Accenture said generative AI deals are accelerating and enterprises are focusing on transformation even as they remain cautious about the economy.
Those takeaways were revealed on Accenture's fourth quarter earnings conference call. The company reported fourth quarter earnings of $2.15 per share on revenue of $16 billion, up 4% from a year ago. For fiscal 2023, Accenture reported earnings of $10.77 per share on revenue of $64.1 billion, up 4%.
Accenture projected first quarter revenue to be between $15.85 billion to $16.45 billion. For fiscal 2024, Accenture projected revenue growth of 2% to 5%.
Generative AI is great for services and consulting. In the third quarter, Accenture said it sold 100 generative AI projects with roughly $100 million in sales over the prior four months. In the fourth quarter, Accenture sold another $200 million in generative AI services for a fiscal year total of $300 million.
Overall, Accenture is working on about 300 generative AI projects. "Clients are doing a variety of different types of work from strategy and use case implementations to tech enablement, to scaling, to model customization, tuning and training, to talent and responsible AI," said Accenture CEO Julie Sweet.
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The pace of generative AI adoption is unclear. "While all companies want to explore and understand gen AI, what we find is that clients who are more mature digitally want to go faster, while others would like to test the waters with proofs of concepts and synthetic data, and others prefer to wait until they have built more of their modern digital core," said Sweet. "The extent and pace of this generative AI progression will become more clear over the coming quarters as the technology and the market continue to mature and progress."
Sweet added that Accenture is seeing real generative AI projects in the $1 million range.
Caution remains. Sweet said the company has seen "greater caution globally, with lower discretionary spend, slower decision-making, and in particular for us, a significant impact from the challenges the comm, media, and tech industries have faced."
Accenture's fiscal year outlook assumes that there's no improvement in discretionary spending or the macroeconomic picture.
ERP modernization far from complete. "We are continuing to see significant demand in areas like cloud migration and modernization, modern ERP and data and AI, and the emergence of gen AI in particular, all of which represent areas of great opportunity. And it's still early," said Sweet.
Only a third of Accenture's clients have modernized their ERP platforms and less than 10% of customers have mature data and AI capabilities, said Sweet.
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What CEOs are saying. Sweet said:
"I was with about 20 different CEOs and they had three messages, right? Tech is super important, that's number one. Number two, they already have major programs underway, and they know they need to do a lot more. But number three is they're feeling cautious about the macro, and we've already seen that in the small deals. But they're asking us to help them save money and be more focused right now, even on the bigger programs.
And so, what I would say is and that's reflected in our guidance is that, the macro is having an effect on the pace of spending right now."