Accenture's shares plunged nearly 20% on June 18, extending a year-long decline of about 50%. The sharp drop followed the company's fiscal third-quarter results, which showed revenues of $18.7 billion — up $1 billion year-over-year but below market expectations. Additionally, new bookings fell 2% compared to the same quarter last year, further disappointing investors.
CEO Julie Sweet Calls for Patience
According to a report by Business Insider, Accenture CEO Julie Sweet has urged investors to hold their judgment, arguing that the company is well-positioned for long-term growth as enterprises accelerate AI adoption. Speaking on CNBC, Sweet said, "The investors, I think, are missing the AI tailwind and how we’re positioning ourselves for the long-term." She pointed to $9 billion in managed services revenue and rising consulting sales as evidence of momentum.
Sweet added, "We're doing more consulting now because clients are doing more reinvention. It really depends on how fast enterprises are ready to scale. There's a lot of work to do to scale. We are optimistic because we see what our clients are asking us to do."
AI Transformation as Growth Driver
Sweet emphasized that many clients are moving beyond pilot projects into full-scale AI production. “We’re doing more consulting now because clients are doing more reinvention,” she said, using Accenture’s in-house term for AI transformation. She added that scaling AI across enterprises will take time but represents a significant growth opportunity.
Last year, Accenture consolidated its strategy, consulting, song, technology, and operations services into a single unit called reinvention services. Sweet explained that the goal is to embed data and AI across client solutions, making it easier to scale transformation across industries and new markets.
Revenue Growth but Bookings Decline
Accenture reported fiscal third-quarter earnings ending May 31, posting revenues of $18.7 billion, up $1 billion from the same quarter last year. Earnings per share rose 9% to $3.80, and operating margin expanded to 17%. However, new bookings fell 2%, disappointing investors and contributing to a sharp 20% drop in the company’s stock on Thursday.
Accenture Revises Salary Increase Structure
Accenture recently revised its salary increase structure for the June compensation cycle. This revision will impact its global workforce of more than 780,000 employees. According to an internal memo reviewed by the Times of India, employees will now receive 50% of their approved salary hike as a one-time lump-sum payout in June, while the remaining 50% will be added to their base pay.
In the memo, the company explained that the revised salary structure is designed to offer employees more immediate cash while still managing overall payroll costs. “We are both significantly increasing the number of people who receive stay-at-level increases and delivering the increase in two parts: half as a base pay increase and half as a one-time lump sum paid in June,” the company said. Promotion-related salary hikes will continue to be delivered entirely through base pay, while lump-sum payments remain separate from annual bonuses awarded in December.
