Accenture raised its outlook for the fiscal year as it continues to rake in AI-related bookings.
The consulting firm, which was one of the winners in Constellation Research's 2024 Enterprise Awards, projected fiscal 2025 revenue growth of 4% to 7% with earnings of $12.43 a share to $12.79 a share. For the second quarter, Accenture projected revenue of $16.2 billion to $16.8 billion, up 5% to 9%.
That outlook was better than expected. Accenture also topped estimates for the first quarter with earnings of $3.59 a share on revenue of $17.7 billion, up 9.3% from a year ago. Earnings were 20 cents a share better than estimates and revenue was $570 million above targets.
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Accenture has been able to land new bookings for generative AI projects even as new booking overall are flat. Generative AI bookings in the first quarter were $1.2 billion. Overall, Accenture landed first quarter bookings of $18.7 billion, up 1% from a year ago.
Julie Sweet, Accenture's CEO, said the company saw revenue growth in consulting and managed services across industries. In the first quarter, Accenture had 30 bookings of more than $100 million. "We continued to lead in helping our clients realize value with generative AI," she said.
By industry group, Accenture reported first quarter revenue growth between 4% and 13%. Health and public service industry drove the strongest growth.
On the earnings call, Sweet said:
"Starting with the demand environment, we saw more of the same. Our clients are focused on reinvention, which means large-scale transformations. We do not currently see an improvement in overall spending by our clients, particularly on smaller deals. When those market conditions improve, we will be well-positioned to capitalize on them, as we continue to meet the demand for the critical programs our clients are prioritizing."
GenAI continues to be a catalyst for reinvention across the enterprise and building out the data foundation necessary to capitalize on AI, as an increasing part of that growth. Themes around achieving both cost efficiencies and growth continue across the demand we're seeing."
Constellation Research analyst Holger Mueller said:
"Accenture had a good quarter, considering that the services business is affected by the AI trend both in a positive and a challenging way. In a positive way: enterprises need help to leverage AI. The negative is that AI makes many tasks easier to implement, thus requiring less of consultant help. Accenture's managed services business on the other side is doing well, with new bookings in managed services for the first time surpassing the (traditional) consulting business. A relatively stronger performance in Europe was a positive surprise as well. Now it is all about how Accenture can further leverage the AI era."
