Accenture plc - Quarter Report: 2024 November (Form 10-Q)

The accompanying Notes are an integral part of these Consolidated Financial Statements.


Table of Contents	Consolidated Financial Statements (In thousands of U.S. dollars and share amounts)
ACCENTURE FORM 10-Q		6

Consolidated Shareholders’ Equity Statement

For the Three Months Ended November 30, 2024

(Unaudited)

Ordinary
Shares

Class A
Ordinary
Shares

Class X
Ordinary
Shares

Restricted
Share
Units

Additional
Paid-in
Capital

Treasury Shares

Retained
Earnings

Accumulated
Other
Comprehensive
Loss

Total
Accenture plc
Shareholders’
Equity

Noncontrolling
Interests

Total
Shareholders’
Equity

No.
Shares

Balance as of August 31, 2024

()

Net income

Other comprehensive income (loss)

()

Purchases of Class A shares

()

Share-based compensation expense

Purchases/redemptions of Accenture Canada Holdings Inc. exchangeable shares and Class X shares

()

Issuances of Class A shares for employee share programs

()

Dividends

()

Other, net

()

Balance as of November 30, 2024

()

The accompanying Notes are an integral part of these Consolidated Financial Statements.


Table of Contents	Consolidated Financial Statements (In thousands of U.S. dollars and share amounts)
ACCENTURE FORM 10-Q		7

Consolidated Shareholders’ Equity Statement — (continued)

For the Three Months Ended November 30, 2023

(Unaudited)

Ordinary
Shares

Class A
Ordinary
Shares

Class X
Ordinary
Shares

Restricted
Share
Units

Additional
Paid-in
Capital

Treasury Shares

Retained
Earnings

Accumulated
Other
Comprehensive
Loss

Total
Accenture plc
Shareholders’
Equity

Noncontrolling
Interests

Total
Shareholders’
Equity

No.
Shares

Balance as of August 31, 2023

()

Net income

Other comprehensive income (loss)

Purchases of Class A shares

()

Deferred tax expense (benefit)

()

Other, net

()

Change in assets and liabilities, net of acquisitions —

Receivables and contract assets, current and non-current

()

Other current and non-current assets

()

Accounts payable

()

Deferred revenues, current and non-current

()

Accrued payroll and related benefits

()

Income taxes payable, current and non-current

Other current and non-current liabilities

()

Net cash provided by (used in) operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment

()

Purchases of businesses and investments, net of cash acquired

()

Proceeds from the sale of businesses and investments

Other investing, net

Net cash provided by (used in) investing activities

()

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of shares

Purchases of shares

()

Proceeds from debt

Repayments of debt

()

Cash dividends paid

()

Other financing, net

()

Net cash provided by (used in) financing activities

()

Effect of exchange rate changes on cash and cash equivalents

()

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

()

CASH AND CASH EQUIVALENTS, beginning of period

CASH AND CASH EQUIVALENTS, end of period

SUPPLEMENTAL CASH FLOW INFORMATION:

Income taxes paid, net

The accompanying Notes are an integral part of these Consolidated Financial Statements.


Table of Contents	Notes To Consolidated Financial Statements (In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
ACCENTURE FORM 10-Q		9

and $, respectively. The change in the allowance is primarily due to immaterial write-offs and changes in gross client receivables and contract assets.

$ Investments without readily determinable fair values Total non-current investments$ $


Table of Contents	Notes To Consolidated Financial Statements (In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
ACCENTURE FORM 10-Q		10

and $, respectively. $ Amortization - Deferred transition Amortization - Intangible assets Operating lease cost Other Total depreciation, amortization and other$ $


Table of Contents	Notes To Consolidated Financial Statements (In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
ACCENTURE FORM 10-Q		11

billion and $ billion as of November 30, 2024 and August 31, 2024, respectively. Our remaining performance obligations represent the amount of transaction price for which work has not been performed and revenue has not been recognized. The majority of our contracts are terminable by the client on short notice with little or no termination penalties, and some without notice. Under Topic 606, only the non-cancelable portion of these contracts is included in our performance obligations. Additionally, our performance obligations only include variable consideration if we assess it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty is resolved. Based on the terms of our contracts, a significant portion of what we consider contract bookings is not included in our remaining performance obligations. We expect to recognize approximately % of our remaining performance obligations as of November 30, 2024 as revenue in fiscal 2025, an additional % in fiscal 2026, and the balance thereafter.

