Q1 2022 Accenture PLC Earnings Call

December 16, 2021

Speaker 1: where we had more clients do over $100 million bookings than the first six months of that fiscal year. And we continue to see that building as clients recognize how much change they need to do and that they have to go faster. So that's really what we see as the function.

Okay.

Your conference will begin momentarily. Please continue to hold.

Speaker 2: Got it, got it. And then, KC, when just looking at the numbers on for the revenue growth, obviously a 27% constant currency number for the quarter and then the guide, I think for 2Q was above.

Speaker 2: Street expectations, 22 to 26. I guess, what does that imply, you know, for the back half of the year? Obviously, it would be a much different growth rate in the back half. Is that some conservatism versus just tougher comps? Can you talk about the back half for 22?

Okay.

Yeah.

Ladies and gentlemen, thank you for standing by. Welcome to the Accenture first quarter fiscal 2022 earnings conference call. At this time all participants are in listen-only mode. Later, we will conduct a question and answer session. If you wish to ask a question, please press one then zero on your telephone keypad. You may withdraw your question at any time by repeating one then zero command.

Speaker 3: Sure, what that implies in the back half is very, it's still very strong in that it's double digits across the back half of the year at the low end and the upper end of our guidance range, which implies also really strong organic growth in the back half of the year. And a continuing build of our business in the back half of the year coming out of the first half of the year overall.

Zero command.

If you should require assistance during the call, please press star then zero. As a reminder, today's conference is being recorded. I'd now like to turn the conference over to your host Ms. Angie Park, managing director and head of Investor Relations. Please go ahead.

As a reminder, today's conference is being recorded.

I'd now like to turn the conference over to your host MS. Angie Park, managing director and head of Investor Relations. Please go ahead.

Thank you, operator, and thanks, everyone for joining us today on our first quarter of fiscal 2022 earnings announcement. As the operator just mentioned, I'm Angie Park, managing director head of Investor Relations. On today's call, you will hear from Julie Sweet, our chair and Chief Executive Officer, and KC McClure, our Chief Financial Officer.

Speaker 2: But nothing specific to call out in terms of any weakness you see in the back half. But it's just a function of how the demand lays out.

Speaker 2: Got it. Thanks so much and happy holidays again. Good to see you. Thanks Brian .

Sir.

I hope you've had an opportunity to review the news release, we issued a short time ago, Let me quickly outline the agenda for today's call. Julie will begin with an overview of our results. KC will take you through the financial details, including the income statement and balance sheet, along with some key operational metrics for the first quarter. Julie will then provide a brief update on our market positioning before KC provides our business outlook for the second quarter and full fiscal year 2022. We will then take your question before Julie provides a wrap up at the end of the call. Some of the matters we'll discuss on this call, including our business outlook are forward-looking and as such are subject to known and unknown risk and uncertainties.

Speaker 1: Okay. I think that was our last question. So, thank you for joining us on today's call, and thank you again to our really incredible people across the globe, and thanks to all of our shareholders for your continued trust. We work to earn it every day, and we really appreciate it. So, best wishes to all for a safe, healthy, and joyful holiday season.

market positioning before KC provides our business outlook for the second quarter and full fiscal year 2022. We will then take your question before Julie provides a wrap up at the end of the call. Some of the matters we'll discuss on this call, including our business outlook are forward-looking and as such are subject to known and unknown risk and uncertainties.

Speaker 4: And ladies and gentlemen, today's conference will be available for replay after 10 AM Eastern today through March 17th at midnight. You may access the AT&T replay system at any time by dialing 1-866-207-1041, entering the access code 574-5754.

Including but not limited to those factors set forth in today's news release and discussed in our annual report on Form 10-K, and quarterly reports on Form 10-Q, and other SEC filings. These risks and uncertainties could cause actual results to differ materially from those expressed in this call. During our call today, we will reference certain non-GAAP financial measures, which we believe provide useful information for investors. We include reconciliations of non-GAAP financial measures, where appropriate to GAAP in our news release or in the Investor Relations section of our website at Accenture.com. As always, Accenture assumes no obligation to update the information presented on this conference call. Now, let me turn the call over to Julie.

Speaker 4: International participants may dial 402-970-0847 and those numbers again are 1-866-207-1041 and 402-970-0847, again entering the access code 574-5754. That does conclude your conference for today. Thank you for your participation and for using AT&T Conferencing Service. You may now disconnect.

