Accenture $ACN stock fell sharply on Thursday after the consulting firm lowered its full-year revenue growth forecast and reported weaker-than-expected bookings for its fiscal third quarter ended May 31.
The company now expects full-year revenue growth of 3% to 4% in local currency, down from its prior guidance of 3% to 5%, citing ongoing weakness in its U.S. federal government business. Excluding the estimated 1% drag from that business, Accenture said it expects growth of 4% to 5%.
Shares closed at $128.46, down 18% on the day — a level not seen since 2016, making it the worst single-session decline in the company's recent history, according to Barron's. The stock had already fallen roughly 40% in 2026 before Thursday's results, according to Yahoo Finance.
For the quarter, revenue reached $18.7 billion, a 6% gain year-over-year in reported terms but 3% in local currency, narrowly missing the $18.8 billion Wall Street had anticipated. Earnings came in at $3.80 per diluted share, a 9% increase from a year ago and above the $3.71 consensus estimate.
On the bookings front, signed business agreements came to $19.3 billion, a slight decline from the $19.7 billion recorded in the same period last year and well short of the roughly 7% growth analysts had projected.
Chair and CEO Julie Sweet said in a statement that "demand for large-scale reinvention remains strong," pointing to 104 quarterly client bookings of $100 million or more year-to-date, up 13%. On the earnings call, Sweet cited the conflict in the Middle East as a factor that weighed on regional operations and rippled outward, with uncertainty pushing enterprise customers to defer or reduce spending. She also struck an upbeat note on large deals, saying the firm had logged 104 client engagements valued at $100 million or more in the year-to-date period, a 13% increase.
The pullback in discretionary spending was echoed by Jefferies analyst Surinder Thind, who said the results reflected customers continuing to tighten their budgets.
Three cybersecurity deals were unveiled in conjunction with the quarterly report: a majority investment in Dragos, an industrial cybersecurity specialist, priced at $4.2 billion, plus outright purchases of runZero and NetRise. Accenture framed the transactions as a way to extend its reach in securing critical infrastructure such as power grids, manufacturing facilities, and data centers.
The announcement landed poorly with an investor base already uneasy about the direction of the company's M&A activity. A Morgan Stanley $MS report issued earlier in the week cut the firm's rating on the stock and trimmed its price target, pointing to questions about whether deals centered on technology products can generate the kind of revenue visibility that Accenture's traditional services contracts once provided, according to The Wall Street Journal.
Looking to the fourth fiscal quarter, the company forecast revenue between $17.75 billion and $18.4 billion, implying local-currency growth of 1% to 5%. Full-year free cash flow guidance was held at $10.8 billion to $11.5 billion, and management lifted the bottom end of its adjusted earnings per share range to $13.78, keeping the top end unchanged at $13.90, versus the prior guidance floor of $13.65.