Accenture forecasts robust annual revenue growth driven by increasing AI adoption and cloud migration, offsetting sluggish enterprise spending and a strong dollar.
Bollywood Fever: IT services provider Accenture projected annual revenue growth largely above estimates on Thursday, attributing this to the growing adoption of artificial intelligence (AI), which is counterbalancing sluggish growth in enterprise spending and the impact of a strong dollar.
Shares of Accenture surged more than 6% in premarket trading, a significant rebound after falling about 19% this year due to market concerns over subdued IT services demand. Economic uncertainty and elevated interest rates have forced many companies to cut back on spending.
Despite these challenges, Accenture has remained a key consultant and outsourcing service provider for businesses transitioning to cloud-based operations, partially shielding the company from broader enterprise budget cuts. The firm has also benefited from the increased adoption of generative AI technologies, which help businesses automate operations, enhance productivity, and reduce costs.
Accenture reported that new bookings—a metric indicating the value of customer contracts with spending commitments—rose to $21.06 billion for the third quarter, up from $17.25 billion a year ago. Notably, $900 million of the new bookings were for its GenAI services, bringing the total for the full year to more than $2 billion.
The company expects annual revenue to grow between 1.5% and 2.5%, surpassing analysts’ expectations of 1.6%, according to LSEG data. While Accenture had previously forecast growth of 1% to 3%, it flagged a negative foreign-exchange impact of 0.7% for the fiscal year ending in August.
For the recent quarter, Accenture reported a profit of $1.93 billion, with revenue totaling $16.47 billion, slightly below estimates of $16.53 billion. Excluding certain items, the company earned $3.13 per share, missing the estimates of $3.15 per share.
Accenture’s ability to leverage the demand for AI and cloud services demonstrates its resilience and strategic positioning in the evolving IT services landscape. As businesses continue to invest in these technologies to drive efficiency and innovation, Accenture is well-placed to benefit from these trends, despite broader economic headwinds.
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