01—Abstract
Summary
Summary of the 10-Q filed June 23, 2022. Cited figures are marked; the original filing is the authoritative source.
Accenture plc reported strong financial performance for the third quarter and first nine months of fiscal year 2022, with significant revenue growth driven by robust demand for its consulting and outsourcing services across all geographic markets.
Revenues increased by 22% in U.S. dollars (27% in local currency) for the quarter and 24% (27% in local currency) for the nine-month period, reflecting strong client engagement in digital transformations. The company demonstrated operational efficiency with an operating margin of 16.1% for the quarter, despite facing increased labor costs due to inflation. Diluted Earnings Per Share (EPS) saw a healthy increase to $2.79a for the quarter and $8.11 for the nine months, reflecting the company's profitability.
Accenture also returned substantial capital to shareholders, repurchasing $3.5 billionb in shares and paying $1.8 billion in dividends during the nine-month period, underscoring its commitment to shareholder value. While the company experienced a $96 million loss from the disposition of its Russia business, this was offset by the overall positive performance. Accenture maintains a strong liquidity position with $6.7 billion in cash and cash equivalents and ample borrowing facilities, positioning it well for continued growth and investment.
02—Key points
Key Highlights
- Revenues grew by 22% year-over-year in U.S. dollars to $16.2 billion for Q3 FY22, and by 27% in local currency, indicating strong market demand.
- Diluted Earnings Per Share (EPS) increased by 16% to $2.79 for Q3 FY22, demonstrating improved profitability.
- Operating margin expanded slightly to 16.1% for Q3 FY22, despite inflationary pressures on labor costs.
- New bookings reached $17.0 billion for Q3 FY22, signaling continued strong future revenue potential.
- Accenture returned $5.4 billion to shareholders in the first nine months of FY22 through $3.5 billion in share repurchases and $1.8 billion in dividends.
- The company disposed of its Russia business in Q3 FY22, resulting in a non-operating loss of $96 million.
- Workforce grew significantly by approximately 141,000 employees year-over-year to 710,000 as of May 31, 2022, to meet demand.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2022, Accenture plc kept $0.11.
- Revenue$16.16B100.0%
- Cost of revenue−$10.84B67.1%
- Gross profit$5.31B32.9%
- Operating costs−$2.71B16.8%
- Operating income$2.60B16.1%
- Interest, other & tax−$817.0M5.1%
- Net income$1.79B11.1%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2022filed June 23, 2022Financial Statements
Q3 FY2022 against Q3 FY2021
| Line item | Q3 FY2022Q3 FY2021 | Change |
|---|---|---|
| Revenue | $16.16B$13.26B | +21.8% |
| Cost of Revenue | $10.84B$8.86B | +22.4% |
| Gross Profit | $5.31B$4.40B | +20.7% |
| Operating Expenses | $13.56B$11.15B | +21.6% |
| Operating Income | $2.60B$2.12B | +22.9% |
| Interest Expense | $12.05M$28.74M | −58.1% |
| Net Income | $1.79B$1.55B | +15.3% |
| EPS (Basic) | $2.82$2.44 | +15.6% |
| EPS (Diluted) | $2.79$2.40 | +16.3% |
| Shares Outstanding (Basic) | 632.75M635.20M | −0.4% |
| Shares Outstanding (Diluted) | 641.00M645.45M | −0.7% |
05—Questions
Frequently Asked Questions
What was Accenture's revenue performance in Q3 FY22?
Accenture reported strong revenue growth in the third quarter of fiscal year 2022. Revenues increased by 22% in U.S. dollars to $16.2 billion and by 27% in local currency compared to the prior year period. This growth was driven by robust demand for consulting and outsourcing services across all its geographic markets.
How did Accenture's profitability fare in this quarter?
Profitability remained strong, with an operating margin of 16.1% for Q3 FY22, a slight expansion from 16.0% in the prior year quarter. Diluted Earnings Per Share (EPS) increased by 16% to $2.79, compared to $2.40 in Q3 FY21, reflecting the company's ability to manage costs and maintain pricing power despite inflationary pressures.
What is the company's outlook regarding shareholder returns and capital allocation?
Accenture continues to prioritize returning capital to shareholders. In the first nine months of FY22, the company returned $5.4 billion to shareholders, comprised of $3.5 billion in share repurchases and $1.8 billion in dividends. The company intends to continue using a significant portion of cash generated from operations for share repurchases.
Were there any significant one-off events impacting the results?
Yes, Accenture disposed of its business in Russia during the third quarter of fiscal year 2022, which resulted in a non-operating loss of $96 million. This loss had a negative impact on diluted EPS, reducing it by approximately $0.15 for the quarter.
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