Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with our Consolidated Financial Statements and related Notes included elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended August 31, 2023, and with the information under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended August 31, 2023.

We use the terms “Accenture,” “we,” “our” and “us” in this report to refer to Accenture plc and its subsidiaries. All references to years, unless otherwise noted, refer to our fiscal year, which ends on August 31. For example, a reference to “fiscal 2024” means the 12-month period that will end on August 31, 2024. All references to quarters, unless otherwise noted, refer to the quarters of our fiscal year.

We use the term “in local currency” so that certain financial results may be viewed without the impact of foreign currency exchange rate fluctuations, thereby facilitating period-to-period comparisons of business performance. Financial results “in local currency” are calculated by restating current period activity into U.S. dollars using the comparable prior year period’s foreign currency exchange rates. This approach is used for all results where the functional currency is not the U.S. dollar.

Disclosure Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”) relating to our operations, results of operations and other matters that are based on our current expectations, estimates, assumptions and projections. Words such as “may,” “will,” “should,” “likely,” “anticipates,” “aspires,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “positioned,” “outlook,” “goal,” “target,” and similar expressions are used to identify these forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Actual outcomes and results may differ materially from what is expressed or forecast in these forward-looking statements. Risks, uncertainties and other factors that might cause such differences, some of which could be material, include but are not limited to those identified below.

Business Risks

Our results of operations have been, and may in the future be, adversely affected by volatile, negative or uncertain economic and political conditions and the effects of these conditions on our clients’ businesses and levels of business activity.
Our business depends on generating and maintaining client demand for our services and solutions, including through the adaptation and expansion of our services and solutions in response to ongoing changes in technology and offerings, and a significant reduction in such demand or an inability to respond to the evolving technological environment could materially affect our results of operations.
If we are unable to match people and their skills with client demand around the world and attract and retain professionals with strong leadership skills, our business, the utilization rate of our professionals and our results of operations may be materially adversely affected.
We face legal, reputational and financial risks from any failure to protect client and/or Accenture data from security incidents or cyberattacks.
The markets in which we operate are highly competitive, and we might not be able to compete effectively.
Our ability to attract and retain business and employees may depend on our reputation in the marketplace.
If we do not successfully manage and develop our relationships with key ecosystem partners or if we fail to anticipate and establish new alliances in new technologies, our results of operations could be adversely affected.


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Financial Risks

Our profitability could materially suffer if we are unable to obtain favorable pricing for our services and solutions, if we are unable to remain competitive, if our cost-management strategies are unsuccessful or if we experience delivery inefficiencies or fail to satisfy certain agreed-upon targets or specific service levels.
Changes in our level of taxes, as well as audits, investigations and tax proceedings, or changes in tax laws or in their interpretation or enforcement, could have a material adverse effect on our effective tax rate, results of operations, cash flows and financial condition.
Our results of operations could be materially adversely affected by fluctuations in foreign currency exchange rates.
Changes to accounting standards or in the estimates and assumptions we make in connection with the preparation of our consolidated financial statements could adversely affect our financial results.

Operational Risks

As a result of our geographically diverse operations and strategy to continue to grow in key markets around the world, we are more susceptible to certain risks.
If we are unable to manage the organizational challenges associated with our size, we might be unable to achieve our business objectives.
We might not be successful at acquiring, investing in or integrating businesses, entering into joint ventures or divesting businesses.

Legal and Regulatory Risks

Our business could be materially adversely affected if we incur legal liability.
Our global operations expose us to numerous and sometimes conflicting legal and regulatory requirements, and violation of these regulations could harm our business.
Our work with government clients exposes us to additional risks inherent in the government contracting environment.
If we are unable to protect or enforce our intellectual property rights, or if our services or solutions infringe upon the intellectual property rights of others or we lose our ability to utilize the intellectual property of others, our business could be adversely affected.
We are incorporated in Ireland and Irish law differs from the laws in effect in the United States and might afford less protection to our shareholders. We may also be subject to criticism and negative publicity related to our incorporation in Ireland.

