Factors driving consulting business
Accenture’s (ACN) consulting business, which contributes more than 50% to its total revenue, has continued to generate strong revenue growth in the last five quarters. New contract wins coupled with higher demand for digital, cloud, and security-related services have led to improved performances in the business.
Moreover, the increased adoption of new technologies by customers, coupled with strong growth across all its operating segments, has also helped the company to maintain strong growth momentum in its consulting business.
In the graph above, we can see the revenue growth of Accenture’s consulting business over the last five quarters. The business has maintained a rising revenue trend. During the period, the consulting business rose at a CAGR (compound annual growth rate) of 3.1%.
Consulting revenue and net bookings trend
In fiscal 1Q18, the company’s consulting revenue climbed 12.9% YoY (year-over-year) to nearly $5.2 billion. However, on a local currency basis, it rose 11% YoY in fiscal 1Q18. Moreover, in fiscal 2017, the company generated ~$18.8 billion in revenue from its consulting business, a 5% rise YoY. In the last three years, it’s risen at a CAGR of 7.6%.
The consulting business has also generated steady net bookings growth over the last five quarters. During the period, its bookings rose at a CAGR of 5%. Its net bookings came in at $5.9 billion in fiscal 1Q18 compared to $4.9 billion in the same period last year. A strong alliance with Microsoft (MSFT) could further boost the company’s consulting revenue moving forward.