Q3 2025 Accenture PLC Earnings Call

Operator: Good day and welcome to Accenture's third quarter fiscal 2025 earnings call. All participants will be in listen-only mode. So to give you the system, please enroll a conference specialist by pressing the star key followed by zero.

Good day, and welcome to our sensors third quarter fiscal 2025 earnings call.

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Alexia Quadrani: I would now like to turn the conference over to Alexia Quadrani, Executive Director and Head of Investment Relations. Please go ahead. Thank you, Operator, and thanks, everyone, for joining us today on our third quarter fiscal 2025 earnings announcement. As the operator just mentioned, I'm Alexia Quadrani, Executive Director, Head of Investor Relations.

Akshay: I would now like to turn the conference over to Akshay, Cadrone Executive director and head of Investor Relations. Please go ahead.

Akshay: Thank you operator, and thanks, everyone for joining us today on our third quarter fiscal 2025 earnings announcements.

Speaker Change: As the operator, just mentioned I'm electric what Ronnie Executive Director head of Investor Relations on today's call, we will hear from Julie Sweet or.

Alexia Quadrani: On today's call, we will hear from Julie Sweet, our Chair and Chief Executive Officer, and Angie Park, our Chief Financial Officer. We hope you've had an opportunity to review the news release we've issued a short time ago.

Julie Sweet: Chair and Chief Executive Officer, and Angie Park, our Chief Financial Officer.

Speaker Change: 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 Andrew 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.

Alexia Quadrani: Let me quickly outline the agenda for today's call. Julie will begin with an overview of our results. Angie 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 Angie provides our business outlook for the fourth quarter and our full fiscal year 2025.

Speaker Change: Then provide a brief update on our market positioning before Angie provides our business outlook for the fourth quarter and our full fiscal year 2025. We will then take your questions before Julie provides a wrap up at the end of the call.

Alexia Quadrani: We will then take your questions before Julie provides a wrap-up at the end of the call.

Alexia Quadrani: Some of the matters we'll discuss on this call, including our business outlook, are forward-looking and, as such, are subject to known and unknown risk and uncertainties, including, but not limited to, those factors set forth in today's news release and discussed in our annual report on Form 10-K and quarterly reports on Form 10-Q and other SEC filings. These risks and uncertainties could cause actual results to differ materially from those expressed on this 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 discussed in our annual report on Form 10-K, and quarterly reports on Form 10-Q, and other S E T.

Speaker Change: Filings these risks and uncertainties could cause actual results to differ materially from those expressed on this call.

Alexia Quadrani: 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.

Speaker Change: During our call today, we will reference certain non-GAAP financial measures, which we believe provide useful information for investors. We include reconciliations of non-GAAP financial measures, where appropriate to GAAP in our news release or in the Investor Relations section of our website at Accenture Dot com as always Accenture soon.

Julie Sweet: There's no obligation to update the information presented on this conference call now, let me turn the call over to Julie.

Julie Sweet: Now let me turn the call over to Julie. Thank you Alexia and to everyone joining this morning. And thank you to our more than 790,000 people around the world for your extraordinary work and commitment to our clients, which resulted in another strong quarter of reinvention across industries, companies and countries. Starting with our quarter, we are very pleased with our results as we continue to deliver on our strategy to be our client's reinvention partner of choice and lead in Gen-AI. Our clients continue to prioritize large-scale reinventions as reflected in our bookings of $19.7 billion, including 30 clients with quarterly bookings greater than $100 million.

Julie Sweet: Thank you Alexia and to everyone. Joining this morning, and thank you to our more than 790000 people around the world for your extraordinary work and commitment to our clients, which resulted in another strong quarter of reinvention across industries companies and countries.

Julie Sweet: Starting with our quarter, we are very pleased with our results as we continue to deliver on our strategy to be our clients' reinvention partner of choice and lead and Jenny I. Our clients continue to prioritize large scale reinventions as reflected in our bookings of $19 $7 billion, including 30 clients with quarterly bookings greater than $100 million.

Julie Sweet: We grew 7% in local currency with revenue of $17.7 billion above our guided range, and 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. We are a leader in Gen-AI with another milestone quarter of $1.5 billion in bookings and over $700 million in revenues, bringing our Q3 year-to-date Gen-AI bookings to a total of $4.1 billion and revenue to $1.8 billion. Operating margin expanded 40 basis points compared to adjusted operating margin last year and we've delivered EPS growth of 12% over Q3 FY24 adjusted EPS.

Julie Sweet: We grew 7% in local currency with revenue of $17 7 billion above our guided range and 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.

Julie Sweet: We are a leader and Jenny I was another milestone quarter of $1 $5 billion in bookings and over $700 million in revenues, bringing our Q3 year to date Jennie O bookings to a total of $4 $1 billion in revenue to $1 8 billion.

Julie Sweet: Operating margin expanded 40 basis points compared to adjusted operating margin last year, and we delivered EPS growth of 12% over Q3, FY 'twenty for adjusted EPS.

Julie Sweet: We continue to invest significantly in our business to drive additional growth in highly strategic areas. We invested in our people with 38 million training hours year-to-date, up 18% over the same period last year. We increased our data and AI workforce to approximately 75,000, continuing progress against our goal of 80,000 by the end of FY26. We invested over $297 million across four strategic acquisitions and investments. We are expanding our LearnVantage capability through this quarter's acquisitions of TalentSprint in India and Ascendiance in the United States, enhancing our ability to deliver industry-relevant certifications and tailored upskilling and reskilling programs. In Japan, we acquired Yumemi, which strengthens SONG's ability to craft, launch, and scale digital products that are both intelligent and impactful.

Julie Sweet: We continue to invest significantly in our business to drive additional growth and highly strategic areas. We invested in our people with 38 million training hours year to date up 18% over the same period last year, we increased our data in a workforce to approximately 75000, continuing progress against our goal of 80000 by the end of FY <unk>.

Julie Sweet: 26, we invested over $297 million across four strategic acquisitions and investments we are expanding our learn vantage capabilities to this quarter's acquisitions of talent sprint in India in a sentence in the United States enhancing our ability to deliver industry relevant certifications and tailored upskilling and reskilling.

Julie Sweet: Programs.

Julie Sweet: In Japan, we acquired <unk>, which strengthens songs ability to craft launch and scale digital products that are both intelligent and impactful we.

Julie Sweet: We are also investing in our Industry X capabilities with the acquisition of Sobin in Scotland, expanding our infrastructure and capital projects expertise globally and across Europe. We are proud to have earned the number six spot on the Great Place to Work list of the world's best workplaces and to have been recognized as a great place to work in 12 individual countries, representing nearly 80% of our people. And in recognition of our strong brands, we are proud to have earned the number 20 position on Cancer Brand's prestigious list of the top 100 most valuable global brands.

Julie Sweet: We were also investing in our industry X <unk> capabilities with the acquisition of <unk>, and Scott and Scotland, expanding our infrastructure and capital projects expertise globally and across Europe.

Julie Sweet: We are proud to have earned the number six spot on the great place to work list of the world's best workplaces and to have been recognized as a great place to work in 12 individual countries, representing nearly 80% of our people.

Julie Sweet: And in recognition of our strong brands brands. We are proud to have earned the number 20 position I'm cancer brands could just list of the top 100, most valuable global brands. Our brand value has increased by 27% to $103 8 billion up from $81 9 billion last year.

Julie Sweet: Our brand value has increased by 27% to $103.8 billion, up from $81.9 billion last year. A key component of our long term strategy is investing and maintaining thriving communities and creating pipelines of talent, the skills we need, which are important for businesses to thrive. In the UK, one of our largest markets, we're supporting a government initiative to create a coalition with 10 other companies focused on upskilling 7.5 million people, one fifth of the UK workforce in AI skills, breaking down barriers to opportunity and unlocking economic growth. I'm also thrilled to congratulate our 97,000 people who were promoted this fiscal year, including more than 800 who were promoted to Managing Director.

Julie Sweet: A key component of our long term strategy is investing in maintaining thriving communities and creating pipelines of talent the skills, we need which are important for businesses to thrive.

Julie Sweet: In the U K, one of our largest markets, we're supporting our government initiative to create a coalition with 10 other companies focused on Upskilling seven 5 million people, one fifth of the UK workforce, and AI skills, breaking down barriers to opportunity and unlocking economic growth.

Julie Sweet: So thrilled to congratulate our 97000 people who were promoted this fiscal year, including more than 800, who were promoted to managing director.

Julie Sweet: In summary, we had a strong quarter.

Angie: In summary, we had a strong quarter over to you Angie.

Angie Park: Over to you, Ed. Thank you, Julie. And thanks to all of you for taking the time to join us on today's call. We are very pleased with our third quarter results with revenue above our guided range, as well as very strong margin expansion, EPS growth, and free cash flow. These results reflect the diversity and resilience of our business and demonstrate our ability to deliver significant value for our shareholders. Based upon the strength of our results, we once again raise our full year revenue outlook, and we are on track to deliver or exceed all aspects of our guidance provided in September.

Angie: Thank you Julie and thanks to all of you for taking the time to join US on today's call. We are very pleased with our third quarter results with revenue above our guided range as well as very strong margin expansion EPS growth and free cash flow.

Angie: These results reflect the diversity and resilience of our business and demonstrate our ability to deliver significant value for our shareholders based upon the strength of our results. We once again raised our full year revenue outlook and we are on track to deliver or exceed all aspects of our guidance provided in September.

Angie Park: Let me summarize a few highlights from the quarter. Revenues grew 7% in local currency and continue to be broad-based across geographic markets, industry groups, and both types of fork. Seven of our 13 industries grew high single digit or higher in the quarter, and our federal business had an immaterial impact to our overall growth in Q3. And we continue to take market share, reflecting the strength of our diversified portfolio and execution. Operating margin of 16.8% for the quarter, an increase of 40 basis points compared to adjusted Q3 results last year, and includes significant investments in our people and our business.

Angie: Let me summarize a few highlights from the quarter revenues grew 7% in local currency and continued to be broad based across geographic markets industry groups in both types of pork seven of our 13 industries grew high single digit or higher in the quarter and our federal business had an immaterial impact to our <unk>.

Angie: Overall growth in Q3 and.

Angie: And we continue to take market share, reflecting the strength of our diversified portfolio and execution.

Angie: Operating margin of 16, 8% for the quarter, an increase of 40 basis points compared to adjusted Q3 result last year and include significant investments in our people and our business, we delivered EPS in the quarter of $3.49, reflecting a 12% growth over adjusted EPS last year.

