Accenture plc (ACN) FY2025 10-K and Q3 FY2026 10-Q Summary

Business

From the fiscal 2025 Form 10-K (year ended August 31, 2025), accession 0001467373-25-000217.

Accenture sells professional services: strategy and management consulting, technology implementation and integration, and the long-term running of client systems and business processes. Its customers are mainly large enterprises (primarily Forbes Global 2000 companies) and governments and government agencies. It earns fees for that work, split almost evenly between two types of work. Consulting ($35.1 billion in fiscal 2025, 50% of revenue) covers finite projects with defined deliverables. Managed services ($34.6 billion, 50%) covers ongoing, repeatable services to run and manage client systems or business functions, usually under multi-year contracts. Total fiscal 2025 revenue was $69.7 billion, up 7% in both US dollars and local currency.

The company had about 9,000 clients, including three quarters of the Fortune Global 100 and 500. It has worked with 195 of its top 200 clients for 10 years or more, and counts 305 "Diamond" clients, its largest relationships. At August 31, 2025 it employed about 779,000 people, most of them in India, the Philippines and the US. It serves clients in more than 120 countries and has offices and operations in 52.

How the business is organized. The three reportable segments are geographic markets, and each one sells the full range of services:

• Americas, $35.1 billion of fiscal 2025 revenue (50%), operating income $5.32 billion (15% margin). Latin America moved into this market in the first quarter of fiscal 2025, when North America became "Americas".
• EMEA (Europe, Middle East and Africa), $24.6 billion (35%), operating income $3.09 billion (13% margin).
• Asia Pacific, $10.0 billion (14%), operating income $1.81 billion (18% margin).

Accenture goes to market through five industry groups. Their fiscal 2025 revenues:

• Products, $21.2 billion: consumer goods, retail and travel services (45% of the group); industrials (35%); life sciences (20%).
• Health & Public Service, $14.8 billion: public service (68%) and health (32%). U.S. federal work is delivered through Accenture Federal Services (AFS). In fiscal 2025, AFS was about 36% of this group's revenue, 15% of Americas revenue and 8% of total revenue.
• Financial Services, $12.8 billion: banking and capital markets (70%) and insurance (30%).
• Communications, Media & Technology, $11.5 billion: software and platforms (43%), communications and media (39%), high tech (18%).
• Resources, $9.5 billion: utilities (47%), chemicals and natural resources (28%), energy (25%).

From September 1, 2025, all service lines were combined into one integrated unit called Reinvention Services. It covers strategy and consulting, technology (AI, data, cloud, systems integration, security, infrastructure and software engineering), operations (business process services run on the company's SynOps platform), Song (customer experience, marketing, commerce and customer service) and Industry X (digital engineering and manufacturing, including capital projects such as power grids and data centers). The company says the change is meant to make it faster and simpler to sell and deliver everything it offers, since most large deals already draw on several of these capabilities.

Competitive position and investment. Accenture says it is the number-one partner of each of its top 10 technology ecosystem partners, which are among the world's largest technology companies. It says a "very significant portion" of its revenue is built on those partners' platforms and software. Its global delivery network, mostly in India and the Philippines, supplies scale and cost advantages. Proprietary platforms include GenWizard, myNav, SynOps and AI Navigator for Enterprise.

Acquisitions are a standing part of the growth model. In fiscal 2025 the company invested $1.5 billion across 23 acquisitions, $0.8 billion in research and development (down from $1.2 billion in fiscal 2024 and $1.3 billion in fiscal 2023) and about $1.0 billion in learning, which delivered about 47 million training hours. It had about 77,000 AI and data practitioners at the end of fiscal 2025, against a goal of 80,000 by the end of fiscal 2026. This builds on a $3 billion multi-year generative AI investment announced in fiscal 2023.

Competitors include large multinational IT service providers and the services arms of technology vendors, offshore providers (particularly in India), accounting firms and consultancies, specialist and regional firms (including advertising holding companies, engineering firms and start-ups), and clients' own in-house IT departments and global capability centers. Clients usually hire Accenture on a non-exclusive basis.

Structure. Accenture plc is an Irish public limited company, incorporated in 2009, headquartered in Dublin and listed on the NYSE. It runs its business through subsidiaries. Current and former senior leaders hold less than 1% of the economic interest through exchangeable shares of Accenture Canada Holdings Inc. Other noncontrolling interests mainly reflect outside shareholders in Avanade Inc.

Risk factors

From the fiscal 2025 Form 10-K, accession 0001467373-25-000217. The third-quarter fiscal 2026 Form 10-Q (accession 0001467373-26-000032) reports no material changes to these risk factors.

