ACN · Q2 2026 Earnings

Bullish

Accenture

Reported March 19, 2026

30-second summary

30-second take: Accenture printed Q2 FY26 revenue of $18.04B (+4% USD, +4% LC), beating the high end of the prior $17.35B–$18.0B guide, with a record $22.1B in new bookings (book-to-bill 1.2x) and 41 clients above $100M (vs. low-30s in Q2 FY25). Management raised the low end of FY26 LC revenue growth (3–5% from 2–5%), the low end of adjusted EPS ($13.65–$13.90 from $13.52–$13.90), and meaningfully lifted FY26 FCF guidance by $1.0B at both ends to $10.8B–$11.5B — alongside an M&A budget step-up to $5B (from $3B). After two quarters of cautious guidance reaffirmations against the federal drag, this is the first clean upward revision of the FY26 operating model and the first quarter where the bookings backdrop materially de-risks the H2 ramp.

Headline numbers

EPS

Q2 FY2026

$2.93

Revenue

Q2 FY2026

$18.04B

+4.0% YoY

Gross margin

Q2 FY2026

30.3%

Free cash flow

Q2 FY2026

$3.70B

Operating margin

Q2 FY2026

13.8%

Key financials

Q2 FY2026

Metric	Q2 FY2026	YoY	Q1 FY2026	QoQ
Revenue	$18.04B	+4.0%	$18.74B	-3.7%
EPS	$2.93	—	$3.94	-25.6%
Gross margin	30.3%	—	33.1%	-280bps
Operating margin	13.8%	—	15.3%	-150bps
Free cash flow	$3.70B	—	$1.51B	+145.0%

Guidance

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q2 FY2026	$17.35B to $18.0B	$18.04B	+$0.04B above high end of guide	Beat
Revenue growth (local currency)	Q2 FY2026	1% to 5%	4%	upper-half of guide	Beat

New guidance

Metric	Period	Guide	YoY
Effective Tax Rate	FY2026	23.5% to 25.5%	—
Foreign-exchange impact on results	FY2026	approximately +2%	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Adjusted EPS	FY2026	$13.52 to $13.90	$13.65 to $13.90	+$0.13 at low end	Raised
GAAP Diluted EPS	FY2026	$13.12 to $13.50	$13.25 to $13.50	+$0.13 at low end	Raised
Revenue growth (local currency)	FY2026	2% to 5%	3% to 5%	+1 percentage point at low end	Raised
Revenue growth excluding federal business (local currency)	FY2026	3% to 6%	4% to 6%	+1 percentage point at low end	Raised
Operating Cash Flow	FY2026	$10.8B to $11.5B	$11.5B to $12.2B	+$0.7B at high end	Raised
Free Cash Flow	FY2026	$9.8B to $10.5B	$10.8B to $11.5B	+$1.0B at low end; +$1.0B at high end	Raised

Reaffirmed unchanged this quarter: Adjusted Operating Margin (15.7% to 15.9%), Capital returns to shareholders (at least $9.3B)

Segment performance

Q2 FY2026

Segment	Q2 FY2026	YoY
Consulting	$8.86B	+3.0%
Managed Services	$9.18B	+5.0%
Communications, Media & Technology	$3.09B	+10.0%
Financial Services	$3.4B	+7.0%
Health & Public Service	$3.67B	-1.0%

Platform metrics

Q2 FY2026

Segment	Q2 FY2026
New Bookings	$22.1 billion
Clients with >$100M quarterly bookings	41
Days Services Outstanding (DSO)	46 days
Bookings Growth (Local Currency)	1%

Profitability

Q2 FY2026

Segment	Q2 FY2026
Operating Margin Expansion	30 basis points

Other KPIs

Q2 FY2026

Segment	Q2 FY2026	YoY
Americas	$8.9B	+3.0%
EMEA	$6.57B	+2.0%
Asia Pacific	$2.58B	+10.0%
Share Repurchases	$1.7 billion	—
Dividend per Share	$1.63 (10% increase YoY)	—
Total Capital Returned to Shareholders	$2.7 billion	—

Management tone

Q3 FY25 reorganization announcement → Q4 FY25 quantified federal headwind → Q1 FY26 "AI is the operating model" reframe → Q2 FY26 "AI as electricity" with execution proof points.

