Despite high revenue, Accenture shares fell 4% after third-quarter results
Accenture (ACN) reported revenue in the third quarter of fiscal 2025 was higher than expected revenue. But bookings for the stock fell about 4% on Friday as total bookings were well below analysts’ estimates – which weakened investors’ estimates despite a solid quarter.
The global professional services company has revenue of $17.73 billion, up 8% year-on-year in US dollars, and revenue from local currencies increased by 7%. According to estimates compiled by Visible Alpha, earnings per share per share (EPS) was $3.49, which is more than Wall Street’s estimate of $3.29. Analysts expect revenue to be $17.33 billion.
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However, the total amount of brand new bookings for the quarter was $19.7 billion – a consensus estimate of $21.5 billion was lost. Neither consulting nor hosting service bookings have forecasts from analysts. Here, bookings related to AI generation account for $1.5 billion, pointing to the ongoing benefits of customers for AI conversion projects.
Operating margin expanded to 16.8%, 80 basis points higher than the previous year and 40 basis points higher than the adjusted operating margin. Free cash flow for the quarter was reported at $3.5 billion. The company also announced a quarterly cash dividend of $1.48 per share.
Accenture has improved the lower end of its full-year guidance for the second consecutive quarter. Now, it expects revenue to grow by 6% to 7%, compared with the previous range of 5% to 7%. Forex is expected to cause a 0.2% headwind. The full-year operating margin is expected to be 15.6% – up 10 basis points from the adjusted margin.
EPS is now between $12.77 and $12.89, from $12.55 to $12.79. Free cash flow guidance remains strong, at $9 billion to $9.7 billion.
Despite revenue and loss of income, Accenture stock is under pressure. The stock fell by just about 13% year-on-year, while Friday’s decline reflected concerns about weaker bookings.
“I’m very happy with the third quarter results for fiscal 2025,” said Julie Sweet, Accenture Chairman and CEO. “We continue to expand our leadership in the AI generation and continue to focus on providing measurable value to our customers with lasers.”