Angie Park: We delivered EPS in the quarter of $3.49 reflecting a 12% growth over adjusted EPS last year. Finally, we delivered free cash flow of $3.5 billion and returned $2.7 billion to shareholders through repurchases and dividends.

Angie: Finally, we delivered free cash flow of $3 $5 billion and returned $2 $7 billion to shareholders through repurchases and dividends nine months into the fiscal year, we have invested $789 million, primarily attributed to 15 acquisitions with those high level comments, let me.

Angie Park: Nine months into the fiscal year, we have invested $789 million, primarily attributed to 15 acquisitions. With those high-level comments, let me turn to some of the details, starting with new bookings. New bookings were $19.7 billion for the quarter, a 6% decrease in U.S. dollars and 7% in local currency, with an overall book-to-bill of 1.1. Consulting bookings were $9.1 billion with a book-to-bill of 1.0. Managed services bookings were $10.6 billion with a book-to-bill of 1.2.

Angie: Turning to some of the details starting with new bookings, new bookings were $19 $7 billion for the quarter, a 6% decrease in U S dollars and 7% in local currency with an overall book to Bill of one one.

Angie: <unk> bookings were $9 $1 billion with a book to Bill was one <unk> managed services bookings were $10 $6 billion with a book to Bill of one two.

Angie Park: Turning now to revenues. Revenues for the quarter were $17.7 billion, an 8% increase in U.S. dollars and 7% in local currency, above our FX-suggested guided range as the foreign exchange impact for the quarter was approximately positive 0.5% compared with a negative 0.5% estimate provided last quarter. Consulting revenues for the quarter were $9 billion, up 7% in U.S. dollars and 6% in local currency. Managed services revenues were $8.7 billion, up 9% in both U.S. dollars and in local currency, driven by double-digit growth in technology-managed services, which includes application-managed services and infrastructure-managed services, and mid-single-digit growth in operations.

Angie: Turning now to revenues revenues for the quarter were $17 $7 billion, an 8% increase in U S dollars and 7% in local currency above our FX suggested guided range as the foreign exchange impact for the quarter was approximately positive <unk>, 5% compared with a negative 0.5 person.

Angie: Estimate provided last quarter.

Angie: Consulting revenues for the quarter were nine $9 billion up 7% in U S dollars and 6% in local currency managed services revenues were $8 $7 billion up 9% in both U S dollars and in local currency driven by double digit growth in technology managed services, which includes application made.

Angie: In services and infrastructure maintenance services and mid single digit growth in operations.

Angie Park: Turning to our geographic market. In the Americas, revenue grew 9% in local currency. Growth was led by banking and capital markets, industrial, and health. Revenue growth was driven by the United States. In EMEA, we delivered 6% growth in local currency led by growth in life sciences, banking and capital markets, and insurance. Revenue growth was driven by the United Kingdom, Germany, and Italy. In Asia Pacific, revenue grew 4% in local currency driven by growth in public service, banking, capital markets, and insurance, partially offset by a decline in chemicals and natural resources. Revenue growth was led by Japan and Australia, partially offset by a decline in Singapore.

Angie: Turning to our geographic markets.

Angie: In the Americas revenue grew 9% in local currency growth was led by banking and capital markets Industrial and health revenue growth was driven by the United States in EMEA, we delivered 6% growth in local currency led by growth in life Sciences banking capital markets and insurance revenue growth was <unk>.

Angie: And by the United Kingdom, Germany, and Italy and.

Angie: In Asia Pacific revenue grew 4% in local currency driven by growth in public service banking capital markets and insurance, partially offset by a decline in chemicals and natural resources revenue growth was led by Japan, and Australia, partially offset by declines in Singapore.

Angie Park: Moving down the income statement, gross margin for the quarter was 32.9% compared to 33.4% for the third quarter last year. Sales and marketing expense for the quarter was 9.9% compared to 10.6% for the third quarter last year. General and administrative expenses 6.1% compared to 6.3% for the same quarter last year.

Angie: Moving down the income statement gross margin for the quarter was 32, 9% compared to 33, 4% for the third quarter last year sales.

Angie: Sales and marketing expense for the quarter was nine 9% compared to 10, 6% for the third quarter last year.

Angie: Oh and administrative expense was six 1% compared to six 3% for the same quarter last year.

Angie Park: Before I continue, I want to note that in Q3 of FY24, we recorded $77 million in cost associated with our business optimization actions, which decreased operating margin by 40 basis points and EPS by $0.08. The following comparisons exclude these impacts and reflect adjusted results. Operating income was $3 billion in the third quarter, reflecting a 16.8% operating margin, a 40 basis point increase from adjusted operating margin in Q3 of last year. Our effective tax rate for the quarter was 24%, compared with an adjusted effective tax rate of 25.5% for the third quarter last year. Diluted earnings per share were $3.49 compared with adjusted diluted EPS at $3.13 in the third quarter last year, reflecting 12% growth.

Angie: Before I continue I want to note that in Q3, FY 'twenty four we recorded $77 million and costs associated with our business optimization actions, which decreased operating margin by 40 basis points and EPS by eight the following comparisons exclude these impacts and reflect adjusted results.

Angie: Operating income was $3 billion in the third quarter, reflecting a 16, 8% operating margin a 40 basis point increase from adjusted operating margin in Q3 of last year.

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

Angie: They alert diluted earnings per share were $3.49 compared with adjusted diluted EPS of $3.13 in the third quarter of last year, reflecting 12% growth.

Angie Park: Day service is outstanding for 47 days compared to 48 days last quarter and 43 days in the third quarter of last year. Free cash flow for the quarter was $3.5 billion, resulting from cash generated by operating activities at $3.7 billion, net of property and equipment additions of $169 million. Our cash balance at May 31st was $9.6 billion, compared with $5 billion at August 31st. With regards to our ongoing objective to return cash to shareholders, in the third quarter, we've repurchased or redeemed 6 million shares for $1.8 billion at an average price of $302.35 per share.

Angie: Days services outstanding were 47 days compared to 48 days last quarter and 43 days in the third quarter of last year.

Angie: Free cash flow for the quarter was $3 $5 billion, resulting from cash generated by operating activities of $3 $7 billion net of property and equipment additions of $169 million, our cash balance at may 31st with $9 $6 billion compared with 5 billion at August 30 <unk>.

Angie: First.

Angie: With regards to our ongoing objective to return cash to shareholders in the third quarter, we repurchased or redeemed 6 million shares for $1 $8 billion at an average price of $302 35 per share.

Angie Park: As of May 31, we had approximately $3.3 billion of share repurchase authority remain. Also in May, we paid a quarterly cash dividend of $1.48 per share for a total of $924 million. This represented a 15% increase over last year. And our Board of Directors declared a quarterly cash dividend of $1.48 per share to be paid on August 15, a 15% increase over last year.

Angie: As of May 31st we had approximately $3 $3 billion of share repurchase authority remaining.

Angie: Also in May we paid a quarterly cash dividend of dollar and 48 cents per share for a total of $924 million. This represented a 15% increase over last year and our board of directors declared a quarterly cash dividend of $1 48 per share to be paid on August 15th.

Angie: 14% increase over last year.

Angie Park: In closing, we feel very good about our results in Q3 and are now working hard to deliver Q4 and continuing to operate our business with rigor and discipline.

Angie: In closing we feel very good about our results in Q3 and are now working hard to deliver Q4 and continuing to operate our business with rigor and discipline and now when you turn it back to Julie Thank.

Julie Sweet: And now let me turn it back to Julie.

Julie Sweet: Thank you, Angie. Let me start with the environment in which our clients are operating today. Stating the obvious, as we shared last quarter, we continue to see a significantly elevated level of uncertainty in the global economic and geopolitical environment as compared to calendar year 2024. In every boardroom and every industry, our clients are not facing a single challenge. They are facing everything at once, economic volatility, geopolitical complexity, major shifts in customer behavior. In these times, our clients need us more than ever. They look to us to help them build resilience and deliver results. To not merely navigate the environment, they want to thrive and be the first to reshape their industries.

Julie Sweet: Thank you Angie, let me start with the environment in which our clients are operating today, stating the obvious as we shared last quarter. We continue to see a significantly elevated level of uncertainty in the global economic and geopolitical environment as compared to calendar year 'twenty 'twenty four and every boardroom in every industry. Our clients are not facing a single challenge.

Julie Sweet: They're facing everything at once economic volatility geopolitical complexity major shifts in customer behavior in.

Julie Sweet: In these times, our clients need us more than ever they look to us to help them build resilience and deliver results did not really navigate the environment. They want to thrive and be the first to reshape their industries to do so all roads lead to reinvention.

Julie Sweet: To do so, all roads lead to reinvention. Gen AI has been a catalyst for reinvention, because the power of Gen AI has created the opportunity to meet challenges in new ways, and is creating new opportunities to achieve even better results than any single technology in the Internet era. And yet, Gen AI alone is just a tool. The work needed to use Gen AI to create value at scale is substantial. We are working with our clients using all of our reinvention expertise, our deep understanding of how to build a cognitive brain for the enterprise, and our deep understanding of data, every function in the enterprise, industries, and change, as well as our own experience reinventing Accenture.

Julie Sweet: Jenny I has been a catalyst for reinvention because the power of Jennie O. I has created the opportunity to meet challenges in new ways and is creating new opportunities to achieve even better results than any single technology in the Internet era, and yet Jenny I alone is just a tool the work needed to use journey.

Julie Sweet: AI to create value at scale is substantial.

Julie Sweet: We are working with our clients using all of our reinvention expertise our deep understanding of how to build a cognitive brain for the enterprise.

Angie: And our deep understanding of data every function in the enterprise industries and change as well as our own experience reinventing accenture.

Julie Sweet: The breadth and depth of our capabilities across industries and solutions that use all of our services is clear in the examples I will highlight today.

Angie: The breadth and depth of our capabilities across industries and solutions that use all of our services is clear and the examples I will highlight today.

Julie Sweet: We are working with Air France KLM, a global leader in aviation, on a digital transformation that will redefine how they operate and serve millions of travelers worldwide by using the power of cloud, data, and AI. As part of a multi-year partnership, we will help them move away from proprietary data centers and migrate their legacy applications to the cloud. This work is expected to unlock new efficiencies across passenger flights, cargo services, and aircraft maintenance to improve the traveler experience. It will drive faster decision-making using real-time insights and a scalable platform to quickly deploy additional resources when there is a spike in demand.

Angie: We are working with air France, KLM, a global leader in aviation on a digital transformation that will redefine how they operate and serve millions of travelers worldwide by using the power of cloud data and AI.

