Accenture Earnings Narrow Revenue Outlook
Accenture earnings showed EPS and margin gains but narrowed fiscal 2026 revenue guidance, prompting concern about weaker IT spending and integration risk.
KEY TAKEAWAYS
- Accenture reported 3Q26 revenue of $18.7 billion and EPS of $3.80, with operating margin at 17.0%.
- Management narrowed FY26 revenue guidance to 3%-4% in local currency or 4%-5% excluding U.S. federal drag.
- The shift stoked investor concern about weaker discretionary IT spending and integration risk.
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Accenture plc (NYSE: ACN) reported fiscal third-quarter 2026 results on June 18, showing earnings per share growth and margin expansion but slower revenue growth. The company narrowed its full-year revenue guidance, citing weak discretionary IT spending and risks from integrating recent acquisitions.
Quarter Results and Guidance
Accenture reported revenue of $18.7 billion for the quarter ended May 31, 2026, up 6.0% in U.S. dollars and 3.0% in local currency compared with the prior year. Diluted earnings per share rose 9.0% to $3.80. New bookings declined 2.0% in dollars and 3.0% in local currency to $19.3 billion. Operating income was $3.2 billion, with operating margin expanding 20 basis points to 17.0%. Free cash flow reached $3.6 billion.
The company updated its fiscal 2026 revenue growth guidance to 3.0%–4.0% in local currency, or 4.0%–5.0% excluding an estimated 1.0% drag from its U.S. federal business unit. It set full-year GAAP diluted EPS guidance between $13.38 and $13.50, representing 10% to 11% growth, and adjusted EPS guidance between $13.78 and $13.90, up 7% to 8%. Free cash flow is expected to range from $10.8 billion to $11.5 billion.
Capital Returns and Market Signals
In the quarter, Accenture returned $2.2 billion to shareholders, including $1.2 billion in share repurchases and redemptions of 6 million shares, and $1.0 billion in dividends, equal to $1.63 per share, a 10% increase. Year-to-date cash returned totaled $8.2 billion. Cash on hand was $10.2 billion as of May 31, down from $11.5 billion a year earlier.
The company highlighted demand for large-scale enterprise reinvention and artificial intelligence transformation programs as revenue drivers. However, market commentary noted investor concerns about the narrower revenue outlook, subdued discretionary IT spending, and the complexity of integrating recent large acquisitions. The modest year-over-year decline in bookings and the increasing role of acquisitions in growth raised questions about execution risks. Accenture’s workforce stood at approximately 798,739 employees as of May 31, up about 1.0% year over year and 2.0% sequentially, with utilization near 93.0%.