During our call today, we will reference certain non-GAAP financial measures, which we believe provide useful information for investors. We include reconciliations of non-GAAP financial measures, where appropriate to GAAP in our news release or in the Investor Relations section of our website at Accenture Dot com as always Accenture assumes no obligation to.

Update the information presented on this conference call now, let me turn the call over to Julie.

Thank you, Angie, and thank you everyone for joining us. I'd like to start by thanking our 674,000 people around the world for your extraordinary work and commitment to our clients. Our results again this quarter reflect how you are living our purpose every day to deliver on the promise of technology and human ingenuity. As more and more companies embrace [compress] transformation, our clients are turning to us as their trusted partner as reflected in our outstanding growth of 27% this quarter. We added 15 new diamond clients, bringing the total to 244. Diamond clients are our largest relationships and to give some context, we added 13 diamonds in all of FY '21.

I'd like to start by thanking our 674000 people around the world for your extraordinary work and commitment to our clients. Our results again this quarter reflect how you are living our purpose every day to deliver on the promise of technology and human ingenuity as more and more companies embrace.

Speaker 5: You

<unk> transformation, our clients are turning to us as their trusted partner as reflected in our outstanding growth of 27% this quarter.

We added 15, new diamond clients, bringing the total to 244 diamond clients are our largest relationships and to give some context. We added 13 diamonds in all of FY 'twenty one.

We also had record bookings of $16.8 billion, 30% growth year over year with 20 clients with bookings over 100 million and we expanded operating margin 20 basis points in Q1 with adjusted EPS growth of 28%, while we continued to invest in our business and people, including $1.7 billion in acquisitions. And in just the first quarter, we invested $250 million in learning for our people with $8.6 million training hours were approximately 14 hours per person. The extraordinary demand we see in the market reflects the imperative of digital transformation.

Acquisitions and in just the first quarter, we invested $250 million in learning for our people with $8 6 million training hours were approximately 14 hours per person.

The extraordinary demand we see in the market reflects the imperative of digital transformation.

Companies are making critical decisions about who will be their strategic partner. And they are selecting us because of our talented people, our deep industry and technology capabilities, and our commitment to both create value and need with values. We predicted back in 2013 that every business would be a digital business and we have executed a clear strategy to rotate our business to anticipate and be ready to serve our clients. And when the pandemic hit, we were ready with capabilities at scale reflected in 70% of our revenue at that time being from digital cloud and security.

Digital business and we have executed a clear strategy to rotate our business to anticipate and be ready to serve our clients and when the pandemic hit we were ready with capabilities at scale reflected in 70% of our revenue at that time being from digital cloud and security.

With strong relationships with the world's leading technology companies, which in some cases go back decades. With a focus on growing our people through learning, allowing us to rapidly re-skill with an unwavering commitment to inclusion and diversity and equality and caring for our people professionally and personally. Making us a talent magnet in a tight labor market, adding 50000 talented individuals in Q1.

Making us a talent magnet in a tight labor market, adding 50000 talented individuals in Q1.

And it is our breadth of capabilities across strategy and consulting interactive technology and operations, which is unique in our industry that allows us to work side by side with our clients to deliver results. And we believe our goal to create 360-degree value for our clients, people, shareholders, partners and communities is an essential part of our success. Certainly, our commitment to creating vibrant career paths for our people is an important part of this value and we just completed our annual promotion process. I want to congratulate our 1,030 new promoted to managing director, 143 new appointments to senior managing directors and more than 90,000 people we promoted around the world in Q1 overall. Today, we launched our 360 value reporting experience, a new way to show our progress and the value we create in all directions for all of our stakeholders. More on that later. KC, over to you.

Partners and communities is an essential part of our success.

Certainly our commitment to creating vibrant career paths for our people is an important part of this value and we just completed our annual promotion process I want to congratulate our 1030, new promoted to managing director 143, new appointments to senior managing directors and more than 90000 people.

promoted around the world in Q1 overall.

Today, we launched our 360 value reporting experience, a new way to show our progress and the value we create in all directions for all of our stakeholders. More on that later. KC, over to you.

Thank you, Julie. Happy holidays to all of you and thanks for taking the time to join us on today's call. We were very pleased with our overall results in the first quarter, which exceeded our expectations, setting a new bookings record at 16.8 billion with consulting bookings exceeding the previous record by more than 1 billion. Our results reflected strong double-digit revenue growth across all dimensions of our business our market services and industry groups.

We were very pleased with our overall results in the first quarter, which exceeded our expectations setting a new bookings record at 16 $8 billion with consulting bookings exceeding the previous record by more than 1 billion or.

