What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-06-20 compared with 2024-03-21 · 134 added, 145 removed, 247 unchanged (53% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations 25

Revenues for the second quarter of fiscal 2024 were flat in both U.S.

dollars and local currency compared to the second quarter of fiscal 2023.

During the second quarter of fiscal 2024, revenue growth in local currency was strong in Growth Markets, while North America was flat and EMEA had a modest decline.

We experienced local currency revenue growth that was very strong in Health & Public Service, solid in Resources and flat in Products, offset by declines in Communications, Media & Technology and Financial Services.

Revenue growth in local currency was modest in managed services, offset by a modest decline in consulting.

The business environment is competitive, and we have been experiencing lower pricing across the business.

Revenues for the third quarter of fiscal 2024 decreased 1% in U.S.

dollars and increased 1% in local currency compared to the third quarter of fiscal 2023.

During the third quarter of fiscal 2024, revenue growth in local currency was very strong in Growth Markets and slight in North America, partially offset by a modest decline in EMEA.

We experienced local currency revenue growth that was very strong in Health & Public Service and modest in Resources and Products, partially offset by a decline in Financial Services and a slight decline in Communications, Media & Technology.

Revenue growth in local currency was solid in managed services, partially offset by a slight decline in consulting.

The business environment is competitive, and we continue to experience lower pricing across the business.

We define pricing as contract profitability or margin on the work that we sell.

In our consulting business, revenues for the second quarter of fiscal 2024 decreased 3% in both U.S.

dollars and local currency compared to the second quarter of fiscal 2023.

The decline in consulting revenue in local currency for the second quarter of fiscal 2024 was driven by a decline in EMEA and a modest decline in North America, partially offset by modest growth in Growth Markets.

In our consulting business, revenues for the third quarter of fiscal 2024 decreased 3% in U.S.

dollars and 1% in local currency compared to the third quarter of fiscal 2023.

The decline in consulting revenue in local currency for the third quarter of fiscal 2024 was driven by a decline in EMEA, partially offset by solid growth in Growth Markets and modest growth in North America.

Our consulting revenue continues to be driven by helping our clients accelerate their digital transformation, including moving to the cloud, embedding security across the enterprise and adopting new technologies.

1 unchanged sentence

While we continue to experience demand for these services, we are seeing a slower pace and level of client spending, especially for smaller contracts with a shorter duration.

In our managed services business, revenues for the second quarter of fiscal 2024 increased 3% in both U.S.

dollars and local currency compared to the second quarter of fiscal 2023.

Managed services revenue growth in local currency for the second quarter of fiscal 2024 was driven by very strong growth in Growth Markets, solid growth in EMEA and slight growth in North America.

In our managed services business, revenues for the third quarter of fiscal 2024 increased 2% in U.S.

dollars and 4% in local currency compared to the third quarter of fiscal 2023.

Managed services revenue growth in local currency for the third quarter of fiscal 2024 was driven by very strong growth in Growth Markets, modest growth in EMEA and slight growth in North America.

We continue to experience growing demand to assist clients with application modernization and maintenance, cloud enablement and cybersecurity-as-a-service.

9 unchanged sentences

dollars may be lower.

dollar strengthened against various currencies during the second quarter of fiscal 2024 compared to the second quarter of fiscal 2023, resulting in unfavorable currency translation and U.S.

dollar strengthened against various currencies during the third quarter of fiscal 2024 compared to the third quarter of fiscal 2023, resulting in unfavorable currency translation and U.S.

dollar revenue growth that was approximately 2% lower than our revenue growth in local currency.

dollar weakened against various currencies during the six months ended February 29, 2024 compared to the six months ended February 28, 2023, resulting in favorable currency translation and U.S.

dollar revenue growth that was approximately 0.5% higher than our revenue growth in local currency.

There was minimal currency translation impact for the nine months ended May 31, 2024 compared to the nine months ended May 31, 2023.

Assuming that exchange rates stay within recent ranges for the remainder of fiscal 2024, we estimate that our full fiscal 2024 revenue growth in U.S.

dollars will be approximately equal to our revenue growth in local currency.

dollars will be approximately 0.7% lower than our revenue growth in local currency.

