Here's our initial take on Accenture's (ACN -5.45%) fiscal 2025 second-quarter financial report.
Key Metrics
| Metric | Q2 FY24 | Q2 FY25 | Change | vs. Expectations |
|---|---|---|---|---|
| Revenue | $15.8 billion | $16.7 billion | 6% | Beat |
| Earnings per share | $2.63 | $2.82 | 7% | Beat |
| Free cash flow | $2.0 billion | $2.7 billion | 35% | n/a |
| New bookings | $21.6 billion | $20.9 billion | (3%) | n/a |
Accenture Posts Beat on Growing Tech Demand
In a quarter that for many was marred by customer hesitation to spend, Accenture continues to see strong demand for its consulting and tech modernization services. The company grew earnings per share by 7% and revenue by 6% year over year, beating Wall Street expectations.
Accenture continues to see generative AI fueling growth, with $1.4 billion in new bookings related to Gen AI in the quarter.
Work for the financial services industry led the way, up 11% year over year, with health and public service revenue also up 10%. Overall, Accenture has 32 clients with quarterly bookings of greater than $100 million, a reflection of the company's importance to its customers. Work in the Western Hemisphere led the way, up 11% year over year, while Europe revenue climbed by 8% and Asia-Pacific, Accenture's smallest region, was up just 1%.
Accenture has generated $3.6 billion in free cash flow in the first six months of its fiscal 2025, and shareholders continue to be a big beneficiary of that cash. So far in fiscal 2025, the company has repurchased about $2.3 billion worth of shares and recently increased its dividend payout by 15%, with dividends totaling $1.9 billion so far this year.
NYSE: ACN
Key Data Points
Immediate Market Reaction
Accenture does not tend to be a volatile stock and usually does not see dramatic swings in the premarket, but investors seem to like what they see in the results. Shares of Accenture were up about 3% in premarket trading following the release, after being up less than 1% heading into the announcement.
What to Watch
Accenture narrowed the low end of its full-year fiscal 2025 guidance, projecting earnings of between $12.55 and $12.79, up from $12.43 to $12.79, and revenue growth of 5% to 7%, up from 4% to 7%.
The company recorded $20.9 billion in new bookings in the quarter, a healthy 1.3 times what it billed in the quarter. Though that bookings number is down about 3% from a year ago, it is flat when adjusted for currency fluctuations.
In fiscal 2024, Accenture committed more than $6 billion to acquisitions in order to build its tech prowess and take advantage of the AI revolution. The latest results suggest that investment is paying off, setting Accenture up for more gains in the quarters to come.