For a more detailed discussion of these factors, see the information under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended August 31, 2023. Our forward-looking statements speak only as of the date of this report or as of the date they are made, and we undertake no obligation to update any forward-looking statements.


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Overview

Accenture is a leading global professional services company, providing a broad range of services and solutions across Strategy & Consulting, Technology, Operations, Industry X and Song. We serve clients in three geographic markets: North America, EMEA (Europe, Middle East and Africa) and Growth Markets (Asia Pacific and Latin America). We combine our strength in technology and leadership in cloud, data and AI with unmatched industry experience, functional expertise and global delivery capability to help the world’s leading businesses, governments and other organizations build their digital core, optimize their operations, accelerate revenue growth and enhance citizen services—creating tangible value at speed and scale.

Our results of operations are affected by economic conditions, including macroeconomic conditions, the overall inflationary environment and levels of business confidence. There continues to be significant economic and geopolitical uncertainty in many markets around the world, which has impacted and may continue to impact our business. These conditions have slowed the pace and level of client spending for smaller contracts with a shorter duration, especially for our consulting services. From an industry perspective, we are also experiencing reduced demand particularly in our Communications, Media & Technology industry group.

Key Metrics

Key metrics for the first quarter of fiscal 2024 compared to the first quarter of fiscal 2023 are included below. We have presented operating margin and diluted earnings per share on a non-GAAP or “adjusted” basis to exclude the impact of $140 million in business optimization costs. For additional information, see Note 1 (Basis of Presentation) to our Consolidated Financial Statements under Item 1, “Financial Statements.”

Revenues of $16.2 billion, representing 3% growth in U.S. dollars and 1% growth in local currency;
New bookings of $18.4 billion, an increase of 14% in U.S. dollars and 12% in local currency;
Operating margin of 15.8%, compared to 16.5% in the first quarter of fiscal 2023; adjusted operating margin expanded 20 basis points to 16.7%;
Diluted earnings per share of $3.10, compared to $3.08 in the first quarter of fiscal 2023; adjusted earnings per share increased 6% to $3.27; and
Cash returned to shareholders of $2.0 billion, including share purchases of $1.2 billion and dividends of $810 million.

Revenues


			Three Months Ended						Percent Increase (Decrease) U.S. Dollars				Percent Increase (Decrease) Local Currency
(in billions of U.S. dollars)			November 30, 2023		November 30, 2022

Geographic Markets (1)	North America		$	7.6	$	7.6			(1)	%			(1)	%
EMEA	5.8		5.3				9				2
Growth Markets	2.9		2.8				2				5
Total Revenues	$	16.2	$	15.7			3	%			1	%


Industry Groups	Communications, Media & Technology		$	2.7	$	3.0			(10)	%			(11)	%
Financial Services	3.0		3.0				2				—
Health & Public Service	3.4		3.0				13				12
Products	4.9		4.7				4				1
Resources	2.3		2.1				7				6
Total Revenues	$	16.2	$	15.7			3	%			1	%


Type of Work	Consulting		$	8.5	$	8.4			—	%			(2)	%
Managed Services	7.8		7.3				6				5
Total Revenues	$	16.2	$	15.7			3	%			1	%

Amounts in table may not total due to rounding.

(1)Effective September 1, 2023, we revised the reporting of our geographic markets for the movement of our Middle East and Africa market units from Growth Markets to Europe, and the Europe market is now referred to as our EMEA (Europe, Middle East and Africa) geographic market. Prior period amounts have been reclassified to conform with the current period presentation.


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Revenues for the first quarter of fiscal 2024 increased 3% in U.S. dollars and 1% in local currency compared to the first quarter of fiscal 2023. During the first quarter of fiscal 2024, revenue growth in local currency was solid in Growth Markets and modest in EMEA, partially offset by a slight decline in North America. We experienced local currency revenue growth that was very strong in Health & Public Service, strong in Resources, slight in Products and flat in Financial Services, partially offset by a significant decline in Communications, Media & Technology. Revenue growth in local currency was solid in managed services, partially offset by a modest decline in consulting during the first quarter of fiscal 2024. The business environment is competitive, and we have been experiencing lower pricing across the business. We define pricing as contract profitability or margin on the work that we sell.

