Accenture plc (ACN)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with our Consolidated Financial Statements and related Notes included elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended August 31, 2025, and with the information under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended August 31, 2025.

We use the terms “Accenture,” “we,” “our” and “us” in this report to refer to Accenture plc and its subsidiaries. All references to years, unless otherwise noted, refer to our fiscal year, which ends on August 31. For example, a reference to “fiscal 2026” means the 12-month period that will end on August 31, 2026. All references to quarters, unless otherwise noted, refer to the quarters of our fiscal year.

We use the term “in local currency” so that certain financial results may be viewed without the impact of foreign currency exchange rate fluctuations, thereby facilitating period-to-period comparisons of business performance. Financial results “in local currency” are calculated by restating current period activity into U.S. dollars using the comparable prior year period’s foreign currency exchange rates. This approach is used for all results where the functional currency is not the U.S. dollar.

Disclosure Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”) relating to our operations, results of operations and other matters that are based on our current expectations, estimates, assumptions and projections. Words such as “may,” “will,” “should,” “likely,” “anticipates,” “aspires,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “positioned,” “outlook,” “goal,” “target,” “strategy,” and similar expressions are used to identify these forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Actual outcomes and results may differ materially from what is expressed or forecast in these forward-looking statements. Risks, uncertainties and other factors that might cause such differences, some of which could be material, include but are not limited to those identified below. Many of the following risks, uncertainties and other factors identified below may be amplified by conflict in the Middle East, as well as any escalation or expansion of economic disruption or the conflict’s current scope.

Business Risks

•Our results of operations have been, and may in the future be, adversely affected by volatile, negative or uncertain economic and geopolitical conditions and the effects of these conditions on our clients’ businesses and levels of business activity.

•Our business depends on generating and maintaining client demand for our solutions and services, including through the adaptation and expansion of our solutions and services in response to ongoing changes in technology and offerings, and a significant reduction in such demand or an inability to respond to the evolving technological environment could materially affect our results of operations.

•Risks and uncertainties related to the development and use of AI, including advanced AI, could harm our business, damage our reputation or give rise to legal or regulatory action.

•If we are unable to match people and their skills with client demand around the world and attract and retain professionals with strong leadership skills, our business, the utilization rate of our professionals and our results of operations may be materially adversely affected.

•We face legal, reputational and financial risks from any failure to protect client and/or Accenture data from security incidents or cyberattacks.

•The markets in which we operate are highly competitive, and we might not be able to compete effectively.

•If we do not successfully manage and develop our relationships with our ecosystem partners or if we fail to anticipate and establish new alliances in new technologies, our results of operations could be adversely affected.

•Our ability to attract and retain business and employees may depend on our reputation in the marketplace.

Financial Risks

•Our profitability could materially suffer due to pricing pressure, if we are unable to remain competitive, if our cost-management strategies are unsuccessful or if we experience delivery inefficiencies or fail to satisfy certain agreed-upon targets or specific service levels.

•Changes in our level of taxes, as well as audits, investigations and tax proceedings, or changes in tax laws or in their interpretation or enforcement, could have a material adverse effect on our effective tax rate, results of operations, cash flows and financial condition.

•Our results of operations could be materially adversely affected by fluctuations in foreign currency exchange rates.

•Our debt obligations could adversely affect our business and financial condition.

Operational Risks

•As a result of our geographically diverse operations and our strategy to continue to grow in our key markets around the world, we are more susceptible to certain risks.

•If we are unable to manage the organizational challenges associated with our size, we might be unable to achieve our business objectives.

•We might not be successful at acquiring, investing in or integrating businesses, entering into joint ventures or divesting businesses.

Legal and Regulatory Risks

•Our business could be materially adversely affected if we incur legal liability.

•Our work with government clients exposes us to additional risks inherent in the government contracting environment.

•Our global operations expose us to numerous and sometimes conflicting legal and regulatory requirements, and violation of these regulations could harm our business.

•If we are unable to protect or enforce our intellectual property rights, or if our solutions or services infringe upon the intellectual property rights of others or we lose our ability to utilize the intellectual property of others, our business could be adversely affected.

•We are incorporated in Ireland and Irish law differs from the laws in effect in the United States and might afford less protection to our shareholders. We may also be subject to criticism and negative publicity related to our incorporation in Ireland.

For a more detailed discussion of these factors, see the information under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended August 31, 2025. Our forward-looking statements speak only as of the date of this report or as of the date they are made, and we undertake no obligation to update any forward-looking statements.

Overview

Accenture helps enterprises reinvent by building their digital core and unleashing the power of AI to create value at speed for organizations across industries. We bring together the talent of our people, with proprietary assets and platforms, deep process and industry expertise, and ecosystem relationships to deliver end-to-end solutions and measurable outcomes at scale. Through our Reinvention Services, we offer broad expertise across Cybersecurity, Digital Core, Finance, Industry and Enterprise, Song, Supply Chain and Engineering and Talent, with advanced capabilities in AI and Data, Industry and Process, and Technology. We serve clients in three geographic markets: the Americas, EMEA (Europe, Middle East and Africa) and Asia Pacific.

