Accenture reported $18 billion in Q2 revenue (4% local-currency growth) and record new bookings of $22.1 billion for the quarter—first-half bookings reached $43 billion with a book-to-bill of 1.2 and 41 clients booking over $100 million.

Margins and cash improved: operating margin rose to 13.8% (+30 bps), diluted EPS was $2.93, free cash flow was $3.7 billion for the quarter and full-year FCF guidance was raised to $10.8–$11.5 billion; the company plans to return at least $9.3 billion to shareholders and repurchased $1.7 billion of stock this quarter.

Accenture is accelerating AI and strategic M&A, hiring over 85,000 AI/data professionals, initiating advanced AI projects with roughly 100 new clients this quarter, and closing $1.6 billion of acquisitions while targeting $5 billion of deals this fiscal year to bolster AI, platforms and cybersecurity capabilities.

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Accenture (NYSE:ACN) executives highlighted record bookings, margin expansion and higher cash flow expectations in the company’s fiscal second-quarter 2026 earnings call, while emphasizing that client spending patterns remain “similar to 2025” as budgets are set for calendar 2026.

Chair and CEO Julie Sweet said Accenture delivered “another strong quarter” with $18 billion in revenue, growing 4% in local currency. CFO Angie Park said revenue was at the top end of the company’s guided range and reflected an 8% increase in U.S. dollars, helped by a +4.4% foreign exchange impact for the quarter (above the prior quarter’s +3.5% estimate).

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Park reported record new bookings of $22.1 billion for the quarter, bringing first-half bookings to $43 billion. Overall book-to-bill was 1.2, with consulting bookings of $11.3 billion (book-to-bill 1.3) and managed services bookings of $10.8 billion (book-to-bill 1.2).

Sweet said Accenture recorded 41 clients with quarterly bookings above $100 million, calling it a record and noting the company had 74 such bookings in the first half, 12 more than the same period last year.

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Accenture posted 13.8% operating margin, an increase of 30 basis points versus the prior-year quarter. Park said gross margin was 30.3% compared with 29.9% a year earlier, while sales and marketing expense declined to 9.7% of revenue from 10.1%. General and administrative expense rose to 6.7% from 6.3%.

Diluted earnings per share were $2.93, up from $2.82 in the year-ago quarter, representing 4% growth. The effective tax rate in the quarter was 24.3%, compared with 20.4% a year earlier.

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Free cash flow was $3.7 billion for the quarter, driven by operating cash flow of $3.8 billion net of $150 million in property and equipment additions. Park also cited improved working capital, including days services outstanding of 46, down from 51 last quarter and 48 in the year-ago quarter. In response to an analyst question, Park said record year-to-date free cash flow of $5.2 billion was “really driven by efficiencies in our operations as well as DSO.”

Consulting revenue was $8.9 billion, up 3% in local currency, while managed services revenue was $9.2 billion, up 5% in local currency. Park said managed services growth was driven by mid-single-digit growth in technology-managed services and high-single-digit growth in operations.

By geography, Park said:

Americas: revenue grew 3% in local currency, led by banking and capital markets, software and platforms, and industrials, partially offset by a decline in public service driven by the U.S. federal business. Excluding a 2% impact from federal, Americas grew about 6% in local currency.

EMEA: revenue grew 2% in local currency, driven by insurance, life sciences, and public service, with the U.K. and Italy cited as growth drivers.

Asia Pacific: revenue grew 10% in local currency, led by Japan and Australia, with growth in banking and capital markets, communications and media, and public service.

Park also noted that fixed-price work continues to rise, with the fixed-price mix “continues to increase over 60% in FY 2025,” which she attributed to the importance of proprietary platforms and clients seeking cost and delivery certainty.

Sweet said Accenture continues to see clients prioritize “their most strategic and large-scale transformational programs,” and that as clients finalize budgets for calendar 2026, Accenture is seeing spending “similar to 2025.” She described demand themes including foundational programs tied to cloud, security and data modernization; reinvention and efficiency through managed services and proprietary platforms; and more clients moving from proof-of-concept to production for AI initiatives. Sweet said “another 100 clients or so” initiated advanced AI projects with Accenture during the quarter.

