Accenture opened fiscal 2026 with revenue up 6% to $18.74 billion and new bookings up 12% to $20.9 billion, but a $308 million severance charge cut reported operating margin to 15.3% and a 290-basis-point jump in the tax rate left GAAP EPS 1% below last year.
What happened
Accenture opened fiscal 2026 — its financial year runs September 2025 to August 2026, so this is the quarter ended November 30, 2025 — with revenue of $18.74 billion, up 6% from $17.69 billion a year earlier, and $20.94 billion of new bookings, up 12%. Bookings are the value of contracts signed during the quarter; that money is not revenue yet and typically converts over months or years, so bookings are the forward indicator and revenue is the backward one.
Reported profit moved the other way. A $308 million charge, mostly employee severance, dragged operating margin down to 15.3% from 16.7% and left GAAP diluted earnings per share at $3.54 versus $3.59 — a 1% decline. Excluding the charge, earnings per share rose 10% to $3.94 and operating margin expanded 30 basis points (0.30 percentage points) to 17.0%. The charge completed a six-month cost programme Accenture had started in the previous quarter, so it is the end of a known item rather than the start of a new one.
Two mechanical effects shaped the headline growth rate. A weaker US dollar added 1.4 percentage points to reported revenue growth, so the underlying "local currency" growth rate — what the business grew before translating foreign revenue back into dollars — was 5%, not 6%. And a higher tax rate absorbed a meaningful share of the operating improvement.
Gross margin is the share of revenue left after the direct cost of delivering client work; operating margin is what is left after sales, marketing and administrative costs as well, and before interest and tax. A basis point (bps) is one hundredth of a percentage point.
Bookings were the strongest part of the quarter
New bookings of $20.94 billion against $18.74 billion of revenue is a book-to-bill ratio of about 1.12 — for every dollar of revenue recognised, Accenture signed $1.12 of new work. Management said 33 individual clients signed more than $100 million each in the quarter.
The mix inside that number matters. Managed services bookings — multi-year outsourcing-style contracts that run the client's processes or systems — rose 17% to $11.06 billion, while consulting bookings (project work, generally shorter) rose 7% to $9.88 billion. Managed services convert to revenue more slowly than consulting, so a bookings quarter weighted this way supports revenue further out rather than immediately.
Accenture separately disclosed $2.2 billion of "advanced AI" new bookings, its term for work building and scaling AI systems for clients. That is roughly a tenth of total bookings — a real and growing line, but not yet the thing setting the company's overall growth rate.
Where the revenue came from
Geographic market
Q1 FY2026 revenue
USD growth
Local-currency growth
Americas
$9,080M
+4%
+4%
EMEA
$6,935M
+8%
+4%
Asia Pacific
$2,727M
+7%
+9%
Total
$18,742M
+6%
+5%
EMEA's 8% headline growth is half currency: in local currency the region grew 4%, the same as the Americas. Asia Pacific is the reverse — 9% underlying growth translated down to 7% in dollars, so its reported figure understates what actually happened there. Management attributes Asia Pacific's growth to Banking & Capital Markets, Communications & Media and Public Service, driven by Japan and Australia.
Industry group
Q1 FY2026 revenue
USD growth
Local-currency growth
Products
$5,741M
+6%
+4%
Health & Public Service
$3,797M
0%
−1%
Financial Services
$3,602M
+14%
+12%
Communications, Media & Technology
$3,102M
+9%
+8%
Resources
$2,499M
+3%
+2%
Financial Services at +12% in local currency is the standout, and Banking & Capital Markets was named as a growth driver in all three geographies — the only client segment that appears in every regional commentary. The offsetting weakness is specific and identified: Health & Public Service declined 1%, with the Americas commentary attributing the drag to Public Service and, within it, the US federal business. That is a policy-driven revenue line rather than a demand problem across the portfolio, and Accenture's own full-year guidance carries roughly a 1 percentage point drag from it.
By type of work, managed services revenue grew 7% in local currency to $9.33 billion and consulting grew 3% to $9.41 billion. Consulting is the discretionary half of the business, and management's language is unchanged from prior quarters: demand persists, but at "a slower pace and level of client spending, particularly for smaller contracts with a shorter duration."
Note that Accenture does not report revenue for its capability groups — strategy, consulting, technology, operations, Song and Industry X — as separate financial segments. Its reportable segments are the three geographic markets above.
