Accenture plc 10-Q

Item 1. Financial Statements Consolidated Balance Sheets November 30, 2024 and August 31, 2024 November 30, 2024 August 31, 2024 ASSETS (Unaudited) CURRENT ASSETS: Cash and cash equivalents $ 8,306,055 $ 5,004,469 Short-term investments 5,150 5,396 Receivables and contract assets 14,574,637 13,664,847 Other current assets 2,312,495 2,183,069 Total current assets 25,198,337 20,857,781 NON-CURRENT ASSETS: Contract assets 128,981 120,260 Investments 371,507 334,664 Property and equipment, net 1,507,460 1,521,119 Lease assets 2,669,480 2,757,396 Goodwill 20,868,911 21,120,179 Deferred contract costs 893,898 862,140 Deferred tax assets 4,108,532 4,147,496 Intangibles 2,740,590 2,904,031 Other non-current assets 1,380,374 1,307,297 Total non-current assets 34,669,733 35,074,582 TOTAL ASSETS $ 59,868,070 $ 55,932,363 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES: Current portion of long-term debt and bank borrowings $ 114,321 $ 946,229 Accounts payable 2,579,165 2,743,807 Deferred revenues 4,711,553 5,174,923 Accrued payroll and related benefits 6,602,324 7,050,833 Income taxes payable 863,673 719,084 Lease liabilities 709,964 726,202 Other accrued liabilities 1,605,968 1,615,049 Total current liabilities 17,186,968 18,976,127 NON-CURRENT LIABILITIES: Long-term debt 5,039,460 78,628 Deferred revenues 623,750 641,091 Retirement obligation 1,845,092 1,815,867 Deferred tax liabilities 453,066 428,845 Income taxes payable 1,366,759 1,514,869 Lease liabilities 2,282,652 2,369,490 Other non-current liabilities 967,900 939,198 Total non-current liabilities 12,578,679 7,787,988 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS’ EQUITY: Ordinary shares, par value 1.00 euros per share, 40,000 shares authorized and issued as of November 30, 2024 and August 31, 2024 57 57 Class A ordinary shares, par value $ 0.0000225 per share, 20,000,000,000 shares authorized, 674,278,898 and 672,484,852 shares issued as of November 30, 2024 and August 31, 2024, respectively 15 15 Class X ordinary shares, par value $ 0.0000225 per share, 1,000,000,000 shares authorized, 307,754 shares issued and outstanding as of November 30, 2024 and August 31, 2024 — — Restricted share units 2,777,423 2,614,608 Additional paid-in capital 15,364,338 14,710,857 Treasury shares, at cost: Ordinary, 40,000 shares as of November 30, 2024 and August 31, 2024; Class A ordinary, 49,248,770 and 47,204,565 shares as of November 30, 2024 and August 31, 2024, respectively ( 11,304,512 ) ( 10,564,572 ) Retained earnings 24,402,568 23,082,423 Accumulated other comprehensive loss ( 2,049,394 ) ( 1,554,742 ) Total Accenture plc shareholders’ equity 29,190,495 28,288,646 Noncontrolling interests 911,928 879,602 Total shareholders’ equity 30,102,423 29,168,248 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 59,868,070 $ 55,932,363 The accompanying Notes are an integral part of these Consolidated Financial Statements. Table of Contents Consolidated Financial Statements (In thousands of U.S. dollars, except share and per share amounts) ACCENTURE FORM 10-Q 4 Consolidated Income Statements For the Three Months Ended November 30, 2024 and 2023 (Unaudited) 2024 2023 REVENUES: Revenues $ 17,689,545 $ 16,224,303 OPERATING EXPENSES: Cost of services 11,866,716 10,776,362 Sales and marketing 1,811,109 1,709,891 General and administrative costs 1,063,243 1,033,499 Business optimization costs — 139,664 Total operating expenses 14,741,068 13,659,416 OPERATING INCOME 2,948,477 2,564,887 Interest income 76,027 101,980 Interest expense ( 30,042 ) ( 14,495 ) Other income (expense), net ( 39,217 ) ( 35,719 ) INCOME BEFORE INCOME TAXES 2,955,245 2,616,653 Income tax expense 639,055 606,672 NET INCOME 2,316,190 2,009,981 Net income attributable to noncontrolling interests in Accenture Canada Holdings Inc. ( 2,170 ) ( 2,016 ) Net income attributable to noncontrolling interests – other ( 35,126 ) ( 34,521 ) NET INCOME ATTRIBUTABLE TO ACCENTURE PLC $ 2,278,894 $ 1,973,444 Weighted average Class A ordinary shares: Basic 625,676,922 627,996,111 Diluted 634,656,410 637,398,361 Earnings per Class A ordinary share: Basic $ 3.64 $ 3.14 Diluted $ 3.59 $ 3.10 Cash dividends per share $ 1.48 $ 1.29 The accompanying Notes are an integral part of these Consolidated Financial Statements. Table of Contents Consolidated Financial Statements (In thousands of U.S. dollars) ACCENTURE FORM 10-Q 5 Consolidated Statements of Comprehensive Income For the Three Months Ended November 30, 2024 and 2023 (Unaudited) 2024 2023 NET INCOME $ 2,316,190 $ 2,009,981 OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: Foreign currency translation ( 474,983 ) 68,192 Defined benefit plans ( 15,758 ) 36,392 Cash flow hedges ( 3,911 ) 11,302 OTHER COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO ACCENTURE PLC ( 494,652 ) 115,886 Other comprehensive income (loss) attributable to noncontrolling interests ( 10,093 ) 1,885 COMPREHENSIVE INCOME $ 1,811,445 $ 2,127,752 COMPREHENSIVE INCOME ATTRIBUTABLE TO ACCENTURE PLC $ 1,784,242 $ 2,089,330 Comprehensive income attributable to noncontrolling interests 27,203 38,422 COMPREHENSIVE INCOME $ 1,811,445 $ 2,127,752 The accompanying Notes are an integral part of these Consolidated Financial Statements. Table of Contents Consolidated Financial Statements (In thousands of U.S. dollars and share amounts) ACCENTURE FORM 10-Q 6 Consolidated Shareholders’ Equity Statement For the Three Months Ended November 30, 2024 (Unaudited) Ordinary Shares Class A Ordinary Shares Class X Ordinary Shares Restricted Share Units Additional Paid-in Capital Treasury Shares Retained Earnings Accumulated Other Comprehensive Loss Total