Accenture Stock Drops Nearly 11% After Q3 Results, Guidance
JPMorgan said concerns over bookings outlook and margins could push Accenture's stock down.
Accenture Plc. stock plunged nearly 11% in New York on Friday after the IT services company reported its third-quarter results and gave an outlook. Analysts highlighted bookings as a weak spot of the print, according to Bloomberg.
US markets were up, with the key benchmark S&P 500 trading 0.5% higher. Another IT major Cognizant Technology Solutions Corp. shares dropped 3%.
Accenture reported revenue rising 8% year-on-year to $17.7 billion for the third quarter of fiscal year 2025, beating estimates of $17.3 billion. Earnings per share rose 15% to $3.49, while operating margin expanded to 16.8%.
The company raised its full-year revenue growth forecast to 6–7% in local currency, up from 5–7% earlier. Free-cash-flow guidance was bumped up to a range of $9 billion to $9.7 billion, and earnings per share are now expected to come in between $12.77 and $12.89.
New bookings during the quarter stood at $19.7 billion, down 6% in US dollar terms. Consulting accounted for $9.08 billion and managed services brought in $10.62 billion. Generative AI-related bookings contributed $1.5 billion. Despite a year-on-year decline in new bookings, the company reported 30 clients with over $100 million in quarterly bookings.
JPMorgan said concerns over bookings outlook and margins could push the stock down, and leadership changes naturally raises questions.
“Forward-looking metrics such as bookings (and headcount this quarter) came in weaker than expected, adding to investor concerns over the near-term outlook," the brokerage said, as per Bloomberg.
Jefferies said in a note that the updated guidance implies growth will continue to slow down and the growth issue "is further reinforced by the decline in bookings," which came in “a bit softer than anticipated for a second consecutive quarter".
