01—Abstract
Summary
Summary of the 10-Q filed December 19, 2024. Cited figures are marked; the original filing is the authoritative source.
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 billiona, 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 billionb.
Accenture returned $1.8 billionc 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.
02—Key points
Key Highlights
- Revenues increased by 9% in U.S. dollars to $17.7 billion, and by 8% in local currency, indicating broad-based demand.
- Operating income grew by 15% to $2.95 billion, with operating margin expanding to 16.7% (up from 15.8% in Q1 FY24).
- Diluted earnings per share (EPS) rose by 16% to $3.59, showcasing strong bottom-line performance.
- Cash and cash equivalents significantly increased to $8.3 billion, strengthening the company's liquidity position.
- Managed services revenue saw robust growth of 11% in both U.S. dollars and local currency, highlighting strength in this segment.
- The company returned $1.8 billion to shareholders in the quarter through $926 million in dividends and $898 million in share repurchases.
- Annualized voluntary attrition rate increased slightly to 12% from 11% in the prior year's comparable quarter.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2025, Accenture plc kept $0.13.
- Revenue$17.69B100.0%
- Cost of revenue−$11.87B67.1%
- Gross profit$5.82B32.9%
- Operating costs−$2.87B16.2%
- Operating income$2.95B16.7%
- Interest, other & tax−$669.6M3.8%
- Net income$2.28B12.9%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed December 19, 2024Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Revenue | $17.69B$16.22B | +9.0% |
| Cost of Revenue | $11.87B$10.78B | +10.1% |
| Gross Profit | $5.82B$5.45B | +6.9% |
| Operating Expenses | $14.74B$13.66B | +7.9% |
| Operating Income | $2.95B$2.56B | +15.0% |
| Interest Expense | $30.04M$14.49M | +107.3% |
| Net Income | $2.28B$1.97B | +15.5% |
| EPS (Basic) | $3.64$3.14 | +15.9% |
| EPS (Diluted) | $3.59$3.10 | +15.8% |
| Shares Outstanding (Basic) | 625.68M628.00M | −0.4% |
| Shares Outstanding (Diluted) | 634.66M637.40M | −0.4% |
05—Questions
Frequently Asked Questions
What was Accenture's revenue growth in the first quarter of fiscal year 2025, and what were the key drivers?
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.
How did Accenture's profitability perform in the first quarter?
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.
What is Accenture's current liquidity position and how is it returning capital to shareholders?
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.
What is the outlook for Accenture's business given current economic conditions?
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.
06—Continue