Accenture plc Shareholders’ Equity Noncontrolling Interests Total Shareholders’ Equity $ No. Shares $ No. Shares $ No. Shares $ No. Shares Balance as of August 31, 2024 $ 57 40 $ 15 672,485 $ — 308 $ 2,614,608 $ 14,710,857 $ ( 10,564,572 ) ( 47,245 ) $ 23,082,423 $ ( 1,554,742 ) $ 28,288,646 $ 879,602 $ 29,168,248 Net income 2,278,894 2,278,894 37,296 2,316,190 Other comprehensive income (loss) ( 494,652 ) ( 494,652 ) ( 10,093 ) ( 504,745 ) Purchases of Class A shares 742 ( 897,395 ) ( 2,528 ) ( 896,653 ) ( 742 ) ( 897,395 ) Share-based compensation expense 413,697 56,728 470,425 470,425 Purchases/redemptions of Accenture Canada Holdings Inc. exchangeable shares and Class X shares ( 869 ) ( 869 ) ( 869 ) Issuances of Class A shares for employee share programs 1,794 ( 284,465 ) 605,253 157,455 484 ( 491 ) 477,752 ( 385 ) 477,367 Dividends 33,583 ( 958,258 ) ( 924,675 ) ( 883 ) ( 925,558 ) Other, net ( 8,373 ) ( 8,373 ) 7,133 ( 1,240 ) Balance as of November 30, 2024 $ 57 40 $ 15 674,279 $ — 308 $ 2,777,423 $ 15,364,338 $ ( 11,304,512 ) ( 49,289 ) $ 24,402,568 $ ( 2,049,394 ) $ 29,190,495 $ 911,928 $ 30,102,423 The accompanying Notes are an integral part of these Consolidated Financial Statements. Table of Contents Consolidated Financial Statements (In thousands of U.S. dollars and share amounts) ACCENTURE FORM 10-Q 7 Consolidated Shareholders’ Equity Statement — (continued) For the Three Months Ended November 30, 2023 (Unaudited) Ordinary Shares Class A Ordinary Shares Class X Ordinary Shares Restricted Share Units Additional Paid-in Capital Treasury Shares Retained Earnings Accumulated Other Comprehensive Loss Total Accenture plc Shareholders’ Equity Noncontrolling Interests Total Shareholders’ Equity $ No. Shares $ No. Shares $ No. Shares $ No. Shares Balance as of August 31, 2023 $ 57 40 $ 15 664,616 $ — 325 $ 2,403,374 $ 12,778,782 $ ( 7,062,512 ) ( 36,391 ) $ 19,316,224 $ ( 1,743,101 ) $ 25,692,839 $ 765,754 $ 26,458,593 Net income 1,973,444 1,973,444 36,537 2,009,981 Other comprehensive income (loss) 115,886 115,886 1,885 117,771 Purchases of Class A shares 1,050 ( 1,188,289 ) ( 3,810 ) ( 1,187,239 ) ( 1,050 ) ( 1,188,289 ) Share-based compensation expense 365,711 57,289 423,000 423,000 Purchases/redemptions of Accenture Canada Holdings Inc. exchangeable shares and Class X shares ( 7 ) ( 2,839 ) ( 2,839 ) ( 2,839 ) Issuances of Class A shares for employee share programs 1,896 ( 245,342 ) 525,335 218,783 641 ( 21,751 ) 477,025 409 477,434 Dividends 29,279 ( 838,504 ) ( 809,225 ) ( 831 ) ( 810,056 ) Other, net ( 6,140 ) ( 6,140 ) 5,982 ( 158 ) Balance as of November 30, 2023 $ 57 40 $ 15 666,512 $ — 318 $ 2,553,022 $ 13,353,477 $ ( 8,032,018 ) ( 39,560 ) $ 20,429,413 $ ( 1,627,215 ) $ 26,676,751 $ 808,686 $ 27,485,437 The accompanying Notes are an integral part of these Consolidated Financial Statements. Table of Contents Consolidated Financial Statements (In thousands of U.S. dollars) ACCENTURE FORM 10-Q 8 Consolidated Cash Flows Statements For the Three Months Ended November 30, 2024 and 2023 (Unaudited) 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 2,316,190 $ 2,009,981 Adjustments to reconcile Net income to Net cash provided by (used in) operating activities — Depreciation, amortization and other 569,340 521,400 Share-based compensation expense 470,425 423,000 Deferred tax expense (benefit) 59,222 ( 24,371 ) Other, net ( 19,903 ) 6,795 Change in assets and liabilities, net of acquisitions — Receivables and contract assets, current and non-current ( 1,225,106 ) ( 836,231 ) Other current and non-current assets ( 441,514 ) ( 658,647 ) Accounts payable ( 124,399 ) 48,728 Deferred revenues, current and non-current ( 313,397 ) ( 510,391 ) Accrued payroll and related benefits ( 307,357 ) ( 273,763 ) Income taxes payable, current and non-current 50,891 85,142 Other current and non-current liabilities ( 11,906 ) ( 293,092 ) Net cash provided by (used in) operating activities 1,022,486 498,551 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment ( 152,205 ) ( 68,933 ) Purchases of businesses and investments, net of cash acquired ( 241,560 ) ( 788,025 ) Proceeds from the sale of businesses and investments 5,270 — Other investing, net 2,971 1,528 Net cash provided by (used in) investing activities ( 385,524 ) ( 855,430 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of shares 477,367 477,434 Purchases of shares ( 898,264 ) ( 1,191,128 ) Proceeds from debt 5,061,085 — Repayments of debt ( 931,885 ) — Cash dividends paid ( 925,558 ) ( 810,056 ) Other financing, net ( 30,997 ) ( 28,163 ) Net cash provided by (used in) financing activities 2,751,748 ( 1,551,913 ) Effect of exchange rate changes on cash and cash equivalents ( 87,124 ) 4,601 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 3,301,586 ( 1,904,191 ) CASH AND CASH EQUIVALENTS, beginning of period 5,004,469 9,045,032 CASH AND CASH EQUIVALENTS, end of period $ 8,306,055 $ 7,140,841 SUPPLEMENTAL CASH FLOW INFORMATION: Income taxes paid, net $ 529,162 $ 563,359 The accompanying Notes are an integral part of these Consolidated Financial Statements. Table of Contents Notes To Consolidated Financial Statements (In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed) ACCENTURE FORM 10-Q 9 1. Basis of Presentation The accompanying unaudited interim Consolidated Financial Statements of Accenture plc and its controlled subsidiary companies have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. We use the terms “Accenture,” “we” and “our” in the Notes to Consolidated Financial Statements to refer to Accenture plc and its subsidiaries. These Consolidated Financial Statements should therefore be read in