Earnings Call Insights: Accenture plc (ACN) Q4 2025
Management View
- Julie T. Sweet, CEO & Chairman, stated that “In fiscal year 2025, we delivered a strong year financially. We significantly elevated our competitive positioning and we took our next big steps to position us for growth in the age of AI.” She highlighted 7% revenue growth, $5 billion in additional revenue, and over $80 billion in bookings, with the majority of growth being organic and broad-based across markets and industries.
- Sweet emphasized the company’s leadership in technology partnerships, noting, “60% of our revenue is from work that we do with these partners which grew 9%, outpacing our overall revenue growth in FY ’25.” She also detailed the company’s investment in GenAI, with revenue from advanced AI tripling year-over-year to $2.7 billion and bookings nearly doubling to $5.9 billion.
- Sweet reported, “Today, we have 77,000 AI and data professionals. We’ve worked on more than 6,000 advanced AI projects just this year and we delivered meaningful revenue in FY ’25.”
- Angie Park, CFO, stated, “We were very pleased with our results in the fourth quarter, which were at the top of our guided range and completed another strong year for Accenture.” Park highlighted a new business optimization program with a $615 million charge in Q4, and an expected $250 million charge in Q1, designed to rotate talent and divest two acquisitions, targeting cost savings for reinvestment.
Outlook
- Angie Park guided for Q1 fiscal 2026 revenues in the range of $18.1 billion to $18.75 billion, projecting 1%–5% growth and factoring in a 1.5% headwind from the federal business. For the full year fiscal 2026, revenue growth is expected to be 2%–5% in local currency, with a 1%–1.5% federal business headwind; excluding federal, revenue is expected to grow 3%–6%. Inorganic contribution is forecast at about 1.5%, with $3 billion planned for acquisitions. Adjusted operating margin is expected to be 15.7%–15.9%. Adjusted diluted EPS guidance is $13.52–$13.90, or 5%–8% growth. The company plans to return at least $9.3 billion to shareholders and increase the quarterly dividend by 10% to $1.63 per share.
- Management reiterated, “We expect to increase our headcount overall across all 3 markets, including in the U.S. and in Europe, reflecting the demand we see in our business.”
Financial Results
- Revenues for the quarter were $17.6 billion, reflecting a 7% increase in U.S. dollars and 4.5% in local currency. Consulting revenues were $8.8 billion and Managed Services revenues were $8.8 billion.
- Adjusted operating margin was 15.1%, up 10 basis points year-over-year. Adjusted EPS was $3.03, up 9%. Free cash flow for the quarter was $3.8 billion, with $1.4 billion returned to shareholders.
- For the full year, revenues reached $69.7 billion, with $80.6 billion in bookings. Free cash flow for the year was $10.9 billion, up 26% year-over-year.
Q&A
- Tien-Tsin Huang, JPMorgan: Asked about revenue growth visibility and discretionary spending. Angie Park responded, “We feel really good about our positioning… Our pipeline is solid overall and we see strong demand for our large transformation deals.”
- Huang followed up about AI-driven productivity and deflationary effects. Julie Sweet answered, “We don’t see AI as deflationary. We do see and are seeing it as expansionary, similar to every tech evolution we’ve been through.”
- David Koning, Baird: Questioned the balance between GenAI and Managed Services. Angie Park confirmed, “Both Consulting and Managed Services are balanced. We see both of them in the low to mid-single-digit range.”
- James Faucette, Morgan Stanley: Inquired about CapEx and GenAI project pricing. Park explained, “We expect about $1 billion this year… expanding our real estate and leasehold improvements.” She added GenAI project pricing is “accretive overall to Accenture’s average.”
- Bryan Bergin, TD Cowen: Asked about clients’ tendency to implement GenAI themselves. Sweet said many clients “started things on their own and then come to us… but then just can’t scale it.”
- Darrin Peller, Wolfe Research: Queried about federal procurement and policy changes. Sweet noted, “We do see procurement is now starting to pick up, although it’s still slower than it has been in the past.”
- James Schneider, Goldman Sachs: Asked about headcount growth. Park responded, “We expect it to grow across all markets.”
Sentiment Analysis
- Analysts’ tone was neutral to slightly positive, focusing on visibility of growth, AI productivity, and the balance between managed and consulting services. Questions were direct but lacked strong skepticism.
- Management maintained a confident and positive tone, emphasizing visibility, growth, and the expansionary role of AI. Sweet stated, “We are confident… we delivered our 7% growth last year.” Management’s tone was consistently more optimistic compared to the previous quarter, where caution and uncertainty were more prominent.
- Compared to last quarter, both analysts and management displayed greater optimism, with fewer concerns about macro headwinds and more focus on execution and AI opportunities.
Quarter-over-Quarter Comparison
- Guidance language shifted from cautious optimism in the previous quarter to more assertive growth targets and expansion plans for AI and headcount in the current quarter.
- Strategic focus evolved from scaling GenAI and launching Reinvention Services to embedding advanced AI throughout the business and accelerating talent rotation.
- Analyst questions this quarter concentrated more on the impact and monetization of AI, as well as operational execution, compared to previous concerns on macro headwinds and acquisition pacing.
- Key metrics such as revenue, margin, and cash flow showed continued improvement and increased guidance, while the tone from management was more confident and less defensive than last quarter.
Risks and Concerns
- Management acknowledged continued macroeconomic uncertainty and a slow pace of federal procurement.
- A $615 million charge was recorded for a business optimization program, with an additional $250 million expected next quarter, including severance and divestitures of non-strategic acquisitions.
- Sweet noted, “We are exiting on a compressed time line, people where reskilling based on our experience is not a viable path for the skills we need.”
- Park added that cost savings from these actions will be reinvested into talent and business growth.
Final Takeaway
Accenture management highlighted a strong finish to fiscal 2025, emphasizing robust revenue growth, record bookings, and significant advancements in AI capabilities. The company is targeting 2%–5% revenue growth for fiscal 2026, plans to increase headcount globally, and is embedding advanced AI into every aspect of its operations and client offerings. Despite ongoing macroeconomic challenges, Accenture reports solid demand visibility and sustained momentum in large-scale transformation projects, underpinned by strategic investments in talent and technology.