Accenture plc (NYSE:ACN) Q2 2023 Earnings Call Transcript

Julie Sweet: No. I mean the actions, I can just kind of reground you on like what we’ve been saying, right, which is we’ve been achieving hypergrowth and there is been wage inflation like none of us have ever experienced and it’s compounding. And we’ve been addressing that through a combination of improved pricing, cost efficiencies, and so this is really us taking a step back and being able to more structurally address the impact of compounding wage inflation. So it’s a real positive for how we’re moving forward. And think of it as really being €“ creating more room in the P&L so that when you think about our enduring shareholder value proposition is we still expect next year to grow faster than the market. We expect to invest at scale in our business, to deliver 10 to 30 basis point margin expansion on an adjusted basis, to have a disciplined capital allocation, including a meaningful return to our shareholders.

So that is a commitment €“ this is an offensive mood to say, yes, today, we’ve got great demand, we’ve got great utilization, and we can take out more structural costs to put us in a better position as we move forward.

Bryan Keane: Okay. Great. That’s really helpful. Congrats.

Julie Sweet: Thanks.

Operator: And our next question comes from the line of Lisa Ellis with MoffettNathanson. Please go ahead.

Lisa Ellis: Terrific. Thanks for taking my question. Maybe just a kind of follow-up on the sort of connecting the dots questions. I noticed that your headcount growth slowed a bit this quarter, up 6% year-on-year and was flat sequentially. Can you kind of connect the dots that side, what you are seeing and sort of what you’re thinking about on the hiring side with the fact that you have record bookings in the quarter and then typically, those two things kind of move a little bit more in tandem? Thank you.

KC McClure: Yes, sure. Thanks, Lisa. So maybe I’ll just first start with just looking back over the last two previous quarters. We added 28,000 people in the previous quarters. So let’s first start there. And you’re right, Lisa, when you take a look at what we were able to accomplish this quarter, first of all, we had record bookings. We drove 9% €“ 9.3% revenue growth, and we had 91% utilization of our people, right? So we have the skills and all the people we needed to deliver to the demand in the market. And if I look €“ answering your question, looking forward, we sequentially did not add headcount from Q1 to Q2. We see that being about the same in Q2 to Q3. And then looking forward, based on the outlook that we have now, we do see that we would add additional heads in the fourth quarter.

Lisa Ellis: Okay. Great. And then my follow-up is related to AI. Maybe this one is, Julie, for you. Just can you talk a bit about how you apply AI in your own operations? I know every time this topic kind of stirs up, there is this question of whether it’s a positive or a negative for the operations of IT services firms. Can you just talk about how you sort of applied internally and how you think about that over the long-term? Thank you.

Julie Sweet: Sure. In fact, I was just at a client this week where we are helping them really transform their whole IT department. And one of the things they want from us is our myWizard platform, which is a great way of explaining how over the last several years, we have built a platform that integrates the best-in-class technology. So, we didn’t write our own code, right. We use the best technologies. And the way it uses AI, for example, is that when a ticket comes in to address something, an IT issue, AI looks at it, identifies whether or not it’s been a problem solved before, in some cases, can solve the problem, in other cases, routes it to the right people. And then it learns from every ticket. So, in the past, when we have talked about €“ with you about why is it €“ how do you think about revenue and people, we said, look, we have already been breaking that for years now because we are using so much technology and AI in how we are delivering all of our technology jobs.