conjunction with the Consolidated Financial Statements and Notes thereto for the fiscal year ended August 31, 2024 included in our Annual Report on Form 10-K filed with the SEC on October 10, 2024. The accompanying unaudited interim Consolidated Financial Statements have been prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions that affect amounts reported in the Consolidated Financial Statements and accompanying disclosures. Although these estimates are based on management’s best knowledge of current events and actions that we may undertake in the future, actual results may differ from those estimates. The Consolidated Financial Statements reflect all adjustments of a normal, recurring nature that are, in the opinion of management, necessary for a fair presentation of results for these interim periods. The results of operations for the three months ended November 30, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending August 31, 2025. Allowance for Credit Losses—Client Receivables and Contract Assets As of November 30, 2024 and August 31, 2024, the total allowance for credit losses recorded for client receivables and contract assets was $ 27,354 and $ 27,561 , respectively. The change in the allowance is primarily due to immaterial write-offs and changes in gross client receivables and contract assets. Investments All available-for-sale securities and liquid investments with an original maturity greater than three months but less than one year are considered to be Short-term investments. Non-current investments consist of equity securities in privately-held companies and are accounted for using either the equity or fair value measurement alternative method of accounting (for investments without readily determinable fair values). Our non-current investments are as follows: November 30, 2024 August 31, 2024 Equity method investments $ 127,776 $ 128,634 Investments without readily determinable fair values 243,731 206,030 Total non-current investments $ 371,507 $ 334,664 For investments in which we can exercise significant influence but do not control, we use the equity method of accounting. Equity method investments are initially recorded at cost and our proportionate share of gains and losses of the investee are included as a component of Other income (expense), net. Table of Contents Notes To Consolidated Financial Statements (In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed) ACCENTURE FORM 10-Q 10 Depreciation and Amortization As of November 30, 2024 and August 31, 2024, total accumulated depreciation was $ 2,752,886 and $ 2,713,855 , respectively. See table below for a summary of depreciation on fixed assets, deferred transition amortization, intangible assets amortization and operating lease cost for the three months ended November 30, 2024 and 2023, respectively. Three Months Ended November 30, 2024 November 30, 2023 Depreciation $ 133,099 $ 133,245 Amortization - Deferred transition 85,324 98,491 Amortization - Intangible assets 160,214 111,631 Operating lease cost 186,529 175,014 Other 4,174 3,019 Total depreciation, amortization and other $ 569,340 $ 521,400 New Accounting Pronouncements On November 27, 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, Improvements to Reportable Segment Disclosures, which requires entities to enhance disclosures regarding their segments, including significant segment expenses. The ASU will be effective beginning with our annual fiscal 2025 financial statements and requires a retrospective method upon adoption. We are currently evaluating the impact of this standard on our segment disclosures. On December 14, 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. The ASU will be effective beginning with our annual fiscal 2026 financial statements and allows for adoption on a prospective basis, with a retrospective option. We are in the process of assessing the impacts and method of adoption. This ASU will impact our income tax disclosures, but not our financial position or results of operations. On November 4, 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses, which requires entities to disclose specified information about certain expenses in the notes to the financial statements, including employee compensation. The ASU will be effective beginning with our annual fiscal 2028 financial statements. We are currently evaluating the impact of this standard on our disclosures. Table of Contents Notes To Consolidated Financial Statements (In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed) ACCENTURE FORM 10-Q 11 2. Revenues Disaggregation of Revenue See Note 12 (Segment Reporting) to these Consolidated Financial Statements for our disaggregated revenues. Remaining Performance Obligations We had remaining performance obligations of approximately $ 29 billion and $ 30 billion as of November 30, 2024 and August 31, 2024, respectively. Our remaining performance obligations represent the amount of transaction price for which work has not been performed and revenue has not been recognized. The majority of our contracts are terminable by the client on short notice with little or no termination penalties, and some without notice. Under Topic 606, only the non-cancelable portion of these contracts is included in our performance obligations. Additionally, our performance obligations only include variable consideration if we assess it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty is resolved. Based on the terms of our contracts, a significant portion of what we consider contract bookings is not included in our remaining performance obligations. We expect to recognize approximately 58 % of our remaining