People Metrics

Annualized Voluntary Attrition

compared to 91% in the second quarter of fiscal 2023

compared to approximately 738,000 as of February 28, 2023

compared to 12% in the second quarter of fiscal 2023

Utilization for the second quarter of fiscal 2024 was 92%, compared to 91% in the second quarter of fiscal 2023.

compared to 91% in the third quarter of fiscal 2023

compared to approximately 732,000 as of May 31, 2023

compared to 13% in the third quarter of fiscal 2023

Utilization for the third quarter of fiscal 2024 was 92%, compared to 91% in the third quarter of fiscal 2023.

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 services and solutions, 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 742,000 as of February 29, 2024, compared to approximately 738,000 as of February 28, 2023.

Our workforce, the majority of which serves our clients, increased to approximately 750,000 as of May 31, 2024, compared to approximately 732,000 as of May 31, 2023.

The year-over-year increase in our workforce reflects people added in connection with acquisitions and hiring for specific skills.

For the second quarter of fiscal 2024, annualized attrition, excluding involuntary terminations, was 13%, up from 12% in the second quarter of fiscal 2023.

For the third quarter of fiscal 2024, annualized attrition, excluding involuntary terminations, was 14%, up from 13% in the third quarter of fiscal 2023.

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.

12 unchanged sentences

Dollars Percent

Currency Six Months Ended Percent

Currency Nine Months Ended Percent

Dollars Percent

(in billions of U.S.

dollars) February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023

dollars) May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023

Consulting $ 9.3 $ 8.9 4 % 8 % $ 28.4 $ 27.7 3 % 4 %

14 unchanged sentences

Management’s Discussion and Analysis of Financial Condition and Results of Operations 27

Results of Operations for the Three and Six Months Ended February 29, 2024 Compared to the Three and Six Months Ended February 28, 2023

Results of Operations for the Three and Nine Months Ended May 31, 2024 Compared to the Three and Nine Months Ended May 31, 2023

Revenues by geographic market, industry group and type of work are as follows:

1 unchanged sentence

Dollars Percent

Currency Six Months Ended Percent

Currency Nine Months Ended Percent

Dollars Percent

(in millions of U.S.

dollars) February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023

dollars) May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023

Geographic Markets

17 unchanged sentences

Geographic Markets

The following revenues commentary discusses local currency revenue changes by geographic market for the three and six months ended February 29, 2024 compared to the three and six months ended February 28, 2023:

The following revenues commentary discusses the primary drivers of local currency revenue changes by geographic market for the three and nine months ended May 31, 2024 compared to the three and nine months ended May 31, 2023:

North America

• Three Months.

Revenues increased 1% in local currency, led by growth in Public Service, partially offset by a decline in Banking & Capital Markets.

Revenue growth was driven by the United States.

• Nine Months.

Revenues were flat in local currency, as growth in Public Service was offset by declines in Banking & Capital Markets, Software & Platforms, and Communications & Media.

• Six Months.

Revenues decreased 1% in local currency, due to declines in Software & Platforms, Banking & Capital Markets and Communications & Media.

These decreases were partially offset by growth in Public Service.

The decline in revenues was driven by the United States.

• Three Months.

Revenues decreased 2% in local currency, due to declines in Communications & Media and Banking & Capital Markets.

These decreases were partially offset by growth in Public Service.

The decline in revenues was driven by the United Kingdom, France and Ireland, partially offset by revenue growth in Italy.

• Six Months.

Revenues were flat in local currency, as growth in Public Service was offset by declines in Communications & Media and Consumer Goods, Retail & Travel Services.

Revenues were driven by increases in Italy and Austria, offset by declines in the United Kingdom and Ireland.

ACCENTURE FORM 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations 27

Revenues decreased 2% in local currency, due to declines in Banking & Capital Markets and Communications & Media, partially offset by growth in Public Service.

The decline in revenues was driven by France, partially offset by revenue growth in Italy.

• Nine Months.

Revenues decreased 1% in local currency, due to declines in Communications & Media and Banking & Capital Markets, partially offset by growth in Public Service.

The decline in revenues was driven by the United Kingdom and France, partially offset by revenue growth in Italy.

Growth Markets

• Three Months.

Revenues increased 6% in local currency, led by growth in Banking & Capital Markets, Industrial, Public Service and Chemicals & Natural Resources.

