The Nasdaq-listed IT major hiked its annual revenue growth forecast to 3-6% for 2025, including 2-3% from mergers and acquisitions (M&A). This is on the back of improvement in the macroeconomic environment and the US Federal Reserve’s recent interest rate cut of 0.5%.
Accenture follows a September-August financial year. The Accenture forecast is an important indicator of the performance of key Indian IT companies as they start reporting their quarter earnings starting from Tata Consultancy Services in early October.
Its fourth quarter revenues of $16.4 billion, increased 3% in dollar terms and 5% in local currency driven by faster growth in managed services as compared with consulting revenues.
The Ireland headquartered IT firm’s consulting revenues were up by 1% in dollar terms and 3% in local currency at $8.26 billion as compared with the fourth quarter of fiscal 2023. Managed Services revenues increased to $8.15 billion, up 5% and 7% in dollar and local currency terms from a year ago.
“Our performance in fiscal year 2024 demonstrates the resilience and agility of our business model, the power of our scale and reinvention in action. We delivered full-fiscal year new bookings of $81 billion, including a record 125 quarterly client bookings of more than $100 million, and now have 310 Diamond clients, our largest relationships. We continue to accelerate our leadership in Generative AI, which we believe is the most transformative technology of the next decade, delivering $3 billion in new bookings for the year,” said Julie Sweet, chair and CEO, Accenture.
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Deal bookings
Accenture had new bookings of $20.1 billion for Q4 (up 21% from a year ago), and $81.2 billion (up 13% YoY) for the full year, a record high for the company. New bookings indicate a key metric of the demand showing the value of customer contracts with technology spending commitments.
The firm’s posted GenAI new bookings at $1 billion for the quarter as compared to $900 million in the previous quarter. GenAI revenues for the full year stood at $3 billion, the company said.
Full year
Missing its full year growth projection of 1.5-2.5%, Accenture’s FY24 revenue stood at $64.9 billion, an increase of 1% in dollar terms and 2% in local currency.
The revenue growth in key regions – North America was up 6% while the EMEA (Europe, Middle East, Africa) growth was at 2%. Among segments, health & public services witnessed an uptick of 11%, products business at 6%, Communications, Media & Technology at 5%. Interestingly, one of the key business verticals – financial services saw a dip in growth of 2%.
Its operating margin for Q4 stood at 15%, declining sequentially by 130 basis points (1.30%) and Full year operating margin increased by 10 basis points (0.1%) to 15.5%.
Share buyback
The company’s Board of Directors also approved $4.0 billion in additional share repurchase (buyback of shares), bringing Accenture’s total outstanding buyback authority to approximately $6.7 billion. At August 31, 2024, Accenture had approximately 626 million total shares outstanding.
During the fourth quarter of fiscal 2024, Accenture made total share buyback worth $4.5 billion by repurchasing and redemptions of 14 million shares for the full fiscal year.
Accenture, which has around 3.25 lakh employees in India of its 7.74 lakh headcount, is a benchmark indicator of the broad trends for the Indian IT industry, giving a direction on the expected earnings for homegrown Indian software service providers.
Last month, Nasdaq-listed Cognizant Technologies Solutions had beat the street estimates for its April-June quarter performance even as revenue came in at $4.9 billion.
Bellwether Tata Consultancy Services (TCS) will kickstart the second quarter (July to September) of fiscal year 2024-25 earnings season on October 10.
