Software and consulting firm Accenture lowered the upper end of its annual revenue growth forecast and announced acquisitions aimed at expanding its cybersecurity business.
The company now expects annual revenue growth of 3% to 4%, compared with its earlier forecast of 3% to 5%.
The revised forecast indicates that clients are continuing to delay or scale back spending on discretionary consulting projects amid an uncertain macroeconomic environment.
Although demand for AI and cybersecurity services remains steady, enterprises are becoming more selective in committing large transformation budgets, affecting the wider consulting sector.
The company said it will acquire asset intelligence company runZero and device security specialist NetRise, while taking a majority stake in industrial cybersecurity firm Dragos. The combined deal is valued at $4.18 billion and is expected to close in August or September, subject to regulatory approvals.
The acquisitions are intended to strengthen Accenture's cybersecurity capabilities in industrial operations and critical infrastructure, including power grids, factories, pipelines and data centres, as cyber threats increase and the use of artificial intelligence expands.
The three businesses together generate annual recurring revenue of about $208 million. They will add to Accenture's cybersecurity business, which currently generates around $10 billion in annual revenue.
Q3 earnings
Accenture's third-quarter revenue rose 6%, but came in slightly below analyst expectations. The company said operating margin increased by 20 basis points to 17%.
The company said demand for large-scale reinvention projects remained intact, with 104 client bookings worth more than $100 million recorded year-to-date, up 13%.
“Accenture delivered a strong third-quarter, with broad-based revenue growth, a 9% increase in EPS, and $8.2 billion returned to shareholders year-to-date. Demand for large-scale reinvention remains strong — 104 quarterly client bookings of $100 million or more year-to-date, up 13% — and we are seeing more large-scale AI transformation programs, while executing our strategy to capture new areas of growth," said CEO Julie Sweet.
“Our agreement to acquire a majority stake in Dragos and all of runZero and NetRise, leaders in OT Security, is the type of move that defines our strategy: it is expanding our addressable market, creating a new platform-led growth opportunity, and is positioning Accenture at the center of one of the most critical cybersecurity challenges our clients face," she said.