10-Q: Accenture Reports Solid Q2 2025 Results, Revenue Up 8.5% in Local Currency

Accenture's Q2 2025 results show revenue growth driven by strong performance in the Americas and EMEA, with new bookings remaining robust.

Summary

• Accenture's Q2 2025 revenues reached $16.7 billion, a 5% increase in U.S. dollars and an 8.5% increase in local currency compared to Q2 2024.
• New bookings totaled $20.9 billion, a decrease of 3% in U.S. dollars but flat in local currency.
• The operating margin was 13.5%, compared to 13.0% in Q2 2024.
• Diluted earnings per share were $2.82, a 7% increase compared to $2.63 in Q2 2024.
• Cash returned to shareholders amounted to $2.4 billion, including $929 million in dividends and $1.4 billion in share repurchases.
• The company's workforce increased to approximately 801,000 as of February 28, 2025, compared to approximately 742,000 as of February 29, 2024.
• Annualized voluntary attrition was 13%, consistent with the second quarter of fiscal 2024.

Sentiment

Score: 7

Explanation: The sentiment is cautiously positive. While revenue and EPS are up, there are concerns about bookings and the economic environment.

Positives

• Revenue growth was strong in the Americas and EMEA.
• Financial Services, Health & Public Service, and Products sectors experienced very strong revenue growth.
• Managed services and consulting both showed strong revenue growth.
• Operating income increased by $198 million, or 10%, compared with the second quarter of fiscal 2024.
• Operating margin increased to 13.5% from 13.0% for the second quarter of fiscal 2024.

Negatives

• New bookings decreased by 3% in U.S. dollars.
• Asia Pacific experienced slight revenue growth.
• Gross margin decreased as a percentage of revenues to 29.9% from 30.9% during the second quarter of fiscal 2024, primarily due to higher subcontractor costs and the impact of business optimization actions.

Risks

• Volatile economic and geopolitical conditions may adversely affect the company's results of operations.
• A significant reduction in client demand for services and solutions could materially affect the company's results of operations.
• Failure to protect client and/or Accenture data from security incidents or cyberattacks poses legal, reputational, and financial risks.
• The markets in which Accenture operates are highly competitive.
• Fluctuations in foreign currency exchange rates could materially adversely affect the company's results of operations.
• The company's debt obligations could adversely affect its business and financial condition.
• The company's work with government clients exposes it to additional risks inherent in the government contracting environment.

Future Outlook

Assuming that exchange rates stay within recent ranges for the remainder of fiscal 2025, we estimate that our full fiscal 2025 revenue growth in U.S. dollars will be approximately 0.5% lower than our revenue growth in local currency.

Industry Context

The report indicates that Accenture is operating in a competitive business environment with economic and geopolitical uncertainty, which has slowed the pace and level of client spending, particularly for smaller contracts and consulting services.

Legal Proceedings

• Accenture is involved in a putative class action lawsuit filed by consumers of Marriott International, Inc. relating to a data security incident.
• Accenture Federal Services (AFS) is responding to an administrative subpoena and cooperating with the U.S. Department of Justice's investigation concerning whether one or more employees provided inaccurate submissions to an assessor who was evaluating on behalf of the U.S. government an AFS service offering and whether the service offering fully implemented required federal security controls.

Stakeholder Impact

• Shareholders will benefit from the cash returned through dividends and share repurchases.
• Employees will see continued investment in workforce and compensation.
• Clients may experience some impact from the company's efforts to manage costs and improve efficiency.
• The company's performance impacts suppliers and creditors through its financial stability and ability to meet obligations.

Key Dates

Keywords

Accenture, revenue, bookings, operating margin, earnings per share, financial results, share repurchases, restricted share units, performance equity award, share incentive plan