NEW YORK–(BUSINESS WIRE)–Accenture (NYSE: ACN) reported financial results for the first quarter of fiscal 2025 ended November 30, 2024.
Julie Sweet, chair and CEO, Accenture, said, “Our strategy to lead reinvention for clients while continuing to invest in our business has given us a strong start to fiscal 2025. We delivered broad-based revenue growth across both consulting and managed services, and across each market and industry group, gaining market share. First quarter new bookings were $18.7 billion, including 30 quarterly client bookings of more than $100 million, and we continued to lead in helping our clients realize value with generative AI, with new bookings of $1.2 billion. On behalf of our leadership team, I want to thank our nearly 799,000 Accenture people whose commitment to our clients’ success makes these results possible.”
Revenues were $17.7 billion, an increase of 9% in U.S. dollars and 8% in local currency compared to the first quarter of fiscal 2024.
GAAP operating income was $2.95 billion, a 15% increase compared to $2.56 billion for the first quarter of fiscal 2024, and an increase of 9% compared to adjusted operating income of $2.70 billion for the first quarter last year. Operating margin was 16.7%, an increase of 90 basis points compared to operating margin of 15.8% for the first quarter of fiscal 2024, and flat compared to adjusted operating margin of 16.7% for the first quarter last year.
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.
GAAP diluted earnings per share were $3.59, a 16% increase compared to $3.10 for the first quarter of fiscal 2024, and an increase of 10% over adjusted EPS of $3.27 for the first quarter last year.
New bookings for the quarter were $18.7 billion, with consulting bookings of $9.2 billion and managed services bookings of $9.5 billion.
Financial Review
Revenues for the first quarter of fiscal 2025 were $17.69 billion, compared with $16.22 billion for the first quarter of fiscal 2024, an increase of 9% in U.S. dollars and 8% in local currency. Revenues were approximately $240 million above the top end of the company’s guided range of $16.85 billion to $17.45 billion. The foreign-exchange impact for the quarter was approximately positive 1%, compared with the positive 1.5% assumption provided in the company’s fourth-quarter earnings release.
- Consulting revenues for the quarter were $9.05 billion, an increase of 7% in U.S. dollars and 6% in local currency compared with the first quarter of fiscal 2024.
- Managed Services revenues for the quarter were $8.64 billion, an increase of 11% in both U.S. dollars and local currency compared with the first quarter of fiscal 2024.
GAAP diluted EPS for the quarter were $3.59, a 16% increase over $3.10 for the first quarter last year, which included a $0.17 decrease for business optimization costs. Excluding these costs, GAAP diluted EPS increased 10% for the first quarter of fiscal 2025 over adjusted EPS of $3.27 for the first quarter of fiscal 2024. The $0.32 increase in GAAP diluted EPS compared to adjusted diluted EPS reflects:
- a $0.29 increase from higher revenue and operating results;
- a $0.07 increase from a lower effective tax rate; and
- a $0.01 increase from lower share count;
partially offset by
- a $0.05 decrease from lower non-operating income.
Gross margin (gross profit as a percentage of revenues) for the quarter was 32.9% compared to 33.6% in the first quarter of fiscal 2024. Selling, general and administrative (SG&A) expenses for the quarter were $2.87 billion, or 16.2% of revenues, compared with $2.74 billion, or 16.9% of revenues, for the first quarter of fiscal 2024.
GAAP operating income for the quarter increased 15%, to $2.95 billion, or 16.7% of revenues, compared with $2.56 billion, or 15.8% of revenues, for the first quarter of fiscal 2024. For the first quarter of fiscal 2024, adjusted operating income was $2.70 billion, or 16.7% of revenues.
The company’s GAAP effective tax rate for the quarter was 21.6%, compared with 23.2% for the first quarter of fiscal 2024.
GAAP net income for the quarter was $2.32 billion, compared with $2.01 billion for the first quarter of fiscal 2024. For the first quarter of fiscal 2024, adjusted net income was $2.12 billion.
Operating cash flow for the quarter was $1.02 billion, and property and equipment additions were $152 million. Free cash flow, defined as operating cash flow net of property and equipment additions, was $870 million. For the same period last year, operating cash flow was $499 million; property and equipment additions were $69 million; and free cash flow was $430 million.
Days services outstanding, or DSOs, were 50 days at November 30, 2024, compared with 46 days at August 31, 2024 and 49 days at November 30, 2023.
Accenture’s total cash balance at November 30, 2024 was $8.3 billion, compared with $5.0 billion at August 31, 2024.