Contract Estimates

Adjustments in contract estimates related to performance obligations satisfied or partially satisfied in prior periods were immaterial for the three months ended November 30, 2024 and 2023.

Contract Balances

Deferred transition revenues were $ and $ as of November 30, 2024 and August 31, 2024, respectively, and are included in Non-current deferred revenues. Costs related to these activities are also deferred and are expensed as the services are provided. Deferred transition costs were $ and $ as of November 30, 2024 and August 31, 2024, respectively, and are included in Deferred contract costs. Generally, deferred transition costs are recoverable under the contract in the event of early termination and are monitored regularly for impairment. Impairment losses are recorded when projected remaining undiscounted operating cash flows of the related contract are not sufficient to recover the carrying amount of contract assets.

$ Contract assets (current) Receivables and contract assets, net of allowance (current) Contract assets (non-current) Deferred revenues (current) Deferred revenues (non-current)

Changes in the contract asset and liability balances during the three months ended November 30, 2024 were a result of normal business activity and not materially impacted by any other factors.

Revenues recognized during the three months ended November 30, 2024 that were included in Deferred revenues as of August 31, 2024 were $ billion. Revenues recognized during the three months ended November 30, 2023 that were included in Deferred revenues as of August 31, 2023 were $ billion.


Table of Contents	Notes To Consolidated Financial Statements (In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
ACCENTURE FORM 10-Q		12

$ Basic weighted average Class A ordinary shares Basic earnings per share$ $ Diluted earnings per shareNet income attributable to Accenture plc$ $ Net income attributable to noncontrolling interests in Accenture Canada Holdings Inc. (1) Net income for diluted earnings per share calculation$ $ Basic weighted average Class A ordinary shares Class A ordinary shares issuable upon redemption/exchange of noncontrolling interests (1) Diluted effect of employee compensation related to Class A ordinary shares Diluted effect of share purchase plans related to Class A ordinary shares Diluted weighted average Class A ordinary shares (2) Diluted earnings per share$ $

(1)Diluted earnings per share assumes the exchange of all Accenture Canada Holdings Inc. exchangeable shares for Accenture plc Class A ordinary shares on a -for-one basis. The income effect does not take into account “Net income attributable to noncontrolling interests - other,” since those shares are not redeemable or exchangeable for Accenture plc Class A ordinary shares.

(2)The weighted average diluted shares outstanding for the calculation of diluted earnings per share excludes an immaterial amount of shares issuable upon the vesting of restricted stock units because their effects were antidilutive.


Table of Contents	Notes To Consolidated Financial Statements (In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
ACCENTURE FORM 10-Q		13

)$() Foreign currency translation() Income tax benefit (expense) Portion attributable to noncontrolling interests () Foreign currency translation, net of tax() Ending balance()()Defined benefit plans Beginning balance()() Reclassifications into net periodic pension and post-retirement expense() Income tax benefit (expense) () Portion attributable to noncontrolling interests () Defined benefit plans, net of tax() Ending balance()()Cash flow hedges Beginning balance()() Unrealized gain (loss) Reclassification adjustments into Cost of services()() Income tax benefit (expense) ()() Portion attributable to noncontrolling interests () Cash flow hedges, net of tax() Ending balance (1)() Accumulated other comprehensive loss$()$()

of net unrealized gains related to derivatives designated as cash flow hedges is expected to be reclassified into Cost of services in the next twelve months.


Table of Contents	Notes To Consolidated Financial Statements (In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
ACCENTURE FORM 10-Q		14

, net of cash acquired. The pro forma effects of these acquisitions on our operations were not material.

$ $()$ EMEA () Asia Pacific (1) () Total$ $ $()$

(1)During the first quarter of fiscal 2025, our Latin America market unit moved from Growth Markets to North America. With this change, North America became the Americas market and Growth Markets became the Asia Pacific market. Prior period amounts have been reclassified to conform with the current period presentation.

