IT services provider Accenture has once again cut its revenue forecast for FY24 as clients continue to reduce spending on consulting services due to economic uncertainties.
Accenture’s revised outlook on Thursday, anticipates full-year revenue growth to be within the range of 1.5-2.5%, compared to its earlier projection of 1-3%. This contrasts with the first quarter’s more optimistic projection of 2-5%. Accenture follows a September-August financial year.
Despite this lowered forecast, Accenture’s shares rose by over 6% in pre-market trading on the New York Stock Exchange.
Accenture’s performance is widely regarded as a benchmark for the Indian IT industry, providing a peek into the expected outcomes for domestic IT firms. The first quarter April-June earnings season commences on July 11, with bellwether Tata Consultancy Services (TCS).
During the quarter (its third), Accenture reported revenues of $16.5 billion, a 1% decrease compared to the same period last year. However, new bookings surged by 22% to $21.1 billion, and the operating margin was flat at 16.3% year-on-year.
“As we absorb kind of higher selling costs, which you would expect, looking at our record 60 billion of booking, and also the continued pressure and pricing that we’ve had across our business. So with that, we feel really good,” the company’s management said in an earnings call.
“We continue to take market share on a rolling four-quarter basis against our basket of our closest global publicly traded competitors, which is how we calculate market share,” it said.
Geographically, North America saw a 1% revenue increase to $7.83 billion. Conversely, the Europe, Middle East, and Africa region experienced a 2% decrease to $5.78 billion, and revenues from other markets fell by 4% to $2.86 billion.
Regarding industry verticals, the products business remained flat at $4.98 billion year-on-year. The health and public service vertical grew by 8% to $3.52 billion, while the financial services vertical declined by 8% to $2.89 billion.
Accenture said its generative AI new bookings exceeded $900 million in the quarter, bringing the total to $2 billion for the fiscal year so far.
Headcount
The company’s headcount increased by 7,882 employees in the third quarter, totaling 750,200, after a previous quarter decline of 723 employees. But, the attrition rate rose by a percentage point to 14%.
Accenture’s headcount growth is notable, especially as many Indian IT companies saw a decline in their headcounts.
“We also continue to steadily increase our data and AI workforce, reaching approximately 55,000 skilled data and AI practitioners against our goal of doubling our data and AI workforce from 40,000 to 80,000 by the end of FY26,” the company’s management said.