Accenture narrows full-year guidance; Q3 revenue declines 1% to $16.47 bn

Information technology (IT) services and consulting major Accenture’s third-quarter (Q3) 2023-24 (FY24) results continued to reflect pressure on discretionary spending, with growth driven by managed services deals.

The company, considered a benchmark for the Indian IT services industry, revised its full-year revenue guidance, narrowing it to a growth range of 1.5 per cent to 2.5 per cent, compared to the previous 1 per cent to 3 per cent.

Revenues for Q3FY24 totalled $16.47 billion, down from $16.56 billion in Q3 2022-23 (FY23), marking a 1 per cent decrease.

Accenture follows a September-August financial year.

Julie Sweet, Chair and chief executive officer of Accenture, commented, “We achieved strong new bookings of over $21 billion, up 22 per cent year-on-year (Y-o-Y), and continued to accelerate our strategy to be the reinvention partner of choice. We added 23 clients with quarterly bookings exceeding $100 million, bringing the year-to-date (YTD) total to 92.”

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The generative artificial intelligence (GenAI) portfolio continued to grow, with bookings reaching $900 million for the quarter, contributing to a total of $2 billion in bookings — the largest in the IT services industry.

“We also reached two significant milestones this quarter: $2 billion in GenAI sales YTD and $500 million in revenue YTD, demonstrating our early leadership in this critical technology. All this while investing at scale in our business, including 35 acquisitions, or $5.2 billion in capital deployed YTD. I want to thank the 750,000 people at Accenture worldwide who work every day to deliver 360° value for our stakeholders,” Sweet added.

Consulting revenues for the quarter were $8.46 billion, a decrease of 3 per cent in US dollars and 1 per cent in local currency compared to Q3FY23, reflecting ongoing pressure on discretionary deals.

Managed services revenues for the quarter were $8.01 billion, up 2 per cent in US dollars and 4 per cent in local currency Y-o-Y.

New bookings for Q3FY24 reached $21.06 billion, a 22 per cent increase Y-o-Y.

In terms of vertical growth, financial services revenue was $2.89 billion, down 8 per cent Y-o-Y, while communications, media and technology revenue decreased by 4 per cent to $2.76 billion.

Growth was driven by health and public services, which grew by 8 per cent Y-o-Y.

Accenture’s headcount increased by 7,882 in the quarter, bringing its total employee count to 750,200. The company also experienced a rise in attrition, increasing to 14 per cent from the previous 13 per cent.

Deep dive

> Narrows full-year growth guidance to 1.5% to 2.5%

> New bookings at $21 billion, up 22% Y-o-Y

> Consulting under pressure, at $8.46 billion, down 3%

> Managed services up 2% at $8.01 billion

> Headcount addition in the quarter: 7,882; attrition at 14%