Accenture forecasts 2024 revenue growth above estimates on AI demand

Accenture forecasts 2024 revenue growth above estimates on AI demand

(Reuters) -IT services provider Accenture projected annual revenue growth largely above estimates on Thursday, as growing adoption of artificial intelligence offsets sluggish growth in enterprise spending, sending its shares up 3% in premarket trading.

Generative AI technologies used to automate certain operations are helping companies boost productivity and save costs.

Accenture has also been a go-to consultant and outsourcing service provider for businesses migrating their operations to the cloud, partially shielding the company from inflation-triggered IT budget cuts.

The company expects annual revenue to grow between 1.5% and 2.5%, compared with analysts’ expectations of 1.6%, according to LSEG data. It had earlier expected growth between 1% and 3%.

Revenue for the quarter ended May 31 stood at $16.47 billion, compared with estimates of $16.53 billion.

Its reported third-quarter profit of $1.93 billion, compared with $2.01 billion a year earlier.

Quarterly new bookings, a metric indicating value of customer contracts with a spending commitment, was $21.06 billion, compared with $17.25 billion a year ago. Accenture reported new bookings of $21.58 billion in the prior three-month period.

(Reporting by Akash Sriram in Bengaluru; Editing by Devika Syamnath)