Accenture : Second Quarter Fiscal 2025 Earnings Press Release

Published: 2025-03-20 06:50:07 ET ACN

Accenture Reports Second-Quarter Fiscal 2025 Results

Accenture's strong Q2 FY25 results reflect broad-based revenue growth across geographic

markets, industry groups and types of work; Company updates fiscal 2025 outlook

NEW YORK; March 20, 2025 - Accenture (NYSE: ACN) reported financial results for the second quarter of fiscal 2025 ended February 28, 2025.

All comparisons are to the second quarter of fiscal 2024, unless noted otherwise.

Accenture Chair and CEO Julie Sweet

"Our second quarter results demonstrate that we continue to deliver on our strategy to lead reinvention for our clients and return to strong growth in FY25, with broad-based growth across markets, industries, and the types of work our clients seek from us. The trust and confidence in our unique strengths and capabilities is reflected in 32 clients with quarterly bookings greater than $100 million and we are very pleased to have another milestone quarter in Gen AI with $1.4 billion in new bookings. Our continued growth is made possible by the extraordinary work of our more than 800,000 people around the world who focus on delivering value to our clients every day."

Second Quarter Fiscal 2025 Key Metrics

Fiscal 2025 Business Outlook Highlights

1Adjusted financial measures presented in this release are non-GAAP financial measures that exclude business optimization costs recorded in fiscal 2024 as further described in this release.

Q2 FY25 Financial Review

New Bookings

New bookings for the second quarter of fiscal 2025 were $20.91 billion, a decrease of 3% in U.S. dollars and flat in local currency compared to the second quarter of fiscal 2024.

Revenues

Revenues for the second quarter of fiscal 2025 were $16.66 billion, an increase of 5% in U.S. dollars and 8.5% in local currency, and were at the top end of the company's guided range of $16.2 billion to $16.8 billion. The foreign-exchange impact for the quarter was approximately negative 3.0%, compared with the negative 2.5% assumption provided in the company's first-quarter earnings release.

Revenues by Type of Work

Revenues

Increase (Decrease) from Q2 FY24

(in billions)

U.S. Dollars

Local Currency

Consulting

$8.28

3 %

6 %

Managed Services

$8.38

8 %

11 %

Total

$16.66

5 %

8.5 %

Revenues by Geographic Market

Americas2

EMEA

Asia Pacific2

Total

Revenues

Increase (Decrease) from Q2 FY24

(in billions)

U.S. Dollars

Local Currency

$8.55

9 %

11 %

$5.80

4 %

8 %

$2.30

(3)%

1 %

$16.66

5 %

8.5 %

Revenues by Industry Group

Revenues

Increase (Decrease) from Q2 FY24

Communications, Media &

(in billions)

U.S. Dollars

Local Currency

$2.73

3 %

6 %

Technology

Financial Services

$3.01

7 %

11 %

Health & Public Service

$3.61

8 %

10 %

Products

$5.05

6 %

9 %

Resources

$2.26

1 %

5 %

Total

$16.66

5 %

8.5 %

Amounts in tables may not total due to rounding.

2During the first quarter of fiscal 2025, our Latin America market unit moved from Growth Markets to North America. With this change, North America became the Americas market and Growth Markets became the Asia Pacific market. Prior period amounts have been reclassified to conform with the current period presentation.

Q2 FY25 Financial Review

Operating Margin and Operating Income

Gross margin (gross profit as a percentage of revenues) for the quarter was 29.9% compared to 30.9% in the second quarter of fiscal 2024. Selling, general and administrative (SG&A) expenses for the quarter were $2.73 billion, or 16.4% of revenues, compared with $2.72 billion, or 17.2% of revenues, for the second quarter of fiscal 2024.

The company's GAAP effective tax rate for the quarter was 20.4%, compared with 18.4% for the second quarter of fiscal 2024. For the second quarter of fiscal 2024, the adjusted effective tax rate was 18.8%.

GAAP net income for the quarter was $1.82 billion, compared with $1.71 billion for the second quarter of fiscal 2024. For the second quarter of fiscal 2024, adjusted net income was $1.80 billion.

Earnings Per Share

Year over Year Increase in Diluted Earnings Per Share

Second Quarter Fiscal 2024 Adjusted EPS

$2.77

Higher revenue and operating results

$0.11

Lower share count

$0.01

Lower non-operating income

$(0.01)

Higher effective tax rate

$(0.06)

Second Quarter Fiscal 2025 GAAP EPS

$2.82

Q2 FY25 Financial Review

Cash Flow

Second Quarter Fiscal 2025

Second Quarter Fiscal 2024

(in billions)

Operating Cash Flow

$2.85

$2.10

Less: Property & Equipment Additions

$0.17

$0.11

Free Cash Flow

$2.68

$1.99

Days services outstanding, or DSOs, were 48 days at February 28, 2025, compared with 46 days at August 31, 2024 and 43 days at February 29, 2024.

