Accenture (NYSE:ACN) outlined what it called a strong start to fiscal 2026, citing broad-based revenue growth, margin expansion, and a rise in advanced AI activity during its first-quarter earnings call. Management also reiterated its full-year outlook while noting that client spending patterns have remained largely unchanged over the past year.
Quarterly results and bookings
Chair and CEO Julie Sweet said the company delivered first-quarter bookings of $20.9 billion, including 33 clients with quarterly bookings above $100 million. Revenue totaled $18.7 billion, which Sweet said was up 5% in local currency and came in at the top of the company’s guided range. Sweet also pointed to 30 basis points of year-over-year adjusted operating margin expansion and 10% adjusted EPS growth.
Park said revenue growth was broad-based across geographic markets and types of work, with nearly 4% organic growth. She added that excluding a 1% impact from the federal business, revenue growth was approximately 6% in local currency.
Performance by segment and geography
Consulting revenue was $9.4 billion, growing 3% in local currency, while Managed Services revenue was $9.3 billion, up 7% in local currency. Park said Managed Services growth was driven by high single-digit growth in technology managed services, including application and infrastructure managed services, along with mid-single-digit growth in operations.
By geography, Park said:
- Americas: revenue grew 4% in local currency; excluding a 2% impact from the federal business, growth was 6%. Growth was led by banking and capital markets, industrials, and software and platforms, partially offset by a decline in public service.
- EMEA: revenue grew 4% in local currency, led by banking and capital markets, insurance, and life sciences, with growth driven by the U.K. and Italy.
- Asia-Pacific: revenue grew 9% in local currency, led by banking and capital markets, communications and media, and public service, with Japan and Australia highlighted as growth drivers.
AI momentum, changing disclosure, and client demand
Sweet said Accenture’s advanced AI bookings were $2.2 billion for the quarter, nearly doubling from the year-ago period and rising from the fourth quarter. Advanced AI revenue reached approximately $1.1 billion in the quarter.
She added that Accenture will stop reporting its specific “advanced AI” bookings and revenue metrics after this quarter, arguing that advanced AI is increasingly embedded across engagements and that isolating a specific subset no longer reflects how demand is evolving. Sweet said that since the company began disclosing these metrics in fiscal 2023, it has delivered approximately $11.5 billion in advanced AI bookings across 11,000 projects, with $4.8 billion of revenue.
On the demand environment, Sweet said clients continue to prioritize large, strategic transformation programs, which can convert to revenue more slowly. She added that overall spending and discretionary spending levels are similar to what the company has seen over the past year. In Q&A, she said Accenture is not seeing a catalyst that would suggest a near-term change in discretionary spending, but said clients remain focused on delivering results “despite the market.”
Partnerships, acquisitions, and operating actions
Sweet emphasized the company’s ecosystem approach, noting that 60% of first-quarter revenue came from work done with Accenture’s top 10 ecosystem partners, and that this portion continued to outpace overall growth. She said Accenture plans to continue reporting this metric and also described an expanded set of partnerships, including with emerging AI and data companies, to help clients integrate new technologies with existing enterprise ecosystems.
On M&A, Sweet said Accenture agreed to acquire a 65% majority stake in DLB Associates, describing it as a U.S.-based leader in AI data center engineering and consulting. She cited an estimated $12 billion addressable market for data center professional services that is expected to double by 2030. Sweet also noted Accenture invested $374 million in the quarter, primarily across six acquisitions, including SIPAL in Italy, Total eBiz Solutions in Southeast Asia, NeuraFlash in the U.S., Aidemy in Japan, and Decho in the U.K. and Ranger Data in the U.S.
Park said Accenture recorded $308 million in business optimization costs in the quarter, primarily related to severance, bringing the total over the past six months to $923 million. She also said the company’s fixed-price work continues to grow, with about 60% of work fixed-price in fiscal 2025, up about 10 points over the past three years.
Cash flow, shareholder returns, and guidance
Park said free cash flow was $1.5 billion in the quarter, and Accenture returned $3.3 billion to shareholders through share repurchases and dividends. The company repurchased or redeemed 9.5 million shares for $2.3 billion at an average price of $245.32 per share, and paid a quarterly dividend of $1.63 per share (a 10% increase year over year), totaling $1 billion.
For the second quarter, Accenture guided revenue to $17.35 billion to $18.0 billion, implying 1% to 5% local-currency growth, including about a 1% impact from the federal business. For the full year, Accenture reiterated expected revenue growth of 2% to 5% in local currency (or 3% to 6% excluding federal impact), adjusted operating margin of 15.7% to 15.9%, and adjusted EPS of $13.52 to $13.90. Park added that due to slightly higher business optimization costs in the quarter, the company now expects GAAP EPS of $13.12 to $13.50.
Accenture also maintained its expectations for full-year free cash flow of $9.8 billion to $10.5 billion and said it expects to return at least $9.3 billion to shareholders through dividends and repurchases, an increase of $1 billion from fiscal 2025.
About Accenture (NYSE:ACN)
Accenture is a global professional services company that provides a broad range of services and solutions in strategy, consulting, digital, technology and operations. The firm works with organizations across industries to design and implement business transformation programs, deploy and manage enterprise technology, optimize operations, and develop customer and digital experiences. Its offerings encompass management and technology consulting, systems integration, application and infrastructure services, cloud migration and managed services, as well as security and analytics capabilities.
The company delivers industry- and function-specific solutions, combining consulting expertise with proprietary tools, platforms and partnerships with major technology vendors.
