Accenture (NYSE: ACN) has reported robust financial results for the first quarter of fiscal 2025, showcasing impressive growth across various segments. The company achieved revenues of $17.7 billion, marking a 9% increase in U.S. dollars and an 8% rise in local currency compared to the same period last year.
This growth was driven by both consulting and managed services, with consulting revenues reaching $9.0 billion and managed services at $8.6 billion. These figures highlight Accenture’s ability to gain market share and deliver value to its clients through innovative solutions.
The company’s operating income for the quarter stood at $2.95 billion, reflecting a 15% increase from the first quarter of fiscal 2024. This resulted in an operating margin of 16.7%, an improvement of 90 basis points from the previous year. Accenture’s strategic focus on client reinvention and continued investment in its business has been pivotal in achieving these results. The company’s new bookings for the quarter amounted to $18.7 billion, with significant contributions from generative AI, which accounted for $1.2 billion in new bookings.
Accenture’s commitment to returning cash to shareholders is evident in its quarterly cash dividend of $1.48 per share, a 15% increase from the previous year. The company also repurchased or redeemed 2.5 million shares for a total of $898 million, reinforcing its dedication to enhancing shareholder value.
Accenture Reports Better than Expected Results for First Quarter
Accenture’s first-quarter performance exceeded market expectations, with revenues surpassing the anticipated range of $16.85 billion to $17.45 billion. The actual revenues of $17.7 billion were approximately $240 million above the top end of this guided range.
This strong performance was further bolstered by a GAAP EPS of $3.59, which surpassed the expected EPS of $3.42. The 16% increase in GAAP EPS compared to the previous year demonstrates Accenture’s operational efficiency and effective cost management strategies.
The company’s consulting and managed services segments both contributed to this outperformance. Consulting revenues grew by 7%, while managed services saw an 11% increase. These results highlight Accenture’s ability to adapt to changing client needs and expand its service offerings. The geographic markets also played a crucial role, with the Americas, EMEA, and Asia Pacific regions all reporting revenue growth, further solidifying Accenture’s global presence.
Accenture’s financial results also reflect the positive impact of foreign exchange rates, which contributed approximately 1% to revenue growth. This was slightly below the company’s previous assumption of a 1.5% positive impact. Despite this, Accenture’s ability to exceed revenue and EPS expectations demonstrates its resilience and strategic agility in navigating currency fluctuations and market dynamics.
Accenture Raises Full-Year Revenue Growth Expectations
Accenture has updated its business outlook for fiscal 2025, raising its full-year revenue growth expectations to a range of 4% to 7% in local currency. Accenture now anticipates a foreign exchange impact of negative 0.5%, a change from the previously expected positive 1.5%, indicating a more cautious approach to currency fluctuations.
The company has also adjusted its GAAP EPS guidance for fiscal 2025, now expecting it to be in the range of $12.43 to $12.79. This revised guidance reflects the increased revenue outlook and the updated foreign exchange assumptions. Accenture continues to expect its GAAP operating margin to be between 15.6% and 15.8%, an expansion of 80 to 100 basis points from fiscal 2024.
Accenture remains committed to returning significant cash to shareholders, aiming to distribute at least $8.3 billion through dividends and share repurchases. The company’s focus on delivering 360° value to its clients, shareholders, and communities is central to its strategic vision, ensuring sustainable growth and long-term success.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
About the author
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird’s US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