performance obligations as of November 30, 2024 as revenue in fiscal 2025, an additional 20 % in fiscal 2026, and the balance thereafter. Contract Estimates Adjustments in contract estimates related to performance obligations satisfied or partially satisfied in prior periods were immaterial for the three months ended November 30, 2024 and 2023. Contract Balances Deferred transition revenues were $ 623,750 and $ 641,091 as of November 30, 2024 and August 31, 2024, respectively, and are included in Non-current deferred revenues. Costs related to these activities are also deferred and are expensed as the services are provided. Deferred transition costs were $ 893,898 and $ 862,140 as of November 30, 2024 and August 31, 2024, respectively, and are included in Deferred contract costs. Generally, deferred transition costs are recoverable under the contract in the event of early termination and are monitored regularly for impairment. Impairment losses are recorded when projected remaining undiscounted operating cash flows of the related contract are not sufficient to recover the carrying amount of contract assets. The following table provides information about the balances of our Receivables and Contract assets, net of allowance, and Contract liabilities (Deferred revenues): November 30, 2024 August 31, 2024 Receivables $ 12,590,544 $ 11,873,442 Contract assets (current) 1,984,093 1,791,405 Receivables and contract assets, net of allowance (current) 14,574,637 13,664,847 Contract assets (non-current) 128,981 120,260 Deferred revenues (current) 4,711,553 5,174,923 Deferred revenues (non-current) 623,750 641,091 Changes in the contract asset and liability balances during the three months ended November 30, 2024 were a result of normal business activity and not materially impacted by any other factors. Revenues recognized during the three months ended November 30, 2024 that were included in Deferred revenues as of August 31, 2024 were $ 2.8 billion. Revenues recognized during the three months ended November 30, 2023 that were included in Deferred revenues as of August 31, 2023 were $ 2.8 billion. Table of Contents Notes To Consolidated Financial Statements (In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed) ACCENTURE FORM 10-Q 12 3. Earnings Per Share Basic and diluted earnings per share are calculated as follows: Three Months Ended November 30, 2024 November 30, 2023 Basic earnings per share Net income attributable to Accenture plc $ 2,278,894 $ 1,973,444 Basic weighted average Class A ordinary shares 625,676,922 627,996,111 Basic earnings per share $ 3.64 $ 3.14 Diluted earnings per share Net income attributable to Accenture plc $ 2,278,894 $ 1,973,444 Net income attributable to noncontrolling interests in Accenture Canada Holdings Inc. (1) 2,170 2,016 Net income for diluted earnings per share calculation $ 2,281,064 $ 1,975,460 Basic weighted average Class A ordinary shares 625,676,922 627,996,111 Class A ordinary shares issuable upon redemption/exchange of noncontrolling interests (1) 595,837 641,659 Diluted effect of employee compensation related to Class A ordinary shares 8,185,818 8,492,332 Diluted effect of share purchase plans related to Class A ordinary shares 197,833 268,259 Diluted weighted average Class A ordinary shares (2) 634,656,410 637,398,361 Diluted earnings per share $ 3.59 $ 3.10 (1) Diluted earnings per share assumes the exchange of all Accenture Canada Holdings Inc. exchangeable shares for Accenture plc Class A ordinary shares on a one -for-one basis. The income effect does not take into account “Net income attributable to noncontrolling interests - other,” since those shares are not redeemable or exchangeable for Accenture plc Class A ordinary shares. (2) The weighted average diluted shares outstanding for the calculation of diluted earnings per share excludes an immaterial amount of shares issuable upon the vesting of restricted stock units because their effects were antidilutive. Table of Contents Notes To Consolidated Financial Statements (In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed) ACCENTURE FORM 10-Q 13 4. Accumulated Other Comprehensive Loss The following table summarizes the changes in the accumulated balances for each component of accumulated other comprehensive loss attributable to Accenture plc: Three Months Ended November 30, 2024 November 30, 2023 Foreign currency translation Beginning balance $ ( 1,295,743 ) $ ( 1,510,632 ) Foreign currency translation ( 486,087 ) 67,789 Income tax benefit (expense) 1,030 2,240 Portion attributable to noncontrolling interests 10,074 ( 1,837 ) Foreign currency translation, net of tax ( 474,983 ) 68,192 Ending balance ( 1,770,726 ) ( 1,442,440 ) Defined benefit plans Beginning balance ( 254,172 ) ( 226,503 ) Reclassifications into net periodic pension and post-retirement expense ( 17,680 ) 44,294 Income tax benefit (expense) 1,907 ( 7,865 ) Portion attributable to noncontrolling interests 15 ( 37 ) Defined benefit plans, net of tax ( 15,758 ) 36,392 Ending balance ( 269,930 ) ( 190,111 ) Cash flow hedges Beginning balance ( 4,827 ) ( 5,966 ) Unrealized gain (loss) 14,598 23,614 Reclassification adjustments into Cost of services ( 7,477 ) ( 10,600 ) Income tax benefit (expense) ( 11,036 ) ( 1,701 ) Portion attributable to noncontrolling interests 4 ( 11 ) Cash flow hedges, net of tax ( 3,911 ) 11,302 Ending balance (1) ( 8,738 ) 5,336 Accumulated other comprehensive loss $ ( 2,049,394 ) $ ( 1,627,215 ) (1) As of November 30, 2024, $ 25,149 of net unrealized gains related to derivatives designated as cash flow hedges is expected to be reclassified into Cost of services in the next twelve months. Table of Contents Notes To Consolidated Financial Statements (In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed) ACCENTURE FORM 10-Q 14 5. Business Combinations During the three months ended November 30, 2024, we completed individually immaterial acquisitions for total consideration of $ 184,871 , net of cash acquired. The pro forma effects of these acquisitions on our operations were not material. 