Accenture PLC Q3 2024 Earnings Call Transcript

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

Question: Tien-tsin Huang - JP Morgan - Analyst : Thank you so much, and congrats to KC and Angie. I just wanted to ask them upfront just for Julie maybe. You mentioned stronger growth next year. Hoping you could just elaborate on that at a high level and those a lot of moving pieces on one hand, you have a big backlog, a lot of large deals. You have strong inorganic growth. From the other hand, the sector's struggling with this week-discretionary spend, and there's uncertainty with global elections in the second half year. So just I know you can't do formal guidance for next year and a consensus is that was 6%. Can you just give us maybe some high-level considerations that are worth underlining as were recasting our outlook for next year? Thank you.

Question: Tien-tsin Huang - JP Morgan - Analyst : Good. Thank you both for that. (inaudible) with my follow-up. Just on the inorganic piece, can this pace continue?

Question: Tien-tsin Huang - JP Morgan - Analyst : Perfect. But I know you've been able to amplify the growth before. So that's why I asked. Thank you.

Question: David Koning - Baird - Analyst : Hey, guys. Thanks so much. One thing I noticed. Debt was up to $1.6 billion or so sequentially was the highest -- in 20 years you almost have no debt and you have a lot of cash. But I guess what's the strategy around that borrowing money now? And maybe it's just the geographic cash positions too. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 20, 2024 / 12:00PM, ACN.N - Q3 2024 Accenture PLC Earnings Call

Question: David Koning - Baird - Analyst : And maybe just as a follow-up, margins this year up at the lower end of kind of normal in certain the scale -- the growth this year being a little slower on maybe the acquisitions interest. As we kind of look forward, the margin puts and takes -- how should we think that with acquisition spend in newer higher? Does the next few quarters remain kind of putting a little pressure on margins there? How should we think of just the moving parts of margins going forward?

Question: David Koning - Baird - Analyst : Thank you.

Question: Bryan Keane - Deutsche Bank - Analyst : Hi, guys. Good morning and congrats. KC, great run. So I want to add from managed services is on the bookings, the $11.8 billion that was outsized number. How much of that is new bookings versus renewals? And maybe give us some flavor on what caused that spike in growth?

Question: Bryan Keane - Deutsche Bank - Analyst : Got it. And just a follow-up, just looking at some of the dimensions breakout. When I look at operations being flat, just any call outs for that? I know it was negative last quarter, so it's turned a little bit here. But just trying to understand the growth there and the prospects specs.

Question: Bryan Keane - Deutsche Bank - Analyst : Thank you.

Question: Rod Bourgeois - DeepDive Equity Research - Analyst : Hey guys. Very best wishes to KC as well. Julie, you mentioned that the debate demand environment is sort of more of the same. At the same time, it appears -- you've seen in our growth mending in certain key areas. I'm particularly interested in the growth improvement in the CMP vertical and in strategy, and consulting. Can you talk about what's enabling those growth improvements in a sense of the outlook for CMP and S&C? Thanks.

Question: Rod Bourgeois - DeepDive Equity Research - Analyst : Great. Thanks for that. And you're seeing revenue mix incrementally shift into managed services. And I'm curious if you think some of that mix shift towards managed services is due to secular forces? Or you purely seeing that mix shift as just a cyclical phenomenon?

Question: Rod Bourgeois - DeepDive Equity Research - Analyst : Got it. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 20, 2024 / 12:00PM, ACN.N - Q3 2024 Accenture PLC Earnings Call

Question: Bryan Bergin - TD Cowen - Analyst : Hi, good morning and congrats. First question I wanted to ask on the consulting existing revenue base performance. Can you just talk about how based business runoff kind of progressed within the minus 1% local currency performance? I heard your comment on that 4Q consulting or just returning to growth. Trying to understand that that's a reflection of sustainable -- stable provision potentially and really gauge whether you're reaching a point where the new consulting bookings conversion should more than offset the existing base runoff moving ahead.

Question: Bryan Bergin - TD Cowen - Analyst : Okay. And then bookings, obviously very solid year. Can you just comment on pipeline and any bookings expectations worth calling out for 4Q?

Question: Bryan Bergin - TD Cowen - Analyst : Thanks.

Question: James Faucette - Morgan Stanley - Analyst : Great. Thanks very much on. Wanted to follow-up on the acquisition activity. Obviously been really robust quoting on a lot of good opportunities. Can you give us any sense collectively across the acquisitions you've been doing and maybe what you are working out in terms of what the growth rates of those businesses generally or collectively when you do the acquisitions? And I know you reported through -- to accelerate those, how the growth has changes -- those companies are absorbed into (inaudible) even if directional? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 20, 2024 / 12:00PM, ACN.N - Q3 2024 Accenture PLC Earnings Call

Question: James Faucette - Morgan Stanley - Analyst : Got it. And then quickly, one of the areas where you've leaned in on and was mentioned the prepared remarks is the government and healthcare sector, really strong growth there obviously. How should we be thinking about that as a long-term or medium-term potential grower in that segment and any -- and how are you thinking about the investment needed to continue to drive that? Thanks.

Question: Keith. Bachman - BMO Capital Markets - Analyst : Hi. Many thanks. And first, Casey and Paul, special congratulations as you make the transition. I wanted to ask a question, and I'll just make it concurrently in the interest of time. And Julie, I think I'll direct this to you. Number one, on BPO, one of your competitors just talked pretty openly about pricing's been under pretty material duress as of late, and I wondered if you would echo that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 20, 2024 / 12:00PM, ACN.N - Q3 2024 Accenture PLC Earnings Call And I'm really curious as to why. Why do you think pricing has been under duress and how do you think about impacting future growth? And then the second area that I wanted to ask about is, Song. Thank you for the comment on mid-single digit growth. And I'm really interested how you think GenAI will impact over your digital agency over the next 12 to 24 months. And the reason I ask the question is, we also spend a lot of time with companies like Adobe that have significant -- generative AI is going to have a significant impact on digital agencies. And some of the agencies are talking about seat reductions because of the value associated with generative AI. And I'm just wondering if you could comment on how you think generative AI will impact the growth potential of Song. And that's it for me. Many thanks.