Q3 2024 Accenture PLC Earnings Call

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Operator: Your conference will begin momentarily; please continue to hold. Ladies and gentlemen, thank you for standing by. Welcome to Accenture's third quarter fiscal 2024 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. If you would like to ask a question, please press one then zero.

Speaker Change: Ladies and gentlemen, thank you for standing by welcome to Accenture as third quarter of fiscal 2024 earnings Conference call. At this time all participants are in a listen only mode. Later, we will conduct a question and answer session. If you would like to ask a question. Please press. One then zero if you should require assistance during the call. Please press Star then zero.

Operator: If you should require assistance during the call, please press star then zero. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Managing Director, Head of Investor Relations, Katie O'Connor. Please go ahead.

Speaker Change: As a reminder, this conference is being recorded I would now like to turn the conference over to your host managing director head of Investor Relations Katy O'connor. Please go ahead.

Katie OConor: Thank you, Operator, and thanks, everyone, for joining us today for our third quarter Fiscal 2024 Earnings Announcement. As the Operator just mentioned, I'm Katie OConor, Managing Director, Head of Investor Relations. On today's call, you will hear from Julie Sweet, our Chair and Chief Executive Officer, and Casey McClure, our Chief Financial Officer.

Speaker Change: Thank you operator, and thanks, everyone for joining us today on our third quarter fiscal 2024 earnings announcement as the operator, just mentioned I'm Katy O'connor managing director head of Investor Relations on today's call you will hear from Julie Sweet, our chair and Chief Executive Officer NK.

Speaker Change: You see in the core our Chief Financial Officer, We 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 though.

Katie OConor: We 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.

Katie OConor: KC will take you through the financial details, including the income statement and balance sheet, along with some key operational metrics for the third quarter. Julie will then provide a brief update on our market positioning before KC provides our business outlook for the fourth quarter and full fiscal year 2024. We will then take your questions 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 risks and uncertainties, including, but not limited to, those factors set forth in today's news release and as 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.

Speaker Change: KC will take you through the financial details, including the income statement and balance sheet, along with some key operational metrics for the third quarter. Tony will then provide a brief update on our market positioning before KC provides our business outlook for the fourth quarter and full fiscal year 2024, We will then take your questions before Julie.

Speaker Change: Provides a wrap up at the end of the call.

Speaker Change: 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 risks and uncertainties, including but not limited to those factors set forth in today's news release and as discussed in our annual report on Form 10-K, and quarterly reports on Form 10-Q, and other S. P.

Speaker Change: E filing.

Speaker Change: 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.

Katie OConor: 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, I will turn the call over to Julie.

Speaker Change: In our news release or in the Investor Relations section of our website at Accenture Dot com.

Speaker Change: As always Accenture assumes no obligation to update the information presented on this conference call now, let me turn the call over to Julie.

Julie T. Spellman Sweet: Thank you, Katie, and everyone joining us, and thank you to our 750,000 people around the world who work every day to deliver 360-degree value for all our stakeholders. Before we get into the quarter, I want to thank KC, who's been an excellent partner for these last five years, and our three other extraordinary leaders who are stepping down in the next two quarters, Sean Mark, Ellen, and Paul. Each has given over 36 years of service and demonstrated strong stewardship in developing outstanding successors, including Angie, who you all know from her former role as head of investor relations, who will succeed KC on December 1. As always, we are executing a smooth leadership transition to the next generation with our strong bench of great leaders. Now, onto the quarter.

Julie T. Spellman Sweet: Thank you Katie and everyone joining and thank you to our 750000 people around the World who work every day to deliver 360 degree value for all our stakeholders.

Julie T. Spellman Sweet: Before we get into the quarter I want to thank Casey who's been an excellent partner for these last five years and our three other extraordinary leaders who are stepping down in the next two quarters should Mark Allen and Paul each have given over 36 years of service and demonstrated strong stewardship and developing outstanding successors, including Ann.

Speaker Change: <unk>, who you all know from her former role as head of Investor Relations, who will succeed Casey in December one.

Speaker Change: As always we are executing a smooth leadership transition to the next generation with a strong bench of great leaders.

Speaker Change: Now onto the quarter I am pleased this quarter to bring to life, yet again, the resilience and agility of our business as our actions to remain laser focused on our clients' needs and quickly adapt to market conditions can be seen in our results, which are building a foundation for stronger growth as we go into Q4 and next fiscal year.

Julie T. Spellman Sweet: I am pleased this quarter to bring to life yet again the resilience and agility of our business as our actions to remain laser-focused on our clients' needs and quickly adapt to market conditions can be seen in our results, which are building a foundation for stronger growth as we go into Q4 and next fiscal year. As you know, this fiscal year, our client spending developed differently than we expected at the beginning of the fiscal year.

Speaker Change: As you know this fiscal year, our clients' spending developed differently than we expected at the beginning of the fiscal year and these conditions continue with clients prioritizing large scale transformations, which convert to revenue more slowly while limiting discretionary spending, particularly in smaller projects with delays in decision, making and a slower.

Julie T. Spellman Sweet: And these conditions continue, with clients prioritizing large-scale transformations, which convert to revenue more slowly while limiting discretionary spending, particularly on smaller projects, with delays in decision-making and a slower pace of spending as well. In response, we have moved quickly to adjust by leveraging our unique strengths, end-to-end services, including deep industry and functional expertise that enable these large-scale transformations or what we call reinventions. We are also leveraging our deep technology expertise and ecosystem partnerships and our learning machine and culture, which gives us the agility to shift to new areas of demand, including, for example, Gen AI, while continuing to invest at scale for future growth.

Speaker Change: So spending as well.

Speaker Change: In response, we have moved quickly to adjust by leveraging our unique strengths our end to end services, including deep industry and functional expertise that enable these large scale transformations or what we call Reinventions. We also leveraging our deep technology expertise and ecosystem partnerships and our learn.

Speaker Change: <unk> machine and culture. It gives us the agility to shift to new areas of demand, including for example journey II, while continuing to invest at scale for future growth.

Julie T. Spellman Sweet: Here is how these strengths and our strategy are demonstrating results three quarters into the fiscal year. With our clients prioritizing large-scale transformations, we have accelerated our strategy to be the reinvention partner of our clients. Our success is reflected in our bookings of $21.1 billion, including another 23 clients with quarterly bookings greater than $100 million, bringing the total of such clients with these bookings to 92 year-to-date, seven more than last year at this time.

Speaker Change: Here is how these strengths and our strategy are demonstrating results three quarters into the fiscal year.

With our clients prioritizing large scale transformations, we have accelerated our strategy to be the reinvention partner of our clients. Our success is reflected in our bookings of $21 $1 billion, including another twenty-three clients with quarterly bookings greater than 100 million, bringing the total of such clients with these bookings to 92.

Speaker Change: Year to date seven more than last year at this time.

Julie T. Spellman Sweet: This focus on being the reinvention partner is an important part of our strategy to return to stronger growth. As we enter next year, as this work ramps up, the revenue from these large-scale bookings is expected to continue to layer in throughout the year, and we are also well-positioned to capture increases in discretionary spend when it comes back because of the strategic positioning these deals bring to our clients. We also have leaned into the new area of growth, Gen-AI, which is comprised of smaller projects as our clients primarily are in experimentation mode.

Speaker Change: This focus on being the reinvention partner is an important part of our strategy to return to stronger growth as we enter next year as this work ramps. The revenue from these large scale bookings is expected to continue to layer in throughout the year and we are also well positioned to capture increases in discretionary spend when it comes back because of the streets.

Speaker Change: <unk> positioning these deals bring at our clients.

Speaker Change: We also have leaned into the new area of growth journey, II, which is comprised of smaller projects as our clients primarily are in experimentation mode and this quarter. We had two important milestones with over $900 million in new Jennie O bookings. This quarter, we now have $2 billion and Jenny I sales year to date.

Julie T. Spellman Sweet: In this quarter, we hit two important milestones. With over $900 million in new Gen-AI bookings this quarter, we now have $2 billion in Gen-AI sales year-to-date, and we have also achieved $500 million in revenue year-to-date. This compares to approximately $300 million in sales and roughly $100 million in revenue from Gen AI in FY23. Leading in Gen-AI positions us to help our clients take the actions needed to reinvent and benefit from Gen-AI, which frequently means large-scale transformation.

Speaker Change: And we have also achieved $500 million in revenue year to date.

Speaker Change: This compares to approximately $300 million in sales and roughly $100 million in revenue from Jenny I in FY2023.

Speaker Change: Leading and Jenny I positions us to help our clients take the actions needed to reinvent and to benefit from Jenny I, which frequently means large scale train information. We're also taking an early lead with an eye toward long term leadership in this critical technology, which is still in the early stages of maturity and adoption. Despite its.

Julie T. Spellman Sweet: We are also taking an early lead with an eye toward long-term leadership in this critical technology, which is still in the early stages of maturity and adoption despite its rapid evolution. We have built our expertise in making strategic acquisitions over the last decade, leveraging a strong balance sheet, and we have used this expertise to expand into new growth areas, scale in hot areas and geographies, and continue to build strength in our industry and functional consulting.

Speaker Change: Rapid evolution.

Speaker Change: We have built our expertise and making strategic acquisitions over the last decade, leveraging our strong balance sheet and we have used this expertise to expand into new growth. If there is scale in hot areas and geographies and continued to build strength in our industry and functional consulting.

Julie T. Spellman Sweet: We deployed $2.3 billion of capital across our geographic markets in Q3 across 12 acquisitions, bringing the total number of acquisitions to 35 with invested capital of $5.2 billion year-to-date as compared to $2.5 billion for the entire FY23. As a learning organization and talent creator, we continue to invest in our people with approximately 13 million training hours this quarter. This averages 19 hours per person, representing an increase predominantly due to Gen AI as we continue to prepare our workforce for the infusion of Gen AI across our business in the coming years.

Speaker Change: We deployed $2 $3 billion of capital across our geographic markets in Q3 across 12 acquisitions, bringing the total number of acquisitions to 35 with invested capital of $5 $2 billion year to date as compared to $2 $5 billion for the entire FY2023.

Speaker Change: As a learning organization and talent creator, we continue to invest in our people with approximately 13 million training hours. This quarter. This averages 19 hours per person representing an increased predominantly due to Jenny I as we continue to prepare our workforce for the infusion of Jenny I across our business in the coming years.

Julie T. Spellman Sweet: We also continue to steadily increase our data and AI workforce, reaching approximately 55,000 skilled data and AI practitioners against our goal of doubling our data and AI workforce from 40,000 to 80,000 by the end of FY26. We continue to take market share on a rolling four-quarter basis against our basket of our closest global publicly traded competitors, which is how we calculate market share, with revenues of $16.5 billion for the quarter, up 1.4% in local currency, and slightly above the midpoint of our FX adjusted range. We expanded our Adjusted Operating Margin by 10 basis points and delivered free cash flow of $3 billion.

Speaker Change: We also continued to steadily increase our data and AI workforce, reaching approximately 55000 skilled data in the eye practitioners against our goal of doubling our data and AI work force from 40000 to 80000 by the end of FY 'twenty six.

Speaker Change: We continued to take market share on a rolling four quarter basis against our basket of our closest global publicly traded competitors, which is how we calculate market share with revenues of $16 5 billion and for the quarter, a 1.4% in local currency and slightly above the midpoint of our FX adjusted range.

Speaker Change: We expanded adjusted operating margin by 10 basis points and delivered free cash flow of $3 billion.

Julie T. Spellman Sweet: I want to congratulate our 97,000 people we have promoted around the world through June 1, including 702 to Managing Director and 64 to Senior Managing Director, reflecting our commitment to providing vibrant career paths. We are recognized as a top 10 place to work in 10 countries, representing more than 70% of our people. Number 2 in Argentina, Brazil, and the Philippines. Number 4 in Singapore. Number 5 in Costa Rica, Finland, and Indonesia.

