Accenture (NYSE: ACN) reported financial results for the fourth quarter and full fiscal year ended Aug. 31, 2021.
For the fourth quarter, revenues were $13.4 billion, an increase of 24% in U.S. dollars and 21% in local currency compared with the fourth quarter of fiscal 2020. Diluted earnings per share were $2.20, an 11% increase from $1.99 last year, which included $0.29 in gains on an investment. Diluted EPS increased 29% from adjusted EPS of $1.70 for the fourth quarter last year. Operating margin for the fourth quarter of fiscal 2021 was 14.6%, an expansion of30 basis points from the fourth quarter of fiscal 2020. Operating cash flow was $2.4 billion and free cash flow was $2.2 billion. New bookings were $15.0 billion.
For the full fiscal year, revenues were $50.5 billion, an increase of 14% in U.S. dollars and 11% in local currency compared with fiscal 2020. Diluted earnings per share increased 16% to $9.16 from $7.89 last year, including gains on an investment of $0.36 and $0.43, respectively.
Excluding these gains, adjusted diluted EPS for fiscal 2021 were $8.80, an 18% increase from $7.46 in fiscal 2020. Operating margin for fiscal 2021 was 15.1%, an expansion of 40 basis points. Operating cash flow for fiscal 2021 was $9.0 billion and free cash flow was $8.4 billion.
New bookings were a record $59.3 billion.
Julie Sweet, Accenture’s Chair & CEO, said, “We are very proud of our outstanding fiscal 2021 financial performance, reflecting growth significantly above the market and strong momentum heading into fiscal 2022. Our results reflect the dedication and hard work of our 624,000 incredible people, who are laser-focused on creating tangible value for our clients, innovating with our ecosystem, and being the trusted partner of choice on our clients’ transformation journeys. We delivered these results while investing in our people and in the capabilities our clients need, now and in the future, and at the same time making progress on our sustainability goals — from progress in inclusion and diversity, to the use of renewable energy now at 50% across the globe, to supporting our communities during these challenging times. We measure our success by this 360° value creation.”
Financial Review
Fourth Quarter Fiscal 2021
Revenues for the fourth quarter of fiscal 2021 were $13.42 billion, compared with $10.84 billion for the fourth quarter of fiscal 2020, an increase of 24% in U.S. dollars and 21% in local currency. Revenues for the quarter reflect a foreign-exchange impact of approximately positive 3%, compared with the positive 4% impact previously assumed. Adjusting for the actual foreign-exchange impact, the company’s guided range for quarterly revenues was approximately $13.0 billion to $13.4 billion. Accenture’s fourth-quarter fiscal 2021 revenues were slightly above this adjusted range.
▪ Consulting revenues were $7.31 billion, an increase of 29% in U.S. dollars and 25% in local currency compared with the fourth quarter of fiscal 2020.
▪ Outsourcing revenues were $6.11 billion, an increase of 19% in U.S. dollars and 16% in local currency compared with the fourth quarter of fiscal 2020.
GAAP diluted EPS for the fourth quarter were $2.20, an increase of $0.21 or 11% from $1.99 for the fourth quarter last year, which included gains on an investment of $219 million, pre-tax, or $0.29 per share. EPS for the quarter increased $0.50, or 29%, from adjusted EPS of $1.70 for the fourth quarter last year. The $0.50 increase in EPS on an adjusted basis reflects:
▪ a $0.46 increase from higher revenue and operating results;
▪ a $0.10 increase from a lower effective tax rate; and
▪ a $0.01 increase from a lower share count;
partially offset by
▪ a $0.07 decrease from higher non-operating expenses.
Gross margin (gross profit as a percentage of revenues) for the fourth quarter was 33.3%, compared with 31.8% for the fourth quarter of fiscal 2020. Selling, general and administrative (SG&A) expenses for the fourth quarter were $2.51 billion, or 18.7% of revenues, compared with $1.90 billion, or 17.5% of revenues, for the fourth quarter of fiscal 2020.
Operating income for the fourth quarter of fiscal 2021 was $1.96 billion, or 14.6% of revenues, compared with $1.54 billion, or 14.3% of revenues, for the fourth quarter of fiscal 2020.
Operating margin for the fourth quarter of fiscal 2021 expanded 30 basis points.
The company’s effective tax rate for the fourth quarter was 25.0%, compared with 26.8% for the fourth quarter of fiscal 2020. Excluding the impact of gains on an investment, the effective tax rate was 28.4% for the fourth quarter last year.
Net income for the quarter was $1.44 billion, compared with $1.31 billion for the fourth quarter of fiscal 2020. Excluding the $185 million after-tax impact of gains on an investment, net income was $1.12 billion for the fourth quarter last year.
Operating cash flow for the fourth quarter was $2.44 billion, and property and equipment additions were $236 million. Free cash flow, defined as operating cash flow net of property and equipment additions, was $2.20 billion. For the same period of fiscal 2020, operating cash flow was $3.16 billion, property and equipment additions were $189 million, and free cash flow was $2.97 billion.