Angie: As part of a multi year partnership we will help them move away from proprietary datacenters and migrate their legacy applications to the cloud. This work is expected to unlock new efficiencies across passenger flights cargo services and aircraft maintenance to improve the traveler experience. It will drive faster decision, making using real time insights and its.

Angie: Scalable platform to quickly deploy additional resources when there's a spike in demand.

Julie Sweet: And we have already delivered value by successfully deploying over 400 apps using a proven governance model that accounts for the company's need for safety, reliability, and resilience to disruption.

Angie: And we've already delivered value by successfully deploying over 400 apps using a proven governance model that accounts for the company's need for safety reliability and resilience disruptions with a more agile agile digital foundation in place Air France, KLM will be setting the stage for growth through continuous reinvention and the creation of new value.

Julie Sweet: With a more agile digital foundation in place, Air France KLM will be setting the stage for growth through continuous reinvention and the creation of new value.

Julie Sweet: We are advancing our partnership with Finconteria, one of the world's largest shipbuilders, to accelerate digital transformation across the maritime industry, helping the sector navigate growing complexity, rising operational demands, and the urgent need for sustainability. Combining our deep expertise in digital platforms, AI, and connected and intelligent operations, we're building NavVis Sapiens, an AI-powered ecosystem designed to make ships smarter and more integrated. This includes building application services that streamline how ships operate and are maintained, creating a secure AI-powered platform, and establishing a marketplace where maritime companies can share digital solutions.

Angie: We are advancing our partnership with Fincantieri out one of the world's largest shipbuilders to accelerate digital transformation across the maritime industry.

Angie: Helping the sector navigate growing complexity rising operational demands and the urgent need for sustainability.

Angie: Combining our deep expertise in digital platforms, AI and connected and intelligent operations, we're building nervous sapiens and AI powered ecosystem designed to make ships smarter and more integrated. This includes building application services that streamline how ships.

Angie: Great and are maintained creating a secure AI powered platform and establishing a marketplace where maritime companies can share digital solutions. For example, a next generation cruise and naval ship will use a digital twin and Iot sensor networks to simulate and monitor vessel core systems.

Julie Sweet: For example, a next-generation cruiser naval ship will use a digital twin and IoT sensor network to simulate and monitor vessel core systems. This, coupled with real-time data exchange between ports, ships, and shipyards, will support AI-driven diagnostics like predictive maintenance and energy management, such as fuel efficiency, to create a more resilient and sustainable infrastructure. The first AI-equipped ship is expected to launch by the end of 2025, demonstrating how we're helping ThinkOntario set a new benchmark for innovation in capital-intensive industries.

Angie: This coupled with real time data exchange between ports ships and shipyards will support AI, driven diagnostics diagnostics like predictive maintenance and energy met and then management such as fuel efficiency to create a more resilient and sustainable infrastructure. The first AI equipped ship is expected to launch by the end of 2025 demonstrating.

Angie: We're helping think Ontario set a new benchmark for innovation in capital intensive industries.

Julie Sweet: We partnered with Nationwide Building Society, one of the UK's leading financial institutions and the world's largest building society to transform their cybersecurity operations and stay ahead of evolving threats. We built a cloud-based, GenAI-powered security information and event management capability and migrated hundreds of terabytes of security logs and detection use cases to help them achieve a streamlined security infrastructure. This is expected to fast-track the deployment process by 40% compared to traditional methods while maintaining full operational continuity. Now, Nationwide has a future-ready security operations center that can detect cyberthreats faster than before, reduce manual effort required from its cybersecurity team, and enhance business resilience, laying the foundation for future adoption of automation and GenAI in its security ecosystem.

Angie: We partnered with nationwide building society, one of the Uk's, leading financial institutions and the world's largest building society transform their cyber security operations and stay ahead of evolving threats.

Angie: We built a cloud based Jenny I powered security information and event management capability and migrated hundreds of terabytes of security logs and detection use cases to help them achieve a streamlined security infrastructure.

Angie: This is expected to fast track the deployment process by 40% compared to traditional methods, while maintaining full operational continuity.

Angie: Now nationwide as a future ready security operations center that can detect cyber threats faster than before reduce manual effort required from its cyber security team and enhanced business resilience laying the foundation for future adoption of automation and Jenny I and it security ecosystem.

Julie Sweet: Our clients continue to take advantage of Gen AI as one of the ways they can accelerate their reinvention. And we see many clients successfully scaling Gen AI to create value today.

Angie: Our clients continue to take advantage of Jenny I as the one of the ways. They can accelerate their reinvention and we see many clients successfully scaling Jenny I to create value today, we are deepening our partnership with Pfizer one of the world's top pharmaceutical pharmaceutical and biotech companies to lead the next wave of reinvention using.

Julie Sweet: We are deepening our partnership with Pfizer, one of the world's top pharmaceutical and biotech companies, to lead the next wave of reinvention, using Gen AI and agentic technologies to transform operations, empower talent, and accelerate digital maturity. Through our GenWizard platform, we are reimagining how technology-managed services are delivered by embedding AI into the process to reduce redundancy, lower costs, and increase efficiency. We are also integrating components of AI Refinery into the GenWizard platform to help the company implement agentic AI and zero-ops automation. Now, intelligent agents will proactively monitor and resolve issues, bringing up support teams to focus on higher-value work.

Angie: Jenny I energetic technologies to transform operations empower talent and accelerate digital maturity.

Angie: Through our Gen Wizard platform, we're re imagining how technology managed services are delivered by embedding AI into the process to reduce redundancy lower costs and increase efficiencies.

Angie: We are also integrating components of AI refinery into the Gen was it platform to help the company implement agenda K I N zero ops automation.

Angie: Now intelligent agents will proactively monitor and resolve issues, bringing up support teams to focus on higher value work.

Julie Sweet: For example, when an employee encounters a system issue, an agentic AI agent can instantly identify similar past cases, resolve the ticket automatically, and take steps to prevent such issues in the future, reducing manual effort and improving speed to resolution.

Angie: For example, when an employee encounters a system issue and Egencia AI agent can instantly identify similar past cases resolved ticket automatically and take steps to prevent such issues the future with you.

Angie: Using manual effort in improving speed to resolution.

Julie Sweet: And through our LearnVantage services, we are training the company's digital employees on leveraging agentic AI to drive operational facilities, efficiencies, foster joint ownership, and enable seamless adoption. This transformation is helping Pfizer set a new standard for how digital and AI technologies and capabilities accelerate innovation and drive efficiencies to bring medicines to patients faster.

Angie: And through our learn managed services, we are training the company's digital employees and leveraging Egencia game to drive operational facilities efficiencies Foster joint ownership in enable seamless adoption. This transformation is helping Pfizer to set a new standard for how digital and AI technologies and capabilities accelerate innovation and drive efficiency.

Angie: Fees to bring medicines to patients faster.

Julie Sweet: We are continuing our work with TruNux, an integrated mind-to-pigment global market leader to reimagine operations using AI-driven solutions that will enhance data trust, productivity, and operational agility. Together, we will build a cloud-based, standardized data foundation as the backbone for the company's digital core. Using our AI refinery platform, we will launch a new set of services based on high-value, priority-gen AI and adjuncted use cases, focusing on productivity, site efficiency, and workforce enablement. For example, a sales and marketing advisor to streamline customer segmentation, a knowledge assistant to unify institutional knowledge across global sites, and an asset management tool to proactively identify and resolve operational issues.

Angie: We are continuing our work with <unk> and integrated mine to pigment global market leader to re imagine operations using AI driven solutions that will enhance data trusted productivity and operational agility.

Angie: Together, we will build a cloud based standardized data foundation as the backbone for the company's digital core youth.

Angie: Using our AI refinery platform, we will launch a new set of services based on high value priority Jenny I, an adjunctive use cases, focusing on productivity site efficiency and workforce enablement for example, our sales and marketing advisor to streamline customer segmentation and knowledge assistance to unify institutional knowledge across the <unk>.

Angie: Both sites and in asset management tool to proactively identify and resolve operational issues.

Julie Sweet: The platform will also support process control and decision making using data to enable predictive insights, faster response times, and improved operational stability.

Angie: The platform will also support process control and decision, making using data to enable predictive insights faster response times and improved operational stability.

Julie Sweet: Our collaboration means Tronex is positioned to achieve long-term differentiation in the pigment manufacturing industry.

Angie: Our collaboration means trucks is positioned to achieve long term, you're referring differentiation in the pigment manufacturing industry.

Julie Sweet: We are continuing our work with Vale, a Brazilian mining and logistics company, to transform its environmental licensing program, accelerating permit applications and advancing its sustainability goals. We've now expanded SmartLicensing, an end-to-end management platform to support greater scale and functionality. Using generative AI, the platform scans application materials and environmental studies to help ensure compliance with regulatory and environmental requirements. Building on this foundation, we've continually introduced new features and enhanced the platform's intelligence and business value. These include tailoring checklists for applicants based on project type and location, automating document validation steps, and deploying AI-powered chatbots to assist users throughout the licensing process.

Angie: We are continuing our work with Vale of Brazilian mining and logistics company to transform its environmental licensing program accelerating permit applications and advancing its sustainability goals. We've now expanded smart licensing and end to end management platform to support greater scale and functionality using generative either.

Angie: <unk> scans application materials, and environmental studies to help ensure compliance with regulatory and environmental requirements building on the foundation, we've continually introduce new features and enhance the platforms intelligence and business value. These include tailoring checklists checklists for Africans based on project type and location automating that.

Angie: Acumen validation steps in deploying AI powered chatbot to assist users throughout the licensing process.

Julie Sweet: Together, these improvements have significantly reduced internal review time and improved submission quality while minimizing rework with demand areas.

Angie: Together. These improvements has significantly reduced internal review time and improve submission quality, while minimizing we worked with demand areas.

Julie Sweet: With our broad capabilities across everything needed to serve the customer, from creative to industry expertise to technology, and of course, the latest in AI, we are helping clients shape new growth opportunities.

Angie: With our broad capabilities across everything needed to serve the customer from creative to industry expertise to technology and of course the latest in AI, we are helping clients she new growth opportunities.

Julie Sweet: We are collaborating with Nestle, a global leader in food and beverage with well-known brands like Purina, Nescafé, Dolce Gusto, and Nespresso to accelerate its digital transformation journey using AI-powered digital twins to meet the growing demand for personalized, high-quality content. In partnership with Accenture Song, we've developed a secure cloud-based platform that creates 3D virtual replicas of physical products to streamline content creation and localization. Nestle's marketing experts can now generate campaign-ready assets without repeated reshoots, digitally adjusting packaging and integrating products into formats tailored to each channel and market. With thousands of digital assets already created, Nestle is reducing the time and cost of scaling digital twins by over 70%, accelerating production, enhancing quality, and keeping their iconic brands top of mind.

