Accenture plc (ACN) delivered solid financial results in its third quarter of fiscal 2026, reporting $18.7 billion in revenue — up 6% in U.S. dollars — along with a 9% increase in diluted earnings per share to $3.80 and a 60-basis-point expansion in operating margin. This Quarterly Report on Form 10-Q for the period ended May 31, 2026, reflects a company navigating a dynamic global environment with disciplined capital allocation, stable internal controls, and effective risk management, even as consulting revenue growth remained tempered by cautious client spending patterns.

I. Revenue and Segment Performance

Accenture reported total revenues of $18.7 billion for the third quarter of fiscal 2026, an increase of 6% in U.S. dollars and 3% in local currency compared to the prior-year quarter [Item 2 - MD&A, ¶8]. The U.S. dollar weakened against various currencies during the period, contributing approximately 2.5% in favorable currency translation to the reported revenue growth rate, a trend the company expects to persist at roughly 2% for the full fiscal year [Item 2 - MD&A, ¶12].

Geographic Segment Performance. Accenture's operations are organized into three geographic reportable segments: Americas, EMEA (Europe, Middle East and Africa), and Asia Pacific. In the third quarter, the Americas generated $9.1 billion in revenue, up 1% in local currency, led by growth in Software & Platforms, High Tech, and Industrials. EMEA reported $6.9 billion, up 4% in local currency, driven by Public Service and Software & Platforms, with particular strength in the United Kingdom and Italy. Asia Pacific posted $2.7 billion, up 8% in local currency, led by growth in Public Service, Banking & Capital Markets, and Insurance, with strength in Japan, Australia, and Singapore [Item 2 - MD&A, ¶17-18]. By industry group, local currency growth was strongest in Communications, Media & Technology at 9%, modest in Financial Services and Products at 3% each, slight in Resources at 1%, and flat in Health & Public Service [Item 2 - MD&A, ¶9].

Revenue by Type of Work. Consulting revenues were $9.3 billion, up just 1% in local currency, reflecting a continued slower pace of client spending on smaller, shorter-duration discretionary projects. Managed services revenues were $9.4 billion, up 5% in local currency, driven by very strong growth in EMEA as clients continue to transform operations through technology, artificial intelligence, and data capabilities [Item 2 - MD&A, ¶9-10]. Total revenue growth was mixed across the two service lines: consulting revenue grew 4% and managed services revenue grew 8% in U.S. dollars, with the managed services strength reflecting deeper, longer-term client relationships [Item 2 - MD&A, ¶8-9].

Bookings and Backlog. New bookings for the third quarter totaled $19.3 billion, a decrease of 3% in local currency year-over-year, comprising consulting bookings of $10.3 billion and managed services bookings of $9.1 billion [Item 2 - MD&A, ¶8]. Despite the quarterly decline in bookings, Accenture's remaining performance obligations stood at approximately $38 billion as of May 31, 2026, up from $34 billion at the end of fiscal 2025, providing solid future revenue visibility and a strong pipeline of committed work [Item 1 - Financial Statements, ¶7].

II. Operating Results and Profitability

Accenture delivered solid profitability improvement in the third quarter of fiscal 2026, with operating income rising 6% year-over-year to $3.2 billion and operating margin expanding to 17.0% from 16.8% in the prior-year quarter. Total revenues reached $18.7 billion, up 6% in U.S. dollars and 3% in local currency [Item 2 - MD&A, ¶8-9].

Gross Margin and Cost of Services. Gross margin for the third quarter was 32.8%, a modest decline from 32.9% in the prior year. Cost of services increased $683 million, or 6%, to $12.6 billion and rose as a percentage of revenues to 67.2% from 67.1%. The increase was primarily attributable to higher non-payroll costs, including increased subcontractor expenses, which were largely offset by lower payroll costs. For the nine-month period, gross margin improved to 32.1% from 31.9%, driven by lower payroll costs [Item 2 - MD&A, ¶20].

Operating Margin and SG&A Expenses. Operating expenses increased 5% but decreased as a percentage of revenues to 83.0% from 83.2%. Sales and marketing expense rose $49 million, or 3%, but declined as a percentage of revenues to 9.7% from 9.9% due to lower selling and business development costs. General and administrative costs increased $67 million, or 6%, and remained flat as a percentage of revenues at 6.1% [Item 2 - MD&A, ¶21]. For the nine-month period, GAAP operating margin was 15.4%, down from 15.7% a year earlier, primarily due to business optimization costs. Excluding those costs, adjusted operating margin was 15.9% [Item 2 - MD&A, ¶25].