Our results reflected strong double digit revenue growth across all dimensions of our business our market services and industry groups.

We saw improved pricing in many parts of our business. Based on the strength of our first-quarter results and the demand we see in the market, we are significantly increasing our full-year revenue and EPS outlook. Now, let me summarize a few of the highlights of the quarter. Revenues grew 27% in local currency, increasing more than $3.2 billion over Q1 last year. And more than $600 million above our guided range with broad-based over delivery across all markets services and industries with all 13 industry groups growing double digits.

Now, let me summarize a few of the highlights of the quarter.

Revenues grew 27% in local currency, increasing more than $3 $2 billion over Q1 last year.

And more than $600 million above our guided range with broad based over delivery across all markets services and industries with all 13 industry groups growing double digits.

We continue to extend our leadership position with growth we estimate to be more than five times the market, which refers to our basket of publicly traded companies. Operating margin of 16.3% for the quarter, an increase with an increase of 20 basis points. We continue to drive margin expansion, while making significant investments in our people and our business, including acquisitions. We delivered very strong EPS of $2.78, up 28% over adjusted fiscal '21 results. Finally, we delivered free cash flow of $349 million and returned $1.5 billion to shareholders through repurchases and dividends.

Operating margin of 16, 3% for the quarter, an increase with an increase of 20 basis points.

We continue to drive margin expansion, while making significant investments in our people and our business, including acquisitions we.

We delivered very strong EPS of $2 since Saturday expense up 28% over adjusted fiscal 'twenty one results.

Finally, we delivered free cash flow of $349 million and returned $1 5 billion to shareholders through repurchases and dividends.

We also invested approximately $1.7 billion in acquisitions, and we continue to expect to invest approximately $4 billion in acquisitions this fiscal year. With those high-level comments, let me turn to some of the details starting with new bookings. New bookings were a record at $16.8 billion for the quarter, representing 30% growth in US dollars, and we're 800 million higher than our previous record. With an overall book to bill of 1.1. Consulting bookings were a record at $9.4 billion with a book to bill of 1.1. Outsourcing bookings were $7.4 billion with a book to book to bill of 1.1.

With those high level comments, let me turn to some of the details starting with new bookings.

New bookings were a record at $16 8 billion for the quarter, representing 30% growth in U S dollars, and we're 800 million higher than our previous record with an overall book to Bill of one one.

Consulting bookings were a record at $9 4 billion with a book to Bill of one one hour.

Outsourcing bookings were $7 4 billion with a book to book to Bill of one one.

We were very pleased with our bookings this quarter, which reflected 20 clients with bookings over $100 million. All of our service dimensions strategy and consulting, technology services, and operations as well as our geographic market delivered strong double-digit bookings growth in US dollars. Turning now to revenues. Revenues for the quarter were $15 billion, a 27% increase in US dollars and in local currency. Consulting revenues for the quarter were $8.4 billion, up 33% in US dollars and 32% in local currency. Outsourcing revenues were $6.6 billion up 21% in US dollars and in local currency. Taking a closer look at our service dimensions, strategy and consulting technology services and operations all grew very strong double digits.

All of our service dimensions strategy and consulting technology services and operations as well as our geographic market delivered strong double digit bookings growth in U S dollars.

Turning now to revenues revenues for the quarter were $15 billion or 27% increase in U S dollars and in local currency.

Consulting revenues for the quarter were $8 4 billion up 33% in U S dollars and 32% in local currency outsourcing revenues were $6 6 billion up 21% in U S dollars and in local currency, taking a closer look at our service dimensions strategy and consulting technology services and operations all grew very.

Wrong double digits.

Turning to our geographic markets. In North America, revenue growth was 26% in local currency driven by double-digit growth in public service, software and platforms, and consumer goods retail and travel services. In Europe, revenues grew 28% in local currency led by double-digit growth in consumer goods retail and travel services, industrial, and banking and capital markets. Looking closer at the countries. Europe was driven by double-digit growth in Germany, UK, France and Italy.

In North America revenue growth was 26% in local currency driven by double digit growth in public service software and platforms and consumer goods retail and travel services.

In Europe revenues grew 28% in local currency led by double digit growth in consumer goods retail and travel services industrial and banking and capital markets.

Looking closer at the countries Europe was driven by double digit growth in Germany, U K, France and Italy.

