Accenture Gets The Boost It Needs From Strong AI Bookings Growth

On June 20th, Accenture plc ACN showcased strong client relationships and recurring business with substantial revenue figures. Despite missing analyst estimates, Accenture stock rose 7.7% due to strong AI bookings growth. Being a global leader in IT services, Accenture proved with its latest financials that its competitive advantage remains strong amidst challenging market conditions. 

Third Quarter Highlights

For the quarter ended on May 31st, 2024, Accenture reported a slight YoY decrease in quarterly revenue from $16.56 million to $16.47 million due to a highly competitive IT services industry that comes with constant pressure on pricing strategies. FactSet’s consensus estimate was $16.54 billion. However, when adjusted for currency fluctuations, Barclays analyst Ramsey El-Assal noted that revenue does surpass expectations.

Moreover, net income remained robust at $1.93 million while a strong balance sheet has been maintained. Adjusted earnings amounted to $3.13 per share, also below FactSet’s estimate of $3.16.

AI Bookings provided Accenture with the needed boost.

The Dublin, Ireland-based company recorded $900 million in new generative AI bookings. For its fiscal year to date, Accenture recorded a total of $2 billion in generative AI bookings. Accenture Chief Executive Julie Sweet stated that  new bookings grew 22% YoY to over $21 billion, emphasizing the company’s status as the reinvention partner of choice with digital transformation and cloud services presenting even more growth space.

August Quarter Outlook

For the current quarter that will end in August, Accenture expects sales between $16.05 billion and $16.65 billion. Prior to the provided guidance, FactSet estimated the sales outlook of about $16.53 billion for the August quarter. 

Back in March, Accenture stock tumbled 8% after its second quarter financials and the full year outlook was lowered amid the consulting market slowdown. This time round, Accenture showcased its capability of generating robust revenue despite an unfavorable  macro backdrop. With an extensive global footprint, Accenture has cemented its role as a pivotal player in consulting, strategy, and technology services, with generative AI further fueling its growth prospects. Its good financial health remains a testament to its operational efficiency and strategic initiatives and along with focus on emerging technologies, like generative AI as well as cybersecurity, Accenture is doing what it can to keep up and remain relevant in this fast-evolving landscape.

DISCLAIMER: This content is for informational purposes only. It is not intended as investing advice.

This article is from an unpaid external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.