Our results of operations are affected by economic conditions, including macroeconomic conditions, the overall inflationary environment, new and rapidly changing technologies, and levels of business confidence. We continue to see significant economic and geopolitical uncertainty in many markets around the world, including as a result of conflict in the Middle East, which has impacted and may continue to impact our business. While the discretionary environment is unchanged, clients continue to prioritize large-scale transformations, which include becoming AI-ready.

Key Metrics

Key metrics for the third quarter of fiscal 2026 compared to the third quarter of fiscal 2025 are included below.

•Revenues of $18.7 billion, an increase of 6% in U.S. dollars and 3% in local currency;

•New bookings of $19.3 billion, a decrease of 2% in U.S. dollars and 3% in local currency;

•Operating margin of 17.0%, compared to operating margin of 16.8% in the third quarter of fiscal 2025;

•Diluted earnings per share of $3.80, compared to diluted earnings per share of $3.49, a 9% increase over the third quarter of fiscal 2025;

•Cash returned to shareholders of $2.2 billion, including dividends of $1.0 billion and share purchases of $1.2 billion.

Revenues

Amounts in table may not total due to rounding.

Revenues for the third quarter of fiscal 2026 increased 6% in U.S. dollars and 3% in local currency compared to the third quarter of fiscal 2025. During the third quarter of fiscal 2026, revenue growth in local currency was very strong in Asia Pacific, solid in EMEA and slight in the Americas. We experienced local currency revenue growth that was very strong in Communications, Media & Technology, modest in Financial Services and Products, slight in Resources and flat in Health & Public Service. Revenue growth in local currency was solid in managed services and slight in consulting. While the business environment remained competitive, pricing was relatively stable. We define pricing as the contract profitability or margin on the work that we sell.

In our consulting business, revenues for the third quarter of fiscal 2026 increased 4% in U.S. dollars and 1% in loc

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with our Consolidated Financial Statements and related Notes included elsewhere in this Annual Report on Form 10-K. This discussion and analysis also contains forward-looking statements and should also be read in conjunction with the disclosures and information contained in “Disclosure Regarding Forward-Looking Statements” and “Risk Factors” in this Annual Report on Form 10-K.

We use the terms “Accenture,” “we,” “our” and “us” in this report to refer to Accenture plc and its subsidiaries. All references to years, unless otherwise noted, refer to our fiscal year, which ends on August 31. For example, a reference to “fiscal 2026” means the 12-month period that ended on August 31, 2026. All references to quarters, unless otherwise noted, refer to the quarters of our fiscal year.

We use the term “in local currency” so that certain financial results may be viewed without the impact of foreign currency exchange rate fluctuations, thereby facilitating period-to-period comparisons of business performance. Financial results “in local currency” are calculated by restating current period activity into U.S. dollars using the comparable prior-year period’s foreign currency exchange rates. This approach is used for all results where the functional currency is not the U.S. dollar.

Overview

Accenture is a business reinvention and technology company. Our people bring deep insights across industries and functions, with capabilities spanning strategy, process, operating model, change management, talent, data, technology and AI. We deliver this expertise through consulting, managed services, proprietary assets and platforms, and increasingly, software. We serve clients in three geographic markets: the Americas, EMEA (Europe, Middle East and Africa) and Asia Pacific.

Our results of operations are affected by economic conditions, including macroeconomic conditions, the overall inflationary environment, new and rapidly changing technologies, and levels of business confidence. We continue to see significant economic and geopolitical uncertainty in many markets around the world, including as a result of conflict in the Middle East, which has impacted and may continue to impact our business. While the discretionary environment is unchanged, clients continue to prioritize large-scale transformations, which include becoming AI-ready.

Key Metrics

Key metrics for fiscal 2026 compared to fiscal 2025 are included below. We have presented operating income, operating margin, effective tax rate and diluted earnings per share for fiscal 2026 and 2025 on a non-GAAP or “adjusted” basis to exclude the impact of business optimization costs. During the first quarter of fiscal 2026, we completed our six-month business optimization program and recorded costs of $308 million and $615 million during fiscal 2026 and 2025, respectively. For additional information regarding our business optimization actions and related costs, see Note 16 (Segment Reporting) to our Consolidated Financial Statements under Item 8, “Financial Statements and Supplementary Data.”

•Revenues of $74.2 billion, an increase of 6% in U.S. dollars and 5% in local currency;

•New bookings of $84.5 billion, an increase of 5% in U.S. dollars and 3% in local currency;

•Operating margin of 15.4%, compared to 14.7% in fiscal 2025; adjusted operating margin of 15.8%, compared to 15.6% in fiscal 2025;

•Diluted earnings per share of $13.56, a 12% increase over diluted earnings per share of $12.15 in fiscal 2025; adjusted earnings per share of $13.97, an 8% increase over adjusted earnings per share of $12.93 in fiscal 2025;

•Cash returned to shareholders of $11.5 billion, including share purchases of $7.5 billion and dividends of $4.0 billion.