Accenture's total cash balance at February 28, 2025 was $8.5 billion, compared with $5.0 billion at August 31, 2024.

Dividend

Share Repurchase Activity

Business Outlook

Third Quarter Fiscal 2025 Outlook

Revenues

$16.9B

- $17.5B

Revenue Growth (Local Currency)

- 7%

Foreign-Exchange Impact on Results

Approximately negative 0.5%

Full Year Fiscal 2025 Outlook

As of March 20, 2025

As of December 19, 2024

Revenue Growth (Local

- 7%

Currency)

Foreign-Exchange Impact on

Approximately negative 0.5%

Results

Operating Margin

15.6%

- 15.7%

15.6%

- 15.8%

80 - 90 bps expansion over FY24 GAAP

80 - 100 bps expansion over FY24 GAAP

10 - 20 bps over FY24 adjusted op margin*

10 - 30 bps over FY24 adjusted op margin*

Annual Effective Tax Rate

22.5%

- 24.5%

22.5%

- 24.5%

Diluted Earnings Per Share

$12.55

- $12.79

$12.43

- $12.79

10% - 12% increase over FY24 GAAP

9% - 12% increase over FY24 GAAP

5% - 7% over FY24 adjusted EPS**

4% - 7% over FY24 adjusted EPS**

Operating Cash Flow

$9.4B - $10.1B

Property & Equipment Additions

$600M

Free Cash Flow

$8.8B

- $9.5B

$8.8B

- $9.5B

Capital Return

at least $8.3B

*Fiscal 2024 adjusted operating margin excluded $438 million for business optimization costs. **Fiscal 2024 adjusted EPS excluded $0.51 for business optimization costs.

Conference Call and Webcast Details

Accenture will host a conference call at 8:00 a.m. EDT today to discuss its second quarter fiscal 2025 financial results. To participate in the teleconference, please dial +1 (877) 883-0383 [+1 (412) 317-6061 outside the U.S., Puerto Rico and Canada] and enter access code 2669177 approximately 15 minutes before the scheduled start of the call.

The conference call will also be accessible live via webcast on the Investor Relations section of the Accenture website at accenture.com. A replay will be available on this website following the call.

About Accenture

Accenture is a leading global professional services company that helps the world's leading businesses, governments and other organizations build their digital core, optimize their operations, accelerate revenue growth and enhance citizen services-creating tangible value at speed and scale. We are a talent- and innovation-led company with approximately 801,000 people serving clients in more than 120 countries. Technology is at the core of change today, and we are one of the world's leaders in helping drive that change, with strong ecosystem relationships. We combine our strength in technology and leadership in cloud, data and AI with unmatched industry experience, functional expertise and global delivery capability. Our broad range of services, solutions and assets across Strategy & Consulting, Technology, Operations, Industry X and Song, together with our culture of shared success and commitment to creating 360° value, enable us to help our clients reinvent and build trusted, lasting relationships. We measure our success by the 360° value we create for our clients, each other, our shareholders, partners and communities. Visit us at accenture.com.

360° Value Reporting

Accenture's goal is to create 360° value for our clients, people, shareholders, partners and communities. Our full 360° Value Report and online 360° Value Reporting Experience provide customizable reporting. To access, please visit the Accenture 360° Value Reporting Experience at accenture.com/reportingexperience.

Non-GAAP Financial Information

This news release includes certain non-GAAP financial information as defined by Securities and Exchange Commission Regulation G. Pursuant to the requirements of this regulation, reconciliations of this non-GAAP financial information to Accenture's financial statements as prepared under generally accepted accounting principles (GAAP) are included in this press release. Financial results "in local currency" are calculated by restating current-period activity into U.S. dollars using the comparable prior-year period's foreign-currency exchange rates. Accenture's management believes providing investors with this information gives additional insights into Accenture's results of operations. While Accenture's management believes that the non-GAAP financial measures herein are useful in evaluating Accenture's operations, this information should be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with GAAP. Accenture provides full-year revenue guidance on a local-currency basis and not in U.S. dollars because the impact of foreign exchange rate fluctuations could vary significantly from the company's stated assumptions.

