Nasdaq-listed IT services major Accenture has raised its annual revenue growth forecast for fiscal 2025 to 4-7%, up from the earlier projection of 3-6%. The revision is attributed to a reduced negative impact from foreign exchange fluctuations, now expected to be approximately 0.5%, compared to the 1.5% projected earlier.
Accenture’s performance and outlook are of particular significance for India, where over 40% of the company’s global workforce of nearly 800,000 are based. The company’s results often serve as a bellwether for the Indian IT sector, which looks to Accenture’s trends as an indicator of global demand. With Indian IT majors gearing up for their Q3 FY25 earnings season in January, Accenture’s Q1 performance highlights critical areas of growth, including the strong demand for generative AI solutions.
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CEO and chair Julie Sweet, however, struck a cautious tone about client budgets. “We do not currently see an improvement in overall spending by our clients, particularly on smaller deals. When those market conditions improve, we will be well positioned to capitalise on them as we continue to meet the demand for the critical programmes our clients are prioritising,” Sweet said during a post-earnings analyst call.
Accenture reported Q1 revenue of $17.7 billion, an 8% sequential increase. The company’s operating margin rose to 16.7%, up 170 basis points from the previous quarter. Its new bookings totaled $18.7 billion, driven by $9.2 billion in consulting and $9.5 billion in managed services. Notably, generative AI contributed $1.2 billion to new bookings in Q1, reflecting a $200 million sequential rise.
Accenture operates on a September-August financial year.
Domestic IT firms, particularly those focusing on emerging technologies, stand to benefit from this surge in demand for generative AI. According to analysts, Indian companies could see a ripple effect from Accenture’s investments in AI-driven client reinvention strategies.
On a geographical basis, Accenture’s North America revenue rose to $8.73 billion in Q1, while Europe, the Middle East, and Africa (EMEA) revenues increased to $6.41 billion. Other markets also reported growth. By verticals, the products segment grew to $5.43 billion, with health and public services and financial services showing notable gains.
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The company’s headcount increased for the second consecutive quarter,
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