Accenture PLC Earnings - Q4 2025 Analysis & Highlights
Accenture delivered strong Q2 FY2026 results with record bookings and broad-based revenue growth, driven by robust demand for AI-powered transformation services and strategic acquisitions across higher-growth markets, while maintaining disciplined execution and raising full-year guidance despite macroeconomic uncertainties.
Key Financial Results
Revenue of $18 billion in Q2 FY2026, representing 4% growth in local currency and 8% growth in US dollars, at the top end of the FX-adjusted guided range.
Record bookings of $22.1 billion for the quarter, representing 6% growth in US dollars and 1% growth in local currency, with an overall book-to-bill of 1.2.
Operating margin of 13.8%, an increase of 30 basis points compared to Q2 of the prior year.
Diluted earnings per share of $2.93, representing 4% growth compared to the prior year quarter.
Free cash flow of $3.7 billion for the quarter, driven by operating cash flow of $3.8 billion net of property and equipment additions of $150 million.
Gross margin of 30.3% compared with 29.9% in the same period last year.
Days sales outstanding of 46 days compared to 51 days last quarter and 48 days in Q2 of the prior year.
Business Segment Results
Consulting revenues of $8.9 billion, up 7% in US dollars and 3% in local currency, with consulting bookings of $11.3 billion and a book-to-bill of 1.3.
Managed services revenues of $9.2 billion, up 10% in US dollars and 5% in local currency, driven by mid single-digit growth in technology-managed services and high single-digit growth in operations.
Americas revenue growth of 3% in local currency, led by growth in banking and capital markets, software and platforms, and industrials, partially offset by a decline in public service driven by US federal business.
EMEA revenue growth of 2% in local currency, driven by growth in insurance, life sciences, and public service.
Asia Pacific revenue growth of 10% in local currency, driven by growth in banking and capital markets, communications and media, and public service.
Record 41 clients with quarterly bookings greater than $100 million, bringing H1 bookings to 74 such clients, 12 more than the same time last year.
Capital Allocation
Share repurchases of 6.8 million shares for $1.7 billion at an average price of $246.09 per share in Q2, bringing year-to-date total to $4 billion in repurchased or redeemed shares.
Quarterly cash dividend of $1.63 per share, a 10% increase over the prior year, for a total of $1 billion paid in February.
Three strategic acquisitions closed in the quarter, deploying $1.6 billion of capital.
Expected acquisition deployment of $5 billion for the full fiscal year, with capacity to do more for the right opportunities.
Property and equipment additions of $150 million in Q2.
Expected return of at least $9.3 billion through dividends and share repurchases for the full year, an increase of $1 billion or 12% from fiscal 2025.
Industry Trends and Dynamics
Clients continuing to prioritize large-scale transformational programs, positioning Accenture in the center of their reinvention agendas.
Spending similar to 2025 as clients finalize budgets going into calendar year 2026.
Clients implementing foundational programs with ecosystem partners to capture the full opportunity of AI, typically involving cloud, security, and data modernization combined with operating model and talent transformation.
At least one out of every two advanced AI projects leading to a data project.
Clients continuing to look to reinvent faster, leverage proprietary platforms and expertise, and achieve greater efficiencies through managed services across the enterprise.
Clients with more advanced digital cores starting to take on larger AI programs, with more moving from proofs of concept to production.
Another hundred clients or so initiating advanced AI projects with Accenture this quarter.
Percentage of fixed price work continuing to increase over 60% in FY 2025, reflecting the rising importance of proprietary platforms and clients' need for cost and delivery certainty.
Competitive Landscape
Accenture continuing to take market share quarter after quarter because of the combination of early leadership in advanced AI, deep ecosystem partnerships with both established leaders and emerging players, and decades of investments to be deep in tech and relevant across the entire enterprise.
Revenue from top 10 ecosystem partners continuing to outpace overall growth, with partnerships being expanded.
On track in FY 2026 to more than double bookings over FY 2025 from partnerships with key emerging AI and data ecosystem partners.
Accenture playing a critical role in the AI ecosystem, helping clients understand what to deploy and when, how to integrate it into their systems, reimagine their processes, modernize their data and digital core, help redesign operating models, and build the capabilities and talent needed to scale across the enterprise.
Accenture being the number one partner to all major ERP ecosystem partners for years and having deployed modern ERP systems across hundreds of clients.
