10-QPeriod: Q1 FY2025

Accenture plc Quarterly Report for Q1 Ended Nov 30, 2024

Filed December 19, 2024For Securities:ACN

Summary

Accenture plc (ACN) reported strong financial results for the first quarter of fiscal year 2025, reflecting robust revenue growth and improved profitability. Revenues reached $17.7 billion, an increase of 9% in U.S. dollars and 8% in local currency, driven by solid performance across all geographic segments and strong demand in managed services. The company also saw a significant improvement in operating income, which rose by 15% to $2.95 billion, with the operating margin expanding to 16.7% from 15.8% in the prior year period. Diluted earnings per share (EPS) also showed considerable strength, increasing by 16% to $3.59. This growth was supported by higher revenues, a lower effective tax rate, and improved operational efficiency. The company's balance sheet remains strong, with cash and cash equivalents increasing to $8.3 billion. Accenture returned $1.8 billion to shareholders in the quarter through dividends and share repurchases, demonstrating a commitment to shareholder value. The company's continued investment in its workforce and its ability to meet evolving client demands, particularly in areas like AI and digital transformation, position it well for future growth.

Financial Highlights

55 data points
Beta

Revenue

$17.69B

32.9% Gross Margin

Net Income

$2.28B

12.9% Net Margin

EPS (Diluted)

$3.59

Total Assets

$59.87B

Cash & Equivalents

$8.31B

Free Cash Flow

$870.28M

Financial Statements
Beta
Revenue$17.69B
Cost of Revenue$11.87B
Gross Profit$5.82B
Operating Expenses$14.74B
Operating Income$2.95B
Interest Expense$30.04M
Net Income$2.28B
EPS (Basic)$3.64
EPS (Diluted)$3.59
Shares Outstanding (Basic)625.68M
Shares Outstanding (Diluted)634.66M

Key Highlights

  • 1Revenues increased by 9% in U.S. dollars to $17.7 billion, and by 8% in local currency, indicating broad-based demand.
  • 2Operating income grew by 15% to $2.95 billion, with operating margin expanding to 16.7% (up from 15.8% in Q1 FY24).
  • 3Diluted earnings per share (EPS) rose by 16% to $3.59, showcasing strong bottom-line performance.
  • 4Cash and cash equivalents significantly increased to $8.3 billion, strengthening the company's liquidity position.
  • 5Managed services revenue saw robust growth of 11% in both U.S. dollars and local currency, highlighting strength in this segment.
  • 6The company returned $1.8 billion to shareholders in the quarter through $926 million in dividends and $898 million in share repurchases.
  • 7Annualized voluntary attrition rate increased slightly to 12% from 11% in the prior year's comparable quarter.

Frequently Asked Questions

Accenture reported revenue of $17.7 billion for the first quarter of fiscal year 2025, representing a 9% increase in U.S. dollars and an 8% increase in local currency compared to the prior year period. The growth was driven by strong performance across all geographic markets (Americas, EMEA, Asia Pacific) and particularly robust demand in managed services (up 11% in local currency). Consulting revenue also grew, driven by demand for technology, data, and AI-led digital transformations, though at a slower pace than managed services.

Accenture demonstrated strong profitability in the first quarter of fiscal year 2025. Operating income increased by 15% to $2.95 billion, and the operating margin expanded to 16.7%, up from 15.8% in the same period last year. This improvement was driven by revenue growth, operational efficiencies, and a lower effective tax rate of 21.6%, down from 23.2% in the prior year quarter. Diluted earnings per share (EPS) also saw a significant increase of 16% to $3.59.

Accenture maintains a strong liquidity position, with cash and cash equivalents increasing to $8.3 billion as of November 30, 2024, up from $5.0 billion at the beginning of the quarter. In terms of capital return, the company returned $1.8 billion to shareholders during the first quarter of fiscal 2025. This included $926 million in dividends and $898 million in share repurchases, indicating a continued commitment to enhancing shareholder value.

Accenture's management noted that while there is significant economic and geopolitical uncertainty, which has impacted and may continue to impact client spending, particularly for shorter-duration consulting contracts, the company is seeing continued demand for large-scale transformations. They are also experiencing growing demand for managed services, cloud enablement, and cybersecurity. The company's ability to adapt and deliver value in areas like AI and digital transformation positions them to navigate these conditions. Accenture also raised $5 billion in senior notes, enhancing its financial flexibility.