Accenture Stock Drops 8% Despite 7.5% Revenue Growth, New Orders Decline 6%

Accenture (ACN.US) experienced a notable decline in its stock price on Friday, dropping nearly 8% to $282.27. This downturn occurred despite the company reporting a 7.5% year-over-year increase in revenue for the third quarter of its 2025 fiscal year, totaling $17.7 billion. The primary concern for investors was the 6% year-over-year decrease in new order volume, which amounted to $19.7 billion when calculated in U.S. dollars. This decline was more pronounced when measured in local currencies, where the decrease was 7%.

The drop in new orders was partially offset by strong performance in the generative artificial intelligence sector, where related business orders reached $1.5 billion. This performance highlights the growing importance of AI in Accenture's business strategy, even as the company faces challenges in other areas. The company's GAAP earnings per share (EPS) for the quarter were $3.49, an increase of $0.17 from the same period last year. Despite the mixed results, Accenture's focus on AI and other innovative technologies positions it well for future growth, though the immediate market reaction reflects investor concerns over the decline in new orders.

Looking ahead to the full year of the 2025 fiscal year, Accenture maintained its previous revenue growth expectations. The company anticipates that its revenue will increase by 6% to 7% when calculated in local currencies. Additionally, the company expects a 0.2% positive impact from currency fluctuations. The target for the full-year operating margin is set at 15.6%, which is an increase of 10 basis points from the adjusted target. The diluted earnings per share (EPS) are projected to be in the range of $12.77 to $12.89, and free cash flow is expected to remain within the range of $9 billion to $9.7 billion.

Accenture's strategic focus on AI and other cutting-edge technologies is evident in its financial performance. The company's ability to generate significant new orders in the AI sector demonstrates its commitment to innovation and its potential for future growth. However, the decline in overall new orders highlights the challenges the company faces in maintaining its market position. Investors will be closely watching Accenture's performance in the coming quarters to see if the company can sustain its growth trajectory despite these challenges.