Accenture Reports First-Quarter Fiscal 2024 Results

By / / Accenture

Accenture Reports First-Quarter Fiscal 2024 Results

   --  Revenues of $16.2 billion, an increase of 3% in U.S. dollars and 1% in 
      local currency 
   --  GAAP operating margin of 15.8%, compared to 16.5% in the first quarter 
      of fiscal 2023; adjusted1 operating margin of 16.7%, an expansion of 20 
      basis points 
   --  GAAP EPS of $3.10, an increase of 1% over the first quarter of fiscal 
      2023; adjusted EPS of $3.27, an increase of 6% 
   --  New bookings of $18.4 billion, an increase of 14% in U.S. dollars and 
      12% in local currency 
   --  Quarterly cash dividend of $1.29 per share, an increase of 15% 
   --  Accenture confirms business outlook for fiscal 2024; continues to 
      expect revenue growth of 2% to 5% in local currency; GAAP EPS of $11.41 
      to $11.76, a 6% to 9% increase; and adjusted EPS of $11.97 to $12.32, a 
      3% to 6% increase 
NEW YORK--(BUSINESS WIRE)--December 19, 2023--

Accenture (NYSE: ACN) reported financial results for the first quarter of fiscal 2024 ended November 30, 2023.

This press release features multimedia. View the full release here:

Q1 FY24 Earnings Infographic (Graphic: Business Wire)

Julie Sweet, chair and CEO, Accenture, said, “I am pleased that we delivered on our commitments this quarter while strategically investing at scale for future growth. Our deep and trusted client relationships are again reflected in the 30 clients with quarterly bookings of more than $100 million. And we continue to lead our industry in Gen AI — the great accelerator of reinvention — with over $450 million in new bookings. I am incredibly grateful to the 743,000 people of Accenture, who are steadfastly dedicated to helping our clients achieve their ambition to grow and thrive in the years ahead.”

Revenues were $16.2 billion, an increase of 3% in U.S. dollars and 1% in local currency over the first quarter of fiscal 2023.

GAAP operating income was $2.56 billion, compared to $2.59 billion for the first quarter of fiscal 2023, and operating margin was 15.8% compared to 16.5% for the first quarter last year. Adjusted operating income was $2.70 billion and adjusted operating margin was 16.7%, an expansion of 20 basis points from the first quarter of fiscal 2023.

GAAP diluted earnings per share were $3.10, compared to $3.08 for the first quarter of fiscal 2023. Adjusted EPS were $3.27, an increase of 6% from the first quarter of fiscal 2023.

New bookings for the quarter were $18.4 billion, with consulting bookings of $8.6 billion and managed services bookings of $9.8 billion.

(1) Adjusted financial measures presented in this release are non-GAAP 
financial measures that exclude business optimization costs, as further 
described in this release.

Financial Review

Revenues for the first quarter of fiscal 2024 were $16.22 billion, compared with $15.75 billion for the first quarter of fiscal 2023, an increase of 3% in U.S. dollars and 1% in local currency.

Revenues for the quarter reflect a foreign-exchange impact of approximately positive 1.5% compared with the positive 2.5% impact previously assumed. Adjusting for the actual foreign-exchange impact, the company’s guided range for quarterly revenues was approximately $15.70 billion to $16.30 billion. Accenture’s first quarter fiscal 2024 revenues were at the top end of this adjusted range.

   --  Consulting revenues for the quarter were $8.46 billion, flat in U.S. 
      dollars and a decrease of 2% in local currency compared with the first 
      quarter of fiscal 2023. 
   --  Managed Services revenues for the quarter were $7.77 billion, an 
      increase of 6% in U.S. dollars and 5% in local currency compared with the 
      first quarter of fiscal 2023.

GAAP diluted EPS for the quarter were $3.10 compared with $3.08 for the first quarter of fiscal 2023. Excluding a $0.17 decrease for business optimization costs, adjusted EPS were $3.27, an increase of 6% from the first quarter of fiscal 2023. The $0.19 increase in EPS on an adjusted basis reflects:

   --  a $0.14 increase from higher revenue and operating results; 
   --  a $0.05 increase from higher non-operating income; and 
   --  a $0.01 increase from lower share count;

partially offset by

   --  a $0.01 decrease from higher noncontrolling interests.

Gross margin (gross profit as a percentage of revenues) for the quarter was 33.6% compared to 32.9% in the first quarter of fiscal 2023. Selling, general and administrative (SG&A) expenses for the quarter were $2.74 billion, or 16.9% of revenues, compared with $2.59 billion, or 16.5% of revenues, for the first quarter of fiscal 2023.

