Accenture’s Q1 Earnings Overview: Mixed Analyst Reactions and Outlook for FY24

Accenture’s Q1 FY24 highlights:
• Revenue: $16.2B (+3% Y/Y, as expected).
• Non-GAAP EPS: $3.27 (surpassed by $0.14).
• New bookings: $18.4B (+12% Y/Y).
• Dividend: $1.29 (+15% Y/Y).
• Stock buyback: $1.2B.

FY24 projections remain:
• Revenue growth: Up to 5% Y/Y fx neutral.
• EPS: Expected at $11.76 (+9% Y/Y).

Accenture’s recent earnings report for Q1 surpassed expectations, showing a slight improvement. They’ve maintained their revenue growth guidance for the fiscal year 2024, expecting a growth of 2% to 5% when considering local currency. The company also secured new bookings worth $18.4 billion, marking a 14% increase in U.S. dollars and a 12% rise in local currency.

JP Morgan analysts commented on Accenture’s performance, noting that while the Q2 guidance wasn’t as strong as hoped, the company’s outlook for the entire fiscal year remains positive. The stock market initially responded negatively to this news, but experts believe that as the focus shifts to 2024, optimism will prevail. Accenture’s consulting bookings outpaced predictions, with a book-to-bill ratio standing at 1.02x.

However, UBS had a slightly different take. They observed that Accenture’s communications, media, and technology (CMT) segment faced some revenue decline. On the bright side, the financial, health, and public services sectors showed stability. UBS also believes that Accenture’s guidance indicates the company’s ability to maintain its profit margins through effective spending strategies, expecting a subdued stock market reaction.

Lastly, insights from Jefferies highlighted that Accenture’s bookings saw a significant improvement. They noted a growth in headcount by 9,000 employees, which came after two consecutive quarters of no growth. However, Jefferies pointed out that the revenue might be more concentrated in the latter part of the year compared to current expectations. They also mentioned that clients seem hesitant to invest at the moment, suggesting a potentially slow start for the IT services sector in the new year.