Three quarters ago AI was framed as a future growth driver requiring proof-of-concept validation; last quarter it was the operating model with discrete bookings retired; this quarter Sweet anchored AI as foundational infrastructure: "AI, as it stands right now, may turn out to be the most powerful technology breakthrough since electricity." The framing has migrated from product-category language to civilizational-shift language — and it sits alongside the first clean FY26 raise. The conviction shift cuts both ways: bigger ambition with bigger expectations to defend on subsequent calls.

Two quarters ago management retired the Advanced AI bookings line on the argument that AI was becoming embedded across the portfolio. This quarter delivered the substitute messaging that Q1's watch list flagged: 41 clients with quarterly bookings above $100M (up from low-30s a year ago), with management characterizing these as AI-led enterprise reinventions. The disclosure substitution worked because the underlying metric improved — but investors should note the company has effectively swapped a precise dollar figure for a count metric that is harder to triangulate against deal economics.

The acquisition narrative escalated materially. At the Q4 FY25 print management guided $3B of FY26 M&A; this quarter that became "$5 billion in acquisitions this year with capacity to do more for the right opportunities." Sweet's framing on the Guggenheim exchange — "paying higher multiples for higher-growth, higher-margin assets" — is a deliberate signal that the M&A bar is being lowered on multiple but tightened on strategic fit (data centers, energy, defense, AI enablers). This is the first quarter where Accenture has explicitly endorsed paying premium multiples.

The TAM-compression rebuttal was the most direct it has been across the four-quarter arc. On the question of whether AI-accelerated delivery (SAP migrations in two weeks, mainframe modernization) shrinks the services opportunity, management argued the technical piece is small relative to total scope, and faster execution unlocks previously gated investments. That is a substantive answer to a substantive bear thesis — and one that has lingered unaddressed in prior quarters.

Federal commentary shifted from defensive to operational. Last quarter the headwind was a sized drag; this quarter Park said the federal business should return to growth in Q4 FY26 after anniversarying the headwind, with a formal update planned for September. The framing has moved from "we are absorbing this" to "we are about to be past this."

Recurring themes management leaned on this quarter:

AI as immediate revenue catalyst and market share driverEnd-to-end enterprise transformation anchored on AI and data modernizationFixed-price and platform-based revenue acceleration (over 60% of bookings)Agentic AI as new operating paradigm across contact centers and core operationsMulti-year re-engagement cycles from legacy ERP/tech stack modernization followed by AI embeddingHigh-growth non-FTE revenue expansion through acquisitions and platform licensing

Risks management surfaced:

Middle East conflict and geopolitical uncertainty (3,000 colleagues in region, ~$1B revenue exposure)U.S. federal business headwind (~1% impact on guidance)Foreign exchange volatility and currency exposurePotential escalation or major economic disruption from Middle East situationExecution risk on $5B acquisition deployment and integration

Q&A highlights

Jason Kupferberg · Wells Fargo

What quantitative evidence should investors look at to substantiate that Accenture is a net beneficiary of AI? Also, given accelerating consulting bookings and easier Q4 comparisons, is the upper end of the 3-5% full-year guidance range (4-6% ex-federal) plausible?

Management stated the key metrics are market share gains, overall growth outpacing the ecosystem, and the number of companies initiating AI with Accenture. On guidance, they reaffirmed the 3-5% (4-6% ex-federal) range as their best view based on record $22B bookings and three consecutive quarters of $20B+ bookings. They aim for the top of the range but noted guidance reflects current visibility.

