Accenture plc
For the period ended May 31, 2025. Filed Jun 20, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
May 31, 2025 · Filed Jun 20, 2025
ACN$260.50-1.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-02-28; filed 2025-03-20.
0001467373-25-000100
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-05-31; filed 2025-06-20.
0001467373-25-000169
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 147 previous paragraphs and 149 current paragraphs.
95 unchanged; 45 reworded; 7 added; 5 removed; 2 previous and 2 current paragraphs rearranged.
Tables are not compared: 24 previous and 24 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
In addition, the U.S. administration is seeking to reduce federal spending and the size of the federal workforce under the guidance of the Department of Government Efficiency. We are seeing some impact from these efforts in our federal government business, including delays in new procurements, reductions in price and contract scope, and contract terminations. These changes have not had a material impact on our results of operations or financial condition.
Current report
•Revenues of $17.7 billion, an increase of 8% in U.S. dollars and 7% in local currency;
Current report
•Nine Months. Revenues increased 10% in local currency, led by growth in Banking & Capital Markets, Industrial, Health and Software & Platforms. Revenue growth was driven by the United States.
Current report
•Three Months. Revenues increased 6% in local currency, led by growth in Life Sciences, Banking & Capital Markets and Insurance. Revenue growth was driven by the United Kingdom, Germany and Italy.
Current report
•Nine Months. Operating income increased primarily due to revenue growth, partially offset by a decline in contract profitability.
Current report
•Nine Months. Operating income increased primarily due to revenue growth, partially offset by a decline in contract profitability.
Current report
The effective tax rates for the third quarter of fiscal 2025 and 2024 were 24.0% and 25.4%, respectively. The lower effective tax rate was primarily due to lower tax expense from changes in the geographic distribution of earnings, partially offset by higher expense from adjustments to prior year tax liabilities. The effective tax rates for the nine months ended May 31, 2025 and 2024 were 22.1% and 22.6%, respectively. The lower effective tax rate was primarily due to lower tax expense from changes in the geographic distribution of earnings.
Removed paragraphs (5)
Previous report
•Revenues of $16.7 billion, an increase of 5% in U.S. dollars and 8.5% in local currency;
Previous report
•Six Months. Revenues increased 11% in local currency, led by growth in Industrial, Banking & Capital Markets, Software & Platforms and Consumer Goods, Retail & Travel Services. Revenue growth was driven by the United States, as well as Argentina, which continued to grow in local currency due primarily to hyperinflation.
Previous report
•Six Months. Operating income increased primarily due to revenue growth, partially offset by a decline in contract profitability.
Previous report
•Six Months. Operating income increased primarily due to revenue growth, partially offset by a decline in contract profitability.
Previous report
The effective tax rates for the second quarter of fiscal 2025 and 2024 were 20.4% and 18.4%, respectively. The higher effective tax rate was primarily due to lower tax benefits from share-based payments. The effective tax rate for both the six months ended February 28, 2025 and February 29, 2024 was 21.1%.
Reworded paragraphs (45)
Previous wording
The following discussion and analysis should be read in conjunction with our Consolidated Financial Statements and related Notes included elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended August 31, 2024, and with the information under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in our Annual Report on Form 10-K for the year ended August 31, 2024, as updated in this Quarterly Report on Form 10-Q.
Current wording
The following discussion and analysis should be read in conjunction with our Consolidated Financial Statements and related Notes included elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended August 31, 2024, and with the information under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended August 31, 2024 (“Annual Report”), and “Risk Factors” in our Annual Report as updated in our Quarterly Report on Form 10-Q for the quarter ended February 28, 2025.
Previous wording
For a more detailed discussion of these factors, see the information under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended August 31, 2024, as updated in Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q. Our forward-looking statements speak only as of the date of this report or as of the date they are made, and we undertake no obligation to update any forward-looking statements.
Current wording
For a more detailed discussion of these factors, see the information under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended August 31, 2024, as updated in Item 1A, “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended February 28, 2025. Our forward-looking statements speak only as of the date of this report or as of the date they are made, and we undertake no obligation to update any forward-looking statements.
