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 $15.8B in Q2 2024 to $16.659B in Q2 2025) | Total Revenue increased by 5.4% YoY due to broad-based strength across segments. Growth in high-performing areas (notably Managed Services and Financial Services) built on previous period momentum, reflecting enhanced operational execution and diversified client demand. |
Managed Services | +7.7% (from $7.778B in Q2 2024 to $8.377B in Q2 2025) | Managed Services revenue accelerated by 7.7% YoY, driven by strong demand for application modernization, cloud enablement, and cybersecurity initiatives. This segment’s performance improved notably over Q2 2024, highlighting a continued shift towards technologically focused services. |
Financial Services | +7.2% (from $2.809B in Q2 2024 to $3.010B in Q2 2025) | Financial Services grew by 7.2% YoY as clients increasingly adopted digital and AI-led transformation initiatives in banking and capital markets. The current period shows an uptick over Q2 2024, benefiting from improved market conditions and renewed client confidence in transformation strategies. |
Health & Public Service | +8.1% (from $3.334B in Q2 2024 to $3.609B in Q2 2025) | Health & Public Service revenue rose by 8.1% YoY, propelled by strong performance in public service and health sectors. This reflects continued advancement from Q2 2024, as digital transformation and technology integration in public health and administration continue to gain traction. |
Products Segment | +6.1% (from $4.762B in Q2 2024 to $5.052B in Q2 2025) | Products segment revenue increased by 6.1% YoY due to robust demand for initiatives focused on cost savings, supply chain and operational resilience, and digital transformations. The growth builds on the prior period’s momentum, driven by strategic consulting that leverages technology, data, and AI. |
EMEA Revenue | +3.7% (from $5.599B in Q2 2024 to $5.804B in Q2 2025) | EMEA revenue grew modestly by 3.7% YoY, reflecting steady improvements in key sectors such as public service and life sciences, despite challenges in other areas. This period’s gains build on previous trends and the geographic reclassification efforts that contributed to the earlier period’s figures. |
| 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 | $16.2Bn to $16.8Bn | $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.
Research analysts covering Accenture.