Accenture beats estimates on AI demand, but shares slide on outlook

Accenture posted stronger-than-expected first-quarter results on Thursday, helped by rising demand for artificial intelligence-led IT services, as clients increasingly turn to automation and machine learning to overhaul operations.

The technology consulting firm reported revenue of $18.7 billion for the quarter, up 6% from a year earlier and ahead of Wall Street expectations of $18.53 billion.

Adjusted earnings climbed 10% to $3.94 a share, surpassing forecasts of $3.74, according to FactSet.

Net income slipped slightly to $3.54 a share from $3.59 a year ago.

New bookings rose 12% to $20.9 billion, including $2.2 billion tied specifically to advanced AI projects, underlining how central artificial intelligence has become to Accenture’s growth strategy.

However, the company forecast second-quarter revenue of between $17.35 billion and $18 billion, the midpoint of which came in slightly below analysts’ expectations of $17.78 billion, according to LSEG data.

Shares fell by more than 2% at market open.

“The strong print wasn’t enough to calm investors’ fears about AI cannibalising the information-technology and consulting sectors,” Barron’s wrote.

AI push drives bookings momentum

Chief executive Julie Sweet said the company saw broad-based strength across large deals, reflecting clients’ urgency to integrate AI into their businesses.

“I am very pleased with our $21 billion in new bookings, including 33 clients with quarterly bookings greater than $100 million,” Sweet said.

Accenture’s push into AI mirrors a wider shift across corporate America, as companies adopt machine learning tools to automate routine tasks and tackle more complex problems.

Investors have bet that these changes could unlock productivity gains and new revenue streams for service providers.

Earlier this month, Accenture deepened its AI strategy by partnering with leading startups Anthropic and OpenAI.

The collaborations are aimed at training employees on the latest models and capabilities, enabling consultants to deploy AI tools more effectively for clients.

Challenges and headwinds

Despite the strong quarterly performance, Accenture flagged ongoing challenges in parts of its business.

Demand from the public sector and government clients remains uneven, as federal agencies rein in spending and redirect budgets.

Investors remain wary that rapid advances in AI could disrupt traditional consulting and IT services.

Accenture shares are down about 22% so far this year, tracking declines at peers such as Salesforce and Adobe, whose stocks have also fallen sharply amid automation concerns.

Exposure to government contracts has added pressure, particularly during the first half of the year.

Consulting model under transformation

AI is reshaping not only client work but also Accenture’s internal operations.

Consultants are increasingly acting as long-term transformation partners, helping design and build AI systems rather than focusing solely on strategy advice.

Sweet has earlier said Accenture’s partnership with OpenAI would “accelerate enterprise reinvention and business outcomes” for clients.

The company is expected to have the largest number of professionals trained through OpenAI certifications.

The shift is also changing the firm’s workforce. Sweet previously said Accenture has been exiting employees who cannot be reskilled for the AI era.

Accenture reaffirmed its full-year outlook, forecasting adjusted earnings of $13.52 to $13.90 a share and revenue growth of 2% to 5% in local currency.

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