Goodwill includes immaterial adjustments related to prior period acquisitions.

Intangible Assets

$()$ $ $()$ Technology () () Patents () () Other () () Total$ $()$ $ $()$

Total amortization related to our intangible assets was $ and $ for the three months ended November 30, 2024 and 2023, respectively.

2026 2027 2028 2029 Thereafter Total$


Table of Contents	Notes To Consolidated Financial Statements (In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
ACCENTURE FORM 10-Q		15

October 10, 2024$ October 9, 2024$ $ )

(1)This facility, which matures on May 14, 2029, provides unsecured, revolving borrowing capacity for general corporate purposes, including the issuance of letters of credit and short-term commercial paper. Borrowings under this facility will accrue interest at the applicable risk-free rate plus a spread. We continue to be in compliance with relevant covenant terms. The facility is subject to annual commitment fees.

(2)We maintain separate, uncommitted and unsecured multicurrency revolving credit facilities. These facilities provide local currency financing for the majority of our operations. Interest rate terms on the revolving facilities are at market rates prevailing in the relevant local markets. As of November 30, 2024 and August 31, 2024, we had borrowings under these facilities.

(3)We also maintain local guaranteed and non-guaranteed lines of credit for those locations that cannot access our global facilities. As of November 30, 2024 and August 31, 2024, we had borrowings under these various facilities.

We had an aggregate of $ and $ of letters of credit outstanding and $ and $ (excluding unamortized discounts) of commercial paper outstanding as of November 30, 2024 and August 31, 2024, respectively. The amount of letters of credit and commercial paper outstanding reduces the available borrowing capacity under the facilities described above.

10.

Our effective tax rates for the three months ended November 30, 2024 and 2023 were % and %, respectively. The lower effective tax rate for the three months ended November 30, 2024 was primarily due to higher benefits from adjustments to prior year tax liabilities.


Table of Contents	Notes To Consolidated Financial Statements (In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
ACCENTURE FORM 10-Q		19

11.

and $, respectively, of which all but approximately $ and $, respectively, may be recovered from the other third parties if we are obligated to make payments to the indemnified parties as a consequence of a performance default by the other third parties. For arrangements with unspecified limitations, we cannot reasonably estimate the aggregate maximum potential liability, as it is inherently difficult to predict the maximum potential amount of such payments, due to the conditional nature and unique facts of each particular arrangement.

As of November 30, 2024 and August 31, 2024, we have issued or provided guarantees in the form of letters of credit and surety bonds of $ ($ net of recourse provisions) and $ ($ net of recourse provisions) respectively, the majority of which support certain contracts that require us to provide them as a guarantee of our performance. These guarantees are typically renewed annually and remain in place until the contractual obligations are satisfied. In general, we would only be liable for these guarantees in the event we defaulted in performing our obligations under each contract, the probability of which we believe is remote.

To date, we have not been required to make any significant payment under any of the arrangements described above. We have assessed the current status of performance/payment risk related to arrangements with limited guarantees, warranty obligations, unspecified limitations, indemnification provisions, letters of credit and surety bonds, and believe that any potential payments would be immaterial to the Consolidated Financial Statements, as a whole.

Legal Contingencies

As of November 30, 2024, we or our present personnel had been named as a defendant in various litigation matters. We and/or our personnel also from time to time are involved in investigations by various regulatory or legal authorities concerning matters arising in the course of our business around the world. Based on the present status of these matters, except as otherwise noted below, management believes the range of reasonably possible losses in addition to amounts accrued, net of insurance recoveries, will not have a material effect on our results of operations or financial condition.

