Accenture (ACN) on September 25, 2025 reported financial results for the fourth quarter and full fiscal year ended August 31, 2025.

• Revenue Growth: Accenture reported revenue of USD 69.7 billion in 2025, an increase of USD 4.8 billion or 7.4% compared to 2024, driven by broad-based growth across markets, industries, and types of work
• EBITDA Improvement: The company's EBITDA rose to USD 12.9 billion in 2025, marking an increase of USD 2.1 billion or 19.4% from the previous year, reflecting strong operational performance
• Capital Expenditure: Accenture's capital expenditure in 2025 was USD 0.6 billion, up USD 0.1 billion or 16.2% from 2024, indicating continued investment in growth initiatives
• Shareholder Returns: The company increased dividends paid to USD 3.7 billion in 2025, a rise of USD 0.5 billion or 14.2% compared to 2024, demonstrating a commitment to returning capital to shareholders
• Strategic Partnerships: Accenture maintained its position as the number one partner for its top 10 ecosystem partners, with 60% of revenue derived from these partnerships, which grew 9% in 2025, outpacing overall revenue growth
• AI and Innovation: The company tripled its revenue from Gen AI and advanced AI to USD 2.7 billion in 2025, highlighting its strategic focus on capturing new areas of client spend and technological advancement.

Company overview

Business model, strategy & markets

Accenture plc, based in Dublin, Ireland, provides strategy, consulting, interactive, technology, and operations services globally, including application services, intelligent automation, digital transformation, technology consulting, artificial intelligence, cybersecurity, cloud, marketing, supply chain management, and sustainability services. Founded in 1989.

Accenture operates as a global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology, and operations. The company focuses on being the leading partner for the tech ecosystem, working closely with top technology companies to help clients turn technology into business outcomes. Accenture's strategic priorities include advancing in AI and digital transformation, with a significant investment in Gen AI to capture new areas of client spending. The company serves over 9,000 clients worldwide, including three-quarters of the Fortune Global 100 and 500, across various industries such as banking, capital markets, insurance, life sciences, and consumer goods. Accenture's key geographic markets include the Americas, EMEA, and Asia Pacific, with notable revenue growth driven by the United States, the United Kingdom, Spain, Japan, and Australia. The company emphasizes its ability to deliver large-scale transformations and maintain deep client relationships, leveraging its global footprint and comprehensive capabilities.

In the fourth quarter of fiscal year 2025, Accenture's revenue in the Americas grew 5% in local currency, driven by the United States. In EMEA, revenue increased 3%, led by the United Kingdom and Spain. In Asia Pacific, revenue rose 6%, with Japan and Australia contributing significantly.

Financial performance

Revenue in 2025 amounted to USD 69.7 billion, reflecting an increase of USD 4.8 billion or 7.4% compared to 2024. Gross profit for the same period was USD 22.2 billion, marking a rise of USD 1.1 billion or 5.1% from the previous year. EBITDA reached USD 12.9 billion, up by USD 2.1 billion or 19.4% year-over-year.

Growth trends

Revenue CAGR decelerated from 9.5% over 5 years to 4.2% over 3 years. Gross profit CAGR also decelerated from 9.7% over 5 years to 4.1% over 3 years. EBITDA CAGR decreased slightly from 8.6% to 8.0%.

Profitability

Margin profile

Gross profit ratio in 2025 was 31.9%, down 0.7% from the previous year. EBITDA ratio in 2025 was 18.6%, up 1.9% from the previous year.

Growth plus profitability in 2025 was 25.9%, up 8.0% (+44.7%) for the year (2024).

Peer margin benchmark

Efficiency metrics

SG&A expenses accounted for 16.4% of revenue in 2025, reflecting a decrease of 0.7 percentage points compared to 2024, indicating improved cost discipline. R&D expenses were 0.0% of revenue, suggesting limited reinvestment in innovation.

Balance sheet strength

Assets & capital

Cash and equivalents increased by USD 6.5 billion (+129.4%) in 2025 compared to 2024, indicating enhanced financial flexibility. Current assets rose by USD 1.6 billion (+9.9%), and non-current assets increased by USD 1.4 billion (+4.0%), suggesting reinvestment in capacity and potential long-term growth.

