Accenture’s Q2 Revenues Hit $16.7 Billion, Surpassing Expectations

Accenture (NYSE: ACN) showcased a robust performance in the second quarter of fiscal 2025, ending February 28, 2025. The company reported revenues of $16.7 billion, marking a 5% increase in U.S. dollars and an 8.5% rise in local currency compared to the previous year. This growth was driven by broad-based expansion across various markets, industries, and work types.

New bookings for the quarter stood at $20.9 billion, although this represented a 3% decrease in U.S. dollars and remained flat in local currency compared to the same quarter last year. Accenture’s operating margin for the quarter was 13.5%, reflecting a 50 basis point increase from the previous year. The company’s diluted earnings per share (EPS) reached $2.82, a 7% rise from the previous year. The increase in EPS was attributed to higher revenue and improved operating results, despite a higher effective tax rate. Free cash flow for the quarter was $2.68 billion, and the company declared a quarterly cash dividend of $1.48 per share, a 15% increase from the previous year.

The company’s performance was buoyed by strong growth in specific sectors. Revenues from the Americas rose by 9% in U.S. dollars and 11% in local currency. The financial services industry group saw a 7% increase in U.S. dollars and 11% in local currency. Health & Public Service also experienced significant growth, with an 8% increase in U.S. dollars and 10% in local currency.

Accenture Reports Better than Expected Results for Q2 FY’25

Accenture’s second-quarter performance exceeded market expectations. Analysts had anticipated an EPS of $2.81 and revenue of $16.63 billion. However, the company surpassed these predictions with an actual EPS of $2.82 and revenue of $16.7 billion. This performance was at the top end of the company’s guided range of $16.2 billion to $16.8 billion.

Despite the challenges of a fluctuating foreign exchange market, which had a negative impact of approximately 3.0% on revenues, Accenture managed to deliver strong results. This was a testament to the company’s strategic focus on diversifying its services and expanding its footprint across various geographic regions. The company’s ability to maintain steady growth in local currency terms, despite the adverse effects of currency fluctuations, highlights its operational strength.

The decrease in new bookings, down 3% in U.S. dollars, was a point of concern. However, this was offset by the company’s success in securing significant contracts, including 32 clients with quarterly bookings exceeding $100 million. Additionally, Accenture’s continued investment in generative AI led to $1.4 billion in new bookings in this area, showcasing its commitment to innovation and technology-driven solutions.

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Accenture Updates Fiscal 2025 Outlook, Expects Full-Year Revenue Growth of 5% to 7%

Accenture has updated its fiscal 2025 outlook. The company now expects full-year revenue growth of 5% to 7% in local currency, narrowing its previous guidance. The anticipated foreign exchange impact remains at approximately negative 0.5%. Accenture has also revised its operating margin expectations to a range of 15.6% to 15.7%, reflecting an expansion of 10 to 20 basis points over the adjusted operating margin from fiscal 2024.

The company projects diluted EPS for the full year to be in the range of $12.55 to $12.79, indicating a 10% to 12% increase over fiscal 2024 GAAP. This reflects Accenture’s confidence in its ability to maintain its growth trajectory, driven by strategic investments and a focus on delivering value to its clients. The company also anticipates operating cash flow of $9.4 billion to $10.1 billion, with free cash flow expected to range from $8.8 billion to $9.5 billion.

For the third quarter of fiscal 2025, Accenture expects revenues to be between $16.9 billion and $17.5 billion, with local currency revenue growth projected at 3% to 7%.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.