6. Goodwill and Intangible Assets Goodwill The changes in the carrying amount of goodwill by reportable segment are as follows: August 31, 2024 Additions/ Adjustments Foreign Currency Translation November 30, 2024 Americas (1) $ 11,960,650 $ 31,993 $ ( 33,777 ) $ 11,958,866 EMEA 7,341,686 109,591 ( 307,796 ) 7,143,481 Asia Pacific (1) 1,817,843 842 ( 52,121 ) 1,766,564 Total $ 21,120,179 $ 142,426 $ ( 393,694 ) $ 20,868,911 (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. Goodwill includes immaterial adjustments related to prior period acquisitions. Intangible Assets Our definite-lived intangible assets by major asset class are as follows: August 31, 2024 November 30, 2024 Intangible Asset Class Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer-related $ 3,924,339 $ ( 1,336,679 ) $ 2,587,660 $ 3,861,361 $ ( 1,412,787 ) $ 2,448,574 Technology 335,845 ( 183,182 ) 152,663 338,271 ( 198,843 ) 139,428 Patents 120,457 ( 72,518 ) 47,939 118,339 ( 71,700 ) 46,639 Other 150,098 ( 34,329 ) 115,769 145,021 ( 39,072 ) 105,949 Total $ 4,530,739 $ ( 1,626,708 ) $ 2,904,031 $ 4,462,992 $ ( 1,722,402 ) $ 2,740,590 Total amortization related to our intangible assets was $ 160,214 and $ 111,631 for the three months ended November 30, 2024 and 2023, respectively. Estimated future amortization related to intangible assets held as of November 30, 2024 is as follows: Fiscal Year Estimated Amortization Remainder of 2025 $ 444,238 2026 534,917 2027 470,141 2028 435,618 2029 346,275 Thereafter 509,401 Total $ 2,740,590 Table of Contents Notes To Consolidated Financial Statements (In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed) ACCENTURE FORM 10-Q 15 7. Shareholders’ Equity Dividends Our dividend activity during the three months ended November 30, 2024 is as follows: Dividend Per Share Accenture plc Class A Ordinary Shares Accenture Canada Holdings Inc. Exchangeable Shares Total Cash Outlay Dividend Payment Date Record Date Cash Outlay Record Date Cash Outlay November 15, 2024 $ 1.48 October 10, 2024 $ 924,675 October 9, 2024 $ 883 $ 925,558 The payment of cash dividends includes the net effect of $ 33,583 of additional restricted stock units being issued as a part of our share plans, which resulted in 93,129 restricted share units being issued. Subsequent Event On December 18, 2024, the Board of Directors of Accenture plc declared a quarterly cash dividend of $ 1.48 per share on our Class A ordinary shares for shareholders of record at the close of business on January 16, 2025 payable on February 14, 2025. Table of Contents Notes To Consolidated Financial Statements (In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed) ACCENTURE FORM 10-Q 16 8. Financial Instruments Derivatives In the normal course of business, we use derivative financial instruments to manage foreign currency exchange rate risk. Our derivative financial instruments consist of deliverable and non-deliverable foreign currency forward contracts. Cash Flow Hedges For a cash flow hedge, the effective portion of the change in estimated fair value of a hedging instrument is recorded in Accumulated other comprehensive loss as a separate component of Shareholders’ Equity and is reclassified into Cost of services in the Consolidated Income Statements during the period in which the hedged transaction is recognized. For information related to derivatives designated as cash flow hedges that were reclassified into Cost of services during the three months ended November 30, 2024 and 2023, as well as those expected to be reclassified into Cost of services in the next twelve months, see Note 4 (Accumulated Other Comprehensive Loss) to these Consolidated Financial Statements. Other Derivatives Realized gains or losses and changes in the estimated fair value of foreign currency forward contracts that have not been designated as hedges were net losses of $ 4,256 and $ 20,280 for the three months ended November 30, 2024 and 2023, respectively. Gains and losses on these contracts are recorded in Other income (expense), net in the Consolidated Income Statements and are offset by gains and losses on the related hedged items. Fair Value of Derivative Instruments The notional and fair values of all derivative instruments are as follows: November 30, 2024 August 31, 2024 Assets Cash Flow Hedges Other current assets $ 55,013 $ 51,152 Other non-current assets 26,407 28,363 Other Derivatives Other current assets 34,707 39,733 Total assets $ 116,127 $ 119,248 Liabilities Cash Flow Hedges Other accrued liabilities $ 29,863 $ 29,247 Other non-current liabilities 25,371 35,346 Other Derivatives Other accrued liabilities 8,851 25,974 Total liabilities $ 64,085 $ 90,567 Total fair value $ 52,042 $ 28,681 Total notional value $ 14,707,184 $ 14,824,483 We utilize standard counterparty master agreements containing provisions for the netting of certain foreign currency transaction obligations and for the set-off of certain obligations in the event of an insolvency of one of the parties to the transaction. In the Consolidated Balance Sheets, we record derivative assets and liabilities at gross fair value. The potential effect of netting derivative assets against liabilities under the counterparty master agreements is as follows: November 