Accenture (ACN) stock was on track for its biggest single-day drop on record Thursday, falling 14% to $133.95 in premarket trading after the consulting giant delivered a mixed earnings report and cut its annual revenue outlook.
The stock was trading around $155 before results hit. That 14% slide wiped out roughly $20 billion in market value in a matter of hours.
EPS came in at $3.80 for the fiscal third quarter, beating Wall Street’s estimate of $3.71. But revenue of $18.72 billion narrowly missed the $18.75 billion consensus, and guidance for the rest of the year disappointed.
Management now expects full-year revenue growth of 3% to 4% in local currency. That’s down from the previous forecast of 4% to 6% — the second time this year Accenture has trimmed that number.
Fourth-quarter revenue was guided to $17.75 billion–$18.4 billion, below the analyst average of $18.47 billion.
Adjusted EPS guidance was nudged up slightly, with the new range of $13.78–$13.90 raising the floor from $13.65 while keeping the ceiling the same.
The earnings miss wasn’t the only thing weighing on the stock. Accenture also announced $4.18 billion in cybersecurity acquisitions — taking a majority stake in industrial cybersecurity firm Dragos and fully acquiring runZero and NetRise.
The deals are expected to close in August or September and will add companies with a combined annual recurring revenue of $208 million to Accenture’s existing $10 billion cybersecurity business.
Just days before earnings, Morgan Stanley downgraded ACN to Equal-Weight from Overweight. The firm said heavy AI investment was pulling resources away from traditional IT services — and that the budget recovery they had been waiting for wasn’t materializing.
“We are not seeing the budget growth inflection we had previously expected,” analysts wrote.
The downgrade landed as IT spending budgets remain under pressure. Morgan Stanley described the current interest-rate environment as a “neutral to negative signal,” with flat rates providing no relief and any potential hike tightening things further.
New bookings for Q3 came in at $19.3 billion, down roughly 2% from the same quarter last year. CEO Julie Sweet pointed to 104 quarterly bookings of $100 million or more as evidence that “demand for large-scale reinvention remains strong.” The market wasn’t convinced.
The fallout spread beyond ACN. Infosys fell 3.8% and Cognizant dropped 4.4% before the U.S. open, while French rival Capgemini slid 6.8% in Paris trading.
Jefferies analyst Surinder Thind flagged back in March that he had seen no evidence of a recovery in customer demand, directly contradicting management’s upbeat tone at the time.
On the AI front, Accenture has been building partnerships with firms like OpenAI and Anthropic rather than competing with them — developing agents for customer support and advertising tasks, with TD Cowen noting the firm is also building its own tools to license to clients.
Q3 new bookings stood at $19.3 billion, compared to $19.7 billion in the same period last year.
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