Liabilities & leverage

Equity increased by USD 3.1 billion (+10.5%) in 2025, indicating strong earnings retention. Debt rose significantly by USD 4.1 billion (+98.6%), suggesting increased leverage. Short-term debt decreased by USD 0.8 billion (-87.9%), reducing liquidity pressure. Accounts payable decreased slightly by USD 0.0 billion (-1.8%), reflecting consistent cash conversion.

Financial stability

Capital structure

Accenture's leverage profile in 2025 indicates a significant increase in debt levels. The debt-to-equity ratio rose to 26.2%, the debt-to-assets ratio reached 12.5%, and the debt-to-capital ratio climbed to 20.8%, all reflecting substantial increases compared to 2024.

Liquidity ratios

The company's liquidity improved in 2025, with the current ratio rising to 1.4, indicating acceptable liquidity, and the cash ratio increasing to 0.6, reflecting a strong cash buffer. These metrics suggest enhanced financial flexibility compared to 2024.

Leverage

The financial leverage ratio for 2025 was 2.1, representing a 6.0% increase from 2024. This indicates a balanced approach to leverage, suggesting the company maintains a moderate level of debt relative to its equity, which supports growth initiatives.

Debt coverage

Debt service coverage ratio increased by 259.7% to USD 30.6 billion in 2025 compared to 2024, indicating improved solvency. However, the interest coverage ratio decreased by 72.5% to USD 44.7 billion, suggesting heightened risk in meeting interest obligations.

Cash flow performance

Operating cash flow in 2025 was USD 11.5 billion, up USD 2.3 billion (+25.7%) from 2024. Investing cash flow was USD -2.0 billion, up USD 5.1 billion (+71.8%) from 2024. Financing cash flow was USD -2.9 billion, up USD 3.2 billion (+52.5%) from 2024.

Capital allocation

Acquisitions and investments

Accenture's capital expenditures in 2025 amounted to USD 0.6 billion, reflecting a 16.2% increase from 2024. This investment primarily focuses on expanding real estate and leasehold improvements in key markets, aligning with the company's strategy to bring more employees back to the office. No acquisitions were reported for the year.

Debt repayment

Net debt issuance in 2025 was USD 0.0 bn, indicating no new borrowing activity during the year. This follows a net debt issuance of USD 0.8 bn in 2024 and USD 0.1 bn in 2023, reflecting a shift from prior years where the company engaged in debt issuance. The absence of net debt issuance in 2025 suggests a conservative approach to leverage, aligning with value investing principles that favor low debt levels to minimize solvency risk.

Dividends

Dividend payout ratio in 2025 was 48.2%, up 3.6% from 2024. This indicates a balanced approach to capital returns, suggesting confidence in cash flow stability while maintaining flexibility for reinvestment opportunities.

Share buybacks & issuances

The weighted average shares outstanding for 2025 remained effectively unchanged, reflecting a stable share count with no stock repurchases or issuances. This stability indicates a focus on maintaining shareholder value without dilution or buyback-driven EPS enhancement.

Capital returns

ROIC in 2025 was 17.0%, a decrease of 2.0% from 2024, while the peer median was 22.8%, down 0.3%. ROA in 2025 was 11.7%, down 1.2% from 2024, indicating reduced capital efficiency compared to 2024.

Valuation

As of 2025-08-31 (price per share: 256.17 USD)

Trading multiples

EPS in 2025 was USD 12.3, representing an increase of USD 0.7 or 6.2% compared to 2024. Despite this growth in earnings per share, the stock price declined by USD 85.8 or 25.1% over the same period, indicating a divergence between shareholder earnings power and market valuation.

The PE ratio in 2025 was USD 20.8, representing a decrease of USD 8.8 or 29.7% compared to 2024.

EV to EBITDA in 2025 was USD 12.1, reflecting a decrease of USD 7.6 from 2024, while EV to FCF was USD 14.4, down USD 10.4 from 2024. Both ratios indicate a moderate valuation range.

Yield metrics

Earnings yield in 2025 was 4.8%, reflecting a 41.8% increase from 2024. The 10-year Treasury yield data for 2025 is unavailable, preventing a direct comparison.

Intrinsic value

The stock price of USD 256.2 in 2025 exceeds the Graham Number of USD 117.5, indicating a premium valuation. The book value per share increased to USD 51.6, reflecting a positive trend in asset value, despite the stock price decline from 2024.

Disclaimer

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