Forward-Looking Statements

Except for the historical information and discussions contained herein, statements in this news release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "may," "will," "should," "likely," "anticipates," "aspires," "expects," "intends," "plans," "projects," "believes," "estimates," "positioned," "outlook," "goal," "target," and similar expressions are used to identify these forward-looking statements. These statements are not guarantees of future performance nor promises that goals or targets will be met, and involve a number of risks, uncertainties and other factors that are difficult to predict and could cause actual results to differ materially from those expressed or implied. These risks include, without limitation, risks that: Accenture's results of operations have been, and may in the future be, adversely affected by volatile, negative or uncertain economic and geopolitical conditions and the effects of these conditions on the company's clients' businesses and levels of business activity; Accenture's business depends on generating and maintaining client demand for the company's services and solutions including through the adaptation and expansion of its services and solutions in response to ongoing changes in technology and offerings, and a significant reduction in such demand or an inability to respond to the evolving

technological environment could materially affect the company's results of operations; risks and uncertainties related to the development and use of AI could harm our business, damage our reputation or give rise to legal or regulatory action; if Accenture is unable to match people and their skills with client demand around the world and attract and retain professionals with strong leadership skills, the company's business, the utilization rate of the company's professionals and the company's results of operations may be materially adversely affected; Accenture faces legal, reputational and financial risks from any failure to protect client and/or company data from security incidents or cyberattacks; the markets in which Accenture operates are highly competitive, and Accenture might not be able to compete effectively; Accenture's ability to attract and retain business and employees may depend on its reputation in the marketplace; if Accenture does not successfully manage and develop its relationships with key ecosystem partners or fails to anticipate and establish new alliances in new technologies, the company's results of operations could be adversely affected; Accenture's profitability could materially suffer due to pricing pressure, if the company is unable to remain competitive, if its cost- management strategies are unsuccessful or if it experiences delivery inefficiencies or fail to satisfy certain agreed-upon targets or specific service levels; changes in Accenture's level of taxes, as well as audits, investigations and tax proceedings, or changes in tax laws or in their interpretation or enforcement, could have a material adverse effect on the company's effective tax rate, results of operations, cash flows and financial condition; Accenture's results of operations could be materially adversely affected by fluctuations in foreign currency exchange rates; Accenture's debt obligations could adversely affect our business and financial condition; changes to accounting standards or in the estimates and assumptions Accenture makes in connection with the preparation of its consolidated financial statements could adversely affect its financial results; as a result of Accenture's geographically diverse operations and our strategy to continue to grow in our key markets around the world, the company is more susceptible to certain risks; if Accenture is unable to manage the organizational challenges associated with its size, the company might be unable to achieve its business objectives; Accenture might not be successful at acquiring, investing in or integrating businesses, entering into joint ventures or divesting businesses; Accenture's business could be materially adversely affected if the company incurs legal liability; Accenture's work with government clients exposes the company to additional risks inherent in the government contracting environment; Accenture's global operations expose the company to numerous and sometimes conflicting legal and regulatory requirements; if Accenture is unable to protect or enforce its intellectual property rights or if Accenture's services or solutions infringe upon the intellectual property rights of others or the company loses its ability to utilize the intellectual property of others, its business could be adversely affected; Accenture may be subject to criticism and negative publicity related to its incorporation in Ireland; as well as the risks, uncertainties and other factors discussed under the "Risk Factors" heading in Accenture plc's most recent Annual Report on Form 10-K, as updated in Item 1A, "Risk Factors" in its Quarterly Report on Form 10-Q for the second quarter of fiscal 2025, and other documents filed with or furnished to the Securities and Exchange Commission. Statements in this news release speak only as of the date they were made, and Accenture undertakes no duty to update any forward-looking statements made in this news release or to conform such statements to actual results or changes in Accenture's expectations.

Rachel Frey

Katie O'Conor

Accenture Media Relations

Accenture Investor Relations

+1 917 452 4421

+1 973 301 3275

rachel.frey@accenture.com

catherine.m.oconor@accenture.com

Accenture plc

Consolidated Income Statements

(In thousands of U.S. dollars, except share and per share amounts) (Unaudited)

Three Months Ended

Six Months Ended

February 28,

% of

February 29,

% of

February 28,

% of

February 29,

% of

2025

Revenues

2024

Revenues

2025

Revenues

2024

Revenues

REVENUES:

Revenues

16,659,301

100.0 %

15,799,514

100.0 %

34,348,846

100.0 %

32,023,817

100.0 %

OPERATING EXPENSES:

Cost of services

11,684,313

70.1 %

10,921,045

69.1 %

23,551,029

68.6 %

21,697,407

67.8 %

Sales and marketing

1,676,781

10.1 %

1,631,185

10.3 %

3,487,890

10.2 %

3,341,076

10.4 %

General and administrative costs

1,053,493

6.3 %

1,085,448

6.9 %

2,116,736

6.2 %

2,118,947

6.6 %

Business optimization costs

- %

115,409

0.7 %

- %

255,073

0.8 %

Total operating expenses

14,414,587

13,753,087

29,155,655

27,412,503

OPERATING INCOME

2,244,714

13.5 %

2,046,427

13.0 %

5,193,191

15.1 %

4,611,314

14.4 %

Interest income

76,113

65,269

152,140

167,249

Interest expense

(64,669)

(10,305)

(94,711)

(24,800)

Other income (expense), net

32,616

(5,652)

(6,601)

(41,371)

INCOME BEFORE INCOME TAXES

2,288,774

13.7 %

2,095,739

13.3 %

5,244,019

15.3 %

4,712,392

14.7 %

Income tax expense

466,333

386,537

1,105,388

993,209

NET INCOME

1,822,441

10.9 %

1,709,202

10.8 %

4,138,631

12.0 %

3,719,183

11.6 %

Net income attributable to

noncontrolling interest in Accenture

(1,685)

(1,675)

(3,855)

(3,691)

Canada Holdings Inc.