Previous wording
Our results of operations are affected by economic conditions, including macroeconomic conditions, the overall inflationary environment and levels of business confidence. We are seeing an elevated level of what was already significant economic and geopolitical uncertainty in many markets around the world, which has impacted and may continue to impact our business. These conditions have slowed the pace and level of client spending, particularly for smaller contracts with a shorter duration and for our consulting services. Clients continue to prioritize large-scale transformations, which convert to revenue over a longer period.
Current wording
Our results of operations are affected by economic conditions, including macroeconomic conditions, the overall inflationary environment and levels of business confidence. We continue to see significant economic and geopolitical uncertainty in many markets around the world, which has impacted and may continue to impact our business. These conditions have slowed the pace and level of client spending, particularly for smaller contracts with a shorter duration and for our consulting services. Clients continue to prioritize large-scale transformations, which convert to revenue over a longer period.
Previous wording
For a discussion of risks related to these and other recent developments, see Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended August 31, 2024, as updated in Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q.
Current wording
For a discussion of risks related to these and other recent developments, see Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended August 31, 2024, as updated in Item 1A, “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended February 28, 2025.
Previous wording
Key metrics for the second quarter of fiscal 2025 compared to the second quarter of fiscal 2024 are included below. We have presented operating income, operating margin, effective tax rate and diluted earnings per share for the second quarter of fiscal 2024 on a non-GAAP or “adjusted” basis to exclude the impact of $115 million in business optimization costs recorded during the quarter, as discussed further in our Results of Operations.
Current wording
Key metrics for the third quarter of fiscal 2025 compared to the third quarter of fiscal 2024 are included below. We have presented operating income, operating margin, effective tax rate and diluted earnings per share for the third quarter of fiscal 2024 on a non-GAAP or “adjusted” basis to exclude the impact of $77 million in business optimization costs recorded during the quarter, as discussed further in our Results of Operations.
Previous wording
•New bookings of $20.9 billion, a decrease of 3% in U.S. dollars and flat in local currency;
Current wording
•New bookings of $19.7 billion, a decrease of 6% in U.S. dollars and 7% in local currency;
Previous wording
•Operating margin of 13.5%, compared to operating margin of 13.0% and adjusted operating margin of 13.7% in the second quarter of fiscal 2024;
Current wording
•Operating margin of 16.8%, compared to operating margin of 16.0% and adjusted operating margin of 16.4% in the third quarter of fiscal 2024;
Previous wording
•Diluted earnings per share of $2.82, a 7% increase over diluted earnings per share of $2.63 and a 2% increase over adjusted earnings per share of $2.77 in the second quarter of fiscal 2024; and
Current wording
•Diluted earnings per share of $3.49, a 15% increase over diluted earnings per share of $3.04 and a 12% increase over adjusted earnings per share of $3.13 in the third quarter of fiscal 2024; and
Previous wording
•Cash returned to shareholders of $2.4 billion, including dividends of $929 million and share purchases of $1.4 billion.
Current wording
•Cash returned to shareholders of $2.7 billion, including dividends of $924 million and share purchases of $1.8 billion.
Previous wording
Revenues for the second quarter of fiscal 2025 increased 5% in U.S. dollars and 8.5% in local currency compared to the second quarter of fiscal 2024. During the second quarter of fiscal 2025, revenue growth in local currency was very strong in the Americas and EMEA, while Asia Pacific experienced slight growth. We experienced local currency revenue growth that was very strong in Financial Services, Health & Public Service and Products, strong in Communications, Media & Technology and solid in Resources. Revenue growth in local currency was very strong in managed services and strong in consulting. While the business environment remained competitive, pricing was relatively stable. We define pricing as the contract profitability or margin on the work that we sell.
