Accenture stock retreated Thursday after the company reported fiscal second-quarter earnings and revenue that edged by estimates amid its acquisition spree. The company warned that its U.S. government business could see slower growth.
Worries over Accenture's federal government services business amid DOGE-led layoffs of federal employees has pressured Accenture stock.
Accenture Stock: U.S. Federal Business
"The new administration has a clear goal to run the federal government more efficiently," said Accenture Chief Executive Julie Sweet on the company's conference call with Wall Street analysts. "During this process, many new procurement actions have slowed, which is negatively impacting our sales and revenue."
In 2024, the U.S. federal government accounted for 8% of our Accenture revenue.
Sweet added: "In addition, recently, the General Service Administration has instructed all federal agencies to review their contracts with the top 10 highest paid consulting firms contracting with the U.S. government, which includes Accenture federal services. The GSA's guidance was to terminate contracts that are not deemed mission-critical by the relevant federal agencies. While we continue to believe our work for federal clients is mission-critical, we anticipate ongoing uncertainty as the government's priorities evolve and these assessments unfold."
On the stock market today, Accenture stock fell 6.2% to 304.24 in midday trading. Sweet's comments also sent down shares in enterprise software maker ServiceNow, which has a sizable federal business. ServiceNow stock dipped 2.9% to 820.69.
Accenture earnings for the quarter ended Feb. 28 rose 2% to $2.82 per share on an adjusted basis, said the Dublin-based global tech services and consulting firm. Including acquisitions, revenue rose 5% to $16.66 billion, Accenture said.
Analysts expected Accenture earnings of $2.81 a share on sales of $16.6 billion.
Also, bookings fell 3% to $20.9 billion, including $1.4 billion in artificial intelligence related bookings.
For its third fiscal quarter, which ends in May, Accenture expects revenue in a range of $16.9 billion to $17.5 billion. Analysts called for revenue of $17.2 billion.
The company narrowed its fiscal 2025 revenue expectations to a 5% to 7% gain, lifting the low end of its previous range by a percentage point. Earnings are now projected to hit $12.55 to $12.79 a share, with Accenture boosting the low end of its prior guidance by 12 cents.
Heading into the Accenture earnings report, shares were down over 8% in 2025.
Accenture Acquisition Spree
Meanwhile, Accenture continues to make acquisitions to move into digital marketing, cloud computing services and artificial intelligence.
Further, Accenture stock has a Relative Strength Rating of 38 out of a best-possible 99, according to IBD Stock Check-up.
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Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
