Accenture (ACN) likely to extend revenue growth in Q4 2025 despite challenges

Accenture (NYSE: ACN) has consistently delivered quarterly revenue growth across its operating segments this year, pushing both top-line and earnings above analysts’ estimates. That momentum is expected to continue when the professional services giant reports its fourth-quarter results next week, despite the recent slowdown in bookings amid economic uncertainties and cautious enterprise spending.

Estimates

The Accenture leadership in a recent statement said it expects fourth-quarter revenue to be in the range of $17.0 billion to $17.6 billion, representing a 1-5% YoY growth in local currency. That is broadly in line with analysts’ consensus revenue estimate of $17.34 billion for the August quarter. Market watchers are looking for earnings of $2.96 per share for Q4, vs. 2.66 per share in the prior-year quarter. The report is slated for release on Thursday, September 25, at 6:40 am ET.

After retreating from the record highs of February this year, Accenture’s stock has declined around 40%, underperforming the S&P 500 index. The downturn mainly reflects investor concerns over economic and geopolitical uncertainties and public sector spending cuts. Since mid-year, the shares have languished below their 52-week average of $322.40. Given the company’s AI-focused growth strategy, which positions it to tap into emerging opportunities in that area, the current stock downturn appears temporary.

Q3 Outcome

In the third quarter, revenues grew 8% year-over-year to $17.7 billion, and 7% in local currency. Net income attributable to the company was $2.20 billion or $3.49 per share in Q3, compared to $1.93 billion or $3.04 per share in the prior-year quarter. Revenue and the bottom line exceeded Wall Street’s expectations, marking the fourth beat in a row. Meanwhile, new bookings, the value of new contracts or projects, declined 6% annually to $19.7 billion in the third quarter, after dropping 3% in the prior quarter.

From Accenture’s Q3 2025 earnings call:

“Stating the obvious, as we shared last quarter, we continue to see a significantly elevated level of uncertainty in the global economic and geopolitical environment as compared to calendar year 2024. In every boardroom, in every industry, our clients are not facing a single challenge. They are facing everything at once. Economic volatility. Geopolitical complexity. Major shifts in customer behavior. In these times, our clients need us more than ever. They look to us to help them build resilience and deliver results.”

Targets

Recently, the management said it is targeting a revenue growth of 6-7%, in local currency, for fiscal 2025. The earnings per share forecast for FY25 is in the range of $12.77 to $12.89. It also raised full-year free cash flow guidance to the range of $9.0 billion to $9.7 billion.

Accenture is navigating a complex business environment this year, marked by technological shifts and evolving customer preferences. While the company continues to benefit from stable demand, the volatile macroeconomic and geopolitical conditions remain a concern due to their impact on client spending.

On Friday, Accenture’s stock traded near levels last seen five years ago, as a months-long losing streak erased its early-year gains. The stock has lost about 26% in the past six months.