Accenture PLC

Thank you all for standing by. Welcome to Accenture's first quarter fiscal 2024 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 now on your phone. If you should require assistance during the call, please press star then 0. As a reminder, this 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 first quarter fiscal 2024 earnings announcement. 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 the first quarter. Julie will then provide a brief update on our market positioning before Casey provides our business outlook for the second quarter and full fiscal year 2024 we will then take your questions before Julie provide the wrap up 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 reconciliations 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. And thanks to our 743,000 people around the world for their incredible dedication and commitment every day, which is how we are able to consistently deliver 360-degree value for all our stakeholders. I am pleased that we delivered on our commitments this quarter while continuing to invest significantly in strategic areas to drive the next waves of growth, including extending our early leadership in generative AI. And we did so against a macro backdrop that continues to be challenging. Starting with our financial results, our bookings were $18.4 billion, representing 12% growth in local currency. We had 30 clients with quarterly bookings greater than $100 million in the quarter, and over half were in North America, representing the trust our clients have in us to be at the center of their major programs, spending, and ongoing reinvention. we delivered revenues of $16.2 billion for the quarter at the top end of our FX adjusted range, representing growth, 1% growth in local currency. We continue to take market share. As expected, we continue to see lower discretionary spend, which particularly impacts our consulting type of work, as well as slower decision-making, and our CMT industry group continues to be challenged. We remain on track with the business optimization actions we announced in March, to reduce structural costs to create greater resilience. And finally, we expanded adjusted operating margin by 20 basis points and delivered adjusted EPS growth of 6% while continuing to invest in our business and our people. Turning now to our investments. We closed 12 acquisitions this quarter for a total of $788 million in strategic areas across our geographic markets. In North America, we are continuing to build out our new growth area of capital projects, an $88 billion addressable market in North America, which we entered in August with the acquisition of Answer Advisory. In Q1, we added ComTech, a consulting and program management company for infrastructure projects in Canada. We also invested in the next digital frontier with our supply chain acquisition of the Shelby Group. We expanded our cloud capabilities with the acquisitions of Ocelot Consulting and Encapsulate, and we invested in digital marketing in the healthcare industry with the acquisition of Concentric Life. In EMEA, we expanded our cybersecurity capabilities with the acquisition of Innotech in Spain, enhanced our business process services in the insurance industry with the acquisition of OnService Group in Germany, and invested in digital healthcare and talent with the acquisitions of Nautilus Consulting and the Storytellers in the UK. Finally, in growth markets, we are focused on the cloud opportunity with the acquisition of Solnet in New Zealand, along with cybersecurity with the acquisition of Nemo in Mexico, and on digital marketing services with the Song acquisition of Signal in Japan. Our ability to invest at scale to fuel our organic growth is a competitive advantage. For example, in EMEA, we are focusing on pivoting our CMT business. We are investing with Vodafone to create a strategic partnership to commercialize its market leading shared services operations and unlock new sources of growth and efficiency, enhance speed to market and new customer opportunities for their operating companies and partner markets. Together, we plan to create a new data and AI driven shared services model and a scaled commercially driven and more efficient organization with higher quality services and enhanced speed to market for its portfolio of offerings. The new unit will utilize Accenture's world-class technology, transformation, and managed services, such as its digital solutions and platforms, and deep AI expertise. It will also tap into our well-known learning capabilities to continuously create new skilling and career paths for its people. This move speaks to Vodafone's ambition to work in new ways, reduce structural complexity, reinvent their company and the industry. And of course, we continue to invest in learning for our people with approximately 8 million training hours in the quarter, representing an average of 12 hours per person. Turning to generative AI, our growth and investments. We continue to take an early leadership position in GenAI, which will be an important part of the reinvention of our clients in the next decade. Last quarter, we shared that we had sold approximately 300 projects with $300 million in sales in all of FY23. Demand continued to accelerate in Q1 with over $450 million in GenAI sales. As you know, we are investing $3 billion in AI over three years. For many of our clients, 2023 was a year of generative AI experimentation. We are now focusing on helping our clients in 2024 realize value at scale. We're excited about the recent launch of our specialized services to help companies customize and manage foundation models. We're seeing that the true value of generative AI is to deliver on personalization and business relevance. This is driven by context and accuracy, data readiness, along with foundation model choices and customization are some of the most important steps and decisions that companies will make in the next year as they pursue value. Our clients are going to use an array of models to achieve their business objectives. Our proprietary switchboard allows the user to select the combination of models to address business context or factors like cost or accuracy. And we will offer rigorous training and certification programs to organizations using these new services to customize and scale GenAI solutions and transform every link in their value chain. We are also investing in AI acquisitions. For example, we recently announced our intent to acquire Amagama, an Italy-based firm that helps companies advance their uses of AI and generative AI technologies. With this acquisition, we will add 90 experienced AI professionals many specializing in generative AI, along with expertise that includes engineering, mathematics, economics, historians, philosophers, and designers who will join our growing network of professionals in our advanced center for AI. And we are progressing towards our goal of doubling our deeply skilled data and AI practitioners from 40,000 to 80,000 with an additional 5,000 practitioners as of Q1. Finally, A few additional highlights of the 360-degree value that we created this quarter. We recently achieved our highest brand value and ranked to date on Interbrand's prestigious Best Global Brands list, increasing to $21.3 billion and ranking number 30. We jumped from number 17 to number 10 on the 2023 World's Best Workplaces list by Fortune and Great Place to Work. This recognition is particularly noteworthy because it is based on feedback from our people. We were recognized for the seventh year in a row on the Wall Street Journal list of best managed companies for excellence in customer satisfaction, employee engagement, and development, innovation, social responsibility, and financial strength. And we also received the top score for social responsibility and are among the top 10 for customer satisfaction. We continue to lead in our ability to attract people with different backgrounds, different perspectives, and different lived experiences. Our success is reflected in the top score on the Human Rights Campaign Corporate Equality Index in the US for the 16th consecutive year for leading equitable workplace policies, practices, and benefits for LGBTQ plus people. And today we're proud to present an update to our 360 degree value reporting experience, which is available on our website because we believe that transparency builds trust and helps us all make more progress. Over to you, Casey.