In response to analyst questions about evidence that AI is a net benefit, Sweet said AI is “permeating everything we do,” and pointed investors to overall performance and market share gains, as well as growth with ecosystem partners outpacing overall growth and the number of clients initiating AI work. She added that Accenture expects its metrics to evolve over time.

Sweet also addressed the pace of frontier model improvements, saying the release of new models does not directly correlate to bookings, but creates “the next opportunity” for Accenture to develop solutions clients can deploy. On the mix of AI programs, she said Accenture is seeing an uptick in growth-focused AI use cases, but “efficiency is still leading the way,” while citing “conversational and agentic commerce” as an area where demand is “surging.”

Sweet provided several client examples during prepared remarks, including work with The Estée Lauder Companies on an “operating ecosystem” leveraging AI and automation, and a Radisson Hotel Group engagement involving Accenture Media Console and agentic AI to optimize content and campaigns. Sweet said that since Accenture’s collaboration with Radisson began, Radisson’s share of direct bookings has “tripled.”

Sweet said Accenture closed three strategic acquisitions during the quarter, deploying $1.6 billion of capital, and now expects to deploy $5 billion in acquisitions this fiscal year “with capacity to do more for the right opportunities.” She described acquisitions across AI-powered transformation, AI enablers (including data centers and cybersecurity), high-growth secular trends, and mid-market expansion. Sweet also highlighted Ookla’s business model, stating the company generated $231 million in calendar 2025 revenue through subscription and licensing, with 8% year-over-year growth, and said the margins are “accretive to Accenture.”

On talent, Sweet said Accenture now has over 85,000 AI and data professionals, exceeding its goal of 80,000 by the end of fiscal 2026. She also said employees completed 13 million training hours in the quarter and that 192,000 completed an Agentic AI Fundamentals program co-created with Stanford’s Institute for Human-Centered AI. In Q&A, Park said Accenture expects headcount to increase in the second half, tied to demand and the company’s “talent rotation” strategy. Sweet added that revenue and headcount have not been linear since around 2015 due to automation.

Park said Accenture is monitoring conflict in the Middle East, noting roughly 3,000 colleagues in the region and that the Middle East represented about 1% or $1 billion of fiscal 2025 revenue. She said Accenture is not currently seeing a significant financial impact, and guidance reflects the company’s “best view today” of potential second-half impacts, but does not assume significant escalation or major economic disruption.

For guidance, Accenture expects:

Q3 revenue of $18.35 billion to $19.0 billion, implying 1% to 5% local-currency growth (including about a 1% impact from the federal business).

Full-year fiscal 2026 revenue growth of 3% to 5% in local currency (including an estimated 1% impact from federal), with an inorganic contribution of about 1.5%.

Adjusted operating margin of 15.7% to 15.9%, representing 10 to 30 basis points expansion over adjusted fiscal 2025.

Adjusted diluted EPS of $13.65 to $13.90, representing 6% to 8% growth.

Free cash flow of $10.8 billion to $11.5 billion, a $1 billion increase to guidance, with an expected free cash flow to net income ratio of 1.3.

Accenture also reiterated plans to return at least $9.3 billion to shareholders through dividends and share repurchases. During the quarter, the company repurchased or redeemed 6.8 million shares for $1.7 billion at an average price of $246.09, and paid a quarterly dividend of $1.63 per share, which Park said was a 10% increase over last year.

Accenture is a global professional services company that provides a broad range of services and solutions in strategy, consulting, digital, technology and operations. The firm works with organizations across industries to design and implement business transformation programs, deploy and manage enterprise technology, optimize operations, and develop customer and digital experiences. Its offerings encompass management and technology consulting, systems integration, application and infrastructure services, cloud migration and managed services, as well as security and analytics capabilities.

The company delivers industry- and function-specific solutions, combining consulting expertise with proprietary tools, platforms and partnerships with major technology vendors.

The article "Accenture Q2 Earnings Call Highlights" was originally published by MarketBeat.