Angie: We are collaborating with Nestle, a global leader in food and beverage with well known brands like Carina and S Cafe, Dolce gusto and espresso to accelerate its digital transformation journey using AI powered digital twins to meet the growing demand for personalized high quality content.

Angie: In partnership with Accenture song with developed a secure cloud based platform that creates three D virtual rough because of physical products to streamline content creation and localization.

Angie: These marketing experts can now generate campaign ready assets without repeatedly shoots digitally adjusting packaging and integrating products into formats tailored to each channel and market with thousands of digital assets already created nestle's, reducing the time and cost of scaling digital twins by over 70% acceleration.

Angie: Accelerating production enhancing quality and keeping their iconic brands top of mind.

Julie Sweet: Accenture Song also is helping a Fortune 100 high-tech company transform its sale and marketing functions to meet the demands of a fast-evolving business landscape. With increasing pressure to improve execution, the company is focused on simplifying structure, reducing costs, and unifying efforts across regions under a leaner, more agile approach powered by an integrated customer data layer. Together, we're shaping a future-ready model that brings greater integration across sales and marketing, accelerating speed to market, increasing efficiency through automation and shared services, driving value through Gen AI and agentic architecture. By focusing on data, AI, customer experience, and simplified ways of working, Song is helping this leading company strengthen execution, enhance creative impact, and deliver lasting business.

Angie: Accenture song also is helping a fortune 100 high Tech company transform its sale and marketing functions to meet the demands of the fast evolving business landscape with.

Angie: With increasing pressure to improve execution and the company's focus on simplifying structure, reducing costs and unifying efforts across regions under our leaner more agile approach powered by an integrated customer data layer together, we're shaping a future ready model that brings greater integration across sales and marketing accelerating speed to market increasing.

Angie: Fishing sea through automation and shared services driving value through Jenny I and Egencia architecture.

Angie: Focusing on data AI customer experience and simplified ways of working so long as helping misleading company's strength and execution enhanced creative impact and deliver lasting business results.

Julie Sweet: I hope these examples have brought to life the amazing work on which we have the privilege of partnering with our clients and the technology ecosystem. We are able to do this quarter in and quarter out, because we invest in having great people and in building extraordinary capabilities across our services, developing deep industry and functional expertise, creating world-class AI-enabled assets and platforms like GenWizard, the AI refinery, and Synops, and by investing in our unmatched technology ecosystem partnerships. And then we bring all of these capabilities together as solutions for our clients that deliver measurable value.

Angie: I hope these examples who brought to life the amazing work on which we have the privilege of partnering with our clients in the technology ecosystem.

Angie: We were able to do this quarter in and quarter out because we invest in having great people and in building extraordinary capabilities across our services developing deep industry and functional expertise, creating world class AI enabled assets and platforms like Gen Wizard the a refinery.

Speaker Change: Set up.

Angie: And by investing in our unmatched technology ecosystem partnerships.

Angie: And then we bring all of these capabilities together our solutions for our clients that deliver measurable value.

Julie Sweet: Which brings me to the exciting news we announced today for how we are changing our growth model so that we can be the most AI enabled, client focused, great place to work in the industry, and capture the massive opportunity we see for our clients, technology partners, and Accenture. Starting September 1, we are bringing all of our services, strategy, consulting, song, technology, and operations together into a single integrated business unit called Reinvention Services. Once we fully implement our new model, we will be able to bring more leading solutions faster and embed data and AI more easily into our solutions and delivery.

Angie: Which brings me to the exciting news we announced today are how we are changing our growth model. So that we can be the most AI enabled client focused great place to work in the industry and capture the massive opportunity we see for our clients technology partners and Accenture.

Angie: Starting September one we're bringing all of our services strategy consulting song technology and operations together into a single integrated business unit called reinvention services. Once we fully implement our new model, we will be able to bring more leading solutions faster and in bad data and AI more easily into our.

Angie: <unk> and delivery, we will also be able to help our people learn and apply AI more easily as this technology continues to evolve quickly.

Julie Sweet: We will also be able to help our people learn and apply AI more easily as this technology continues to evolve quickly. We will continue to manage our business through our geographic markets, the Americas, EMEA, and APAC.

Angie: We will continue to manage our business there are geographic markets, the Americas EMEA and APAC.

Julie Sweet: and GoToMarketByIndustry. I'm excited about these changes and how they will fuel our growth.

Angie: And go to market by industry IMAX.

Angie: I'm excited about these changes and how they will fuel our growth back to U N G.

Angie Park: Back to you, Angie. Thanks, Julie.

Speaker Change: Thanks, Julie now, let me turn to our business outlook.

Angie Park: Now let me turn to our business outlook. For the fourth quarter of fiscal 25, we expect revenues to be in the range of $17 to $17.6 billion. This assumes the impact of FX will be approximately positive 2.5% compared to the fourth quarter of fiscal 24 and reflects an estimated 1 to 5% growth in local currency. I'd also like to provide some additional context on our guidance for Q4. As it relates to our federal business, we saw an immaterial impact to our overall growth in Q3. And our best estimates right now include about a 2% headwind overall in Q4.

Speaker Change: For the fourth quarter of fiscal 'twenty, five we expect revenues to be in the range of 17% to $17 $6 billion. This assumes the impact of FX will be approximately positive two 5% compared to the fourth quarter of fiscal 'twenty four and reflects an estimated 1% to 5% growth in local currency.

Speaker Change: <unk>.

Speaker Change: I'd also like to provide some additional context on our guidance for Q4.

Speaker Change: As it relates to our federal business, we saw an immaterial impact to our overall growth in Q3, and our best estimates right now include about a 2% headwind overall in Q4.

Angie Park: Moving to full fiscal 25. Based upon how the rates have been trending over the last few weeks, we now assume the impact of FX on our results in U.S. dollars will be positive 0.2% compared to fiscal 24. For the full fiscal 25, we now expect our revenue to be in the range of 6 to 7% growth in local currency over fiscal 24. We expect our inorganic contribution for the full year to be about 3%. And we now expect to invest about $1 to $1.5 billion in acquisitions this fiscal year. For operating margin, we now expect fiscal year 25 to be 15.6%, a 10-basic point expansion over adjusted fiscal 24 results.

Speaker Change: Moving to full fiscal 'twenty five based upon how the rates have been trending over the last few weeks, we now assume the impact of FX on our results in U S dollars will be positive, 0.2% compared to fiscal 'twenty four.

Speaker Change: For the full fiscal 'twenty five we now expect our revenue to be in the range of 6% to 7% growth in local currency over fiscal 'twenty four we expect our inorganic contribution for the full year to be about 3% and we now expect to invest about one to one and a half billion dollars in acquisitions this fiscal year.

Speaker Change: Our operating margin, we now expect fiscal year 'twenty five to be 15, 6%, a 10 basis point expansion over adjusted fiscal 'twenty four results.

Angie Park: We now expect our annual effective tax rate to be in the range of 23 to 24%. This compares to an adjusted effective tax rate of 23.6% in fiscal 24. We now expect our full year diluted earnings per share for fiscal 25 to be in the range of $12.77 to $12.89, or 7 to 8% growth over adjusted fiscal 24 results. For the full fiscal 25, we now expect operating cash flow to be in the range of $9.6 to $10.3 billion, property and equipment additions to be approximately $600 million, and free cash flow to be in the range of $9 billion to $9.7 billion.

Speaker Change: We now expect our annual effective tax rate to be in the range of 23% to 24%. This compares to an adjusted effective tax rate of 23, 6% in fiscal 'twenty four.

Speaker Change: We now expect our full year diluted earnings per share for fiscal 'twenty five to be in the range of $12 77 to.

Speaker Change: To $12 89 or.

Speaker Change: Or 7%, 8% growth over adjusted fiscal 'twenty four results.

Speaker Change: For the full fiscal 'twenty five we now expect operating cash flow to be in the range of nine 6% to $10 3 billion property and equipment additions to be approximately $600 million and free cash flow to be in the range of 9 billion to $9 $7 billion.

Angie Park: Our free cash flow guidance continues to reflect a free cash flow to net income ratio of 1.1 to 1.2.

Speaker Change: Our free cash flow guidance continues to reflect our free cash flow to net income ratio of one one to one that too.

Angie Park: Finally, we continue to expect to return at least $8.3 billion through dividends and share repurchases, as we remain committed to returning a substantial portion of cash per shareholder.

Speaker Change: Finally, we continue to expect to return at least $8 $3 billion through dividends and share repurchases as we remain committed to returning a substantial portion of cash for our shareholders.

Alexia Quadrani: With that, let's open it up so that we can take your questions.

Speaker Change: With that let's open it up so that we can take your questions Alexia. Thanks, Angie I would ask that you each for 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.

Alexia Quadrani: Alexia. Thanks, Angie.

Alexia Quadrani: I would ask that you each speak to one question and a follow-up to allow as many participants as possible to ask a question.

Operator: Operator, would you provide instructions for those on the call? Absolutely. As a reminder, if you'd like to ask a question, please press star then 1 on your keypad. If your question has already been addressed and you'd like to remove yourself from queue, please press star then two.

Speaker Change: Absolutely.

Speaker Change: Other people to ask a question please close carbon water.

Speaker Change: Bob.

Speaker Change: Of course, it has already been addressed through a reversal from Hugh who's approached all of them too.

Xinjin Huang: Today's first question comes from Xinjin Huang with J.P. Morgan. Please go ahead.

Speaker Change: The first question will come from Jim along well.

Speaker Change: Hum.

Speaker Change: Thanks, so much good morning.

Julie Sweet: Good morning. I wanted to ask about the leadership changes. Talent Retention, if that's okay, Voluntary and Involuntary is what I'm thinking about, given some of the headcount. We're getting a lot of questions on that, and some departures from the leaders with today's re-org. I'm just curious, Julie, are you observing any change in talent retention or shift in talent delivery overall? No, so maybe just separate the two. Tristan picked up a little bit this quarter, but as you know that goes up and down. It's well within kind of what we normally see and, you know, Tingen, over time we have leaders who, you know, leave Accenture and pursue other opportunities.

Speaker Change: The leadership changes.

Speaker Change: Talent retention, if that's okay voluntary and involuntary.

Speaker Change: Some of the head count.