$22 billion bookings this quarter (record)Three consecutive quarters of $20 billion or more in bookings3-5% full-year revenue guidance (4-6% excluding federal)Key metrics: market share, growth relative to ecosystem, number of companies initiating AI

Tin Jin Wong · J.P. Morgan

Is there a correlation between frontier model improvements and bookings growth/revenue conversion? How do improving AI capabilities impact deal flow?

Management clarified that models are 'powerful engines' but require broader integration (wheels, transmission) to drive business impact. Better models don't directly correlate to immediate bookings, but enable new solution opportunities. They are seeing more experimentation with agentic workflows and agents as models improve. On AI work mix, 78% of C-suite now cite growth as biggest AI value driver, but efficiency-led use cases still dominate in execution. Conversational and agentic commerce is identified as the most exciting growth area with surging demand.

78% of C-suite surveyed say growth is the biggest AI value driver (vs. efficiency)Efficiency-led AI use cases still leading revenue todayAgentic and conversational commerce identified as highest-growth opportunityNo direct correlation between model release and bookings; models create opportunities for new solutions

Kevin McVeigh · UBS

Are acquisition budgets increasing from $3B to $5B? How is inorganic contribution tracking, and how should we think about emerging partner growth scaling relative to existing ecosystem partners?

Management confirmed acquisition pipeline of $5B with potential for more. Inorganic contribution expected at ~1.5% due to timing of deal closes. On partner growth, both large ecosystem partners and emerging partners (Anthropic, Databricks, NVIDIA) showing strong growth across the board. As models improve, enterprise deployment expands into new areas like KYC in banking, mainframe code conversion, and other previously unsolved problems.

$5 billion acquisition pipeline (up from $3 billion last quarter)1.5% expected inorganic contributionStrong growth with both large ecosystem and emerging partnersNew solution areas unlocked: KYC, mainframe modernization, enterprise deployment as models mature

Jonathan Lee · Guggenheim Partners

What's driving the step-up in M&A deployment? Is this a shift toward larger assets, higher multiples, or IP-led deals? Also, how do AI-enabled tools compressing project timelines (e.g., SAP migrations in 2 weeks) impact TAM and rate cards?

Management described M&A strategy focused on higher-growth areas (data centers, energy, defense, education, AI enablers) and new commercial models (data licensing, subscriptions). They are intentionally paying higher multiples for higher-margin, higher-growth assets. On compression: they view faster technical execution as a positive driver of more work because technical piece is small relative to total deal scope (change management, process change). Faster delivery unlocks previously gated investments and expands TAM. They're partnering with SAP/Palantir on new products at scale.

Paying higher multiples for higher-growth, higher-margin acquisition targetsFocus areas: data centers, energy infrastructure, defense, public sector, education, AI enablersNew commercial models: licensing and subscription (e.g., Ookla data asset)Technical acceleration does not compress TAM; unlocks additional work in change management and modernization

Dave Cunning · Baird

Large clients with $100M+ quarterly bookings are up 20%+ (to 41 from low 30s). Are big clients early to spend on AI while midsize companies wait-and-see, or is there a larger wave to come? Also, will federal spending normalize higher in next fiscal year?

Management said smaller/midsize companies are also spending significantly on AI, not just large enterprises. The $100M+ bookings reflect the scale of reinvention required in large enterprises and their sprawling estates. They expect a large funnel of future work because companies that deployed modern ERP in recent years have no advanced AI capability yet—that's an entire wave of work ahead. Core operations work is still nascent due to technology maturity. Management said they'll provide federal guidance update in September, but are pleased to anniversary the headwind and return to federal growth in Q4.

41 clients with $100M+ quarterly bookings this quarter (up 20%+)Smaller/midsize companies actively spending on AI (not just large enterprises)Large cohort of recent modern ERP deployments with no advanced AI capability—future TAMFederal business returning to growth in Q4 after headwind anniversaries

Answers to last quarter's watch list

Q2 LC growth landing point inside the 1–5% range — Q2 LC growth came in at +4%, in the upper half of the band, and management raised the FY26 LC range low end from 2% to 3% (3–5% new range; 4–6% ex-federal). The reaffirmation of the prior guide as appropriately calibrated has been replaced by a modest raise.

