Accenture (NYSE:ACN) was in focus on Thursday as the consulting firm reported better-than-expected quarterly results, but said it expects growth to slow amid U.S. federal spending cuts.
Shares initially rose following the results, but fell 2.4% in premarket trading.
Looking to fiscal 2026, Accenture expects to earn between $13.52 and $13.90 per share on an adjusted basis, with the midpoint of $13.71 slightly below the $13.78 per share estimate.
Revenue is expected to grow between 2% and 5% in local currency, however that excludes an impact of 1% to 1.5% from the U.S. federal business, Accenture said. Analysts had forecast 5.28% year-over-year revenue growth, or $18.52B.
The guidance comes as Accenture reported stronger-than-expected results for the fourth-quarter, aided by generative artificial intelligence. Generative AI new bookings in the quarter were $1.8B and $5.9B for the full-year. That helped the company earn $3.03 per share on an adjusted basis, better than the $2.99 per share estimate. Revenue rose 7.3% year-over-year to $17.6B, above the $17.46B estimate.
Adjusted operating margin during the period rose 10 basis points to 15.1%, while free cash flow for the period was $3.8B.
“I am very pleased with our 7% growth in fiscal 2025, demonstrating our unique ability to deliver for our clients as they seek our help to reinvent and lead with AI,” Accenture Chair and CEO Julie Sweet said in a statement. “As clients continue to embrace reinvention to create value and drive financial results and business outcomes, they need help to build their digital core, prepare data and reimagine processes, all while training their people to work in entirely new ways. This is what Accenture does best and our strong results this year clearly illustrate our impact.”