Accenture (ACN US) 4QFY25 Quarterly results: Resilient Revenue Growth but Muted Bookings and Soft Guidance Signal Sluggish Demand by Choice Institutional Equities
* Revenue beat estimates: In Q4FY25, Accenture reported a modest revenue growth of 4.5% YoY in constant currency (CC) terms, in-line with estimates. In USD terms, the company’s revenue declined by 0.7% QoQ, while it grew by 7.3% YoY. The revenue growth was driven by 1.2% QoQ and 8.3% YoY growth in managed services, while consulting business reported a decline of 2.6% QoQ , while it grew by 6.2% YoY in USD terms. In FY25, Accenture reported revenue of USD 69.7Bn a growth of 7% YoY in cc terms.
* Geographical & Segmental performance: Financial services led the growth by growing at 12% YoY, while Communication Media, Products & Resources each grew by 5% YoY respectively. These growth was offset by decline in Healthcare vertical witnessing a de-growth of 3% YoY. Geographically, Growth was led by good performance in Growth markets (4%YoY) followed by North America (5% YoY) and EMEA (3% YoY) in cc terms.
* Muted Booking: Bookings grew moderately by 3% YoY on a CC basis, owing to weak performance in consulting segment declining by 2.3% YoY, this is partially offset by booking in managed services, highlighting cautious client spending and selective deal closures. In USD terms, the bookings grew by 8.2% QoQ and 5.8% YoY. The company is grappling with weak U.S. federal contracting environment as the Trump administration has slowed new contracts and cut existing agreements in a bid to reduce federal spending.
* Margins decline sharply: Operating margin declined by 520 bps QoQ and 270 bps YoY to 11.6% (Adjusted margin on the basis of Security optimisation efforts stands at 15.1%).
* FY26E Guidance: Accenture expects FY26E CC revenue growth guidance to be around 2%-5% band (vs a growth of 7% in FY25). This is primarily due to a 1% to 1.5% impact from U.S. federal business.
* Decline in headcount addition: The net headcount declined by 11,419 employees, marking a decline of 1.4% QoQ, while it remained flat on a YoY basis. The company's utilization rate increased by 100 bps QoQ to 93%, while attrition declined by 100 bps to 15%.
* AI & Gen AI Update: Accenture reported strong GenAI traction with USD 5.9Bn bookings in FY25 and significantly scaled its workforce of 77,000 AI/data professionals engaged in 6,000+ projects.
View and Read-through for Indian IT Cos: Accenture’s results underscore a subdued demand environment, with weakness in consulting and flat managed services bookings pointing to limited near-term revenue acceleration. While resilience in financial services is a positive, ongoing softness in communications and retail weighs on overall sentiment. Enterprises remain focused on cost optimization, automation, and vendor consolidation, driving efficiency-led deals over discretionary transformation projects. As a result, earnings for FY26E are expected to remain soft with stable margins, and meaningful acceleration is unlikely until there is greater macro clarity and a revival in discretionary spending. Potential Fed rate cuts may ease macro pressures, improving H2FY26 performance through better TCV conversion
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