Accenture PLC

Good morning. Thank you for standing by. Welcome to Accenture's first quarter fiscal 2026 conference call. At this time, all participants will be in listen-only mode. Since you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, we will conduct a question and answer session. To ask a question, you may press star then one on your telephone keypad, and to withdraw your question, please press star then two. As a reminder, this conference is being recorded. I'd now like to turn the conference over to Alexia Quadrani, Managing Director and Head of Investor Relations. Please go ahead.

Thank you, Operator, and thanks, everyone, for joining us today on our first quarter 2026 earnings announcement. As the Operator mentioned, I'm Alexia Quadrani, Executive Director, Head of Investor Relations. On today's call, you will hear from Julie Sweet, our Chair and Chief Executive Officer, and Angie Park, 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. Angie 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 Angie provides our business outlook for the second quarter and full year fiscal 2026. 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 risk 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 on the call. During our call today, we will reference certain non-GAAP financial measures, which we believe provide useful information for investors. will 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 call. Now let me turn the call over to Julie.

Thank you, Alexia, and everyone for joining this morning. Apologies in advance for my voice. I am getting over a seasonal cold. and my voice is not quite cooperating. And really wanted to start today by thanking our nearly 784,000 people around the world for your extraordinary work and your commitment to our clients, which enabled us to deliver another strong quarter. Let me begin by sharing that we are very proud to have earned the number four spot on the Great Place to Work list of the world's best workplaces, our highest ever ranking on this prestigious list This recognition reflects our strategy to be the most client focused, AI enabled, great place to work for re-inventors. It is especially meaningful because it is based on feedback from our people worldwide. Our ability to attract and retain great talent is one of our most important competitive advantages. Before handing over to Angie, I will briefly highlight the value we delivered this quarter, the importance of our partnership strategy, and this quarter's strategic acquisitions. We are very pleased with our results as we continue executing our strategy to help our clients reinvent every part of their enterprise, reflected in our bookings of $20.9 billion, including 33 clients with quarterly bookings greater than $100 million. We delivered revenue of $18.7 billion, growing 5% in local currency at the top of our guided range, with broad-based growth across markets and both types of work. And we continue to strengthen our competitive position by taking significant market share on a rolling four-quarter basis against our basket of our closest global publicly traded competitors, which is how we calculate market share. Adjusted operating margin expanded by 30 basis points year over year, and we delivered adjusted EPS growth of 10% compared to Q1 last year. We continue to invest significantly to execute our talent strategy to rotate our workforce. We have nearly reached our goal of 80,000 AI and data professionals, and our people participated in approximately 8 million training hours this quarter, with a significant focus on building advanced AI, technology, and industry skills. Advanced AI is increasingly embedded in our large transformation programs, either enabling future enterprise use or being implemented directly as part of our solutions. Our strong leadership in Advanced AI is a clear competitive advantage as clients select us to help them capture the value of this technology now and over time, and to build the readiness required to adopt it effectively across the enterprise. Momentum in the adoption of Enterprise AI continues. Our Advanced AI bookings this quarter were $2.2 billion, nearly doubling from Q1 last year and also up from Q4. Revenue reached another milestone this quarter at approximately $1.1 billion. As we think about the advanced AI opportunity ahead, as you know, we were the first in our industry to share our bookings and revenue from advanced AI, which we define as gen AI, agentic AI, and physical AI, and does not include data, classical AI, or RPA. We introduced the metrics in Q3 FY23, just months after Gen AI burst onto the scene, initially to size the reality of the opportunity and to demonstrate our early leadership. At that time, bookings were about $100 million across roughly 100 projects, and revenue was immaterial. We have measured it consistently since that time. To date, we have now delivered approximately $11.5 billion in bookings across 11,000 projects with revenue of $4.8 billion. This will be the last quarter in which we share these specific metrics. The demand for AI is both real and rapidly maturing. We've now reached a point where advanced AI is being embedded in some way across nearly everything we do. and many of our clients are focusing on moving beyond standalone proofs of concept or initiatives. We're shifting to more scaled, end-to-end solutions that integrate multiple forms of AI, and it has become less meaningful to isolate the data specifically for advanced AI, as it does not reflect how the demand is evolving on the ground, the full scope of our AI work, or the value we're creating. Now turning to our partnership strategy. Our partnership strategy is grounded in client demand. Demand for reinvention remains strong, with our clients continuing to prioritize larger transformational programs focused on building their digital core and driving both efficiency and growth. Technology is front and center for every client, and the 60% of our revenue in Q1 from work we do with our top 10 ecosystem partners continue to outpace our overall growth. Given the importance of the broader technology ecosystem to our clients, We plan to continue providing insight into the role our top partners play in our growth by maintaining the metric we introduced at the end of FY25, the percentage of our revenue tied to work with our top 10 ecosystem partners and its growth relative to our overall growth as it provides a clear view into our largest, most important partnerships. We also plan to continue to share our partnership strategy and how we're growing new businesses with an expanded group of partners. Most of our clients operate with a network of ecosystem partners to meet their enterprise needs. They rely on us to help integrate those partners and expect us to be the leader with the most relevant players across their enterprises, including new and emerging players. As a result, it is important that in addition to our top 10, we work with a broad set of partners that play important roles across enterprises. Many of these support specific functions such as digital manufacturing, product and engineering, core banking and insurance, supply chain and finance, while others are helping clients advance their AI and data capabilities. Our partnerships are critical to our clients reinventing all parts of their enterprises. Together, they represent meaningful opportunities for growth and further strengthen our ability to deliver comprehensive end-to-end solutions. Over the past year, in response to client demand, we've been expanding and in some cases forming new partnerships with emerging AI and data companies. And we will play a key role in helping our clients use these technologies, including creating new solutions and integrating and leveraging the synergies with their existing ecosystems. These evolving partnerships, which are laid out in our earnings presentation, are a significant competitive advantage for us. Turning now to our strategic acquisitions. Earlier this week, we announced an agreement to acquire a 65% majority stake in DLB Associates, a US-based leader in AI, data center, engineering, and consulting in the rapidly growing data center professional services market, an estimated $12 billion addressable market expected to double by 2030. Along with our FY25 acquisition of UK-based Sobin, this meaningfully expands our capital projects capabilities and presence in the high growth data center consulting market. It also positions us to capture growth not only through the work we do with helping our clients use AI, our primary business, but also in the opportunity created by the companies building the infrastructure to power AI. And this quarter, we also invested $374 million primarily in six strategic acquisitions. We're scaling our capabilities with CPAL, Integrated Product Support Business in Italy, which brings deep defense and aerospace engineering expertise for mission-critical programs, and Total eBiz Solutions in Southeast Asia, which adds AI, cloud, and digital workplace innovation that strengthens Avanade's position in the region. And we're scaling new growth areas with NeuroFlash in the U.S., a Salesforce and advanced AI leader whose agentic solutions expand our reach into the mid-market. ATEMI in Japan, which enhances LearnVantage with AI learning and reskilling capabilities to help clients build AI-ready workforces, and DECO in the UK and Ranger Data in the US, which strengthen our Palantir and Advanced AI capabilities. In summary, we are pleased with how we delivered a quarter and continue to strengthen our foundation for long-term growth. Over to you, Angie.