Accenture's AI revenue tops $1 billion in Q1, says won’t disclose AI nos any more

Significantly, the world’s largest technology and consulting services company said it will not disclose numbers from AI business in the future, as the technology has become all-pervasive.

“This will be the last quarter in which we share advanced AI bookings and revenues," read Accenture’s earnings presentation on Thursday. “We have now reached a point where advanced AI is being embedded in some way across nearly everything we do, and many of our clients are focusing on moving beyond standalone proofs of concept or initiatives."

Accenture chair and chief executive Julie Sweet said, “It has become less meaningful to isolate the data specifically for advanced AI, as it does not reflect how the demand is evolving on the ground, the scope, the full scope of our AI work and the value we're creating."

Integration over isolation

At least one expert said Accenture’s move is also to avoid any confusion.

“Accenture’s decision is pragmatic rather than evasive — GenAI is now deeply embedded across deals, pricing models, and delivery constructs, rather than a clean, standalone revenue line," said Phil Ferhst, chief executive of HFS Research. “Disclosing a headline number risks creating more confusion than clarity, especially when much of the value is tied to transformation programs, productivity gains, and multi-year platform builds rather than pure GenAI licences or projects."

“Accenture is already positioning GenAI as part of its core operating model, not a bolt-on growth story," Fersht added.

Accenture’s move comes less than 30 months after it first reported $100 million in AI-related business in February-May 2023, and less than a day after Tata Consultancy Services Ltd (TCS) first revealed its AI business numbers on Wednesday.

As part of its analyst day on Wednesday, TCS said that its AI-related revenue totalled $1.5 billion on an annualised basis at the end of the September quarter. Accenture, which follows a September-August fiscal year, got $2.7 billion in GenAI revenue last year.

The developments underscore the early adoption of AI by Accenture, and probably the late embrace by large homegrown IT firms, as only TCS and HCL Technologies quantify business from AI-related work. In October, HCL Technologies said revenue from AI technologies totalled $100 million in the July-September period.

HFS Research’s Fersht said homegrown firms began calling this trend to signal market momentum.

Growth amid market uncertainty

Accenture ended with $18.74 billion in revenue in the first quarter, up 6.5% on a sequential basis. While management was optimistic about AI-led reinvention, it retained its full-year guidance from the previous quarter, expecting revenue growth of 2-5% in local currency.

“The pace of overall spending and discretionary spending in our market is at the same level we have seen over the last year. We are delivering strong results and taking market share in this environment, because reinvention is critical for our clients," said Sweet.

This implies that the gloom being navigated by the country’s largest IT services companies may be here to stay as Accenture’s guidance sets the tone for the homegrown IT outsourcers, which announce their third-quarter results next month.

For now, investors are still hopeful about homegrown IT services firms. Shares of TCS ended 2% higher on Thursday after a half-dozen brokerages expressed confidence in TCS’s aggressive Gen AI approach that the company outlined on Wednesday.