Speaker Change: I want to congratulate our 97000 people we have promoted around the world to June one, including 702 to managing director and 60 board as senior managing director, reflecting our commitment to providing vibrant career paths.

We are recognized as a top 10 place to work in 10 countries, representing more than 70% of our people number two in Argentina, Brazil, and the Philippines number four in Singapore number five in Costa Rica, Finland, and Indonesia number seven in the U S and number 10 in Chile on the great place to work list of best workplaces and number two on business.

Julie T. Spellman Sweet: Number 7 in the U.S. And number 10 in Chile on the Great Place to Work list of best workplaces, and number 2 on Business Today's Best Companies to Work For in India. And in recognition of our strong brand, we are proud to earn the number 20 position on Contra Brands' prestigious Top 100 Most Valuable Global Brands list, our highest rank to date, with an 11% increase in brand value to $81.9 billion.

Speaker Change: Today's best companies to work for in India.

Speaker Change: And in recognition of our strong brand we are proud to earn the number 20 position on Kantar brand sees prestigious top 100, most valuable global brands list, our highest rank to date with an 11% increase in brand value to $81 $9 billion.

Julie T. Spellman Sweet: Our scale across strategy, consulting, technology, and operations, and our breadth and depth across industries and functions make us uniquely capable of helping our clients reinvent using technology, data, AI, and new ways of working. Before turning to KC, I want to give a little more color on our acquisitions this quarter, which yet again demonstrate the strategic importance of both our ability to invest and our expertise in identifying, attracting, and integrating great companies. Joining Accenture.

Speaker Change: Our scale across strategy consulting technology, and operations, and our breadth and depth across industries and functions make us uniquely capable of helping our clients reinvent using technology data AI and new ways of working.

Speaker Change: Before turning to KC I want to give a little more color on our acquisitions this quarter, which yet again demonstrates the strategic importance of both our ability to invest and our expertise in identifying attracting and integrating great companies joining accenture.

Julie T. Spellman Sweet: Let's start with new areas of growth. We completed our acquisition of Udacity to scale our technology learning and training services and to help our clients reskill and upskill their people. Udacity is a critical part of our LearnVantage digital learning platform, which we announced last quarter as a new area of growth for the future.

Let's start with new areas of growth, we completed our acquisition of Udacity to scale, our technology learning and training services and to help our clients Reskill and upskill. Their people Udacity is a critical part of our learn vintage digital learning platform, which we announced last quarter is a new area of growth for the future.

Julie T. Spellman Sweet: Building on our expertise in customer-focused consulting, we invested to help drive our clients' growth agendas. We acquired Unlimited, an award-winning customer engagement agency with a deep understanding of human behavior, as evidenced by its proprietary human understanding lab and AI-powered data insights platform. We acquired Loomery in Australia, a marketing technology consultancy that helps leading organizations deliver seamless customer experiences and transform their marketing services.

Speaker Change: Building on our expertise and customer face focused consulting we invested to help drive our clients growth agendas, We acquired unlimited and award winning customer engagement agency with a deep understanding of human behavior as evidenced by its proprietary human understanding web and AI powered data insights platform.

Speaker Change: We acquired the luminary in Australia, our marketing technology consultancy that helps leading organizations deliver seamless customer experiences and transform their marketing services. It provides industry and platform consulting services, including marketing advisory and planning implementation across entire technology stacks operational excellence and <unk>.

Julie T. Spellman Sweet: It provides industry and platform consulting services including marketing, advisory, and planning, implementation across entire technology stacks, operational excellence, and simplification. We closed our acquisition of GEMSEEK in Bulgaria, a leading customer experience analytics provider helping global businesses understand customers through insights, analytics, and AI-powered predictive models. And we closed MindCurve, a cloud-native digital experience and data analytics company specializing in composable software, digital engineering, and commerce

Speaker Change: Vacation.

Speaker Change: We closed our acquisition of gem seek in Bulgaria, a leading customer experience analytics provider, helping global businesses understand customers through insights analytics and AI powered predictive models.

Speaker Change: And we closed mine curve, a global digital global a cloud native digital experience and data analytics companies specializing in Composedly software digital engineering and Commerce services.

Julie T. Spellman Sweet: Now let's turn to scaling in hot industries. We acquired Cognosante, a provider of innovative technology solutions for U.S. federal health, defense, intelligence, and civilian agencies. With this acquisition, Federal Services is creating a new federal health portfolio for its business. We invested in Customer Management IT and Serfin PA, which will provide the public sector with technology, support, and justice and public safety in Italy. We see public service, and in particular health, intelligence, and defense, as highly strategic industry focus areas globally for the next several years. And we invested in TeamXPAT, focusing on testing integration for lithography systems in the semiconductor industry, another attractive industry segment.

Speaker Change: Now, let's turn to scaling and hot industries, we acquired cognoscente it provider of innovative technology solutions for U S. Federal Health Defense intelligence and civilian agencies with this acquisition Federal services is creating a new help federal health portfolio for its business.

Speaker Change: We invested in customer management, I T and surfing P, a which will provide the public sector with technology support and justice and public safety in Italy.

Speaker Change: We see public service and in particular health intelligence and defense as highly strategic industry focus areas globally for the next several years.

Speaker Change: And we invested in team ex Pat focusing on testing integration for Elisa lithography systems in the semiconductor industry. Another attractive industry segment, our investment in flow group, a leading European consultancy and Oracle business partner, who specializes in global supply chain logistics is helping us scale and supply chain also a major.

Julie T. Spellman Sweet: Our investment in Flow Group, a leading European consultancy and Oracle business partner who specializes in global supply chain logistics, is helping us scale in supply chain, also a major growth area. Finally, we're scaling in attractive geographic markets. We acquired CLIMB, a technology-based consultancy based in Japan, where we continue to experience very strong revenue growth. Over to you, Casey.

Speaker Change: Both area.

Speaker Change: Finally, we're scaling in attractive geographic markets, we acquired climb a technology based consultancy based in Japan, where we continue to experience very strong revenue growth of Virginia Casey.

Kathleen R. McClure: Thank you, Julie, and thanks to all of you for taking the time to join us on today's call. We are pleased with our Q3 results, which were in line with our expectations and reflect continued investment at scale. We continue to serve as a trusted partner for our clients while running our business with rigor and discipline. Now, I will summarize a few of the highlights for the quarter.

Thank you Julie and thanks to all of you for taking the time to join US on today's call. We are pleased with our Q3 results, which were in line with our expectations and reflect continued investment at scale. We continue to serve as a trusted partner for our clients, while running our business with rigor and discipline now let me summarize a few of the highlights for the quarter revenues grew.

Kathleen R. McClure: Revenues grew 1.4% in local currency with mid-single-digit growth or higher in seven of our 13 industries, including public service, industrial, high-tech, life sciences, energy, utilities, and health. We also continue to see improvement in our CMT industry group. And we continue to take a smart share. As a reminder, we assess market growth against our investable basket, which is roughly two dozen of our closest global public competitors, which represents about a third of our addressable market. We use a consistent methodology to compare our financial results to theirs, adjusted to exclude the impact of significant acquisitions through the date of their last publicly available results on a rolling four-quarter basis.

Speaker Change: One, 4% local currency with mid single digit growth or higher and seven of our 13 industry, including public service Industrial High Tech Life Sciences energy utility and health. We also continued to see improvement in our CMT industry group.

Speaker Change: We continue to take market share as a reminder, we assess market growth against our investable basket, which is roughly two dozen of our closest global public competitors, which represents about a third of our addressable market. We used a consistent methodology to compare our financial results to their adjusted to exclude the impact of significant acquisition.

Speaker Change: Through the date of their last publicly available results on a rolling four quarter basis.

Speaker Change: Adjusted operating margin was 16, 4% an increase of 10 basis points over Q3 last year and includes continued significant investments in our people and our business.

Speaker Change: Finally, we delivered free cash flow of 3 billion and returned $2 2 billion to shareholders through repurchases and dividends.

Speaker Change: Date, we've invested $5 $2 billion across 35 acquisition.

Kathleen R. McClure: Adjusted operating margin was 16.4%, an increase of 10 basis points over Q3 last year and includes continued significant investments in our people and our business. Finally, we delivered free cash flow of $3 billion and returned $2.2 billion to shareholders through repurchases and dividends. To date, we've invested $5.2 billion across 35 acquisitions. With those high-level comments, let me turn to some of the details, starting with new bookings. New bookings were $21.1 billion for the quarter, representing 22% growth in U.S. dollars and 26% growth in local currency, with an overall book-to-bill of 1.3. Consulting bookings were $9.3 billion, with a book-to-bill of 1.1.

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

Speaker Change: New bookings were $21 1 billion for the quarter, representing 22% growth in U S dollars and 26% growth in local currency with an overall book to Bill of one three.

Speaker Change: Consulting bookings were $9 3 billion with a book to Bill of 1.1 managed services bookings were $11 8 billion with a book to Bill of 1.5, turning now to revenues revenues for the quarter were $16 5, billion% to 1% decline in U S dollars and a one 4% increase in local currency.

Kathleen R. McClure: Turning now to revenues, revenues for the quarter were $16.5 billion, a 1% decline in U.S. dollars and a 1.4% increase in local currency, and slightly above the midpoint of our FX Adjusted Guidance Range, as the FX headwind was approximately 2% compared to the 1% headwind estimated at the beginning of the quarter. Consulting revenues for the quarter were $8.5 billion, a decline of 3% in U.S. dollars and a decline of 1% in local currency.

Speaker Change: And slightly above the midpoint of our FX adjusted guidance range as the FX headwind was approximately 2% compared to the 1% headwind estimated at the beginning of quarter.

Speaker Change: Consulting revenues for the quarter or $8 5 billion, a decline of 3% in U S dollars and a decline of 1% in local currency managed services revenues were 8 billion up 2% in U S dollars and up 4% local currency.

Kathleen R. McClure: Managed services revenues were $8 billion, up 2% in U.S. dollars and up 4% in local currency. Taking a closer look at our service dimensions, technology services, strategy, and consulting grew low single digits, and operations was flat. Turning to our geographic markets, in North America, revenue grew 1% local currency led by growth in public service, partially offset by declines in banking and capital markets. In EMEA, revenues declined 2% local currency, with growth in public service offset by declines in banking and capital markets and communications and media.

Speaker Change: Taking a closer look at our service imagine technology services and strategy and consulting grew low single digit and operations was flat.

Speaker Change: Turning to our geographic markets in North America revenue grew 1% local currency led by growth in public service.

Speaker Change: We offset by decline in banking and capital markets.

EMEA revenues declined 2% local currency with growth in public service offset by declines in banking capital markets and communications and media revenue growth of Italy was offset by a decline in France.

Kathleen R. McClure: Revenue growth in Italy was offset by a decline in France. In growth markets, revenue grew 8% in local currency, led by growth in banking and capital markets and industrial. Revenue growth was driven by Argentina and Japan, partially offset by a decline in Australia. Moving down the income statement, gross margin for the quarter was 33.4%, consistent with the same period last year. Sales and marketing expense for the quarter was 10.6% compared to 10.5% for the third quarter last year.

Speaker Change: In growth markets revenue grew 8% local currency led by growth in banking and capital markets and industrial revenue growth was driven by Argentina, and Japan, partially offset by a decline in Australia.

Speaker Change: Moving down the income statement gross margin for the quarter was 33, 4% consistent with the same prairie last year.

Speaker Change: Marketing expense for the quarter was 10, 6% compared to 10, 5% for the quarter for the third quarter last year.

