Q2 2025 Earnings Summary
- Accenture reported strong bookings of $20.9 billion in Q2, with a book-to-bill ratio of 1.3 and 32 clients with quarterly bookings greater than $100 million, reflecting continued strong demand and market share gains.
- Clients are investing in larger transformational deals, focusing on reinvention, and Accenture continues to execute on this demand, positioning the company for growth despite uncertainties.
- Accenture's well-diversified business across markets, industries, and types of work enables it to navigate uncertainties effectively and capitalize on opportunities like federal government modernization and reinvention.
- Elevated Global Economic Uncertainty May Impact Accenture's Business: Accenture executives acknowledged an elevated level of uncertainty in the global economic and geopolitical environment, including discussions around tariffs and consumer sentiment. This uncertainty could potentially impact client spending and Accenture's business performance.
- Lower Organic Growth Expected in Second Half of FY25: Accenture is projecting organic growth for the full fiscal year to be 2% to 4%, down from higher levels in the first half. The inorganic contribution from acquisitions is also expected to decrease from about 4% in the first half to about 2% in the second half, suggesting a potential slowdown in business momentum.
- Competitive Market Leading to Pricing Pressure: Despite reporting relatively stable pricing, Accenture acknowledges that the market continues to be very competitive, which may result in ongoing pricing pressure and could impact margins and profitability.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | +5.4% (from $15,800M to $16,659M) | Total Revenue grew by 5.4% YoY driven by a balanced recovery across service lines and geographic markets, building on earlier period improvements where strong growth in key industry groups and managed services helped offset weaknesses in certain sectors. These gains indicate that the enhancements in operational efficiency and strategic prioritization seen in previous periods continue to support overall revenue growth. |
Financial Services revenue | +7.2% (from $2,809M to $3,010M) | Financial Services revenue increased by 7.2% YoY, reflecting a rebound built upon earlier successes where increased activity in Banking & Capital Markets and initiatives like AI and digital transformation contributed to growth. The improvement continues the momentum seen in previous periods as regional dynamics—particularly strong performance in the Americas—helped drive higher conversions. |
Health & Public Service | +8.3% (from $3,334M to $3,609M) | Health & Public Service shows robust growth of 8.3% YoY, building on the earlier period’s gains driven by public service initiatives and client investments in digital transformation. Consistent improvements in efficiency and cost-saving measures—especially in markets such as EMEA and the Americas—have underpinned this sustained upward trend. |
Products segment revenue | +6.1% (from $4,762M to $5,052M) | Products segment revenue increased by 6.1% YoY due to broad-based demand across consumer goods, retail, and travel services. This follows previous period trends where strong geographic contributions—especially from the Americas—and client focus on supply chain resilience and operational improvements drove the segment’s growth. |
EMEA regional revenue | +3.7% (reaching $5,804M) | EMEA revenue grew modestly by 3.7% YoY, a change that mirrors the mixed performance seen in earlier periods. Growth from countries like the United Kingdom and Italy was counterbalanced by declines in other sectors, such as Banking & Capital Markets, resulting in a lower overall percentage increase despite positive contributions from managed services and public service initiatives. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Revenue | Q3 2025 | "$16.2B to $16.8B, 5% to 9% growth, FX impact -2.5% " | "$16.9B to $17.5B, 3% to 7% growth, FX impact -0.5% " | raised |
Revenue Growth | FY 2025 | "4% to 7% in local currency over FY 2024 " | "5% to 7% in local currency " | raised |
Inorganic Contribution | FY 2025 | "Bit more than 3% (≈4% in H1 and 2% in H2) " | "Bit more than 3% (4% in H1 and 2% in H2) " | no change |
Operating Margin | FY 2025 | "15.6% to 15.8% (10-30 bp expansion) " | "15.6% to 15.7% (10-20 bp expansion) " | lowered |
Diluted EPS | FY 2025 | "$12.43 to $12.79 " | "$12.55 to $12.79 " | raised |
Operating Cash Flow | FY 2025 | "$9.4B to $10.1B " | "$9.4B to $10.1B " | no change |
