Accenture Q1 beats the Street with 9% revenue growth at $17.7 bn; raises FY25 guidance – CNBC TV18

Accenture reported strong Q1 FY25 results, with revenue reaching $17.7 billion, marking a 9% year-on-year (YoY) increase in US dollar terms and 8% in local currency, leading to a 5% jump in its shares in premarket trading on Thursday, December 19.

The IT giant beat Wall Street estimates for Q1 revenue on the back of growing demand for its services to help clients adopt AI-powered tools.

Earnings per share (EPS) stood at $3.59, up 16% from $3.10 in the same period last year and exceeding analyst expectations of $3.42.

Product revenue rose to $5.43 billion, a 12% YoY increase, while the health and public service segment reported $3.81 billion in revenue, up 13%.

GAAP operating margin improved by 90 basis points to 16.7%, and operating cash flow more than doubled to $1.02 billion, compared to $498.6 million a year ago. The company declared a quarterly cash dividend of $1.48 per share.

“Our strategy to lead reinvention for clients while continuing to invest in our business has given us a strong start to fiscal 2025,” said Julie Sweet, Chair and CEO of Accenture.

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“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 realise value with generative AI, with new bookings of $1.2 billion,” she added.

For FY25, Accenture raised its revenue growth guidance to 4-7% in local currency, up from the previous range of 3-6%. The company projects full-year GAAP EPS to be in the range of $12.43-12.79, reflecting its increased revenue outlook.

For Q2 FY25, revenue is expected to be between $16.2-16.8 billion, in line with market expectations. Accenture also reaffirmed its FY25 GAAP operating margin outlook of 15.6-15.8%, representing up to 100 basis points of expansion.

The company’s full-year cash flow forecast remains unchanged, with operating cash flow expected between $9.4-10.1 billion, capital expenditures at $600 million, and free cash flow in the range of $8.8-9.5 billion. The effective tax rate is forecasted to remain between 22.5-24.5%.