Kathleen R. McClure: General and administrative expense was 6.3% compared to 6.5% for the same quarter last year. Before I continue, I want to note that in Q3 of FY24 and FY23, we recorded $77 million and $347 million in costs associated with our business optimization actions, respectively. These costs decreased operating margin by 40 basis points in EPS by $0.08 this quarter and operating margin by 210 basis points in EPS by $0.42 in Q3 of last year. In Q3 of last year, we also recognized a gain on our investment in Duck Creek Technologies, which impacted our tax rate and increased ETS by $0.38. The following comparisons exclude these impacts and reflect adjusted results.

Speaker Change: General and administrative expense was six 3% compared to six 5% for the same quarter last year.

Speaker Change: Before I continue I want to note that in Q3 of FY 'twenty, four and FY2023 we recorded $77 million, it's $347 million and costs associated with our business optimization active actions respectively.

These costs decreased operating margin by 40 basis points and EPS by <unk> <unk> this quarter and operating margin by 210 basis points and EPS by 42 cents in Q3 of last year.

Speaker Change: In Q3 of last year, we also recognized a gain on our investment in Duck Creek technologies, which impacted our tax rate and increased EPS by <unk> 38 cents.

Speaker Change: The following comparisons exclude these impacts and reflect adjusted results.

Kathleen R. McClure: Adjusted operating income was $2.7 billion in the third quarter, reflecting an adjusted operating margin of 16.4%, an increase of 10 basis points from adjusted operating margin in the third quarter of last year. Our adjusted effective tax rate for the quarter was 25.5%, compared with an adjusted effective tax rate of 24% for the third quarter of last year. Adjusted diluted earnings per share were $3.13, compared with adjusted diluted EPS of $3.19 in the third quarter last year.

Speaker Change: Adjusted operating income was $2 7 billion in the third quarter, reflecting an adjusted operating margin of 16, 4% an increase of 10 basis points from adjusted operating margin in the third quarter of last year.

Speaker Change: Our adjusted effective tax rate for the quarter was 25, 5% compared with an adjusted effective tax rate of 24% for the third quarter last year.

Adjusted diluted earnings per share or $3 13 per cent compared with adjusted diluted EPS of $3 19 in the third quarter last year.

Kathleen R. McClure: Day service outstanding was 43 days compared to 43 days last quarter and 42 days in the third quarter of last year. The cash flow for the quarter was $3 billion, resulting from cash generated by operating activities of $3.1 billion net of property and equipment additions of $124 million. Our cash balance at May 31st was $5.5 billion, compared with $9 billion at August 31st. With regard to our ongoing objective to return cash to shareholders,

Speaker Change: Days service outstanding were 43 days compared to 43 days last quarter and 42 days in the third quarter of last year.

Free cash flow for the quarter was 3 billion, resulting from cash generated by operating activities of $3 1 billion net of property and equipment additions of $124 million.

Speaker Change: Our cash balance at May 31st was $5 5 billion compared with 9 billion at August 31.

Speaker Change: With regards to our ongoing objective to return cash to shareholders.

Kathleen R. McClure: In the third quarter, we repurchased or redeemed 4.3 million shares for $1.4 billion, an average price of $320.41 per share. As of May 31st, we had approximately $3.3 billion of share repurchase authority remaining. Also in May, we paid a quarterly cash dividend of $1.29 per share for a total of $811 million. This represents a 15% increase over last year. And our Board of Directors declared a quarterly cash dividend of $1.29 per share to be paid on August 15th, a 15% increase over last year.

In the third quarter, we repurchased or redeemed four 3 million shares for $1 4 billion.

And the average price of $320.41 per share as of May 31, we had approximately $3 3 billion billion of share repurchase authority remaining also in May we played it quarterly cash dividend of $1 29 per share for a total of $811 million. This represents a third.

Speaker Change: 14% increase over last year.

Speaker Change: And our board of directors declared a quarterly cash dividend of $1 29 per share to be paid on August 15th% to 15% increase over last year.

Kathleen R. McClure: In closing, we feel good about our results in Q3 and are now working hard to deliver Q4. We remain focused on capturing growth opportunities while continuing to invest in our business for long-term market leadership. Now, let me turn it back to Julie.

Julie T. Spellman Sweet: In closing we feel good about our results in Q3 and are now working hard to deliver Q4, we remain focused on capturing growth opportunities, while continuing to invest in our business for long term market leadership now, let me turn it back to Julie.

Julie T. Spellman Sweet: Thank you, Casey. As I mentioned earlier, we're seeing more of the same in terms of the demand environment. Now, let me give a little context on how we're executing our strategy to be the reinvention partner of our choice and why we're uniquely positioned to be helping our clients on AI. It is important to remember that while there is near-universal recognition now of the importance of AI, which is the heart of reinvention, the ability to use Gen AI at scale varies widely with clients on a continuum.

Julie T. Spellman Sweet: Thank you Casey as I mentioned earlier, we're seeing more of the same in terms of the demand environment now, let me give a little context on how we're executing our strategy to be the reinvention partner of choice and why we're uniquely positioned to be helping our clients an AI. It is important to remember that while there is a near universal recognition now of the.

Julie T. Spellman Sweet: <unk>, a b I, which is the heart of reinvention the ability to use gen. AI at scale varies widely with clients on a continuum.

Julie T. Spellman Sweet: With those which have strong digital cores genuinely seeking to move more quickly, while most clients are coming to the realization of the investments needed to truly implement AI across the enterprise, starting with a strong digital core, from migrating applications and data to the cloud, building a new cognitive layer, implementing modern ERP and applications across the enterprise, and a strong security layer. And nearly all clients are finding it difficult to scale their Gen AI projects because the AI technology is a small part of what is needed.

Julie T. Spellman Sweet: With those which have strong digital course genuinely seeking to move more quickly while most clients are coming to the realization of the investments needed to truly implement AI across the enterprise starting with a strong digital core from migrating applications and data to the cloud building, a new cognitive layer implementing modern ERP.

Jenny: P in applications across the enterprise to a strong security layer and nearly all clients are finding it difficult to scale Jenny I projects, because the AI technology is a small part of what is needed to reinvent using technology data and AI. You must also change your processes and ways of working Reskill and Upskill your people and build new.

Julie T. Spellman Sweet: To reinvent using technology, data, and AI, you must also change your processes and ways of working, rescale and upscale your people, and build new capabilities around responsible AI, all with a deep understanding of industry, function, and technology to unlock the value. And many clients need to first find more efficiencies to enable scaled investment in their digital cores and all these capabilities, particularly in data foundations. In short, Gen AI is acting as a catalyst for companies to more aggressively go after cost, build the digital core, and truly change the ways they work, which creates significant opportunities for us.

Jenny: <unk> around responsible AI, all with a deep understanding of the industry function and technology to unlock the value and many clients need to first find more efficiencies to enabled scaled investment in their digital cores and all of these capabilities, particularly in data foundations and short journey I is acting as a catalyst.

Jenny: For companies to more aggressively go after cost build the digital core and truly change the ways. They work, which creates significant opportunity for us and this is why clients are coming to US we were able to help our clients with this AI rotation because of our broad services across strategy and consulting technology and operations as well as everything customer through.

Julie T. Spellman Sweet: And this is why clients are coming to us. We are able to help our clients with this AI rotation because of our broad services across strategy and consulting, technology, and operations, as well as everything customer through Song and digital manufacturing and engineering through Industry X and our relevance across the functions of enterprises and 13 industries. Our privileged position in the technology ecosystem has never been more important.

Jenny: Song and digital manufacturing and engineering through industry X and our relevance across the functions of the enterprises and 13 industries, our privileged position in the technology ecosystem has never been more important we are working closely with our ecosystem partners to help our clients understand the right data and AI backbone that is needed and how to achieve.

Julie T. Spellman Sweet: We are working closely with our ecosystem partners to help our clients understand the right data and AI backbone that is needed and how to achieve tangible business value. Now, let me give you a few examples of the complex work of reinvention and building a digital core. We are partnering with Curry's, a leading European technology retailer, to unlock new growth and cost savings by accelerating its adoption of new technologies.

Jenny: <unk> tangible business value.

Jenny: Let me give you a few examples of the complex work of reinvention and building a digital core we are partnering with currys, a leading European technology retailer to unlock new growth and cost savings by accelerating its adoption of new technologies first we will move their operations from a legacy data center to a new cloud part from using prebuilt and customized solutions to <unk>.

Julie T. Spellman Sweet: First, we will move their operations from a legacy data center to a new cloud platform, using pre-built and customized solutions to create a powerful digital core. This unified data foundation allows us to deploy automation and generative AI in key growth areas, such as repair centers, customer service, e-commerce, procurement, and in-store experiences, delivering faster, more efficient services to their customers. The move to a new platform supports the company's sustainability goals by reducing energy consumption by transitioning to a more efficient cloud infrastructure.

Jenny: A powerful digital core this unified data foundation allows us to deploy automation agenda to be eye in key growth areas, such as repair centers customer service e-commerce procurement and in store experiences delivering faster more efficient services to their customers. The move to a new platform supports the company's sustainability goals, reducing energy consumption by trans.

Jenny: Turning to a more efficient cloud infrastructure.

Jenny: Now Chris employees will be empowered to serve their customers better by offering high touch experiences both online and in stores.

Julie T. Spellman Sweet: Now, Curry's employees will be empowered to serve their customers better by offering high-touch experiences both online and in stores. We're working with Independence Health Group, IHG, a leading health organization headquartered in southeastern Pennsylvania, on a transformation journey to modernize end-to-end operations, improving the way they serve current and future generations of customers.

Speaker Change: We're working with Independents Health group I H G. A leading health organization headquartered in South Eastern Pennsylvania on a transformation journey to modernize end to end operations, improving the way they serve current and future future generations of customers. We will help migrate nearly 2 million members to a new digital first platform expected to drive.

Julie T. Spellman Sweet: We will help migrate nearly 2 million members to a new digital-first platform, expected to drive immediate improvements in existing business processes. This will lay the foundation to leverage advanced technology and generative AI to proactively manage members' health. We are also helping reskill and retrain their operations staff, creating opportunities for employee development. With this reinvention, Independence continues its ongoing efforts to increase service quality, improve experiences, and enable better health outcomes, positioning it for new areas of growth in the rapidly changing healthcare landscape.

Speaker Change: Mediate improvements in existing business processes. This will lay the foundation to leverage advanced technology in general the eye to protect proactively manage members' health. We are also helping reskill and retrain their operation staff, creating opportunities for employee development with this reinvention independents continues its ongoing efforts to increase service quality improved.

Speaker Change: <unk> and enable better health outcomes positioning them for new areas of growth in the rapidly changing health care landscape.

Julie T. Spellman Sweet: Digital core work also requires deep industry expertise as we work with our clients to design the right tech, data, and AI to reinvent their enterprise and their industry. For example, we are helping Macy's, an iconic American retailer, with a technology modernization effort. As a strategic technology execution partner, we will migrate their mainframe systems to a cloud platform, a move that will enhance their operational efficiency and scalability. This will allow Macy's to be more agile and enable growth.

Speaker Change: Digital core work also requires deep industry expertise as we work with our clients to design the right Tech data and AI to reinvent their enterprise and their industry.

Speaker Change: We are helping Macy's an iconic American retailer with the technology modernization effort as the strategic technology execution partner, we will migrate their mainframe systems to our cloud platform.

Speaker Change: Move that will enhance our operational efficiency and scalability. This will allow macy's to be more agile and enable growth we were helping the central bank of the United Arab Emirates, the regulatory body responsible for the country's banking and insurance sector with a digital transformation to strengthen the financial system stability and contribute to growth innovation and diversification.

Julie T. Spellman Sweet: We are helping the Central Bank of the United Arab Emirates, the regulatory body responsible for the country's banking and insurance sector, with a digital transformation to strengthen the financial system's stability and contribute to growth, innovation, and diversification in the sector, in line with the UAE's national vision. Our program will deliver advanced analytics along with AI-driven automation to improve supervisory capabilities and streamline activities for licensed financial institutions by creating best-in-class processes to support regulatory compliance.