These are the risks with the most bearing on the investment case, condensed:

• Macroeconomic and geopolitical demand risk. When conditions are uncertain, clients cut, delay or cancel spending, and consulting demand is especially hard to forecast. The company names tariffs and trade restrictions, inflation and geopolitical tensions as drivers. Its fiscal 2026 filings add the conflict in the Middle East.
• Short, cancellable contracts. Many consulting contracts last less than 12 months and can be ended on as little as 30 days' notice. Most contracts can be terminated on short notice with little or no penalty, so a large share of reported bookings does not appear in remaining performance obligations.
• AI as both opportunity and threat. Accenture is investing heavily in AI. AI could also automate tasks its people perform today, which would reduce demand and lower utilization. Clients, ecosystem partners and AI-native firms may build their own capabilities. The company says results could suffer if it cannot move to pricing or commercial models that capture the value AI creates. AI also brings regulatory exposure, such as the EU AI Act, along with intellectual property, bias, accuracy and reputational risk.
• Talent and workforce balance. The business depends on matching skills to demand. When skills fall out of step with demand, Accenture runs workforce actions such as the "three-pronged talent strategy" begun in the fourth quarter of fiscal 2025. The timing and cost of these actions are uncertain, and works-council consultations in some countries limit how fast they can move.
• Cybersecurity and data protection. Accenture holds sensitive client data. It has experienced data security incidents in the past, and clients have suffered breaches of systems it enabled or managed. Liability may fall outside contractual caps. GDPR fines alone can reach 4% of worldwide revenue.
• Competition and ecosystem dependence. Rivals may price more aggressively. Technology partners increasingly offer services themselves, or build products that need less integration work. Partner priorities may diverge from Accenture's, and partners sometimes form preferred arrangements with competitors.
• Pricing and delivery execution. Profitability depends on estimating effort and cost correctly. This matters most in large, complex transformation deals that turn into revenue over long periods, depend on subcontractors and vendors, and tie fees to performance milestones.
• Government contracting. In the U.S., government auditors such as the Defense Contract Audit Agency routinely audit contract costs. Adverse findings can lead to refunds, billing withholds, False Claims Act liability, suspension or debarment. The 10-K describes three specific exposures:
  • Federal spending cuts. Reductions in federal spending and workforce under the Department of Government Efficiency have caused procurement delays, price and scope reductions, and contract terminations at AFS.
  • DOJ investigation. The Department of Justice opened a civil and criminal investigation after a voluntary disclosure by AFS. It concerns whether employees gave inaccurate submissions to an assessor evaluating an AFS service offering, and whether that offering fully implemented required federal security controls.
  • DEI certification. A January 2025 executive order requires federal contractors to certify that they run no diversity, equity and inclusion programs that violate federal anti-discrimination law.
• Tax. Accenture has audits and proceedings running in many jurisdictions, and tax authorities are increasingly challenging its intercompany transactions. Pillar Two applies from fiscal 2025, and digital taxes and EU state-aid investigations add uncertainty. The company also depends on the U.S.–Ireland tax treaty and on how U.S. law defines a "U.S. person".
• Currency. Most revenue is in currencies other than the US dollar, chiefly the euro, yen and pound. A large share of delivery costs is incurred in Indian rupees and Philippine pesos, so those currencies strengthening would push costs up.
• Debt. Borrowing grew after the $5 billion bond issue in October 2024. More debt could reduce cash available for other uses and raise the risk of a credit-rating downgrade.
• Concentrated delivery and global operations. The largest and second-largest headcounts are in India and the Philippines, which concentrates delivery risk from conflict, disasters, utility and network outages, and nationalist or local-sourcing policies. The company generally has no insurance against terrorism or war losses.
• Acquisitions and divestitures. Accenture closes many deals each year, and each carries integration, retention, assumed-liability and impairment risk. In fiscal 2025, about $271 million of impairments related to divesting two Americas acquisitions that no longer fit its strategy.
• Legal liability and regulation. The company faces exposure from client system failures, from industrial and engineering work, from content-moderation services, and from conflicting rules worldwide on anticorruption, sanctions (Russia), export controls and data. Laws limiting the use of offshore resources could also hurt it.
• Irish incorporation. Irish company law gives shareholders different and possibly weaker protections. There is no treaty for reciprocal enforcement of U.S. civil judgments, and share issuance needs shareholder authority. Being domiciled in Ireland also draws criticism.

Management's discussion, fiscal 2025

From the fiscal 2025 Form 10-K, accession 0001467373-25-000217.