Revenues

Amounts in table may not total due to rounding.

Revenues for fiscal 2026 increased 6% in U.S. dollars and 5% in local currency compared to fiscal 2025. During fiscal 2026, revenue growth in local currency was very strong in Asia Pacific and solid in EMEA and the Americas. We experienced local currency revenue growth that was very strong in Communications, Media & Technology, strong in Financial Services, solid in Products and modest in Resources and Health & Public Service. Revenue growth in local currency was strong in managed services and modest in consulting. The business environment remained competitive, and we experienced lower pricing in many areas of the business during the fourth quarter of fiscal 2026. For the full fiscal year 2026, pricing was relatively stable compared to fiscal 2025. We define pricing as the contract profitability or margin on the work that we sell.

In our consulting business, revenues for fiscal 2026 increased 5% in U.S. dollars and 3% in local currency compared to fiscal 2025. Consulting revenue growth in local currency for fiscal 2026 was driven by very strong growth in Asia Pacific, solid growth in the Americas and slight growth in EMEA. Our consulting revenue continues to be driven by helping our clients accelerate their reinvention and drive business outcomes, by redesigning processes and operating models, modernizing and implementing technology and data foundations, and leveraging cloud, software enterprise platforms, security, AI and data, as well as our change capabilities to help clients build new skills and drive the successful adoption of new processes and technologies. In addition, clients continue to be focused on initiatives designed to deliver cost savings, supply chain and operational resilience, as well as to accelerate growth and improve customer experiences. While we continue to experience demand for these services, particularly large transformation programs, the discretionary spending environment continues to impact smaller contracts with a shorter duration.

In our managed services business, revenues for fiscal 2026 increased 8% in U.S. dollars and 6% in local currency compared to fiscal 2025. Managed services revenue growth in local currency for fiscal 2026 was driven by very strong growth in Asia Pacific and EMEA and solid growth in the Americas. We continue to assist clients with reinvented operations, application development and maintenance, and infrastructure management including cloud, security, AI and data. Clients continue to be focused on transforming their operations through technology, AI and data, and leveraging our proprietary assets and platforms and talent to drive productivity and cost savings.

As we are a global company, our revenues are denominated in multiple currencies and may be significantly affected by currency exchange rate fluctuations. While a significant portion of our revenues are in U.S. dollars, the majority of our revenues are denominated in other currencies, including the Euro, U.K. pound and Japanese yen. There continues to be volatility in foreign currency exchange rates. Unfavorable fluctuations in foreign currency exchange rates have had and could in the future have a material effect on our financial results. If the U.S. dollar weakens against other currencies, resulting in favorable currency translation, our revenues, revenue growth and results of operations in U.S. dollars may be higher. If the U.S. dollar strengthens against other currencies, resulting in unfavorable currency translation, our revenues, revenue growth and results of operations in U.S. dollars may be lower. The U.S. dollar weakened against various currencies during fiscal 2026, resulting in favorable currency translation and U.S. dollar revenue growth that was approximately 2% higher than our revenue growth in local currency for the year. Assuming that exchange rates stay within recent ranges, we estimate that our fiscal 2027 revenue growth in U.S. dollars will be approximately equal to our revenue growth in local currency.

People Metrics

Utilization for fiscal 2026 was 93%, up from 92% in fiscal 2025. We hire to meet current and projected future demand. We proactively plan and manage the size and composition of our workforce and take actions as needed to address changes in the anticipated demand for our solutions and services, given that compensation costs are the most significant portion of our operating expenses. Our workforce, the majority of which serves our clients, was approximately 814,000 as of August 31, 2026, compared to approximately 779,000 as of August 31, 2025.

For fiscal 2026, attrition, excluding involuntary terminations, was 13%, down from 14% in fiscal 2025. For the fourth quarter of fiscal 2026, annualized attrition, excluding involuntary terminations, was 13%, down from 14% in the third quarter of fiscal 2026. We evaluate voluntary attrition, adjust levels of new hiring and use involuntary terminations as a means to keep our supply of skills and resources in balance with changes in client demand.

In addition, we adjust compensation to provide market relevant pay based on the skills of our people and locations where we operate. We also consider a variety of factors, including the macroeconomic environment, in making our decisions around pay and benefits. We strive to adjust pricing as well as drive cost and delivery efficiencies, such as changing the mix of people and utilizing technology, to reduce the impact of compensation increases on our margin and contract profitability.

Our ability to grow our revenues and maintain or increase our margin could be adversely affected if we are unable to: match people and skills with the types or amounts of solutions and services clients are demanding; recover or offset increases in compensation; deploy our employees globally on a timely basis; manage attrition; and/or effectively assimilate new employees.

New Bookings

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