01—Abstract
Summary
Summary of the 10-Q filed December 16, 2021. Cited figures are marked; the original filing is the authoritative source.
Accenture plc reported strong financial performance for the first quarter of fiscal year 2022, ending November 30, 2021.
Total revenues reached $14.97 billiona, a significant 27% increase year-over-year in both U.S. dollars and local currency, driven by robust demand across all geographic markets, industry groups, and service types. The company highlighted strong growth in both its consulting (up 33% in USD) and outsourcing (up 21% in USD) businesses. New bookings also saw a substantial increase of 30% to $16.8 billion.
Operating income grew by 29% to $2.43 billionb, resulting in an operating margin of 16.3%, a slight expansion from the prior year's 16.1%. Diluted earnings per share (EPS) rose to $2.78 from $2.32 in the prior year's comparable period, excluding the impact of investment gains in the prior year. The company also returned $1.5 billion to shareholders through share purchases and dividends, underscoring its commitment to capital return.
Key balance sheet improvements include a substantial increase in goodwill, primarily driven by acquisitions, reflecting continued investment in strategic growth. While cash and cash equivalents decreased from the prior quarter due to significant investments in acquisitions and share repurchases, the company maintained a strong liquidity position with substantial available borrowing facilities. The company's outlook remains positive, with strong demand anticipated for its digital transformation services.
02—Key points
Key Highlights
- Revenues grew by 27% year-over-year to $14.97 billion, demonstrating strong client demand for Accenture's services.
- New bookings increased by 30% year-over-year to $16.8 billion, indicating a healthy pipeline of future revenue.
- Operating income increased by 29% year-over-year to $2.43 billion, with operating margin expanding slightly to 16.3%.
- Diluted earnings per share (EPS) increased to $2.78 from $2.32 (adjusted for prior year gains), reflecting improved profitability.
- The company returned $1.5 billion to shareholders in the quarter through share purchases ($845 million) and dividends ($613 million).
- Goodwill increased significantly by approximately $1.27 billion, driven by strategic acquisitions, indicating ongoing investment in growth.
- Cash and cash equivalents decreased from $8.17 billion to $5.64 billion, largely due to substantial investments in acquisitions and share repurchases.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2022, Accenture plc kept $0.12.
- Revenue$14.97B100.0%
- Cost of revenue−$10.05B67.1%
- Gross profit$4.92B32.9%
- Operating costs−$2.48B16.6%
- Operating income$2.43B16.3%
- Interest, other & tax−$643.3M4.3%
- Net income$1.79B12.0%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2022filed December 16, 2021Financial Statements
Q1 FY2022 against Q1 FY2021
| Line item | Q1 FY2022Q1 FY2021 | Change |
|---|---|---|
| Revenue | $14.97B$11.76B | +27.2% |
| Cost of Revenue | $10.05B$7.86B | +27.8% |
| Gross Profit | $4.92B$3.90B | +26.1% |
| Operating Expenses | $12.53B$9.87B | +26.9% |
| Operating Income | $2.43B$1.89B | +28.8% |
| Interest Expense | $11.18M$8.85M | +26.3% |
| Net Income | $1.79B$1.50B | +19.4% |
| EPS (Basic) | $2.83$2.37 | +19.4% |
| EPS (Diluted) | $2.78$2.32 | +19.8% |
| Shares Outstanding (Basic) | 632.28M634.27M | −0.3% |
| Shares Outstanding (Diluted) | 644.92M646.88M | −0.3% |
05—Questions
Frequently Asked Questions
What was Accenture's revenue growth in the reported quarter, and what drove it?
Accenture reported revenue growth of 27% year-over-year, reaching $14.97 billion. This growth was strong across all geographic markets (North America, Europe, Growth Markets), industry groups, and service types (Consulting and Outsourcing). The company highlighted strong client demand for digital transformation services, cloud adoption, and operational efficiency initiatives as key drivers.
How did Accenture's profitability fare in this quarter compared to the prior year?
Accenture demonstrated improved profitability. Operating income increased by 29% to $2.43 billion, and the operating margin expanded slightly from 16.1% to 16.3%. Diluted earnings per share (EPS) rose to $2.78 from $2.32 in the comparable prior-year period (after adjusting for investment gains in the prior year), indicating stronger bottom-line performance.
What is Accenture's strategy for capital allocation, particularly regarding shareholder returns?
Accenture continues to focus on returning capital to shareholders. In this quarter, the company returned $1.5 billion to shareholders through $845 million in share repurchases and $613 million in dividends. The company stated its intention to use a significant portion of cash generated from operations for share repurchases during the remainder of fiscal year 2022.
What is the significance of the increase in Goodwill?
The increase in Goodwill, which rose by approximately $1.27 billion during the quarter, is primarily attributed to acquisitions. This indicates Accenture's strategic approach to investing in and integrating businesses to expand its service offerings and market reach, aligning with its growth strategy.
06—Continue