Nasdaq-listed IT services firm, Accenture on Thursday revised its lower end of the annual revenue growth forecast for fiscal 2025 to 5-7%, up from the previous projection of 4-7% on the back of increasing demand of AI-based solutions.
However, CEO and chair Julie Sweet said there has been no significant increase in client budgets for the calendar year 2025. “It’s still early, and a lot can happen. Clients may change focus, speeding up cost-cutting rather than investing in new projects,” she said in the post Q2 earnings call with the analyst.
Accenture’s Q2 revenue decreased nearly 6% quarter-on-quarter to $16.7 billion. The operating margin for the quarter stood at 13.5% down from 16.7% reported in the previous quarter. Accenture follows the September-August financial year.
New bookings during the quarter increased to $20.9 billion against $18.7 billion reported in the previous quarter. The new deal wins comprises $10.5 billion in consulting bookings and $10.4 billion in managed services bookings.
“The trust and confidence in our unique strengths and capabilities is reflected in 32 clients with quarterly bookings greater than $100 million and we are very pleased to have another milestone quarter in Gen AI with $1.4 billion in new bookings,” Sweet said.
Generative AI contributed significantly to the company’s new bookings, recording $1.4 billion in Q2, an increase of $200 million compared to the previous quarter.
“Our clients are focused on reinvention, and GenAI is a key part of that. They are building a digital core with more AI, which is boosting our growth. The number of clients using Gen AI is increasing, and we are starting to see real examples of scale in data and AI.”
On a geographical basis, revenue from North America fell a tad sequentially to $8.5 billion in Q2, from $8.7 billion in the previous quarter. Revenue from the Europe, Middle East, and Africa (EMEA) region also fell to $5.8 compared to $6.41 billion in Q1. Revenue from other markets also saw a small decline.
By verticals, the products business, Accenture’s largest segment, fell to $5.1 in Q2 down from $5.4 billion in Q1. The health and public service vertical reported revenue of $3.6 billion, down from $3.8 billion in the previous quarter. The financial services segment recorded $3 billion in revenue, a decrease from $3.2 billion in Q1.
The IT company’s headcount increased sequentially for the fourth straight quarter. The company added 2,318 employees to 801,099 in Q2.
Meanwhile, the attrition rate increased by 1 percentage point to 13% for the quarter.
Accenture’s results are often seen as a bellwether for the Indian IT industry, given the company’s significant workforce presence in India. The Q2 performance offers a preview of trends and potential outcomes for Indian IT firms, whose earnings season for Q4 FY25 begins in April.