In our consulting business, revenues for the first quarter of fiscal 2024 were flat in U.S. dollars and decreased 2% in local currency compared to the first quarter of fiscal 2023. The decline in consulting revenue in local currency for the first quarter of fiscal 2024 was driven by modest declines in North America and EMEA, while Growth Markets was flat. Our consulting revenue continues to be driven by helping our clients accelerate their digital transformation, including moving to the cloud, embedding security across the enterprise and adopting new technologies. In addition, clients continue to be focused on initiatives designed to deliver cost savings and operational efficiency, as well as projects to accelerate growth and improve customer experiences. While we continue to experience demand for these services, we are seeing a slower pace and level of client spending, especially for smaller contracts with a shorter duration.

In our managed services business, revenues for the first quarter of fiscal 2024 increased 6% in U.S. dollars and 5% in local currency compared to the first quarter of fiscal 2023. Managed services revenue in local currency for the first quarter of fiscal 2024 was driven by very strong growth in Growth Markets and EMEA, while North America was flat. We continue to experience growing demand to assist clients with application modernization and maintenance, cloud enablement and cybersecurity-as-a-service. In addition, clients continue to be focused on transforming their operations through technology, data and AI, and leveraging our digital platforms and talent to drive productivity and operational cost savings.

As we are a global company, our revenues are denominated in multiple currencies and may be significantly affected by currency exchange rate fluctuations. While a significant portion of our revenues are in U.S. dollars, the majority of our revenues are denominated in other currencies, including the Euro, Japanese yen and U.K. pound. There continues to be volatility in foreign currency exchange rates. Unfavorable fluctuations in foreign currency exchange rates have had and could in the future have a material effect on our financial results. If the U.S. dollar weakens against other currencies, resulting in favorable currency translation, our revenues, revenue growth and results of operations in U.S. dollars may be higher. If the U.S. dollar strengthens against other currencies, resulting in unfavorable currency translation, our revenues, revenue growth and results of operations in U.S. dollars may be lower. The U.S. dollar weakened against various currencies during the first quarter of fiscal 2024 compared to the first quarter of fiscal 2023, resulting in favorable currency translation and U.S. dollar revenue growth that was approximately 1.5% higher than our revenue growth in local currency. Assuming that exchange rates stay within recent ranges for the remainder of fiscal 2024, we estimate that our full fiscal 2024 revenue growth in U.S. dollars will be approximately equal to our revenue growth in local currency.

People Metrics



Utilization	Workforce	Annualized Voluntary Attrition
91%	743,000+	11%
consistent with the first quarter of fiscal 2023	compared to approximately 738,000 as of November 30, 2022	compared to 13% in the first quarter of fiscal 2023

Utilization for the first quarter of fiscal 2024 was 91%, consistent with the first quarter of fiscal 2023. We hire to meet current and projected future demand. We proactively plan and manage the size and composition of our workforce and take actions as needed to address changes in the anticipated demand for our services and solutions, given that compensation costs are the most significant portion of our operating expenses. Our workforce, the majority of which serves our clients, increased to approximately 743,000 as of November 30, 2023, compared to approximately 738,000 as of November 30, 2022. The year-over-year increase in our workforce reflects people added in connection with acquisitions and hiring for specific skills.

For the first quarter of fiscal 2024, annualized attrition, excluding involuntary terminations, was 11%, down from 13% in the first quarter of fiscal 2023. We evaluate voluntary attrition, adjust levels of new hiring and use involuntary terminations as a means to keep our supply of skills and resources in balance with changes in client demand.

