Accenture PLC Q4 2024 Earnings Call Transcript

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

Question: Tien-tsin Huang - J.P. Morgan Securities LLC - Analyst : Hey. Thank you so much. Yeah, really strong bookings. I wanted to think about how that translates into revenue visibility, if you don't mind. I know Accenture doesn't normally talk about ACV, but can you maybe comment on the current relationship between the ACV and TCV and how that's evolving. Seems really important to us as we think about revenue and visibility. Duration looks like it's up, but you also have a lot of large deals converting as well. So can you comment on that?

Question: Tien-tsin Huang - J.P. Morgan Securities LLC - Analyst : No. It's reasonable as well, just to say that loud. Just on the acquisitions side, Julie, I think I asked last quarter, so I'll ask again. I know you've been very busy like the examples that you gave around the productivity you're getting from some of the deals and the examples you do have again. But how about just overall appetite this year? Are you still seeing good opportunities? Do we see a step down or a pause in the short term? Anything else to add?

Question: Tien-tsin Huang - J.P. Morgan Securities LLC - Analyst : Perfect. Thank you. Well done.

Question: Jason Kupferberg - BofA Global Research - Analyst : Good morning, guys. Thanks. I wanted to pick up on the commentary about the consulting outlook for fiscal '25. You stood up low to mid-single digits. I think that's very consistent with the exit rate of 3% coming out of fiscal '24. Does that imply that you are not building much of a discretionary spending recovery into this initial F25 guide?

Question: Jason Kupferberg - BofA Global Research - Analyst : Okay. That's very helpful. And then maybe one for Julie. I just wanted to get your broad take on the macro backdrop. I mean, I guess what are decision makers telling you right now versus three months ago? What are they waiting to see to open the discretionary budget a little bit more?

Question: Jason Kupferberg - BofA Global Research - Analyst : Thanks for all the color.

Question: Keith Bachman - BMO Capital Markets - Analyst : Hi. Good morning. Thank you very much. I wanted to revisit on M&A, if I could, and just get some clarification. In FY24 use that, as you noted, $6.6 billion, which was up about 160% year-over-year. And if we sort of do the math on, what would your normalized from multiple sources of revenue? Looks like you're starting FY25 with 3 points of M&A help. And so I just want to understand, is that the right way to think about it. And then Julie, you'd indicated that you plan to spend $3 billion more in M&A this year, and it will be as you sit back and weighted. But I'm just struggling why M&A is that $3 billion number is even second half-weighted. Why M&A isn't, you know, 4% or more for the year?

Question: Keith Bachman - BMO Capital Markets - Analyst : Okay. Let me transition the bookings. As you think about them before '25, and I know you don't go to bookings, which is more of an output. But any puts and takes on that you want us to think about in terms of the book-to-bill ratio in FY25 that might be higher or lower? Any kind of cadence there? And if you don't mind was there an M&A help in the August quarter bookings as well or signings, excuse me.

Question: Keith Bachman - BMO Capital Markets - Analyst : Okay. Many thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 26, 2024 / 12:00PM, ACN.N - Q4 2024 Accenture PLC Earnings Call

Question: Bryan Keane - Deutsche Bank - Analyst : Morning. Julie, I just wanted to ask about GenAI. I think bookings were up almost about $300 million in the third quarter, sequentially, up about $100 million this quarter. Anything about the cadence there of GenAI in the fall through there that you can help us understand?

Question: Bryan Keane - Deutsche Bank - Analyst : Got it. And then just a clarification on the guide. I know the fourth quarter organic growth was positive and we're talking about fiscal year '25 revenue guide of 3% to 6% on a constant currency basis. And if you back out the acquisitions, I think you guys said on the low end, we're talking about flat organic growth. That will be a slight step down from the fourth quarter, which was -- would be a little surprising given some of the momentum that you guys are seeing in bookings and then headcount growth. So just want to make sure I understood what that low end might imply and why would there necessarily be a step down from where the fourth quarter kind of ended? Thank you.

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

Question: Dan Dolev - Mizuho Securities USA, LLC - Analyst : Hi. Thanks for taking my question. Great results and great guidance here. Two questions on GenAI. Are you seeing more of your conversations being less replacements and reallocations and purely incremental on GenAI. And then I have a follow-up.

Question: Dan Dolev - Mizuho Securities USA, LLC - Analyst : Got it. And then a quick follow-up on margins. Can you maybe touch on the GenAI services, how it stands versus your traditional business. I think that would be really helpful for investors. Thank you.

Question: Dan Dolev - Mizuho Securities USA, LLC - Analyst : GenAI -- correct. GenAI services versus your traditional --

Question: Dan Dolev - Mizuho Securities USA, LLC - Analyst : Got it, thanks. Well, great momentum.

Question: Jim Schneider - Goldman Sachs - Analyst : Good morning. Thanks for taking my question. Very helpful commentary on the client outlook on limited discretionary spend. But can you maybe help us understand or unpack. When you talk to them, what are they looking for to release discretionary spend? Is it more macro factors, whether that be relates rates, election or regulatory? Or is it more micro factors tied to there IT budgets? And if it's the latter, what are the things they're looking for in terms of getting increased clarity on this priority is to go into 2025? l vet

Question: Jim Schneider - Goldman Sachs - Analyst : That's very helpful. Thanks. Maybe a follow on. You referenced several verticals there. Can you maybe as you perspectively look into fiscal '25, call out maybe one or two verticals where you expect the most improvement and maybe one or two where you see potential risk of deterioration. 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. SEPTEMBER 26, 2024 / 12:00PM, ACN.N - Q4 2024 Accenture PLC Earnings Call

Question: Jim Schneider - Goldman Sachs - Analyst : Great. Thank you.

Question: Bryan Bergin - TD Cowen - Analyst : Hi. Good morning. Thank you. On GenAI can you give us some sense of the size of some of these largest individual programs have reached? And then as it relates to internal productivity progress, any -- comment on the service lines we are seeing the earliest impacts as it relates to productivity or any metrics that you can share in more advanced programs?

Question: Bryan Bergin - TD Cowen - Analyst : Okay. That's helpful. Thank you. And then I appreciate your commentary on the capital returns on the balance sheet and understanding this has overall been a tougher environment, while M&A outlay has been on the upper end. But just curious how we should be thinking about the potential magnitude of leverage in the model going forward, just any guardrails we should consider.

Question: Bryan Bergin - TD Cowen - Analyst : Okat. Thank you.