On July 24, 2019, Accenture was named in a putative class action lawsuit filed by consumers of Marriott International, Inc. (“Marriott”) in the U.S. District Court for the District of Maryland. The complaint alleges negligence by us, and seeks monetary damages, costs and attorneys’ fees and other related relief, relating to a data security incident involving unauthorized access to the reservations database of Starwood Worldwide Resorts, Inc. (“Starwood”), which was acquired by Marriott on September 23, 2016. Since 2009, we have provided certain IT infrastructure outsourcing services to Starwood. On May 3, 2022, the court issued an order granting in part the plaintiffs’ motion for class certification, which we appealed. On August 17, 2023, the appeals court vacated the class certification and remanded the case to the district court for consideration of, among other things, the class action waiver signed by Starwood customer plaintiffs. On November 29, 2023, the district court reinstated the classes previously certified by the court in May 2022. We are appealing the district court’s decision. We continue to believe the lawsuit is without merit and we will vigorously defend it. At present, we do not believe any losses from this matter will have a material effect on our results of operations or financial condition.

After Accenture Federal Services (“AFS”) made a voluntary disclosure to the U.S. government, the U.S. Department of Justice (“DOJ”) initiated a civil and criminal investigation concerning whether one or more employees provided inaccurate submissions to an assessor who was evaluating on behalf of the U.S. government an AFS service offering and whether the service offering fully implemented required federal security controls. AFS is responding to an administrative subpoena and cooperating with DOJ’s investigation. This matter could subject us to adverse consequences, including civil and criminal penalties, including under the civil U.S. False Claims Act and/or other statutes, and administrative sanctions, such as termination of contracts, forfeiture of profits, suspension of payments, fines and suspensions or debarment from doing business with agencies of the U.S. government. We cannot at this time determine when or how this matter will be resolved or estimate the cost or range of costs that are reasonably likely to be incurred in connection with this matter.


Table of Contents	Notes To Consolidated Financial Statements (In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
ACCENTURE FORM 10-Q		20

12.

geographic markets, which are the Americas, EMEA and Asia Pacific. $ EMEA Asia Pacific (1) Total Revenues$ $ Industry GroupsCommunications, Media & Technology $ $ Financial Services Health & Public Service Products Resources Total Revenues$ $ Type of WorkConsulting$ $ Managed Services Total Revenues$ $


	Operating Income
	November 30, 2024	November 30, 2023
Geographic Markets
Americas (1)	$	$
EMEA
Asia Pacific (1)
Total Operating Income	$	$

Asia Pacific (1)2.5 2.4 %Financial Services3.2 3.0 Products5.4 4.9 Resources 2.4 2.3

Amounts in table may not total due to rounding.


Table of Contents
ACCENTURE FORM 10-Q	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Revenues for the first quarter of fiscal 2025 increased 9% in U.S. dollars and 8% in local currency compared to the first quarter of fiscal 2024. During the first quarter of fiscal 2025, revenue growth in local currency was very strong in the Americas, strong in EMEA and solid in Asia Pacific. We experienced local currency revenue growth that was very strong in Health & Public Service and Products, strong in Communications, Media & Technology and Resources and solid in Financial Services. Revenue growth in local currency was very strong in managed services and strong in consulting. The business environment is competitive, and we continue to experience lower pricing across the business. We define pricing as contract profitability or margin on the work that we sell.

In our consulting business, revenues for the first quarter of fiscal 2025 increased 7% in U.S. dollars and 6% in local currency compared to the first quarter of fiscal 2024. Consulting revenue growth in local currency for the first quarter of fiscal 2025 was driven by very strong growth in the Americas, solid growth in EMEA and modest growth in Asia Pacific. Our consulting revenue continues to be driven by helping our clients accelerate their reinvention, in particular technology, data, and AI led digital transformations. This includes moving to the cloud, embedding security and responsible AI across the enterprise and leveraging our change capabilities to help our clients build new skills and drive the successful adoption of new processes and technologies. In addition, clients continue to be focused on initiatives designed to deliver cost savings and supply chain and operational resilience, as well as projects to accelerate growth and improve customer experiences. While we continue to experience demand for these services, we are seeing a slower pace and level of client spending, particularly for smaller contracts with a shorter duration.

In our managed services business, revenues for the first quarter of fiscal 2025 increased 11% in both U.S. dollars and local currency compared to the first quarter of fiscal 2024. Managed services revenue growth in local currency for the first quarter of fiscal 2025 was driven by very strong growth in the Americas and EMEA, and solid growth in Asia Pacific. We continue to experience growing demand to assist clients with application modernization and maintenance, cloud enablement and cybersecurity-as-a-service. In addition, clients continue to be focused on transforming their operations through technology, data and AI, and leveraging our digital platforms and talent to drive productivity and operational cost savings.