In addition, we adjust compensation to provide market relevant pay based on the skills of our people and locations where we operate. We also consider a variety of factors, including the macroeconomic environment, in making our decisions around pay and benefits. We strive to adjust pricing as well as drive cost and delivery efficiencies, such as changing the mix of people and utilizing technology, to reduce the impact of compensation increases on our margin and contract profitability.


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Our ability to grow our revenues and maintain or increase our margin could be adversely affected if we are unable to: match people and skills with the types or amounts of services and solutions clients are demanding; recover or offset increases in compensation; deploy our employees globally on a timely basis; manage attrition; and/or effectively assimilate new employees.

Operating Expenses

The primary categories of operating expenses include Cost of services, Sales and marketing and General and administrative costs. Cost of services is primarily driven by the cost of people serving our clients, which consists mainly of compensation, subcontractor and other payroll costs, and non-payroll costs such as facilities, technology and travel. Cost of services includes a variety of activities such as: contract delivery; recruiting and training; software development; and integration of acquisitions. Sales and marketing costs are driven primarily by: compensation costs for business development activities; marketing- and advertising-related activities; and certain acquisition-related costs. General and administrative costs primarily include costs for people that are non-client-facing, information systems, office space and certain acquisition-related costs.

Gross margin (Revenues less Cost of services as a percentage of Revenues) for the first quarter of fiscal 2024 was 33.6%, compared with 32.9% for the first quarter of fiscal 2023. The increase in gross margin for the first quarter of fiscal 2024 was primarily due to lower labor costs, including lower subcontractor costs, partially offset by higher non-payroll costs, primarily for travel.

Sales and marketing and General and administrative costs as a percentage of revenues were 16.9% for the first quarter of fiscal 2024 compared with 16.5% for the first quarter of fiscal 2023. For the first quarter of fiscal 2024 compared to the same period in fiscal 2023, Sales and marketing costs increased 70 basis points due to higher selling and other business development costs as a percentage of revenues. For the first quarter of fiscal 2024 compared to the same period in fiscal 2023, General and administrative costs decreased 20 basis points as a percentage of revenues.

During the three months ended November 30, 2023, we recorded $140 million in business optimization costs, primarily for employee severance. For additional information, see Note 1 (Basis of Presentation) to our Consolidated Financial Statements under Item 1, “Financial Statements.”

Operating margin (Operating income as a percentage of Revenues) for the first quarter of fiscal 2024 was 15.8%, compared with 16.5% for the first quarter of fiscal 2023. The business optimization costs recorded during the three months ended November 30, 2023 reduced operating margin by 90 basis points. Excluding these costs, operating margin for the three months ended November 30, 2023 increased 20 basis points to 16.7%.

Effective Tax Rate

The effective tax rates for the first quarter of fiscal 2024 and 2023 were 23.2% and 23.3%, respectively. The business optimization costs of $140 million and related reduction in tax expense of $34 million for the three months ended November 30, 2023 had an immaterial impact on our effective tax rate.

Earnings Per Share

Diluted earnings per share were $3.10 for the first quarter of fiscal 2024, compared with $3.08 for the first quarter of fiscal 2023. The $106 million of business optimization costs, net of related taxes, decreased diluted earnings per share by $0.17 for the first quarter of fiscal 2024. Excluding these impacts, diluted earnings per share were $3.27 for the first quarter of fiscal 2024.

Non-GAAP Financial Measures

For fiscal 2024, we have presented operating income, operating margin, effective tax rate and diluted earnings per share excluding the business optimization costs, as we believe doing so facilitates understanding as to the impact of these items and our performance in comparison to the prior periods. While we believe that this non-GAAP financial information is useful in evaluating our operations, this information should be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with GAAP.


