Global consulting and professional services company Accenture (ACN -6.86%) reported fourth-quarter and full-year fiscal 2024 earnings on Thursday that showed a 3% increase in revenue for the quarter and a 1% increase for the year. The company reported Q4 revenue of $16.41 billion, which fell within management’s guidance range.
GAAP EPS for Q4 was $2.66, bringing the full-year GAAP EPS to $11.44, aligned with management's guidance. Overall, the quarter showcased robust performance driven by strategic priorities like AI and cloud technology despite economic pressures.
| Q4 Fiscal 2024 | Q4 Fiscal 2023 | Change (YOY) | |
|---|---|---|---|
| Revenue | $16.41 billion | $15.99 billion | 3% |
| GAAP EPS | $2.66 | $2.15 | 23.7% |
| Adjusted EPS | $2.79 | $2.71 | 3% |
| GAAP net income | $1.72 billion | $1.41 billion | 22% |
Source: Accenture. YOY = Year over year.
Understanding Accenture
Accenture is a leading global professional services company providing a wide range of services in strategy, consulting, digital, technology, and operations. With capabilities at the intersection of business and technology, it helps organizations maximize their performance and achieve their vision. Accenture’s key focus areas include technological innovation, ecosystem relationships, investment in talent and culture, strategic acquisitions, and sustainability practices. These factors drive its competitive advantage in the market.
Accenture’s recent strategies have centered around leveraging cutting-edge technologies such as artificial intelligence (AI), cloud computing, and data analytics. Its strong emphasis on building relationships with leading technology providers has enhanced its service offerings.
Quarterly Highlights
The small rise in Q4 revenue was primarily driven by its North American market, which reported $7.97 billion (up 5% year over year and up 6% in local currency). The Growth Markets segment saw a 9% increase in local currency revenue to $2.80 billion, though it declined by 3% in U.S. dollars.
The company's focus on technological innovation is evident in its generative AI bookings, which reached $1 billion for Q4 and $3 billion for the full fiscal year. CEO Julie Sweet emphasized the transformative potential of generative AI, noting, “We continue to accelerate our leadership in Generative AI, which we believe is the most transformative technology of the next decade.”
Operating margin for Q4 was 14.3% on a GAAP basis, with a slight improvement to 14.8% for the full fiscal year. Adjusted operating margin was in line with management's guidance at 15.5%, showcasing operational efficiency even in challenging market conditions.
Accenture also continued its strategic acquisitions strategy, investing $6.58 billion in various acquisitions throughout fiscal 2024. These investments bolster the company’s capabilities and geographic reach, albeit with inherent risks if expected synergies do not materialize.
Accenture raised its quarterly dividend to $1.48 per share (up 15%), underlining its commitment to shareholder returns. This is part of a long-term strategy to return excess cash to shareholders while maintaining a strong balance sheet.
Accenture also repurchased 2.1 million shares for a total $628 million. This latest repurchase brought total share repurchases for the full fiscal year to 14 million at a price of roughly $4.5 billion.
The company aims to achieve net-zero emissions by 2025, reinforcing its dedication to sustainability.
Looking Ahead
Accenture provided solid fiscal year 2025 guidance with revenue growth expectations between 3% and 6% in local currency. GAAP EPS is projected to be between $12.55 and $12.91, a 5% to 8% increase. The company anticipates a GAAP operating margin of 15.6% to 15.8% and free cash flow in the range of $8.8 billion to $9.5 billion. This guidance indicates cautious optimism, balancing expectations of further driving technological innovations with broader economic uncertainties.
Investors should closely monitor Accenture’s performance in its key focus areas: technological advancements, strategic acquisitions, and sustainability initiatives. These will be the primary drivers to meet its targeted financial outcomes in the upcoming quarters.
