Accenture PLC

Good morning. Thank you for standing by. Welcome to Accenture's second quarter fiscal 2024 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. If you have a question at any time during the call, please press 1, then 0. 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 your host, Managing Director, Head of Investor Relations, Katie O'Connor. Please go ahead.

Thank you, Operator, and thanks, everyone, for joining us today on our second 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'll 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 second quarter. Julie will then provide a brief update on our market positioning before Casey provides our business outlook for the third quarter and full fiscal year 2024. We will then take your questions before Julie provides a 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 thank you to our 742,000 people around the world who work every day to deliver 360-degree value for all our stakeholders. I'm pleased with our performance in an uncertain macro. Our results highlight the benefit of the deep trust our clients have in us, our capabilities to do the most complex work at the heart of their businesses, the privileged position we hold within the ecosystem, and our ability to invest for the next waves of growth. We continue to see momentum in the quarter on how we are executing on our strategy to be the trusted reinvention partner of our clients, with a record 39 clients with quarterly bookings greater than $100 million. These large transformational wins position us to capture more growth as spending increases. We also had over $600 million in new Gen AI bookings, taking us to $1.1 billion in Gen AI sales the first half of the fiscal year, expanding our early lead in Gen AI, which is core to our clients' reinvention. We now have over 53,000 skilled data and AI practitioners against our goal of doubling our data and AI workforce from 40,000 to 80,000 by the end of fiscal year 26th. We are laser focused on the needs of our clients, and this focus is reflected in our bookings of $21.6 billion, representing our second highest quarter on record. This included $10 billion of bookings in North America, our highest ever. We continue to take market share with revenues of $15.8 billion for the quarter, flat compared to last year and slightly above the midpoint of our range. As we turn the page on the calendar year, We saw another turn of the dial on constraining spending by our clients, including spending on our services, particularly in parts of EMEA and North America. This was evident in the composition of our new bookings, which came in differently than expected. We see clients continuing to prioritize investing in large-scale transformations, which convert to revenue more slowly, while further limiting discretionary spending, particularly in smaller projects. We also saw continued delays in decision-making and a slower pace of spending. We are pleased that despite these conditions, our focused efforts to return to growth resulted in North America and CMT showing improvement over last quarter. We are running our business with rigor and discipline, and we remain on track with the business optimization actions we announced last year to reduce structural costs to create greater resilience. We delivered adjusted EPS growth of 3%, We continue to invest significantly in our business to drive additional growth in highly strategic areas with $2.1 billion of capital deployed across our geographic markets in Q2 in 11 acquisitions, bringing the total investment in acquisitions to $2.9 billion in H1 across a total of 23 acquisitions. We also continue to invest in learning for our people with approximately 10 million training hours in the quarter, representing an average of 14 hours per person. In recognition of the 360-degree value we create, we are proud that we earned the number one position in our industry for the 11th year in a row and number 33 overall on Fortune's list of the world's most admired companies. We ranked number one in our industry and number three overall on the Just Capital CNBC list of America's most just companies. And we have been recognized by Ethisphere as one of the world's most ethical companies for the 17th year in a row. An important part of our growth strategy is to use our strong balance sheet to invest in order to scale higher growth areas and expand into new growth areas. We have a strong track record of delivering on this strategy. Here are some highlights from the quarter. In North America, we invested in supply chain, an area with significant reinvention ahead. with the additions of insight sourcing, impending, and on-process technology. We acquired Navisite to help clients across multiple cloud providers, enterprise applications, and digital technologies modernize their digital core. And in Song, we acquired Work & Co. to help our clients drive growth by designing and bringing digital brand strategies to market and operationalizing world-class digital products at scale. In EMEA, we are investing to help clients build their digital core and drive growth. In the UK, we invested in 6.6, which will help our clients transform their digital capabilities and modernize their legacy systems. We also acquired in the UK RedKite with its full-stack data expertise that will help our clients accelerate their performance with data-driven intelligence and AI. And in Germany, we added Voketas, which will accelerate our clients' growth strategies using behavioral economics modeling to develop pricing strategy and sales concepts for B2B and B2C models. Similarly, in growth markets, our acquisitions position us to drive our clients' growth agendas by expanding our capabilities in marketing and customer experience, with Rabbit's Tail in Thailand and Jixi in Singapore, helping clients in Indonesia capitalize on their fast-growing digital economy. Our ability to invest to fuel our organic growth is a competitive advantage. And as our clients continue to transform, we announced earlier this month that we will invest $1 billion over the next three years in Accenture LearnVantage, which will provide comprehensive technology learning and training services to help our clients reskill and upskill their people. Our investment includes the acquisition of Udacity, a digital education pioneer, which we expect to close by the summer. Once closed, we will have revenue in the zone of $100 million annually. These services are highly strategic, and they enhance our position as a reinvention partner of choice because talent is at the top of the agenda for CEOs. For example, we are helping Merck, a global biopharmaceutical company known as MSD outside of the United States and Canada, launch a groundbreaking generative AI training program for their employees to create world-class digital leaders. As a renowned thought leader in the biopharmaceutical market, Merck has long led the way in investing in its people and helping them build the skills and expertise needed to develop breakthrough therapies. Digital, data, analytics, and AI play a pivotal role in discovering, developing, manufacturing, and providing access for patients to medicines and vaccines. By once again investing in its people, Merck will be able to continue delivering on its promise to use the power of leading edge science to save and improve lives around the world. Over to you, Casey.