Resolved positively

Adjusted EPS as the new AI lens — Management substituted the retired Advanced AI bookings disclosure with a $100M+ client count (41 this quarter vs. low-30s a year ago, +20%+ YoY) and qualitative framing of AI as "central, sometimes as the destination" of new engagements. The substitute metric is directional and useful but less precise than the prior dollar figure. Status: Resolved positively (substitute disclosure in place; precision lower than prior framework)

Gross margin sustainability — Q2 gross margin came in at 30.3% vs. 29.9% in Q2 FY25 (+40bps YoY), and operating margin expanded 30bps YoY in the quarter — within the 10-30bps annual guide. Q1's 33.1% gross margin reflected normal seasonality (gross margin steps down from Q1 highs through the fiscal year). The bull case for margin expansion is tracking.

Continue monitoring

Bookings trajectory below 1.12x — Q2 book-to-bill stepped up to 1.2x as reported (1.22x implied from $22.1B/$18.04B), reversing Q1's softening from Q4's 1.2x. This is the third consecutive quarter of $20B+ bookings. The H2 FY26 revenue ramp risk that the prior watch list flagged has materially de-risked.

Resolved positively

Working capital and DSO — DSO improved to 46 days from 51 days in Q1 — a 5-day reduction that directly enabled Q2 FCF of $3.7B (20.5% FCF margin). This is the proximate cause of the $1.0B FCF guide raise. The back-half FCF concern has cleared.

Resolved positively

Federal anniversary timing — The FY26 federal headwind is still characterized as ~1% (unchanged from Q1's narrowing), but management now signals federal will return to growth in Q4 FY26 with a formal update planned for September. The headwind framing did not improve further this quarter, but the operational path is clearer.

Continue monitoring

What to watch into next quarter

Q3 LC growth landing point in the 1–5% guide range (2–6% ex-federal): with Q2 in the upper half of its band and bookings momentum strong, a Q3 print at or above +4% LC would imply the FY26 guide raise underestimates back-half acceleration and sets up a second raise on the Q3 call. Below +3% LC would suggest the federal anniversary timing slipped.

September federal guidance update: management explicitly committed to a formal federal update in September. Whether federal returns to growth in Q4 FY26 as guided, or whether the headwind extends into FY27, is the single largest swing factor on the FY26 ex-federal guide. Watch for any pre-September commentary or revision.

$5B M&A deployment cadence and inorganic contribution: management raised M&A budget from $3B to $5B with ~1.5% expected inorganic contribution. Watch whether deployment lands within FY26 (vs. slipping to FY27 timing) and whether announced deals validate the "higher multiple, higher growth" framework on data centers, energy, defense, and AI enablers.

Clients above $100M quarterly bookings — the count substitute for Advanced AI: 41 this quarter vs. low-30s a year ago. A Q3 print holding above 40 confirms this metric is structural; a step-down would suggest Q2 was a concentration peak rather than a new run-rate.

FCF margin trajectory and DSO maintenance at 46 days: Q2 FCF of $3.7B (20.5% margin) and DSO improving 5 days unlocked the $1.0B FCF guide raise. A Q3 DSO that holds at or improves on 46 days validates the FY26 FCF range of $10.8B–$11.5B; any reversal toward 50+ days would put the raise at risk.

Adjusted EPS guide ceiling: this quarter's raise lifted only the low end ($13.52 → $13.65), leaving the high end at $13.90. A Q3 raise that lifts the high end would signal management sees margin upside it has not yet committed to.

Sources

Accenture Q2 FY26 Form 8-K Earnings Release Exhibit — https://www.sec.gov/Archives/edgar/data/1467373/000146737326000013/q2fy26earnings8-kexhibit.htm

Get the next brief, free.

We publish analyst-grade earnings briefs the same day or morning after every call — headline numbers, segment KPIs, Q&A highlights, and tone analysis. Free during beta.

This is not investment advice.