Executive Summary
Accenture delivered a solid QQ2 2025 performance driven by broad-based revenue growth of 8.5% in local currency and a total revenue of $16.66 billion, supported by $20.9 billion in new bookings and a book-to-bill of 1.3. Management highlighted Gen AI as a central growth catalyst, noting $1.4 billion in Gen AI bookings and approximately $600 million in Gen AI-related revenue, underscoring Accenture’s leadership in AI-enabled transformations. While the quarter featured gross margin compression (29.9% vs 30.9% YoY, reflecting higher subcontractor costs and a large prior-year optimization impact), the company maintained an adjusted operating margin trajectory and reaffirmed full-year guidance, signaling discipline on cost, investments in AI-enabled capabilities, and a strong balance sheet to fund growth via acquisitions and buybacks.
Net income of about $1.79 billion and EPS of $2.82 (diluted $2.82) reflected 2% YoY growth on an adjusted basis, with free cash flow of $2.68 billion and a cash balance of roughly $8.49 billion driving continued shareholder returns (FSF: $2.68B; buybacks of $1.4B; dividends raised by 15% YoY to $1.48 per share). Guidance calls for 5-7% revenue growth in local currency for the full year 2025, with organic growth of 2-4% and inorganic contributions around 3% (split ~4% in H1, ~2% in H2). The margin is guided to expand 10-20 bps for the year, with operating margin targeted at 15.6-15.7% and an effective tax rate of 22.5-24.5%. Free cash flow guidance remains robust at $8.8-9.5B and operating cash flow at $9.4-10.1B. Management remains focused on AI-driven reinvention for clients, ongoing acquisitions (2-3B in the year), and disciplined capital allocation to support growth and shareholder returns.
The quality of Accenture’s earnings reflects durable demand for large-scale transformations, with nine of 13 industries growing high-single digits or higher and a continued emphasis on ecosystem partnerships, Gen AI applications, and Industry X. Management’s commentary on Federal exposure remains a key risk factor in the near term, but the long-term opportunity in modernizing government operations and accelerating AI-enabled public sector transformation remains favorable. Overall, Accenture’s QQ2 performance reinforces its position as a high-quality, AI-enabled services leader with strong balance sheet strength and ample liquidity to execute on its strategic plan.
Key Performance Indicators
Key Insights
Revenue: $16.6593B in QQ2 2025, up 5.44% YoY in reported currency and 8.5% in local currency; QoQ growth not explicitly disclosed in the data provided. Gross margin: 29.90% in QQ2 2025, down from 30.90% in QQ2 2024, driven by higher subcontractor costs and the lapping of prior-year optimization costs (EPS impact of ~$0.14). Operating margin: 13.50% in QQ2 2025, down 20 bps versus adjusted QQ2 2024; excludes the prior-year $115M optimization costs which reduced margin by ~70 bps and EPS by ~$0.14...
Financial Highlights
Revenue: $16.6593B in QQ2 2025, up 5.44% YoY in reported currency and 8.5% in local currency; QoQ growth not explicitly disclosed in the data provided. Gross margin: 29.90% in QQ2 2025, down from 30.90% in QQ2 2024, driven by higher subcontractor costs and the lapping of prior-year optimization costs (EPS impact of ~$0.14). Operating margin: 13.50% in QQ2 2025, down 20 bps versus adjusted QQ2 2024; excludes the prior-year $115M optimization costs which reduced margin by ~70 bps and EPS by ~$0.14 (adjusted figures used for comparisons). Net income: $1.788B; net margin 10.73%. EPS: GAAP $2.86; diluted $2.82. Operating cash flow: $2.853B; free cash flow: $2.683B. Bookings: $20.9B for the quarter; book-to-bill 1.3; nine of 13 industries grew high-single digits or higher; nine months in the quarter growth drivers included Gen AI and cloud/security verticals.
