Accenture sees Q1 revenue below estimates due to currency volatility

Accenture’s first-quarter guidance of $15.20 billion – $15.75 billion, much below the street expectations, does not bode well for the Indian IT services industry.

Accenture, which announced its quarter fourth number and full-year performance, saw its numbers getting impacted by currency volatility. Revenue for the quarter ended August 31, 2022 came in at $15.4 billion. The foreign exchange impact for the quarter was approximately negative 7.5 per cent, compared with the assumption of a negative 8 per cent impact provided in the company’s third-quarter earnings release.

For the full year the company reported revenue of $61.6 billion– an increase of 22 per cent in US dollar terms.

Accenture’s consulting revenue for the quarter was up 14 per cent at $8.33 billion. Its outsourcing numbers, which is similar to the work that the IT services industry does, were up 16 per cent at $7.09 billion for the quarter.

The continued volatility of the US dollar to other currencies is expected to impact the company in the upcoming quarters too. Accenture expects revenues for the first quarter of fiscal 2023 to be in the range of $15.2 billion to $15.75 billion, an increase of 10 per cent to 14 per cent in local currency, reflecting the company’s assumption of an approximately negative 8.5 per cent foreign-exchange impact compared with the first quarter of fiscal 2022.

Julie Sweet, chair and CEO, Accenture, said, “The depth, breadth and relevance of our services uniquely position us to help our clients achieve resilience, agility and growth across every part of the enterprise. Records across all financial metrics – new bookings, revenues, EPS and cash flow, reflect the continued successful execution of our growth strategy.”