Julie T. Spellman Sweet: We will also modernize the bank's enterprise data management by implementing a single unified portal to provide a holistic view of the financial services ecosystem, all of which will enhance the UAE's position as a global financial center. We are partnering with Virgin Media O2, a leading carrier services provider in the UK, to support regional businesses to realize the promise of 5G, opening new revenue streams and stimulating growth in the telco market.

Speaker Change: <unk> in our sector in line with the UAE National Vision, our program will deliver advanced analytics, along with AI, driven automation to improve supervisory capabilities and streamline activities for licensed financial institutions by creating best in class processes to support regulatory compliance. We will also modernize the bank's enterprise data management by.

Speaker Change: In a single unified portal to provide a holistic view of the financial services ecosystem, all of which will enhance the U as position as a global financial Center.

Speaker Change: We are partnering with Virgin media owe to a leading carrier services provider in the U K to support regional businesses to realize the promise of five G opening new revenue streams and stimulating growth in the telco market, we will bring to market solutions built on our edge orchestration platform, which combines edge computing data AI Jennie O.

Julie T. Spellman Sweet: We will bring to market solutions built on our Edge orchestration platform, which combines edge computing, data AI, gen AI, and embedded security. This will enable use cases such as quality inspection, safe workplace management, and behavior monitoring to improve operations and customer experience. Whether it's enabling safe communication on building sites, creating a fan experience while handling crowds in busy venues, or supporting vital devices and clinician workflow in healthcare, Virgin Media O2 can now offer businesses a range of flexible, secure, and affordable solutions that boost efficiency, growth, and performance.

Speaker Change: And embedded security this will enable use cases, such as quality inspection safe workplace.

Speaker Change: This management and behavior monitoring to improve operations and customer experience, whether it's enabling safe communication on building sites, creating a fan experience will handling crowds and busy venues are supporting vital devices and clinician workflow and health care Virgin Media O. Two can now offer businesses a range of flexible secure and affordable.

Speaker Change: Portable solutions, the boost efficiency growth and performance.

Julie T. Spellman Sweet: And with our managed services and customer operations, we can work together with Virgin Media O2 to scale this growth. Security is a critical part of reinvention in the digital core. We saw continued very strong double-digit growth in our security business this quarter. We are partnering with the U.S. Navy to enhance its cybersecurity operations with cutting-edge capabilities that will strengthen its data security posture and support mission readiness. More than ever, data and information are critically important to national security.

Speaker Change: And with our managed services and customer operations, we can work together with Virgin Media O two to scale this growth.

Julie Sweet: Securities, a critical part of re-invention in the digital core, we saw continued very strong digital, double-digit growth in our security businesses quarter. We are partnering with the U.S. Navy to enhance its cybersecurity operations with cutting-edge capabilities that will strengthen its data security posture and support mission readiness.

Speaker Change: Security is a critical part of reinvention and the digital core we saw continued very strong digital double digit growth in our security business. This quarter, we are partnering with the U S. Navy to enhance its cyber security operations with cutting edge capabilities that will strengthen its data security posture and support mission readiness more than ever data and information are critically in.

Julie T. Spellman Sweet: More than ever, data and information are critically important to national security. Our solution sets are configured to provide defensive cyber operations across Navy networks to help safeguard digital assets and mission operations. Together, we will help ensure the U.S. Navy can combat evolving cyber threats, protectors sailors at sea, and defend American interests around the world.

According to National Security our solution sets are configured to provide defensive cyber operations across Navy networks to help safeguard digital assets and mission operations together, we will help ensure the U S Navy and combat evolving cyber threats protector sale is at sea and defend American interest around the world.

Julie T. Spellman Sweet: Our solution sets are configured to provide defensive cyber operations across Navy networks to help safeguard digital assets and mission operations. Together, we will help ensure the U.S. Navy can combat evolving cyber threats, protect our sailors at sea, and defend American interests around the world. Once clients have a strong foundation, they can explore new opportunities to drive growth and efficiencies with GenAI. For example, we are helping a leading global food and beverage company that has already built a strong digital core as part of its reinvention journey to now leverage the power of generative AI to create new value. Together, we developed a digital shelf console pilot, a GenAI engine that accelerates content creation for e-commerce and optimizes it to drive sales.

Julie Sweet: Once clients of a strong foundation, they can explore new opportunities to drive growth in efficiencies with Gen AI. We are helping a leading global food and beverage company who already built a strong digital core as part of its re-invention journey to now leverage the power of gender to AI to create new value. Together, we developed a digital shelf console pilot, a Gen AI engine that accelerates content creation for e-commerce and optimizes it to drive sales.

Speaker Change: Once clients have a strong foundation, they can explore new opportunities to drive growth and efficiencies with Jenny I, we're helping a leading global food and beverage company, who already built a strong digital core as part of its reinvention journey to now leverage the power of generative AI to create new value together, we developed a digital shelf console pilot.

Speaker Change: Jenny I engine that accelerates content creation for E Commerce and Optimizes it to drive sales the engine empowers marketers to audit and customized content at scale expected to reduce time to deliver one year's worth of content to just eight working days and save cost of up to 80% quickly and effectively once they scale. This enables.

Julie Sweet: The engine and powers marketers to audit and customize content at scale, expected to reduce time to deliver one year's worth of content to just eight working days and save costs of up to 80% quickly and effectively. Once they scale, the enables the company to produce more targeted content with significant time and cost efficiency, increase sales, and transform customer experiences.

Julie T. Spellman Sweet: The engine empowers marketers to audit and customize content at scale, expected to reduce time to deliver one year's worth of content to just eight working days and save costs of up to 80% quickly and effectively. Once they scale, this enables the company to produce more targeted content with significant time and cost efficiency, increase sales, and transform customer experiences. We have partnered with National Australia Bank, one of the country's largest financial institutions, to strategically implement and scale generative AI to create material value at speed, enhance relationship-driven customer service, and drive operational efficiencies. We worked on a methodical build of a secure and robust GenAI platform built within the bank's existing strategic data platform, with the creation of 200 generative AI use cases in backlog.

Speaker Change: The company to produce more targeted content with significant time and cost efficiency increase sales and transform customer experiences.

Julie Sweet: We have partnered with National Australia Bank, one of the country's largest financial institutions, to strategically implement and scale gender to create material value at speed and hands relationship-driven customer service and drive operational efficiencies. We worked on a methodical build of a secure and robust Gen AI platform. Built within the banks' existing strategic data platform with the creation of 200 Gen AI use cases in backlog. To date, over 20 use cases have been tested across the bank, with eight of these enterprise-grade pilots underway in a number of those scaling and already delivering value. We also co-created a methodology for delivering Gen AI projects from experiments to scalable deployment, ensuring each stage delivers tangible business benefits.

Julie T. Spellman Sweet: To date, over 20 use cases have been tested across the bank, with eight of these enterprise-grade pilots underway and a number of those scaling and already delivering value. We have also co-created a methodology for delivering GenAI projects from experiments to scalable deployment, ensuring each stage delivers tangible business benefits. While doing so, National Australia Bank and Accenture are putting safety at the core of the approach through responsible AI and risk policies alongside developing in-house AI expertise and literacy. One of the areas of the richest opportunities for our clients is customer experience transformation, which uses the unique capabilities of SONG across creative, customer insights, and deep technology expertise. Song grew by mid-single digits this quarter.

Speaker Change: We have partnered with National Australia Bank, one of the country's largest financial institutions to strategically implement and scale generative AI to create material value at speed enhance relationship driven customer service and drive operational efficiencies. We worked on a methodical build a secure and robust Jenny Jenny a platform built.

Speaker Change: Within the bank's existing strategic data platform with the creation of 200 generative AI use cases in backlog to date over 20 use cases have been tested across the bank with eight of these enterprise grade pilots underway in a number of those scaling and already delivering value.

Speaker Change: We also co created a methodology for delivering journey of projects from experiments to scalable deployment, ensuring each stage delivers tangible business benefits, while doing so national Australia Bank and Accenture are putting safety at the core of the approach to responsibly I am risk policies alongside developing in house AI expertise.

Julie T. Spellman Sweet: While doing so, National Australia Bank and Accenture are putting safety at the core of the approach through responsible AI and risk policies, alongside developing in-house AI expertise and literacy.

Speaker Change: Literacy.

Julie Sweet: One of the areas of richest opportunities for our clients is customer experience transformation, which uses the unique capabilities of songs across creative customer insights and deep technology expertise. Sound grew in mid-single digits this quarter.

Speaker Change: One of the areas of rich's opportunities for our clients as customer experience transformation, which uses the unique capabilities of songs across creative customer insights and deep technology expertise. So.

Speaker Change: <unk> grew mid single digits. This quarter, we're helping saudia saudia airline's the national flag carrier carrier of Saudi Arabia to launch an innovative digital platform to transform the traveler's experience powered by Jenny I. The platform will provide a one stop solution, enabling customers to seamlessly plan their journeys.

Julie T. Spellman Sweet: We are helping Saudia Airlines, the national flag carrier of Saudi Arabia, to launch an innovative digital platform to transform the traveler's experience. Powered by Gen-AI, the platform will provide a one-stop solution, enabling customers to seamlessly plan their journeys, book flights, and modify their trips in just a few words, all while providing a personalized and conversational experience. The platform is continuously evolving and will integrate more services over time. This modernization will support Saudia Airlines' vision of redefining the standards of travel in a digital world.

Julie Sweet: We are helping Saudi Arabia, Saudi Airlines, the national flag carrier of Saudi Arabia, to launch an innovative digital platform to transform the travel experience. Powered by Gen AI, the platform will provide a one-stop solution enabling customers to seamlessly plan their journeys, book flights, and modify their trips in just a few words, all while providing a personalized and conversational experience. The platform is continuously evolving and will integrate more services over time.

Speaker Change: Book flights and modify their trips in just a few words, all while providing a personalized and conversational experience. The platform is continuously evolving and will integrate more services over time. This monetization will support saudia airline's vision of redefining the standards of travel in a digital world.

Julie T. Spellman Sweet: This modernization will support Saudi Airlines' vision of redefining the standards of travel and digital world.

Julie T. Spellman Sweet: We continue to see strong demand for digital manufacturing and engineering services; Industry X grew high single digits in Q3. We are supporting a large Asia Pacific automobile manufacturer on their reinvention towards software-defined vehicles. We will help accelerate software development and create a software center of excellence to optimize quality, cost pressures, and delivery times.

Julie T. Spellman Sweet: We continue to see strong demand for digital manufacturing and engineering services. Industry X grew by high single digits in Q3. We are supporting a large Asia-Pacific automobile manufacturer in their reinvention towards software-defined vehicles. We will help accelerate software development and create a software center of excellence to optimize quality, cost pressures, and delivery times. The center of excellence will manage four key work streams, advanced driver assistance systems, in-vehicle infotainment, electrical and electronics, and powertrain.

We continue to see strong demand for digital manufacturing and engineering services industry X grew high single digits. In Q3, we are supporting a large Asia Pacific automobile manufacturer on their reinvention towards software defined vehicles, we will help accelerate software development and create a software center of excellence to optimize quality.

Speaker Change: Cost pressures and delivery times the centre of excellence will manage for key work streams advanced driver assistance systems in vehicle infotainment, electrical and electronics and powertrain by leveraging our expertise and strong and strategic partnerships. We are empowering them to strengthen and evolve its in vehicle software providing advanced functions in <unk>.

Julie Sweet: The center of excellence will manage 4 key work strengths: advanced driver assistance systems, in-vehicle infotainment, electrical and electronics, and power train. By leveraging our expertise and strategic partnerships, we are empowering them to strengthen and evolve its in-vehicle software, providing advanced functions and services throughout the vehicle's life cycle. This enables the company to drive innovation and hand-striver and passenger experiences and realize the full potential of software defined vehicles.

