Accenture, on Thursday, beat Street estimates for first-quarter revenue, riding on a strong demand for its AI solutions, but said it will no longer disclose separate revenue and bookings data for AI deals going ahead, as the tech is now increasingly embedded across almost all projects.
“We have now reached a point where advanced AI is being embedded in some way across nearly everything we do, and many of our clients are focusing on moving beyond standalone proofs of concept or initiatives,” the company said in its earnings presentation. Hence, it has become less meaningful to report advanced AI data separately, as it does not effectively reflect the demand. Accenture was the first IT services firm to disclose AI deal figures in its earnings.
Moving from Pilot to Production
During the quarter, revenue rose 6.2% sequentially to $18.7 billion, ahead of Bloomberg estimates of $18.5 billion. The company expects revenue growth to be between 1-5% in the second quarter and between 2-5% for the full year. Accenture follows the September-August financial year.
While total new bookings were down marginally from Q4 to $21 billion, bookings for advanced AI solutions were up 22% to $2.2 billion. The company earned $1.1 billion in quarterly revenue from AI deals, serving over 1,300 clients to date.
In Q1, both of its business segments – consulting and managed services – contributed equally to the overall revenue.
Revenue from its largest market, the Americas, which forms nearly half of its topline, rose 4% year-on-year to $9.08 billion, while the smaller market segments EMEA and Asia Pacific recorded 8% and 7% growth, respectively. Revenue from is biggest industry group, products, rose 6% year-on-year to $5.74 billion. Meanwhile, the BFSI segment recorded revenue growth of 14%, the highest among its industry groups, and that from communications, media and technology sector rose 9%.
Market Performance
Besides the encouraging topline growth, adjusted operating margins rose 190 basis points over Q4 to 17% in the reported quarter. The company plans to keep its adjusted operating margins in the range of 15.7%-15.9% for the rest of the year. Net income attributable to the company rose to $2.21 billion from $1.41 billion in the last quarter, but did not manage to meet estimates of $2.33 billion.
Sequentially, headcount rose by a percent to 783,691 employees, while quarterly attrition improved by 200 basis points to 13%.
Accenture’s results are often seen as a bellwether for the Indian IT industry, given the company’s significant workforce presence in India. The Q1 performance offers a preview of trends and potential outcomes for Indian IT firms, whose earnings season for Q3 FY26 begins in Jan.