Speaker Change: Some questions on that and some departures from the leaders.

Speaker Change: I'm just curious.

Speaker Change: Perfect.

Speaker Change: And talent retention or shift in talent delivery.

Speaker Change: Hi.

Speaker Change: Maybe just separate the two attrition ticked up a little bit this quarter, but as you know that goes up and down its well within.

Speaker Change: Kind of what we normally see a and you know Tien tsin overtime, we have leaders, who leave accenture and pursue other opportunities. Our leaders are in demand as you might imagine and ER and you know we have a deep bench of leaders and of course, we can talk a little bit more about that we have a great track.

Julie Sweet: Our leaders are in demand, as you might imagine, and, you know, we have a deep bench of leaders and, of course, and we can talk a little bit more about that.

Julie Sweet: We have a great track record of putting in place new growth models and driving growth.

Speaker Change: Record of putting in place new growth models and driving growth.

Speaker Change: Yeah.

Speaker Change: Okay.

Julie Sweet: My follow-up question... I know you've called out now a couple quarters of heightened uncertainty, but you're still generating revenue above your guidance. Public sector, I think I heard immaterial couple points on overall growth in the... fourth quarter and products were generally fine. I know that was a worry. I'm just curious.

Speaker Change: Oh up question.

Speaker Change: I know you've called out now a couple of quarters of heightened uncertainty.

Speaker Change: Public sector.

Speaker Change: A couple of points.

Speaker Change: In the fourth quarter in products.

Speaker Change: I'm just curious.

Speaker Change: This heightened uncertainties translating at all in any way.

Speaker Change: Yeah.

Speaker Change: Are you seeing clients.

Julie Sweet: interact with you, how did bookings come in versus plan, and any other considerations as you exit the year. It's a great question, and it really speaks to the resilience of our model. When we think about resilience, we think about what are the building blocks that we have built over decades that we can bring together and quickly shift to meet clients' needs. If you think about fiscal year 24, when we saw this continuation of lower discretionary spending, we said what clients want is reinvention. They want the big transactions. We pivoted over the three quarters or so in FY24 to say if that's what they want, let's bring all of our services.

Speaker Change: Hum.

Speaker Change: In versus plan and any other considerations.

Speaker Change: Given the 1% to 5% growth.

Speaker Change: Sure Tien tsin.

Speaker Change: It's a great question and it really speaks to the resilience of our model. When we think about resilience. We think about what are the building blocks that we have built over decades that we can bring together and quickly shift to meet clients' needs and so if you think about fiscal year 'twenty four when we saw this sort of.

Speaker Change: <unk> of lower discretionary spending we said what clients want is reinvention right. They want the big transactions and we pivoted over the sort of three three quarters or so in FY 'twenty four to say if that's what they want let's bring all of our services, let's focus on that right.

Julie Sweet: Let's focus on that because the discretionary spending wasn't there, and we didn't have an expectation. We told you all when we came into this year that even at the top end of our guided range, we were making allowances for lower discretionary spending. Our ability to do that is because we have, for decades, trusted relationships. We have an incredible list of clients. We have large relationships with those clients, and uniquely in the market, we have strategy, we have consulting, we have technology, operations, so on. All of this is what's bringing together, and you see that in the examples we give quarter after quarter.

Speaker Change: Because of the discretionary spending wasn't there and we didn't have an expectation and we told you all when we came into this year that even at the top end of our guided range right, we were making allowances for lower discretionary spending that our ability to do that right is because we have for decades trusted relationships we have in it.

Speaker Change: Credible list of clients right, we have large our relationships with those clients and uniquely in the market. We have strategy consulting we have technology operations song all of this is what's bringing together and you see that in the examples we give quarter after quarter and so what we do is in tough mark.

Julie Sweet: What we do is, in tough markets, is we focus on what our clients need, and we see that trend. You'll remember, back in April of 2022, when we had our first investor and analyst day, this is what we predicted. We introduced our strategy to be the reinvention partner of choice, and since that quarter, we have had nearly $400 million or more bookings in a quarter since that quarter, which is our proxy for reinvention. What you're seeing is the benefits of the agility that we have built into our model from diversification, from client relations, built over decades, and very importantly, our ability to change fast.

Speaker Change: Kids is we focus on what our clients need and we see that trend and you'll remember back in April of 2022, when we had our first investor and Analyst day. This is what we predicted right. We introduced our strategy to be the reinvention partner of choice and since that quarter, we have had nearly <unk>.

Speaker Change: 400 hundred million dollar or more bookings in a quarter since that quarter, which is our proxy for reinvention and so what you're seeing is the benefits of the agility that we have built into our model from diversification from client relations built over decades and Barry <unk>.

Speaker Change: Accordingly, our ability to change fast.

Unknown Executive: Well done.

Unknown Executive: Thank you.

Speaker Change: Thank you.

Speaker Change: Thanks.

David Koning: And our next question today comes from David Koning with Baird. Please go ahead. Yeah, hey guys, good job. And I guess my first question, Gen-AI bookings remain very strong, but sequentially grew a little slower than in some previous quarters. And just wondering kind of the backdrop of Gen-AI demand, you know, relative to other types of projects in the current environment. The Gen AI demand continues to be very, very strong. And now it's getting big enough that it's going to fluctuate a little bit, right? But you'll see it even, you know, as we went through a lot of examples today, you know, Gen AI is just being more and more embedded into, you know, everything we do.

Speaker Change: And our next question comes.

Speaker Change: We've been partnering with Baird. Please go ahead.

Speaker Change: Yeah, Hey, guys. Good good job and I guess my first question Jenny I bookings remained very strong but sequentially grew a little slower than some previous quarters, and just wondering kind of the backdrop of Jenny I demand.

Speaker Change: Relative to other types of projects in the current environment.

Speaker Change: The generic demand continues to be very very strong and now it's getting big enough that it's going to fluctuate a little bit right now, but you'll see it even you know as we went through a lot of examples today you know Jenny I is just being more and more embedded in everything.

Speaker Change: Everything we do.

David Koning: Okay, thank you.

Speaker Change: Okay. Thank you and then I guess just a numbers question second we pace of acquisitions a lot slower this year than last year, obviously still the 3% or a little over 3% guide for this year's contribution is that impact and then maybe what could we expect maybe into next.

David Koning: And then I guess just a numbers question. Secondly, pace of acquisitions a lot slower this year than last year, obviously. Still the 3% or a little over 3% guide for this year's contribution. Is that intact? And then maybe what could we expect maybe into next year, you know, based on a little slower pace of acquisitions this year?

Speaker Change: At year.

Speaker Change: Just on a little slower pace of acquisitions this year.

Angie Park: Hi, David. And thanks for the question. I'll start here. And I do want just to ground us on the fact that our acquisition strategy remains exactly the same. We've been doing acquisitions, you know, to scale and expand our capabilities now for over a decade. And what's really important is the discipline that we use. Right. So if you think about this year, we've not seen the level of acquisitions given the tough market. And you've seen that we can flex up, we can flex down based upon the opportunities. But what you do, what you should know is that, you know, what remains the same is our acquisition strategy is core.

Speaker Change: Hi, David and thanks for the question I'll start here and.

Speaker Change: I do want just to ground us on the fact that our acquisition strategy remains exactly the same we.

Speaker Change: We've been doing acquisitions, you know to scale and expand our capabilities now for over a decade and what's really important is the discipline that we use right. So as you think about this year, we've not seen.

Speaker Change: The level of acquisitions, given the tough market and you've seen us we can flex up we can flex down based upon the opportunities.

Speaker Change: But what you do what you should know is that and.

Speaker Change: What remains the same as our acquisition strategy is poor and it's a continuing part of our growth strategy will continue to target about 2% a year in and year out and inorganic contribution, but it but of course that can ebb and flow and you saw that last year with the volume of acquisitions that we did last year and this year, it's a little while.

Angie Park: And it's a continuing part of our growth strategy. So we'll continue to target about two percent year in and year out in inorganic contribution. But but of course, that can inflow. And you saw that last year with the volume of acquisitions that we did last year. And this year, it's a little lighter based upon based upon what we see. And for this year, we continue to expect about three percent for the year. Yeah. And let me just add a little bit.

Speaker Change: Based upon.

Speaker Change: Based upon what we see and for this year, we continue to expect about 3% for the year, Yeah, and let me just add a little bit obviously, we're not going to guide for next year, but you know if if our targeted is roughly 2%. It goes up and down the thing that's very important is that we don't buy acquisitions.

Angie Park: Obviously, we're not going to, you know, guide for next year. But, you know, if our target is is roughly two percent, it goes up and down. The thing that's very important is that we don't buy acquisitions if they don't have good economics. Right. So it's we have an economic focus. And then they help us either scale, bring these new capabilities or build our industry and functional capabilities. And, you know, the industry has been tough this year and we just haven't seen the kinds of economics that we think makes sense to bring in. And, you know, we see that as being more of a market, you know, sort of a market condition right now, not something that changes our view of acquisitions over the long term.

Speaker Change: If they don't have good economics right. So it's we have an economic focus and then they help us either scale bring these new capabilities are built our industry and functional capabilities and you know the industry has been tough this year and we just haven't seen the kinds of economics that we think makes sense to bring.

Speaker Change: In and you know, we think we see that as being more of a market you know sort of a market condition right now not something that changes our view of acquisitions over the long term and you know, we'll give you a view of what we see at the beginning of the year you know next year change over.

Angie Park: And, you know, we'll give you a view of what we see at the beginning of the year, you know, next year, change over time. And so, you know, we saw more last year, but kind of as things have developed, we just haven't seen the right targets this year that makes sense.

Speaker Change: Time, and so you know we saw more last year, but kind of as things have developed we just haven't seen the right targets. This year that makes sense.

David Koning: Yeah, that's great. Thanks, guys. Good job.

Speaker Change: Yeah, that's great. Thanks, guys good job.

David Koning: Thanks.

Speaker Change: Okay. Thanks.

James Faucette: And our next question today comes from James Faucette with Morgan Stanley. Please go ahead. Hi, good morning. Thanks for all the details. I wanted to just quickly follow up on on that question around acquisitions and contribution. I understand you're not seeing kind of the it sounds like you're not seeing the financial profile.

Speaker Change: Our next question today comes from James Faucette with Morgan Stanley. Please go ahead.

Speaker Change: Hi, good morning, Thanks for all the details I wanted to just quickly follow up on on that question around acquisition contribution I understand youre, not seeing kind of be it sounds like youre not seeing that.

Speaker Change: Financial profile, but our.

