.54M$3.90M | +16.3% |
| Net Income | $1.33B$690.73M | +92.0% |
| EPS (Basic) | $2.12$1.10 | +92.7% |
| EPS (Diluted) | $2.08$1.08 | +92.6% |
| Shares Outstanding (Basic) | 626.52M628.25M | −0.3% |
| Shares Outstanding (Diluted) | 668.13M679.17M | −1.6% |
05—Questions
Frequently Asked Questions
How did Accenture's revenue perform in the second quarter of fiscal year 2016?
Accenture reported a 6% increase in net revenues in U.S. dollars and a 12% increase in local currency for the second quarter of fiscal year 2016, compared to the same period in fiscal year 2015. This growth was driven by strong demand across its key operating segments.
What was the impact of the Navitaire divestiture on the company's financial results?
The sale of the Navitaire business resulted in a pre-tax gain of $554 million, which significantly boosted net income and diluted earnings per share for the second quarter of fiscal year 2016. This gain added $0.74 to the diluted EPS.
What is the company's outlook on its cash position and liquidity?
Accenture ended the second quarter of fiscal year 2016 with $3.0 billion in cash and cash equivalents. The company believes its available cash and expected operational cash flows are sufficient to meet its working capital and investment needs for the next twelve months and beyond.
How has Accenture's workforce changed?
Accenture's headcount increased significantly year-over-year, reaching approximately 373,000 employees as of February 29, 2016. This increase reflects the growing demand for its services and solutions, particularly those delivered through its Global Delivery Network, as well as headcount added from acquisitions.
06—Continue