GAAP operating income for the quarter decreased 1%, to $2.56 billion, or 15.8% of revenues, compared with $2.59 billion, or 16.5% of revenues, for the first quarter of fiscal 2023. Adjusted operating income for the quarter was $2.70 billion, or 16.7% of revenues, an expansion of 20 basis points from the first quarter of fiscal 2023.

The company’s GAAP effective tax rate for the quarter was 23.2%, compared with 23.3% for the first quarter of fiscal 2023.

GAAP net income for the quarter was $2.01 billion, compared with $2.00 billion for the first quarter of fiscal 2023. Adjusted net income for the quarter was $2.12 billion.

Operating cash flow for the quarter was $499 million, and property and equipment additions were $69 million. Free cash flow, defined as operating cash flow net of property and equipment additions, was $430 million. For the same period last year, operating cash flow was $495 million; property and equipment additions were $99 million; and free cash flow was $397 million.

Days services outstanding, or DSOs, were 49 days at November 30, 2023, compared with 42 days at August 31, 2023 and 48 days at November 30, 2022.

Accenture’s total cash balance at November 30, 2023 was $7.1 billion, compared with $9.0 billion at August 31, 2023.

New Bookings

New bookings for the first quarter of fiscal 2024 were $18.45 billion, a 14% increase in U.S. dollars and a 12% increase in local currency over the first quarter of fiscal 2023.

   --  Consulting new bookings were $8.62 billion, or 47% of total new 
      bookings. 
   --  Managed Services new bookings were $9.83 billion, or 53% of total new 
      bookings.

Revenues by Geographic Market(2)

Revenues by geographic market were as follows:

   --  North America: $7.56 billion, a decrease of 1% in both U.S. dollars and 
      local currency compared with the first quarter of fiscal 2023. 
   --  EMEA: $5.80 billion, an increase of 9% in U.S. dollars and 2% in local 
      currency compared with the first quarter of fiscal 2023. 
   --  Growth Markets: $2.86 billion, an increase of 2% in U.S. dollars and 5% 
      in local currency compared with the first quarter of fiscal 2023.

Revenues by Industry Group

Revenues by industry group were as follows:

   --  Communications, Media & Technology: $2.67 billion, a decrease of 10% in 
      U.S. dollars and 11% in local currency compared with the first quarter of 
      fiscal 2023. 
   --  Financial Services: $3.03 billion, an increase of 2% in U.S. dollars 
      and flat in local currency compared with the first quarter of fiscal 
      2023. 
   --  Health & Public Service: $3.38 billion, an increase of 13% in U.S. 
      dollars and 12% in local currency compared with the first quarter of 
      fiscal 2023. 
   --  Products: $4.86 billion, an increase of 4% in U.S. dollars and 1% in 
      local currency compared with the first quarter of fiscal 2023. 
   --  Resources: $2.28 billion, an increase of 7% in U.S. dollars and 6% in 
      local currency compared with the first quarter of fiscal 2023.

Returning Cash to Shareholders

Accenture continues to return cash to shareholders through cash dividends and share repurchases.

(2) Effective September 1, 2023, we revised the reporting of our geographic 
markets for the movement of our Middle East and Africa market units from 
Growth Markets to Europe, and the Europe market is now referred to as our EMEA 
(Europe, Middle East and Africa) geographic market.

Dividend

On November 15, 2023, a quarterly cash dividend of $1.29 per share was paid to shareholders of record at the close of business on October 12, 2023. These cash dividend payments totaled $810 million.

Accenture plc has declared another quarterly cash dividend of $1.29 per share for shareholders of record at the close of business on January 18, 2024. This dividend, which is payable on February 15, 2024, represents a 15% increase over the quarterly dividend rate of $1.12 per share in fiscal 2023.

Share Repurchase Activity

During the first quarter of fiscal 2024, Accenture repurchased or redeemed 3.8 million shares for a total of $1.2 billion, including approximately 3.4 million shares repurchased in the open market.

Accenture’s total remaining share repurchase authority at November 30, 2023 was approximately $5.4 billion.

At November 30, 2023, Accenture had approximately 628 million total shares outstanding.

Business Outlook

Second Quarter Fiscal 2024

Accenture expects revenues for the second quarter of fiscal 2024 to be in the range of $15.40 billion to $16.00 billion, or negative 2% to 2% in local currency, reflecting the company’s assumption of a negative 0.5% foreign-exchange impact compared with the second quarter of fiscal 2023.

Fiscal Year 2024

Accenture’s business outlook for fiscal 2024 continues to assume that the foreign-exchange impact on its results in U.S. dollars will be flat compared with fiscal 2023.

For fiscal 2024, the company continues to expect revenue growth to be in the range of 2% to 5% in local currency.

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