Accenture Share Price Crashes 7% After Q3 Results as Drop in New Bookings Overshadows Revenue Beat

New Delhi, June 21, 2025 — Accenture Plc’s share price tumbled 7% in after-hours trading on Thursday after the global IT and consulting giant reported its fiscal Q3 2025 results. While the company managed to surpass revenue expectations, a sharp decline in new bookings raised concerns about future growth, spooking investors and overshadowing an otherwise solid quarter.

Earnings Snapshot: Revenue Beats, Profit in Line

Accenture reported Q3 FY25 revenue of $17.26 billion, beating analysts' consensus estimates of $17.14 billion. This represents a modest 1% year-on-year growth, driven primarily by strong demand in cloud, data, and AI services.

Earnings per share came in at $3.13, aligning with Wall Street expectations. Operating margin stood at 15.6%, a slight improvement from the previous quarter, indicating steady operational efficiency.

However, new bookings—a key metric reflecting future business—fell to $17.2 billion, marking a sharp 22% drop from $22.3 billion a year ago. This slump cast a shadow over the otherwise stable top-line performance.

Market Reaction: Sentiment Turns Cautious

Following the announcement, Accenture shares plunged over 7% in extended trading. The steep fall reflects growing investor unease about a potential slowdown in corporate IT spending amid global macroeconomic uncertainty.

“While revenue and EPS met expectations, the sharp drop in new bookings is a red flag,” said Edward Kelly, senior analyst at JPMorgan. “It suggests that enterprise clients are becoming more cautious about committing to large-scale digital transformation projects in the near term.”

The market has shown a heightened sensitivity to future guidance and growth triggers, especially for large-cap tech and consulting firms. The deceleration in deal wins points to increasing scrutiny of discretionary IT budgets by clients.

Why New Bookings Matter

Accenture's business model heavily relies on consistent deal flow to sustain its growth trajectory. Bookings act as a leading indicator of future revenues. A drop of this magnitude is rare for a firm that is widely regarded as a bellwether for global enterprise IT trends.

According to the company, the decline in bookings was most notable in the consulting segment, which is more discretionary in nature compared to managed services.

“The bookings shortfall in consulting reflects a more cautious decision-making environment,” said Julie Sweet, Chair and CEO of Accenture, during the earnings call. “Clients continue to prioritize cost optimization and shorter ROI cycles.”

Sector-Wide Implications

Accenture’s results mirror a broader trend of decelerating growth in the global IT services sector, impacted by tightening budgets, delayed decision-making, and geopolitical headwinds.

Indian IT giants like TCS, Infosys, and Wipro have already flagged similar headwinds in recent quarters. Analysts say Accenture’s latest figures could foreshadow a challenging environment for other IT services providers as well.

“We expect muted commentary from other major players in the upcoming earnings season,” noted Ruchir Sharma, technology strategist at ICICI Securities. “The softness in new deals, especially in North America and Europe, is likely to persist through the next two quarters.”

Geographic and Segmental Trends

Regionally, growth was led by North America, which saw a 3% revenue uptick, followed by modest gains in Europe and growth markets. Segment-wise, managed services remained resilient, driven by stable demand for cloud infrastructure, cybersecurity, and platform maintenance.

In contrast, the consulting division experienced a noticeable pullback, particularly in sectors such as banking, retail, and manufacturing.

Company Guidance and Strategic Focus

For Q4 FY25, Accenture provided revenue guidance in the range of $16.85 to $17.25 billion, suggesting flat to low-single-digit growth. The company reaffirmed its full-year EPS guidance of $11.95 to $12.15 and continued to forecast free cash flow in the range of $8.5 to $9.0 billion.

Management emphasized continued investment in generative AI, automation, and industry-specific cloud offerings as key strategic priorities.

“Despite near-term softness, we remain confident in the medium-to-long-term demand for technology-driven transformation,” Sweet assured shareholders.

Investor Outlook: Storm Clouds or Passing Shower?

With macroeconomic uncertainty still clouding visibility, analysts remain split on Accenture’s near-term prospects.

Some view the Q3 results as a temporary hiccup. “A drop in bookings isn’t the end of the world—enterprises are still investing, but more selectively,” said Mona Verma, senior portfolio manager at HDFC AMC. “Accenture’s fundamentals remain robust, and any correction offers a potential long-term entry point.”

However, others urge caution. “This isn't a buying opportunity just yet. Investors should wait for clearer signs of recovery in deal flows before turning bullish again,” warned Peter Lawson of Benchmark Capital.

Accenture’s Q3 performance underscores the challenges facing even the most well-diversified players in the IT services space. While the company continues to execute well on existing contracts and maintain profitability, the decline in new bookings raises legitimate concerns about future revenue momentum.

As the broader industry adjusts to slower enterprise tech spending, Accenture's ability to adapt its consulting value proposition and secure high-value digital transformation deals will be crucial in navigating this transitional phase.