Current wording
Revenues for the third quarter of fiscal 2025 increased 8% in U.S. dollars and 7% in local currency compared to the third quarter of fiscal 2024. During the third quarter of fiscal 2025, revenue growth in local currency was very strong in the Americas, strong in EMEA and solid in Asia Pacific. We experienced local currency revenue growth that was very strong in Financial Services, strong in Health & Public Service and Products and solid in Communications, Media & Technology and Resources. Revenue growth in local currency was very strong in managed services and strong in consulting. While the business environment remained competitive, pricing improved in several areas of our business. We define pricing as the contract profitability or margin on the work that we sell.
Previous wording
In our consulting business, revenues for the second quarter of fiscal 2025 increased 3% in U.S. dollars and 6% in local currency compared to the second quarter of fiscal 2024. Consulting revenue growth in local currency for the second quarter of fiscal 2025 was driven by very strong growth in the Americas and strong growth in EMEA, partially offset by a modest decline in Asia Pacific. Our consulting revenue continues to be driven by helping our clients accelerate their reinvention, in particular technology, data, and AI led digital transformations. This includes moving to the cloud, embedding security and responsible AI across the enterprise and leveraging our change capabilities to help our clients build new skills and drive the successful adoption of new processes and technologies. In addition, clients continue to be focused on initiatives designed to deliver cost savings and supply chain and operational resilience, as well as projects to accelerate growth and improve customer experiences. While we continue to experience demand for these services, we are seeing a slower pace and level of client spending, particularly for smaller contracts with a shorter duration.
Current wording
In our consulting business, revenues for the third quarter of fiscal 2025 increased 7% in U.S. dollars and 6% in local currency compared to the third quarter of fiscal 2024. Consulting revenue growth in local currency for the third quarter of fiscal 2025 was driven by strong growth in the Americas and EMEA and modest growth in Asia Pacific. Our consulting revenue continues to be driven by helping our clients accelerate their reinvention, in particular technology, data, and AI led digital transformations. This includes moving to the cloud, embedding security and responsible AI across the enterprise and leveraging our change capabilities to help our clients build new skills and drive the successful adoption of new processes and technologies. In addition, clients continue to be focused on initiatives designed to deliver cost savings and supply chain and operational resilience, as well as projects to accelerate growth and improve customer experiences. While we continue to experience demand for these services, we are seeing a slower pace and level of client spending, particularly for smaller contracts with a shorter duration.
Previous wording
In our managed services business, revenues for the second quarter of fiscal 2025 increased 8% in U.S. dollars and 11% in local currency compared to the second quarter of fiscal 2024. Managed services revenue growth in local currency for the second quarter of fiscal 2025 was driven by very strong growth in the Americas and EMEA and strong growth in Asia Pacific. We continue to experience growing demand to assist clients with application modernization and maintenance, cloud enablement and cybersecurity-as-a-service. In addition, clients continue to be focused on transforming their operations through technology, data and AI, and leveraging our digital platforms and talent to drive productivity and operational cost savings.
Current wording
In our managed services business, revenues for the third quarter of fiscal 2025 increased 9% in both U.S. dollars and local currency compared to the third quarter of fiscal 2024. Managed services revenue growth in local currency for the third quarter of fiscal 2025 was driven by very strong growth in the Americas and strong growth in EMEA and Asia Pacific. We continue to experience growing demand to assist clients with application modernization and maintenance, cloud enablement and cybersecurity-as-a-service. In addition, clients continue to be focused on transforming their operations through technology, data and AI, and leveraging our digital platforms and talent to drive productivity and operational cost savings.
