Earnings Call Insights: Accenture (ACN) Q1 2026
Management View
- Julie T. Sweet, CEO & Chairman, opened by highlighting strong quarterly performance, stating, “We are very pleased with our results as we continue executing our strategy to help our clients reinvent every part of their enterprise, reflected in our bookings of $20.9 billion, including 33 clients with quarterly bookings greater than $100 million. We delivered revenue of $18.7 billion, growing 5% in local currency at the top of our guided range with broad-based growth across markets and both types of work.” She underscored expansion in market share and noted, “Adjusted operating margin expanded by 30 basis points year-over-year, and we delivered adjusted EPS growth of 10% compared to Q1 last year.”
- Sweet emphasized the continued strategic investment in AI and talent rotation, saying, “We have nearly reached our goal of 80,000 AI and data professionals and our people participated in approximately 8 million training hours this quarter with a significant focus on building advanced AI technology and industry skills.”
- She announced a change in advanced AI reporting, explaining, “This will be the last quarter in which we share these specific metrics. The demand for AI is both real and rapidly maturing. We’ve now reached a point where advanced AI is being embedded in some way across nearly everything we do.”
- Sweet detailed new partnerships and acquisitions, including an agreement to acquire a 65% stake in DLB Associates, which she said, “meaningfully expands our capital projects capabilities and presence in the high-growth data center consulting market.” Six acquisitions, totaling $374 million, were completed in the quarter to strengthen AI, data, and digital capabilities across global regions.
- CFO Angie Park stated, “We are very pleased with our first quarter results with revenue at the top of our guided range as well as strong adjusted margin expansion, adjusted EPS growth and free cash flow.”
Outlook
- Park provided guidance for Q2 fiscal 2026, expecting revenues of $17.35 billion to $18 billion, with local currency growth of 1% to 5%, including about a 1% impact from the federal business. For the full fiscal year 2026, she reiterated expectations for revenue growth of 2% to 5% in local currency over fiscal 2025, including a 1% federal headwind.
- Park maintained that “adjusted operating margin, we continue to expect fiscal year ’26 to be 15.7% to 15.9%, a 10 to 30 basis point expansion over adjusted fiscal ’25 results,” and projected adjusted diluted EPS in the range of $13.52 to $13.90, or 5% to 8% growth over fiscal 2025.
- The company continues to anticipate $3 billion in acquisitions for the year and plans at least $9.3 billion in shareholder returns.
Financial Results
- Accenture reported Q1 revenues of $18.7 billion, with 5% growth in local currency and 6% growth in U.S. dollars. Consulting revenue was $9.4 billion, and managed services revenue was $9.3 billion.
- Adjusted operating margin reached 17%, representing a 30 basis point year-over-year increase. Adjusted EPS was $3.94, reflecting 10% growth. Free cash flow for the quarter was $1.5 billion.
- Bookings were $20.9 billion, and the company returned $3.3 billion to shareholders through repurchases and dividends.
- Business optimization costs for the quarter were $308 million, primarily related to employee severance.
Q&A
- Tien-Tsin Huang, JPMorgan: Asked about the shift in consulting’s role in AI and its business impact. Sweet replied, “Enterprise AI is fundamentally different than consumer AI… Clients — our clients are convinced AI is going to be a very important part of their future, and it’s going to allow them to unlock brand-new value.”
- Jason Kupferberg, Wells Fargo: Inquired about expectations for AI partnerships to impact revenue. Sweet responded that the timing aligns with market adoption, not just partnership readiness, and “our expectations there are reflected in our guidance.”
- James Faucette, Morgan Stanley: Asked about the mix of proof-of-concept vs. production in AI projects. Sweet explained scaling is more common in customer service, finance, and procurement, but “it’s still pretty early in terms of scaling.”
- Bryan Keane, Citi: Questioned discretionary spend trends. Sweet replied, “We have not been waiting around for it to come back… at this point, we haven’t seen a change in the market.”
- Bryan Bergin, TD Cowen: Asked about growth outlook and Song’s trajectory. Park said, “our 2% to 5% really reflects what we see going for the remainder of the fiscal year.” Sweet addressed Song’s role in driving client growth amid productivity tools.
- Darrin Peller, Wolfe Research: Inquired about revenue opportunities as clients complete digital core work. Sweet stated, “what you’re seeing is… this inflection point where you’ve got now clients saying to us, okay, we have to do this across the enterprise.”
- Kevin McVeigh, UBS: Asked about margins and AI adoption. Park cited “30 basis points of op margin expansion” and confirmed full-year margin guidance.
- David Koning, Baird: Asked about health and public services growth. Park cited strength in federal and EMEA/Asia Pacific regions.
Sentiment Analysis
- Analysts’ tone was generally neutral to slightly positive, with repeated focus on AI adoption, revenue visibility, discretionary spend, and margin trajectory. Questions highlighted curiosity about the scalability of AI, pricing, and commercial models.
- Management adopted a confident tone in prepared remarks and during Q&A, emphasizing competitive advantages, but also provided measured responses regarding discretionary spend and the pace of AI adoption. Sweet directly addressed concerns, saying, “We are not seeing a catalyst.”
- Compared to last quarter, both analysts and management maintained a similar tone, though management’s confidence around AI integration and the business model evolution was more pronounced.
Quarter-over-Quarter Comparison
- Guidance language and targets remained consistent with the previous quarter, with no significant changes to revenue, margin, or EPS outlooks.
- Strategic focus continued to center on advanced AI integration, talent rotation, and expanding ecosystem partnerships, with management reiterating the embedded nature of AI across offerings.
- Analysts maintained focus on AI, partnership revenue impact, pricing, and discretionary spending trends, with recurring queries about the timing and scalability of AI contributions.
- Key metrics showed improvement quarter-over-quarter, including higher adjusted operating margins and EPS growth.
- Management’s tone remained confident, emphasizing execution and the company’s differentiated market position.
Risks and Concerns
- Management noted $308 million in business optimization costs related to employee severance and referenced ongoing optimization actions.
- Sweet acknowledged that discretionary spend remains unchanged and that “the pace of overall spending and discretionary spend in our market is at the same levels we have seen over the last year.”
- Analysts raised concerns about the pace of AI adoption, scalability beyond proof-of-concept, and the sustainability of revenue per person growth.
- There were no indications of major new risks or disruptions but ongoing macroeconomic and federal business headwinds were acknowledged.
Final Takeaway
Accenture management underscored the company’s strong performance in the first quarter of fiscal 2026, reiterating guidance for 2% to 5% local currency revenue growth and continued margin expansion. The integration of advanced AI across offerings, a robust partnership ecosystem, and ongoing strategic acquisitions were highlighted as key drivers for sustained growth. Management addressed analyst questions with confidence, emphasizing that while AI adoption is early, demand remains strong, and Accenture is positioned at the forefront of enterprise reinvention. The company remains focused on executing its strategy and investing for long-term leadership in the evolving technology landscape.