As we are a global company, our revenues are denominated in multiple currencies and may be significantly affected by currency exchange rate fluctuations. While a significant portion of our revenues are in U.S. dollars, the majority of our revenues are denominated in other currencies, including the Euro, Japanese yen and U.K. pound. There continues to be volatility in foreign currency exchange rates. Unfavorable fluctuations in foreign currency exchange rates have had and could in the future have a material effect on our financial results. If the U.S. dollar weakens against other currencies, resulting in favorable currency translation, our revenues, revenue growth and results of operations in U.S. dollars may be higher. If the U.S. dollar strengthens against other currencies, resulting in unfavorable currency translation, our revenues, revenue growth and results of operations in U.S. dollars may be lower. The U.S. dollar weakened against various currencies during the first quarter of fiscal 2025 compared to the first quarter of fiscal 2024, resulting in favorable currency translation and U.S. dollar revenue growth that was approximately 1% higher than our revenue growth in local currency. Assuming that exchange rates stay within recent ranges for the remainder of fiscal 2025, we estimate that our full fiscal 2025 revenue growth in U.S. dollars will be approximately 0.5% lower than our revenue growth in local currency.

People Metrics

Utilization

Workforce

Annualized Voluntary Attrition

91%

799,000

12%

consistent with the first quarter of fiscal 2024

compared to approximately 743,000 as of November 30, 2023

compared to 11% in the first quarter of fiscal 2024

Utilization for the first quarter of fiscal 2025 was 91%, consistent with the first quarter of fiscal 2024. We hire to meet current and projected future demand. We proactively plan and manage the size and composition of our workforce and take actions as needed to address changes in the anticipated demand for our services and solutions, given that compensation costs are the most significant portion of our operating expenses. Our workforce, the majority of which serves our clients, increased to approximately 799,000 as of November 30, 2024, compared to approximately 743,000 as of November 30, 2023. The year-over-year increase in our workforce reflects demand for our services and solutions, as well as people added in connection with acquisitions.

For the first quarter of fiscal 2025, annualized attrition, excluding involuntary terminations, was 12%, up from 11% in the first quarter of fiscal 2024. We evaluate voluntary attrition, adjust levels of new hiring and use involuntary terminations as a means to keep our supply of skills and resources in balance with changes in client demand.


Table of Contents
ACCENTURE FORM 10-Q	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	25

In addition, we adjust compensation to provide market relevant pay based on the skills of our people and locations where we operate. We also consider a variety of factors, including the macroeconomic environment, in making our decisions around pay and benefits. We strive to adjust pricing as well as drive cost and delivery efficiencies, such as changing the mix of people and utilizing technology, to reduce the impact of compensation increases on our margin and contract profitability.

Our ability to grow our revenues and maintain or increase our margin could be adversely affected if we are unable to: match people and skills with the types or amounts of services and solutions clients are demanding; recover or offset increases in compensation; deploy our employees globally on a timely basis; manage attrition; and/or effectively assimilate new employees.

New Bookings

November 30, 2023

We provide information regarding our new bookings, which include new contracts, including those acquired through acquisitions, as well as renewals, extensions and changes to existing contracts, because we believe doing so provides useful trend information regarding changes in the volume of our new business over time. New bookings can vary significantly quarter to quarter depending in part on the timing of the signing of a small number of large managed services contracts. The types of services and solutions clients are demanding and the pace and level of their spending may impact the conversion of new bookings to revenues. For example, managed services bookings, which are typically for multi-year contracts, generally convert to revenue over a longer period of time compared to consulting bookings.

Information regarding our new bookings is not comparable to, nor should it be substituted for, an analysis of our revenues over time. New bookings involve estimates and judgments. There are no third-party standards or requirements governing the calculation of bookings. We do not update our new bookings for material subsequent terminations or reductions related to bookings originally recorded in prior fiscal years. New bookings are recorded using then-existing foreign currency exchange rates and are not subsequently adjusted for foreign currency exchange rate fluctuations.