Revenues increased 8% in local currency, led by growth in Banking & Capital Markets and Industrial.

Revenue growth was driven by Argentina and Japan, partially offset by a decline in Australia.

Argentina revenues grew in local currency primarily due to hyperinflation.

ACCENTURE FORM 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations 28

• Nine Months.

Revenues increased 6% in local currency, led by growth in Banking & Capital Markets, Chemicals & Natural Resources and Industrial.

Revenue growth was driven by Japan and Argentina, partially offset by declines in Australia and Brazil.

Argentina revenues grew in local currency due to hyperinflation, but declined slightly in U.S.

• Six Months.

Revenues increased 5% in local currency, led by growth in Chemicals & Natural Resources, Banking & Capital Markets, Public Service and Industrial.

Revenue growth was driven by Japan and Argentina, partially offset by declines in Brazil and Australia.

Argentina revenues grew in local currency due to hyperinflation, but declined slightly in U.S.

Operating Expenses

Operating expenses for the second quarter of fiscal 2024 decreased $116 million, or 1%, compared to the second quarter of fiscal 2023, and decreased as a percentage of revenues to 87.0% from 87.7% during this period.

Operating expenses for the six months ended February 29, 2024 increased $388 million, or 1%, compared to the six months ended February 28, 2023, and remained flat as a percentage of revenues at 85.6% during this period.

Operating expenses for the third quarter of fiscal 2024 decreased $369 million, or 3%, compared to the third quarter of fiscal 2023, and decreased as a percentage of revenues to 84.0% from 85.8% during this period.

Operating expenses for the nine months ended May 31, 2024 increased $19 million compared to the nine months ended May 31, 2023, and decreased as a percentage of revenues to 85.1% from 85.7% during this period.

The primary categories of operating expenses include Cost of services, Sales and marketing and General and administrative costs.

10 unchanged sentences

Operating expenses by category are as follows:

Three Months Ended Six Months Ended

Three Months Ended Nine Months Ended

(in millions of U.S.

dollars) February 29, 2024 February 28, 2023 Increase

(Decrease) February 29, 2024 February 28, 2023 Increase

dollars) May 31, 2024 May 31, 2023 Increase

(Decrease) May 31, 2024 May 31, 2023 Increase

Operating Expenses $ 13,836 84.0 % $ 14,205 85.8 % $ (369) $ 41,248 85.1 % $ 41,230 85.7 % $ 19

5 unchanged sentences

Cost of Services

Cost of services for the second quarter of fiscal 2024 decreased $58 million, or 1%, from the second quarter of fiscal 2023, and decreased as a percentage of revenues to 69.1% from 69.4% during this period.

Gross margin for the second quarter of fiscal 2024 increased as a percentage of revenues to 30.9% compared to 30.6% during the second quarter of fiscal 2023.

The increase in gross margin was primarily due to lower labor costs compared to the same period in fiscal 2023.

Cost of services for the six months ended February 29, 2024 increased $156 million, or 1%, over the six months ended February 28, 2023, and decreased as a percentage of revenues to 67.8% from 68.3% during this period.

Gross margin for the six months ended February 29, 2024 increased to 32.2% compared to 31.7% during the six months ended February 28, 2023.

The increase in gross margin was primarily due to lower labor costs, including lower subcontractor costs compared to the same period in fiscal 2023.

Cost of services for the third quarter of fiscal 2024 decreased $67 million, or 1%, from the third quarter of fiscal 2023, and remained flat as a percentage of revenues at 66.6% during this period.

Gross margin for the third quarter of fiscal 2024 remained flat as a percentage of revenues at 33.4% compared to the third quarter of fiscal 2023 as lower labor costs were offset by higher non-payroll costs, primarily for travel.

Cost of services for the nine months ended May 31, 2024 increased $89 million over the nine months ended May 31, 2023, and decreased as a percentage of revenues to 67.4% from 67.7% during this period.

Gross margin for the nine months ended May 31, 2024 increased to 32.6% compared to 32.3% during the nine months ended May 31, 2023.

The increase in gross margin was primarily due to lower labor costs, partially offset by higher non-payroll costs, primarily for travel compared to the same period in fiscal 2023.

Sales and Marketing

Sales and marketing expense for the second quarter of fiscal 2024 increased $68 million, or 4%, over the second quarter of fiscal 2023, and increased as a percentage of revenues to 10.3% compared to 9.9% during this period.