Restructuring Charges. During the first quarter of fiscal 2026, Accenture completed a six-month business optimization program and recorded $308 million in charges, primarily for employee severance [Item 2 - MD&A, ¶22]. Across the entire program initiated in the fourth quarter of fiscal 2025, total costs reached $923 million, including $628 million of employee severance and $295 million primarily related to the divestiture of two acquisitions in the Americas [Item 1 - Financial Statements, ¶26]. These restructuring actions reduced GAAP operating margin by approximately 60 basis points for the nine-month period, but the completion of the program positions the company with a leaner cost structure going forward.

Net Income and Earnings Per Share. Net income attributable to Accenture plc for the third quarter was $2.34 billion, up from $2.20 billion in the prior year. Diluted earnings per share rose 9% to $3.80 from $3.49, driven by higher revenue and operating results and a lower share count [Item 2 - MD&A, ¶28]. For the nine-month period, diluted EPS was $10.27 compared to $9.90. Excluding business optimization costs of $250 million net of taxes, which reduced EPS by $0.40, adjusted diluted EPS was $10.67 [Item 2 - MD&A, ¶29]. The effective tax rate for the quarter was 24.2%, relatively consistent with 24.0% a year ago, while the year-to-date rate of 24.3% was higher than 22.1% due to reduced tax benefits from share-based payments [Item 2 - MD&A, ¶27].

III. Liquidity and Capital Resources

Accenture maintains a strong liquidity position supported by robust operating cash flows, a manageable debt profile, and disciplined capital allocation. As of May 31, 2026, the company held $10.2 billion in cash and cash equivalents, compared to $11.5 billion as of August 31, 2025, with the decline driven by significant investing and financing outflows that more than offset healthy operating cash generation [Item 2 - MD&A, ¶29].

Cash Flows from Operating, Investing, and Financing Activities. During the nine months ended May 31, 2026, net cash provided by operating activities totaled $9,268 million, an increase of $1,708 million year over year, driven by higher net income, increased compensation accruals reflected in accrued payroll and benefits, and the timing of vendor accruals and payments in accounts payable. Net cash used in investing activities was $3,452 million, up $2,204 million primarily due to higher spending on business acquisitions. Net cash used in financing activities was $7,091 million, a $5,417 million increase largely reflecting lower net proceeds from borrowings and higher net purchases of shares [Item 2 - MD&A, ¶30].

Primary Sources of Liquidity. Accenture's primary liquidity sources are cash flows from operations, existing cash reserves, and borrowing facilities. The company expects its working capital, investment, and general corporate funding requirements to be satisfied for the next twelve months and thereafter through these channels. Substantially all cash is held in jurisdictions without regulatory restrictions or material tax effects on the free flow of funds, and dividend distributions from lower-tier subsidiaries have historically met the Irish parent company's cash needs [Item 2 - MD&A, ¶30].

Shareholder Returns and Capital Allocation. During the third quarter of fiscal 2026, Accenture returned $2.2 billion to shareholders through $1.0 billion in dividends and $1.2 billion in share purchases [Item 2 - MD&A, ¶8]. For the nine months ended May 31, 2026, open-market share purchases totaled $4,605 million across approximately 20 million Class A ordinary shares, with additional purchases of $586 million primarily via share withholding for payroll tax obligations. The company intends to continue using operating cash flows for share repurchases for the remainder of fiscal 2026 [Item 2 - MD&A, ¶33]. The aggregate available authorization for share purchases and redemptions stood at $3,244 million as of May 31, 2026, with cumulative Board-authorized buybacks totaling $59.1 billion since August 2001, underscoring Accenture's long-standing commitment to returning capital to shareholders.

Debt Profile and Financing Arrangements. As of May 31, 2026, Accenture had $5 billion in outstanding senior unsecured notes issued by Accenture Capital, with maturities ranging from 2027 through 2034 and fully and unconditionally guaranteed by Accenture plc. The weighted-average effective interest rate on outstanding commercial paper was 3.8%, and the estimated fair value of the senior notes was $4.9 billion, classified as Level 2 within the fair value hierarchy [Item 1 - Financial Statements, ¶17]. Interest expense for the nine months ended May 31, 2026 was $200 million, a 23% increase over the prior-year period reflecting a higher average long-term debt balance [Item 2 - MD&A, ¶31]. The company also maintains an S-3 registration statement on file allowing its finance subsidiaries to issue additional debt securities. Operating cash flows benefited from favorable working capital dynamics, including higher compensation accruals and the timing of vendor payments. With $9.3 billion in operating cash generation over nine months and ready access to debt capital markets, Accenture maintains ample capacity to fund ongoing operations, strategic acquisitions, and shareholder returns while preserving a solid liquidity buffer for future needs [Item 2 - MD&A, ¶29-30].