Angie Park: But how are you feeling about any change that you may need to make or want to make in terms of types of companies or skill sets, etc, that you're looking at? Is that Changing it all, or does that remain relative? How You've Evaluated Acquisitions from a Capability Standpoint. Yeah, I mean, the categories remain the same. So we start with our business strategy. And then we are always looking at, you know, okay, what's hot? And you know, what makes sense to build versus buy? We remember our primary growth strategy is organic growth. And I, I might just add, you know, organic growth is back, something we committed to you at the end of last year, as we come into this year.

Speaker Change: Are you feeling about any change that you may need to make or want to make in terms of types of companies or skill sets et cetera that youre looking at is that.

Speaker Change: Changing at all or seven remain relatively consistent.

Speaker Change: Acquisitions from a capability standpoint in the past.

Speaker Change: Yeah, I mean, the categories remain the same so we start with our business strategy and then we are always looking at okay. What's hot and you know what makes sense to build versus buy I mean remember our primary growth strategy is organic growth and I I might just add you know organic growth is back something we committed to you at the end of last year as we can.

Angie Park: That's our primary growth. But what we're always making an estimate is when do you build, when do you buy, and it really ties to our strategy. So you saw us make a capital projects acquisition again, this quarter with Sobin, you know, that's a multi year strategy to go into a new addressable market, right? And we've talked about how successful that has been, right? When you think about, you know, where do we, you know, what are we seeing, you know, in data and AI, that's a really great area, but we have an incredible ability to build those skills ourselves.

Speaker Change: Come into this year, that's our primary growth, but what we're always I'm, making an estimate is when do you build when do you buy and it really ties to our strategy. So you saw us make a capital projects acquisition again. This quarter was so Ben that's a multiyear strategy to go into a new addressable markets right and we've talked about how successful.

Speaker Change: That has been right. When you think about where do we you know what are we seeing in data and AI. That's a really great area, but we have an incredible ability to build those skills ourselves and the latest skills are not available at many of the companies that we're buying and so we're very clear what is our business strategy.

Angie Park: And the latest skills are not available at many of the companies that we're buying. And so we're very clear, what is our business strategy? What are the capabilities that we need in order to drive that strategy? And then we're disciplined about do we build it or we buy it. And so we're not seeing, you know, anything different with, you know, how we exercise that strategy. And every year, we're dynamically evolving it based on the strategy and our needs.

Speaker Change: What are the capabilities that we need in order to drive that strategy and that we're disciplined about do we build it or we buy it and so we're not seeing anything different with how we exercise that strategy and every year, we're dynamically evolving it based on the strategy and our needs.

Angie Park: That's great articulation of that.

Speaker Change: Alright, that's great.

James Faucette: And then my follow-up question is back on the point around organic growth. As we're exiting this fiscal year, are you anticipating that we're going to be able to maintain that organic growth rate, even on a year-over-year basis, exiting this fiscal fourth quarter? We've gotten a few questions given the amount of inorganic vis-à-vis your overall guided range of growth for the fiscal fourth quarter.

Speaker Change: Thank you.

Speaker Change: And then my follow up question is back on the point around organic growth.

Speaker Change: We're exiting this fiscal year are you anticipating that we're going to be able to maintain that organic growth rate even on a year over year basis exiting this fiscal fourth quarter, we've got a few questions Kevin.

Speaker Change: The amount of inorganic versus vis vis your your overall guided range of Brookfield.

Speaker Change: The fiscal fourth quarter. Thanks.

Angie Park: Thanks. Hi, James. Thanks for the question. So Look, when we, as we think about, you know, FY26, and I get it, it's on the top of your mind.

Speaker Change: Hi, James Thanks for the question and so.

Speaker Change: When we as we think about you know FY 'twenty, six and I and I get it it's on the top of your mind well update you in September on that but let me just give you some underneath in terms of our guidance. After the fourth quarter in particular, Julie mentioned that our goal was to return to organic growth this year and you're seeing that did not result since he.

Angie Park: We'll update you in September on that. But let me just give you some underneath in terms of our guidance for the fourth quarter in particular. Julie mentioned that our goal was to return to organic growth this year, and you're seeing that in our results. So if you think about our guidance for the year, at 6 to 7%, that implies organic growth of 3 to 4%, right? So super important to understand. At the same time, as you think about our fourth quarter guidance that we just gave you, 1 to 5%, that implies 4% at the top end of our range for organic growth.

Speaker Change: Think about our guidance for the year at 67% that implies organic growth of 3% to 4% rate that's super important to understand at the same time as you think about our fourth quarter guidance that we just gave you 1% to 5% that implies 4% at the top end of.

Speaker Change: Our range for organic growth.

Unknown Executive: Thank you so much.

Speaker Change: Thank you so much.

Speaker Change: Thanks.

Bryan Bergin: And our next question today comes from Bryan Bergin with TD Cowen.

Speaker Change: I don't know how schwartzman from where it comes from Bryan Bergin.

Angie Park: Please go ahead. Hi, good morning. Thank you. So, I appreciate the color on the growth headwind you provided on Doge for the fourth quarter. I'm curious how much clarity or just visibility you have right now on the potential cancellations or reductions of scope across the portfolio of the work that you do for the government, or, you know, just given the timing of their fiscal year end. Really less concerned about this year, but just going forward, I'm trying to just make sure we're all kind of aligned on expectations. Should we kind of be thinking about that two-point headwind in 4Q as a run rate or any other color?

Colin: Colin Please go ahead.

Bryan Bergin: Hi, good morning. Thank you. So I appreciate the color on the growth headwinds you provided on those for the fourth quarter I'm curious how much clarity or just visibility you have right now on the potential cancellations reductions of scope across the portfolio of the work that you do for the government just given the timing of their fiscal year end.

Bryan Bergin: Really less concern about this year, but just going forward I'm trying to just make sure. We're all kind of aligned on expectations should we kind of be thinking about that two point headwind in <unk> as a run rate or any other color you can share.

Angie Park: We're going to update you on 26 at the end of next quarter. And I, you know, it's just too early to be making, you know, kind of making those assumptions, right. But we're giving you the data as we see it. You know, this is our best data point we have right now. Okay, understood.

Bryan Bergin: What kind of update you on 26 at the end of next quarter and you know, it's just too early to be making you know kind of making the assumptions right, but we're giving you the data as we see it.

Bryan Bergin: This is our best data point, we have right now.

Speaker Change: Okay understood and my follow up on the growth model changes. So are there implications on the financial model here just understanding this is being made for client delivery on the integration of services, but our other savings for you also on the back end and the delivery on this and if so how should we be thinking about that.

Unknown Executive: My follow up on the growth model changes.

Julie Sweet: So, are there implications on the financial model here? Just understanding this is being made for client delivery on the integration of services, but are there savings for you also on the back end in the delivery org? If so, how should we be thinking about it? Yeah, the way I would think about the change in the growth model, it is being driven by what we see in the market in terms of our ability to grow, it is not being driven by cost cutting, right. And of course, we are always looking for efficiencies in that. And, you know, we will, you know, look about those, but the driver is growth.

Speaker Change: Yeah.

Speaker Change: The way I would think about the change in the growth model. It is being driven by what we see in the market in terms of our ability to grow it is not being driven by cost cutting right and of course, we are always looking for efficiencies in that and we will.

Speaker Change: No look about those but the driver is growth and just a quick reminder, right. We have made growth model changes when there've been inflections in the market, where we believe that working in a different way is going to fuel growth. So back in 2013. When we said every business would be a digital business, we put in a new growth model to incubate.

Julie Sweet: And just a quick reminder, right, we have made growth model changes when there have been inflections in the market where we believe that working in a different way is going to fuel growth. So back in 2013, when we said every business would be a digital business, we put in a new growth model to incubate digital to create strategy, and to drive the digital transformation of Accenture. And from 2013 to 2019, which was our ambition, we grew at a CAGR of 9%.

Speaker Change: Digital to create strategy and to drive the digital transformation of Accenture and from 'twenty 13 to 2019, which was our ambition. We grew at a CAGR of 9% right. Then I became the CEO in 2019, and we put in in March of 2020, the next growth model, which was off.

Julie Sweet: Right, then I became the CEO in 2019. And we put in, in March of 2020, the next growth model, which was all about scaling, right, we said, the next decade is going to be about scaling digital transformation, we dissolved digital, because it was everywhere. And we said, we need to be able to scale. So we went to a geographic P&L, in order to be able to scale from March of 2020, through March of 2025. That's been a 10% CAGR. As you sit here today, we all talk about the massive opportunity from AI, we have for the last three years demonstrated that our reinvention partner choice strategy, and our lead in Gen AI strategy is working.

Speaker Change: All about scaling right. We said the next decade is gonna be a scaling digital transformation, we dissolve digital because it was everywhere and we said we need to be able to scale. So we went to a geographic P&L in order to be able to scale from March of 2020 through March of 2025, Thats been a 10% CAGR.

Speaker Change: As you sit here today, we all talk about the massive opportunity from AI, we have for the last three years demonstrated that our reinvention partner of choice strategy, and our lead and Jenny I strategy.

Julie Sweet: And what is working about it is what makes us most unique that we have all of these different services that we've been bringing together for these big transactions. We have a proven strategy. And now what we're saying is, that's what's differentiating us in the market, let's bring it together, so that we can more easily create those solutions and scale them to all of our clients across all of our sizes across all of our markets, and embed Gen AI, because the kinds of skills that you have to have, whether you're in strategy, or in, you know, technology or operations are much more common, right.

Speaker Change: It is working and what is working about it is what makes US most unique that we have all of these different services that we've been bringing together for these big transactions, we have a proven strategy and now what we're saying is that's what's differentiating us in the market, let's bring it together so that we can more easily create.

Speaker Change: Those solutions and scale them to all of our clients across all of our sizes across all of our markets.

Speaker Change: And in bed, Jenny I, because the kinds of skills that you have to have whether you're in strategy or in technology or operations are much more common rate and we are uniquely able to embed that data and AI and so this is all about the ability to rotate our offerings, our delivery and to bring kind.

Julie Sweet: And we're uniquely able to embed that data in AI. And so this is all about the ability to rotate our offerings, our delivery, and to bring kind of the magic of Accenture that we're bringing to our largest clients across our client base faster. And that's exactly what clients need today. And we expect this to be fueling the next chapter of growth. And we've got a very good track record of seeing where the market is going, making the big changes to get there, and then executing very well.

Speaker Change: The magic of Accenture that we're bringing to our largest clients across our client base faster and that's exactly what clients need today and we expect this to be fueling the next chapter of growth and we've got a very good track record of seeing where the market is going making the big changes to <unk>.