Headline results. Fiscal 2025 revenue rose 7% in both US dollars and local currency to $69.7 billion. New bookings slipped 1% to $80.6 billion: consulting bookings rose 2% to $37.6 billion and managed services bookings fell 3% to $43.0 billion. Operating margin was 14.7%, compared with 14.8% in fiscal 2024. Excluding business optimization costs it was 15.6%, compared with 15.5%. Diluted EPS rose 6% to $12.15, and adjusted EPS rose 8% to $12.93. Accenture returned $8.3 billion to shareholders: $3.7 billion in dividends and $4.6 billion in share purchases.

What drove it. Local-currency growth was very strong in the Americas (+9%, led by Banking & Capital Markets, Industrials and Software & Platforms in the United States). It was strong in EMEA (+6%, led by the UK and Germany, partly offset by France) and solid in Asia Pacific (+4%, led by Japan and Australia, partly offset by Singapore).

Managed services grew 9% and consulting grew 5% in local currency. Management described a "slower pace and level of client spending, particularly for smaller contracts with a shorter duration". Clients kept prioritizing large-scale transformations, including becoming "AI-ready". Pricing improved in several areas. Currency translation had minimal effect on the year.

Margins and costs. Gross margin fell to 31.9% from 32.6% because of higher payroll costs. Lower sales and marketing costs (10.1% of revenue, from 10.6%) and lower general and administrative costs (6.2%, from 6.6%) offset most of that.

In the fourth quarter of fiscal 2025, Accenture began a six-month business optimization program and recorded $615 million of costs. This comprised $344 million of severance tied to exiting people "in a compressed timeline" where reskilling is not viable, and about $271 million of asset impairments, mainly from the planned divestiture of two Americas acquisitions. These costs reduced fiscal 2025 operating margin by 90 basis points and EPS by $0.78. Fiscal 2024 had included $438 million of similar costs.

The effective tax rate was 23.7%. Interest expense rose to $229 million from $59 million after the October 2024 issue of $5 billion of senior notes.

People. Utilization was 92%, the same as fiscal 2024. Headcount rose to about 779,000 from about 774,000. Voluntary attrition was 14%, up from 13%. About 97,000 people were promoted.

Cash and capital. Operating cash flow rose $2.34 billion to $11.47 billion. Cash used in investing fell to $2.02 billion from $7.06 billion because Accenture spent less on acquisitions: total consideration for fiscal 2025 acquisitions was $1.17 billion, compared with $6.46 billion in fiscal 2024. Cash and cash equivalents ended the year at $11.5 billion, up from $5.0 billion, helped by the bond proceeds. Long-term debt consisted of $5 billion of senior notes maturing between 2027 and 2034.

After the year ended, the board declared a quarterly dividend of $1.63 per share, up from $1.48, and added $5 billion of repurchase authority, taking the total available to about $7.85 billion.

Federal business. Management flagged that U.S. federal spending reductions were hurting AFS, through delays in new procurements, reductions in price and contract scope, and contract terminations. It warned this could have a material impact on results.

Current quarter, third quarter of fiscal 2026 (three months ended May 31, 2026)

From the third-quarter fiscal 2026 Form 10-Q, accession 0001467373-26-000032, except where another filing is named.

Results. Revenue was $18.72 billion, up 6% in US dollars and 3% in local currency. A weaker dollar added about 2.5 points to US-dollar growth, and management expected currency to add about 2 points for the full year.

Operating margin widened 20 basis points to 17.0%, and operating income rose 6% to $3.18 billion. Diluted EPS rose 9% to $3.80 from $3.49. Higher revenue and operating results added $0.23, a lower share count added $0.09, and a higher tax rate (24.2%, compared with 24.0%) took off $0.01.

Where growth came from. Local-currency growth was uneven:

• By geographic market:
  • Asia Pacific, +8%, the strongest market, led by Public Service, Banking & Capital Markets and Insurance in Japan, Australia and Singapore.
  • EMEA, +4%, led by Public Service and Software & Platforms in the UK and Italy, partly offset by Germany.
  • Americas, +1%, the weakest market. Software & Platforms, High Tech and Industrials grew, partly offset by a decline in Public Service. For the nine months, management attributed that decline to the U.S. federal business.
• By industry group: Communications, Media & Technology grew 9%. Financial Services and Products each grew 3% and Resources 1%. Health & Public Service was flat.
• By type of work: Managed services grew 5% and consulting 1%. Management again cited a slower pace of client spending on smaller, shorter consulting contracts, while pricing was "relatively stable".

