Accenture plc
ACN · NYSE
Next quarter
Reports Oct 1, 2026, before the open.
Consensus is $3.19 EPS for Aug 2026 across 7 estimates, ranging $3.17 to $3.22.
ACN May 2026
- 2.70%
- -2.46%
- $3.70
- $3.80
- —
- $18.72B
Reported results
- $18.72B
- 32.77%
- $3.18B
- 16.96%
- $2.34B
- $3.80
Highlights
- Earnings beat: Q3 FY26 diluted EPS was $3.80, 2.7% above the $3.70 consensus and up 9% from $3.49 a year ago.
- Revenue growth: Revenue increased 6% year over year to $18.72 billion, or 3% in local currency, slightly above the midpoint of Accenture’s $18.35 billion-$19.0 billion guidance range.
- Profitability: Operating income rose 6% to $3.18 billion and operating margin expanded 20 basis points to 17.0%, despite gross margin slipping to 32.8% from 32.9%.
- Demand mix: New bookings were $19.32 billion, down 2% in U.S. dollars and 3% in local currency; consulting bookings were $10.26 billion and managed-services bookings were $9.06 billion.
- Managed services led growth: Managed-services revenue grew 8% in U.S. dollars and 5% in local currency to $9.39 billion, versus consulting growth of 4% and 1%, respectively.
- Broad geographic and industry growth: Local-currency revenue rose 8% in Asia Pacific, 4% in EMEA and 1% in the Americas; Communications, Media & Technology led industries at 9% growth.
- Guidance narrowed: FY26 local-currency revenue growth is now expected at 3%-4%, down from 3%-5%; excluding an estimated 1% federal-business impact, growth is expected at 4%-5%, down from 4%-6%.
- Cash returns remained substantial: Free cash flow was $3.6 billion in the quarter, while Accenture returned $2.2 billion through $1.2 billion of repurchases and $1.0 billion of dividends.
- Acquisition-led expansion: Accenture completed $2.82 billion of acquisitions in the first nine months and agreed to acquire stakes in Dragos, runZero and NetRise to expand its OT cybersecurity platform.
Analysis
Accenture’s third quarter was a solid earnings and margin print, with EPS of $3.80 beating the $3.70 consensus by 2.7%. Revenue of $18.72 billion increased 6% in U.S. dollars and 3% in local currency from $17.73 billion a year ago, while operating income increased 6% to $3.18 billion. Attributable net income rose to $2.34 billion from $2.20 billion. Sequentially, revenue increased 4% from $18.04 billion in Q2, operating income rose 27% from $2.49 billion and EPS increased 30% from $2.93.
The defining feature was continued, but uneven, demand for transformation work. Managed services grew faster than consulting, and Asia Pacific and EMEA outpaced the Americas, while bookings declined modestly year over year. Profitability was stronger in the quarter, helped by operating discipline and a lower SG&A ratio, although higher subcontractor and other non-payroll costs pressured gross margin. The more cautious element was the outlook: FY26 revenue growth was narrowed to 3%-4% in local currency, with the federal business expected to reduce growth by about 1 percentage point. Accenture nonetheless raised the low end of its GAAP EPS outlook to $13.38-$13.50 and maintained free-cash-flow guidance of $10.8 billion-$11.5 billion.
Revenue and bookings
Revenue growth remained positive across the portfolio, but bookings indicated a more selective spending environment. Accenture said clients continued to prioritize large-scale reinvention and AI readiness, while smaller, shorter-duration consulting contracts experienced a slower pace of spending.
- Type of work: Consulting revenue was $9.33 billion, up 4% in U.S. dollars and 1% in local currency; managed-services revenue was $9.39 billion, up 8% and 5%, respectively.
- Bookings: Total bookings were $19.32 billion versus $19.72 billion a year ago. Consulting bookings increased to $10.26 billion from $9.10 billion, while managed-services bookings fell to $9.06 billion from $10.62 billion.
- Geography: Local-currency revenue grew 8% in Asia Pacific, 4% in EMEA and 1% in the Americas. EMEA revenue was $6.87 billion, Asia Pacific was $2.71 billion and the Americas was $9.14 billion.