In growth markets, we delivered 30% revenue growth in local currency driven by double-digit growth in consumer goods retail and travel services banking and capital markets and public service. From a country perspective, growth markets was led by double-digit growth in Japan, and Australia. Moving down the income statement gross margin for the quarter was 32.9% compared with 33.1% for the same period last year. Sales and marketing expense for the quarter was 9.7% compared with 10.4% for the first quarter last year.

Moving down the income statement gross margin for the quarter was 32, 9% compared with 33, 1% for the same period last year.

Sales and marketing expense for the quarter was nine 7% compared with 10, 4% for the first quarter last year.

General and administrative expenses were 6.9% compared to 6.6% for the same quarter last year. Operating income was $2.4 billion in the first quarter, reflecting a 16.3% operating margin up 20 basis points compared with Q1 last year. Before I continue, as a reminder, we recognized an investment gain in Q1 last year, which impacted our tax rate and increased EPS by 15 cents. The following comparisons exclude these impacts and reflect adjusted results. Our effective tax rate for the quarter was 24.4% compared with an adjusted effective tax rate of 23.7% for the first quarter last year. Diluted earnings per share were $2.78 compared with adjusted diluted EPS of $2.17 in the first quarter last year. Days service outstanding were 42 days compared to 38 days last quarter and 38 days in the first quarter of last year.

Operating income was $2 4 billion in the first quarter, reflecting a 16, 3% operating margin up 20 basis points compared with Q1 last year.

Before I continue as a reminder, we recognized an investment gain in Q1 last year, which impacted our tax rate and increased EPS by <unk> 15.

The following comparisons exclude these impacts and reflect adjusted results.

Our effective tax rate for the quarter was 24, 4% compared with an adjusted effective tax rate of 23, 7% for the first quarter last year.

Diluted earnings per share were $2 78 <unk>.

Compared with adjusted diluted EPS of $2 17 in the first quarter last year.

Days service outstanding were 42 days compared to 38 days last quarter and 38 days in the first quarter of last year.

Free cash flow for the quarter was $349 million, resulting from cash generated by operating activities of 531 billion, net of property and equipment additions of $182 million. Our cash balance at November 30 was $5.6 billion compared with $8.2 billion at August 31st. With regards to our ongoing objective to return cash to shareholders, in the first quarter, we repurchased or redeemed 2.4 million shares for $845 million at an average price of $346.19 per share. In November 30th, we had approximately $5 6 billion of share repurchase authority remaining.

Our cash balance at November 30 was $5 $6 billion compared with $8 2 billion at August 31.

With regards to our ongoing objective to return cash to shareholders in the first quarter, we repurchased or redeemed two 4 million shares for $845 million at an average.

Average price of $346 19 per share in November 30th we had approximately $5 6 billion of share repurchase authority remaining.

Also in November, we paid a quarterly cash dividend of 97 cents per share for a total of $613 million. This represents a 10% increase over last year. And our board of directors declared a quarterly cash dividend of 97 cents per share to be paid on February 15th, a 10% increase over last year. So in summary, we are very pleased with our Q1 result, and we're off to a very strong start in FY '22. Now, let me turn it back to Julie.

This represents a 10% increase over last year.

Our board of directors declared a quarterly cash dividend of <unk> 97 per share to be paid on February 15th a 10% increase over last year.

So in summary, we are very pleased with our Q1 result, and we're off to a very strong start in FY 'twenty two.

Now, let me turn it back to Julie.

Yeah.

Thank you, KC. Starting with the demand environment, as we expected across industries and the globe technology continues to be the single biggest driver of change accelerating disrupting and creating new opportunities. More companies are embracing compressed transformation underpinned by cloud and digital and are moving to build their digital core and use technology to transform how they operate and to find new ways to compete and grow. As you would expect with 27% revenue growth, we are seeing broad-based demand across all markets, services and industries with double-digit growth across all our strategic growth priorities, including applied intelligence, cloud, industry ex, interactive, intelligent operations, intelligent platform services, security, and transformational change management.

Starting with the demand environment as we expected across industries and the globe technology continues to be the single biggest driver of change accelerating disrupting and creating new opportunities.

More companies are embracing compressed transformation underpinned by cloud and digital and are moving to build their digital core and use technology to transform how they operate and to find new ways to compete and grow as you would expect with 27% revenue growth. We are seeing broad based demand across all markets.

industries with double-digit growth across all our strategic growth priorities, including applied intelligence, cloud, industry ex, interactive, intelligent operations, intelligent platform services, security, and transformational change management.

