Accenture reported financial results for the second quarter of fiscal 2020, ended Feb. 29, 2020, with revenues of $11.1 billion, an increase of 7% in U.S. dollars and 8% in local currency over the same period last year.
Diluted earnings per share were $1.91, a 10% increase from the second quarter last year. Operating income was $1.49 billion, a 7% increase over the same period last year, and operating margin was 13.4%, an expansion of 10 basis points.
New bookings for the quarter were $14.2 billion, with consulting bookings of $7.2 billion and outsourcing bookings of $7.0 billion.
Julie Sweet, Accenture’s chief executive officer, said, “The world is now facing a global health crisis and significant disruption in the global economy. I am incredibly proud of how our leadership team and all our people have rallied to ensure the safety and well-being of each other while continuing to serve our clients at this time of great need. We exited the first half of our fiscal year in a clear position of strength — delivering excellent results, gaining significant market share and continuing to successfully execute our growth strategy. As we move forward, we will focus on helping our clients navigate and succeed in this uncertain period and continue to invest in our business and our people for the long term.”
Financial Review Revenues for the second quarter of fiscal 2020 were $11.14 billion, compared with $10.45 billion for the second quarter of fiscal 2019, an increase of 7% in U.S. dollars and 8% in local currency, at the top end of the company’s guided range of $10.85 billion to $11.15 billion. The foreign-exchange impact for the quarter was approximately negative 1%, consistent with the assumption provided in the company’s first-quarter earnings release.
Consulting revenues for the quarter were $6.17 billion, an increase of 7% in U.S. dollars and 8% in local currency compared with the second quarter of fiscal 2019.
Outsourcing revenues were $4.97 billion, an increase of 6% in U.S. dollars and 8% in local currency compared with the second quarter of fiscal 2019. Diluted EPS for the quarter were $1.91, compared with $1.73 for the second quarter last year. The $0.18 increase in EPS reflects:
a $0.14 increase from higher revenue and operating results; and
a $0.04 increase from higher non-operating income. Gross margin (gross profit as a percentage of revenues) for the quarter was 30.2%, compared with 29.2% for the second quarter last year. Selling, general and administrative (SG&A) expenses for the quarter were $1.87 billion, or 16.8% of revenues, compared with $1.67 billion, or 16.0% of revenues, for the second quarter last year.
Operating income for the quarter increased 7%, to $1.49 billion, or 13.4% of revenues, compared with $1.39 billion, or 13.3% of revenues, for the second quarter of fiscal 2019. The company’s effective tax rate for the quarter was 17.1%, compared with 17.1% for the second quarter last year.
Net income for the quarter was $1.25 billion, a 10% increase from $1.14 billion for the second quarter last year.
Operating cash flow for the quarter was $1.53 billion and property and equipment additions were $165 million. Free cash flow, defined as operating cash flow net of property and equipment additions, was $1.37 billion for the quarter. For the same period last year, operating cash flow was $1.36 billion; property and equipment additions were $140 million; and free cash flow was $1.22 billion.
Days services outstanding, or DSOs, were 39 days at Feb. 29, 2020, compared with 40 days at Aug. 31, 2019 and 40 days at Feb. 28, 2019.
Accenture’s total cash balance at Feb. 29, 2020 was $5.4 billion, compared with $6.1 billion at Aug. 31, 2019.
New bookings for the second quarter were $14.2 billion and reflect a negative 1% foreign currency impact compared with new bookings in the second quarter last year.
Consulting new bookings were $7.2 billion, or 50% of total new bookings.
Outsourcing new bookings were $7.0 billion, or 50% of total new bookings.
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