Accenture forecasts 2% to 5% growth in 2024 fiscal

BENGALURU: Accenture has forecast a revenue growth of 2% to 5% in the 2024 fiscal signalling a subdued business environment as clients cut back on discretionary spending. It also expects revenues for the first quarter of the 2024 fiscal to be in the range of $15.8 billion to $16.4 billion, translating into a growth of -2% to 2%. Accenture’s earnings underscore a softer outlook which will have a bearing on Indian IT companies' September quarter numbers.

For the 2023 fiscal, its revenues were $64.1 billion, a 4% growth in US dollars and 8% in local currency compared with the 2022 fiscal. Accenture follows a September-August financial year. “We and our clients have had to navigate a macro environment that’s tougher than we anticipated at the beginning of fiscal 2023. Well, it's played out differently across markets and we have seen greater caution globally with lower discretionary spend, slower decision making and for us, a significant impact from the challenges media and tech industries have faced,” Accenture CEO Julie Sweet said in the investor call. New bookings for the fourth quarter of the 2023 fiscal were $16.6 billion, a decrease of 10% in both US dollars and local currency.

Sweet said, while the pace of spending has changed, the fundamentals have not -- all strategies continue to lead to technology. “And companies will need to reinvest every part of their enterprise tech, data, and AI to optimize operations and accelerate growth. To do so, they must build a digital core. We're continuing to see significant demand in areas like cloud migration and modernization and the emergence of genAI, representing areas of great opportunity, and it's still early,” she said.

Accenture is seeing early days of monetisation for some of the genAI deals. “We are also rapidly taking an early leadership position in genAI, which will be an important part of the reinvention of our clients in the next decade. Last quarter, we shared that we had sold 100 projects with roughly $100 million in sales over the prior four months. Demand accelerated in the fourth quarter, with another approximately $200 million and genAI sales to bring our total to over $300 million for the year. We also are embracing the use of genAI in our own delivery of services. Our clients’ generative AI bookings of $300 million in the last six months position us at the heart of the beginning of AI-fuelled reinvention,” Sweet added.

Moshe Khatri, MD of Wedbush Securities, said, "Accenture reported mixed Q4/FY23 results (weaker than expected communication, media and technology verticals), while FY24 C/C revenue growth guidance pointed to a back-end loaded year. "


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