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New Bookings


	Three Months Ended				Percent Increase (Decrease) U.S. Dollars		Percent Increase (Decrease) Local Currency
(in billions of U.S. dollars)	November 30, 2023		November 30, 2022
Consulting	$	8.6	$	8.1	6	%	5	%
Managed Services	9.8		8.1		21		19
Total New Bookings	$	18.4	$	16.2	14	%	12	%

We provide information regarding our new bookings, which include new contracts, including those acquired through acquisitions, as well as renewals, extensions and changes to existing contracts, because we believe doing so provides useful trend information regarding changes in the volume of our new business over time. New bookings can vary significantly quarter to quarter depending in part on the timing of the signing of a small number of large managed services contracts. The types of services and solutions clients are demanding and the pace and level of their spending may impact the conversion of new bookings to revenues. For example, managed services bookings, which are typically for multi-year contracts, generally convert to revenue over a longer period of time compared to consulting bookings.

Information regarding our new bookings is not comparable to, nor should it be substituted for, an analysis of our revenues over time. New bookings involve estimates and judgments. There are no third-party standards or requirements governing the calculation of bookings. We do not update our new bookings for material subsequent terminations or reductions related to bookings originally recorded in prior fiscal years. New bookings are recorded using then-existing foreign currency exchange rates and are not subsequently adjusted for foreign currency exchange rate fluctuations.

The majority of our contracts are terminable by the client on short notice with little or no termination penalties, and some without notice. Only the non-cancelable portion of these contracts is included in our remaining performance obligations disclosed in Note 2 (Revenues) to our Consolidated Financial Statements under Item 1, “Financial Statements.” Accordingly, a significant portion of what we consider contract bookings is not included in our remaining performance obligations.


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Results of Operations for the Three Months Ended November 30, 2023 Compared to the Three Months Ended November 30, 2022

Revenues by geographic market, industry group and type of work are as follows:


	Three Months Ended				Percent Increase (Decrease) U.S. Dollars		Percent Increase (Decrease) Local Currency		Percent of Revenues for the Three Months Ended
(in millions of U.S. dollars)	November 30, 2023		November 30, 2022				November 30, 2023		November 30, 2022
Geographic Markets (1)
North America	$	7,563	$	7,623	(1)	%	(1)	%	47	%	48	%
EMEA	5,804		5,313		9		2		36		34
Growth Markets	2,858		2,812		2		5		18		18
Total	$	16,224	$	15,748	3	%	1	%	100	%	100	%
Industry Groups
Communications, Media & Technology	$	2,669	$	2,980	(10)	%	(11)	%	16	%	19	%
Financial Services	3,034		2,963		2		—		19		19
Health & Public Service	3,377		3,000		13		12		21		19
Products	4,860		4,666		4		1		30		30
Resources	2,284		2,138		7		6		14		14
Total	$	16,224	$	15,748	3	%	1	%	100	%	100	%
Type of Work
Consulting	$	8,457	$	8,444	—	%	(2)	%	52	%	54	%
Managed Services	7,768		7,303		6		5		48		46
Total	$	16,224	$	15,748	3	%	1	%	100	%	100	%

Amounts in table may not total due to rounding.

Revenues

The following revenues commentary discusses local currency revenue changes for the first quarter of fiscal 2024 compared to the first quarter of fiscal 2023:

Geographic Markets

North America revenues decreased 1% in local currency, due to declines in Communications & Media, Software & Platforms and Banking & Capital Markets. These decreases were partially offset by growth in Public Service. The decline in revenues was driven by the United States.
EMEA revenues increased 2% in local currency, led by growth in Public Service and Banking & Capital Markets. These increases were partially offset by a decline in Communications & Media. Revenue growth was driven by Italy, Austria and France, partially offset by a decline in the United Kingdom.
Growth Markets revenues increased 5% in local currency, led by growth in Chemicals & Natural Resources, Public Service, and Banking & Capital Markets. Revenue growth was driven by Japan.

Operating Expenses

Operating expenses for the first quarter of fiscal 2024 increased $505 million, or 4%, compared to the first quarter of fiscal 2023, and increased as a percentage of revenues to 84.2% compared to 83.5% during this period. The increase as a percentage of revenues is primarily due to business optimization costs of $140 million recorded during the first quarter of fiscal 2024.


