Accenture PLC

investor relations section of our website at Accenture.com. As always, Accenture assumes no obligation to update the information presented on this conference call. Now let me turn the call over to Julie.

Thank you, Angie, and thank you everyone for joining us. Today we are proud to announce outstanding financial results for the second quarter of fiscal 21 and our return to pre-COVID level financial results a quarter earlier than we expected and with a tough compare. Let's first go back 12 months ago on March 19th, only eight days after the pandemic was declared when we were all together to announce our outstanding fiscal year 20 Q2 financial results. Results you may not remember because at the time we were all focused on the go forward potential impact of the pandemic. In Q2 of fiscal year 20, we had 8% revenue growth in local currency, our then highest bookings ever of $14.2 billion and strong underlying profitability and free cash flow. We also announced that 18 clients that quarter had bookings over $100 million. With this backdrop of fiscal year 20 Q2, the significance of this Q2's results in fiscal year 21 becomes even more clear. We have delivered 5.4% revenue growth in local currency, which includes a reduction of two percentage points from a decline in revenue from reimbursable travel costs, meaning apples to apples, 5.4% is in the zone of fiscal year 20 Q2 revenue when you exclude the travel costs related revenue. We have delivered bookings of $16 billion, beating our previous record set in Q2 last year by $1.8 billion and we have delivered strong profitability and free cash flow. This quarter, 18 clients had bookings over $100 million and we continue to take market share faster than pre-COVID. In H1, we have accelerated our investment in B&A with approximately $1.1 billion of capital deployed and we are increasing our programmatic B&A investment to at least $2 billion for FY21 from the $1.7 billion we previously communicated. And for the last 12 months, we have remained consistent. We gave guidance every quarter which we met or beat. We deliberately invested in our people and preserved our talent to continue to serve our clients as demand came back. And we continue to significantly invest in our business and our communities. And throughout, we have lived our core values, including maintaining without pause our commitment to make more progress on diversity and inclusion and sustainability. These financial results reflect these choices, the strength of our core values and the power of our laser focus on creating client value and being a trusted partner, as well as our incredibly talented people, strong ecosystem relationships and the resilience of our growth strategy, as well as the substantial investments we have made year in and year out since we set out to be the leader in digital cloud and security and continuous innovation. They also reflect the operational rigor and discipline that long has been a hallmark of our success. I want to thank our people for their hard work and continued dedication to to our clients, and for delivering on our commitments. Casey, over to you.

