Accenture CEO: ‘Ongoing Uncertainty’ From Trump Cost-Cutting Plans

‘As you know, the new administration has a clear goal to run the federal government more efficiently. During this process, many new procurement actions have slowed, which is negatively impacting our sales and revenue,’ says Accenture Chair and CEO Julie Sweet.

Accenture stock fell 7 percent Thursday after CEO Julie Sweet warned that the consulting giant would take a revenue hit as a result of the Trump administration’s focus on trimming costs while also mentioning potential opportunities from the shifts in policy priorities.

While Sweet said in her prepared remarks at the company’s second fiscal quarter 2025 earnings call on Thursday that Accenture was very pleased with the quarter’s results as Accenture continues to deliver on its strategy to return to strong growth in fiscal year 2025, she said that growth has been affected in a couple of areas with changes being put in place by the current administration. She did not mention President Trump or Elon Musk-led DOGE, the Department of Government Efficiency, by name.

The first is at Accenture Federal Services, which accounted for about 8 percent of Accenture’s global revenue and 16 percent of its Americas revenue in fiscal 2024.

“As you know, the new administration has a clear goal to run the federal government more efficiently,” she said. “During this process, many new procurement actions have slowed, which is negatively impacting our sales and revenue. In addition, recently, the General Service Administration has instructed all federal agencies to review their contracts with the top 10 highest paid consulting firms contracting with the U.S. government, which includes Accenture Federal Services. The GSA’s guidance would try to terminate contracts that are not deemed mission-critical by the relevant federal agencies. While we continue to believe our work for federal clients is mission-critical, we anticipate ongoing uncertainty as the government’s priorities evolve and these assessments unfold.”

That said, changes in the federal government also present potential opportunities, Sweet said.

“Based on our significant experience across federal and commercial clients, we see major opportunities over time for us to help consolidate, modernize, and reinvent the federal government, to drive a whole new level of efficiency,” she said.

The Wall Street Journal, citing a person familiar with the matter, reported that the General Services Administration has nixed about 1,700 consulting contracts across various federal agencies since Trump was inaugurated.

The second impact from changes in Washington, D.C., is an elevated level of what was already significant uncertainty in the global economic and geopolitical environment, Sweet said.

“[This marks] a shift from our first quarter FY 25 earnings report in December,” she said. “At the same time, we believe the fundamentals of our industry remain strong, and we are very well-positioned with our clients because all strategies continue to lead to reinventions or new ways of working tech, data, and AI. We are confident in executing our strategy to help clients reinvent.”

When asked by an analyst during the question-and-answer portion of the conference call about Accenture’s second fiscal quarter federal business growth rate and expectations for the second half of the year, Sweet said that Accenture does not give that kind of guidance other than at the end of the fiscal year.

Accenture is pleased with its second fiscal quarter performance and that it was able to update its guidance for the full year, she said.

“[We’re] pleased with how our business is sufficient with the larger deals coming online, which was a very deliberate part of our strategy,” she said. “And then, as you think about Q3 and the full year, it includes our current estimates and assumptions of the potential impact of Federal and the overall environment.”

When asked about potential risks to Accenture’s federal revenue, Sweet declined to be any more specific.

“What I would say is, what we’ve been clear about is the guidance range we’re giving for the quarter and for the year reflects our best view of the impact that’s coming from both the slowing of new procurement actions and the assessments of the work that we’re doing. And so we don’t get into different pieces of it.”

Sweet, responding to an analyst question about a possible slowdown in spending, said that the company has not seen a slowdown in the last few weeks.

“What we commented on, which I think everyone’s well aware of, is in the last few weeks there’s been an elevated level of what was already significant uncertainty,” she said. “And there’s a couple of big themes around that. Obviously, tariffs, and that’s a global discussion. That is not just an Americas discussion. And also consumer sentiment, which is a little bit more of an Americas discussion. And so we’re really just commenting on what I think we’re all seeing, and that’s only been in the last few weeks. And we’re already in the heart of the discussions of clients globally who are talking about it. And you’re seeing, for example, in Europe, there was an announcement of, like, major spending, you know, in areas like defense, where we’ve been investing, and are well positioned.”

Accenture’s AI Business Continues To Bloom

Aside from the impact of changes in the federal business, Sweet used her prepared remarks to discuss Accenture’s advances in the AI business.

“We had another milestone quarter in GenAI, with $1.4 billion in new bookings and approximately $600 million in revenue. … We continue to invest significantly in our business to drive additional growth in highly strategic areas with over $250 million deployed primarily across six strategic acquisitions, and we invested in our people with approximately 15 million training hours this quarter, designed to help us bring the latest in solutions and technology to our clients, provide our people with marketable skills and reinvent our services using Gen AI,” she said. “We increased our data and AI workforce to approximately 72,000 [employees], continuing progress against our goal of 80,000 by the end of FY 2026.”

Accenture’s clients continue to be focused on reinvention, and GenAI is a catalyst for reinvention, Sweeny said.

“They’re focused on building the digital core with more AI being built in, which is driving our growth, and on areas such as the customer and core operations, including supply chain and Industry X,” she said. “For our clients, the twin themes of achieving both cost efficiency and growth continue. The number of clients embracing GenAI is increasing significantly, and we are starting to see some tangible examples of scale in data and AI.”

Accenture By The Numbers

For its second fiscal quarter 2025, which ended February 28, Accenture reported total revenue of $16.66 billion, an increase of 5 percent over its second fiscal quarter 2024 revenue.

That revenue was almost divided evenly between the company’s two major businesses, with consulting revenue of $8.28 billion, up 3 percent, and managed services revenue of $8.38 billion, up 8 percent.

By industry group, Accenture reported communications, media, and technology revenue of $2.73 billion, up 3 percent; financial services revenue of $3.01 billion, up 7 percent; health and public service revenue of $3.61 billion, up 8 percent; produces revenue of $5.05 billion, up 6 percent; and resources revenue of $2.26 billion, up 1 percent.

Americas revenue rose 9 percent year-over-year to $8.55 billion.

Accenture also reported GenAI new bookings of $1.4 billion.

The company also reported GAAP net income of $1.82 billion or $2.82 per share, up from last year’s $1.71 billion or $2.63 per share.

Looking Ahead

Looking ahead, Accenture expects revenue for its fiscal third quarter 2025 to be in the range of $16.9 billion to $17.5 billion. For full fiscal 2025, Accenture expects revenue growth in the range of 5 percent to 7 percent. The company also expects full year earnings to be in the range of $12.55 to $12.79 per share, or 5 percent to 7 percent growth over adjusted fiscal 2024.

Accenture also expects to invest about $2 billion to $3 billion in acquisitions in all of fiscal year 2025.

David Harris contributed to this report.