Free Cash Flow | FY 2025 | "$8.8B to $9.5B " | "$8.8B to $9.5B " | no change |
Property and Equipment Additions | FY 2025 | "$600 million " | "$600 million " | no change |
Acquisitions | FY 2025 | "Approximately $3 billion " | "$2 billion to $3 billion " | lowered |
Effective Tax Rate | FY 2025 | "22.5% to 24.5% (compared to 23.6% in FY 2024) " | "22.5% to 24.5% (compared to 23.6% in FY 2024) " | no change |
Shareholder Returns | FY 2025 | "At least $8.3 billion " | "At least $8.3 billion " | no change |
Organic Growth | FY 2025 | no prior guidance | "Expected in the range of 2% to 4% " | no prior guidance |
Segment Growth | FY 2025 | no prior guidance | "Consulting: mid-single-digit; Managed Services: high single-digit " | no prior guidance |
| Metric | Period | Guidance | Actual | Performance |
|---|---|---|---|---|
Revenue | Q2 2025 | $16.2 billion to $16.8 billion | $16,659 million | Met |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Large-Scale Transformation Deals & High-Value Client Bookings | Emphasized consistently in Q1 2025, Q3 2024, and Q4 2024 as a key driver of client reinvention, with numerous high‐value bookings and a strategic shift toward large-scale transformations | Q2 2025 continues the focus with record numbers (e.g., 32 clients over $100M and $20.9B in total bookings), reinforcing its status as a reinvention partner | Consistent emphasis with increasing scale and reinforcing messaging across periods. |
Global Economic and Geopolitical Uncertainty | Mentioned lightly in Q1 2025 (via the CEO’s general comments) and in Q4 2024 with a cautious tone; little mention in Q3 2024 | Q2 2025 highlights an elevated level of uncertainty, stressing global and geopolitical risks | Increased emphasis in the current period with a more pronounced focus on uncertainty. |
Competitive Pricing Pressure & Margin Challenges | Discussed in Q1 2025 (competition driving lower pricing, mitigated by efficiencies) and in Q3 2024 (acknowledged pricing pressure with operating margin expansion) | Q2 2025 notes stable pricing despite competition but points to a decrease in gross margin (contractor cost factors) while expecting modest operating margin expansion | A consistent challenge with subtle shifts in the drivers of margin pressure. |
Organic Growth Slowdown & Decline in Inorganic Contributions | Addressed in Q1 2025 and Q4 2024: forecasts of decelerating organic growth and a reduced contribution from acquisitions were flagged as cautionary | Q2 2025 projects organic growth between 2% and 4% and a noticeable decline in inorganic contributions later in the year | Steady deceleration with a persistent cautious tone on both organic and inorganic growth. |
Consulting Business Performance and Outlook | Consistently positive across Q1, Q3, and Q4 2024 with steady revenue, improved bookings, and a pivot toward large transformation deals | Q2 2025 reports strong consulting performance with stable pricing and robust bookings, continuing the trend of positioning as a partner in large-scale transformations | Maintaining a positive outlook with stable performance and incremental evolution in strategic focus. |
Emergence and Impact of GenAI Solutions | Extensively discussed in Q1, Q3, and Q4 2024 as an emerging, transformative catalyst with growing bookings and revenue milestones | Q2 2025 deepens the emphasis on GenAI with record revenue and new bookings, highlighting its role in client transformations and internal productivity | A rapidly growing, strategically critical area with significantly positive sentiment and accelerated adoption. |
Federal Government and Public Sector Modernization | A recurring topic in Q3 2024, Q1 2025, and Q4 2024, emphasizing strategic partnerships, acquisitions, and public sector transformation opportunities | Q2 2025 discusses challenges (e.g., federal contract reviews) alongside opportunities to modernize and consolidate government operations | Consistent focus with a mix of caution (due to review uncertainty) and long-term opportunity. |
Financial Strength, Leverage, and Credit Ratings | Addressed in Q4 2024 (emphasis on maintaining low net leverage and strong ratings) and briefly noted in Q1 2025 and Q3 2024 with debt and cash position details | Not mentioned in Q2 2025 | Dropped from current discussion, potentially indicating reduced emphasis this period. |