Sales and marketing expense for the six months ended February 29, 2024 increased $227 million, or 7%, over the six months ended February 28, 2023, and increased as a percentage of revenues to 10.4% compared to 9.9% during this period.

The increase as a percentage of revenues for the three and six months ended February 29, 2024 was due to higher selling and other business development costs as a percentage of revenues compared to the same period in fiscal 2023.

Sales and marketing expense for the third quarter of fiscal 2024 increased $12 million, or 1%, over the third quarter of fiscal 2023, and increased as a percentage of revenues to 10.6% compared to 10.5% during this period.

Sales and marketing expense for the nine months ended May 31, 2024 increased $239 million, or 5%, over the nine months ended May 31, 2023, and increased as a percentage of revenues to 10.5% compared to 10.1% during this period.

The increase as a percentage of revenues for the nine months ended May 31, 2024 was due to higher selling and other business development costs compared to the same period in fiscal 2023.

General and Administrative Costs

General and administrative costs for the second quarter of fiscal 2024 increased $3 million over the second quarter of fiscal 2023, and increased as a percentage of revenues to 6.9% compared to 6.8% during this period.

General and administrative costs for the six months ended February 29, 2024 decreased $6 million from the six months ended February 28, 2023, and decreased as a percentage of revenues to 6.6% from 6.7% during this period.

ACCENTURE FORM 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations 28

General and administrative costs for the third quarter of fiscal 2024 decreased $44 million, or 4%, from the third quarter of fiscal 2023, and decreased as a percentage of revenues to 6.3% from 6.5% during this period.

General and administrative costs for the nine months ended May 31, 2024 decreased $51 million, or 2%, from the nine months ended May 31, 2023, and decreased as a percentage of revenues to 6.5% from 6.7% during this period.

Business Optimization Costs

During the second quarter of fiscal 2024 and 2023, we recorded business optimization costs of $115 million and $244 million, respectively, primarily for employee severance.

During the six months ended February 29, 2024, and February 28, 2023, we recorded business optimization costs of $255 million and $244 million, respectively, primarily for employee severance.

During the third quarter of fiscal 2024 and 2023, we recorded business optimization costs of $77 million and $347 million, respectively, primarily for employee severance.

During the nine months ended May 31, 2024 and 2023, we recorded business optimization costs of $332 million and $591 million, respectively, primarily for employee severance.

For additional information, see Note 1 (Basis of Presentation) to our Consolidated Financial Statements under Item 1, “Financial Statements.”

ACCENTURE FORM 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations 29

Non-GAAP Financial Measures

We have presented operating income, operating margin, effective tax rate and diluted earnings per share on a non-GAAP or "adjusted" basis exclu ding the business optimization costs recorded in fiscal 2024 and fiscal 2023, as we believe doing so facilitates understanding as to the impact of these items and our performance in comparison to the prior periods.

We have presented operating income, operating margin, effective tax rate and diluted earnings per share on a non-GAAP or "adjusted" basis exclu ding the business optimization costs recorded in fiscal 2024 and fiscal 2023, and, with respect to effective tax rate and diluted earnings per share, the impact of an investment gain recorded in fiscal 2023, as we believe doing so facilitates understanding as to the impact of these items and our performance in comparison to the prior periods.

While we believe that this non-GAAP financial information is useful in evaluating our operations, this information should be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with GAAP.

1 unchanged sentence

Operating income and operating margin for each of the geographic markets are as follows:

Three Months Ended Six Months Ended

February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023

Three Months Ended Nine Months Ended

May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023

(in millions of U.S.

16 unchanged sentences

Prior period amounts have been reclassified to conform with the current period presentation.

Operating income for the second quarter of fiscal 2024 increased $102 million, or 5%, compared with the second quarter of fiscal 2023.

Operating margin for the second quarter of fiscal 2024 was 13.0%, compared with 12.3% for the second quarter of fiscal 2023.

Operating income for the six months ended February 29, 2024 increased $74 million, or 2%, compared with the six months ended February 28, 2023.

Operating margin for the six months ended February 29, 2024 was 14.4%, flat with the six months ended February 28, 2023.

