In its Q4 fiscal 2023 earnings call, Accenture (NYSE:ACN) revealed robust year-end results, with record bookings and revenue growth. The company also provided an optimistic outlook for fiscal 2024, anticipating steady growth rates and significant returns to shareholders.
Key takeaways from the call include:
- Accenture reported record bookings of $72 billion and revenues of $64 billion for the year, marking an 8% growth in local currency.
- The company expanded its adjusted operating margin by 20 basis points and delivered adjusted EPS growth of 9%.
- Free cash flow for the year was $9 billion, and over $7 billion was returned to shareholders.
- Accenture is focusing on areas like cloud migration, modern ERP, data and AI, and gen AI to drive growth.
- The company expects revenues for the first quarter of fiscal 2024 to be between $15.85 billion and $16.45 billion, with a projected full-year growth rate of 2% to 5%.
- Accenture plans to return at least $7.7 billion to shareholders through dividends and share repurchases in fiscal 2024.
Accenture's Q4 adjusted operating income was $2.4 billion, showing a margin increase of 20 basis points compared to the same quarter in the previous year. The adjusted effective tax rate for the quarter was 27.4%, and adjusted diluting earnings per share were $2.71. The company ended the quarter with a cash balance of $9 billion.
The company also discussed its focus on AI, specifically deep AI and gen AI specialization. They plan to double their skilled data and AI practitioners from 40,000 to 80,000. Accenture is also committed to creating value in communities and has made efforts to support refugees by partnering with organizations to help skill and support job seekers and migrants.
In terms of financial outlook, Accenture's full-year adjusted earnings per share for fiscal 2024 are projected to be in the range of $11.97 to $12.32, representing 3% to 6% growth over fiscal 2023 results. They anticipate operating cash flow to be in the range of $9.3 billion to $9.9 billion and free cash flow to be in the range of $8.7 billion to $9.3 billion.
During an earnings call, the executives discussed the performance and outlook of their managed services division. They expect 2% to 5% growth for the full year, with a focus on building throughout the year. The executives highlighted the importance of managed services for clients, both as a cost-saving measure and a means for faster digitization.
Regarding the outlook for the fiscal year, Accenture mentioned that the back half of the year is less certain due to budget setting, but they are confident in their steps to pivot to higher growth areas. They highlighted the demand for building a digital core, cloud migration, modernizing ERP, security, and data and AI.
In the earnings call, the company discussed their fourth-quarter bookings, which were slightly lower than expected due to deals being delayed. They expressed satisfaction with their 21 clients with over $100 million in bookings. Looking ahead to 2024 Q1, they anticipate growth in bookings compared to 2023 Q1. Regarding strategy and consulting, they aim for positive growth but expect the pace to vary by market. North America may face more challenges. The call ended with thanks to employees and shareholders. A replay of the conference is available.
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