- Industry mix: Communications, Media & Technology grew 9% in local currency to $3.22 billion, followed by Financial Services and Products at 3% each. Health & Public Service was flat and Resources grew 1%.
Margins and earnings
Accenture converted modest local-currency growth into faster profit and EPS growth. Operating margin improved despite a slight gross-margin decline, as selling and marketing expense fell as a percentage of revenue and the company benefited from a lower share count.
- Operating result: Operating income increased to $3.18 billion from $2.98 billion, while operating margin rose to 17.0% from 16.8%.
- Cost profile: Operating expenses increased 5% to $15.54 billion but declined to 83.0% of revenue from 83.2%. Gross margin decreased to 32.8% from 32.9%, primarily because of higher non-payroll and subcontractor costs.
- EPS bridge: EPS increased from $3.49 to $3.80, with higher revenue and operating results contributing $0.23 and the lower share count contributing $0.09; a higher effective tax rate reduced EPS by $0.01.
- Workforce execution: Utilization improved to 93% from 92%, annualized voluntary attrition declined to 14% from 16%, and the workforce reached approximately 799,000.
Fiscal 2026 outlook
The outlook balanced stronger earnings delivery with a lower revenue-growth range. Accenture’s updated revenue view reflects pressure from its U.S. federal business, while the company raised the low end of its GAAP EPS range and preserved its cash-flow targets.
- Revenue: FY26 local-currency growth is now expected at 3%-4%, compared with 3%-5% previously. Excluding an estimated 1% federal-business impact, growth is expected at 4%-5%, versus 4%-6% previously.
- Fourth quarter: Revenue is expected at $17.75 billion-$18.4 billion, implying local-currency growth of 1%-5% and an approximately 0.5% foreign-exchange headwind.
- Earnings: GAAP diluted EPS is now expected at $13.38-$13.50, or 10%-11% growth, versus the prior $13.25-$13.50 range. Adjusted EPS remains $13.78-$13.90.
- Cash and capital return: Operating cash flow is expected at $11.5 billion-$12.2 billion, free cash flow at $10.8 billion-$11.5 billion and capital return at least $9.5 billion.
AI and cybersecurity expansion
Management emphasized large-scale AI transformation as a continuing demand driver while using acquisitions to broaden the addressable market. Accenture reported 104 year-to-date quarterly bookings of at least $100 million, up 13%, and said it was seeing more large-scale AI transformation programs.
- Cybersecurity strategy: Accenture agreed to acquire a majority stake in Dragos and all of runZero and NetRise, targeting industrial and operational-technology security capabilities.
- Acquisition spending: The company completed individually immaterial acquisitions totaling $2.82 billion, net of cash acquired, during the first nine months. Goodwill increased to $25.32 billion from $22.54 billion at fiscal year-end.
- Contract visibility: Remaining performance obligations were approximately $38 billion at May 31, 2026, up from $34 billion at August 31, 2025; Accenture expects to recognize 33% during FY26 and 35% during FY27.
Cash returns and liquidity
Cash generation supported both shareholder distributions and increased acquisition activity. Nine-month operating cash flow reached $9.27 billion, up from $7.56 billion a year ago, although cash declined from fiscal year-end as acquisitions, repurchases and dividends absorbed capital.
- Quarterly cash flow: Free cash flow was $3.60 billion versus $3.52 billion a year ago, with operating cash flow of $3.79 billion and capital additions of $186 million.
- Shareholder returns: Accenture repurchased or redeemed 6.0 million shares for $1.2 billion and paid $1.0 billion in dividends during the quarter. The quarterly dividend was $1.63 per share, 10% above the prior-year rate.
- Liquidity: Cash and cash equivalents were $10.2 billion at May 31, down from $11.5 billion at August 31, 2025. Remaining share-repurchase authorization was approximately $3.2 billion.
- Federal exposure: The filing disclosed an ongoing DOJ civil and criminal investigation involving Accenture Federal Services’ submissions regarding a service offering and federal security controls; the company said it could not yet estimate potential costs.
