Accenture pulls in solid full year earnings - CEO Julia Sweet says ‘all strategies lead to technology’

(via Accenture )

Accenture delivered a strong set of full year 2022 results, with revenues increasing year-over-year and the size of deals increasing over the 12 month period. CEO Julia Sweet acknowledged that the macroeconomic climate is uncertain, but highlighted that Accenture is delivering on the enterprise priorities for its customers. 

The key full year numbers are: 

• Revenues for the full 2022 fiscal year were $61.6 billion, compared with $50.5 billion for fiscal 2021, an increase of 22% in U.S. dollars and 26% in local currency. Revenues for fiscal 2022 reflect a foreign-exchange impact of approximately negative 4% compared with fiscal 2021.

• New bookings for the full fiscal year were $71.7 billion, an increase of 21% in U.S. dollars and 25% in local currency from fiscal 2021.

• Accenture’s business outlook for the full 2023 fiscal year assumes that the foreign-exchange impact on its results in U.S. dollars will be approximately negative 6% compared with fiscal 2022. For fiscal 2023, the company expects revenue growth to be in the range of 8% to 11% in local currency.

CEO Sweet added some colour to the numbers, highlighting the increase in size of Accenture’s larger accounts, its focus on acquisitions and R&D, as well as how it is investing in the workforce. She said: 

In FY '22, we delivered record bookings of $72 billion. As our clients continue to execute compressed transformations, we had 100 clients with quarterly bookings greater than $100 million compared to $72 million last fiscal year. We delivered revenues of $62 billion, representing a record 26% growth in local currency, adding $11 billion in revenue for the year.

We continue to take significant market share growing more than 2x the market. Our financial results reflect our commitment to creating value for our clients every day, which is why they are turning to us as their trusted partner across the enterprise.

We achieved this profitable growth while continuing to invest significantly in our business and people with $3.4 billion deployed across 38 acquisitions that are well balanced across markets, services and strategic priorities; $1.1 billion invested in R&D assets, platforms and industry solutions, including growing our portfolio of patents and pending patents to more than 8,300; and $1.1 billion invested in the training and development of our people to grow the skills needed to serve our clients.

We continue to offer an employee value proposition that includes providing vibrant career paths and opportunities for our people with approximately 157,000 promotions and over 40 million training hours while expanding our workforce by almost 100,000 and achieving 47% women as we continue our progress towards gender parity by 2025.

An uncertain environment

Sweet didn’t shy away from the concern in the market around the macroeconomic environment - including inflation, supply chain woes, looming recessions and pressures on sourcing and retaining talent. However, she said that despite this backdrop, Accenture still delivered $18.4 billion in new bookings in Q4, a year-over-year increase of 31% in local currency. 

Sweet added that Accenture’s in a good position to thrive, given its position and the trends it is seeing with enterprise customers. In particular, buyers are focused on technology procurement and quick return to value outcomes. She said; 

While industries and markets are being affected differently, there are two common themes: all strategies lead to technology, particularly cloud, data, AI and security, which are fundamental to its strong digital core. Our cloud business is now $26 billion and grew 48%, with Cloud First being the biggest driver of the growth.

Companies are also seeking to execute compressed transformations, the second theme. These mean bold programs on accelerated time frames often spanning multiple parts of the enterprise at the same time. Managed services have become increasingly strategic as companies seek to move faster and leverage our digital platform and talent, and they are turning to Accenture because of our excellence across the enterprise. We are unmatched in terms of breadth and depth of capabilities and industry coverage.

We continue to see a growing number of companies embrace the need to harness the five key forces of change that we have identified for the next decade. Total enterprise reinvention, talent, sustainability, the Metaverse Continuum and the ongoing tech revolution, which in turn will fuel our growth.

My take

The outlook may be uncertain, but Accenture has had a very solid year and appears confident about the future.