Executive Summary

Q1 FY25 revenue of $17.7B grew 9% YoY in USD (8% LC), came in ~$240M above the top end of guidance; GAAP EPS was $3.59 (+16% YoY), operating margin 16.7% (+90bps YoY; flat vs adjusted Q1 FY24) .
New bookings were $18.7B (+1%), with book-to-bill 1.1; GenAI bookings hit $1.2B and GenAI revenue approximated ~$500M, underscoring traction in AI-led reinvention programs .
FY25 guidance raised: revenue growth to 4–7% LC (from 3–6%); FX assumption revised to -0.5% (from +1.5%); GAAP EPS range tweaked to $12.43–$12.79 (from $12.55–$12.91) on FX despite better revenue outlook; Q2 FY25 revenue guided to $16.2–$16.8B (5–9% LC) .
Stock catalysts: above-guide revenue execution on large deals; visibility into sustained managed services strength; accelerating AI programs and increased inorganic contribution early in FY25; minor near-term headwind from FX and rising interest expense with inaugural $5B bond .

What Went Well and What Went Wrong

What Went Well

Broad-based growth across markets and industries; consulting +7% USD and managed services +11% USD drove total revenue above the guided range’s top end by ~$240M .
Large-deal momentum: 30 quarterly client bookings over $100M; new bookings $18.7B; GenAI bookings $1.2B and ~ $500M revenue, highlighting scaled execution in AI .
Margin discipline: GAAP operating margin expanded 90bps YoY to 16.7%; SG&A down to 16.2% of revenue vs 16.9% YoY; EPS +16% YoY (+10% vs adjusted) aided by lower tax rate and improved operations .

Management quotes: “We delivered broad-based revenue growth… gaining market share… continued to lead in helping our clients realize value with generative AI” — Julie Sweet .

What Went Wrong

Gross margin contracted 70bps YoY to 32.9%, reflecting competitive pricing and mix; management noted continued pricing pressure across the business .
DSOs rose to 50 days vs 46 at Aug 31 and 49 a year ago, a modest working capital headwind; interest expense rose with new long-term debt .
FX assumptions turned from prior tailwind to headwind: FY25 FX now -0.5% vs +1.5% previously; GAAP EPS guidance nudged lower despite raised revenue outlook .

Financial Results

Metric	Q3 FY24	Q4 FY24	Q1 FY25
Revenue ($USD Billions)	$16.47	$16.41	$17.69
Diluted EPS ($)	$3.04	$2.66	$3.59
Operating Margin (%)	16.0%	14.3%	16.7%
Gross Margin (%)	33.4%	32.5%	32.9%
Consulting Revenues ($B)	$8.46	$8.26	$9.05
Managed Services Revenues ($B)	$8.01	$8.15	$8.64

Segment breakdown (Q1 FY25):

Segment	Q1 FY25 ($USD Billions)
Americas	$8.73
EMEA	$6.41
Asia Pacific	$2.54
Communications, Media & Technology	$2.86
Financial Services	$3.17
Health & Public Service	$3.81
Products	$5.43
Resources	$2.42

KPIs and operating metrics:

KPI	Q3 FY24	Q4 FY24	Q1 FY25
New Bookings ($B)	$21.06	$20.10	$18.70
Book-to-Bill (Total)	—	—	1.1
GenAI Bookings ($B)	$0.90	$1.00	$1.20
GenAI Revenue ($B)	$0.50 YTD by Q3	—	~$0.50 in Q1
Free Cash Flow ($B)	$3.02	$3.18	$0.87
DSOs (days)	43	46	50
Cash Balance ($B)	$5.54	$5.00	$8.30

Notes: Q1 FY25 revenue exceeded guided range by ~$240M; FX impact was +1% vs +1.5% assumed .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue Growth (LC %)	FY25	3%–6%	4%–7%	Raised
FX impact (FY %)	FY25	+1.5%	-0.5%	Lowered (more negative)
GAAP Operating Margin	FY25	15.6%–15.8%	15.6%–15.8%	Maintained
GAAP EPS ($)	FY25	$12.55–$12.91	$12.43–$12.79	Lowered (FX-driven)
Effective Tax Rate	FY25	22.5%–24.5%	22.5%–24.5%	Maintained
Operating Cash Flow ($B)	FY25	$9.4–$10.1	$9.4–$10.1	Maintained
Free Cash Flow ($B)	FY25	$8.8–$9.5	$8.8–$9.5	Maintained
Capital Returns ($B)	FY25	≥$8.3	≥$8.3	Maintained
Q2 Revenue ($B)	Q2 FY25	—	$16.2–$16.8 (5%–9% LC, ~-2.5% FX)	New
Dividend ($/share)	Quarterly	Raised to $1.48	$1.48 declared for Feb 14, 2025	Maintained new rate