Let me bring this demand to life. First, compress transformation is occurring across the globe and the key enabler is the cloud across the continuum from public to hybrid to increasingly be edge and the move to leading SaaS platforms, along with the convergence of cloud and data. For example, we are working with the leading global supplier of tires in mobility solutions to migrate to the cloud, modernize its IT platforms, use data to accelerate growth and value, and shift to a digital supply chain.

Leading global supplier of tires in mobility solutions to migrate to the cloud modernize its platforms use data to accelerate growth and value and shift to a digital supply chain.

We created a state of the art system to track inventory, sales, warranty information and returns all in the cloud all in real-time and have already helped to increase customer satisfaction, 35% with improved cost optimization and increased revenue up next. We're also helping Mount Sinai Health System, New York city's largest academic medical system transform modernize and increase its resilience by migrating its clinical systems, non-clinical systems, and clinical data to a stable secure cloud-based infrastructure to proactively detect and prevent threats, adapt to business and regulatory changes together with the potential to save millions over the next five years. Savings that can be reinvested to fund strategic innovative programs and help re-skill teams.

We're also helping Mount Sinai Health system, New York city's largest academic medical system transform modernize and increase its resilience by migrating its clinical systems non clinical systems in clinical data to a stable secure cloud based infrastructure to proactively detect and prevent threat adapt to business and regulatory.

Tori changes together with the potential to save millions over the next five years savings that can be reinvested to fund strategic innovative programs and helped me skilled teams.

Our deep industry expertise is helping companies find new solutions and path to growth and helping their customers. For example, we are collaborating with [Opay,] a leading finished financial group to use automation advanced analytics and other emerging technologies to increase business agility, reduce cost, and deliver enhanced custom and employee experiences. Opay will adopt the intelligent automation platform Accenture My Wizard to enable the company to extract greater value from its technology investments.

And employee experiences.

We will adopt the intelligent automation platform Accenture My Wizard to enable the company to extract greater value from its technology investments.

We are working with chugai are leading utilities provider in Germany to create and operate a game changing meter to cash platform in the cloud it will help reduce operating costs by up to 40% accelerate time to market and free up resources for energy transition and innovations like smart metering, helping customers make environmentally. Conscious decisions and energy provider to stay responsive and reliable. And as we talked about last quarter, our sustainability services are focused on helping our clients across industries moved from commitment to action at scale. See these services is critical to our clients' agendas.

Conscious decisions and energy provider to stay responsive and reliable.

And as we talked about last quarter, our sustainability services are focused on helping our clients across industries moved from commitment to action at scale.

See these services is critical to our clients' agendas.

Pleased to announce that we have signed an agreement to acquire that's group that's sustainability services company with 140 employees that specializes in energy transition services and sourcing renewables and other clean energy sources we.

Look forward to welcoming them welcoming them and working together to help clients move at speed to achieve net zero carbon.

We continue to help our clients to enter the next digital frontier of industry X. We're excited to have completed the acquisition of boom out and are seeing the power of our combination already.

Together, we're working with a global technology leader to transform from a traditional engineering platform to a more agile model based engineering platform that uses simulation and analysis from design and development all the way through the product lifecycle. We are also working with an American wireless operator to help improve daily operations and transform their <unk>.

Network security by combining our deep security risk assessment and communications industry skills.

Of course growth is at the heart of every client's agenda and interactive is helping our clients capture new growth with their customers with a unique combination of creativity technology data AI and industry expertise. For example, we are applying our digital global capabilities to help Capri Holdings limited.

Our global fashion luxury group, consisting of the iconic brands Versace, Jimmy Choo, and Michael Kors translate its rich in store luxury shopping experience to a digital experience that aligns with shifting customer behaviors and it accelerated sustainable growth.

As a strategic partner with Volkswagen Group.

Germany Motor vehicle manufacturer, we're helping Audi and VW to pave the way for sustainable growth through precise continuous commerce and rich experiences along the entire harboring car buying journey.

We are combining the power of AI and predictive analytics to deliver the right experiences at the right time to accelerate revenue growth through an expanded digital commerce ecosystem.

We're also working with Eli our Brazilian logistics solutions company and try to its new platform business to provide a digital one stop shop for self employed truckers to enhance their growth to improve logistics by offering options for more profitable freight product as well as to provide them access to critical services such as insurance.

Loans in health care, all by combining data analytics and AI.

We see an increasing demand to create the platforms the power of the digital products and experiences our clients seek for their customers.

We're helping CLO a leader in electronic payments in Latin America become more competitive by migrating to the cloud, which will accelerate new product development and enabled a cutting edge technologies.

