Accenture reported financial results for the third quarter of fiscal 2020, ended May 31, 2020, with revenues of $11.0 billion, a decrease of 1% in U.S. dollars and an increase of 1.3% in local currency over the same period last year. Revenue growth for the quarter was reduced approximately 2 percentage points by a decline in revenues from reimbursable travel costs.
Diluted earnings per share were $1.90, compared with $1.93 for the third quarter last year.
Operating income was $1.71 billion, compared with $1.72 billion for the same period last year, and operating margin was 15.6%, an expansion of 10 basis points.
New bookings for the quarter were $11.0 billion, with consulting bookings of $6.2 billion and outsourcing bookings of $4.8 billion.
Julie Sweet, Accenture’s chief executive officer, said, “In times of crisis, our laser focus on creating value for our clients, our ability to deliver mission-critical services for the world’s leading companies, and our unwavering commitment to our people and to living our core values inside and outside Accenture make a difference. I am proud of how we helped ensure the business continuity of our clients, while prioritizing the health and well-being of our people, and continued to deliver on our commitments to our shareholders. We delivered third-quarter financial results that aligned with our expectations, including revenue growth in the top end of our guided range as well as strong profitability and free cash flow, while continuing to invest in our business and our people.”
Financial Review
Revenues for the third quarter of fiscal 2020 were $11.0 billion, compared with $11.1 billion for the third quarter of fiscal 2019, a decrease of 1% in U.S. dollars and a 1.3% increase in local currency. Revenues for the quarter reflect a foreign-exchange impact of approximately negative 2.5%, compared with the negative 1.5% impact we had previously assumed. Adjusting for the actual foreign-exchange impact, the company’s guided range for quarterly revenues was approximately $10.65 billion to $11.05 billion. Accenture’s third quarter fiscal 2020 revenues were in the top end of this adjusted range.
Consulting revenues for the quarter were $6.0 billion, a decrease of 4% in U.S. dollars and 2% in local currency compared with the third quarter of fiscal 2019, including a reduction of approximately 3 percentage points from a decline in revenues from reimbursable travel costs.
Outsourcing revenues were $5.0 billion, an increase of 3% in U.S. dollars and 5% in local currency compared with the third quarter of fiscal 2019.
Diluted EPS for the quarter were $1.90 compared with $1.93 for the third quarter last year. The $0.03 decrease in EPS reflects: a $0.01 increase from a lower share count; offset by a $0.01 decrease from lower revenue and operating results;▪ a $0.02 decrease from higher non-operating expense; and a $0.01 decrease from higher income attributable to noncontrolling interests.
Gross margin (gross profit as a percentage of revenues) for the quarter was 32.1%, compared with 31.8% for the third quarter last year. Selling, general and administrative (SG&A) expenses for the quarter were $1.82 billion, or 16.5% of revenues, compared with $1.81 billion, or 16.3% of revenues, for the third quarter last year.
Operating income for the quarter was $1.71 billion, or 15.6% of revenues, compared with $1.72 billion, or 15.5% of revenues, for the third quarter of fiscal 2019.
The company’s effective tax rate for the quarter was 25.5%, compared with 25.6% for the third quarter last year.
Net income for the quarter was $1.25 billion, compared with $1.27 billion for the third quarter last year.
Operating cash flow for the quarter was $2.74 billion and property and equipment additions were $150 million. Free cash flow, defined as operating cash flow net of property and equipment additions, was $2.59 billion for the quarter. For the same period last year, operating cash flow was $2.12 billion; property and equipment additions were $140 million; and free cash flow was $1.98 billion.
Days services outstanding, or DSOs, were 41 days at May 31, 2020, compared with 40 days at Aug. 31, 2019 and 39 days at May 31, 2019.
Accenture’s total cash balance at May 31, 2020 was $6.4 billion, compared with $5.4 billion at Feb. 29, 2020 and $6.1 billion at Aug. 31, 2019.
New Bookings
New bookings for the third quarter were $11.0 billion, an increase of 4% in U.S. dollars and 6% in local currency from the third quarter last year.
Consulting new bookings were $6.2 billion, or 56% of total new bookings.
Outsourcing new bookings were $4.8 billion, or 44% of total new bookings.
Revenues by Geographic Market
Revenues by geographic market were as follows:
North America: $5.24 billion, compared with $5.15 billion for the third quarter of fiscal 2019, an increase of 2% in both U.S. dollars and local currency.
Europe: $3.57 billion, compared with $3.77 billion for the third quarter of fiscal 2019, a decrease of 5% in U.S. dollars and 2% in local currency.▪
Growth Markets: $2.18 billion, compared with $2.18 billion for the third quarter of fiscal 2019, flat in U.S. dollars and an increase of 5% in local currency.
Revenues by Industry Group
Revenues by industry group were as follows:
Communications, Media & Technology: $2.20 billion, compared with $2.25 billion for the third quarter of fiscal 2019, a decrease of 2% in U.S. dollars and flat in local currency.
Financial Services: $2.14 billion, compared with $2.20 billion for the third quarter of fiscal 2019, a decrease of 3% in U.S. dollars and flat in local currency.
Health & Public Service: $2.02 billion, compared with $1.82 billion for the third quarter of fiscal 2019, an increase of 11% in U.S. dollars and 12% in local currency.
Products: $3.00 billion, compared with $3.08 billion for the third quarter of fiscal 2019, a decrease of 3% in U.S. dollars and 1% in local currency.
Resources: $1.64 billion, compared with $1.75 billion for the third quarter of fiscal 2019, a decrease of 6% in U.S. dollars and 3% in local currency.
We use cookies to help provide you with the best possible online experience.
By using this site, you agree that we may store and access cookies on your device.
You can find out more and set your own preferences here.