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Operating expenses by category are as follows:


	Three Months Ended
(in millions of U.S. dollars)	November 30, 2023				November 30, 2022				Increase (Decrease)
Operating Expenses	$	13,659	84.2	%	$	13,155	83.5	%	$	505
Cost of services	10,776		66.4		10,562		67.1		215
Sales and marketing	1,710		10.5		1,550		9.8		160
General and administrative costs	1,033		6.4		1,043		6.6		(10)
Business optimization costs	140		0.9		—		—		140

Amounts in table may not total due to rounding.

Cost of Services

Cost of services for the first quarter of fiscal 2024 increased $215 million, or 2%, over the first quarter of fiscal 2023, and decreased as a percentage of revenues to 66.4% from 67.1% during this period. Gross margin for the first quarter of fiscal 2024 increased as a percentage of revenues to 33.6% over 32.9% during the first quarter of fiscal 2023. The increase in gross margin was primarily due to lower labor costs, including lower subcontractor costs, partially offset by higher non-payroll costs, primarily for travel compared to the same period in fiscal 2023.

Sales and Marketing

Sales and marketing expense for the first quarter of fiscal 2024 increased $160 million, or 10%, over the first quarter of fiscal 2023, and increased as a percentage of revenues to 10.5% over 9.8% during this period due to higher selling and other business development costs as a percentage of revenues.

General and Administrative Costs

General and administrative costs for the first quarter of fiscal 2024 decreased $10 million, or 1%, from the first quarter of fiscal 2023, and decreased as a percentage of revenues to 6.4% from 6.6% during this period.

Business Optimization Costs

During the first quarter of fiscal 2024, we recorded business optimization costs of $140 million, primarily for employee severance. For additional information, see Note 1 (Basis of Presentation) to our Consolidated Financial Statements under Item 1, “Financial Statements.”

Operating Income and Operating Margin

Operating income for the first quarter of fiscal 2024 decreased $28 million, or 1%, from the first quarter of fiscal 2023. Operating margin for the first quarter of fiscal 2024 was 15.8%, compared with 16.5% for the first quarter of fiscal 2023. The business optimization costs reduced operating margin by 90 basis points. Excluding these costs, operating margin for the first quarter of fiscal 2024 increased 20 basis points to 16.7%.

Operating income and operating margin for each of the geographic markets are as follows:


	Three Months Ended
	November 30, 2023				November 30, 2022
(in millions of U.S. dollars)	Operating Income		Operating Margin		Operating Income		Operating Margin		Increase (Decrease)
North America	$	1,257	17	%	$	1,310	17	%	$	(53)
EMEA (1)	824		14		727		14		97
Growth Markets (1)	485		17		556		20		(72)
Total	$	2,565	15.8	%	$	2,593	16.5	%	$	(28)

Amounts in table may not total due to rounding.


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Operating Income and Operating Margin Excluding Business Optimization Costs (Non-GAAP)


	Three Months Ended
	November 30, 2023								November 30, 2022
(in millions of U.S. dollars)	Operating Income (GAAP)		Business Optimization (1)		Operating Income (Non-GAAP)		Operating Margin (Non-GAAP)		Operating Income (GAAP)		Operating Margin (GAAP)		Increase (Decrease)
North America	$	1,257	$	46	$	1,303	17	%	$	1,310	17	%	$	(7)
EMEA (2)	824		71		894		15		727		14		168
Growth Markets (2)	485		23		508		18		556		20		(49)
Total	$	2,565	$	140	$	2,705	16.7	%	$	2,593	16.5	%	$	111

Amounts in table may not total due to rounding.

(1)Costs recorded in connection with our business optimization initiatives, primarily for employee severance.

(2)Effective September 1, 2023, we revised the reporting of our geographic markets for the movement of our Middle East and Africa market units from Growth Markets to Europe, and the Europe market is now referred to as our EMEA (Europe, Middle East and Africa) geographic market. Prior period amounts have been reclassified to conform with the current period presentation.