30, 2024 August 31, 2024 Net derivative assets $ 83,615 $ 91,127 Net derivative liabilities 31,573 62,446 Total fair value $ 52,042 $ 28,681 Table of Contents Notes To Consolidated Financial Statements (In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed) ACCENTURE FORM 10-Q 17 9. Borrowings and Indebtedness On October 4, 2024, Accenture Capital Inc. (“Accenture Capital”), a wholly owned finance subsidiary of Accenture plc, issued $ 5 billion aggregate principal amount of senior unsecured notes. Net proceeds from the offering are being used for general corporate purposes, including repayment of outstanding commercial paper borrowings. Interest on the senior unsecured notes is payable semi-annually in arrears. Accenture Capital may redeem the senior unsecured notes at any time in whole, or from time to time, in part at specified redemption prices. Accenture plc and Accenture Capital are not subject to any financial covenants under the senior unsecured notes. The following is a summary of total outstanding debt as of November 30, 2024 and August 31, 2024 , respectively: November 30, 2024 August 31, 2024 Current portion of long-term debt and bank borrowings Commercial paper (1) $ 99,446 $ 931,507 Other (2) 14,875 14,722 Total current portion of long-term debt and bank borrowings $ 114,321 $ 946,229 Long-term debt Senior notes – 3.90 % due 2027 $ 1,100,000 $ — Senior notes – 4.05 % due 2029 1,200,000 — Senior notes – 4.25 % due 2031 1,200,000 — Senior notes – 4.50 % due 2034 1,500,000 — Total principal amount (3) $ 5,000,000 $ — Less: unamortized debt discount and issuance costs ( 37,998 ) — Total carrying amount $ 4,962,002 $ — Other (2) 77,458 78,628 Total long-term debt $ 5,039,460 $ 78,628 (1) The carrying amounts of the commercial paper as of November 30, 2024 and August 31, 2024 include the remaining principal outstanding of $ 100,000 and $ 935,000 , respectively, net of total unamortized discounts of $ 554 and $ 3,493 , respectively. The weighted-average effective interest rate for the commercial paper was 4.6 % and 5.4 % as of November 30, 2024 and August 31, 2024, respectively. (2) Amounts primarily include finance lease liabilities. (3) The total estimated fair value of our senior notes was $ 4.9 billion as of November 30, 2024. The fair value was determined based on quoted prices as of the last trading day of the first quarter of fiscal 2025 and is classified as Level 1 within the fair value hierarchy. As of November 30, 2024, future principal payments for total outstanding debt, excluding finance leases, are summarized as follows: Fiscal Year Amount Remainder of 2025 $ 100,000 2026 — 2027 — 2028 1,100,000 2029 — Thereafter 3,900,000 Total $ 5,100,000 Table of Contents Notes To Consolidated Financial Statements (In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed) ACCENTURE FORM 10-Q 18 As of November 30, 2024, we had the following borrowing facilities: Credit Facilities Syndicated loan facility (1) $ 5,500,000 Separate, uncommitted, unsecured multicurrency revolving credit facilities (2) 1,917,931 Local guaranteed and non-guaranteed lines of credit (3) 281,345 Total $ 7,699,276 (1) This facility, which matures on May 14, 2029, provides unsecured, revolving borrowing capacity for general corporate 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. (2) We maintain separate, uncommitted and unsecured multicurrency revolving credit facilities. These facilities provide local currency financing for the majority of our operations. Interest rate terms on the revolving facilities are at market rates prevailing in the relevant local markets. As of November 30, 2024 and August 31, 2024 , we had no borrowings under these facilities. (3) We also maintain local guaranteed and non-guaranteed lines of credit for those locations that cannot access our global facilities. As of November 30, 2024 and August 31, 2024 , we had no borrowings under these various facilities. We had an aggregate of $ 1,242,317 and $ 1,269,178 of letters of credit outstanding and $ 100,000 and $ 935,000 (excluding unamortized discounts) of commercial paper outstanding as of November 30, 2024 and August 31, 2024, respectively. The amount of letters of credit and commercial paper outstanding reduces the available borrowing capacity under the facilities described above. 10. Income Taxes We apply an estimated annual effective tax rate to our year-to-date operating results to determine the interim provision for income tax expense. In addition, we recognize taxes related to unusual or infrequent items or resulting from a change in judgment regarding a position taken in a prior year as discrete items in the interim period in which the event occurs. Our effective tax rates for the three months ended November 30, 2024 and 2023 were 21.6 % and 23.2 %, respectively. The lower effective tax rate for the three months ended November 30, 2024 was primarily due to higher benefits from adjustments to prior year tax liabilities. Table of Contents Notes To Consolidated Financial Statements (In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed) ACCENTURE FORM 10-Q 19 11. Commitments and Contingencies Indemnifications and Guarantees In the normal course of business and in conjunction with certain client engagements, we have entered into contractual arrangements through which we may be obligated to indemnify clients with respect to certain matters. As of November 30, 2024 and August 31, 2024, our aggregate potential liability to our clients for expressly limited guarantees involving the performance of third parties was approximately $ 2,181,000 and $ 2,370,000 , respectively, of which all but approximately $ 59,000 and $ 61,000 , respectively, may be recovered from the other third parties if we are obligated to make payments to the indemnified parties as a consequence of a performance default by the other third parties. For arrangements with unspecified limitations, we cannot reasonably estimate the aggregate maximum potential liability, as it is inherently difficult to predict the maximum potential amount of such payments, due to the conditional nature and unique facts of each particular arrangement. As of November 30, 2024 and August 31, 2024, we have issued or provided guarantees in the form of letters of credit and surety bonds of $ 1,692,529 ($ 1,514,492 net of recourse provisions) and $ 1,758,783 ($ 1,609,046 net of recourse provisions) respectively, the majority of which support certain contracts that require us to provide them as a guarantee of our performance. These guarantees are typically renewed annually and remain in place until the contractual obligations are satisfied. In general, we would only be liable for these guarantees in the event we defaulted in performing our obligations under each contract, the probability of which we believe is remote. To date, we have not been required to make any significant payment under any of the arrangements described above. We have assessed the current status of performance/payment risk related to arrangements with limited guarantees, warranty obligations, unspecified limitations, indemnification provisions, letters of credit and surety bonds, and believe that any potential payments would be immaterial to the Consolidated Financial Statements, as a whole. Legal Contingencies As of November 30, 2024, we or our present personnel had been named as a defendant in various litigation matters. We and/or our personnel also from time to time are involved in investigations by various regulatory or legal authorities concerning matters arising in the course of our business around the world. Based on the present status of these matters, except as otherwise noted below, management believes the range of reasonably possible losses in addition to amounts accrued, net of insurance recoveries, will not have a material effect on our results of operations or financial condition. On July 24, 2019, Accenture was named in a putative class action lawsuit filed by consumers of Marriott International, Inc. (“Marriott”) in the U.S. District Court for the District of Maryland. The complaint alleges negligence by us, and seeks monetary damages, costs and attorneys’ fees and other related relief, relating to a data security incident involving unauthorized access to the reservations database of Starwood Worldwide Resorts, Inc. (“Starwood”), which was acquired by Marriott on September 23, 2016. Since 2009, we have provided certain IT infrastructure outsourcing services to Starwood. On May 3, 2022, the court issued an order granting in part the plaintiffs’ motion for class certification, which we appealed. On August 17, 2023, the appeals court vacated the class certification and remanded the case to the district court for consideration of, among other things, the class action waiver signed by Starwood customer plaintiffs. On November 29, 2023, the district court reinstated the classes previously certified by the court in May 2022. We are appealing the district court’s decision. We continue to believe the lawsuit is without merit and we will vigorously defend it. At present, we do not believe any losses from this matter will have a material effect on our results of operations or financial condition. After Accenture Federal Services (“AFS”) made a voluntary disclosure to the U.S. government, the U.S. Department of Justice (“DOJ”) initiated a civil and criminal investigation concerning whether one or more employees provided inaccurate submissions to an assessor who was evaluating on behalf of the U.S. government an AFS service offering and whether the service offering fully implemented required federal security controls. AFS is responding to an administrative subpoena and cooperating with DOJ’s investigation. This matter could subject us to adverse consequences, including civil and criminal penalties, including under the civil U.S. False Claims Act and/or other statutes, and administrative sanctions, such as termination of contracts, forfeiture of profits, suspension of payments, fines and suspensions or debarment from doing business with agencies of the U.S. government. We cannot at this time determine when or how this matter will be resolved or estimate the cost or range of costs that are reasonably likely to be incurred in connection with this matter. Table of Contents Notes To Consolidated Financial Statements (In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed) ACCENTURE FORM 10-Q 20 12. Segment Reporting Our reportable segments are our three geographic markets, which are the Americas, EMEA and Asia Pacific. Information regarding reportable segments, industry groups and type of work is as follows: Revenues Three Months Ended November 30, 2024 November 30, 2023 Geographic Markets Americas (1) $ 8,733,095 $ 8,026,972 EMEA 6,411,952 5,803,642 Asia Pacific (1) 2,544,498 2,393,689 Total Revenues $ 17,689,545 $ 16,224,303 Industry Groups Communications, Media & Technology $ 2,857,885 $ 2,669,448 Financial Services 3,168,835 3,033,578 Health & Public Service 3,812,609 3,377,466 Products 5,425,317 4,859,987 Resources 2,424,899 2,283,824 Total Revenues $ 17,689,545 $ 16,224,303 Type of Work Consulting $ 9,045,228 $ 8,456,506 Managed Services 8,644,317 7,767,797 Total Revenues $ 17,689,545 $ 16,224,303 Operating Income Three Months Ended November 30, 2024 November 30, 2023 Geographic Markets Americas (1) $ 1,377,234 $ 1,292,981 EMEA 1,035,977 823,601 Asia Pacific (1) 535,266 448,305 Total Operating Income $ 2,948,477 $ 2,564,887 (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. Table of Contents ACCENTURE FORM 10-Q Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 21 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, 2024, and with the information under the heading “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, 2024. 