Accenture rises after Q4 beat amid AI wave, upbeat Q1 outlook

Accenture’s (NYSE:ACN) stock rose about 4% premarket on Thursday after fiscal fourth quarter results beat expectations and the forecast for the first quarter of fiscal 2025 revenue was seen above estimates.

Peers, EPAM Systems (EPAM) rose about 2%, while Cognizant Technology Solutions (CTSH) and Infosys (INFY) were up about 1% each.

For the fiscal fourth quarter ended Aug. 31, adjusted EPS rose 3% year-over-year to $2.79, while revenue climbed 3% (in U.S. dollar terms) year-on-year to $ $16.41B. Both top and bottom line numbers surpassed analysts’ estimates.

“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. Our successful strategy to lead reinvention for clients and continued investments in our business have positioned Accenture for strong growth in fiscal 2025,” said Accenture’s Chair and CEO Julie Sweet.

The Irish company noted that generative AI new bookings were $1B for the fourth quarter.

Accenture’s Consulting revenues in the fourth quarter grew 1% (in U.S. dollars) year-over-year to $8.26B, while Managed Services revenues jumped 5% (in U.S. dollars) to $8.15B.

New bookings for the fourth quarter were $20.1B, an increase of 21% (in U.S. dollars), compared to the year ago period.

The company’s total cash balance at Aug. 31, 2024 was $5B, compared with $9B at Aug. 31, 2023.

Dividend: Accenture declared a $1.48 quarterly dividend, a 14.7% increase from the prior dividend of $1.29.

Stock Buyback: During the fourth quarter, Accenture bought back or redeemed 2.1M shares, including 2M shares repurchased in the open market, for a total of $628M. This brought total stock repurchases and redemptions for the full fiscal year to 14M shares, including 11.8M shares bought in the open market, to $4.5B.

The company’s board has approved an additional $4B stock buyback, bringing the total outstanding authority to about $6.7B.

Outlook:

Q1: Accenture expects revenues for the first quarter of fiscal 2025 to be in the range of $16.85B to $17.45B (mid-point $17.15B), compared to consensus of $16.94B.

Fiscal Year 2025: For fiscal 2025, the company expects revenue growth to be in the range of 3% to 6% in local currency.

The company said that in fiscal year 2025 it expects to return at least $8.3B in cash to shareholders through dividends and share repurchases.