Operating income for the third quarter of fiscal 2024 increased $272 million, or 12%, compared with the third quarter of fiscal 2023.

Operating margin for the third quarter of fiscal 2024 was 16.0%, compared with 14.2% for the third quarter of fiscal 2023.

Operating income for the nine months ended May 31, 2024 increased $345 million, or 5%, compared with the nine months ended May 31, 2023.

Operating margin for the nine months ended May 31, 2024 was 14.9%, compared with 14.3% for the nine months ended May 31, 2023.

Geographic Markets

We estimate that the aggregate percentage impact of foreign currency exchange rates on our operating income during the three and six months ended February 29, 2024 was similar to that disclosed for revenue for each geographic market.

The commentary below provides insight into other factors affecting geographic market performance and operating income, including the impact of foreign currency exchange rates where significant, for the three and six months ended February 29, 2024 compared with the three and six months ended February 28, 2023:

We estimate that the aggregate percentage impact of foreign currency exchange rates on our operating income during the three and nine months ended May 31, 2024 was similar to that disclosed for revenue for each geographic market.

The commentary below provides insight into other factors affecting geographic market performance and operating income, including the impact of foreign currency exchange rates where significant, for the three and nine months ended May 31, 2024 compared with the three and nine months ended May 31, 2023:

North America

• Three Months.

Operatin g income increased primarily due to lower business optimization costs and lower labor costs, partially offset by a decline in consulting contract profitability.

• Six Months.

Operating i ncome increased primarily due to lower business optimization costs and lower labor costs, partially offset by a decline in consulting contract profitability.

Operatin g income increased primarily due to lower business optimization costs and lower labor costs, partially offset by a decline in consulting contract profitability and higher acquisition-related costs.

• Nine Months.

Operating i ncome increased primarily due to lower business optimization costs and lower labor costs, partially offset by a decline in consulting contract profitability and higher acquisition-related costs .

• Three Months.

Operatin g income decreased primarily due to higher business optimization costs as well as a decline in consulting revenues and consulting contract profitability.

• Six Months.

Operatin g income increased primarily due to lower business optimization costs and lower labor costs, partially offset by declines in consulting contract profitability and consulting revenues in local currency .

• Nine Months.

Operating incom e increased primarily due to the positive impact of foreign currency exchange rates which resulted in an increase in U.S.

dollar revenues, partially offset by higher business optimization costs.

dollar revenues, and lower labor costs, partially offset by declines in consulting revenues in local currency and consulting contract profitability .

Growth Markets

• Three Months.

Opera ting income decreased as revenue growth in local currency was more than offset by lower contract profitability and the negative impact of foreign currency exchange rates which resulted in a decline in U.S.

Opera ting income increased primarily due to lower business optimization costs and revenue growth in local currency, partially offset by the negative impact of foreign currency exchange rates which resulted in a decline in U.S.

dollar revenues.

• Nine Months.

Operating income decreased as revenue growth in local currency and lower business optimization costs were more than offset by lower contract profitability and the negative impact of foreign currency exchange rates which resulted in a decline in U.S.

dollar revenues.

ACCENTURE FORM 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations 30

• Six Months.

Oper ating income decreased as revenue growth in local currency was more than offset by lower contract profitability, higher business optimization costs and the negative impact of foreign currency exchange rates which resulted in a decline in U.S.

dollar revenues.

Operating Income and Operating Margin Excluding Business Optimization Costs (Non-GAAP)

The business optimization costs reduced operating margin for the second quarter of fiscal 2024 and 2023 by 70 and 150 basis points, respectively .

Adjusted operating margin for the second quarter of fiscal 2024 decreased 10 basis points to 13.7% compared with the second quarter of fiscal 2023.

The business optimization costs reduced operating margin for both the six months ended February 29, 2024 and February 28, 2023 by 80 basis points.

Adjusted op erating margin for the six months ended February 29, 2024 remained flat at 15.2% compared with the six months ended February 28, 2023.

The business optimization costs reduced operating margin for the third quarter of fiscal 2024 and 2023 by 40 and 210 basis points, respectively .

Adjusted operating margin for the third quarter of fiscal 2024 increased 10 basis points to 16.4% compared with the third quarter of fiscal 2023.

The business optimization costs reduced operating margin for the nine months ended May 31, 2024 and 2023 by 70 and 130 basis points, respectively.

