01—Abstract
Summary
Summary of the 10-Q filed June 22, 2023. Cited figures are marked; the original filing is the authoritative source.
Accenture plc reported solid revenue growth in its third quarter of fiscal year 2023, with revenues reaching $16.6 billiona, a 3% increase in U.S. dollars and 5% in local currency year-over-year.
This growth was driven by strong performance in Managed Services, which saw a 10% increase in U.S. dollar revenue, and positive contributions from Europe and Growth Markets. However, the Consulting segment experienced a slight revenue decline of 4% in U.S. dollars. The company reported significant business optimization costs of $347 millionb in the quarter, primarily related to employee severance, which impacted operating income and margin.
Excluding these costs, adjusted operating margin expanded by 20 basis points. Diluted earnings per share (EPS) were $3.15c, an increase from the prior year, with adjusted EPS also showing a healthy increase, reflecting both the impact of business optimization costs and a notable gain on an investment. Accenture returned $1.5 billion to shareholders through share purchases and dividends.
02—Key points
Key Highlights
- Revenues grew 3% in U.S. dollars to $16.6 billion, and 5% in local currency, indicating resilient demand.
- Managed Services revenue increased by 10% in U.S. dollars, demonstrating strong client adoption of outsourcing and transformation services.
- Consulting revenue saw a slight decrease of 4% in U.S. dollars, signaling a potential slowdown in advisory services or a shift in client spending priorities.
- Significant business optimization costs of $347 million impacted reported operating income, highlighting restructuring efforts.
- Diluted Earnings Per Share (EPS) rose to $3.15, with adjusted EPS showing a 14% increase, reflecting operational performance excluding one-time charges and gains.
- New bookings increased to $17.2 billion, a 2% rise in U.S. dollars and 4% in local currency, indicating continued pipeline strength.
- Shareholder returns remained robust with $1.5 billion distributed through share repurchases and dividends.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2023, Accenture plc kept $0.12.
- Revenue$16.56B100.0%
- Cost of revenue−$11.04B66.6%
- Gross profit$5.53B33.4%
- Operating costs−$3.17B19.1%
- Operating income$2.36B14.2%
- Interest, other & tax−$349.3M2.1%
- Net income$2.01B12.1%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2023filed June 22, 2023Financial Statements
Q3 FY2023 against Q3 FY2022
| Line item | Q3 FY2023Q3 FY2022 | Change |
|---|---|---|
| Revenue | $16.56B$16.16B | +2.5% |
| Cost of Revenue | $11.04B$10.84B | +1.8% |
| Gross Profit | $5.53B$5.31B | +4.0% |
| Operating Expenses | $14.21B$13.56B | +4.8% |
| Operating Income | $2.36B$2.60B | −9.4% |
| Interest Expense | $11.21M$12.05M | −7.0% |
| Net Income | $2.01B$1.79B | +12.5% |
| EPS (Basic) | $3.18$2.82 | +12.8% |
| EPS (Diluted) | $3.15$2.79 | +12.9% |
| Shares Outstanding (Basic) | 631.54M632.75M | −0.2% |
| Shares Outstanding (Diluted) | 638.74M641.00M | −0.4% |
05—Questions
Frequently Asked Questions
How did Accenture's revenue perform in Q3 FY23 compared to Q3 FY22?
Accenture reported revenues of $16.6 billion for the third quarter of fiscal year 2023, representing a 3% increase in U.S. dollars and a 5% increase in local currency compared to the same period in fiscal year 2022.
What is the impact of the business optimization costs on Accenture's profitability?
Accenture incurred $347 million in business optimization costs during the third quarter of fiscal year 2023, primarily for employee severance. These costs reduced reported operating income and operating margin. Excluding these costs, the adjusted operating margin showed an expansion of 20 basis points.
How did the different service lines (Consulting vs. Managed Services) perform?
Managed Services revenue grew strongly by 10% in U.S. dollars, while Consulting revenue experienced a slight decline of 4% in U.S. dollars. This suggests continued client preference for longer-term managed services engagements over shorter-term consulting projects.
What is the outlook for future revenue based on new bookings?
New bookings for the quarter were $17.2 billion, up 2% in U.S. dollars and 4% in local currency year-over-year. This indicates a healthy pipeline of future work, with Managed Services bookings showing robust growth.
06—Continue