Accenture PLC

Thank you for standing by. Welcome to the Accenture's fourth quarter fiscal 2023 earnings call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. If you wish to ask a question, please press 1, then 0 on your touch-tone phone. You will hear an acknowledgement that you've been placed into queue, and you can remove yourself from queue at any time by repeating the 1-0 command. Should you require assistance from an operator during the call, please press star, then zero, and an operator will assist you offline. As a reminder, today's conference is being recorded. I would now like to turn the conference over to our host, Katie O'Connor, Managing Director, Head of Investor Relations. Please go ahead.

Thank you, Operator, and thanks, everyone, for joining us today on our fourth quarter and full fiscal 2023 earnings announcements. As the operator just mentioned, I'm Katie O'Connor, Managing Director, Head of Investor Relations. On today's call, you will hear from Julie Sweet, our Chair and Chief Executive Officer, and Casey McClure, our Chief Financial Officer. We hope you've had an opportunity to review the news release we issued a short time ago. Let me quickly outline the agenda for today's call. Julie will begin with an overview of our results. Casey will take you through the financial details, including the income statement and balance sheet, along with some key operational metrics for both the fourth quarter and full fiscal year. Julie will then provide a brief update on our market positioning before Casey provides our business outlook for the first quarter and full fiscal year 2024. We will then take your questions before Julie provides a wrap at the end of the call. Some of the matters we'll discuss on this call, including our business outlook, are forward-looking and as such are subject to known and unknown risks and uncertainties, including but not limited to those factors set forth in today's news release and discussed in our annual report on Form 10-K and quarterly reports on Form 10-Q and other SEC filings. These risks and uncertainties could cause actual results to differ materially from those expressed in this call. During our call today, we will reference certain non-GAAP financial measures, which we believe provide useful information for investors. We include reconciliation of non-GAAP financial measures where appropriate to GAAP in our news release or in the 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, Katie, and everyone joining us. And thank you to the approximately 733,000 Accenture people who have worked hard to be at the center of our clients' business across our fiscal year 23. Our laser focus on creating 360-degree value for our clients and all our stakeholders is reflected in our overall strong results for the year. With record bookings of $72 billion, We had a record 106 clients with quarterly bookings greater than 100 million in FY23, up from 100 last year. We now have 300 Diamond clients, our largest client relationships, an increase of 33 from last year, demonstrating yet again the depth and breadth of our capabilities and the trust our clients have in us. We delivered revenues of $64 billion for the year, representing 8% growth in local currency while continuing to take market share. We expanded adjusted operating margin by 20 basis points and delivered adjusted EPS growth of 9%, while continuing to significantly invest in our business and our people, with capital deployed of over $2.5 billion across 25 acquisitions. $1.3 billion in R&D, assets, platforms, and industry solutions, and $1.1 billion invested in the training and development of our people. And we generated free cash flow of $9 billion, allowing us to return over $7 billion of cash to shareholders. And we are delivering a little ahead of schedule on our business optimization actions we announced in March to reduce structural costs to create greater resilience. We also continue to attract, retain, and inspire outstanding people through our talent strategy. We're making progress toward our commitment to net zero by 2025, and we invested in our communities to help ensure we have vibrant places where we work and live. I will give more detail a little later in the call. Taking a step back, coming off two fiscal years of double-digit growth and a truly extraordinary FY22 year, We are very pleased with our FY23 results and the moves we have made to optimize our business. We are also rapidly taking an early leadership position in Gen AI, which will be an important part of the reinvention of our clients in the next decade. Last quarter, we shared that we had sold 100 projects with roughly $100 million in sales over the prior four months. Demand accelerated in Q4 with another approximately $200 million in Gen AI sales to bring our total to over $300 million for the year. We also are embracing the use of Gen AI in our own delivery of services and the way we work across Accenture. As we reflect on how our market has developed over the last year, we and our clients have had to navigate a macro environment that is tougher than we anticipated at the beginning of FY23. While it's played out differently across markets and industries, we have seen greater caution globally with lower discretionary spend, slower decision-making, and in particular for us, a significant impact from the challenges the comm, media, and tech industries have faced. For example, in Q4, where we grew 4% in local currency, if we exclude CMT, we grew 7% globally, 6% in North America, 9% in Europe, and 8% in growth markets. Against that backdrop, as we enter FY24, we remain laser-focused on creating value for our clients. While the pace of spending has changed, the fundamentals have not. All strategies continue to lead to technology, and companies will need to reinvent every part of their enterprise using tech, data, and AI to optimize operations and accelerate growth. To do so, they must build a digital core. We are continuing to see significant demand in areas like cloud migration and modernization, modern ERP and data and AI, and the emergence of Gen AI in particular, all of which represent areas of great opportunity. And it's still early. For example, we estimate that only 40% of workloads are in the cloud today. Only one-third of clients have modernized their ERP platforms, and less than 10% have what we define as mature data and AI capabilities. We believe helping build a strong digital core and then using it to reinvent will be the drivers of our growth. Our ability to advise, shape, and deliver value-led transformation, leveraging the from strategy and consulting to technology to our managed services across industries and geographic markets, along with our privileged position with our ecosystem partners, is what makes Accenture unique. And you can see this unique positioning in the number of our diamond clients and clients who turn to us for large-scale transformation.