10-QPeriod: Q3 FY2020

Accenture plc Quarterly Report for Q3 Ended May 31, 2020

Filed June 25, 2020For Securities:ACN

Summary

Accenture plc reported revenues of $10.99 billion for the third quarter of fiscal year 2020, a 1% decrease in U.S. dollars but a 1% increase in local currency compared to the prior year. This performance was significantly impacted by the COVID-19 pandemic, which led to a shift towards remote work for most employees and reduced demand in certain industries like Travel, Retail, and Energy, while digital transformation and cloud services saw increased demand. Despite revenue pressures, the company maintained a strong operating income of $1.71 billion and a slightly improved operating margin of 15.6%. Diluted earnings per share were $1.90, a modest decrease from $1.93 in the prior year, largely due to increased non-operating expenses and higher net income attributable to non-controlling interests. The company also reported robust operating cash flow and maintained a strong liquidity position with $6.4 billion in cash and cash equivalents, underscoring its financial resilience amidst challenging economic conditions.

Financial Highlights

53 data points
Beta

Revenue

$10.99B

32.1% Gross Margin

Net Income

$1.23B

11.2% Net Margin

EPS (Diluted)

$1.90

Total Assets

$35.06B

Cash & Equivalents

$6.44B

Free Cash Flow

$2.59B

Financial Statements
Beta
Revenue$10.99B
Cost of Revenue$7.46B
Gross Profit$3.53B
Operating Expenses$9.28B
Operating Income$1.71B
Interest Expense$4.96M
Net Income$1.23B
EPS (Basic)$1.93
EPS (Diluted)$1.90
Shares Outstanding (Basic)636.15M
Shares Outstanding (Diluted)645.61M

Key Highlights

  • 1Q3 FY2020 revenues were $10.99 billion, down 1% in USD but up 1% in local currency, impacted by COVID-19.
  • 2Operating income remained strong at $1.71 billion, with a slightly improved operating margin of 15.6%.
  • 3Diluted Earnings Per Share (EPS) was $1.90, down from $1.93 in the prior year's quarter.
  • 4Significant shift to remote work, with approximately 95% of the workforce enabled to work remotely.
  • 5Demand saw a decline in Travel, Retail, Energy, High Tech, and Industrial sectors, while digital, cloud, and security services experienced increased demand.
  • 6Strong operating cash flow of $5.06 billion for the nine months ended May 31, 2020, up from $4.51 billion in the prior year.
  • 7Company maintained a robust cash position of $6.44 billion as of May 31, 2020, and added a $1 billion syndicated loan facility in June 2020 for liquidity.

Frequently Asked Questions

The COVID-19 pandemic had a significant impact, causing a 1% decline in U.S. dollar revenues but a 1% growth in local currency for the third quarter of fiscal year 2020. It led to reduced demand in sectors like Travel, Retail, and Energy, while increasing demand for digital transformation, cloud, and security services. The company also shifted to a remote work model for most of its employees.

Accenture reported a strong operating income of $1.71 billion and an operating margin of 15.6% for the third quarter of fiscal year 2020. Diluted earnings per share were $1.90, a slight decrease from $1.93 in the same period last year, attributed to higher non-operating expenses and other factors.

Accenture maintained a strong liquidity position with $6.44 billion in cash and cash equivalents as of May 31, 2020. For the nine months ended May 31, 2020, cash flow from operations was $5.06 billion, an increase from $4.51 billion in the prior year. The company also bolstered its liquidity by adding a $1 billion syndicated loan facility in June 2020.

For the third quarter, North America revenues grew 2% in local currency, while Europe saw a 2% decrease, and Growth Markets increased by 5%. By type of work, consulting revenues decreased 2% in local currency, while outsourcing revenues grew by 5%.