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Accenture (ACN) delivered a solid start to fiscal 2026, posting Q1 revenue at the top of its guided range and EPS that comfortably cleared analyst expectations. However, while revenue of $18.7 bln represented a steady 5.7% yr/yr increase, the company’s decision to maintain its full-year EPS guidance despite the Q1 beat tempered investor enthusiasm.

• Adjusted EPS of $3.94 grew 10% yr/yr, fueled by disciplined cost management and a 30-bps expansion in adjusted operating margin to 17%.
• Margin expansion was primarily driven by talent rotation and improved contract profitability, which helped drive a 7% increase in revenue per person this quarter.
• New bookings reached $20.9 bln, a 12% increase in USD, supported by 33 clients with quarterly bookings exceeding $100 mln.
• Managed Services led the growth, with bookings of $11.1 bln (1.2 book-to-bill) outpacing Consulting bookings of $9.9 bln (1.0 book-to-bill).
• Advanced AI momentum continued with $2.2 bln in new bookings, nearly doubling from the same period last year, as the technology becomes "embedded in some way across nearly everything" the company does, according to ACN executives.
• FY26 guidance remains conservative, with the company reaffirming local currency revenue growth of 2-5% and adjusted EPS of $13.52 to $13.90.

Briefing.com Analyst Insight:

ACN’s Q1 results underscore its leadership in the "AI-enablement" era, yet the stock remains under pressure as the company opted to reaffirm rather than raise its FY26 EPS outlook. The 30-bps margin expansion is a testament to the company's ability to drive efficiency through proprietary platforms and fixed-price contracts, which now represent 60% of its work. However, management noted that the 7% growth in revenue per person may moderate as they ramp up hiring for new skills in the U.S. and Europe. The company’s AI strategy is shifting from "proof of concept" to scaled, end-to-end solutions, particularly in customer service, finance, and procurement. Given that discretionary spend in the broader market remains flat with no clear catalyst for change, ACN’s reliance on large-scale transformational deals makes it a steady but cautious play in a maturing AI landscape.