Previous wording
As we are a global company, our revenues are denominated in multiple currencies and may be significantly affected by currency exchange rate fluctuations. While a significant portion of our revenues are in U.S. dollars, the majority of our revenues are denominated in other currencies, including the Euro, Japanese yen and U.K. pound. There continues to be volatility in foreign currency exchange rates. Unfavorable fluctuations in foreign currency exchange rates have had and could in the future have a material effect on our financial results. If the U.S. dollar weakens against other currencies, resulting in favorable currency translation, our revenues, revenue growth and results of operations in U.S. dollars may be higher. If the U.S. dollar strengthens against other currencies, resulting in unfavorable currency translation, our revenues, revenue growth and results of operations in U.S. dollars may be lower. The U.S. dollar strengthened against various currencies during the three and six months ended February 28, 2025 compared to the three and six months ended February 29, 2024, resulting in unfavorable currency translation and U.S. dollar revenue growth that was approximately 3% and 1% lower, respectively, than our revenue growth in local currency. Assuming that exchange rates stay within recent ranges for the remainder of fiscal 2025, we estimate that our full fiscal 2025 revenue growth in U.S. dollars will be approximately 0.5% lower than our revenue growth in local currency.
Current wording
As we are a global company, our revenues are denominated in multiple currencies and may be significantly affected by currency exchange rate fluctuations. While a significant portion of our revenues are in U.S. dollars, the majority of our revenues are denominated in other currencies, including the Euro, Japanese yen and U.K. pound. There continues to be volatility in foreign currency exchange rates. Unfavorable fluctuations in foreign currency exchange rates have had and could in the future have a material effect on our financial results. If the U.S. dollar weakens against other currencies, resulting in favorable currency translation, our revenues, revenue growth and results of operations in U.S. dollars may be higher. If the U.S. dollar strengthens against other currencies, resulting in unfavorable currency translation, our revenues, revenue growth and results of operations in U.S. dollars may be lower. The U.S. dollar weakened against various currencies during the third quarter of fiscal 2025 compared to the third quarter of fiscal 2024, resulting in favorable currency translation and U.S. dollar revenue growth that was approximately 0.5% higher than our revenue growth in local currency. The U.S. dollar strengthened against various currencies during the nine months ended May 31, 2025 compared to the nine months ended May 31, 2024, resulting in unfavorable
Previous wording
Utilization for the second quarter of fiscal 2025 was 91%, compared to 92% in the second quarter of fiscal 2024. We hire to meet current and projected future demand. We proactively plan and manage the size and composition of our workforce and take actions as needed to address changes in the anticipated demand for our services and solutions, given that compensation costs are the most significant portion of our operating expenses. Our workforce, the majority of which serves our clients, increased to approximately 801,000 as of February 28, 2025, compared to approximately 742,000 as of February 29, 2024. The year-over-year increase in our workforce reflects hiring for the skills needed to support demand for our services and solutions, as well as people added in connection with acquisitions.
Current wording
Utilization for the third quarter of fiscal 2025 was 92%, consistent with the third quarter of fiscal 2024. We hire to meet current and projected future demand. We proactively plan and manage the size and composition of our workforce and take actions as needed to address changes in the anticipated demand for our services and solutions, given that compensation costs are the most significant portion of our operating expenses. Our workforce, the majority of which serves our clients, increased to approximately 791,000 as of May 31, 2025, compared to approximately 750,000 as of May 31, 2024. The year-over-year increase in our workforce reflects hiring for the skills needed to support demand for our services and solutions, as well as people added in connection with acquisitions.
Previous wording
For the second quarter of fiscal 2025, annualized attrition, excluding involuntary terminations, was 13%, consistent with the second quarter of fiscal 2024. We evaluate voluntary attrition, adjust levels of new hiring and use involuntary terminations as a means to keep our supply of skills and resources in balance with changes in client demand.
Current wording
For the third quarter of fiscal 2025, annualized attrition, excluding involuntary terminations, was 16%, up from 14% in the third quarter of fiscal 2024. We evaluate voluntary attrition, adjust levels of new hiring and use involuntary terminations as a means to keep our supply of skills and resources in balance with changes in client demand.
