Accenture CEO: GenAI Has The Potential To Be A ‘Catalyst Of Reinvention’

‘AI is both a technology and a new way of working, and the full value will only come from strategies built on both productivity and growth. And it will be used in every part of the enterprise,’ says Accenture Chair and CEO Julie Sweet.

Despite a challenging environment in fiscal 2024, Accenture used its expertise to help customers reinvent themselves with GenAI, Chair and CEO Julie Sweet Thursday told investors during the company’s fiscal fourth-quarter 2024 quarterly financial conference call.

Sweet said during her prepared remarks that Accenture believes GenAI will be the most transformative technology of the next decade.

“As a result, over the last four quarters, we have successfully positioned Accenture for strong growth in FY25,” she said. “When market conditions improve, we will be well positioned to capitalize on them.”

During the year, Accenture continued to grow faster than the market, take share and expand its earnings and margins while investing at scale, Sweet said. The company saw full fiscal year bookings grow 14 percent year over year to $81 billion and had 33 customers with quarterly bookings greater than $100 million in the fourth quarter. That brought the total of such bookings to 125 for the year, 19 more than last year, she said.

“With our clients prioritizing large-scale transformations, we doubled down on our strategy to be the reinvention partner of our clients,” she said.

For all of fiscal year 2024, Accenture had $3 billion in new GenAI bookings, including $1 billion in its fourth quarter, Sweet said. For the full fiscal year, it had nearly $900 million in revenue. This compares with fiscal 2023 when the company reported about $300 million in sales and roughly $100 million in revenue from GenAI.

“This was an area where our clients continued to buy small deals, and we focused on accelerating our growth here,” she said.

Accenture, ranked No. 1 on the CRN 2024 Solution Provider 500, has steadily bolstered its data and AI workforce and now has about 57,000 practitioners against its goal of 80,000 by the end of fiscal 2026, Sweet said.

“We invested in our people to continue to develop their marketable skills and to help us reinvent our services using GenAI,” she said. “Our people had approximately 44 million training hours this year, representing an increase of 10 percent predominantly due to GenAI training.”

Accenture’s fiscal 2024 growth was driven by customers looking to reinvent themselves using technology, data, AI and new ways of working, Sweet said.

“Reinvention requires a strong digital core,” she said. “In FY25, a significant driver of our growth will continue to be helping our clients with digital transformation, including building out their digital core and then using it to drive productivity and growth. We see the advent of GenAI and its tremendous potential acting as a catalyst for reinvention.”

Accenture’s investments in its advanced platforms, assets and solutions, process expertise, insight from scale and diversification, and its ability to design and build the solutions combined with its managed services are key differentiators for the company, Sweet said.

“AI is both a technology and a new way of working, and the full value will only come from strategies built on both productivity and growth,” she said. “And it will be used in every part of the enterprise. We believe the introduction of GenAI 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 as part of that. We expect that the work to prepare enterprise data, which is the fuel for AI, will be an increasing part of our growth.”

Every industry has a challenge or opportunity that GenAI can now solve, and Accenture’s deep understanding of the industry and the technology positions it to create real value from GenAI, Sweet said.

Sweet discussed several GenAI projects the company worked on during the quarter, including a project to help accelerate the transformation of TIAA’s retirement record- keeping capabilities and operations; a project to improve security around the Kuwait government’s central agency for information technology, a project to develop AI-powered underwriting solutions across multiple lines of business at QBE Insurance Group; and one focused on consumer experience transformation with Mondelez International.

Accenture has built many of its capabilities via acquisitions of companies around the world, Sweet said.

“As we look forward, we are excited about the opportunity to better serve our clients and differentiate in the market through the acquisitions we’ve made this last fiscal year,” she said. “As a reminder, we do acquisitions ultimately to drive our organic growth, our global footprint, [deepen] client relationships across industries, as well as [build a] strong ecosystem. [This] gives us a unique perspective on growth opportunities. We use acquisitions to scale quickly in growth areas, to build new skills in adjacent markets, and to deepen our technology, industry and functional expertise.”

The past 12 months have seen Accenture invest in its capital projects business via the acquisitions of U.S.-based Anser Advisory, Canada-based Comtech and Spain-based Boslan, Sweet said. “We recognized over $800 million in revenue on capital projects this fiscal year 2024,” she said.

In the health-care market, Accenture this year acquired U.S.-based Cognosante to create a new federal health portfolio in its federal service business, Sweet said. The company also acquired Nautilus Consulting in the U.K., a digital consultancy specializing in electronic patient records, and unveiled plans to acquire Germany-based health-care consultancy Consus.health, she said.

The European public service industry is also a growth market for Accenture, which acquired Germany-based Aris and Italy-based Intellera Consulting, she said.

Accenture By The Numbers

For its fiscal fourth quarter 2024, which ended Aug. 31, Accenture reported revenue of $16.41 billion, up 2.6 percent over the $16.00 billion the company reported for its fiscal fourth quarter 2023.

That beat analyst expectations for revenue by $20 million, according to Seeking Alpha.

This included North American revenue of $8.00 billion, up 5 percent; EMEA revenue of $5.64 billion, up 2 percent; and growth market revenue of $2.80 billion, down 3 percent. By industry, Accenture reported communications, media and technology revenue of $2.75 billion, up 2 percent; financial services revenue of $2.87 billion, down 5 percent; health and public service revenue of $3.61 billion, up 10 percent; product revenue of $4.95 billion, up 4 percent; and resources revenue of $2.22 billion, flat over last year.

Consulting accounted for $8.26 billion, up 1 percent, while managed services accounted for $8.15 billion, up 5 percent.

For the quarter, Accenture reported GAAP net income of $1.72 billion, or $2.66 per share, up from last year’s $1.41 billion, or $2.15 per share. On a non-GAAP basis, Accenture reported net income of $2.79 per share. That beat analyst non-GAAP expectations by 2 cents per share, according to Seeking Alpha.

For all of fiscal 2024, Accenture reported revenue of $64.90 billion, up 1.2 percent over the $64.11 billion it reported last year.

Accenture also reported GAAP net income for the year of $7.42 billion, or 11.44 per share, up from last year’s $6.87 billion, or $10.77 per share. On a non-GAAP basis, Accenture reported net income of $7.75 billion, or $11.95 per share, up from last year’s $7.58 billion, or $11.67 per share.

Looking ahead, for its first fiscal quarter 2025, Accenture expects revenue to be in the range of $16.85 billion to $17.45 billion, or an increase of 2 percent to 6 percent in local currency. For its full fiscal year 2025, the company expects revenue growth to be in the range of 3 percent to 5 percent over fiscal 2024.