Accenture Q2 results beat estimates, warns of impact from Ukraine conflict

Accenture's results continue to show that the momentum for digital transformation and shift to cloud services is growing strong.

Information technology (IT) services and consulting firm Accenture reported better-than-expected numbers in the second quarter (Q2), beating its own guidance in the process. It also revised its annual guidance upwards to 24-26 per cent from the earlier 19-22 per cent.
 

In Q2, revenues came in at $15.05 billion, an increase of 24 per cent in US dollar terms year-on-year (YoY). Accenture had reported revenue of $12.09 billion in the year-ago period. Revenue in Q2 was also approximately $300 million above the top end of the company’s guided range of $14.3 billion to $14.75 billion.
 

Accenture also cautioned the Street that if the impact of the Russian invasion of Ukraine escalates further it will have an adverse effect on the company’s operations.
 

“The invasion of Ukraine by Russia and the sanctions and other measures being imposed in response to this conflict have increased the level of economic and political uncertainty. Accenture’s Q3 and financial year 2021-22 (the firm follows a September to August fiscal year) business outlook does not include assumptions for a significant escalation or expansion of economic disruption or the conflict’s current scope, which could have a material adverse effect on the company’s results of operations,” the company said in a release.
 

Accenture’s results continue to show that the momentum for digital transformation and shift to cloud services is going strong. The double-digit growth and an upward revised guidance augurs well for the Indian IT services industry.
 

Julie Sweet, Accenture’s chair and chief executive officer, said, “Our outstanding second-quarter financial performance demonstrates continued strong, broad-based demand across all our markets, services and industries. Our core strength is the diversity of our business that enables us to digitally transform across the enterprise through the depth and breadth of our services.”
 

She further added, “At the same time, our clients also have access to talent at scale through our nearly 700,000 incredible people who deliver for them every day.”  For the quarter the company had attrition of 18 per cent (quarterly voluntary attrition-annualised). This has gone up from 17 per cent in the Q1 of fiscal 2022 and 12 per cent in the same quarter last year.
 

Consulting revenues for the quarter were $8.32 billion, an increase of 29 per cent in US dol­lar terms, compared with the year-ago period. Outsour­cing revenues were $6.72 billion, an increase of 19 per cent in US dollar terms YoY. Net income for the quarter was $1.66 billion, compared with $1.46 billion for the year-ago period.
 

New bookings for the quarter were a record $19.6 billion, with all-time high bookings in both consulting and outsourcing of $10.9 billion and $8.7 billion, respectively.
 

Growth was seen across sectors and regions, both the segments registered double-digit growth. North America grew by 26 per cent, Europe was up 31 per cent, and growth markets rose 30 per cent.