Julie T. Spellman Sweet: By leveraging our expertise and strategic partnerships, we are empowering them to strengthen and evolve their in-vehicle software, providing advanced functions and services throughout the vehicle's life cycle. This enables the company to drive innovation, enhance driver and passenger experiences, and realize the full potential of software-defined vehicles. And we will continue to leverage all of our strengths to manage the current macro conditions and constrained spending while investing in leadership for the future. Back to you, KC.

Speaker Change: Services throughout the vehicles lifecycle. This enables the company to drive innovation enhanced driver and passenger experiences and realize the full potential of software defined vehicles and.

Julie T. Spellman Sweet: And we will continue to leverage all of our strengths to manage the current macro conditions and the training spending on investing in leadership for the future.

Speaker Change: And we will continue to leverage all of our strength to manage the current met the current macro conditions and constrained spending or investing in leadership for the future back to you Casey. Thanks, Julie now turning to our business outlook for the fourth quarter of fiscal 'twenty. Four we expect revenues to be in the range of $16 5 billion to $16 65 billion.

Operator: Back to you, KC. Thanks, Julie.

Kathleen R. McClure: Thanks, Julie. Now, turning to our business outlook, for the fourth quarter of fiscal 24, we expect revenues to be in the range of $16.05 billion to $16.65 billion. This assumes the impact of FX will be about negative 2% compared to the fourth quarter of fiscal 23 and reflects an estimated 2% to 6% growth in local currency. For the full fiscal year 24, based upon how the rates have been trending over the last few weeks, we now expect the impact of FX on our results in U.S. dollars will be negative 0.7 compared to fiscal 23.

Operator: Now, turning to our business outlook for the fourth quarter of fiscal 24, we expect revenues to be in the range of 16.05 billion to 16.65 billion. This assumes the impact of FX will be about negative 2% compared to the fourth quarter of fiscal 23 and reflects an estimated 2 to 6% growth in local currency. For the full fiscal year 24, based upon how the rates have been trending over the last few weeks, we now expect the impact of FX on our results in US dollars will be negative 0.7 compared to fiscal 23. So the full fiscal 24, we now expect revenues to be in the range of 1.5 to 2.5% growth in local currency over fiscal 23, which assumes an inorganic contribution approaching 3%.

Casey: This assumes the impact of FX will be about negative 2% compared to the fourth quarter of fiscal 'twenty, three and reflects an estimated 2% to 6% growth in local currency.

Speaker Change: For the full fiscal year 'twenty four based upon how the rates have been trending over the last few weeks. We now expect the impact of FX on our results in U S dollars will be negative 0.7 compared to fiscal 'twenty three.

Kathleen R. McClure: For the full fiscal 24, we now expect our revenues to be in the range of 1.5 to 2.5 percent growth in local currency over fiscal 23, which assumes an inorganic contribution approaching 3 percent. We continue to expect business optimization actions to impact the fiscal 24 GAAP operating margin by 70 basis points and EPS by 56 cents. For adjusted operating margin, we continue to expect Fiscal 24 to be 15.5%, a 10 basis point expansion of Fiscal 23 results. We now expect our adjusted annual effective tax rate to be in the range of 23.5% to 24.5%. This compares to an adjusted effective tax rate of 23.9% in fiscal 23.

Speaker Change: For the full fiscal 'twenty four we now expect our revenues to be in the range of one 5% to 2.5% growth in local currency over fiscal 'twenty, three which assumes an inorganic contribution approaching 3%.

Operator: We continue to expect business optimization actions to impact fiscal 24 gap operating margin by 70 basis points in EPS by 56 cents. For adjusted operating margin, we continue to expect fiscal 24 to be 15.5% at 10 basis point expansions of fiscal 23 results. We now expect our adjusted annual effective tax rate to be in the range of 23.5% to 24.5%. This compares to an adjusted effective tax rate of 23.9% in fiscal 23. We now expect our full year adjusted earnings for share for fiscal 24 to be in the range of $11.85 to 12 dollars, or two to 3% growth over fiscal 23 results.

Speaker Change: We continue to expect business optimization actions to impact fiscal 'twenty for GAAP operating margin by 70 basis points and EPS by 56%.

Speaker Change: For adjusted operating margin, we continue to expect fiscal 'twenty for it to be 15, 5%, a 10 basis point expansion of fiscal 'twenty three results.

Speaker Change: We now expect our adjusted annual effective tax rate to be in the range of 23, 5% to 24, 5%. This compares to an adjusted effective tax rate of 23, 9% in fiscal 'twenty three.

Kathleen R. McClure: We now expect our full-year adjusted earnings per share for Fiscal 24 to be in the range of $11.85 to $12, or 2 to 3 percent growth over Fiscal 23 results. For the full fiscal 24, we continue to expect operating cash flow to be in the range of $9.3 billion to $9.9 billion, property equipment additions to be approximately $600 million, and free cash flow to be in the range of $8.7 billion to $9.3 billion.

Speaker Change: We now expect our full year adjusted earnings per share for fiscal 'twenty four to be in the range of $11 85 to $12 or 2% to 3% growth over fiscal 'twenty three results.

Operator: For the full fiscal 24, we continue to expect operating cash flow to be in the range of 9.3 billion to 9.9 billion. Property equipment additions to be approximately 600 billion and free cash flow to be in the range of 8.7 billion to 9.3 billion. Our free cash flow guidance continues to reflect a very strong free cash flow today.

Speaker Change: For the full fiscal 'twenty four we continue to expect operating cash flow to be in the range of $9 3 billion to $9 9 billion property and equipment additions to be approximately $600 million and free cash flow to be in the range of $8 7 billion to $9 3 billion.

Speaker Change: Our free cash flow guidance continues to reflect a very strong free cash flow today to income ratio of 1.2.

Operator: Finally, we continue to expect to return at least 7.7 billion through dividends and share repurchases as we remain committed to returning a substantial portion of our cash flow share.

Speaker Change: Finally, we continue to expect to return at least $7 7 billion through dividends and share repurchases as we remain committed to returning a substantial portion of our cash to our shareholders.

Kathleen R. McClure: Our free cash flow guidance continues to reflect a very strong free cash flow to debt income ratio of 1.2. Finally, we continue to expect to return at least $7.7 billion through dividends and share repurchases as we remain committed to returning a substantial portion of our cash to our shareholders. With that, let's open it up so we can take your questions. Katie.

Katie OConor: Thanks, Casey. I would ask that you each keep to one question and a follow-up to allow as many participants as possible to ask questions. Operator, would you please provide instructions for those on the call?

KC: With that let's open it up so we can take your question Katy. Thanks, KC I would ask that you each keep to one question and a follow up to allow as many participants as possible to ask a question operator would you provide instructions for those on the call.

Operator: Thank you. Ladies and gentlemen, if you'd like to ask a question, please press 1 and 0 on your telephone keypad. You may withdraw your question at any time by repeating the 1-0 command. If you are using a speakerphone, please pick up the handset before pressing the numbers.

Speaker Change: Thank you, ladies and gentlemen, if you'd like to ask a question. Please press. One then zero on your telephone keypad you may withdraw your question at any time by repeating the one zero come out if youre using a speakerphone. Please pick up the handset before pressing the numbers. Once again, if you have a question. Please press one zero at this time and one moment. Please for your first question.

Operator: Once again, if you have a question, please press 1 and 0 at this time. And one moment, please, for your first question. Your first question comes from the line of Tin Jin Wong from J.P. Morgan. Please go ahead. Thank you so much, and congratulations to Casey and Angie.

Speaker Change: Your first question comes from the line of Tien Tsin Huang from Jpmorgan. Please go ahead.

Tin Jin Wong: I'm excited for both of you guys. I just wanted to ask up front, just for Julie, if maybe you mentioned stronger growth next year. Hoping you could just elaborate on that at a high level. I know there's a lot of moving pieces. On the one hand, you have a big backlog, a lot of large deals, you have strong inorganic growth, but on the other hand, the sector is struggling with this weak discretionary spend, and there's uncertainty with global elections in the second half of the year. So, I know you can't give formal guidance until next year. I know the consensus is at what, 6%?

Speaker Change: Thank you so much and congrats the KC and Angie I'm excited for both of you guys.

Speaker Change: Just wanted to ask them upfront just for jewelry, maybe you mentioned stronger growth next year, hoping you could just elaborate on that at a high level I know, there's a lot of moving pieces on one hand, you have.

Backlog a lot of large deals you have strong organic growth, but on the other hand the sectors.

Speaker Change: We're going with this weak discretionary spend and there's uncertainty with global elections in the second half year. So just I know you can't give formal guidance for next year I think consensus is at one 6% can you just give us maybe just.

Julie T. Spellman Sweet: Can you just give us maybe just... some high-level considerations that are worth underlining as we're recasting our outlook for next year? Thank you.

Speaker Change: Some high level considerations that are worth underlining is were recasting our outlook for next year. Thank you.

Julie T. Spellman Sweet: Sure, and thanks for the question Tianjin. So let's just anchor on our strategy for growth and what you're seeing after three quarters of the year because, obviously, expectations at the beginning of this year were different in terms of how things developed with spending. So what did we do? We looked into what clients needed, and they needed these reinventions; they needed these big, large-scale transformations. And so what you've seen us do is like, you got to go with what the clients need, and that's what they're buying.

Sure and thanks for the question Tien Tsin, So, let's just anchor on our strategy for growth and what Youre seeing in three quarters into the year, because obviously expectations at the beginning of this year were different in terms of how things develop with spending so what did we do we leaned into what do clients need.

And they need these reinventions they need these big large scale transformations and so what you've seen us to do is like you Gotta go with what the clients need and that's what they're buying and so we have accelerated our are leaning into these large transformation deals which is why you see that we have seven more than last year at this time of clients with bookings of over one.

Julie T. Spellman Sweet: And so we have accelerated our leaning into these large transformation deals, which is why you see that we have seven more than last year at this time of clients with bookings of over $100 million. Now, these convert to revenue more slowly, but as we're accelerating, you'll know that they ramp up, and they will start to layer in. And so as you think about the reinvention strategy, that's a strategy we've been implementing for a couple of years.

Speaker Change: $100 million now these convert to revenue more more.

Speaker Change: More slowly, but as we're accelerating you'll you'll know that they ramp up and they will start to layer in and we are very uniquely positioned in this market to be able to do these large scale transformations because they require the combination of services everything from the ability to help them move faster through our managed services our industry expertise.

Speaker Change: Everyone wants to do that with the eye towards Jenny I. So even though the transformations are often in preparation for Jenny I. They want to work with the partner, who really understands Jenny I and so how do we get there faster and so as you think about the reinvention strategy. That's a strategy we've been executing for a couple of years and we uniquely can.

Julie T. Spellman Sweet: And we uniquely can lean in, and you're seeing the results of that this quarter with the acceleration of compared to last year of clients with that level of bookings. And those, of course, then ramp up next year.

Speaker Change: Lean in and that you're seeing the results of that this quarter with the acceleration of compared to last year of clients with that level of bookings and those of course, then ramp next year. The second is our leaning into where we are seeing growth in smaller deals because remember their discretionary spending.

Speaker Change: [noise] is constrained overall spending constrained in particularly in smaller projects, but what did we do it right. We see journey is the new growth, we have an incredible ability to pivot. Our people you can see the specialists and data and AI growing started at 40000 were at 55000 now against our goal of 80000 by the end of 'twenty six.

Speaker Change: We're also training our people you saw that big increase because we're preparing our people you're now doing a transformation. It may not be gen. AI, but you have to understand Jenny I and so we're uniquely able to train our people at scale to understand NII and how is that translating we'll look at our bookings this quarter now.

Speaker Change: Getting to $2 billion three quarters into the year as compared to $300 million last year and $500 million in revenue so starting to be meaningful right. In terms of you know the numbers. We were at 100 million for all of last year. So we expect to continue to lean into Jenny I.

