10-QPeriod: Q2 FY2024

Accenture plc Quarterly Report for Q2 Ended Feb 29, 2024

Filed March 21, 2024For Securities:ACN

Summary

Accenture plc reported stable revenues of $15.8 billion for the second quarter of fiscal year 2024, flat year-over-year in both U.S. dollars and local currency. Despite macroeconomic uncertainties and a competitive environment impacting client spending, particularly in consulting services, the company saw growth in managed services and strong performance in specific industries like Health & Public Service and Resources. Diluted earnings per share increased by 10% to $2.63, reflecting improved operating margins and effective management of business optimization costs. The company also continued its commitment to returning capital to shareholders, with $2.1 billion in cash returned during the quarter through share repurchases and dividends. Accenture's strong balance sheet and operational efficiency position it to navigate current market conditions while investing in future growth areas like cloud, data, and AI.

Financial Highlights

55 data points
Beta

Revenue

$15.80B

30.9% Gross Margin

Net Income

$1.67B

10.6% Net Margin

EPS (Diluted)

$2.63

Total Assets

$51.31B

Cash & Equivalents

$5.12B

Free Cash Flow

$1.99B

Financial Statements
Beta
Revenue$15.80B
Cost of Revenue$10.92B
Gross Profit$4.88B
Operating Expenses$13.75B
Operating Income$2.05B
Interest Expense$10.30M
Net Income$1.67B
EPS (Basic)$2.66
EPS (Diluted)$2.63
Shares Outstanding (Basic)629.02M
Shares Outstanding (Diluted)636.80M

Key Highlights

  • 1Revenues remained flat at $15.8 billion for the second quarter of fiscal 2024 compared to the prior year period, indicating resilience in a challenging economic climate.
  • 2Diluted Earnings Per Share (EPS) saw a significant increase of 10% to $2.63, demonstrating effective cost management and operational efficiency.
  • 3Operating margin improved to 13.0% from 12.3% year-over-year, driven by better cost of services management, despite increased sales and marketing expenses.
  • 4New bookings totaled $21.6 billion, a slight decrease of 2% in both U.S. dollars and local currency, reflecting cautious client spending, particularly in consulting.
  • 5Managed services revenue grew by 3% in local currency, indicating continued demand for outsourced and ongoing client support services.
  • 6The company returned $2.1 billion in cash to shareholders through share purchases ($1.3 billion) and dividends ($813 million), underscoring a commitment to capital return.
  • 7Goodwill increased significantly by approximately $2.4 billion to $17.9 billion, reflecting strategic acquisitions aimed at expanding service capabilities.

Frequently Asked Questions

Accenture's revenues for the second quarter of fiscal year 2024 were $15.8 billion, which was flat year-over-year in both U.S. dollars and local currency. This indicates stable performance amidst economic uncertainties, with growth in managed services and specific industries partially offsetting a decline in consulting revenue and certain sectors like Communications, Media & Technology and Financial Services.

Profitability improved, with operating margin increasing to 13.0% from 12.3% in the prior year. Diluted earnings per share (EPS) saw a substantial increase of 10% to $2.63. This improvement was driven by effective management of operating expenses, particularly cost of services, and a lower effective tax rate, partly due to tax benefits from share-based payments.

Accenture incurred $115 million in business optimization costs during the second quarter of fiscal 2024, primarily for employee severance, down from $244 million in the prior year. These costs, while impacting reported results, are managed strategically. When adjusted for these costs, the adjusted operating margin was 13.7%, and adjusted diluted EPS was $2.77, showing continued operational strength.

New bookings for the quarter were $21.6 billion, a slight 2% decrease, reflecting cautious client spending, particularly in consulting. However, the company has significant remaining performance obligations totaling approximately $27 billion as of February 29, 2024. Accenture expects to recognize about 51% of these obligations as revenue in fiscal 2024, indicating a solid revenue base for the remainder of the year.