We estimate that the aggregate percentage impact of foreign currency exchange rates on our operating income during the first quarter of fiscal 2024 was similar to that disclosed for revenue for each geographic market. In addition, during the first quarter of fiscal 2024 each geographic market’s operating income was unfavorably impacted by business optimization costs. The commentary below provides insight into other factors affecting geographic market performance and operating income, including the impact of foreign currency exchange rates where significant, for the first quarter of fiscal 2024 compared with the first quarter of fiscal 2023:

North America operating income was relatively flat year-over-year as a decline in consulting revenue and lower contract profitability was offset by lower labor costs.
EMEA operating income increased primarily due to managed services revenue growth in local currency and the positive impact of foreign currency exchange rates which resulted in an increase in U.S. dollar revenues.
Growth Markets operating income decreased as revenue growth was more than offset by lower contract profitability and an increase in selling and other business development costs as a percentage of revenues.

Interest Income

Interest income for the first quarter of fiscal 2024 was $102 million, an increase of $57 million over the first quarter of fiscal 2023. The increase was primarily due to higher cash balances and interest rates.

Income Tax Expense

Earnings Per Share

Diluted earnings per share were $3.10 for the first quarter of fiscal 2024, compared with $3.08 for the first quarter of fiscal 2023. The $106 million of business optimization costs, net of related taxes, decreased diluted earnings per share by $0.17. Excluding these impacts, diluted earnings per share were $3.27 for the first quarter of fiscal 2024. For information regarding our earnings per share calculations, see Note 3 (Earnings Per Share) to our Consolidated Financial Statements under Item 1, “Financial Statements.”

The increase in diluted earnings per share was due to the following factors:


	Earnings Per Share
Q1 FY23 As Reported	$	3.08
Higher revenue and operating results	0.14
Higher non-operating income	0.05
Lower share count	0.01
Higher net income attributable to noncontrolling interests	(0.01)
Q1 FY24 As Adjusted	$	3.27

Business optimization costs	(0.17)
Q1 FY24 As Reported	$	3.10


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Liquidity and Capital Resources

As of November 30, 2023, Cash and cash equivalents was $7.1 billion, compared with $9.0 billion as of August 31, 2023.

Cash flows from operating, investing and financing activities, as reflected in our Consolidated Cash Flows Statements, are summarized in the following table:


	Three months ended
(in millions of U.S. dollars)	November 30, 2023		November 30, 2022		Change
Net cash provided by (used in):
Operating activities	$	499	$	495	$	3
Investing activities	(855)		(782)		(73)
Financing activities	(1,552)		(1,677)		125
Effect of exchange rate changes on cash and cash equivalents	5		(27)		31
Net increase (decrease) in cash and cash equivalents	$	(1,904)	$	(1,990)	$	86

Amounts in table may not total due to rounding.

Operating activities: The $3 million increase in operating cash flows was primarily due to higher net income, partially offset by changes in operating assets and liabilities.

Investing activities: The $73 million increase in cash used was primarily due to higher spending on business acquisitions. For additional information, see Note 5 (Business Combinations) to our Consolidated Financial Statements under Item 1, “Financial Statements.”

Financing activities: The $125 million decrease in cash used was primarily due to a decrease in the net purchases of shares, partially offset by an increase in cash dividends paid. For additional information, see Note 7 (Shareholders’ Equity) to our Consolidated Financial Statements under Item 1, “Financial Statements.”

We believe that our current and longer-term working capital, investments and other general corporate funding requirements will be satisfied for the next twelve months and thereafter through cash flows from operations and, to the extent necessary, from our borrowing facilities and future financial market activities.

Substantially all of our cash is held in jurisdictions where there are no regulatory restrictions or material tax effects on the free flow of funds. Domestic cash inflows for our Irish parent, principally dividend distributions from lower-tier subsidiaries, have been sufficient to meet our historic cash requirements, and we expect this to continue into the future.

