• Revenue: $17.7 billion, an 8% increase in local currency.
• EPS: $3.59, reflecting 10% growth over adjusted EPS last year.
• Operating Margin: 16.7%, consistent with adjusted Q1 results last year.
• Free Cash Flow: $870 million.
• New Bookings: $18.7 billion, with a book to bill of 1.1.
• Consulting Revenue: $9 billion, up 6% in local currency.
• Managed Services Revenue: $8.6 billion, up 11% in local currency.
• Gross Margin: 32.9% compared to 33.6% last year.
• Cash Balance: $8.3 billion as of November 30.
• Share Repurchases: 2.5 million shares for $898 million.
• Quarterly Dividend: $1.48 per share, a 15% increase over last year.

• Warning! GuruFocus has detected 6 Warning Sign with ACN.

Release Date: December 19, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Accenture PLC (NYSE:ACN) reported strong financial results for the first quarter of fiscal 2025, with revenue of $17.7 billion, exceeding the top end of their guided range by approximately $240 million.
• The company achieved 8% revenue growth in local currency, demonstrating broad-based growth across geographic markets and industry groups.
• Accenture PLC (NYSE:ACN) secured $18.7 billion in new bookings, including significant deals with 30 clients having quarterly bookings greater than $100 million.
• The company increased its data and AI workforce to approximately 69,000, progressing towards its goal of 80,000 by the end of fiscal year 2026.
• Accenture PLC (NYSE:ACN) was recognized by Fortune as one of the world's best workplaces, moving up from number 10 to number 6, highlighting its strong workplace culture and employee satisfaction.

Negative Points

• Despite strong performance, the operating margin remained flat compared to the adjusted operating margin from the previous year.
• The company noted a constrained spending environment, particularly on smaller deals, indicating potential challenges in securing smaller contracts.
• Accenture PLC (NYSE:ACN) experienced a decline in revenue growth in certain regions, such as France in EMEA and Singapore and Australia in Asia Pacific.
• The company faced a competitive pricing environment, with lower pricing observed across its business segments.
• Gross margin for the quarter decreased to 32.9% compared to 33.6% in the first quarter of the previous year, indicating pressure on profitability.

Q & A Highlights

Q: It's encouraging to see revenue above the guidance range. What do you attribute this new pattern to, and are market conditions improving? A: Julie Sweet, CEO: The strategy we've been executing involves focusing on becoming the reinvention partner of choice for large-scale transformations. This pivot allowed us to secure more significant deals, positioning us for strong growth in FY25. The market environment hasn't changed; our results reflect the successful execution of this strategy.

Q: Given the change in administration, will Accenture adjust its strategy regarding the US federal government? A: Julie Sweet, CEO: Our core competencies in federal work, such as driving efficiencies and securing critical infrastructure, align well with the government's mission. We are well-positioned to continue supporting federal initiatives, leveraging our commercial solutions and strong ecosystem partnerships.

Q: With the raised revenue guidance, are you assuming any improvement in consulting? A: Angie Park, CFO: No change from our previous guidance. The top end of our range doesn't assume material improvement in consulting. Our over-delivery in Q1 was due to better-than-expected performance in large deals.

Q: Can you discuss the hiring trends and whether they indicate a bullish outlook? A: Angie Park, CFO: We added about 24,000 people in Q1, reflecting business momentum. Hiring is concentrated in India, and we continue to manage supply and demand effectively. This hiring supports our organic growth momentum.

Q: Are there any changes in the dynamics of European demand over the next 12 months? A: Julie Sweet, CEO: Europe is in a more challenging environment, but our guidance reflects our confidence in our business there. We remain relevant to our clients and feel good about the demand environment, which is factored into our raised guidance.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.