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 2025” means the 12-month period that ended on August 31, 2025. 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 leading solutions and global professional services company that helps enterprises reinvent by building their digital core and unleashing the power of AI to create value at speed across the enterprise, bringing together our people, proprietary assets and platforms, and deep ecosystem relationships. Through our Reinvention Services we bring together our capabilities across strategy, consulting, technology, operations, Song and Industry X with our deep industry expertise to create and deliver solutions and services for our clients. 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, 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.

In addition, the U.S. administration is reducing federal spending and the size of the federal workforce under the guidance of the Department of Government Efficiency. We are seeing impacts from these efforts in our federal government business (“Accenture Federal Services, or AFS”), including delays in new procurements, reductions in price and contract scope, and contract terminations. These changes have had an adverse effect on AFS’s results and could in the future have a material impact on our results of operations or financial condition. For a discussion of risks related to these and other recent developments, see Item 1A, “Risk Factors.”

Key Metrics

Key metrics for fiscal 2025 compared to fiscal 2024 are included below. We have presented operating income, operating margin, effective tax rate and diluted earnings per share for fiscal 2025 and 2024 on a non-GAAP or “adjusted” basis to exclude the impact of business optimization costs. During the fourth quarter of fiscal 2025, we initiated business optimization actions and recorded $615 million in related costs, which includes $344 million associated with a refreshed talent strategy, as well as asset impairments of approximately $271 million primarily related to the divestiture of two acquisitions that are no longer aligned with our strategic priorities. In fiscal 2024, we recorded $438 million in business optimization costs associated with actions initiated in fiscal 2023 and completed in fiscal 2024. For additional information regarding our business optimization actions and related costs, see Note 1 (Summary of Significant Accounting Policies) to our Consolidated Financial Statements under Item 8, “Financial Statements and Supplementary Data.”

•Revenues of $69.7 billion, an increase of 7% in both U.S. dollars and local currency;

•New bookings of $80.6 billion, a decrease of 1% in both U.S. dollars and local currency;

•Operating margin of 14.7%, a decrease from 14.8% in fiscal 2024; adjusted operating margin of 15.6%, an increase compared to 15.5% in fiscal 2024;

•Diluted earnings per share of $12.15, a 6% increase over diluted earnings per share of $11.44 in fiscal 2024; adjusted earnings per share of $12.93, an 8% increase over adjusted earnings per share of $11.95 in fiscal 2024; and

•Cash returned to shareholders of $8.3 billion, including dividends of $3.7 billion and share purchases of $4.6 billion.

Revenues

Amounts in table may not total due to rounding.

(1)During the first quarter of fiscal 2025, our Latin America market unit moved from Growth Markets to North America. With this change, North America became the Americas market and Growth Markets became the Asia Pacific market. Prior period amounts have been reclassified to conform with the current period presentation.

Revenues for fiscal 2025 increased 7% in both U.S. dollars and local currency compared to fiscal 2024. During fiscal 2025, revenue growth in local currency was very strong in the Americas, strong in EMEA and solid in Asia Pacific. We experienced local currency revenue growth that was very strong in Financial Services & Products, strong in Health & Public Service and Communications, Media & Technology and solid in Resources. Revenue growth in local currency was very strong in managed services and solid in consulting. While the business environment remained competitive, pricing improved in several areas of our business. We define pricing as the contract profitability or margin on the work that we sell.

In our consulting business, revenues for fiscal 2025 increased 6% in U.S. dollars and 5% in local currency compared to fiscal 2024. Consulting revenue growth in local currency for fiscal 2025 was driven by strong growth in the Americas, solid growth in EMEA and modest growth in Asia Pacific. Our consulting revenue continues to be driven by helping our clients accelerate their reinvention, leveraging cloud, enterprise platforms, security, AI and data, including advanced AI, 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, we are seeing a slower pace and level of client spending, particularly for smaller contracts with a shorter duration.

In our managed services business, revenues for fiscal 2025 increased 9% in both U.S. dollars and local currency compared to fiscal 2024. Managed services revenue growth in local currency for fiscal 2025 was driven by very strong growth in the Americas and strong growth in EMEA and Asia Pacific. We continue to experience growing demand to assist clients with reinvented operations, application development and maintenance, and infrastructure management including cloud and security. 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, Japanese yen and U.K. pound. 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. There was minimal currency translation impact for fiscal 2025 compared to fiscal 2024. Assuming that exchange rates stay within recent ranges, we estimate that our fiscal 2026 revenue growth in U.S. dollars will be approximately 2% higher than our revenue growth in local currency.

People Metrics

Utilization for fiscal 2025 was 92%, consistent with fiscal 2024. 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, increased to approximately 779,000 as of August 31, 2025, compared to approximately 774,000 as of August 31, 2024.

For fiscal 2025, attrition, excluding involuntary terminations, was 14%, compared to 13% in fiscal 2024. For the fourth quarter of fiscal 2025, annualized attrition, excluding involuntary terminations, was 15%, down from 16% in the third quarter of fiscal 202

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