Thank you, Julie, and thanks to all of you for taking the time to join us on today's call. We were very pleased with our overall results in the second quarter, which exceeded our expectations and reflects strong momentum across our business. We are particularly pleased with our record new bookings and strong revenue growth, which demonstrate our leading position in the market as a trusted partner to deliver value for our clients. Based on the strength of our second quarter results and the confidence in the second half of the fiscal year, we are increasing all elements of our full year outlook, which I will cover in more detail later in our call. Now, let me begin by summarizing a few of the highlights for the quarter. Revenues grew 5.4% in local currency and continue to include a reduction of approximately two percentage points from a decline in revenues from reimbursable travel costs. Q2 revenues were nearly $140 million above our guided range, driven by broad-based over-delivery across all dimensions, markets, services, and industries, as our business built back even faster than anticipated. We also continued to extend our leadership position with growth significantly above the market. We saw broad improvement in industry trends. Approximately 50% of our revenues came from seven industries that were less impacted by the pandemic, which in aggregate accelerated this quarter to low double-digit growth. At the same time, we saw continued improvement from clients in highly impacted industries, which collectively represents over 20% of our revenues and declined mid-single digits. Operating margin was 13.7%, an increase of 30 basis points for the quarter and 40 basis points year-to-date, reflecting strong underlying profitability as we continue to invest in our business and our people, including the one-time bonus we just announced. We continued to benefit from lower spend on travel, meeting, and events. And we delivered very strong EPS of $2.03, up 10% over fiscal 20, after adjusting both years for gains in investment. And finally, we generated significant free cash flow of $2.4 billion in the quarter and $4 billion year-to-date. We continue to execute on our strategic capital allocation objective with roughly $3.1 billion returned to shareholders via dividends and share repurchases year to date. We've made investments of $1.1 billion in acquisitions, primarily attributed to 19 transactions in the first half of the year. And we expect to invest at least $2 billion in acquisitions this fiscal year. With that, let me turn to some of the details starting with new bookings. New bookings were a record at $16 billion, representing a 13% growth in US dollar over previous records in Q2 of last year. We had a very strong overall book-to-bill of 1.3 and a quarter and 1.2 year-to-date. Consulting bookings were $8 billion, a record high with a book-to-bill of 1.2. Outsourcing bookings were also a record at $8 billion with a book to bill of 1.4. Similar to last quarter, our bookings were driven by both technology services and operations. We were pleased with the strength of our bookings in strategy and consulting with a book to bill of 1.2. Turning now to revenues. Revenues for the quarter were $12.1 billion, an 8% increase in U.S. dollars and 5.4% in local currency, including a reduction of approximately 2% from a decline in revenues from reimbursable travel costs. Consulting revenues for the quarter were $6.4 billion, of 4% U.S. dollars and up 1% local currency, including a reduction of approximately 3% from a decline in revenues from reimbursable travel costs. Outsourcing revenues were $5.6 billion of 14% in U.S. dollars and 11% in local currency. Taking a closer look at our service dimensions, both operations and technology services grew double digits. As expected, strategy and consulting services declined high single digits, and we expect strategy and consulting to return to growth in Q3. Turning to our geographic markets, the industry dynamics that I mentioned earlier continue to play out in a similar manner across all three markets. In North America, revenue growth was 7% in local currency. In Europe, revenues grew 3% in local currency, driven by mid-single-digit growth in Italy and the UK. In growth markets, we delivered 6% revenue growth in local currency, driven by double-digit growth in Japan. Moving down the income statement, Gross margin for the quarter was 29.7% compared with 30.2% for the same period last year. Sales and marketing expense for the quarter was 9.4% compared with 10.4% for the second quarter last year. General and administrative expenses was 6.6% compared to 6.4% for the same quarter last year. Operating income was $1.7 billion in the second quarter, reflecting a 13.7% operating margin, up 30 basis points compared with Q2 last year. Before I continue, as a reminder, in Q2 last year, we recognized an investment gain which impacted our tax rate and increased EPS by 7 cents. This quarter, we again recognized an investment gain which impacted our tax rate and increased EPS by 21 cents. The following comparisons exclude these impacts and reflect adjusted results. Our adjusted effective tax rate for the quarter was 17.5% compared with the adjusted effective tax rate of 17.1% for the second quarter last year. Adjusted diluted earnings per share were $2.03 compared with an adjusted EPS of $1.84 in the second quarter last year. This reflects a 10% year-over-year increase. Days service outstanding were 34 days compared to 38 days last quarter and 39 days in the second quarter of last year. Free cash flow for the quarter was $2.4 billion. resulting from cash generated by operating activities of $2.5 billion, net of property and equipment additions of $93 million. Our cash balance of February 28th was $9.2 billion, compared with $8.4 billion at August 31st. With regards to our ongoing objective to return cash to shareholders, in the second quarter, we were purchased or redeemed 4.6 million shares for $1.2 billion, and an average price of $2.5 $155.29 per share. As of February 28th, we had approximately $5 billion of share repurchase authority remaining. Also in February, we paid a quarterly cash dividend of 88 cents per share for a total of $561 million. This represented a 10% increase over last year. And our board of directors declare a quarterly cash dividend of 88 cents per share to be paid on May 14th a 10% increase over last year. So at the halfway point of fiscal 21, we feel really good about our results to date and our positioning for the remainder of the year, realizing that the pace of recovery is hard to accurately predict. Now, let me turn it back to Julie.