IV. Market Risk Exposures and Hedging

Accenture operates across more than 120 countries, generating revenues in multiple currencies including the Euro, U.K. pound, and Japanese yen, which subjects the company to significant foreign currency exchange rate risk. During the nine months ended May 31, 2026, there were no material changes to the market risk exposure information previously disclosed in Accenture's Annual Report on Form 10-K for fiscal 2025 [Item 3 - Market Risk, ¶1].

Foreign Currency Risk and Translation Effects. As a globally integrated company, the majority of Accenture's revenues are denominated in currencies other than the U.S. dollar, and the company continues to experience volatility in foreign currency exchange rates [Item 2 - MD&A, ¶11]. During the three and nine months ended May 31, 2026, the U.S. dollar weakened against various currencies compared to the same prior-year periods, resulting in favorable currency translation effects. This made U.S. dollar revenue growth approximately 2.5% higher for the quarter and 2.7% higher for the nine-month period than local currency growth rates. Assuming exchange rates remain within recent ranges, management estimates full fiscal 2026 revenue growth in U.S. dollars will be approximately 2% higher than local currency growth [Item 2 - MD&A, ¶12]. Currency translation effects on operating income were estimated to be similar to those on revenue for each geographic market.

Interest Rate Risk on Cash Equivalents, Investments, and Debt. Accenture's cash and cash equivalents totaled $10.2 billion as of May 31, 2026, and interest income reached $260 million for the first nine months of fiscal 2026, up 12% from the prior year due to a higher average cash balance [Item 2 - MD&A, ¶26]. In October 2024, Accenture Capital issued $5 billion aggregate principal amount of senior unsecured notes with maturities ranging from 2027 to 2034, the proceeds of which were used for general corporate purposes including repayment of commercial paper [Item 1 - Financial Statements, ¶16]. As of May 31, 2026, the weighted-average effective interest rate on outstanding commercial paper was 3.8%, and the estimated fair value of the senior notes was $4.9 billion, classified as Level 2 within the fair value hierarchy [Item 1 - Financial Statements, ¶17]. Interest expense for the nine months was $200 million, up 23% year-over-year, primarily due to the higher average long-term debt balance [Item 2 - MD&A, ¶26].

Risk Management Policies and Derivative Instruments. Accenture manages foreign currency exchange rate risk through the use of derivative financial instruments, specifically deliverable and non-deliverable foreign currency forward contracts [Item 1 - Financial Statements, ¶13]. For derivatives designated as cash flow hedges, the effective portion of changes in fair value is recorded in Accumulated Other Comprehensive Loss and reclassified into Cost of services when the hedged transaction is recognized. As of May 31, 2026, $362,320 of net unrealized losses on cash flow hedges are expected to be reclassified into Cost of services within the next twelve months [Item 1 - Financial Statements, ¶14]. Foreign currency forward contracts not designated as hedges resulted in net losses of $95,646 for the nine months ended May 31, 2026, recorded in Other income (expense), net and offset by gains and losses on the related hedged items. The total notional value of all derivative instruments was approximately $16.9 billion as of May 31, 2026, with a net negative fair value of $643 million.

Quantitative Sensitivity Analysis and Changes in Market Risk Profile. Accenture did not provide updated quantitative sensitivity analysis or value-at-risk disclosures in this interim filing, instead referring readers to the comprehensive discussion in its Annual Report on Form 10-K for fiscal 2025. Importantly, management confirmed that there were no material changes to the company's overall market risk profile during the nine months ended May 31, 2026, relative to the prior fiscal year [Item 3 - Market Risk, ¶1]. This stability reflects the company's ongoing hedging strategies and consistent risk management framework.

V. Evaluation of Disclosure Controls and Internal Control Changes

Management's Conclusion on Disclosure Controls and Procedures. Accenture plc's management, under the supervision and with the participation of the principal executive officer and principal financial officer, conducted an evaluation of the effectiveness of the Company's disclosure controls and procedures as of the end of the period covered by this quarterly report. This evaluation was performed in accordance with Rule 13a-15 under the Securities Exchange Act of 1934, which defines disclosure controls and procedures as controls designed to ensure that information required to be disclosed in SEC reports is recorded, processed, summarized, and reported within the time periods specified [Item 4 - Controls, ¶1]. Based on this evaluation, the principal executive officer and principal financial officer concluded that Accenture's disclosure controls and procedures were effective at the reasonable assurance level as of the end of the reporting period [Item 4 - Controls, ¶1].

Scope and Limitations of Controls Evaluation. It is important to recognize the inherent limitations of any controls system. As Accenture's management acknowledges, no matter how well designed and operated, any controls and procedures can provide only reasonable — not absolute — assurance of achieving the desired control objectives [Item 4 - Controls, ¶1]. This means that the evaluation process, while thorough, cannot guarantee that all misstatements or omissions will be prevented or detected. The reasonable assurance standard recognizes that the cost of a control system should not exceed the benefits derived, and that there are inherent limitations in any system of internal controls, including the possibility of human error, circumvention, or management override.