Adjusted op erating margin for the nine months ended May 31, 2024 remained flat at 15.6% compared with the nine months ended May 31, 2023.

Three Months Ended

February 29, 2024 February 28, 2023

May 31, 2024 May 31, 2023

(in millions of U.S.

12 unchanged sentences

Total $ 2,631 $ 77 $ 2,708 16.4 % $ 2,359 $ 347 $ 2,706 16.3 % $ 2

Six Months Ended

February 29, 2024 February 28, 2023

Nine Months Ended

May 31, 2024 May 31, 2023

(in millions of U.S.

17 unchanged sentences

Interest Income

Interest income for the second quarter of fiscal 2024 was $65 million, an increase of $15 million over the second quarter of fiscal 2023.

Interest income for the six months ended February 29, 2024 was $167 million, an increase of $72 million over the six months ended February 28, 2023.

The increase for the three and six months ended February 29, 2024 was primarily due to higher interest rates compared to the three and six months ended February 28, 2023.

Interest income for the third quarter of fiscal 2024 was $54 million, a decrease of $28 million from the third quarter of fiscal 2023.

Interest income for the nine months ended May 31, 2024 was $221 million, an increase of $44 million over the nine months ended May 31, 2023.

The decrease for the third quarter of fiscal 2024 was primarily due to lower cash balances compared to the third quarter of fiscal 2023.

The increase for the nine months ended May 31, 2024 was primarily due to higher interest rates compared to the nine months ended May 31, 2023.

Other Income (Expense), net

Other income (expense), net primarily consists of foreign currency gains and losses, non-operating components of pension expense, as well as gains and losses associated with our investments.

During the three and six months ended February 29, 2024, Other income (expense), net decreased $31 million and $24 million from the three and six months ended February 28, 2023, respectively, primarily due to higher gains on investments, partially offset by higher foreign currency exchange losses.

For additional information, see Note 1 (Basis of Presentation) to our Consolidated Financial Statements under Item 1, “Financial Statements."

During the three and nine months ended May 31, 2024, Other income (expense), net decreased $221 million and $197 million from the three and nine months ended May 31, 2023, respectively, primarily due to lower gains on investments.

Income Tax Expense

The effective tax rates for the second quarter of fiscal 2024 and 2023 were 18.4% and 20.4%, respectively.

The lower effective tax rate for the second quarter of fiscal 2024 was primarily due to higher tax benefits from share-based payments.

The effective tax rates for the six months ended February 29, 2024 and February 28, 2023 were 21.1% and 22.0%, respectively.

The effective tax rates for the third quarter of fiscal 2024 and 2023 were 25.4% and 22.2%, respectively.

The higher effective tax rate for the third quarter of fiscal 2024 was primarily due to the tax impact in the prior year from an investment gain and higher expense from adjustments to prior year tax liabilities.

The effective tax rates for the nine months ended May 31, 2024 and 2023 were 22.6% and 22.1%, respectively.

The higher effective tax rate for the nine months ended May 31, 2024 was primarily due to the tax impact in the prior year from an investment gain.

Income Tax Expense Excluding Business Optimization Costs and Investment Gain (Non-GAAP)

Excluding the business optimization costs of $77 million and related reduction in tax expense of $24 million, our adjusted effective tax rate was 25.5% for the third quarter of fiscal 2024.

Excluding the business optimization costs of $347 million and related reduction in tax expense of $80 million, and the investment gain of $253 million and related tax expense of $9 million , our adjusted effective tax rate was 24.0% for the third quarter of fiscal 2023 .

ACCENTURE FORM 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations 31

Income Tax Expense Excluding Business Optimization Costs (Non-GAAP)

Excluding the business optimization costs of $115 million and $244 million, and related reduction in tax expense of $28 million and $52 million, our adjusted effective tax rates were 18.8% and 20.4% for the second quarter of fiscal 2024 and 2023, respectively.

Excluding the business optimization costs of $255 million and $244 million, and related reduction in tax expense of $62 million and $52 million, our adjusted effective tax rates were 21.2% and 22.0% for the six months ended February 29, 2024 and February 28, 2023, respectively.

Excluding the business optimization costs of $332 million and related reduction in tax expense of $86 million, our adjusted effective tax rate was 22.8% for the nine months ended May 31, 2024 .

