Global IT services giant Accenture has revealed a $4.0 billion share buyback plan, signaling strong financial confidence as it continues to capitalize on growing demand for generative artificial intelligence (AI) solutions.
The announcement, made on Thursday, caused a near 7% surge in Accenture’s premarket share price, highlighting investors’ positive sentiment.
Q4 revenue beats expectations with generative AI driving growth
Accenture reported fourth-quarter revenue of $16.41 billion, marginally exceeding the analyst forecast of $16.38 billion, according to LSEG data.
The robust performance was bolstered by the company’s generative AI business, which has seen consistent growth over the past four quarters.
Generative AI contributed significantly to Accenture’s overall new bookings, accounting for $1 billion in the fourth quarter, compared to $900 million in the prior quarter.
Julie Sweet, Accenture’s Chair and CEO, highlighted the transformative potential of AI, stating,
We continue to accelerate our leadership in Generative AI, which we believe is the most transformative technology of the next decade, delivering $3 billion in new bookings for the year.
Strong bookings underscore resilient demand
Accenture’s new bookings, a key metric that reflects the value of customer contracts with future spending commitments, climbed to $20.1 billion in Q4, up from $17.25 billion in Q3.
Consulting new bookings were $8.6 billion, or 43% of total new bookings while managed services new bookings were $11.6 billion, or 57% of total new bookings.
Accenture’s fiscal 2024 performance saw $81 billion in new bookings, with 125 client deals exceeding $100 million. Sweet said, “We’ve secured 310 major clients and achieved $3 billion in generative AI bookings.”
The bookings growth helped offset a general slowdown in IT services demand, positioning the company as a leader in AI technology adoption.
Future business outlook
Despite the strong results, Accenture’s outlook for fiscal 2025 predicts slightly slower revenue growth of 3% to 6%, which is below Wall Street expectations.
The company cited foreign exchange impacts and potential market headwinds but remains optimistic about its growth trajectory in the AI space.
The information technology company expects its earnings per share in the range of $12.55-12.91 in 2025, an increase of 10-13% from 2024, it said.
Excluding items, the company expects an increase of 5-8% in its earnings per share.
For fiscal 2025, the company expects operating cash flow to be in the range of $9.4 billion to $10.1 billion; property and equipment additions to be $600 million; and free cash flow to be in the range of $8.8 billion to $9.5 billion.
The company expects to return at least $8.3 billion in cash to shareholders through dividends and share repurchases.
Accenture’s stock has performed well over the past year, climbing 7.21% in the last 12 months.
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