Accenture (ACN) Q3 2024 earnings summary

Executive summary

• Q3 FY24 revenues were $16.5B, up 1.4% in local currency but down 1% in USD year-over-year; new bookings reached a record $21.1B, up 26% in local currency and 22% in USD.

• Generative AI bookings surpassed $900M in Q3, with $2B in sales and $500M in revenue year-to-date.

• Adjusted operating margin was 16.4% (up 10 bps YoY); GAAP operating margin was 16.0% (up 180 bps YoY); adjusted EPS was $3.13 (down 2% YoY); GAAP EPS was $3.04 (down 3% YoY).

• Workforce grew to over 750,000, with utilization at 92% and 13M training hours in Q3.

• Quarterly dividend increased 15% to $1.29 per share.

Financial highlights

• Free cash flow was $3.0B in Q3; $5.4B year-to-date; $2.2B returned to shareholders in Q3 via repurchases and dividends.

• Cash balance at quarter-end was $5.5B, down from $9.0B at fiscal year start.

• Net income for Q3 was $1.98B (GAAP); adjusted net income was $2.04B.

• Gross margin was 33.4%, flat year-over-year.

• SG&A expenses were $2.79B (16.9% of revenues).

Outlook and guidance

• FY24 revenue growth expected at 1.5%–2.5% in local currency, with a -0.7% FX impact; Q4 revenue expected between $16.05B–$16.65B, or 2%–6% local currency growth.

• FY24 adjusted EPS guided to $11.85–$12.00 (up 2%–3% YoY); GAAP EPS $11.29–$11.44.

• FY24 adjusted operating margin expected at 15.5% (up 10 bps YoY); GAAP margin at 14.8%.

• Free cash flow for FY24 expected at $8.7B–$9.3B; at least $7.7B to be returned to shareholders.

• $450M in business optimization costs expected for FY24.