Changes in Internal Control Over Financial Reporting. With respect to internal control over financial reporting (ICFR), Accenture reported that there was no change during the third quarter of fiscal 2026 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting [Item 4 - Controls, ¶1]. This finding indicates that Accenture's internal control environment remained stable throughout the quarter, with no significant modifications to the design or operation of its control processes.

Material Weaknesses and Remediation. The evaluation did not identify any material weaknesses in the Company's disclosure controls and procedures or internal control over financial reporting. Furthermore, no new remediation actions were initiated or reported during the quarter, as the absence of any material changes to ICFR suggests that the existing control environment continued to operate effectively.

Impact on Financial Reporting Quality. The conclusion that disclosure controls and procedures were effective at the reasonable assurance level, combined with the absence of changes in internal control over financial reporting during the quarter, supports the reliability and accuracy of Accenture's financial reporting. Investors and stakeholders can have confidence that the Company's financial statements and disclosures in this 10-Q filing reflect a control environment that is functioning as designed, subject to the inherent limitations of any control system. The stable internal control landscape during the third quarter of fiscal 2026 reinforces the consistency and dependability of Accenture's financial reporting processes.

VI. Risk Factors, Legal Proceedings, and Other Required Disclosures

Item 1A — Risk Factors. Accenture has disclosed that there have been no material changes to the risk factors previously described in the company's Annual Report on Form 10-K for the fiscal year ended August 31, 2025 [Item 1A - Risk Factors, ¶1]. Investors are directed to that filing for a comprehensive discussion of the potential risks and uncertainties facing the business, including those related to macroeconomic conditions, competitive pressures, talent management, cybersecurity, and global operations.

Item 1 — Legal Proceedings. The information regarding Accenture's legal proceedings is incorporated by reference to the discussion under "Legal Contingencies" in Note 11 (Commitments and Contingencies) to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q [Item 1 - Legal, ¶1]. No material new developments in legal proceedings were separately reported.

Items 2, 3, 4, and 5 — Other Required Disclosures. During the third quarter of fiscal 2026, Accenture purchased 5,754,179 Class A ordinary shares under its publicly announced open-market share purchase program for an aggregate price of approximately $1,147 million [Item 2 - Equity Sales, ¶1]. As of May 31, 2026, the company's aggregate available authorization for share purchases and redemptions was $3,244 million. Additionally, Accenture purchased 197,612 Class A ordinary shares primarily through share withholding for payroll tax obligations in connection with employee equity plans, which do not affect the available authorization [Item 2 - Equity Sales, ¶2]. There were no defaults upon senior securities during the quarter [Item 3 - Defaults, ¶1]. Mine safety disclosures were not applicable to Accenture's operations [Item 4 - Mine Safety, ¶1]. During the quarter, Joel Unruch, General Counsel and Corporate Secretary, adopted a Rule 10b5-1 trading arrangement on April 29, 2026, covering a period from July 30, 2026 through April 23, 2027, for the potential sale of up to 24,000 Class A ordinary shares [Item 5 - Other Info, ¶1]. All such trading arrangements are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c).

Item 6 — Exhibits. The company filed several exhibits with this Form 10-Q, including: (i) a Five-Year Credit Agreement and a 364-Day Credit Agreement, each dated April 22, 2026 (Exhibits 10.1 and 10.2); (ii) the Accenture LLP Leadership Separation Benefits Plan (Exhibit 10.3); (iii) CEO and CFO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 (Exhibits 31.1, 31.2, 32.1, and 32.2); and (iv) financial statement data formatted in Inline XBRL (Exhibits 101 and 104) [Item 6 - Exhibits, Table 74]. The report was signed on June 18, 2026, by Chief Financial Officer Angie Park, and no subsequent events requiring disclosure were identified.

Conclusion

Accenture's third-quarter fiscal 2026 results demonstrate resilient execution in a complex operating environment. The company posted 6% revenue growth in U.S. dollars, expanded operating margins by 60 basis points year-over-year, generated $9.3 billion in operating cash flow through nine months, and continued its disciplined capital return program with $2.2 billion returned to shareholders in the quarter alone. While consulting revenue growth remained subdued at just 1% in local currency — signaling ongoing client caution around discretionary spending — the 5% local-currency growth in managed services, a strong $38 billion backlog, and the completion of the business optimization program position Accenture well for sustained performance. With effective internal controls, unchanged risk factors, and a stable market risk profile, this 10-Q reflects a company navigating near-term headwinds from a position of considerable financial and operational strength.