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 will end 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. 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,” 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 lim ited to those identified below. 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 services and solutions, including through the adaptation and expansion of our services and solutions 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 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. • Our ability to attract and retain business and employees may depend on our reputation in the marketplace. • If we do not successfully manage and develop our relationships with key ecosystem partners or if we fail to anticipate and establish new alliances in new technologies, our results of operations could be adversely affected. Table of Contents ACCENTURE FORM 10-Q Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 22 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. • Changes to accounting standards or in the estimates and assumptions we make in connection with the preparation of our consolidated financial statements could adversely affect our financial results. 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 global operations expose us to numerous and sometimes conflicting legal and regulatory requirements, and violation of these regulations could harm our business. • Our work with government clients exposes us to additional risks inherent in the government contracting environment. • If we are unable to protect or enforce our intellectual property rights, or if our services or solutions 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, 2024. 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. Table of Contents ACCENTURE FORM 10-Q Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 23 Overview Accenture is a leading global professional services company, providing a broad range of services and solutions across Strategy & Consulting, Technology, Operations, Industry X and Song. We serve clients in three geographic markets: the Americas, EMEA (Europe, Middle East and Africa) and Asia Pacific. We combine our strength in technology and leadership in cloud, data and AI with unmatched industry experience, functional expertise and global delivery capability to help the world’s leading businesses, governments and other organizations build their digital core, optimize their operations, accelerate revenue growth and enhance citizen services—creating tangible value at speed and scale. Our results of operations are affected by economic conditions, including macroeconomic conditions, the overall inflationary environment and levels of business confidence. There continues to be significant economic and geopolitical uncertainty in many markets around the world, which has impacted and may continue to impact our business. These conditions have slowed the pace and level of client spending, particularly for smaller contracts with a shorter duration and for our consulting services. Clients continue to prioritize large-scale transformations, which convert to revenue over a longer period. Key Metrics Key metrics for the first quarter of fiscal 2025 compared to the first quarter of fiscal 2024 are included below. We have presented operating income, operating margin, effective tax rate and diluted earnings per share for the first quarter of fiscal 2024 on a non-GAAP or “adjusted” basis to exclude the impact of $140 million in business optimization costs recorded during the quarter, as discussed further in our Results of Operations. • Revenues of $17.7 billion, an increase of 9% in U.S. dollars and 8% in local currency; • New bookings of $18.7 billion, an increase of 1% in both U.S. dollars and local currency; • Operating margin of 16.7%, compared to operating margin of 15.8% and adjusted operating margin of 16.7% in the first quarter of fiscal 2024; • Diluted earnings per share of $3.59, a 16% increase over diluted earnings per share of $3.10 and a 10% increase over adjusted earnings per share of $3.27 in the first quarter of fiscal 2024; and • Cash returned to shareholders of $1.8 billion, including dividends of $926 million and share purchases of $898 million. Revenues Three Months Ended Percent Increase (Decrease) U.S. Dollars Percent Increase (Decrease) Local Currency Percent of Revenues for the Three Months Ended (in billions of U.S. dollars) November 30, 2024 November 30, 2023 November 30, 2024 November 30, 2023 Geographic Markets Americas (1) $ 8.7 $ 8.0 9 % 11 % 49 % 49 % EMEA 6.4 5.8 10 6 36 36 Asia Pacific (1) 2.5 2.4 6 4 14 15 Total Revenues $ 17.7 $ 16.2 9 % 8 % 100 % 100 % Industry Groups Communications, Media & Technology $ 2.9 $ 2.7 7 % 7 % 16 % 16 % Financial Services 3.2 3.0 4 4 18 19 Health & Public Service 3.8 3.4 13 12 22 21 Products 5.4 4.9 12 10 31 30 Resources 2.4 2.3 6 6 14 14 Total Revenues $ 17.7 $ 16.2 9 % 8 % 100 % 100 % Type of Work Consulting $ 9.0 $ 8.5 7 % 6 % 51 % 52 % Managed Services 8.6 7.8 11 11 49 48 Total Revenues $ 17.7 $ 16.2 9 % 8 % 100 % 100 % 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. Table of Contents ACCENTURE FORM 10-Q