0001467373-26-000014
SEC filingAccenture Q2 FY2026 revenue $18.0B (+8% YoY), operating margin expanded to 13.8% from 13.5%, driven by managed services growth.
For the second quarter of fiscal 2026, Accenture reported revenues of $18.0 billion, an increase of 8% in U.S. dollars and 4% in local currency compared to the prior year period. The stronger USD growth reflects favorable foreign exchange movements, as the dollar weakened against major currencies. Operating expenses grew 8% to $15.6 billion but decreased as a percentage of revenue to 86.2% from 86.5%, leading to an operating margin improvement of 30 basis points to 13.8% (from 13.5%). Gross margin expanded to 30.3% from 29.9%, driven primarily by lower non-payroll costs, including subcontractor expenses. Diluted earnings per share increased 4% to $2.93 from $2.82, with higher revenue and operating results contributing $0.31, partially offset by a higher effective tax rate ($0.15 headwind) and lower non-operating income ($0.10 headwind).
Geographically, Asia Pacific led with local currency revenue growth of 10%, with strength in Banking & Capital Markets, Communications & Media, and Public Service, driven by Japan and Australia. Americas grew modestly at 3% in local currency, led by Banking & Capital Markets, Software & Platforms, and Industrials, partially offset by a decline in U.S. federal public service. EMEA grew 2% in local currency, with growth in Insurance, Life Sciences, and Public Service, led by the United Kingdom and Italy. Operating income by segment reflected revenue trends: Americas operating income increased on revenue growth; EMEA operating income grew but margin declined slightly; Asia Pacific operating income rose despite higher non-payroll costs. By type of work, managed services revenues grew 5% in local currency (10% USD), outpacing consulting growth of 3% local (7% USD), as clients continued to prioritize large-scale transformations and AI-readiness initiatives.
Management noted that while the discretionary spending environment remains unchanged, clients continue to focus on large-scale transformations, including AI readiness. The company estimates that for the full fiscal year 2026, U.S. dollar revenue growth will be approximately 2% higher than local currency growth, assuming current exchange rates persist. No explicit revenue or margin guidance was provided for the remainder of the year. However, the completion of the business optimization program ($308 million in H1) is expected to yield ongoing savings. Adjusted operating margin for the first half (excluding optimization costs) was 15.4%, versus 15.1% GAAP in the prior year, indicating underlying margin improvement. The company remains focused on matching workforce skills to demand, managing attrition (stable at 13%), and leveraging pricing improvements to mitigate compensation cost pressures.
Cash and cash equivalents totaled $9.4 billion as of February 28, 2026, down from $11.5 billion at August 31, 2025, primarily due to share repurchases and acquisitions. Short-term investments were negligible at $6.4 million. Total debt stood at $5.14 billion, including $5.0 billion of senior notes (net of discount) and $100 million of commercial paper. The syndicated loan facility of $5.5 billion remains undrawn. Shareholders' equity was $32.3 billion, nearly flat compared to August 31, 2025.
Remaining performance obligations (RPO) reached $37 billion as of February 28, 2026, up from $34 billion at August 31, 2025, indicating strong future revenue visibility. Approximately 46% is expected to be recognized as revenue in fiscal 2026, an additional 25% in fiscal 2027, and the balance thereafter. Guarantees and indemnifications totaled approximately $2.2 billion in potential liability, largely recoverable from third parties.
Share repurchases totaled $4.01 billion during the six months ended February 28, 2026, accelerating from $2.34 billion in the prior-year period. Dividends paid were $2.02 billion, or $1.63 per share quarterly, a 10.1% increase over the prior year's $1.48. No new debt was issued or repaid; the debt profile remains stable with maturities starting in 2027. Capital expenditures were $306 million, or 0.83% of sales, consistent with the prior year.
For the six months ended February 28, 2026, Americas generated $17.98B revenue (+4.0% YoY) and $2.92B operating income (16.2% margin). EMEA revenue grew 10.5% to $13.50B, but operating income declined 5.9% to $1.58B (11.7% margin). Asia Pacific revenue grew 9.5% to $5.31B, with operating income down 3.4% to $0.87B (16.4% margin). The decline in EMEA and Asia Pacific operating income reflects business optimization costs of $308 million recorded in the six-month period.