Net income attributable to

(32,681)

(32,668)

(67,807)

(67,189)

noncontrolling interests - other (1)

NET INCOME ATTRIBUTABLE TO

1,788,075

10.7 %

1,674,859

10.6 %

4,066,969

11.8 %

3,648,303

11.4 %

ACCENTURE PLC

CALCULATION OF EARNINGS PER

Net income attributable to Accenture plc

1,788,075

1,674,859

4,066,969

3,648,303

Net income attributable to

noncontrolling interest in Accenture

1,685

1,675

3,855

3,691

Canada Holdings Inc. (2)

Net income for diluted earnings per

1,789,760

1,676,534

4,070,824

3,651,994

share calculation

WEIGHTED AVERAGE SHARES:

Basic

626,824,946

629,016,555

626,247,762

628,488,831

Diluted

634,211,978

636,797,814

634,543,212

637,069,356

EARNINGS PER SHARE:

Basic

2.85

2.66

6.49

5.80

Diluted

2.82

2.63

6.42

5.73

Cash dividends per share

1.48

1.29

2.96

2.58

Accenture plc

Summary of Revenues

(In thousands of U.S. dollars) (Unaudited)

Percent

Increase

Three Months Ended

(Decrease)

U.S.

Local

February 28, 2025

February 29, 2024

Dollars

Currency

GEOGRAPHIC MARKETS

Americas (1)

8,553,098

7,815,543

9 %

11 %

EMEA

5,803,875

5,598,850

Asia Pacific (1)

2,302,328

2,385,121

(3)

Total Revenues

16,659,301

15,799,514

5 %

8.5 %

INDUSTRY GROUPS

Communications, Media & Technology

2,729,655

2,654,137

3 %

6 %

Financial Services

3,010,430

2,808,930

Health & Public Service

3,608,912

3,334,039

Products

5,051,839

4,761,838

Resources

2,258,465

2,240,570

Total Revenues

16,659,301

15,799,514

5 %

8.5 %

TYPE OF WORK

Consulting

8,282,260

8,021,034

3 %

6 %

Managed Services

8,377,041

7,778,480

Total Revenues

16,659,301

15,799,514

5 %

8.5 %

Percent

Increase

Six Months Ended

(Decrease)

U.S.

Local

February 28, 2025

February 29, 2024

Dollars

Currency

GEOGRAPHIC MARKETS

Americas (1)

17,286,193

15,842,515

9 %

11 %

EMEA

12,215,827

11,402,492

Asia Pacific (1)

4,846,826

4,778,810

Total Revenues

34,348,846

32,023,817

7 %

8.3 %

INDUSTRY GROUPS

Communications, Media & Technology

5,587,540

5,323,585

5 %

6 %

Financial Services

6,179,265

5,842,508

Health & Public Service

7,421,521

6,711,505

Products

10,477,156

9,621,825

Resources

4,683,364

4,524,394

Total Revenues

34,348,846

32,023,817

7 %

8.3 %

TYPE OF WORK

Consulting

17,327,488

16,477,540

5 %

6 %

Managed Services

17,021,358

15,546,277

Total Revenues

34,348,846

32,023,817

7 %

8.3 %

Accenture plc

Operating Income by Geographic Market (In thousands of U.S. dollars)

(Unaudited)

Three Months Ended

February 28, 2025

February 29, 2024

Operating

Increase

Income

Margin

Income

Margin

(Decrease)

Americas (1)

1,240,443

15 %

$ 1,083,257

14 %

157,186

EMEA

639,235

529,012

110,223

Asia Pacific (1)

365,036

434,158

(69,122)

Total Operating Income

2,244,714

13.5 %

$ 2,046,427

13.0 %

198,287

Six Months Ended

February 28, 2025

February 29, 2024

Operating

Increase

Income

Margin

Income

Margin

(Decrease)

Americas (1)

2,617,677

15 %

$ 2,376,238

15 %

241,439

EMEA

1,675,212

1,352,613

322,599

Asia Pacific (1)

900,302

882,463

17,839

Total Operating Income

5,193,191

15.1 %

$ 4,611,314

14.4 %

581,877

Disclaimer

Accenture plc published this content on March 20, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 20, 2025 at 10:49:10.961.