Accenture beats quarterly revenue estimates on strong demand for genAI services

(Reuters) -Accenture beat Wall Street estimates for first-quarter revenue and profit on Thursday, on the back of growing demand for its services to help clients adopt AI-powered tools, sending its shares up 6.5% in early trading.

Businesses are placing an emphasis on scaling their AI projects and digitizing their core operations as well as data security to increase growth and cut costs, and companies such as Accenture (NYSE:ACN) are reaping the benefits.

Accenture is leveraging GenerativeAI across industries to help clients optimize operations, from predictive maintenance in manufacturing to automating workflow in advertising operations, the company said in a post-earnings call.

Its GenAI business recorded new bookings of $1.2 billion, and about $500 million in revenue, due to an increase in projects utilizing the service.

The company’s new bookings, a key indicator of future revenue, rose to $18.7 billion for the first quarter from $18.4 billion a year earlier.

The IT provider said it has increased its data and AI workforce to 69,000 and plans to reach 80,000 by 2026, indicating growing demand for its services.

The company raised its annual revenue growth forecast to between 4% and 7% from its earlier estimate of 3%-6%. However, the mid-point is below analysts’ expectations of 5.63%, according to data compiled by LSEG.

Accenture forecast second-quarter revenue of $16.2 billion to $16.8 billion, the mid-point of which is below analysts’ average estimate of $16.63 billion.

Its first-quarter revenue stood at $17.7 billion, beating analysts’ estimates of $17.12 billion, driven by growth in the Americas and EMEA regions and across public service and health industries.