Excluding the business optimization costs of $591 million and related reduction in tax expense of $132 million, and the investment gain of $253 million and related tax expense of $9 million , our adjusted effective tax rate was 22.7% for the nine months ended May 31, 2023 .

Earnings Per Share

Diluted earnings per share were $2.63 for the second quarter of fiscal 2024, compared with $2.39 for the second quarter of fiscal 2023.

Diluted earnings per share were $5.73 for the six months ended February 29, 2024, compared with $5.47 for the six months ended February 28, 2023.

Diluted earnings per share were $3.04 for the third quarter of fiscal 2024, compared with $3.15 for the third quarter of fiscal 2023.

Diluted earnings per share were $8.77 for the nine months ended May 31, 2024, compared with $8.62 for the nine months ended May 31, 2023.

For information regarding our earnings per share calculations, see Note 3 (Earnings Per Share) to our Consolidated Financial Statements under Item 1, “Financial Statements.”

Earnings Per Share Excluding Business Optimization Costs (Non-GAAP)

The business optimization costs of $87 million and $193 million, net of related taxes, decreased diluted earnings per share by $0.14 and $0.30 for the second quarter of fiscal 2024 and 2023, respectively.

Adjusted diluted earnings per share were $2.77 and $2.69 for the second quarter of fiscal 2024 and 2023, respectively.

The business optimization costs of $193 million, net of related taxes, decreased diluted earnings per share by $0.30 for both the six months ended February 29, 2024 and February 28, 2023.

Adjusted diluted earnings per share were $6.04 and $5.77 for the six months ended February 29, 2024 and February 28, 2023, respectively.

Three Months Ended Six Months Ended

February 29, 2024 As Reported $ 2.63 $ 5.73

Earnings Per Share Excluding Business Optimization Costs and Investment Gain (Non-GAAP)

The business optimization costs of $54 million, net of related taxes, decreased diluted earnings per share by $0.08 for the third quarter of fiscal 2024.

Adjusted diluted earnings per share were $3.13 for the third quarter of fiscal 2024.

The business optimization costs of $267 million, net of related taxes, decreased diluted earnings per share by $0.42 and the investment gain of $244 million, net of related taxes, increased diluted earnings per share by $0.38 for the third quarter of fiscal 2023.

Adjusted diluted earnings per share were $3.19 for the third quarter of fiscal 2023.

The business optimization costs of $247 million, net of related taxes, decreased diluted earnings per share by $0.39 for the nine months ended May 31, 2024.

Adjusted diluted earnings per share were $9.16 for the nine months ended May 31, 2024.

The business optimization costs of $459 million, net of related taxes, decreased diluted earnings per share by $0.72 and the investment gain of $244 million, net of related taxes, increased diluted earnings per share by $0.38 for the nine months ended May 31, 2023.

Adjusted diluted earnings per share were $8.96 for the nine months ended May 31, 2023.

Three Months Ended Nine Months Ended

May 31, 2024 As Reported $ 3.04 $ 8.77

Business optimization costs 0.12 0.52

Tax effect of business optimization costs (1) (0.04) (0.13)

February 29, 2024 As Adjusted $ 2.77 $ 6.04

February 28, 2023 As Reported $ 2.39 $ 5.47

May 31, 2024 As Adjusted $ 3.13 $ 9.16

May 31, 2023 As Reported $ 3.15 $ 8.62

Business optimization costs 0.54 0.93

Tax effect of business optimization costs (1) (0.08) (0.08)

February 28, 2023 As Adjusted $ 2.69 $ 5.77

Gain on an investment (0.40) (0.40)

Tax effect of business optimization costs and gain on an investment (1) (0.11) (0.19)

May 31, 2023 As Adjusted $ 3.19 $ 8.96

Amounts in table may not total due to rounding.

(1) The income tax effect of business optimization costs includes both the current and deferred income tax impact and was calculated by using the relevant tax rate of the country where the costs were recorded.

(1) The income tax effect of business optimization costs and gain on an investment include both the current and deferred income tax impact and was calculated by using the relevant tax rate of the country where the adjustments were recorded.

