Accenture PLC Q1 2026 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Tien-Tsin Huang - JPMorgan Chase & Co - Analyst : Julie, I appreciate your comments on scaling AI and how it's not a quick fix. So I did want to ask or maybe comment that we've noticed a bit of a shift in how people view the consulting industry's role in AI. Do you agree with this, Julie? And if so, why now? What's driving the change? And are you seeing any impact on business activity as a result of that?

Question: Tien-Tsin Huang - JPMorgan Chase & Co - Analyst : All right, perfect. And sort of a related question. You mentioned the partners. I'll ask around these AI partnerships. You announced a bunch, Anthropic, OpenAI, Snowflake, et cetera. Just how might these partnerships on the AI front be different than other tech ecosystem partnerships in terms of we think about time to productivity or investments to certify personnel to scale it up, et cetera. Just your thoughts on that and how quickly might these AI partners get to the top 10 on the partner front? Thanks.

Question: Tien-Tsin Huang - JPMorgan Chase & Co - Analyst : Thank you.

Question: James Faucette - Morgan Stanley - Analyst : I want to follow up on a couple of things that have been said by Tien-Tsin and Jason. First, back on AI and those bookings. I appreciate that those are -- AI is becoming integral to all of your engagements and so maybe define specific bookings, et cetera, on a go-forward basis makes sense. But how should we think about like the mix between what we could think of as proof-of-concept type engagements versus going into full production? And any color you can give on the types of projects that are moving to production, whether that be by industry or type, et cetera?

Question: James Faucette - Morgan Stanley - Analyst : That's great. And then as a follow-up, I mentioned and talked a little bit about the revenue per head and the evolution there. One of the questions that we get from investors a lot is around pricing, particularly on a like-for-like basis and how that may be evolving and how we should think about the puts and takes there, especially as it relates to your margins and margin growth objectives. Thanks.

Question: Bryan Keane - Citi Infrastructure Investments LLC - Analyst : Wanted to ask about discretionary spend. We're all waiting around for a while here for that to come back. I'd just be curious to know how you're thinking about that heading into next year conversations with clients? And should we be hopeful that discretionary spend comes back and the turn in the calendar year?

Question: Bryan Keane - Citi Infrastructure Investments LLC - Analyst : Got it. Got it. And then just as a follow-up, that 60% of work being fixed price is above industry norms, and you guys have been working on that forever, and that's pushed up 10 points in the last three years. How do we think about the -- as AI becomes a bigger piece of that. Does that -- can that number get up to 70% or 80%? And just a little bit of how that pricing works with productivity, how do you pass on some savings and keep it yourselves? Thanks so much.

Question: Bryan Keane - Citi Infrastructure Investments LLC - Analyst : Got it. Thanks for taking the questions.

Question: Bryan Bergin - Cowen and Company LLC - Analyst : Wanted to ask on the growth side, so just really the moving parts as you consider the fiscal '26 growth outlook from here. So you -- from the 2% to 5% after a solid 1Q at the top end, 2Q looks largely as expected, yet the Federal headwind is actually a bit less than the lower -- than the prior range. So it sounds like demand is broadly consistent. So the question is, what may have precluded a low-end raise just considering that low end raise had deterioration assumed before? Just curious, is there anything incremental there or just ongoing uncertainty and just prudent approach just given this early in the fiscal year?

Question: Bryan Bergin - Cowen and Company LLC - Analyst : Okay, understood. And my follow-up on Song. So I heard the mid-single-digit growth that sounds consistent here, which is good. I wanted to dig in, and I appreciate the detail you gave in the slides. Can you just talk about the implications for Song growth? Just looking ahead, just you consider recent advances in models like SOAR and there's a perception that enterprises can do more of this themselves or just the cost of such services will see material deflation. So how do you navigate that type of a backdrop going forward?

Question: Bryan Bergin - Cowen and Company LLC - Analyst : Makes sense. Thanks, and happy holidays.

Question: Kevin McVeigh - UBS AG - Analyst : Congratulations on the results. I think you had mentioned that advanced AI is 1,300 of your 9,000 clients, and that implies about 14% versus the 6% revenue and 9% bookings. Should we use that in terms of a leading indicator or goalpost of what the revenue and bookings should scale? And if that's the case, any sense of that 14%, how that scales over time, just as we're thinking about the adoption rate?

Question: Kevin McVeigh - UBS AG - Analyst : It's super helpful. And then just real quick, the 17.3% margin, I mean, I went back, I think that's the highest Q1 you've ever had. Is that a function of the efficiencies and again, the fixed pricing? And how should we think about the margin trajectory of the business maybe a little bit longer term to the extent you can comment on that?

Question: David Koning - Robert W. Baird & Co Inc - Analyst : The health and public services growth was sequentially, I think, up 7%, the strongest, or I think the second strongest in 12 years, so very, very good. Is a lot of that just the Federal spending headwind dissipating from Q4 into Q1? Was that a lot of it? Or is it just underlying health and Federal spending just getting better than normal?

Question: David Koning - Robert W. Baird & Co Inc - Analyst : Great. Thank you. Happy holidays.