Speaker Change: And what it's doing is very interesting from where we were say three quarters ago is acting as the catalyst to understand what you have to do so I'll finish here and then I'll. Just just of course mentioned our ability to invest in inorganic but right now from a perspective of like what the the end of the pull through we're still re prioritizing but.

Speaker Change: You know every other Jenny I project now is leading to some data project because people are understanding hate. This is a great technology and I'm not ready. So we feel really good about being very well positioned as spending increases.

Julie T. Spellman Sweet: So we feel really good about being very well positioned as spending increases when it does increase because of what we're doing. And then, finally, remember, we invest in acquisitions to drive organic growth. So it's all about future growth, and I put a lot into the script today to just help bring to life just how strategic our ability to invest is as we think about future growth. So I am not trying to comment at all on FY25.

Speaker Change: Increases when it is when it does increase because of what we're doing and then finally remember we invest in acquisitions to drive organic growth like that as you know so it's all about future growth and I gave a lot in the script today to just help bring to life, just how strategic our ability to <unk>.

Speaker Change: <unk> is as we think about future growth. So not trying to you know comment at all in FY 'twenty five we'll call. It like we see it but we also want to be clear that our strategy is working and these deals will ramp up yeah, maybe I'll just add.

Speaker Change: And just how we feel just within this fiscal year or so.

Speaker Change: We're very pleased with where we landed in Q3.

Speaker Change: Is it when you looked at Q4, we do have and you see that in our growth rate a clear uptick in our growth rate for the fourth quarter.

Julie T. Spellman Sweet: We'll call it like we see it, but we also want to be clear that our strategy is working, and these deals will ramp up. And I think importantly included in that is the expectation that our consulting type of work in Q4 will return to growth and that we haven't had growth in consulting work since Q2 of last year. Thank you both for that. I'll be less wordy with my follow-up. Just on the inorganic piece, can this pace continue?

Speaker Change: And I think importantly included in that is the expectation that our consulting type of work in Q4 can Jim will return to growth and that we haven't had growth in consulting type of work since Q2 of last year.

Speaker Change: Mhm.

Speaker Change: Great. Thank you both for that there'll be less worthy with my follow up just on the inorganic piece can this pace continue.

Kathleen R. McClure: I'll let Julie talk about, you know, add on here, but in terms of our, let's talk about capital allocation, we've always said this, we have the ability, and I think it's a differentiator of ours, to be able to invest and approach the market whenever we see something that we want to, you know, execute, and that remains unchanged, and we've been able, and you've seen us do And importantly, when we do that, we're able to continue all parts of our capital allocation in terms of share buybacks and dividends as well.

Speaker Change: Yeah, I'll, let Julie talk about you know out on here, but in terms of our let's talk about capital allocation. We've always said this we have the ability and I think it's a differentiator of ours to be able to invest and approach to market whenever we see something that we want to oh what execute.

Speaker Change: And that remains unchanged and we've been able and you've seen us do with us over all the different business cycles and importantly, when we do that we're able to continue all parts of our capital allocation in terms of share buybacks and dividends as well so from a financial standpoint, we have very strong balance sheet, we have the ability to continue to flex up and down.

Kathleen R. McClure: So, from a financial standpoint, we have a very strong balance sheet. We have the ability to continue to flex up and down as we see fit from a capital allocation standpoint, Tianzhen. Yeah, Tianzhen, and I think we'll make the decision as we go into next year as to what level we want to drive for next year. So, I think we'll comment next quarter.

Speaker Change: As we see fit from a capital allocation standpoint, pigeon, Yeah, Tien Tsin, and I think we'll make the decision as we go into next year as to what level, we want to drive for next year. So so.

Speaker Change: So I think we'll comment in next quarter.

Tin Jin Wong: I know you've been able to amplify the growth of what you've bought, so that's why I asked. Thank you.

Speaker Change: Oh, that's perfect I know you've been able to amplify the growth of what you bought so that's why I ask thank you.

Speaker Change: Thanks.

David John Koning: Your next question comes from the line of Dave Koning from Baird. Please go ahead. Yeah, hey guys, thanks so much. One thing I noticed, debt was up to $1.6 billion or so sequentially, it was the highest. Really, in 20 years, you've almost had no debt, and you have a lot of cash, so I guess what's the strategy around... Borrowing money now, maybe it's just uh, the geographic cash position. Yeah, that's a great question.

Speaker Change: Your next question comes from the line of Dave Koning from Baird. Please go ahead.

David John Koning: Hey, guys. Thanks, so much one one thing I noticed that that was up to $1 6 billion or so sequentially. It was the highest it really in 20 years you almost had no debt and you have a lot of cash I guess, what's the strategy around it.

Speaker Change: Borrowing money now and maybe it's just a geographic cash positions too.

David John Koning: So in terms of our cash, you said that we started the year at $9 billion. And now we're down a little bit. We're about $5.5 billion. And we do have some debt, but it's very small, as you mentioned, for a company of our size. We do have a credit facility that we put in right during the pandemic, and we continue to have a credit facility. It's about $5.5 billion. It's a five-year credit facility.

Speaker Change: Yeah. That's a that's a great question. So in terms of our cash so that we started the year at 9 billion and now we're a little bit were about $5 5 billion and we do have some debt. It's very small as you mentioned for a company of our size. We do have a we had a credit facility that we put in during the pen right during the pandemic.

David John Koning: We continue to have a credit facility, it's about $5 $5 billion with a five year credit facility and what you just see Dave is that we're just exercising some of that credit facility kind of normal treasury operation.

Kathleen R. McClure: And what you just saw, Dave, is that we're just exercising some of that credit facility, a kind of normal treasury operation. Okay. And maybe just as a follow-up, margins, you know, margins this year up at the lower end of kind of normal and certainly scale, you know, that just the growth this year being a little slower, maybe because of acquisitions. And just, you know, as we kind of look forward, the margin puts and takes, you know, how should we think that with acquisitions spending a little higher, does the next few quarters remain kind of So, I'll just obviously keep my comments to this year, to 24, and maybe I'll just point out where we are and what we are continuing to assist.

And maybe just as a follow up margins you know margins this year up at the lower end of kind of normal and certainly scale.

David John Koning: The growth this year being a little slower maybe the acquisitions in just you know as we.

David John Koning: As we kind of look forward the margin puts and takes.

David John Koning: We think that with the acquisition spending me or higher.

Speaker Change: The next few quarters remain kind of putting a little pressure on margins or how should we think of just the moving parts of margins going forward.

Speaker Change: Yeah sure. So I'll see if obviously keep mccormick fit to this for this year to 'twenty four but.

Speaker Change: I'll just point out what where we are and what we are continuing to send so we stated last quarter that we'd be at 10 basis points of operating margin expansion and we reconfirmed that gave for the full year again this this quarter and.

Kathleen R. McClure: So, we stated last quarter that we'd be at 10 basis points of operating margin expansion, and we reconfirmed that date for the full year again this quarter, and we feel confident in our ability to do that. So, if you look at, you know, we run our business at operating margin. If you look at gross margin and overall what we've been saying about pricing, and just importantly, when we talk about pricing, we mean the margin on the work that we sell.

Speaker Change: And we feel confident in our ability to do that so if you look at you know we run our business to operating margin. If you look at gross margin and overall, what we've been saying on pricing and just importantly, when we talk about pricing. We mean the margin on the work that we felt we were I think is really important for us is that we've been able to offer.

Kathleen R. McClure: What I think is really important for us is that we've been able to operate our business with rigor and discipline, and how we run ourselves in the efficient operations of Accenture and be our own best credential as we absorb higher selling costs, which you would expect. We're looking at our record $60 billion of bookings and also the continued pressure and pricing that we've had across our business. So, with that, we feel really good, and if you look at it, we grew 1% in quarter one, as an example, and we were able to do 20 basis points of margin expansion. We grew 1% this quarter, and we were able to do 10 basis points of margin expansion. So, we feel good about the way we run our business with rigor and discipline. Thanks, and have a nice booking.

Speaker Change: Our business with rigor and discipline and how we run ourselves in.

In operation are inefficient operations of Accenture and via our own best credential.

As we absorb higher selling cost, which you would expect we're looking at a record 60 billion of bookings.

Speaker Change: Also the continued pressure in pricing that we've had across the business. So with that we feel really good and if you look at it we grew 1% in quarter. One as an example, we were able to do 20 basis points of margin expansion.

Speaker Change: Grew 1% this quarter and we were able to do.

Speaker Change: 10 basis points of margin expansion. So we feel good about the way, we run our business with rigor and discipline.

Speaker Change: Great. Thanks, a nice bookings.

Speaker Change: Thank you.

Speaker Change: Thank you Internet.

David John Koning: Thank you. Your next question comes from the line of Bryan King from Deutsche Bank. Please go ahead.

Speaker Change: Your next question comes from the line of Bryan King from Deutsche Bank. Please go ahead.

Bryan Connell Keane: Hi guys, good morning and congrats, KC, great run, Accenture, you were awesome. So, I want to ask how managed services on the bookings, the $11.8 billion, that was an outsized number. How much of that is new bookings versus renewals, and maybe give us some flavor of what caused that spike in growth? May I give you the numbers? I'll talk a little bit about the numbers in terms of, you know, it is record bookings for managed services.

Bryan Connell Keane: Hi, guys. Good morning, and congrats Casey Great run Accenture you were awesome. So.

Bryan Connell Keane: I wanted to ask on managed services on the bookings the 11 8 billion.

Bryan Connell Keane: That was a outsized number how much of that is is new bookings versus renewals and maybe give us some flavor on what caused that spike in growth.

Speaker Change: Yeah, I mean, I'll give you the I'll talk a little bit about the numbers.

Speaker Change: In terms of you know it is a record bookings for managed services as Julie has been as we've been talking.

Bryan Connell Keane: As Julie's been, and as we've been talking, you know, it is obviously based on the larger transformational deals that we're doing. It's, well, those larger transformational deals, just to be clear, Bryan, they do have both consulting and outsourcing, excuse me, managed services type of work with them. They do have, as you would expect, a larger portion of managed services-type work. So, when you see what we were able to do this year, we're already at 92, seven more than last year, and we did have a very strong managed services booking, as you noted, in Q3.

Speaker Change: It is obviously based on the the larger transformational deals that we're doing it's wow those larger transformational deals just to be clear, Brian. They do have both consulting and outsourcing excuse me managed services type of work with them. They do have as you would expect a larger portion of managers managed services type.

Speaker Change: So when you see what we were able to do this year, we're already at 92 seven more than last year and we did have a very strong managed services bookings as you noted in Q3, we don't really.

Bryan Connell Keane: We don't really, you know, do a breakout in terms of extensions or new, but there's always, you know, we always have a healthy mix, I would say, of both with, that's what we strive to achieve over, you know, ruling four quarters in our business always, and no difference there.

Do you have a breakout in terms of expansions or new but theres always you know we always have a healthy mix I would say of both with it that's what we strive to over a rolling four quarters and hope as always no different there yeah, and just maybe a little color Brian as you think about this idea of reinvention Virgin Media O. Two was a great example, because their rate we've occur.

Kathleen R. McClure: Yeah, and maybe a little color, Bryan, as you think about this idea of reinvention, Virgin Media O2 is a great example because they're, right, we have a combination where, you know, using our Edge platform to provide, you know, help to provide, Virgin Media O2 to provide these new services, and at the same time, we're supporting it with our customer operations, supporting their growth so that they can scale, and, you know They're also looking for transformation and efficiency. The other thing I'd say is this is a great example of how we're embracing Gen AI.

Speaker Change: Combination, where you know using our edge platform to provide you know help O. Two provides Virgin media O. Two to provide these new services and at the same time, we're supporting it with our customer operations supporting their growth. So that they can scale and you know right now clients of course, they're looking for growth are also looking for <unk>.