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2: Q3 FY24; Q-1: Q4 FY24)	Current Period (Q1 FY25)	Trend
Generative AI scale and monetization	YTD GenAI bookings $2.0B; $0.5B revenue by Q3	$1.2B bookings in Q1; ~$0.5B revenue; scaled programs across industries	Accelerating
Demand environment & deal mix	Competitive pricing; consulting softness offset by managed services strength	Macro “more of the same”; pivot to larger reinvention deals drove over-delivery	Stable macro; mix shifting to large programs
Consulting vs Managed Services	Q3: Consulting -3% USD; MS +2% USD	Q1: Consulting +7% USD; MS +11% USD	Improving, broad-based
Geographic performance	EMEA softer; NA leading; Growth Markets mixed	Americas +11% LC; EMEA +6% LC; APAC +4% LC	Americas robust; EMEA stabilizing
Pricing pressure	Competitive market, lower pricing	Continued pricing pressure across business	Persistent headwind
Federal/Government exposure	Public services strong; federal wins disclosed	Positioned for efficiency/security; commercial solutions into federal; ~8% exposure discussed	Stable opportunity set
Headcount/Utilization	Strong utilization ~90%; acquisitions fueling capacity	Net adds ~24K in Q1, concentrated in India; utilization ~90%	Scaling capacity

Management Commentary

“Our strategy to lead reinvention for clients… gave us a strong start to fiscal 2025… gaining market share… $18.7B bookings… $1.2B GenAI bookings” — Julie Sweet .
“Operating margin was 16.7%… EPS grew 10% over adjusted EPS last year… increased our data and AI workforce to ~69,000” — Julie Sweet .
“Revenues grew 8% in local currency, above top end of our guided range… free cash flow of $870M… returned $1.8B to shareholders” — Angie Park .
“Clients are focused on reinvention… building digital core required for GenAI; double-digit growth in cloud and security” — Julie Sweet .

Q&A Highlights

Demand and strategy: Macro stable; outperformance driven by pivot to larger reinvention deals; well-positioned when smaller-deal spending returns .
Guidance and organic/inorganic mix: FY25 revenue growth raised to 4–7% LC; inorganic contribution “a bit more than 3%” (~4% H1, ~2% H2) .
Hiring and utilization: Net adds ~24K in Q1; utilization ~90%; hiring concentrated in India; organic momentum implied at high end of guidance .
Q2 sequential pattern: Q2 guide solid (5–9% LC); no unique fall-off; Q1 over-delivery tied to large deals coming online better than expected .
Interest expense: Expect sequential pickup below the line given long-term debt; already factored into guidance .
Pricing: Highly competitive; lower pricing observed; AMS used to modernize while reducing costs via GenAI (Gen Wizard) and full-stack talent .

Estimates Context

Wall Street consensus (S&P Global) was unavailable due to a temporary data limit; therefore, comparisons to consensus cannot be provided. Values retrieved from S&P Global.*
Relative to company guidance, Q1 FY25 revenue exceeded the guided range ($16.85–$17.45B) by ~$240M; FX impact +1% vs +1.5% assumed, indicating stronger-than-anticipated large-deal execution .

Key Takeaways for Investors

Execution on large reinvention programs and AI initiatives drove an above-guide revenue print and double-digit managed services growth; supports continuing market share gains .
FY25 top-line outlook raised (4–7% LC) with inorganic contribution front-loaded; monitor organic trajectory into H2 as inorganic tailwind moderates .
Margins healthy (16.7% operating), but gross margin compression and persistent pricing pressure remain watch items; delivery efficiencies and SG&A leverage partly offset .
Working capital and cash: DSOs ticked up to 50 days; free cash flow was $870M; cash balance increased with $5B inaugural bond issuance; interest expense will run higher near term .
Q2 revenue guide ($16.2–$16.8B) implies continued momentum despite FX headwinds (≈-2.5%); broad-based growth with Americas strongest .
AI narrative accelerating: $1.2B GenAI bookings in Q1; stronger data foundation and cloud migrations are enabling scaled deployments across industries .
Tactical: Near-term trading may hinge on sustained large-deal flow, managed services strength, and updates on FX/interest expense; medium term thesis benefits from reinvention-led secular tailwinds and AI monetization .

*Values retrieved from S&P Global.

Accenture plc (ACN)·Q1 2025 Earnings Summary