Accenture’s third quarter was marked by solid revenue growth, with management attributing the results to increasing client demand for large-scale technology and AI-driven transformations. Despite surpassing Wall Street’s revenue expectations, the market responded negatively, largely due to earnings per share falling significantly below consensus. CEO Julie Sweet pointed to the company’s rapid scaling in advanced AI and digital core modernization as key contributors, but also acknowledged that enterprise adoption of AI remains in its early stages, requiring significant investment in skills and organizational readiness.
Is now the time to buy ACN? Find out in our full research report (it’s free).
Accenture (ACN) Q3 CY2025 Highlights:
- Revenue: $17.6 billion vs analyst estimates of $17.37 billion (7.3% year-on-year growth, 1.3% beat)
- Adjusted EPS: $3.03 vs analyst estimates of $2.97 (2% beat)
- Adjusted EBITDA: $3.42 billion vs analyst estimates of $3.26 billion (19.5% margin, 5.1% beat)
- Revenue Guidance for Q4 CY2025 is $18.43 billion at the midpoint, roughly in line with what analysts were expecting
- Adjusted EPS guidance for the upcoming financial year 2026 is $13.71 at the midpoint, missing analyst estimates by 0.6%
- Operating Margin: 11.6%, down from 14.3% in the same quarter last year
- Market Capitalization: $151.8 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Accenture’s Q3 Earnings Call
- Tien-Tsin Huang (JPMorgan) asked about visibility into future revenue growth given the record backlog and discretionary spending trends. CFO Angie Park responded that the current bookings provide confidence but the guidance range accounts for possible shifts in discretionary client budgets.
- Dave Koning (Baird) questioned the balance between AI-driven consulting and managed services. CEO Julie Sweet explained that managed services remain strategic, especially for clients behind in tech adoption, and that savings from AI are reinvested into new priorities rather than replacing managed service demand.
- James Faucette (Morgan Stanley) inquired about increased capital expenditures and Gen AI project pricing. Park clarified that higher CapEx is directed toward expanding office space in key markets, while pricing for advanced AI projects is accretive to company averages.
- Jamie Friedman (Susquehanna) probed the definition of advanced AI and the exclusion of data. Sweet explained that data remains foundational, but the company is segmenting reporting to show acceleration in new areas of spend, while recognizing that data-driven work underpins AI transformation.
- Bryan Bergin (TD Cowen) asked about client tendencies to pursue AI work internally versus with Accenture. Sweet stated that many clients attempt internal pilots but often return for help scaling, as organizational complexity and process reinvention are significant hurdles to enterprise-level AI adoption.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will closely monitor (1) the rate of enterprise-wide AI adoption and expansion of large-scale digital transformation projects, (2) progress in operational efficiencies and margin recovery following recent talent and portfolio optimization, and (3) continued momentum in cybersecurity and advanced AI services, particularly as new acquisitions are integrated. Execution on these priorities will signal Accenture’s ability to sustain top-line growth and margin improvement.
Accenture currently trades at $244, up from $239.16 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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