We'll make it easier to launch innovative products reduce time to market by two thirds and lower costs, all while enhancing their customers' experience.

And of course security is critical to all our clients. We were proud to be selected by the department of Homeland Security Cyber security and infrastructure Security Asia Agency <unk> in the U S. Americas risk adviser defending against today's threats with advanced cyber services to help the department of Homeland security protect federal.

Civilian executive branch systems against cyber attacks like ransomware, Botnets and malware campaigns.

Even as companies undergo compressed transformation exponential technology changes continue.

We are investing to anticipate the future and we are working with our clients to innovate and take advantage of emerging technologies to compete and win our R&D is powered by Accenture Labs adventures and extends across every part of our business. So that we can quickly translate research into real results for our clients.

Example, we are working with ESPN to explore how emerging technologies can enable new ways for fans to experience sports at the E. S. P N edge innovation center leveraging the years. The early investments we have made an extended reality.

We've been a key participant in shaping the innovation and enterprise blockchain technologies across the globe with applications in financial markets supply chain and digital identity, which now are creating value for our clients from.

From partnering with the digital dollar foundation to explore our U S Central Bank digital currency to working with Hong Kong exchanges and clearing limited to build a new integrated settlement platform using digital asset modeling language smart contract.

And while the meta versus recently burst into the public eye, we've been an early innovator in applying the technology. In fact, we often innovate on cutting edge technologies, but that by deploying them at Accenture first we're proud to have the largest enterprise meta burst through what we call the <unk> floor and are deploying over.

60000.

Level of demand, you're seeing is sort of surprised even you guys you have a very good handle on it all the time so.

I don't know if you can just give some color around what your sense is about whats happening like what's happening out in the marketplace. You said, it's very broad based across industries across geographies.

And so maybe just sort of from a narrative perspective whats your sense of what's the what's happening differently or differently than you expected even three months ago in terms of that's driving a dramatic increase in demand. Thank you.

Sure you know I think a big aspect of it is embracing the need for speed and so you are continuing to see you know more and more companies doing the compressed transformation the willingness to take on more at the same time and even to do that.

<unk> faster I was just thinking of a couple of calls I had just this past week clients that we've been working with on some top for some time thinking about their cloud journey.

I'd would call me up Monday, and say, Okay. We're going to pull forward you know wave two we've got to go faster, it's harder than we thought we need to go faster and and so there's just you know as is as companies are kind of getting into it they're seeing that they want to go even faster they're also seeing the impact of that.

Who've come ahead, you know I was recently talking to the Covid The company, where we're doing them a major cloud and data platform and his point to us. It's like Okay. Now I get it you know I can only go so fast but can you go faster because I now see what I can really do one site re platform right and and so you know.

This embracing more change and speed you know, we do think is helping drive this demand and we predicted the sort of you know remember we talked about compressed transformation that it's really only been in about a third of industries and that it was going to continue to expand but the point is.

In the first round of compressed transformation is just the first round and as you'd begin to see the power of what it is to be in the cloud. The next sets of opportunities are being seen by the clients and so I do think it's it's mostly around a recognition of the value of re platforming and.

And the need for speed competitively.

Terrific, Thank you and happy holidays.

That'd be holidays.

And we do have a question from the line of Jason Kupferberg with Bank of America. Please go ahead.

Thanks, guys. Congrats on these numbers off of your holidays, I'm, maybe a little bit more to follow up on some of these topline questions. You mentioned the pipeline still remains robust after the very strong Q1 bookings. So how should we be thinking about our second quarter bookings growth in both consulting and outsourcing relative to the.

The Q1 levels.

Thanks, Jason and happy holidays to you too we do feel good about our pipeline and for the for the second quarter for the remainder of the year or so but bookings can be lumpy. So there's nothing that I would project, obviously, one way or the other against Q1, Jason but for both outsourced.

And consulting.

Across all of our markets and the services within those we do feel really good.

Yeah.

Okay. Okay.

Okay got it got it to off to account for some of that some of that Lumpiness and I'm wondering also if there's been any noticeable change in average project sizes or conversion cycles of backlog into revenue and then just anything you may want to comment on regarding updated assumptions for consulting and outsourcing.

Revenue growth in our full year fiscal 'twenty two thanks again.

Yeah sure. So theres really no change Jason to anything that we're seeing in duration or in conversion I mean, it all depends on the mix of the work that we're selling but at every individual type of service, but there was no change within within those durations are mixes.

And then just in terms of what we're seeing for the full year I'll just comment on the type of work we see.