New Bookings
New bookings for the first quarter of fiscal 2025 were $18.70 billion, a 1% increase in both U.S. dollars and local currency over the first quarter of fiscal 2024.
- Consulting new bookings were $9.22 billion, or 49% of total new bookings.
- Managed Services new bookings were $9.48 billion, or 51% of total new bookings.
Revenues by Geographic Market2
Revenues by geographic market were as follows:
- Americas: $8.73 billion, an increase of 9% in U.S. dollars and 11% in local currency compared with the first quarter of fiscal 2024.
- EMEA: $6.41 billion, an increase of 10% in U.S. dollars and 6% in local currency compared with the first quarter of fiscal 2024.
- Asia Pacific: $2.54 billion, an increase of 6% in U.S. dollars and 4% in local currency compared with the first quarter of fiscal 2024.
Revenues by Industry Group
Revenues by industry group were as follows:
- Communications, Media & Technology: $2.86 billion, an increase of 7% in both U.S. dollars and local currency compared with the first quarter of fiscal 2024.
- Financial Services: $3.17 billion, an increase of 4% in both U.S. dollars and local currency compared with the first quarter of fiscal 2024.
- Health & Public Service: $3.81 billion, an increase of 13% in U.S. dollars and 12% in local currency compared with the first quarter of fiscal 2024.
- Products: $5.43 billion, an increase of 12% in U.S. dollars and 10% in local currency compared with the first quarter of fiscal 2024.
- Resources: $2.42 billion, an increase of 6% in both U.S. dollars and local currency compared with the first quarter of fiscal 2024.
Returning Cash to Shareholders
Accenture continues to return cash to shareholders through cash dividends and share repurchases.
Dividend
On November 15, 2024, a quarterly cash dividend of $1.48 per share was paid to shareholders of record at the close of business on October 10, 2024. These cash dividend payments totaled $926 million.
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.
Accenture plc has declared another quarterly cash dividend of $1.48 per share for shareholders of record at the close of business on January 16, 2025. This dividend, which is payable on February 14, 2025, represents a 15% increase over the quarterly dividend rate of $1.29 per share in fiscal 2024.
Share Repurchase Activity
During the first quarter of fiscal 2025, Accenture repurchased or redeemed 2.5 million shares for a total of $898 million, including approximately 2.2 million shares repurchased in the open market.
Accenture’s total remaining share repurchase authority at November 30, 2024 was approximately $5.9 billion.
At November 30, 2024, Accenture had approximately 626 million total shares outstanding.
Business Outlook
Second Quarter Fiscal 2025
Accenture expects revenues for the second quarter of fiscal 2025 to be in the range of $16.2 billion to $16.8 billion, or 5% to 9% growth in local currency, reflecting the company’s assumption of an approximately negative 2.5% foreign-exchange impact compared with the second quarter of fiscal 2024.
Fiscal Year 2025
Accenture’s business outlook for fiscal 2025 now assumes that the foreign-exchange impact on its results in U.S. dollars will be approximately negative 0.5% compared with fiscal 2024; the company previously expected the impact to be positive 1.5%.
For fiscal 2025, the company raises revenue growth to be in the range of 4% to 7% in local currency, compared to 3% to 6% previously.
Accenture continues to expect GAAP operating margin for fiscal 2025 to be in the range of 15.6% to 15.8%, an expansion of 80 to 100 basis points from fiscal 2024 GAAP operating margin, and an expansion of 10 to 30 basis points from fiscal 2024 adjusted operating margin, which excludes $438 million for business optimization costs.
The company continues to expect its annual effective tax rate to be in the range of 22.5% to 24.5%.
Reflecting its increased revenue outlook and revised foreign-exchange assumption, the company now expects GAAP diluted EPS for fiscal 2025 to be in the range of $12.43 to $12.79, compared to $12.55 to $12.91 previously, an increase of 9% to 12% over fiscal 2024 GAAP diluted EPS of $11.44, and an increase of 4% to 7% over adjusted EPS of $11.95, which excludes $0.51 for business optimization costs.
For fiscal 2025, the company continues to expect operating cash flow to be in the range of $9.4 billion to $10.1 billion; property and equipment additions to be $600 million; and free cash flow to be in the range of $8.8 billion to $9.5 billion.
The company continues to expect to return at least $8.3 billion in cash to shareholders through dividends and share repurchases.
360° Value Reporting
Accenture’s goal is to create 360° value for our clients, people, shareholders, partners and communities. Our reporting captures how we deliver unique value across six vital dimensions and offers a comprehensive view of our financial and environmental, social and governance (ESG) measures, and our goals, progress and performance for each. 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.
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 799,000 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.
