KC McClure: Yeah. I’m going to maybe give a little bit of color and then I’ll certainly hand it over to Julie. Just more from a financial perspective, I think — and as you know this really well, but our competitive advantage really is our investment capacity that allows us to pivot to higher areas of growth. And we can do that and invest through every cycle, and you’ve seen us do that. And I really think that is clearly a differentiator for us. You see that with our strong start this quarter. Julie talked about the 12 acquisitions, $800 million of spend, and we have five more that we’ve announced for Q2. All of that, and we’re reconfirming op margin expansion of 10 basis points to 30 basis points. I think it’s important to see that in terms of our strategy, we’re continuing to do this to really fuel organic growth.
And lastly, I think one of the parts that really distinguishes us is our capital allocation framework, which is durable yet flexible. So, we’re able to flex up and do inorganic to the degree that we see that we’d like to, while at the same time, continuing to increase our return to our shareholders. So, I think it’s really, really great.
Julie Sweet: Great. Yeah. And there’s no change in the strategies in the sense of we’re still trying to — we’re still investing to either scale in hot areas or add new types of skills. So, you see that we’re executing in capital projects like we described, right? In August, we did the — yeah, in August, we did the Anser Advisory. We just added Canada. And then, of course, adding the niche skills in consulting and whether it’s industry or functional. So, no change in strategy. But I would reiterate that it is really a huge competitive advantage for us that we can invest across the cycles. You saw that we did that in the first year after the pandemic, where we significantly increased, and again, always to drive organic growth and position ourselves for those next waves. So, you’re going to see the AI acquisitions. You saw health in the UK, another great area of growth, capital projects. So, think about our strengths here is how we accelerate pivoting to growth.
KC McClure: And then, I’ll just add, Tien-Tsin, that you heard me mention in guidance, that we are going to do now more than 2% in organic contribution for this year.
Julie Sweet: Yeah.
Tien-Tsin Huang: Yeah. No, I’m sure you’ll amplify the growth of what you buy. Just wanted to check on that. That’s helpful. Thank you.
Julie Sweet: Thanks.
Operator: Your next question comes from the line of Ashwin Shirvaikar from Citi. Please go ahead.
Ashwin Shirvaikar: Thanks, and congratulations on the performance. Happy holidays from me. I wanted to ask about, as you have conversations with your clients with regards to budget and spending priorities into next year, if you can comment, first of all, on that? And then, it’s only a couple of quarters since sort of the GenAI kind of took hold, but it’s a fast-moving technology, and I want to kind of inquire into whether the nature of those discussions has changed or become more meaningful, gone past proofs of concept and so on.
Julie Sweet: Great. And happy holidays to you, too. Great question. So first, with respect to — on your first point around what’s happening in the market on client budgets is what I would say is that we’re having lots of discussions that are pretty similar to what we’ve been talking about, which is, how do you prioritize in a more cautionary environment? So, we’ll really know how that will play out in January as always because this is when we — they finalize. But what I’d say is it’s a consistent thing I’ve been talking about, which is in a cautionary environment, in a tough macro, we’re helping clients prioritize. And they’re in the things that we talked about in the script again today, things like building the digital core.
It’s using the technology to drive both growth and cost. And I would just say on the macro side, right, is that, our clients, we recognize you cannot cut yourself to growth. And if you think about the examples that I used in today’s script, most of them were both cost and growth, right? Because that is what our clients are focused on, is how are they going to grow revenue despite whatever the environment is. And that, of course, is our unique capabilities to be able to do both. And then, with respect to GenAI, so first of all, I just want to say $450 million in sales this quarter, we’re very pleased with. I mean, it demonstrates we are leading here. All of last year, it was $300 million. And to your point, the conversations are changing. You have examples like BBVA, which we talked about earlier in my script, where we’re starting to use it at scale.
Our clients want to get out of proofs of concept to material value, and we’re super well positioned. Why? GenAI is not plug and play. It is not just technology. In fact, it’s closer to any other technology. Think about cloud, that’s farther away from the heart of the business. In order to scale, you have to deeply understand the technology, which is still rapidly changing, and the business value. And this is Accenture’s leadership position, right? We have strategy. We have consulting, deep industry and functional expertise. We’re the biggest partner with every major player. We’re working with them at a product level and we can bring those two things together. So, think of 2024 as being the shift for our clients from experimentation to scale, and we believe we’re at the best position to lead that shift to value.
