Accenture 2026 Q4 Earnings Call

Please go ahead. Thank you, operator.

Thanks everyone for joining us today on our fourth quarter and full year fiscal 2026 earnings call. As the operator just mentioned, I'm Alexia Quadrani, Executive Director, Head of Investor Relations. On today's call, you will hear from Julie Sweet, our Chair and Chief Executive Officer, and Angie Park, our Chief Financial Officer. We hope you've had an opportunity to review both the earnings release and the accompanying presentation issued prior to this call. Let me outline the agenda for today. Julie will begin with an overview of our Q4 results and step back to look at fiscal 2026 overall, before following with a brief update on our market positioning.

Angie will then take you through the detailed financial numbers, including the income statement and balance sheet, along with key operational metrics for the fourth quarter and full fiscal year before providing a business outlook for the first quarter and full year fiscal 2027. We will then open the line for your questions before Julie closes with a wrap-up. Some of the matters we'll discuss on this call, including our business outlook, are forward-looking, and as such, are subject to known and unknown risks and uncertainties, including, but not limited to, those factors set forth in today's earnings release and discussed in our annual report on Form 10-K and quarterly reports on Form 10-Q and other SEC filings. These risks and uncertainties could cause actual results to differ materially from those expressed in this call.

During our call today, we will reference certain non-GAAP financial measures which we believe provide useful information for investors. We include reconciliations of non-GAAP financial measures where appropriate to GAAP in our earnings release or in the investor relations section of our website at accenture.com. As always, Accenture assumes no obligation to update the information presented on this conference call. Now let me turn the call over to Julie.

Thank you, Alexia, and everyone joining us this morning. Thank you to our more than 814,000 reinventors around the world for your extraordinary work and commitment to our clients. Before Angie takes you through the detailed numbers in our FY 2027 outlook, I will start with Q4 and then step back to look at fiscal 2026 overall. Starting with Q4, revenue was $18.7 billion, growing 7% in local currency above the top end of our guided range. Growth was broad-based across markets, industries, and both types of work. We once again took significant market share. Revenue from work with our top 10 ecosystem partners continued to outpace our overall growth. We had $22.2 billion of bookings in Q4, reflecting the relevance of Accenture to our clients and demonstrating again our strong competitive position.

I was particularly pleased with our 37 clients with bookings greater than $100 million. Our focus on being relevant where our clients are spending helped us capture this strong level of bookings, even though the overall demand environment, including discretionary spending, did not meaningfully change. We also delivered strong margin expansion, EPS growth, and free cash flow while continuing to invest in our business and our people. In Q4, we deployed $1.9 billion in acquisitions. Approximately $3 billion of capital related to the Cyber OT acquisitions, including Dragos, shifted into September due to regulatory timing, and we are pleased those transactions have now closed. In Q4, we continued to use our strong balance sheet and acquisition experience as competitive advantages to accelerate our strategy and ultimately fuel organic growth.

As a reminder, we use acquisitions to scale in high-growth areas, deepen our industry and functional capabilities, and expand into new growth areas, which increasingly include businesses with non-FTE commercial models. In Q4, we closed Ookla, a global leader in network intelligence, competitive benchmarking, and customer experience analytics, which is an expansion into a new growth area with a non-FTE commercial model. Ookla also deepens our industry skills in the core value chain of the comms and tech industries. We also closed Whalar, a leading creator and social agency recognized for its creative excellence and ability to deliver measurable business outcomes. Whalar is part of our focus on expanding our functional skills within our Accenture Song business in a high-growth area. To help accelerate our strategy to expand in the mid-market, we closed COMWARE, an end-to-end technology services provider with deep SAP, CRM, and manufacturing expertise serving Japan's mid-market.

We also announced our agreement to acquire McCoy, a trusted Dutch SAP transformation partner for mid-market companies. Finally, we announced an agreement to acquire Industries eXcellence Group, which deepens our engineering skills as part of our supply chain and engineering business. Turning to demand in Q4. Large-scale reinventions, including many driven by AI, drove strong demand. These spanned transforming functions and building out digital cores. Our clients are also focused on AI and believe AI will help them achieve more than previously possible across the enterprise, but clients remain at very different stages of readiness. Much of our growth today comes from continuing to build their digital core data foundations and the enterprise AI stack that they need to use AI at scale. Many are just starting their AI journey.

Nearly 100 additional clients initiated their first advanced AI work with us this quarter, bringing the FY 2026 total to more than 400. Because we are investing in our platforms and new solutions, we are able to embed advanced AI earlier into large-scale reinventions. Our proprietary assets and platforms, ecosystem relationships, and our ability to deliver the work through consulting, managed services, or a combination of both, allows us to meet clients where they are and help them move at pace. Our managed services-led work also includes a significant consulting and AI expertise, as many clients use this work to both reinvent and to get greater certainty around outcomes, including cost savings. Against this backdrop, two things stand out. First, our largest client relationships continue to expand as clients take on broader, more strategic transformations. FedEx is a great example of how our largest client relationships grow over time.

We began by moving part of its applications to the cloud. As more deliveries shifted to homes, FedEx launched One FedEx to create a more connected, flexible, and efficient operation. Delivering on that vision requires coordinating the technology, data, and processes that keep the business running, all while FedEx moves millions of packages every day. Today, we're helping build the digital core behind One FedEx while supporting its investment in its people through enterprise-wide AI fluency programs. Together, this work is helping FedEx make supply chains smarter and embed AI more deeply into the way work gets done. Our partnership has continued to deepen as FedEx has expanded our role with additional managed services and modernization work designed to streamline operations, enhance customer service, and support future growth. That is how our relationships grow. Each success creates the opportunity for the next.

The second standout from the quarter is how our AI demand is broadening because of both the depth and breadth of our expertise in the various functions of an enterprise across industry, process, operating model, data, technology, and AI. We continue to see AI being embedded in the broader transformations our clients are undertaking. BP, one of the world's largest energy and convenience businesses, operates across more than 150 markets with over 10 million customer touchpoints every day. To turn that scale into a growth advantage, Accenture Song is helping BP build a global marketing engine that combines data, AI, and marketing expertise, deepening customer intelligence to move from insight to action faster. BP's marketing teams operated with hundreds of regional processes, making it harder to scale campaigns consistently across markets. We replace that complexity with a single scalable model, and the gains compound.

BP is now producing 2.5 times more content with 23% less effort. That benefit is also realized in customer reach. For example, customer engagement activity has grown threefold in the last 12 months alone. By intelligently optimizing across offer, channel, and customer moment, BP has been able to put its marketing budget in the right place at the right time, helping support measurable business results. Over the past year, active loyalty customers grew 12% and loyalty transactions rose 7%. This is what it looks like when marketing becomes a true commercial driver. We also continue to see green shoots of enterprise-wide AI transformations where our clients have been investing in strong digital cores. PPC is one of the leading early examples. Over the past several years, we've helped PPC Group, Greece's largest electricity utility, strengthen its digital core and build the foundations to drive continuous reinvention.

Today, we're helping PPC put AI at the center of its next phase of growth as it transforms from a traditional utility into a power tech company, using AI to reinvent and expand into new businesses and markets. AI will be infused across the enterprise, from power generation and customer experience to renewables and corporate functions, bringing together larger volumes of data to get work done faster. For example, in energy management, AI will help to cut analysis time in half, helping traders make faster pricing and hedging decisions. At the same time, AI will help deliver more seamless digital experiences to millions of customers, increasing customer lifetime value and driving top-line growth. PPC Group is not inserting AI into its existing processes, it is reinventing them.