Macroeconomic Environment
Roughly 3,000 colleagues in the Middle East, a region which represented about 1% or $1 billion of revenue in FY 2025.
Colleagues in the Middle East are safe, and Accenture is providing them with all the support it can.
Currently not seeing any significant financial impact from the conflict in the Middle East.
Environment is more uncertain given the conflict, but based upon the information available, Accenture is increasing key elements of its full year guidance.
Guidance range for Q3 and the full year reflects best view of the potential impact of the conflict in H2, but does not take into account a significant escalation or the occurrence of major economic disruption.
Growth Opportunities and Strategies
AI-powered transformation through acquisitions including Faculty, a leading UK-based AI-native services company with a decision intelligence product business, and two companies to accelerate growth with Palantir (Decho in the UK and RANGR Data in the US).
AI enablers including data centers, cybersecurity, energy infrastructure, and data, with acquisitions of a 65% stake in DLB Associates, CyberCX, and Ookla, a global leader in network intelligence with $231 million of revenue in calendar year 2025 through non-FTE subscription and licensing revenue models.
High-growth secular trends including capital projects, defense and public sector, and education around AI, data, and tech, with acquisitions of Orlade Group and Aidemy in Japan.
Mid-market expansion through acquisitions of NeuraFlash, Total eBiz Solutions, and announcement of Cabel to expand presence in the mid-market where Accenture is experiencing higher revenue growth and higher volume of smaller deal sizes that convert to revenue faster.
Over 85,000 AI and data professionals, exceeding the goal of 80,000 professionals by the end of fiscal 2026.
13 million training hours completed by Reinventors this quarter alone.
192,000 completed the agentic AI fundamentals program, co-created with Stanford's Institute for Human-Centered AI.
Use of AI tools and contributions to helping Accenture become the most AI-enabled company in the world now a formal part of performance evaluation.
Clients embedding AI directly into systems that run the business, with intelligence built into core workflows across finance, supply chain, asset maintenance, and field operations.
Mainframe modernization becoming feasible due to advanced AI and new hardware capabilities, which is believed to open a major services market.
Custom systems integration work having a renaissance and showing strong momentum due to AI enabling solutions in core operations.
Conversational and agentic commerce driving the biggest revolution in retail since the advent of social media, with strong demand and Accenture uniquely positioned to serve clients.
Entirely new offerings such as dedicated AI services to be either a client's main execution arm or augment a client's core AI team.
Financial Guidance and Outlook
Q3 FY2026 revenue guidance of $18.35 billion to $19 billion, assuming FX impact of approximately positive 2.5% compared to Q3 FY2025.
Q3 guidance reflecting estimated 1% to 5% growth in local currency, including about 1% impact from federal business, or 2% to 6% excluding federal impact.
Full fiscal 2026 revenue guidance of 3% to 5% growth in local currency over fiscal 2025, including an estimated 1% impact from federal business, or 4% to 6% excluding federal impact.
FX impact on full fiscal 2026 results assumed to be approximately positive 2% compared to fiscal 2025.
Inorganic contribution of about 1.5% expected for the year.
Adjusted operating margin for fiscal year 2026 expected to be 15.7% to 15.9%, a 10-basis-point to 30-basis-point expansion over adjusted fiscal 2025 results.
Annual adjusted effective tax rate expected to be in the range of 23.5% to 25.5%, compared to an adjusted effective tax rate of 23.6% in fiscal 2025.
Full year adjusted diluted earnings per share for fiscal 2026 expected to be in the range of $13.65 to $13.90, or 6% to 8% growth over adjusted fiscal 2025 results.
Operating cash flow for full fiscal 2026 expected to be in the range of $11.5 billion to $12.2 billion, with property and equipment additions of approximately $700 million.
Free cash flow guidance raised by $1 billion, now expected to be in the range of $10.8 billion to $11.5 billion, reflecting a strong free cash flow to net income ratio of 1.3.
Talent Strategy and Organizational Development
Intentional talent strategy to hire more entry-level Reinventors in FY 2026 than FY 2025, which is important for the financial model.
Head count expected to increase in the second half based upon the demand that Accenture sees.
Talent rotation continuing as discussed at the beginning of the fiscal year.
Non-linear relationship between revenue and head count expected to continue, not having had a linear relationship since around 2015 when RPA came in.