Margins by segment. EMEA's operating income rose $241 million to $994 million (margin 14%, up from 12%), helped by local-currency growth, favorable currency and lower payroll costs as a share of revenue. The Americas' operating income fell $12 million to $1.71 billion, and Asia Pacific's fell $37 million to $473 million (margin 17%, down from 20%). In both, higher non-payroll costs offset revenue growth: subcontractors in the Americas, facilities and technology in Asia Pacific.

Company-wide, gross margin was 32.8%, compared with 32.9%. Higher subcontractor and other non-payroll costs were largely offset by lower payroll costs.

Bookings. New bookings were $19.3 billion, down 2% in US dollars and 3% in local currency. Consulting bookings rose 13% to $10.3 billion, but managed services bookings fell 15% to $9.1 billion. That fall follows the lumpy timing of large multi-year contracts, which the company says can move bookings significantly from quarter to quarter. Nine-month bookings were $62.4 billion, up 5%. The CEO said the company had signed 104 client bookings of $100 million or more in the year to date, up 13%.

Nine-month view. Revenue for the nine months was $55.5 billion, up 7% in US dollars and 4% in local currency. Operating margin was 15.4%, compared with 15.7%. The difference is the $308 million of business optimization costs recorded in the first quarter, which completed the program. Excluding those costs, margin was 15.9%.

The program cost $923 million in total: $628 million of severance and $295 million mainly related to divesting two Americas acquisitions. Nine-month diluted EPS was $10.27, or $10.67 adjusted, compared with $9.90. The nine-month tax rate rose to 24.3% from 22.1% because of smaller tax benefits from share-based payments and adjustments to prior-year tax liabilities.

People. Utilization was 93%, compared with 92%. Headcount reached about 799,000, compared with 779,000 at fiscal year-end and 791,000 a year earlier. Annualized voluntary attrition fell to 14% from 16%.

Capital allocation and liquidity. Accenture spent heavily on both acquisitions and buybacks:

• Acquisitions. Over the nine months it completed acquisitions it describes as individually immaterial, for $2.82 billion of total consideration net of cash acquired. That is more than double the full-year fiscal 2025 figure. Goodwill rose to $25.3 billion from $22.5 billion.
• Repurchases. The company bought back 22.3 million shares for $5.19 billion in the nine months, including 20.0 million shares for $4.61 billion in the open market. The rest were mainly shares withheld for employee payroll taxes.
• Dividends. Nine-month dividend payments totaled $3.01 billion.
• Cash and debt. Net cash used in financing rose $5.42 billion to $7.09 billion. The company borrowed less than in the prior-year period, when it raised bond proceeds, and bought back more shares. Cash fell to $10.2 billion from $11.5 billion at fiscal year-end. Long-term debt was still the $5 billion of senior notes. In April 2026, new syndicated facilities totaling $8.1 billion replaced the previous $5.5 billion five-year facility. Commercial paper outstanding was $100 million.

Legal. Two disclosed matters remain open:

• Marriott lawsuit. The Marriott/Starwood data-breach class action continues after the appeals court reversed class certification on June 3, 2025. Accenture does not expect a material loss.
• AFS investigation. AFS is answering an administrative subpoena and cooperating with the DOJ's civil and criminal investigation. The company says it cannot yet estimate costs above amounts already accrued.

Outlook and strategy. In its third-quarter earnings release (Form 8-K, accession 0001467373-26-000031), Accenture narrowed its full-year revenue outlook. It again quantified the U.S. federal business as a drag of about 1 point on fiscal 2026 local-currency growth. The same release described the planned operational-technology security acquisitions (a majority stake in Dragos and all of runZero and NetRise; no price disclosed) as expanding the company's addressable market and creating a "platform-led growth opportunity".

Subsequent events

From the third-quarter fiscal 2026 Form 10-Q, accession 0001467373-26-000032.

The 10-Q's subsequent-events note discloses one event. On June 17, 2026, the board declared a quarterly cash dividend of $1.63 per share, payable on August 14, 2026 to shareholders of record on July 9, 2026. The note reports no acquisition, divestiture or financing after May 31, 2026.

Later Form 8-K filings add three developments:

• a $2 billion increase to the fiscal 2026 share repurchase plan (June 23, 2026; accession 0001467373-26-000035)
• a $5.0 billion senior notes issue by Accenture Capital Inc. (closed July 10, 2026; accession 0001193125-26-300813), which roughly doubled long-term debt
• full fiscal 2026 results and a fiscal 2027 outlook (October 1, 2026; accession 0001467373-26-000037)