ACN
Earnings call · Aug 2025 (Q4 FY25)

Accenture Q4 FY25 earnings call ACN

Sep 25, 2025 Source

Executive summary

Accenture Q4 FY25 — Strong Financials and AI Leadership

Accenture delivered strong Q4 and full-year FY25 results, driven by its leadership in AI and strategic ecosystem partnerships. The company's focus on enterprise reinvention and large-scale transformations, particularly in advanced AI, is expanding client relationships and driving sustainable growth. Management anticipates continued growth in FY26, balancing investments in talent and acquisitions with margin expansion, despite an unchanged macroeconomic outlook.

Highlights

5

  • FY25 revenue grew 7% in local currency, adding nearly $5 billion in revenue to reach $69.7 billion.

  • FY25 bookings reached $80.6 billion, with a record 129 quarterly client bookings over $100 million.

  • Advanced AI revenue tripled over FY24 to $2.7 billion in FY25, with bookings nearly doubling to $5.9 billion.

  • Adjusted EPS grew 9% to $3.03 in Q4 FY25 and 8% to $12.93 for the full year.

  • Free cash flow for FY25 was $10.9 billion, up 26% year-over-year, with a strong FCF to net income ratio of 1.4.

Concerns

4

  • Macroeconomic backdrop did not improve over FY24, creating a challenging environment.

  • Federal business was a 20 basis point headwind to overall growth for FY25 and is expected to be a 1% to 1.5% headwind for FY26.

  • Gross margin for Q4 FY25 was 31.9%, down from 32.5% in Q4 FY24.

  • Business optimization program resulted in a charge of $615 million in Q4 FY25, with an additional $250 million expected in Q1 FY26.

Guidance & targets

CategoryTargetConfidence
Q1 FY26 Revenue
$18.1 billion to $18.75 billion
high materiality
High
FY26 Revenue Growth (Local Currency)
2% to 5%
high materiality
High
FY26 Inorganic Contribution to Revenue Growth
about 1.5%
medium materiality
High
FY26 Adjusted Operating Margin
15.7% to 15.9%
high materiality
High
FY26 Annual Adjusted Effective Tax Rate
23.5% to 25.5%
medium materiality
High
FY26 Adjusted Diluted Earnings Per Share
$13.52 to $13.90
high materiality
High
FY26 Operating Cash Flow
$10.8 billion to $11.5 billion
medium materiality
High
FY26 Property and Equipment Additions (Capex)
approximately $1 billion
medium materiality
High
FY26 Free Cash Flow
$9.8 billion to $10.5 billion
medium materiality
High
FY26 Cash Return to Shareholders
at least $9.3 billion
high materiality
High
Quarterly Cash Dividend
$1.63 per share
medium materiality
High
Share Repurchase Authority
$5 billion
medium materiality
High
FY26 Acquisitions Investment
about $3 billion
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Consulting
Q4 FY25 revenue. Full-year FY25 Consulting revenues were $35.1 billion, up 5% in local currency.
$8.8 billion3% in local currency——
Managed Services
Q4 FY25 revenue. Full-year FY25 Managed Services revenues were $34.6 billion, up 9% in local currency, driven by 10% growth in technology managed services and 6% growth in operations.
Technology Managed Services growth: high single-digitOperations growth: mid-single-digit
$8.8 billion6% in local currency——
Americas
Q4 FY25 revenue growth, led by Banking & Capital Markets, Industrials, and Software & Platforms, partially offset by a decline in Public Service. Excluding the 3% impact from federal business, Americas grew 8% in local currency.
—5% in local currency——
EMEA
Q4 FY25 revenue growth, led by Insurance, Life Sciences, Utilities, and Consumer Goods, Retail and Travel Services, partially offset by a decline in Public Service. Growth driven by the United Kingdom and Spain, partially offset by a decline in Italy.
—3% in local currency——
Asia Pacific
Q4 FY25 revenue growth, driven by Banking & Capital Markets, Public Service, and Utilities, partially offset by a decline in Energy. Growth led by Japan and Australia.
—6% in local currency——
Industry X
FY25 growth. Strong demand for digital manufacturing and engineering.
—10%——
Song
FY25 growth. Strong demand for reinventing customer experience using AI and data.
—8%——

Operational metrics

Revenue Growth (Local Currency)
7%
FY25

Majority was organic and broad-based across markets, industries, and types of work.

Revenue Growth (Local Currency)
4.5%
Q4 FY25

Excluding the 1.5% impact from federal business, revenues grew 6% in Q4.

Revenue Growth (USD)
7%
Q4 FY25

Q4 FY25 revenue was $17.6 billion.

Adjusted Operating Margin
15.1% up 10 bps
Q4 FY25

Compared to adjusted Q4 FY24 results. Reflects margin expansion while making significant investments.

Adjusted Operating Margin
15.6% 10 bps expansion
FY25

Over adjusted FY24 results.