Liquidity & capital deployment: Cash balance $8.49B; total debt $8.06B; net debt position negative $0.43B (net cash). Share repurchases: 4.0M shares repurchased for $1.4B; dividends: $0.947B paid in the quarter; quarterly dividend of $1.48 per share announced for May 15. Valuation context (as of QQ2 2025 data): Price-to-earnings ~30.5x; EV/EBITDA ~80.2x; Price-to-book ~7.47x; Price-to-sales ~13.11x; dividend yield ~0.43%.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
16.66B |
5.44% |
-5.82% |
| Gross Profit |
4.97B |
1.98% |
-14.56% |
| Operating Income |
2.24B |
9.69% |
-23.87% |
| Net Income |
1.79B |
6.76% |
-21.54% |
| EPS |
2.86 |
7.52% |
-21.43% |
Key Financial Ratios
operatingProfitMargin
13.5%
operatingCashFlowPerShare
$4.55
freeCashFlowPerShare
$4.28
Management Commentary
Key management takeaways from the QQ2 2025 earnings call:
- Strategy and AI momentum: Gen AI is a catalyst for reinvention; Accenture is leveraging AI across the digital core to drive growth, with Gen AI bookings of $1.4B and approximately $600M in Gen AI revenue in Q2. Julie Sweet stated, Gen AI is a catalyst for reinvention; 'we are their reinvention partner of choice' as bookings reached $20.9B.
- Growth and bookings: Bookings of $20.9B, 32 clients with quarterly bookings >$100M; nine of 13 industries grew high-single digits or higher; revenues of $16.7B at the high end of guidance; nine industries growing robustly; strong consulting and managed services mix (Consulting $8.3B; Managed Services $8.4B).
- Margin and profitability: Gross margin 29.9%; operating margin 13.5%; margin pressure from investments in people and business enhancements; management notes that Q2 2024 included $115M of optimization costs (70 bps margin impact and about $0.14 EPS) which are not in the current period's comparisons.
- Federal exposure and guidance: U.S. Federal represented ~8% of global revenue in FY2024; guidance assumes FX headwinds and ongoing uncertainty in the federal environment; Angie Park reiterated 3%+ inorganic contribution and 2% organic growth for QQ2 FY25 with full-year organic growth of 2-4% and revenue growth of 5-7% in local currency; operating margin targeted to 15.6-15.7% for FY25; FCF guidance intact at $8.8-9.5B.
- Acquisitions and investments: The company deployed almost $500M in the first half through 11 acquisitions (AOX, Staufen AG, IQT Group, Halfspace, Altus Consulting, Percipient, etc.), reinforcing the real-time AI and Industry X capabilities and the ambition to self-fund reinvention through acquisitions.
- Market conditions and customer demand: Julie noted no material slowdown in demand yet; ‘we haven’t seen a slowdown in the last few weeks’ and emphasized ongoing client discussions on cost optimization and reinvestment, with some clients accelerating programs as they seek faster cost efficiencies. James Faucette (Morgan Stanley) highlighted that customers continue to pursue large transformational deals even in uncertain times, reflecting Accenture’s diversified demand base.
- Strategic partnerships and ecosystem: Telstra joint venture to advance data and AI roadmap; emphasis on AI refinery, cognitive digital brain, and Agentic AI; focus on partnerships with ecosystem leaders to accelerate AI-driven outcomes.
Gen AI is a catalyst for reinvention.
— Julie Sweet
We haven’t seen a slowdown in the last few weeks.
— Julie Sweet
Forward Guidance
Outlook and management commentary indicate disciplined, mid-to-long-term growth prospects balanced by near-term macro uncertainty. QQ3 2025 revenue guidance is $16.9B–$17.5B, implying 3–7% growth in local currency with a negative FX impact of ~0.5% versus Q3 FY24. For FY25, Accenture now expects 5–7% local-currency revenue growth with about 3% incremental inorganic contribution (roughly 4% in H1 and 2% in H2). Operating margin is guided to 15.6–15.7%, a modest expansion of 10–20 bps versus FY24 adjusted results, driven by pricing discipline and efficiency gains, while continuing to invest in AI, talent, and acquisitions. The annual effective tax rate is guided to 22.5–24.5%, and full-year diluted EPS is targeted at $12.55–$12.79, or 5–7% growth over adjusted FY24. OCF is expected to be $9.4–$10.1B with capex around $0.6B and free cash flow of $8.8–$9.5B, maintaining a free cash flow to net income ratio of 1.1–1.2. The company intends to return at least $8.3B to shareholders via dividends and buybacks.
Assessment: The guidance appears achievable given the favorable backlog dynamics (9x QoQ bookings >$100M) and Gen AI traction, though it is contingent on macro stability and the pace of normalization in federal procurement. Upward potential could arise from stronger than anticipated demand for large-scale transformations, faster realization of AI-driven efficiency, and successful integration of acquisitions into recurring-revenue streams. Downside risk centers on sustained macro deterioration, continued federal headwinds, FX volatility, and execution risk in assimilating multiple acquisitions into a coherent AI-enabled operating model.