Previous wording
Results of Operations for the Three and Six Months Ended February 28, 2025 Compared to the Three and Six Months Ended February 29, 2024
Current wording
Results of Operations for the Three and Nine Months Ended May 31, 2025 Compared to the Three and Nine Months Ended May 31, 2024
Previous wording
The following revenues commentary discusses the primary drivers of local currency revenue changes by geographic market for the three and six months ended February 28, 2025 compared to the three and six months ended February 29, 2024:
Current wording
The following revenues commentary discusses the primary drivers of local currency revenue changes by geographic market for the three and nine months ended May 31, 2025 compared to the three and nine months ended May 31, 2024:
Previous wording
•Three Months. Revenues increased 11% in local currency, led by growth in Banking & Capital Markets, Industrial, Health and Consumer Goods, Retail & Travel Services. Revenue growth was driven by the United States.
Current wording
•Three Months. Revenues increased 9% in local currency, led by growth in Banking & Capital Markets, Industrial and Health. Revenue growth was driven by the United States.
Previous wording
•Six Months. Revenues increased 7% in local currency, led by growth in Public Service, Life Sciences, Consumer Goods, Retail & Travel Services and Health. Revenue growth was driven by the United Kingdom and Italy, partially offset by a decline in France.
Current wording
•Nine Months. Revenues increased 7% in local currency, led by growth in Public Service, Life Sciences, Health and Consumer Goods, Retail & Travel Services. Revenue growth was driven by the United Kingdom, Italy and Germany, partially offset by a decline in France.
Previous wording
•Six Months. Revenues increased 2% in local currency, led by growth in Utilities, Insurance and Industrial, partially offset by a decline in Chemicals & Natural Resources. Revenue growth was driven by Japan, partially offset by a decline in Singapore.
Current wording
•Three Months. Revenues increased 4% in local currency, led by growth in Public Service, Banking & Capital Markets and Insurance, partially offset by a decline in Chemicals & Natural Resources. Revenue growth was driven by Japan and Australia, partially offset by a decline in Singapore.
Previous wording
•Three Months. Revenues increased 1% in local currency, led by growth in Insurance and Utilities, partially offset by a decline in Chemicals & Natural Resources. Revenue growth was driven by Japan, partially offset by a decline in Singapore.
Current wording
•Nine Months. Revenues increased 3% in local currency, led by growth in Utilities, Insurance, Public Service and Health, partially offset by a decline in Chemicals & Natural Resources. Revenue growth was driven by Japan, partially offset by a decline in Singapore.
Previous wording
Operating expenses for the second quarter of fiscal 2025 increased $662 million, or 5%, compared to the second quarter of fiscal 2024, and decreased as a percentage of revenues to 86.5% from 87.0% during this period. Operating expenses for the six months ended February 28, 2025 increased $1,743 million, or 6%, compared to the six months ended February 29, 2024, and decreased as a percentage of revenues to 84.9% from 85.6% during this period.
Current wording
Operating expenses for the third quarter of fiscal 2025 increased $909 million, or 7%, compared to the third quarter of fiscal 2024, and decreased as a percentage of revenues to 83.2% from 84.0% during this period. Operating expenses for the nine months ended May 31, 2025 increased $2,652 million, or 6%, compared to the nine months ended May 31, 2024, and decreased as a percentage of revenues to 84.3% from 85.1% during this period.
Previous wording
Cost of services for the second quarter of fiscal 2025 increased $763 million, or 7%, over the second quarter of fiscal 2024, and increased as a percentage of revenues to 70.1% compared to 69.1% during this period. Gross margin for the second quarter of fiscal 2025 decreased as a percentage of revenues to 29.9% from 30.9% during the second quarter of fiscal 2024. The decrease in gross margin was primarily due to higher subcontractor costs and the impact of our business optimization actions which reduced severance costs in gross margin during the second quarter of fiscal 2024.
Current wording
Cost of services for the third quarter of fiscal 2025 increased $933 million, or 9%, over the third quarter of fiscal 2024, and increased as a percentage of revenues to 67.1% compared to 66.6% during this period. Gross margin for the third quarter of fiscal 2025 decreased as a percentage of revenues to 32.9% from 33.4% during the third quarter of fiscal 2024. The decrease in gross margin was primarily due to higher labor costs, partially offset by lower non-payroll costs.