Adjusted EPS
$3.03 9% growth
Q4 FY25

Compared to adjusted EPS of $2.79 in Q4 FY24.

Adjusted EPS
$12.93 8% growth
FY25

Over adjusted FY24 EPS.

Cash and investments balance
$11.5 billion vs $5 billion last year
As of Aug 31

Compared with $5 billion at August 31 last year.

Free cash flow to net income ratio
1.4
FY25

Very strong ratio.

Share repurchases and redemptions
$474 million
Q4 FY25

At an average price of $295.45 per share.

Cash dividend paid
$922 million
Q4 FY25

Fourth quarterly cash dividend of $1.48 per share.

Total cash returned to shareholders
$8.3 billion
FY25

Through dividends and share repurchases.

Gross margin
31.9% vs 32.5% last year
Q4 FY25

Compared with 32.5% for the same period last year.

Sales and marketing expense
10.2% vs 10.7% last year
Q4 FY25

Compared with 10.7% for the fourth quarter last year.

General and administrative expense
6.6% vs 6.8% last year
Q4 FY25

Compared to 6.8% for the same quarter last year.

Adjusted effective tax rate
27.9% vs 26.2% last year
Q4 FY25

Compared with an adjusted effective tax rate of 26.2% for the fourth quarter last year.

Days services outstanding
47 days vs 47 days last quarter and 46 days last year
Q4 FY25

Compared to 47 days last quarter and 46 days in the fourth quarter of last year.

Revenue from ecosystem partners
60% 9% growth
FY25

60% of revenue is from work with top 10 ecosystem partners, which grew 9%, outpacing overall revenue growth.

Advanced AI revenue
$2.7 billion tripled over FY24
FY25

Reflects revenue specifically related to GenAI, agentic AI, and physical AI, excluding data, classical AI, or AI used in delivery.

Capital projects business revenue
$1.2 billion 49% YoY growth
FY25

Largely organic growth, initially built through acquisitions.

AI and data professionals
77,000 vs 40,000 in FY23
Current

Increased from 40,000 in FY23.

Employees trained in GenAI fundamentals
Over 550,000
Current

Part of the company's re-skilling efforts.

Acquisitions investment
$1.5 billion
FY25

Across 23 acquisitions in FY25.

Headcount
increase
FY26

Expected to increase overall across all 3 markets, including the U.S. and Europe, reflecting demand.

Utilization rate
93%
Q4 FY25

Expected to stay in the low 90s.

Industry KPIs

MetricValueDetails
Headcount dso47 days days
Rpo current rpo$80.6 billion USD
Customer logo metrics305 clients
Large customer cohorts129 clients
Bookings tcv book to bill1.2
Genai ai book of business$5.9 billion USD

Orderbook & backlog

New bookings $21.3 billion Q4 FY25

6% growth in USD, 3% growth in local currency

On top of 24% growth in Q4 of last year.

Overall book-to-bill 1.2 Q4 FY25
Consulting bookings $8.9 billion Q4 FY25
Consulting book-to-bill 1.0 Q4 FY25
Managed Services bookings $12.4 billion Q4 FY25
Managed Services book-to-bill 1.4 Q4 FY25
New bookings $80.6 billion FY25
Client bookings over $100 million 129 FY25

record

Record number of quarterly client bookings over $100 million.

Diamond clients 305 FY25

Largest relationships.

Product announcements

ProductTypeDetails
Reinvention Serviceslaunch

Deals & partnerships

CyberCX Largest cybersecurity acquisition to date, expanding geographic presence and AI-powered security platforms.

Brings approximately 1,400 specialists in APAC and AI-powered security platforms applicable globally, strengthening Accenture's position in advanced cyber protection.

IAMConcepts Canadian identity security specialist serving critical infrastructure.

Expands the depth and regional reach of Accenture's managed security and identity capabilities, underpinning secure AI adoption.

MomentumABM Marketing agency in the U.K. specializing in B2B marketing.

Extends Accenture Song's edge in B2B marketing.

Superdigital Marketing agency in the U.S. specializing in social and influencer marketing.

Extends Accenture Song's edge in social and influencer marketing.

Palantir Strategic partnership playing a critical role in the federal sector.

Accenture is pleased with its new partnership with Palantir, which is key to its federal strategy.

Capital programs

Business Optimization Program underway approximately $865 million
Period spend: $615 million
Spent to date: $615 million
Start: Q4 FY25

Benefit:Over $1 billion in cost savings

Initiated in Q4 FY25, with a charge of $615 million recorded. An additional approximately $250 million is expected in Q1 FY26. The program includes rapid talent rotation (severance for headcount reductions) and divestiture of two non-aligned acquisitions. Expected cost savings of over $1 billion will be reinvested in the business and people.

Risks & headwinds

Macroeconomic backdrop FY25

did not improve over FY24

Mitigation:Focused on delivering results regardless of market conditions by being relevant to clients and leading in AI.

