Accenture on Thursday reported a 15 percent increase in revenue to $15.4 billion for the June-August period compared with the corresponding quarter a year ago. The IT services firm — which follows a September-August financial year — guided for revenue growth of 10-14 percent to $15.2-15.75 billion for the next quarter, which ends on November 30.
The expectation of a sequential dip in revenue growth comes at a time when lower IT spending — thanks to sticky red-hot inflation — and a stronger dollar continue to batter the IT space.
Accenture estimates the negative impact of foreign exchange to be at 8.5 percent for the September-November period.
It is for the quarter ended August 2022 improved by 10 basis points to 14.7 percent on a year-on-year basis, according to a regulatory filing. Its operating income increased 15.8 percent to $2.27 billion.
For the full year ending August 2023, Accenture guided for revenue growth to stand in the range of 8-11 percent in local currency terms. That is in stark contrast to its growth of 26 percent for the year ended August 2022.
It expects its operating margin to come in at 15.3-15.5 percent for the year ending August 2023.
The US dollar has risen about 16 percent against a basket of currencies so far in 2022 — riding on the back of the Fed's steep hikes in benchmark interest rates and rising geopolitical tensions.
A strong dollar typically eats into the profits of IT companies that convert foreign currencies into dollars.
Accenture typically starts a financial year with a weaker guidance and raises it gradually during the course of the year.
For instance, its guidance for the year 2020-21 was at 2-5 percent at initially, which it eventually raised to 11 percent. Similarly, it began the next year with a guidance of 12-15 percent and raised it to 21-22 percent in constant currency terms.
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