On December 19, 2023, Accenture PLC (ACN, Financial) released its 8-K filing, announcing financial results for the first quarter of fiscal year 2024, which ended on November 30, 2023. The company reported revenues of $16.2 billion, marking a 3% increase in U.S. dollars and a 1% increase in local currency compared to the first quarter of fiscal 2023. Despite economic challenges, ACN demonstrated resilience with a GAAP operating margin of 15.8%, a slight decrease from the 16.5% reported in the same quarter of the previous year. However, the adjusted operating margin expanded by 20 basis points to 16.7%.
Financial Highlights
Accenture's GAAP diluted earnings per share (EPS) for the quarter were $3.10, a modest increase from $3.08 in the first quarter of fiscal 2023. The adjusted EPS, which excludes certain costs, stood at $3.27, representing a 6% increase year-over-year. This growth in adjusted EPS was attributed to a combination of higher revenue, operating results, and non-operating income, along with a lower share count, partially offset by an increase in noncontrolling interests.
The company's gross margin improved to 33.6% from 32.9% in the previous year, indicating a more profitable revenue mix. Selling, general and administrative (SG&A) expenses were up slightly to 16.9% of revenues, compared to 16.5% in the prior year's first quarter.
Operational Efficiency and Cash Flow
Operating cash flow for the quarter was $499 million, with free cash flow of $430 million after accounting for property and equipment additions. This compares to a free cash flow of $397 million in the same period last year. Days services outstanding (DSOs) stood at 49 days, a slight increase from 48 days at the end of the first quarter of fiscal 2023.
Segment Performance
Accenture's performance varied across its operating segments. Consulting revenues remained flat in U.S. dollars and decreased by 2% in local currency, while Managed Services revenues grew by 6% in U.S. dollars and 5% in local currency. Geographically, the EMEA region experienced a 9% increase in U.S. dollars and a 2% increase in local currency, while North America saw a slight decline. Growth Markets revenues increased by 2% in U.S. dollars and 5% in local currency.
Outlook and Shareholder Returns
Looking ahead, ACN confirmed its business outlook for fiscal 2024, expecting revenue growth of 2% to 5% in local currency. The company anticipates GAAP EPS to be between $11.41 and $11.76, a 6% to 9% increase, and adjusted EPS to range from $11.97 to $12.32, a 3% to 6% increase. Accenture also declared a quarterly cash dividend of $1.29 per share, a 15% increase from the previous fiscal year, and repurchased 3.8 million shares for a total of $1.2 billion.
Conclusion
Accenture PLC (ACN, Financial) has maintained a steady performance in the first quarter of fiscal 2024, with modest revenue growth and a notable increase in new bookings. The company's strategic investments and focus on future growth, particularly in areas like Gen AI, have positioned it well to navigate the current economic landscape. With a solid financial foundation and a commitment to returning value to shareholders, ACN continues to be a noteworthy player in the professional services industry.
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Explore the complete 8-K earnings release (here) from Accenture PLC for further details.