Jenny: <unk> and efficiency. The other thing I'd say is this is a great example of how we're embracing Jenny I know you you've heard us talk in the past about our my Wizard platform, which helps in our managed services. We now that's become Gen Wizard and we're seeing that are embracing early embracing is using gen AI, where it's ready to be.

Julie T. Spellman Sweet: You know, you've heard us talk in the past about our MyWizard platform, which helps in our managed services. Now that's become GenWizard, and we're seeing that our early embrace of using Gen AI where it's ready to be used has been a real differentiator in our technology managed services. So, you know, we're very focused on helping our clients move faster using our expertise and leverage our digital investments in order for them to, you know, transform and reinvent faster, and you're seeing that, you know, that focus.

Jenny: Used has been a real differentiator in our technology managed services. So you know, we're very focused on helping our clients.

Jenny: Move faster using our expertise and leverage our digital investments are in order for them to.

Jenny: Transform and reinvent faster and Youre seeing that.

Jenny: You know that that focus.

Bryan Connell Keane: And just a follow-up, just looking at some of the dimensions breakout, when I look at operations being flat, just any call-outs for that. I know it was negative last quarter, so it's turned a little bit here, but just trying to understand the growth there and the prospects. Yeah, no, we're really pleased that it, you know, that ticked up then this quarter, and it's a very strategic part of our business. Think about it, it really is like sort of two ways, right?

Speaker Change: Got it and just a follow up just looking at.

Speaker Change: Some of the the dimensions breakout when when I look at operations being flat just any call outs for that I know it was negative last quarter. So it's turned a little bit here, but just trying to understand that the growth there and the prospects. Thanks.

Yeah, no. It's we're really pleased that it Ah you know they ticked up than this quarter and it's a very strategic part of our business think about it really is like sort of two ways right. So we remain number one in our industry and finance and accounting and we're embracing again, Jenny I there to help differentiate our platform.

Julie T. Spellman Sweet: So, you know, we remain number one in our industry in finance and accounting, and we're embracing Gen AI again to help differentiate our platform. And so there's a focus that we're seeing in our clients as they say, Okay, we need to, we really understand how much more we need to digitize. And we need to do that in the enterprise. They're excited about our ability to grow over time. Again, it's very early days still in Gen AI, but we're building our synopsis platform, we're building in Gen AI, and that helps them have less to build on their enterprise side by, you know, partnering with us. And so that's, we think, a really great differentiator.

Speaker Change: And so there is a focus that we're seeing in our clients as they're saying, okay. We need to we really understand how much more we need to digitize and we need to do that in the enterprise. They're excited about our ability over time again, it's very early days still and Jenny I over time to help build our bill.

Speaker Change: Our sin ops platform, we're building and Jenny I and that helps them have less to building in their enterprise side by partnering with us and so that's we think a really great differentiator and then we continue to diversify into areas that are in the core of our business with are a core of our industries for our COO.

Julie T. Spellman Sweet: And then we continue to diversify into areas that are in the core of our business, whether a core of our industries for our clients, whether it's claims, and underwriting, and insurance or supply chain for consumer goods and industrial or, you know, core banking in the financial services. So, you know, we feel really good about the business and, you know, its continued prospects. Thank you.

Speaker Change: Lyons, whether its claims and underwriting in insurance or supply chain for consumer goods and industrial or.

Speaker Change: Core banking in that financial services. So you.

Speaker Change: You know, we feel really good about the business and you know can it continue.

Speaker Change: And it's continued prospects.

Speaker Change: Thank you.

Rod Bourgeois: Your next question comes from the following... Your next question comes from the line of Rod Bourgeois from Deep Dive Equity Research. Please go ahead.

Your next question comes from the.

Speaker Change: Your next question comes from the line of Rod bourgeois from deep dive equity research. Please go ahead.

Julie T. Spellman Sweet: Hey guys, and very best wishes to KC as well. Julie, you mentioned that the demand environment is sort of more of the same. At the same time, it appears you've seen some growth mending in certain key areas. I'm particularly interested in the growth improvement in the CMT vertical and in strategy and consulting. Can you talk about what's enabling those growth improvements and a sense of the outlook for CMT and S&C? Thanks.

Rod Bourgeois: Hey, guys.

Speaker Change: Best wishes to Casey as well Julia you mentioned that the demand environment is sort of more of the same at the same time it appears you've seen Tim.

Speaker Change: Our growth mending in certain key areas.

Speaker Change: Particularly interested in the growth improvement in the CMT vertical and in strategy and consulting can you talk about what's enabling those growth improvements in a sense of the outlook for CMT and S. N C. Thanks.

Julie T. Spellman Sweet: So, you know, really want to compliment our entire team on the work that they're doing with our clients in CMT. So, as you know, we've been talking about that for now for a little while, and you start to see things like the Virgin Media O2 deal. So, our teams are working with our clients on what they need, and they're focused on getting rid of technology debt because that's critical in order to use some of these new technologies.

Speaker Change: So you don't really want to complement our entire team on the work that they're doing with our clients and CMT. So as you know we've been talking about that for now for for a little while and you start to see things like the Virgin media to deal. So our teams are working with our clients on what do they need.

Speaker Change: Need and they're focused on getting rid of technology that because that's critical in order to use some of these new technologies are they're.

Julie T. Spellman Sweet: They're focused on using new technologies. So, you know, we have a number of clients that, while they're still small, are working on Gen AI. And then, you know, being very focused on efficiencies. And then, finally, networks.

Speaker Change: They are focused on using the new technologies. So we have a number of clients that while its still small or are working on gen AI.

Speaker Change: And then you know being very focused on efficiencies and and then finally network. So really across the board what I would say is.

Julie T. Spellman Sweet: So, really, across the board, what I would say is, you know, the industry was challenged. We have been just focused on going to where they need help, and you're seeing that result in our results. And then, on strategy and consulting, again, it's all about being focused on what our clients need. And so, we've, you know, pivoted many more people, for example, toward cost and strategy. So, cost takeout's a big theme and, you know, particularly for our strategy.

The industry was challenged we have been just focused on going to where they need help and you're seeing that result.

Speaker Change: With in our results and then on strategy and consulting.

Speaker Change: Again, it's all about being focused on what do our clients need and so we've pivoted. Many more people for example towards costs and strategy so cost take out a big theme.

Speaker Change: And you know, particularly for our strategy.

Julie T. Spellman Sweet: We're still seeing a lot of growth in things like implementing modern ERP platforms with the focus on the digital core. And again, at Accenture, it's not just technology, right? It's about, you know, we're the number one player with all of these technology ecosystem players, but our clients want to do it faster. They need industry expertise. And so, you saw a number of examples in the script about, you know, how we're putting these platforms in place, and we're doing so within an industry context.

We are seeing a lot of growth still in things like implementing modern ERP platforms with a focus on the digital core and again at Accenture, It's not just technology right. It's about where the you know we're the number one player with all of these technology ecosystem players, but our clients want to do it faster they need the industry expertise.

Speaker Change: And so you saw a number of examples in the script about how we're putting in these platforms and we're doing so within an industry context, and so I'd say cost take out and.

Julie T. Spellman Sweet: And so, I'd say cost takeout and move the cloud data platforms, you know, wrapped around industry and functional expertise. That's where we're seeing the growth, and we just continue to remain laser-focused on more people, more focus, working with the clients on what they need to buy. Great, thanks for that.

Speaker Change: Move the cloud data platforms, you know wrapped around with industry and functional expertise, that's where we're seeing the growth.

Speaker Change: We just continue to remain laser focused on more people more focus working with the clients on what they need to buy.

Kathleen R. McClure: And you're seeing revenue mix incrementally shift into managed services, and I'm curious if you think some of that mix shift towards managed services is due to secular forces, or are you purely seeing that mix shift as just a cyclical phenomenon? Yeah, I think it's in terms of, you know, what the real driver is, it's the larger deals that have a little bit of both in those, both components of a sector and cyclical, and what you're talking about. So it is really just based on the larger deal.

Speaker Change: Great. Thanks for that and you see revenue mix incrementally shifts into managed services and I'm curious if you think some of that mix shift towards managed services is due to secular forces or are you purely seeing that mix shift as just a cyclical phenomenon.

Yes.

Speaker Change: Yeah, I think it's in terms of you know what the real driver is is it the larger deals that have a little bit of both of those are both components of our sector and cyclical and what you're talking about so it really is just based on the larger deal. So just you know think about Accenture is very uniquely positioned in this market clients their.

Julie T. Spellman Sweet: So just, you know, think about Accenture is very uniquely positioned in this market. Clients are prioritizing large-scale transformations and doing those, getting the efficiencies, and moving faster. Managed services is a highly strategic component of being able to do that. And this is where Accenture, with such scale in both strategy and the consulting type of work with managed services, is really able to lean into what its clients are buying now. You got it. Thank you.

Speaker Change: Tithing large scale transformations and doing those and getting the efficiencies and moving faster managed services is a highly strategic component of being able to do that and this is where accenture with such scale in both strategy and I think we both consulting type of work with.

Speaker Change: Managed services is really able to lean into what our clients buying now.

Speaker Change: Got it thank you.

Speaker Change: Okay.

Bryan C. Bergin: Your next question comes from the line of Bryan Bergin from TD Cohen; please go ahead. Hi, good morning and congratulations to Casey and the other leaders on the retirements and appointments. First question I want to ask about the existing revenue-based performance of the consulting business, can you just talk about how the base business runoff kind of progressed within the minus 1% local currency performance? I heard your comment on the 4Q consulting returning to growth. I'm trying to understand if that's a reflection of sustainable stabilization potential here and really gauge whether you're reaching a point where the new consulting bookings conversion should more than offset the existing base runoff moving forward.

Speaker Change: Your next question comes from the line of Bryan Bergin from T. D. Cohen. Please go ahead.

Bryan C. Bergin: Hi, good morning, and congrats Casey any other leaders on the on the retirements on appointments.

Bryan C. Bergin: First question I wanted to ask on the consulting existing revenue base performance can you just talk about how base business run off kind of progressed within.

Speaker Change: The minus 1% local currency performance I heard your comment on the <unk> consulting we're just returning to growth I'm trying to understand if that's a reflection of sustainable stabilization potentially aren't really gauge, whether you're reaching a point, where the new consulting bookings conversion should more than offset the existing base run off moving ahead.

Bryan C. Bergin: Yeah, so, you know, Bryan, in terms of what we'll give, what we'll talk about is really what I just mentioned in Q4, I guess, and I understand what you mean by a base runoff. But we don't really think of it that way.

Speaker Change: Yeah. So you know Brian in terms of what we'll give we'll talk about it really is what I. Just mentioned on Q4, you know I guess I understand what you mean by a base run off we don't really think of it that way we kind of look at it is maybe our turns will be what do we have booked in backlog and John you know what are we already you know and what's new coming in from new sales and so I get it.

Kathleen R. McClure: We kind of look at it as maybe our terms will be whether we have booked and a backlog and, you know, what we are already, and what's new coming in from new sales. And so, just kind of going with those two points, the way we evaluate and we talk about it, Bryan, is on a year-over-year basis, looking at both the components of what we've already sold for the next quarter and then what we see in our pipeline and how we see those sales will convert to revenue.

Speaker Change: Just kind of going with those two points when we the way we evaluate and we we've talked about it Brian is from a from a a.

Speaker Change: Our year over year basis looking at both the components of what we've already sold for the next quarter and then what we see in our pipeline and how we see those sales will convert to revenue. That's how we kind of assess where we think that we will be overall and again very pleased that consulting we do feel that and see that it will return to growth in <unk>.