Consulting strong double digits, even probably stronger than what we saw obviously at the beginning of the year and our outsourcing now a double digit growth.

Yeah, and it's probably worth reminding what Casey said earlier right our expectations were exceeded across all sizes and obviously when small deals are also you know over delivering that in quarter revenue right. So you know it's really it is broad based.

Okay. Appreciate all that thanks again guys.

Sure.

And we do have a question from the line of Rod bourgeois with deep dive equity research. Please go ahead.

Hey, guys. Congrats on the results in the a and the color that you're providing here Hey, I just had one question I'd like if you could comment on your newer offerings it'd be helpful to know which of your newer offerings are showing the most uptick against this growth wave.

You know if you could wave wave you the relative amount of lift that you're getting from offerings like industry X <unk> cloud automation et cetera is there a certain newer offering that's getting more uptick than the others or is it is it again I mean, maybe maybe you can go beyond the everything is good comment.

And give it a little more color on the specific offerings. Thanks.

Sure. Thanks, Rod I mean, I'll give you a little bit more color, maybe on some of the numbers and hand it over to Julie.

Add anything she'd like to but you.

What youll see is on cloud industry acts interactive security I mean, they're all.

At scale, they're all strong or very strong double digit growth and so you know there there is really not what I would call out individually. Julie also mentioned another another other list of our strategic priorities within.

Her commentary at the beginning of the call. So I won't be redundant go through those again are the Chileans are anything you want to add in terms of additional color well sure I mean, so first of all I just have to remember scale right. So accenture cloud first.

You know it was a $12 billion business our cloud business overall is $12 billion business is down 18 billion dollar business right. So that's what we announced last quarter and so when cloud is very strong double digit growth. It's obviously you know, adding you know big dollars, but across each of the strategic priority. So obviously that would be a different.

Scale, but you know look you have to look at the cloud right because the cloud is the enabler like think about it there's cloud enabler data as the driver and an AI will be the differentiator for our clients and so you saw many many of the examples really bringing these things together.

Right, so that you've got to get to the cloud you've got to get a handle on your data.

And then be able to use AI and you saw that in many of the examples that I gave in.

Today, and so the first big step and of course re platforming and the cloud both through migration and south products. So just.

If you kind of have that mental model I think it is helpful. And then that goes across.

Now that goes across the organization.

Well explain things.

Okay.

Next question.

And we have a question from David Toga with Evercore ISI. Please go ahead.

Good morning, and congrats on these superior results I'd like to ask about the sustainability.

Of the compressed digital transformation can you give us some proof points that you're still in the early innings.

This transformation, especially in some of your largest practices like cloud first in an interactive.

Sure.

A few things right, so and we shared this last quarter.

That if you look at it.

So you have to build your digital core right. So if you look at platforms like Oracle.

S E T and Theyre moving to the cloud those are all well below 50% of their installed base, having moved right. The the sort of moved to the cloud itself. The percentages are still around you know, 30% ish, maybe a little bit more in terms of workloads that have moved to the <unk>.

Cloud right. So if you just sort of look at you know kind of where where are we just technically right you see a lot of ways than you look at.

Our own research, where we talk about you know leaders and leapfrog errors and what we see is that you know about 10% on average for every company are really leaders.

And performing much better than the bottom, 25%, but you know that's the only still a part of their organization there they're still working on lots of compressed transformation. You've got these lead progress are coming from behind you know that's about we estimate about a third are really doing compress transformation and those compressed information is way.

Avon way right once you get to the cloud and what do you do with the data.

You know, we we continue to see that as really being a multiyear journey and I will tell you that a lot of people will talk about the pandemic.

Celebrated you know years of transformation into months, that's only in thinking right. It is really hard to re platform right and then and it's really hard to move you know get your data under control and then be able to do that once you do it it opens up so much but but there's a lot of <unk>.

Work for our clients ahead, and we're privileged to get to be their partner.

Thanks for that just as a quick follow up could you comment on you know where you are with industry X. In terms of you know you know in terms of the earnings into the growth of this business I mean, clearly we've got huge supply chain problems. Currently I mean, how long do you think supply the supply chain problems will last as you look around the globe.

Well, that's you know that's always there.

Can you talk about that with our clients all the time right because.

You know look the supply chain.

There's there's kind of the immediate issues, but there is the longer term issues like the ports or not.

Enough and most of the markets around the world right, there's fundamental shifts going on.

In terms of you know how do you get them, how do you build resilience, which as you know been moving from sort of cost to resilient and so you.