The majority of our contracts are terminable by the client on short notice with little or no termination penalties, and some without notice. Only the non-cancelable portion of these contracts is included in our remaining performance obligations disclosed in Note 2 (Revenues) to our Consolidated Financial Statements under Item 1, “Financial Statements.” Accordingly, a significant portion of what we consider contract bookings is not included in our remaining performance obligations.


Table of Contents
ACCENTURE FORM 10-Q	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	26

Results of Operations for the Three Months Ended November 30, 2024 Compared to the Three Months Ended November 30, 2023

Revenues

Revenues by geographic market, industry group and type of work are as follows:


	Three Months Ended				Percent Increase (Decrease) U.S. Dollars		Percent Increase (Decrease) Local Currency
(in millions of U.S. dollars)	November 30, 2024		November 30, 2023
Geographic Markets
Americas (1)	$	8,733	$	8,027	9	%	11	%
EMEA	6,412		5,804		10		6
Asia Pacific (1)	2,544		2,394		6		4
Total	$	17,690	$	16,224	9	%	8	%
Industry Groups
Communications, Media & Technology	$	2,858	$	2,669	7	%	7	%
Financial Services	3,169		3,034		4		4
Health & Public Service	3,813		3,377		13		12
Products	5,425		4,860		12		10
Resources	2,425		2,284		6		6
Total	$	17,690	$	16,224	9	%	8	%
Type of Work
Consulting	$	9,045	$	8,457	7	%	6	%
Managed Services	8,644		7,768		11		11
Total	$	17,690	$	16,224	9	%	8	%

Amounts in table may not total due to rounding.

Geographic Markets

The following revenues commentary discusses the primary drivers of local currency revenue changes by geographic market for the first quarter of fiscal 2025 compared to the first quarter of fiscal 2024:

•Americas revenues increased 11% in local currency, led by growth in Industrial, Software & Platforms, Banking & Capital Markets and Consumer Goods, Retail & Travel Services. Revenue growth was driven by the United States, as well as Argentina, which continued to grow in local currency due primarily to hyperinflation.

•EMEA revenues increased 6% in local currency, led by growth in Public Service, Life Sciences and Health, partially offset by a decline in Banking & Capital Markets. Revenue growth was driven by the United Kingdom and Italy, partially offset by a decline in France.

•Asia Pacific revenues increased 4% in local currency, led by growth in Utilities, Industrial and Health, partially offset by a decline in Chemicals & Natural Resources. Revenue growth was driven by Japan, partially offset by declines in Singapore and Australia.

Operating Expenses

Operating expenses for the first quarter of fiscal 2025 increased $1,082 million, or 8%, compared to the first quarter of fiscal 2024, and decreased as a percentage of revenues to 83.3% from 84.2% during this period.

The primary categories of operating expenses include Cost of services, Sales and marketing and General and administrative costs. Cost of services is primarily driven by the cost of people serving our clients, which consists mainly of compensation, subcontractor and other payroll costs, and non-payroll costs such as facilities, technology and travel. Cost of services includes a variety of activities such as: contract delivery; recruiting and training; software development; and integration of acquisitions. Sales and marketing costs are driven primarily by compensation costs for business development activities; marketing- and advertising-related activities; and certain acquisition-related costs. General and administrative costs primarily include costs for people that are non-client-facing, information systems, office space and certain acquisition-related costs.


Table of Contents
ACCENTURE FORM 10-Q	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	27

Operating expenses by category are as follows:


(in millions of U.S. dollars)	November 30, 2024				November 30, 2023				Increase (Decrease)
Operating Expenses	$	14,741	83.3	%	$	13,659	84.2	%	$	1,082
Cost of services	11,867		67.1		10,776		66.4		1,090
Sales and marketing	1,811		10.2		1,710		10.5		101
General and administrative costs	1,063		6.0		1,033		6.4		30
Business optimization costs	—		—		140		0.9		(140)

Amounts in table may not total due to rounding.

