Accenture Reports Better than Expected Q4: Revenues Hit $16.4 Billion
Accenture (NYSE: ACN) reported its financial results for the fourth quarter of fiscal 2024, showcasing notable achievements across several key performance metrics.
The company recorded revenues of $16.4 billion, reflecting a 3% increase in U.S. dollars and a 5% rise in local currency compared to the same period last year. The GAAP operating margin stood at 14.3%, up from 12.0% in the fourth quarter of fiscal 2023, while the adjusted operating margin was 15.0%, a slight increase from 14.9% the previous year. New bookings for the quarter reached $20.1 billion, marking a significant 21% increase in U.S. dollars and 24% in local currency from the prior year.
Accenture’s GAAP diluted earnings per share (EPS) for the quarter were $2.66, a 24% increase from $2.15 in the fourth quarter of fiscal 2023. Adjusted EPS saw a modest rise of 3%, reaching $2.79 from $2.71 in the same period last year. The company’s free cash flow for the quarter was $3.18 billion, slightly down from $3.23 billion in the previous year.
The company’s performance was driven by growth in both its Consulting and Managed Services segments. Consulting revenues were $8.26 billion, up 1% in U.S. dollars and 3% in local currency, while Managed Services revenues were $8.15 billion, increasing by 5% in U.S. dollars and 7% in local currency. This balanced growth across segments highlights Accenture’s comprehensive service offerings and its ability to meet diverse client needs.
Accenture Beats EPS and Revenue Expectations in Q4
Accenture’s fourth-quarter results exceeded market expectations on several fronts. The company reported revenues of $16.4 billion, slightly above the expected $16.35 billion. Strong bookings and growth in key segments underpinned this revenue performance. The GAAP EPS for the quarter was $2.66, marginally below the expected EPS of $2.78. However, the adjusted EPS of $2.79 surpassed expectations, reflecting the company’s effective cost management and operational efficiency.
The company’s robust performance in new bookings, totaling $20.1 billion for the quarter, was crucial in exceeding revenue expectations. This growth was fueled by significant client demand for both Consulting and Managed Services, with Consulting new bookings reaching $8.6 billion and Managed Services new bookings hitting $11.6 billion.
Accenture’s performance across geographic markets also contributed to its strong quarterly results. North America led the way with revenues of $7.97 billion, up 5% in U.S. dollars and 6% in local currency. EMEA (Europe, Middle East, and Africa) reported revenues of $5.64 billion, a 2% increase in U.S. dollars and local currency. Growth Markets experienced a 3% decrease in U.S. dollars but a 9% increase in local currency, demonstrating resilience in the face of currency fluctuations.
Accenture Expects 10% to 13% Increase in EPS y/y for Fiscal 2025
Accenture has provided optimistic guidance for fiscal 2025. The company expects revenue growth in the range of 3% to 6% in local currency, reflecting continued strong demand for its services. This guidance assumes a positive foreign-exchange impact of approximately 1.5% compared to fiscal 2024. Accenture also anticipates a GAAP operating margin expansion to between 15.6% and 15.8%, an increase of 80 to 100 basis points from the fiscal 2024 GAAP operating margin.
The company projects a GAAP diluted EPS for fiscal 2025 in the range of $12.55 to $12.91, representing a 10% to 13% increase over fiscal 2024’s GAAP diluted EPS of $11.44.
This guidance also indicates a 5% to 8% increase over the adjusted EPS of $11.95 for fiscal 2024. Accenture’s effective tax rate for fiscal 2025 is expected to be between 22.5% and 24.5%, slightly lower than the previous year, which should positively impact net income.
Accenture expects to generate operating cash flow between $9.4 billion and $10.1 billion, with property and equipment additions projected at $600 million. Free cash flow is anticipated to be in the range of $8.8 billion to $9.5 billion. The company also plans to return at least $8.3 billion to shareholders through dividends and share repurchases.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
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