Speaker Change: Yet there and then executing very.

Speaker Change: Very well.

Unknown Executive: Okay, that's clear. Thank you.

Speaker Change: Okay. That's clear thank you.

Speaker Change: Thank you Rob on our questions, where it comes from Darrin Peller with Wolfe Research. Please go ahead.

Darrin Peller: And our next question today comes from Darrin Peller with Wolf Research. Please go ahead. Guys, thanks again.

Speaker Change: Guys. Thanks again.

Julie Sweet: Maybe we just start off a little bit more around Boking's composition. And just if you can give us a little bit more sense as to what types of contracts from the size standpoint you're seeing. Also where the priorities are from a budget standpoint from your customers at this point.

Speaker Change: Maybe we just start off a little bit more around bookings composition.

Speaker Change: Just if you can give us a little bit more sense as to what types of construction. Besides there what you're seeing.

Speaker Change: Also of where the priorities are from a budget standpoint.

Speaker Change: At this point.

Julie Sweet: And then I also want to kind of going a little bit more into tariffs, just because I know Julie, we talked in the past. Uncertainty on the tariff side, keeping customers on the sidelines. Are you seeing any change in that yet? And what could be the change if we get more and more clarity as time goes on in terms of where position contracts could be geographically?

Speaker Change: I also wanted to kind of.

Speaker Change: Going a little bit more tariffs, just because I know jewelry, we talked in the past.

Speaker Change: Uncertainty on the tariff side, keeping customers on the sidelines or you're seeing any change in that yet.

Speaker Change: And what could be the change if we get more and more clarity as time goes on in terms of where position contracts could be geographically.

Julie Sweet: But let me take the second part first, because, you know, I've been super clear, I'm talking to CEOs every day. And, you know, there was this whole narrative that about like a pause and sitting on the sidelines. And I would tell you, it was very short, right? Our clients have moved from pause, to focus and leapfrog. Focus being even more, they want to do the biggest things that are going to make a difference, which is what plays into our strengths. And that's what you continue to see in these, you know, large bookings, you know, and big deals that we're doing.

Speaker Change: Let me take the second part first because you know I've been Super clear I am talking to Ceos every day and you know there was this whole narrative that about like a pause and sitting on the sidelines and I would tell you. It was very short right. Our clients have moved from pause to focus and leapfrog focus.

Speaker Change: Even more they want to do the biggest things that are going to make a difference which is what plays into our strengths and that's what you'll continue to see in these large bookings you know a big deals that we're doing leapfrog is and you know this whole idea of AI like how can we be the first straight how can we lead and you saw that for example.

Julie Sweet: Leapfrog is and, you know, this, this whole idea of AI, like, how can we be the first, right? How can we lead and you saw that, for example, you know, the platform we're building for Finca And almost all cases, though, we're now doing things in parallel. So KLM Air France has got data, AI embedded from the beginning, which is a shift than when you saw cloud migration a few years ago, right? Because everybody wants to get to AI faster. That, of course, is why we're so differentiated. Because when we're now doing migrations, we're building in what is needed to have that cognitive brain.

Speaker Change: You know the platform we're building for Fincantieri I like right that is a first of its kind now the nature of the work is really important to understand because it depends on where the company is and so you know.

Speaker Change: For example.

Speaker Change: We gave you. The example of air France, KLM, which is all about migrating to the cloud and creating the cloud Van Foundation, because that's where their digital core is whereas there are other places where they are already in the cloud, but now we're building that cognitive brain.

Speaker Change: In almost all cases, though we're now doing things in parallel so KLM air France has got data AI embedded from the beginning which is a shift than when you saw cloud migration a few years ago right because everybody wants to get to a faster that of course is why we're so differentiated because when we're now.

Speaker Change: I'm doing migrations were building in what is needed to have that cognitive brain. So it really depends on where the company is but you know theres a lot of focus on cost and so you have us in some cases doing major deals where in one part of the organization, we are driving efficiencies applying a.

Julie Sweet: So it really depends on where the company is. But in, you know, there's a lot of focus on cost. And so you have us, in some cases, doing major deals, where in one part of the organization, we're driving efficiencies, applying AI, using our platforms, like Synops, our managed services, so they can leverage our people and our platforms, and then reinvesting it in the core of the business, right, whether that's in how they're engaging with customers or in product development, in R&D, you know, in the grid. So the themes, though, are tech data and AI, really rewiring organizations to working in new ways, being future ready, so that no matter where they are on their curve, we're helping them get to the point where they can use AI.

Speaker Change: Using our platforms like Sin ops are managed services. So they can leverage our people and our platforms and then reinvesting it in the core of the business right, whether that's in how they are engaging with customers or in product development in R&D in.

Speaker Change: In the grid so.

Speaker Change: It seems though our tech data and AI.

Speaker Change: Really rewiring organization, so working in new ways being future ready so that no matter, where they are on their curve, we're helping them get to the point, where they can use AI.

Unknown Executive: That's really great color.

Speaker Change: That's really great color. Thank you and then just a quick.

Angie Park: Thank you. And then just a quick follow up would just be around hiring. Maybe incorporating how you're thinking about the bench for AFS or what you need there, but just more broadly, you can give us a sense of what you're looking at going forward.

Speaker Change: Follow up would just be around.

Speaker Change: Maybe incorporate and how you're thinking about the bench for your fast or what you need there, but just more broadly can you give us a sense of where you're looking at going forward.

Angie Park: Thanks again.

Speaker Change: Hi, guys.

Speaker Change: Thanks.

Angie Park: Hey, Dan, it's Angie. And let me take that. And just on the on our head count, right, we ended our Q3 with about 790,000 people, it was an increase of about 5% year over year. And you saw that our utilization ticked up to 92%. And that was even with us delivering revenue above our guided range. As it relates to AFS, and certainly they're in the mix. And so it's all encompassing. I will say I know that you guys think about headcount as part of a consideration for your model. And you know, we've said for years that there's not a direct correlation between revenue and headcount.

Dan TMT: Hey, Dan TMT, and let me take that and just on that on our head count right. We ended Q3 with about 790000 people. It was an increase of about 5% year over year and you saw that our utilization ticked up to 92% and that was even with us delivering revenue above our guy.

Speaker Change: Good range and as it relates to a F S and certainly they are in the mix and so it's all encompassing.

Speaker Change: I will say I know that you guys think about head count as part of the consideration for your model and you know we've said for years that there's not a direct correlation between revenue and head count. So the best way to think about the demand for our services is the guidance that we just gave.

Angie Park: So the best way to think about the demand for our services is the guidance that we just Great.

Speaker Change: Great. Thanks, guys.

Unknown Executive: Thanks, guys.

Speaker Change: Thanks.

Unknown Executive: Thank you.

Ramsey Ellisall: And our next question today comes from Ramsey Ellisall with Barclays. Please go ahead. I want to follow up on, uh, I think Bryan. about did federal contracting or sort of lack thereof. Order. And I guess, are the Q4 headwinds coming more from cancer?

Speaker Change: Unfortunately for agriculture rooms, we ever fall with Barclays. Please go ahead.

Speaker Change: Alright. Thank you for taking my question I wanted to follow up on I think.

Brian Bergin: Brian's question earlier about sort of impact.

Brian Bergin: What degree did federal contracting or sort of lack thereof.

Brian Bergin: Bookings in the quarter.

Brian Bergin: Are the Q4 headwinds coming more from cancellations or is it the result of less.

Brian Bergin: Procurement.

Brian Bergin: Or maybe shorter term deals.

Angie Park: Hi, Ramsey, good morning. And as it relates to bookings, like we won't give you specific color on on our context around the specificity of a part of our business. But for as you think about Yeah, it's so right.

Speaker Change: Hi, <unk>, good morning, and as it relates to bookings like we won't give you specific color on on a context around the specificity of a part of our business.

Brian Bergin: But for as you think about.

Brian Bergin: Yeah.

Brian Bergin: Yeah. So.

Angie Park: Let me just take this quickly. So on, as we said, in earlier, federal was kind of immaterial on kind of all aspects of our, you know, of our booking sales revenue in terms of negative impact. And then when you think about Q4, the impacts coming from both, right, we've talked about slower procurement, right, and we've talked about cancellations. And so that's all of that is kind of in the mix, when we anticipate what the impact is.

Brian Bergin: Let me just take that quickly so on as we said in our earlier federal was kind of immaterial I'm kind of all aspects of our you know of.

Brian Bergin: Our bookings sales revenue in terms of negative impact.

Brian Bergin: And then when you think about Q4, the impacts coming from both right. We've talked about slower procurement right and we've talked about cancellations and so that's all of that is kind of in the mix when we anticipate.

Brian Bergin: I anticipate what the impact on Q4.

Unknown Executive: Thank you for follow up from me, you know, blockchain technology sort of shifted in and out of favor over the past few years, it seems to be having another moment currently. I'm curious if you're seeing any renewed demand or interest from your clients on block How are you guys playing in this space, maybe particularly in the financial... Yes, and in fact, that, you know, blockchain comes back, and then it gets renamed, because people didn't like blockchain, you know, etc. One of the great, you know, one of the things that you're pointing out, though, is that technology is continuing to involve quantum, you know, there's a lot of interest in quantum, blockchain continues to be part of solutions, particularly, as you said, in the financial services vertical, I don't think you're going to start to see tons of headlines around that, because people are so focused on AI, but in the places where it makes sense, particularly in banking, particularly in some of the, if you start to see more industry-wide solutions, right, the blockchain, underlying blockchain technology is going to be, you know, important for security in that.

Speaker Change: Okay, a follow up for me you know blockchain technology sort of shifted in our favor over the past few years it seems to be having another moment currently I'm just curious if you're seeing any renewed demand or interest from your clients on blockchain. How are you guys playing in the space, maybe particularly in the financial services vertical but elsewhere as well.

Brian Bergin: Yeah.

Brian Bergin: Yes, and in fact, they blockchain comes back and then it gets renamed because people didn't like blockchain et cetera. One of agree you know one of the things that you are pointing out though is that technology is continuing to evolve quantum you know theres a lot of interest in quantum blockchain continues to be part of solutions, particularly at Lee as you.

Brian Bergin: Said in the financial services vertical I don't think you're going to start to see tons of headlines around that because people are so focused on AI, but in the places where it makes sense, particularly in banking, particularly in some of the as you start to see more industry wide solutions right. The blockchain.

