Shares of the professional services company Accenture plc moved higher after it posted a strong earnings and revenue beat in its fiscal 2025 first quarter and increased its outlook for the full year.

The company reported earnings before certain costs such as stock compensation of $3.59 per share, easily beating Wall Street’s target of $3.42 per share. Revenue for the period rose 9%, to $17.7 billion, surpassing the analysts’ forecast of $17.1 billion. All told, Accenture delivered a net income of $2.31 billion in the quarter, rising 13% from the $2 billion profit it recorded one year ago.

For the current quarter, Accenture is looking for revenue of between $16.2 billion and $16.8 billion, the midpoint of which falls just below the Street’s forecast of $16.6 billion. However, its long-term forecast is looking much better, as it increased its fiscal 2025 revenue outlook from between 3% to 6%, to a new range of 4% to 7%.

Investors liked what they saw, and Accenture’s stock gained more than 7% during the regular trading session today.

The information technology management and consulting firm reported $18.7 billion worth of new bookings during the quarter, up 1% from a year earlier, with new artificial intelligence-related bookings coming to $1.2 billion. It has emerged as a significant beneficiary of enterprise’s demand for generative AI tools in particular, assisting organizations with the intricacies of training, fine-tuning and deploying sophisticated large language models within their IT environments.

During the quarter, Accenture revealed it’s partnering with Nvidia Corp. to help kickstart adoption of one of the hottest new trends in the AI sector at the moment, namely agentic AI.

Agentic AI is the word used to describe more advanced and autonomous AI systems that can make decisions and take actions independently, based on their environment, goals and training. Whereas traditional AI models operate strictly within the bounds of preprogrammed instructions and responses, AI agents are able to learn, adapt and respond in a more dynamic way.

The partnership with Nvidia will see 30,000 Accenture consultants work with clients to build AI agents in 120 countries, the company said at the time.

Accenture Chair and Chief Executive Julie Sweet (pictured) hailed the company’s “strong start” to the new fiscal year. “We delivered broad-based revenue growth across both consulting and managed services, and across each market and industry group, gaining market share,” she told investors.

On a conference call, Sweet told analysts that she believes generative AI is becoming “catalyst for reinvention,” playing a significant role in driving the company’s quarterly revenue growth.

Holger Mueller of Constellation Research Inc. told SiliconANGLE that AI can be a growth driver for consultancy firms like Accenture, but at the same time it may also present the company with challenges, which its CEO was less willing to discuss on the call.

“AI can be positive because enterprises need help in deploying and managing their AI models and applications, but it can also be a negative because it makes many other tasks and platforms easier to implement,” the analyst said. “So in that case, AI can mean that enterprises require less held from specialist consultants like Accenture.”

We’ll have to wait and see if AI ultimately becomes a long-term growth driver or a threat, Mueller said, but in the mean time, he believes that its managed services business is doing very well.

“New bookings in managed services surpassed those of its traditional consulting business for the first time ever,” the analyst pointed out. “It also surprised with a relatively stronger performance in Europe than in the U.S., and that may have pleased investors. But looking forward, everyone will be watching to see how Accenture negotiates the AI era.”

On a conference call with analysts, Sweet said the demand environment at present was “more of the same,” with many of its clients currently focused on implementing “large-scale transformations” that require the company’s expertise.

“We do not currently see an improvement in overall spending by our clients, particularly on smaller deals,” Sweet added. However, she promised that the company will be well-positioned to capitalize on such deals when market conditions improve.

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