Changes in adjusted diluted earnings per share were due to the following factors:

Three Months Ended Six Months Ended

February 28, 2023 As Adjusted $ 2.69 $ 5.77

Three Months Ended Nine Months Ended

May 31, 2023 As Adjusted $ 3.19 $ 8.96

Non-operating income — 0.11

Effective tax rate 0.06 0.06

Operating results — 0.10

Lower share count 0.02 0.03

Effective tax rate (0.07) (0.01)

Net income attributable to noncontrolling interests (0.01) (0.03)

Operating results (0.03) 0.10

February 29, 2024 As Adjusted $ 2.77 $ 6.04

May 31, 2024 As Adjusted $ 3.13 $ 9.16

ACCENTURE FORM 10-Q

1 unchanged sentence

Liquidity and Capital Resources

As of February 29, 2024, Cash and cash equivalents was $5.1 billion, compared with $9.0 billion as of August 31, 2023.

As of May 31, 2024, Cash and cash equivalents was $5.5 billion, compared with $9.0 billion as of August 31, 2023.

Cash flows from operating, investing and financing activities, as reflected in our Consolidated Cash Flows Statements, are summarized in the following table:

Six Months Ended

Nine Months Ended

(in millions of U.S.

dollars) February 29, 2024 February 28, 2023 Change

dollars) May 31, 2024 May 31, 2023 Change

Net cash provided by (used in):

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Financing activities:

The $225 million increase in cash used was primarily due to an increase in cash dividends paid.

The $530 million increase in financing cash flows was primarily due to net proceeds from borrowings, partially offset by increases in the net purchases of shares and cash dividends paid.

For additional information, see Note 7 (Shareholders’ Equity) to our Consolidated Financial Statements under Item 1, “Financial Statements.”

3 unchanged sentences

Borrowing Facilities

As of February 29, 2024, we had the following borrowing facilities:

(in millions of U.S.

dollars) Credit Facilities

Syndicated loan facility (1) $ 3,000

Separate, uncommitted, unsecured multicurrency revolving credit facilities 1,900

Local guaranteed and non-guaranteed lines of credit 243

Total $ 5,144

Amounts in table may not total due to rounding.

(1) This facility, which matures on April 24, 2026, provides unsecured, revolving borrowing capacity for general corporate capital purposes, including the issuance of letters of credit and short-term commercial paper.

Borrowings under this facility will accrue interest at the applicable risk-free rate plus a spread.

We continue to be in compliance with relevant covenant terms.

The facility is subject to annual commitment fees.

As of February 29, 2024, we had $100 million of commercial paper outstanding and backed by this facility, with a weighted-average effective interest rate of 5.4%.

Under the borrowing facilities described above, we had an aggregate of $1,037 million of letters of credit outstanding as of February 29, 2024.

We also had $100 million of commercial paper outstanding as of February 29, 2024.

The amount of commercial paper and letters of credit outstanding reduces the available borrowing capacity under these facilities.

ACCENTURE FORM 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations 32

For information about borrowing facilities, see Note 9 (Borrowings and Indebtedness) to our Consolidated Financial Statements under Item 1, “Financial Statements.”

Share Purchases and Redemptions

1 unchanged sentence

exchangeable shares held by current and former members of Accenture Leadership and their permitted transferees.

Our share purchase activity during the six months ended February 29, 2024 is as follows:

Our share purchase activity during the nine months ended May 31, 2024 is as follows:

Accenture plc Class A

10 unchanged sentences

These shares are held as treasury shares by Accenture plc and may be utilized to provide for select employee benefits, such as equity awards to our employees.

(2) During the six months ended February 29, 2024, as authorized under our various employee equity share plans, we acquired Accenture plc Class A ordinary shares primarily via share withholding for payroll tax obligations due from employees and former employees in connection with the delivery of Accenture plc Class A ordinary shares under those plans.

(2) During the nine months ended May 31, 2024, as authorized under our various employee equity share plans, we acquired Accenture plc Class A ordinary shares primarily via share withholding for payroll tax obligations due from employees and former employees in connection with the delivery of Accenture plc Class A ordinary shares under those plans.

These purchases of shares in connection with employee share plans do not affect our aggregate available authorization for our publicly announced open-market share purchase and the other share purchase programs.

ACCENTURE FORM 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations 33

We intend to continue to use a significant portion of cash generated from operations for share repurchases during the remainder of fiscal 2024.

13 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis