Accenture (NYSE: ACN) reported fourth-quarter revenue of $17.6 billion, topping expectations, with bookings rising 3% to $21.3 billion.
The company issued fiscal 2026 guidance in line with forecasts but announced another restructuring to fund AI-related investments.
Guggenheim analyst Jonathan Lee maintained an Accenture Buy rating and lowered the price forecast from $305 to $285.
Also Read: Accenture’s AI Push Sparks Growth And Boosts Dividend Payouts
For Q4, Accenture reported:
- Revenue of $17.6 billion, above the consensus of $17.4 billion.
- An adjusted operating margin of 15.1% and adjusted EPS at $3.03, slightly ahead of consensus.
- New bookings: $21.3 billion, a 3% increase, implying a book-to-bill ratio of 1.2x.
- A decrease in headcount of over 11,000.
Lee acknowledged that Accenture delivered fiscal fourth-quarter 2025 revenue growth at the high end of its outlook, posting a 4.5% year-over-year increase in constant currency. Management also provided fiscal 2026 guidance in line with expectations, the analyst noted. However, he argued that these results did little to ease investor concerns about ongoing margin pressures.
Accenture’s restructuring during the quarter drove AI-related investments. Lee says this move likely fueled doubts about the durability of its profitability model. The analyst highlighted persistent gross margin challenges and noted that this restructuring is the second in three years.
Accenture remains positioned to benefit from client demand for cost optimization and digital transformation in the medium term.
Accenture Optimization
Accenture also launched a six-month optimization program that included:
- Rapid talent rotation
- Severance costs
- Divestiture of two acquisitions and
- Restructuring charges of $865 million.
The analyst flagged near-term pressure on Accenture's margins and free cash flow, even as longer-term growth is supported by tech adoption and cost-cutting.
Gross margin fell 65 basis points year-over-year, though generative AI remains accretive.
Management's fiscal 2026 outlook assumes stability despite weak discretionary demand.
Lee trimmed fiscal 2026 EPS estimates to $13.77 from $14.04 and fiscal 2027 EPS to $14.91 from $15.18. He applied a 20 times multiple to the revised 2027 EPS, below Accenture's two-year average, reflecting sector compression and demand uncertainty.
Price Action: ACN stock was trading higher by 2.28% to $237.87 at last check Friday.
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