This company had $1 billion in quarterly AI bookings - and it's not a chip maker

By Tomi Kilgore

Accenture already has 57,000 AI employees and plans to add 23,000 more over the next couple of years

Shares of Accenture PLC rallied toward a six-month high Thursday, after the management consultant got back to beating earnings expectations and continued to tout itself as a play on the boom in generative artificial intelligence.

Chief Executive Julie Sweet said in Accenture's fiscal fourth-quarter earnings release that the company "continue[d] to accelerate our leadership in generative AI."

The stock (ACN) climbed 5.6% in afternoon trading, putting it on track to close at a six-month high.

While many still appear to focus on semiconductor, chip equipment and server companies as drivers of the AI boom, Accenture is involved in a different way. The company provides consulting services to corporate clients looking to reinvent themselves to benefit from generative AI.

"We believe the introduction of gen AI signifies a transformative era that is set to drive growth for us and our clients over the next decade, much like digital technology has in the last decade, and continues to do so," Sweet said, according to an AlphaSense transcript of the company's earnings call with analysts.

"In every industry, there is a challenge or opportunity that gen AI can now uniquely solve," Sweet added.

Accenture said it had $1 billion in new generative-AI bookings in the fourth quarter, to bring its fiscal 2024 total to $3 billion. And for the full fiscal year, the company recorded nearly $900 million in new generative-AI revenue, or about triple what it recorded a year ago.

CFRA analyst Veronica Pasko reiterated her strong buy rating on Accenture's stock while raising the price target to $424 from $376. Pasko feels continued growth in AI bookings is key for Accenture, "given the importance of establishing early AI leadership, which [Accenture] is accomplishing."

The company said it now has about 57,000 AI employees, up from 55,000 in the third quarter and 53,000 in the second quarter. The steady growth is part of the company's plan to have an 80,000 AI workforce by the end of fiscal 2026.

That business still has room to grow for Accenture, as the company had a total of $20.1 billion in new bookings during the fourth quarter to Aug. 31. And at the end of the last fiscal year, Accenture had a total of about 733,000 employees.

Separately, the company reported fourth-quarter net income that rose to $1.69 billion, or $2.66 a share, from $1.37 billion, or $2.15 a share, in the same period a year ago.

Excluding nonrecurring items, adjusted earnings per share increased to $2.79 from $2.71 and topped the FactSet EPS consensus of $2.78.

The company had missed EPS expectations for the third-quarter, to snap a seven-quarter streak of beats.

Revenue grew 2.6% to $16.41 billion, above the FactSet consensus of $15.99 billion, after the company missed expectations the previous two quarters.

For the fiscal first quarter, Accenture expects revenue of $16.85 billion to $17.45 billion, which surrounds the current FactSet consensus of $17.07 billion.

For fiscal 2025, the company is guiding for net EPS of $12.55 to $12.91, while the current FactSet EPS consensus is $12.85.

Accenture's stock has rallied 16.7% over the past three months, while the S&P 500 index SPX has gained 4.9%.

-Tomi Kilgore

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09-26-24 1559ET

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