Accenture Outperforms Q1 Revenue Estimates Driven by AI Demand, Raises FY25 Guidance

The IT consulting giant outperformed Wall Street revenue estimates, driven by increasing demand for its services to help clients integrate AI-powered tools into their operations.

IT consulting giant Accenture outperformed Wall Street revenue estimates on Thursday, boosted by increasing demand for its services to help clients integrate AI into their operations.

Accenture’s revenue rose 10% to $16.04 billion in the first quarter ended Nov. 30, beating analysts’ estimates of $15.73 billion, according to Refinitiv data.

Earnings per share (EPS) reached $3.59, up 16% from $3.10 in the same quarter last year and surpassing analysts’ expectations of $3.42.

Accenture’s product revenue hit $5.43 billion, reflecting a 12% year-over-year (YoY) increase, while its health and public service segment generated $3.81 billion in revenue, up 13%.

GAAP operating margin improved by 90 basis points to 16.7%, and operating cash flow more than doubled to $1.02 billion, compared to $498.6 million in the previous year.

“Our strategy to lead reinvention for clients while continuing to invest in our business has given us a strong start to fiscal 2025,” said Julie Sweet, Chair and CEO of Accenture.

Accenture’s new bookings for Q1 reached $18.7 billion, including 30 client contracts over $100 million. The company’s focus on generative AI was a key factor, with $1.2 billion in new bookings related to this technology.

Looking ahead, Accenture raised its revenue growth guidance for FY25 to 4-7% in local currency, up from the previous forecast of 3-6%. The company also expects full-year GAAP EPS to range from $12.43 to $12.79, reflecting its updated revenue outlook.

For Q2 FY25, revenue is expected to fall between $16.2 billion and $16.8 billion, aligning with market expectations. The company reaffirmed its FY25 GAAP operating margin forecast of 15.6-15.8%, signaling up to 100 basis points of expansion.

Accenture’s full-year cash flow forecast remains steady, with operating cash flow expected between $9.4 billion and $10.1 billion, capital expenditures set at $600 million, and free cash flow forecast to range from $8.8 billion to $9.5 billion. The effective tax rate is projected to remain between 22.5% and 24.5%.