Federal business impact FY25, FY26

20 basis point headwind to overall growth for FY25; estimated 1% to 1.5% headwind for FY26

Mitigation:Procurement is picking up, demand for modernization and efficiency, strong position with ecosystem partners, new partnership with Palantir.

Business optimization program charges Q4 FY25, Q1 FY26

$615 million in Q4 FY25; approximately $250 million expected in Q1 FY26

Mitigation:Expected to generate over $1 billion in cost savings, which will be reinvested in the business and people for future growth.

Gap between AI mindshare and enterprise adoption Current

Value realization underwhelming for many, enterprise adoption at scale is slow outside digital natives.

Mitigation:Helping clients with enterprise reinvention, tech and org readiness, data preparedness, and new talent strategies to unlock AI value.

Talent rotation challenges Ongoing

Exiting people where reskilling is not a viable path for needed skills.

Mitigation:Investing in upskilling existing employees as primary strategy, continuously identifying areas for efficiency through AI to create investment capacity.

What to watch in Q1 FY26

FY26 Revenue Growth (ex-federal)

FY26
Current FY25: 7% local currency (6% ex-federal in Q4)
Target 3% to 6% local currency

Why it matters

This indicates the underlying health and demand for Accenture's services, excluding a known drag, and is key to the company's overall growth thesis.

For the full fiscal '26, we expect revenue to be in the range of 2% to 5% growth in local currency over fiscal '25, including an estimated 1% to 1.5% impact from our federal business. Excluding the impact of federal, our revenue is expected to be an estimated 3% to 6%.

Q&A highlights

What is the visibility on revenue growth for FY26, given strong bookings and pipeline, and what are you seeing in discretionary spending?

Accenture has good visibility for FY26 due to strong FY25 bookings of $80.6 billion and a solid pipeline for large transformation deals. For discretionary spending, the guidance assumes no change at the top end of the range, while allowing for deterioration at the bottom end.

“As we look at FY '26, we feel really good about our positioning. And so as you said, you saw our strong bookings of $80.6 billion in FY '25 that positions us for FY '26. We can see our backlog from the large deals.”

asked by Tien-Tsin Huang · answered by Angie Park

2 min read 6 chapters

Detailed narrative

Strategic Advantages and Ecosystem Partnerships

Accenture's strong FY25 performance is attributed to its long-standing competitive advantages, including deep ecosystem partnerships, broad capabilities, and trusted client relationships. The company's strategy to be the #1 partner for the tech ecosystem has proven successful, with 60% of its revenue derived from work with top 10 ecosystem partners, growing 9% in FY25. These partnerships are deepening as tech companies seek help to translate technology into business outcomes and scale AI adoption.

AI Leadership and Market Positioning

Accenture's early and significant investment of $3 billion in GenAI has positioned it as a leader in this new area of spend. The company tripled its advanced AI revenue to $2.7 billion and nearly doubled advanced AI bookings to $5.9 billion in FY25. This growth reflects a focus on GenAI, agentic AI, and physical AI, excluding data and classical AI. Accenture is helping clients navigate the gap between AI mindshare and actual enterprise adoption, which is often hindered by tech and organizational readiness.

Talent Strategy and Internal Reinvention

Accenture has significantly re-skilled its workforce, growing its AI and data professionals from 40,000 to 77,000. Over 550,000 employees are trained in GenAI fundamentals. The company is implementing a refreshed 3-pronged talent strategy focused on upskilling, exiting employees for whom reskilling is not viable, and driving efficiencies through AI to create investment capacity. The launch of Reinvention Services aims to streamline operations and accelerate the integration of AI and data into offerings.

Client Engagement and Large-Scale Transformations

The company added 37 clients with quarterly bookings over $100 million in Q4, bringing the full-year total to a record 129. Accenture finished the year with 305 Diamond clients, its largest relationships. AI is acting as a new catalyst for large-scale digital core transformations, deepening long-standing partnerships and accelerating demand. Examples include modernizing the Bank of England's Real-Time Gross Settlement service and expanding work with a major financial services client where contract value more than doubled over five years due to AI-driven initiatives.

Industry-Specific AI Adoption and Security

In banking, cloud adoption is accelerating due to AI demand, driving digital core modernization. Accenture's security business grew 16% for the year, reflecting increased demand for advanced cyber protection and integrated security solutions that leverage AI. The company made strategic acquisitions like CyberCX and IAMConcepts to strengthen its position in cybersecurity and identity management, particularly in APAC and critical infrastructure.

Cross-Industry AI Applications and Growth Areas

Accenture is applying AI across various industries, such as with Ecolab to redesign Lead to Cash processes using 9 scaled agentic AI agents, aiming for 5-7% sales growth and 20% operating income margin without increasing costs at the same pace. For an energy company, AI-powered digital twins are optimizing field operations, expected to reduce lost production by 2-4% and decrease costs by up to 22%. Industry X grew 10% and Song grew 8% in FY25, indicating strong demand for digital manufacturing and customer experience reinvention.

AI-generated summary of the company's earnings call. Not investment advice.