Cost of Services

Cost of services for the first quarter of fiscal 2025 increased $1,090 million, or 10%, over the first quarter of fiscal 2024, and increased as a percentage of revenues to 67.1% compared to 66.4% during this period. Gross margin for the first quarter of fiscal 2025 decreased as a percentage of revenues to 32.9% from 33.6% during the first quarter of fiscal 2024. The decrease in gross margin was primarily due to higher subcontractor costs and the impact of our business optimization actions which reduced severance costs in gross margin during the first quarter of fiscal 2024.

Sales and Marketing

Sales and marketing expense for the first quarter of fiscal 2025 increased $101 million, or 6%, over the first quarter of fiscal 2024, and decreased as a percentage of revenues to 10.2% from 10.5% during this period primarily due to lower labor costs.

General and Administrative Costs

General and administrative costs for the first quarter of fiscal 2025 increased $30 million, or 3%, over the first quarter of fiscal 2024, and decreased as a percentage of revenues to 6.0% from 6.4% during this period primarily due to lower labor costs, partially offset by an increase in non-payroll costs.

Business Optimization Costs

During the second quarter of fiscal 2023, we initiated actions to streamline our operations, transform our non-billable corporate functions and consolidate our office space to reduce costs. We recorded a total of $1.5 billion related to these actions, primarily for employee severance, which have been completed as of August 31, 2024.

Non-GAAP Financial Measures

We have presented operating income, operating margin, effective tax rate and diluted earnings per share on a non-GAAP or “adjusted” basis excluding the business optimization costs recorded in fiscal 2024 as we believe doing so facilitates understanding as to the impact of this item and our performance in comparison to the prior periods. While we believe that this non-GAAP financial information is useful in evaluating our operations, this information should be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with GAAP.

Operating Income and Operating Margin

Operating income and operating margin for each of the geographic markets are as follows:


	Three Months Ended
	November 30, 2024				November 30, 2023
(in millions of U.S. dollars)	Operating Income		Operating Margin		Operating Income		Operating Margin		Increase (Decrease)
Americas (1)	$	1,377	16	%	$	1,293	16	%	$	84
EMEA	1,036		16		824		14		212
Asia Pacific (1)	535		21		448		19		87
Total	$	2,948	16.7	%	$	2,565	15.8	%	$	384

(1) Each plan will expire on the earlier of the expiration date or the completion of all transactions under the trading arrangement.

(2) The actual number of shares sold will depend on the vesting of certain performance-based equity awards and the number of shares withheld by Accenture to satisfy its income tax withholding obligations, and may vary from the approximate number provided.

Item 6. Exhibits

Exhibit Index:


Exhibit Number						Exhibit
3.1						Amended and Restated Memorandum and Articles of Association of Accenture plc (incorporated by reference to Exhibit 3.1 to Accenture plc’s 8-K filed on February 7, 2018)

10.1						Accenture LLP Leadership Separation Benefits Plan (filed herewith)

31.1						Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)

31.2						Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)

32.1						Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)

32.2						Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)

101						The following financial information from Accenture plc’s Quarterly Report on Form 10-Q for the quarterly period ended November 30, 2024, formatted in Inline XBRL: (i) Consolidated Balance Sheets as of November 30, 2024 (Unaudited) and August 31, 2024, (ii) Consolidated Income Statements (Unaudited) for the three months ended November 30, 2024 and November 30, 2023, (iii) Consolidated Statements of Comprehensive Income (Unaudited) for the three months ended November 30, 2024 and November 30, 2023, (iv) Consolidated Shareholders’ Equity Statement (Unaudited) for the three months ended November 30, 2024 and November 30, 2023, (v) Consolidated Cash Flows Statements (Unaudited) for the three months ended November 30, 2024 and November 30, 2023 and (vi) the Notes to Consolidated Financial Statements (Unaudited)

104						The cover page from Accenture plc’s Quarterly Report on Form 10-Q for the quarterly period ended November 30, 2024, formatted in Inline XBRL (included as Exhibit 101)


Table of Contents
ACCENTURE FORM 10-Q	Signatures	34

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: December 19, 2024


			ACCENTURE PLC

			By:			/s/ Angie Park
			Name:			Angie Park
			Title:			Chief Financial Officer
						(Principal Financial Officer and Authorized Signatory)

Accenture plc - Quarter Report: 2024 November (Form 10-Q)

Similar companies