Borrowing Facilities

As of November 30, 2023, we had the following borrowing facilities:


(in millions of U.S. dollars)	Credit Facilities
Syndicated loan facility (1)	$	3,000
Separate, uncommitted, unsecured multicurrency revolving credit facilities	1,873
Local guaranteed and non-guaranteed lines of credit	248
Total	$	5,122

Amounts in table may not total due to rounding.

(1)This facility, which matures on April 24, 2026, provides unsecured, revolving borrowing capacity for general corporate capital purposes, including the issuance of letters of credit and short-term commercial paper. Borrowings under this facility will accrue interest at the applicable risk-free rate plus a spread. We continue to be in compliance with relevant covenant terms. The facility is subject to annual commitment fees. As of November 30, 2023, we had $100 million of commercial paper outstanding and backed by this facility, with a weighted-average effective interest rate of 5.4%.

Under the borrowing facilities described above, we had an aggregate of $1,099 million of letters of credit outstanding as of November 30, 2023. We also had $100 million of commercial paper outstanding as of November 30, 2023. The amount of commercial paper and letters of credit outstanding reduces the available borrowing capacity under these facilities.


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ACCENTURE FORM 10-Q						Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			29

Share Purchases and Redemptions

The Board of Directors of Accenture plc has authorized funding for our publicly announced open-market share purchase program for acquiring Accenture plc Class A ordinary shares and for purchases and redemptions of Accenture plc Class A ordinary shares and Accenture Canada Holdings Inc. exchangeable shares held by current and former members of Accenture Leadership and their permitted transferees.

Our share purchase activity during the three months ended November 30, 2023 is as follows:


	Accenture plc Class A Ordinary Shares			Accenture Canada Holdings Inc. Exchangeable Shares
(in millions of U.S. dollars, except share amounts)	Shares	Amount		Shares	Amount
Open-market share purchases (1)	3,439,438	$	1,075	—	$	—
Other share purchase programs	—	—		8,997	3
Other purchases (2)	370,495	113		—	—
Total	3,809,933	$	1,188	8,997	$	3

(1)We conduct a publicly announced open-market share purchase program for Accenture plc Class A ordinary shares. These shares are held as treasury shares by Accenture plc and may be utilized to provide for select employee benefits, such as equity awards to our employees.

(2)During the three months ended November 30, 2023, as authorized under our various employee equity share plans, we acquired Accenture plc Class A ordinary shares primarily via share withholding for payroll tax obligations due from employees and former employees in connection with the delivery of Accenture plc Class A ordinary shares under those plans. These purchases of shares in connection with employee share plans do not affect our aggregate available authorization for our publicly announced open-market share purchase and the other share purchase programs.

We intend to continue to use a significant portion of cash generated from operations for share repurchases during the remainder of fiscal 2024. The number of shares ultimately repurchased under our open-market share purchase program may vary depending on numerous factors, including, without limitation, share price and other market conditions, our ongoing capital allocation planning, the levels of cash and debt balances, other demands for cash, such as acquisition activity, general economic and/or business conditions, and board and management discretion. Additionally, as these factors may change over the course of the year, the amount of share repurchase activity during any particular period cannot be predicted and may fluctuate from time to time. Share repurchases may be made from time to time through open-market purchases, in respect of purchases and redemptions of Accenture Canada Holdings Inc. exchangeable shares, through the use of Rule 10b5-1 plans and/or by other means. The repurchase program may be accelerated, suspended, delayed or discontinued at any time, without notice.

Off-Balance Sheet Arrangements

In the normal course of business and in conjunction with some client engagements, we have entered into contractual arrangements through which we may be obligated to indemnify clients with respect to certain matters.

To date, we have not been required to make any significant payment under any of the arrangements described above. For further discussion of these transactions, see Note 10 (Commitments and Contingencies) to our Consolidated Financial Statements under Item 1, “Financial Statements.”

Significant Accounting Policies

See Note 1 (Basis of Presentation) to our Consolidated Financial Statements under Item 1, “Financial Statements.”


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ACCENTURE FORM 10-Q						Item 3. Quantitative and Qualitative Disclosures About Market Risk			30

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