Alignment with Client Budget Cycles & Discretionary Spending Trends | Detailed in Q3 2024 and Q4 2024 (with promotion cycle adjustments and emphasis on budget timing) and in Q1 2025 (visibility into early-year budgets) | Q2 2025 maintains focus on large transformation spending while noting constrained discretionary budgets, with continued monitoring as uncertainty evolves | A stable theme with consistent alignment; the focus remains on larger strategic deals amid limited discretionary spend. |
Tariffs and Consumer Sentiment | Not addressed in Q1, Q3, or Q4 2024 | Introduced in Q2 2025 with commentary on tariffs as part of a global discussion and consumer sentiment as a regional (Americas) issue | A new topic emerging in the current period, adding an external macroeconomic dimension to the discussion. |
Wage Inflation Effects on Gross Margins | Q1 2025 mentioned stable wage dynamics with market-relevant wages; Q3 and Q4 2024 did not specifically discuss this | Q2 2025 minimally discusses gross margin pressure, attributing decreases chiefly to contractor costs rather than wage inflation per se | Consistently managed with no new escalation; remains a low-impact factor in current discussions. |
Negative Operations Revenue Trends | Q3 2024 mentioned a recovery from negative trends (from negative to flat) and Q1 and Q4 reflected positive growth in operations | Q2 2025 reports no negative trends—rather, robust growth in managed services and operations revenue | An area showing consistent improvement with no adverse trends noted in the current period. |
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Revenue Outlook and Guidance
Q: What's the updated revenue outlook amid current uncertainties?
A: Accenture raised their full-year revenue growth guidance to 5%-7% by removing the bottom end of prior guidance. This includes expected organic growth of 2%-4% , reflecting elevated uncertainty but no observed slowdown. They assume discretionary spending does not need to improve for the top end, allowing for deterioration at the bottom. -
Impact of Uncertainty on Demand
Q: Are clients delaying initiatives due to recent uncertainties?
A: Management noted an elevated level of uncertainty in recent weeks, particularly due to tariffs and consumer sentiment. Despite this, they haven't seen a slowdown or pauses in client activity , and are in discussions about accelerating cost-related programs. -
U.S. Federal Revenue Risk
Q: How is the U.S. Federal segment impacting outlook?
A: Accenture's U.S. Federal business, representing 8% of revenue , faces potential impacts from slowing procurement actions. The guidance range reflects their best view of these impacts, though they didn't specify revenue at risk. -
Margin Outlook
Q: What's affecting the margin outlook, and are costs rising?
A: Operating margin is expected to expand 10-20 basis points for the year. Gross margin decreased due to higher contractor costs and reduced severance costs from prior year actions. Pricing remains relatively stable but the market is highly competitive. -
Pricing Environment
Q: Is pricing stabilizing despite competition?
A: Pricing was relatively stable this quarter , though the market remains very competitive. Accenture continues to focus on pricing, which reflects contract profitability. -
Bookings and Large Deals
Q: How did bookings perform, and what's the outlook?
A: Accenture reported $20.9 billion in bookings in Q2 with a book-to-bill ratio of 1.3. They had 32 clients with bookings over $100 million , indicating strong demand for large transformational deals. -
Discretionary Spending Trends
Q: Are clients' discretionary spends changing?
A: Discretionary spending remained constrained overall in Q2 , with some improvements in banking and capital markets in the Americas. The guidance assumes discretionary spend does not need to improve at the top end, allowing for further deterioration at the bottom. -
AI and GenAI Initiatives
Q: How is AI impacting business and client relationships?
A: Accenture is seeing increasing client adoption of Generative AI (GenAI). In H1, they generated $1.1 billion in GenAI revenue, surpassing last year's full-year figure of $900 million. They work closely with ecosystem partners to drive reinvention through AI. -
Workforce Management
Q: How is the workforce mix changing?
A: The mix of subcontractors and employees can fluctuate based on client work. Accenture added over 2,000 people in Q2 and maintained utilization at 91%, their desired range. -
Growth of Accenture Song
Q: What's the outlook for the Song segment's growth?
A: Accenture Song achieved double-digit growth. They help clients build data foundations to utilize GenAI, reinforcing Song's durable growth by being at the core of clients' digital reinvention.