The margin story is a one-off, and the regional split shows it
Reported operating income fell $75 million to $2.87 billion. The $308 million severance charge is the entire reason: excluding it, operating income was $3.18 billion, up $233 million or 8%.
Geographic market
Operating margin Q1 FY2026 (GAAP)
Excluding severance
Q1 FY2025
Americas
17%
18%
16%
EMEA
13%
15%
16%
Asia Pacific
16%
19%
21%
The charge was distributed unevenly — $170 million of the $308 million landed in EMEA, $71 million in Asia Pacific, $67 million in the Americas — which is why EMEA's reported margin fell three points. Even adjusted, though, EMEA (15% vs 16%) and Asia Pacific (19% vs 21%) were both below last year, with management citing higher non-payroll costs in each. Only the Americas improved on both measures. So the severance charge explains most of the reported margin decline but not all of the underlying regional softness.
Underneath, the cost lines were favourable: gross margin improved to 33.1% from 32.9% on lower non-payroll costs, and sales and marketing fell to 10.0% of revenue from 10.2%. Headcount is down year over year — about 784,000 people versus 799,000 a year earlier — while utilisation (the share of employee time billed to clients) rose to 93% from 91%. Accenture is delivering 5% more work with 2% fewer people.
Takeaway: The reported earnings decline is an accounting artefact of a severance charge that has now finished; the genuine pressure point is tax, not operations. Adjusted operating income rose 8% and adjusted EPS rose 10%, but the tax rate jumped 290 basis points and took $0.12 per share straight back out — the single largest negative item in the year-over-year EPS bridge, larger than any operational headwind.
Below the operating line
Three items moved between operating income and net income:
Tax. The effective tax rate — total tax as a share of pre-tax profit — rose to 24.5% from 21.6%, because of "reduced benefits from adjustments to prior year tax liabilities." This is a real cash cost, and Accenture's own full-year guidance assumes 23.5% to 25.5%, so the elevated rate is structural for fiscal 2026 rather than a one-quarter blip.
Investment gains. Other income swung $92 million favourably, to a $53 million gain from a $39 million loss, on higher gains on investments. This is a low-quality earnings item — it contributed $0.11 per share and will not necessarily repeat.
Share count. Diluted shares fell to 626.0 million from 634.7 million, adding $0.06 per share purely through buybacks.
Put together, $0.29 of the year-over-year adjusted EPS gain came from actual revenue and operating performance; $0.17 came from investment gains and a smaller share count; $0.12 was given back to tax.
Cash and capital return
Free cash flow — cash generated by operations minus spending on property and equipment — was $1.51 billion, up from $0.87 billion. That jump is mostly timing rather than a step-change in profitability; the first quarter is Accenture's seasonally weakest for cash, and days services outstanding (the average time to collect from clients) rose to 51 days from 47 at the August year-end.
Accenture returned $3.3 billion to shareholders: $2.3 billion buying back 9.5 million shares and $1.0 billion in dividends at $1.63 a share, a 10% increase on the fiscal 2025 rate. That is more than double the quarter's free cash flow, funded from the balance sheet — total cash fell to $9.6 billion from $11.5 billion at the August year-end. Remaining buyback authorisation was $5.6 billion.
What management expects next
For the second quarter, Accenture guided to revenue of $17.35–18.0 billion, equal to 1–5% growth in local currency, assuming a currency tailwind of roughly 3.5%.
For the full fiscal year, management held local-currency revenue growth at 2–5% (3–6% excluding the roughly 1 percentage point drag from the US federal business) and held adjusted EPS at $13.52–13.90. It trimmed the GAAP figures to absorb the severance charge: GAAP operating margin to 15.2–15.4% from 15.3–15.5%, and GAAP EPS to $13.12–13.50 from $13.19–13.57. Free cash flow guidance was unchanged at $9.8–10.5 billion, with at least $9.3 billion committed to shareholder returns.
Our read. The unchanged adjusted guidance after a quarter that came in at the top of the guided revenue range is a deliberately conservative stance, and it is consistent with what the bookings mix implies: the strength is in managed services, which converts to revenue slowly, while consulting — the faster-converting, higher-discretion half — grew just 3% and management explicitly flagged continued slowness in small, short contracts. Two things will decide whether the full year lands at the top or bottom of that 2–5% range, and neither is AI: how much further the US federal business shrinks, and whether consulting demand improves. The margin question is largely settled — with the cost programme complete, the 10–30 basis points of adjusted margin expansion guided for the year should come through, provided the non-payroll cost increases seen in EMEA and Asia Pacific do not persist.