Brian Bergin: Lying blockchain technology is going to be important for security and that we don't see it as like an independent big driver of our growth in the way that we see AI because AI effects literally every part of the enterprise that can drive growth and productivity, we see that as a very important enabling technology.

Julie Sweet: But we don't see it as like an independent, big driver of our growth in the way that we see AI, because AI affects literally every part of the enterprise, it can drive growth and productivity. We see that as a very important enabling technology in certain industries and certain solutions. And that's where our clients come to us to really be able to understand that. So it's a mix. But, you know, I would say quantum is, you know, as important to understand right now. And both of them are not going to be independent big drivers in the near term, but very important that we understand them and put them in the right places.

Brian Bergin: In certain industries, and certain solutions, and Thats, where our clients come to us to really be able to understand that so it's a mix, but I would say quantum is as important to understand right now and both of them are not gonna be independent big drivers in the near term, but very important that we understand them and put them in.

Brian Bergin: Alright places.

Unknown Executive: Thank you very much. Thanks.

Brian Bergin: Thank you very much.

Brian Bergin: Yes.

Jim Schneider: Thank you. And our next question today comes from Jim Schneider with Goldman Sachs. Please go ahead. Good morning, thanks for taking my question.

Jim Schneider: Thank you remember my first one is where I come from Jim Schneider with Goldman Sachs drug.

Speaker Change: Good morning, Thanks for taking my question Julie I was wondering if you could maybe kind of extend on your commentary around our clients pivoting from from pause too to be maybe a little bit more proactive in their posture can maybe talk about that in the context of your pipeline and your visibility in terms of bookings pipeline into the next quarter and beyond Directionally.

Julie Sweet: Julie, I was wondering if you could maybe kind of extend on your commentary around clients pivoting from from pause to to being maybe a little bit more proactive in their posture. Can maybe talk about that in the context of your pipeline and your visibility in terms of bookings pipeline into the next quarter and beyond directionally relative to maybe last quarter? Yeah, we have a strong pipeline overall going into Q4, very pleased with where we're seeing. And you can see that reflected, you know, in raising the bottom of our guidance, and you know, where we see ourselves landing for the year.

Jim Schneider: Relative to maybe last quarter.

Jim Schneider: Yeah, we have a strong pipeline overall going into Q4, we're very pleased with where we're seeing and you can see that reflected.

Jim Schneider: You know and are raising the bottom of our guidance and where we see ourselves landing for the year.

Julie Sweet: And, you know, we continue to see the themes that I've been talking about, you know, both the cost, building the digital core, embedding AI, really, you know, getting into everything from both customer to, you know, deep into the industrial space, driving energy efficiency, I mean, it's really across the enterprise. And those themes continue, we're seeing the same themes in the bookings ahead. Thank you.

Jim Schneider: And you know we continue to see the themes that I've been talking about both the cost of building the digital core embedding AI really.

Brian Bergin: Getting into everything from both customer too.

Brian Bergin: Keep into the industrial space are driving energy efficiency I mean, it's really across the enterprise and those seems continue we're seeing the same themes and the bookings are ahead.

Brian Bergin: Yeah.

Angie Park: And then as a follow-up, maybe one for Angie, sort of a housekeeping question. I realize you do not sort of manage the business to gross margins, but instead operating margins, but there has been a little bit of gross margin pressure in the business last couple of quarters. I believe you may have called out some kind of increased use of subcontractors last quarter. I'm wondering if you saw that again this quarter and how you sort of expect that to trend over the next few quarters of that reverse.

Speaker Change: Thank you and then as a follow up maybe one for sort of a housekeeping question I realize you do not.

Brian Bergin: The remainder of the business to gross margins, but understood operating margins, but there has been a little bit of gross margin pressure in the business last couple of quarters. I believe you may have called out some kind of increased use of subcontractors.

Brian Bergin: Last quarter I'm wondering if you saw that again this quarter and how you expect that to trend over the next few quarters if that reverses. Thank you.

Brian Bergin: Okay, Hey, Jim how are you and as it relates to gross margins and I did mentioned subcontract. This last quarter because it was a driver and as we look at NSA and as we think about our subs. We had shared that like it can ebb and flow based upon the client work that we're doing and so for this quarter, we didn't call it out because.

Angie Park: Hi, Jim, how are you? As it relates to gross margins, I did mention subcontractors last quarter, because it was a driver. And as we look at, and as I, you know, as we think about our subs, we had shared that, like, it can ebb and flow based upon the client work that we're doing. And so for this quarter, we didn't call it out, because while they were a driver, they weren't a material driver overall to our gross margins. And importantly, I know that you're looking at gross margins and SG&A. But remember, we look at our business from an operating margin standpoint overall.

Brian Bergin: While they were a driver they werent a material driver overall to our gross margins and importantly, I know that youre looking at gross margins and SG&A, but remember we look at our business from an operating margin standpoint overall and so for US. This quarter. We were very pleased with the 40 basis points of margin expansion in <unk>.

Angie Park: And so for us, this quarter, we were very pleased with the 40 basis points of margin expansion, and EPS growth of 12%. We work hard at it, and we were super pleased with that result.

Brian Bergin: <unk> growth of 12%, we work hard at it and we were Super pleased with that result.

Operator: Operator, we have time for one more question and then Julie will wrap up the call. Yes, ma'am.

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

Speaker Change: That's one of our final question comes from James from Harper Byrne with Bank of America. Please go ahead.

Jason Kupferberg: Our final question today comes from Jason Kupferberg with Bank of America. Please go ahead. Good morning, guys. Thank you. I just wanted to start on the consulting side. I know the book to bill was 1.0 in the quarter, and I think you'd typically target something a little higher. Your tone on the impact of macro on client decision making does sound a little bit better.

Speaker Change: Yeah.

Speaker Change: Good morning, guys. Thank you.

Speaker Change: To start on the consulting side I know the book to Bill was one <unk> in the quarter are typically charges have been a little higher your tone on the impact of macro on client decision, making goes down a little bit better. So would you expect this metric to improve in Q4.

Angie Park: So would you expect this metric to improve in Q4? What a nice start, if that's okay. Good morning. And so when you look at our, when you look at our bookings overall, $19.7 billion, 1.1 book to bill, we were very pleased. And you know that our bookings can be lumpy. And you see that over time, which is why we focus on the trailing 12 months book to bill, and we have a strong 1.2. As it relates to consulting, same point that I'm going to make, which is the trailing 12 months for consulting is a strong 1.1.

Brian Bergin: Why don't I start if that's okay and good morning, and so when you look at our when you look at our bookings overall $19 7 billion. One one book to Bill we were very pleased and you know that our bookings can be lumpy and you see that over time, which is why we focus on the trailing 12 months book to Bill.

Brian Bergin: A strong one that too as it relates to consulting same point that I'm going to make which is the trailing 12 months for consulting is a strong one one and so we're very pleased with that overall.

Angie Park: And so we're very pleased with that overall.

Brian Bergin: Yeah.

Julie Sweet: Okay, just as a follow up, some other IT services companies have been saying that upwards of 20% or so of their code is now being written by AI and wondering if something Similar would be true for Accenture these days, and if so, are you sharing AI-related savings back with the clients and seeing them reinvest those savings in other projects with Accenture, or are there instances where there's some net deflationary pressure on revenue? How's all that kind of netting out? Thank you. Thanks. Yeah, well, first of all, our guidance takes into account, you know, how we deliver and any effects on how, you know, Gen AI is being built into our commercial models.

Brian Bergin: Okay.

Julie Sweet: A follow up on some other it services companies have been saying that upwards of 20% or so of their code is now being written by AI and wondering if something.

Speaker Change: Similar would be true for Accenture. These days and if so are you sharing AI related savings back with the clients and seeing them reinvest those savings in other projects with Accenture or are there instances, where there is some.

Julie Sweet: Net deflationary pressure on revenue has all that kind of getting out. Thank you.

Speaker Change: Ah Thanks, Yeah, well first of all of our guidance takes into account, how we deliver and any effects on how Jenny I is being built into our commercial models and so again, that's why it's really important to stay focused on what are we delivering.

Julie Sweet: And so, again, that's why it's really important to, like, stay focused on what are we delivering. You know, I've seen a lot of things out there, and I think it kind of get confusing about code or not, because as you think about Accenture, right, with, you know, we're not doing a lot of greenfield code, you know, because we're developing, like, new apps, right? We do very sophisticated, difficult integration. And so we actually look at how you use Gen AI across the entire lifecycle. And we are increasing and embracing as quickly as possible our use of it in delivery in order to be, you know, really at the cutting edge.

Speaker Change: I've seen a lot of things out there and I think it kind of get confusing about code or not because as you think about accenture right with you know we're not doing a lot of Greenfield code because we're developing like new apps right. We do very sophisticated difficult integration and so we actually look at how you use Jenny I across the entire lifecycle.

Speaker Change: And we are increasing and embracing as quickly as possible our use of it in delivery in order to be.

Speaker Change: Really at the cutting edge and we have Oh, we have built that into our guidance of course, you're also seeing our pricing improve as well this quarter. So remember we keep talking about this this kind of technology.

Julie Sweet: And we have, we have built that into, you know, our guidance. Of course, you're also seeing our pricing improve as well this quarter. So, remember, we keep talking about this, this kind of technology wave where it drives efficiency and allows us to deliver more efficiently is something we have managed over and over again. And the way that we manage it is by focusing on the value delivered to the client. And you're seeing that come through in our numbers. Thanks.

Speaker Change: Wave, where it drives efficiency and allows us to deliver more efficiently is something we have managed over and over again and the way that we manage it is by focusing on the value delivered to the clients and you're seeing that come through in our numbers.

Speaker Change: Thanks.

Unknown Executive: Great.

Julie Sweet: Well, thanks, everyone, for joining. In closing, I just want to thank all of our shareholders for your continued trust and support. We are working every day to continue to earn that trust. And a huge thank you to all of our people, because you are why we are able to deliver these results. So thanks, everyone, and we'll see you next quarter. Thank you.

Speaker Change: Great well thanks, everyone for joining in closing I just want to thank all of our shareholders for your continued trust and support we are working every day to continue to earn that trust and a huge thank you to all of our people. Because you are why we were able to deliver these results. So thanks, everyone and.

Speaker Change: We'll see you next quarter.

Speaker Change: Thank you. This concludes our conference call. We thank you all for attending today's presentation.

Operator: This concludes today's conference call. We thank you all for attending today's presentation.

Operator: You may now disconnect your lines and have a wonderful day.

Speaker Change: For two arms and have a wonderful day.

Speaker Change: Okay.

Speaker Change: [noise].