Accenture Narrows Profit, Revenue Forecast For FY25
Firm raises revenue outlook on strong demand for Gen-AI which clocked $1.4 billion in bookings during the quarter.
Accenture Plc on Thursday increased its lower-end forecast for earnings per share and revenue for fiscal 2025.
The information technology company now expects its EPS to be in the range of $12.55 to $12.79 per share for fiscal 2025 as opposed to its previous expectations of $12.43 to $12.79, while it anticipates its revenue to rise in the range of 5-7% for the period as compared with 4-7% previously. Analysts tracked by Bloomberg projected its EPS estimates for the fiscal 2025 at $12.74.
Accenture also sees an operating margin between 15.6% and 15.7% for the full year, slightly tightening its previous range of 15.6% to 15.8%. Its generative AI-related new bookings for the second quarter stood at $1.4 billion.
The company maintained its effective tax rate forecast at 22.5% to 24.5% and reiterated its operating cash flow expectations between $9.4 billion and $10.1 billion, with estimates at $10.03 billion. Free cash flow guidance remained unchanged at $8.8 billion to $9.5 billion.
The IT firm has declared another quarterly cash dividend of $1.48 per share for shareholders of record as of April 10, payable on May 15. This represents a 15% increase over the quarterly dividend rate of $1.29 per share in fiscal 2024.
Accenture Q2 Earnings Highlights
Earnings per share stood at $2.82, compared with $2.63 a year ago and an estimate of $2.81.
Revenue rose 5.4% year-on-year to $16.66 billion, exceeding the estimate of $16.6 billion.
Generative AI new bookings stood at $1.4 billion.
Total bookings declined 3.2% year-on-year to $20.9 billion, below the estimate of $21.69 billion.
Gross margin declined to 29.9% from 30.9% a year ago, missing the estimate of 31.2%.
Free cash flow rose 35% year-on-year to $2.68 billion.
Operating cash flow increased 36% year-on-year to $2.85 billion, exceeding the estimate of $2.73 billion.
Operating margin expanded to 13.5% from 13% a year ago.
Outlook
For the third quarter, Accenture expects revenue between $16.9 billion and $17.5 billion, compared with analyst estimates of $17.22 billion. The company forecasts revenue growth of 3-7% for the period.
"The trust and confidence in our unique strengths and capabilities is reflected in 32 clients with quarterly bookings greater than $100 million and we are very pleased to have another milestone quarter in Gen AI with $1.4 billion in new bookings," said Accenture Chair and CEO Julie Sweet.
