‘We believe that AI will be a tailwind for us and our industry as it scales, because it is a catalyst for reinvention and is creating new opportunities for growth and efficiency for our clients and for us,’ says Accenture CEO Julie Sweet.
Accenture reported strong third-quarter growth with an additional $1 billion in revenue compared to the same period last year, even as geopolitical tensions in the Middle East weighed on results.
The company’s stock, down about 50 percent since the start of the year, declined more than 18 percent to $127.30 in trading on Thursday.
The Dublin-based solutions provider, No. 1 on CRN’s Solution Provider 500 list, generated $3.4 billion in additional revenue year-to-date compared with fiscal 2025, while also delivering margin expansion, earnings-per-share growth and strong free cash flow.
Speaking on the company’s investor relations call Thursday, CEO Julie Sweet said the Iran war and the resulting chaos in the Middle East dropped quarterly revenue by about $100 million relative to expectations. The impact mostly hit consulting work and was evenly split between direct effects in the region and indirect consequences across global markets, she said.
Sales were also affected, with about $400 million in sales impacted in the Middle East and parts of Europe, the Middle East and Africa due to slower client decision-making.
[Related: Accenture CEO: AI Tools Are Helping Us ‘Become The Most AI-Enabled Company In The World‘]
“Because the indirect impact really started in the last few weeks and mostly in discretionary spend, we do think that there will be more impact in Q4,” she said. “It’s difficult, of course, to predict exactly how it’s all going to play out.”
Despite those challenges, executives remained optimistic about the growth opportunities created by AI as Sweet said the company is increasingly helping clients move beyond AI experimentation into large-scale initiatives.
“We believe that AI will be a tailwind for us and our industry as it scales, because it is a catalyst for reinvention and is creating new opportunities for growth and efficiency for our clients and for us,” she said.
The company is also expanding relationships with major AI and data providers including Anthropic, Databricks, Google Gemini, Mistral AI, Nvidia, OpenAI, Palantir and Snowflake. Sweet said bookings are expected to double from these partnerships.
Alongside its AI push, Accenture made one its largest cybersecurity investments to date with the acquisition of a majority stake in Dragos as well as full ownership of runZero and NetRise.
The combined businesses are valued at about $4.175 billion and creates what Sweet described as “a first-of-its-kind operational technology cybersecurity platform,” focused on protecting infrastructure such as power grids, pipelines, manufacturing facilities and data centers.
“You cannot have an AI revolution without critical infrastructure, and you can’t have that without OT security, which is where today the world is most vulnerable,” she said. “This is about long-term growth and really a massive market,” she said. “We view a really massive opportunity because it is meeting such a critical need. You cannot succeed in AI unless you’ve got security.”
In Q3, revenue rose six percent year-over-year to $18.7 billion. The company generated $19.3 billion in new bookings and generated free cash flow of $3.6 billion during the quarter.