The work of supply chain.

Is multiyear, but I think it's important just I always go back to kind of where we were you know.

The new technologies have really only come on line you know some of the newer platforms like blue Yonder illuminate or S. A piece.

As for our supply chain work in the last couple of years right and so they're just starting to really get the momentum and the you know the implementation and.

And so I would say the digital supply chain.

Work is you know very very early innings and the same with manufacturing that's why we call. It. The next frontier. It's a big focus I mean, I think Gartner had a survey that said, 93% or 91% of directors believe it's the biggest transformation opportunity, but we're in very very early innings still.

Thank you happy holidays happy holidays.

Yeah.

Okay.

And our next question comes from the line of Jamie Friedman with Susquehanna. Please go ahead.

Yeah.

Hi.

Good morning.

Nice work here, a good way to finish the year.

I was just Oh I don't think anyone asked about travel yet and if they did I apologize if I missed it but can you see what are you contemplating in terms of travel for fiscal 'twenty two at this point.

Jamie on travel it's no change to the assumptions that we had at the beginning of the year. So two components. The travel revenue from Reimbursable travel, we don't have that in our guidance at the beginning here.

No travel revenue assumed and if it changes, we'll let you know and then in terms of travel outside of contract travel to clients.

We continue have an uptick.

In our expenses forecasted for the back half of the year, which again continues to be difficult to accurately estimate.

Thanks for that and then I have a Julien because you do have any early view on calendar 'twenty two at your budgets for your clients like those I know, you'll make your own whether a lot of time, but are those rising to what degree is it.

Is it tastes different than it was say last calendar.

I mean, I would just say that it's you know this is kind of when the budgets are getting finalized. So we'll have you know much more.

You know insight.

Quarter, because they get finalized into January.

But what we're seeing is that you know which is reflected in our <unk>.

And our guidance is continued strong demand.

Got it thank you very much.

Okay.

Great Operator, we have time for one more question and then Julie will wrap up the call.

Of course and that last question then comes from the line of Bryan Keane with Deutsche Bank. Please go ahead.

Hi, guys happy holidays. The first question I wanted to ask was.

The surprise jump in and Diamond client adds.

It was 15 in the quarter and you did 13 all of last fiscal year. So just trying to get a sense is that something is centuries, specifically doing with the sales force to grab those larger clients or is that just a function of the demand environment that people are knocking down your door. Even these larger clients that you would think you would already be.

Working with you or not and they're just continuing to add to the number of diamond clients for you guys.

Yeah, it's really a function of what we've been talking about is compressed transformation right. It's it's a function of more clients.

Taking on more change right because that's what builds.

This level of bookings and we've been talking about that trend really from the first six months after the pandemic, where we had more clients do over $100 million bookings in the first six months of that fiscal year, and we continue to see that building as clients recognize how much change they need.

To do and that they have to go faster. So that's really what we see as a function.

Got it got it and then Casey when just looking at the numbers on for the revenue growth, obviously, a 27% constant currency number for the quarter and then the guide I think for <unk> was above street expectations.

Dictations 'twenty two to 'twenty six.

Guess, what does that imply for the back half of the year, obviously, it would be a much different growth rate in the back half is that some conservatism versus just tougher comps can you talk about the back half for 'twenty two.

Sure right what that implies for the back half is very is still very strong and that it's double digits.

Across the back half of the year at the low end and the upper end of our guidance range, which implies also really strong organic growth.

In the back half of the year and a.

A continuing ability of our business in the back half of the year are coming out of the first half of the year overall.

But nothing specific to call out in terms of you know.

Any weakness you see in the back half, but it's it's just the <unk>.

Function of how the demand plays out.

Correct.

Got it thanks, so much and happy holidays again.

Tim He is.

Brian.

Yeah.

Okay I think that was our last question so thank.

Thank you for joining us on today's call and thank you again to our really incredible people across the globe.

And thanks to all of our shareholders for your continued trust them. We are we work to earn it every day and we really appreciate it so best wishes to all for a safe healthy and joyful holiday season.

And ladies and gentlemen, todays conference will be available for replay after 10 a M. Eastern today through March 17th at Midnight, you May access the AT&T replay system at anytime by dialing 18662071041.

Entering the access code 5745754.

International participants may dial four zero to 90 700847, and those numbers again are 1866207.

041, and four zero to 90 700847.

And entering the access code 5745754 that does conclude your conference for today. Thank you for your participation and for using AT&T conferencing service.

May now disconnect.

Okay.

Yeah.

Okay.

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