Kathleen R. McClure: That's how we kind of assess where we think that we will be overall. And again, very pleased with consulting. We do feel that, you know, and see that it will return to growth. And I think it's a milestone that we haven't had in a number of quarters. So, we're pleased with that, and we'll comment on anything else for next year, which I mean, in September. Okay. And then booking is obviously very solid here.

Speaker Change: It's a milestone that we haven't had in a number of quarters. So we're pleased with that and we'll comment on anything else next for next year next year I mean in September.

Speaker Change: Okay.

Speaker Change: And then bookings obviously very solid here can you just comment on pipeline and any bookings expectations worth calling out for <unk>.

Kathleen R. McClure: Can you just comment on the pipeline and any bookings expectations worth calling out for 4Q? Yeah, you know, overall, we feel good about our pipeline. And we don't book yet, we don't get guidance for next quarter's bookings, but we feel good. Thank you. Your next question comes from the line of James Faucette from Morgan Stanley. Please go ahead. Great, thank you very much.

Speaker Change: Yeah.

Speaker Change: Overall, we feel good about our pipeline.

Speaker Change: But we don't book, we don't give guidance to a next quarter bookings, but we feel good.

Speaker Change: Thanks.

Speaker Change: Thank you.

Speaker Change: Yeah.

Speaker Change: Your next question comes from the line of James Faucette from Morgan Stanley. Please go ahead.

James Eugene Faucette: I wanted to follow up on the acquisition activity. It's obviously been really robust, providing a lot of good opportunities. Can you give us any sense of how collectively across the acquisitions you've been doing and maybe what you are looking at in terms of what the growth rates of those businesses are generally or collectively when you do the acquisitions. And I know there's a target to accelerate those, but how that, how the growth rates tend to change as those companies are absorbed into Accenture, even if directional.

James Eugene Faucette: Great. Thank you very much wanted to follow up on the acquisition activity. It's obviously been really robust providing a.

James Eugene Faucette: A lot of good opportunities can you give us any sense.

James Eugene Faucette: Collectively across the acquisitions, you've been doing in and maybe what you are looking at in terms of what the growth rates of those businesses are.

Speaker Change: Generally you are collectively when you do the acquisitions and I know you Theres, a toyota to accelerate those how that public growth rates tend to changes as those companies are absorbed into our indirect center, even if directionally.

Speaker Change: Yeah, I mean, I think in terms of you know make sure I'm answering your question is when we look at overall at our acquisitions, though they all come with.

James Eugene Faucette: I mean, I think in terms of, you know, making sure I'm answering your question is, you know, when we look at our acquisitions overall, they all come with, you know, they're typically higher growth business cases that we have from the companies that we buy, you know, and we have a base case that comes with the organization, and we assess that growth rate. And then we obviously put in pretty significant synergies cases that are, you know, without going through kind of metrics that are, you know, a pretty high bar for those acquisitions to deliver to, along with a broader Accenture.

Speaker Change: They're typically higher growth business cases that we have from the companies that we buy and we have a base case that comes with the organization and we assess that.

Right and then we obviously put in pretty significant synergy cases that are you know.

Speaker Change: Without going through kind of metrics that are.

Speaker Change: A pretty high bar for those acquisitions.

Speaker Change: Acquisitions, two to deliver two along with the broader Accenture. That's why integration is so important and what we do because we it's not just having great business case that is you know maybe half of what you need to do but the key really is and how you integrate to deliver to that and we have a very strong track record and so what you'll see is it.

Kathleen R. McClure: And that's why integration is so important in what we do, because we not only have a great business case, that is, you know, maybe half of what you need to do, but the key really is how you integrate to deliver on that. And we have a very strong track record. And so, what you'll see is, you can maybe get the sense of your question is, look at how many we've done over the last five years. And you can see how we've been able to continue to grow our business throughout that time. And it is really continuing to affect our organic growth. Got it.

Speaker Change: It could just maybe get a sense of your question is looking at how many we've done over the last five years and you can see how we've been able to continue to grow our business throughout that time and it is really continuing to grow our organic growth.

Kathleen R. McClure: And then quickly, you know, one of the areas where you've leaned in on and was mentioned in the prepared remarks is the government and healthcare sector. Really strong growth there, obviously. How should we be thinking about that as a long-term or medium-term potential growther in that segment, and how are you thinking about the investment needed to continue to drive that? Thanks.

Got it.

Speaker Change: And then quickly you know one of the areas where you.

Speaker Change: You you've leaned in on and we've mentioned in the prepared remarks is as the government and health care sector really strong growth there obviously.

Speaker Change: How should we be thinking about that as a no long term or medium term potential grower in that segment and.

Speaker Change: Any.

Speaker Change: And how are you thinking about the investment needed to continue to drive that.

Speaker Change: <unk>.

Kathleen R. McClure: Yeah, no, we feel really good about that vertical. Obviously, there's a lot of transformation that's going on in public service. You see health as a big driver; defense is a big driver.

Speaker Change: Thanks, Yeah, no we feel we feel really good about that vertical obviously theres a lot of transformation that's going on in public service you see health as a big driver of defense is a big driver. There's a lot of infrastructure support whether it's IRA and the U S or.

Speaker Change: What the he has been doing as well so.

Speaker Change: And of course, a lot of the digital transformation hasn't happened in a public service and health and so we see that now being the time and you're seeing that in our results. So we so we feel very confident and we think about the investment like we do all our industries I mean remember we we've 13 industry groups, we have the diversification is.

Kathleen R. McClure: There's a lot of infrastructure support, whether it's IRA in the US or what the EU has been doing as well. But, of course, a lot of the digital transformation hasn't happened in public service and health. And so, you know, we see that now being the time, and you're seeing that in the results. So we are still very confident, and we think about the investment like we do in all our industries.

Speaker Change: A key part of both our resilience and our growth strategy and so you know at any given time, we're investing differently, depending on the growth trajectory and as we called out this quarter, we've been investing significantly in public service because we see the next several years this being a big growth area and we're making those investments now.

Speaker Change: Operator, we have time for one more.

Kathleen R. McClure: I mean, remember, we have 13 industry groups; diversification is a key part of both our resilience and our growth strategy. And so, you know, at any given time, we're investing differently depending on the growth trajectory. And as we called out this quarter, we've been investing significantly in public service because we see the next several years as this being a big growth area, and we're making these investments now. Operator, we have time for one more. Operator, we have time for one more question and then Julie will wrap up the call. Okay, that question comes from the line of Keith Bachman from BMO. Please go ahead.

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

Speaker Change: Okay.

Speaker Change: Comes from the line of Keith Bachman from BMO. Please go ahead.

Keith Frances Bachman: Hi, many thanks. And first, Casey and Paul, special congratulations as you make the transition. I wanted to ask a question, and I'll just do it concurrently in the interest of time. And Julie, I think I'll direct this to you. Number one, on BPO: one of your competitors just talked pretty openly about pricing being under pretty material duress as of late, and I wondered if you would echo that. And I'm really curious as to why.

Keith Frances Bachman: Hi, Manny first Casey and Paul a special congratulations as you make the transition.

Wanted to ask question and I'll just make it concurrently in the interest of time and Julia I think I'll direct this to you number one on on V. P. O. One of your competitors just talked pretty openly about pricings been under pretty material duress as of late and I Wonder if you would echo that.

Kathleen R. McClure: Why do you think pricing has been under duress? And how do you think it will impact future growth? And then the second area that I wanted to ask about is song. Thank you for the comment on mid-single-digit growth. And I'm really interested in what you think.

And I'm really curious as to why why do you think pricing has been under duress.

Keith Frances Bachman: How do you think about impacting future growth and then the second area that I wanted to ask about is song. Thank you for the comment on.

Speaker Change: On mid single digit growth.

Speaker Change: I'm really interested how you think Jenny I will impact over the over your digital agency over the next 12 to 24 months and the reason I ask the question.

Julie T. Spellman Sweet: Gen AI will impact your digital agency over the next 12 to 24 months. And the reason I ask the question is we also spend a lot of time with companies like Adobe that have significant, you know, generative AI is going to have a significant impact on digital agencies. And some of the agencies are talking about seat reductions because of the value associated with generative AI. And I'm just wondering if you could comment on how generative AI will impact the growth potential of SONG. And that's it for me.

Speaker Change: We also spent a lot of time with companies like Adobe that have significant.

Speaker Change: Generative AI is going to have a significant impact on digital agencies.

Speaker Change: And some of the agencies, we're talking about seat reductions because of the value associated with general generally they are and I'm. Just wondering if you could comment on how you think generally I will impact the growth potential.

Speaker Change: So and that's it for me many thanks.

Kathleen R. McClure: Great, Kasey, why don't you quickly cut the price, and then I'll do the song. Keith, I would say just in terms of pricing, and we've been commenting on this for quite some time, you are correct in that we've had, Overall, in our entire business, continued price compression. So that's the way I would reflect on that statement in your question before I hand it over to Julie. Yeah, it's overall, it's a tight market, so that's what you normally see.

Speaker Change: Great because he wanted to quickly cut yeah pricing and then I'll do some Keith I would say just in terms of our pricing and we've been commenting on this for quite some time.

You are correct in that we've had.

Speaker Change: Overall, then our entire business continued pricing pressure.

Speaker Change: So that's the way I would reflect on that statement on your question before I hand, it over to Don.

Speaker Change: It's overall, it's a it's a tight market. So that's what you would normally see unsung, here's where we are so unique because our business is not an agency business right. The agencies are part of an incredibly differentiated value proposition, where you have creative and technology and.

Julie T. Spellman Sweet: On Song, here's where we are so unique, because our business is not an agency business, right? The agencies are part of an incredibly differentiated value proposition where you have creative and technology and digital and, by the way, managed services. And so, we see this as a huge opportunity because we are embracing it as fast as possible to help our clients get value, but we put it together with all of these other services.

Digital and by the way managed services.

And so we see this as a huge opportunity because we are embracing it as fast as possible to help our clients get value, but we put it together with all of these other services. So we were happy to see the uptick in growth this quarter with song and long term, where we really think it's great and remember this is all.

Julie T. Spellman Sweet: So, we were happy to see the uptick in growth this quarter with song and long-term where we really think it's great. And remember, this is our playbook, right? We embrace technology. We've done it in every wave. We've done it, you know, when we did managed services. Remember, in 2015, we had Synops and, you know, MyWizard.

Speaker Change: Our playbook right, we embrace technology, we've done it in every wave we've done it you know when we did managed services remember in 2015, and we had synapse and you know my Wizard arent business is to help our clients be more efficient and grow that is what we do and we use technology and how we deliver it and we.

Julie T. Spellman Sweet: Our business is to help our clients be more efficient and grow. That is what we do, and we use technology in how we deliver it, and we help them use technology in how they operate. And so, we see Gen AI as yet another way that we're going to embrace it.

Speaker Change: We help them use technology and how they operate and so we see Jenny I is yet another way that we're going to embrace it we're gonna be fast and we're gonna help we're going to do what we do for clients and that is a very exciting opportunity. So we feel really good about our sock business.

Julie T. Spellman Sweet: We're going to be fast, and we're going to help. We're going to do what we do for clients, and that is a very exciting opportunity. So, we feel really good about our song business.

Speaker Change: Great. So.

Julie T. Spellman Sweet: Great. Thanks, everyone, for the questions and the time today. In closing, I want to, again, as always, thank all of our shareholders for your continued trust and support, and all of our people for what you're doing for our clients and for each other every day. Thanks so much for joining us. Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T Teleconference. You may now disconnect. We're sorry, your conference is ending now. Please hang up.

Speaker Change: Thanks, everyone for the questions and the time today in closing I want to again as always thank all of our shareholders for your continued trust and support and all of our people for what you're doing for our clients and for each other every day. Thanks, so much for joining.

Speaker Change: Ladies and gentlemen that does conclude your conference for today. Thank you for your participation and for using AT&T teleconference. You may now disconnect.

Speaker Change: Okay.

Speaker Change: Yeah.

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