Previous wording
Cost of services for the six months ended February 28, 2025 increased $1,854 million, or 9%, over the six months ended February 29, 2024, and increased as a percentage of revenues to 68.6% compared to 67.8% during this period. Gross margin for the six months ended February 28, 2025 decreased as a percentage of revenues to 31.4% from 32.2% during the six months ended February 29, 2024. The decrease in gross margin was primarily due to higher subcontractor costs and the impact of our business optimization actions which reduced severance costs in gross margin during the six months ended February 29, 2024.
Current wording
Cost of services for the nine months ended May 31, 2025 increased $2,786 million, or 9%, over the nine months ended May 31, 2024, and increased as a percentage of revenues to 68.1% compared to 67.4% during this period. Gross margin for the nine months ended May 31, 2025 decreased as a percentage of revenues to 31.9% from 32.6% during the nine months ended May 31, 2024. The decrease in gross margin was primarily due to higher subcontractor costs.
Previous wording
Sales and marketing expense for the second quarter of fiscal 2025 increased $46 million, or 3%, over the second quarter of fiscal 2024, and decreased as a percentage of revenues to 10.1% from 10.3% during this period. Sales and marketing expense for the six months ended February 28, 2025 increased $147 million, or 4%, over the six months ended February 29, 2024, and decreased as a percentage of revenues to 10.2% from 10.4% during this period. The decrease as a percentage of revenues for the three and six months ended February 28, 2025 was primarily due to lower labor costs compared to the same periods in fiscal 2024.
Current wording
Sales and marketing expense for the third quarter of fiscal 2025 increased $12 million, or 1%, over the third quarter of fiscal 2024, and decreased as a percentage of revenues to 9.9% from 10.6% during this period primarily due to both lower non-payroll and labor costs. Sales and marketing expense for the nine months ended May 31, 2025 increased $159 million, or 3%, over the nine months ended May 31, 2024, and decreased as a percentage of revenues to 10.1% from 10.5% during this period primarily due to lower labor costs.
Previous wording
General and administrative costs for the second quarter of fiscal 2025 decreased $32 million, or 3%, from the second quarter of fiscal 2024, and decreased as a percentage of revenues to 6.3% from 6.9% during this period. General and administrative costs for the six months ended February 28, 2025 decreased $2 million from the six months ended February 29, 2024, and decreased as a percentage of revenues to 6.2% from 6.6% during this period. The decrease as a percentage of revenues for the three and six months ended February 28, 2025 was primarily due to lower labor costs compared to the same periods in fiscal 2024.
Current wording
General and administrative costs for the third quarter of fiscal 2025 increased $42 million, or 4%, over the third quarter of fiscal 2024, and decreased as a percentage of revenues to 6.1% from 6.3% during this period. General and administrative costs for the nine months ended May 31, 2025 increased $39 million, or 1%, over the nine months ended May 31, 2024, and decreased as a percentage of revenues to 6.1% from 6.5% during this period primarily due to lower labor costs.
Previous wording
Operating income for the second quarter of fiscal 2025 increased $198 million, or 10%, compared with the second quarter of fiscal 2024. Operating margin for the second quarter of fiscal 2025 was 13.5%, compared with 13.0% for the second quarter of fiscal 2024. Operating income for the six months ended February 28, 2025 increased $582 million, or 13%, compared with the six months ended February 29, 2024. Operating margin for the six months ended February 28, 2025 was 15.1%, compared with 14.4% for the six months ended February 29, 2024.
Current wording
Operating income for the third quarter of fiscal 2025 increased $352 million, or 13%, compared with the third quarter of fiscal 2024. Operating margin for the third quarter of fiscal 2025 was 16.8%, compared with 16.0% for the third quarter of fiscal 2024. Operating income for the nine months ended May 31, 2025 increased $934 million, or 13%, compared with the nine months ended May 31, 2024. Operating margin for the nine months ended May 31, 2025 was 15.7%, compared with 14.9% for the nine months ended May 31, 2024.
Previous wording
We estimate that the aggregate percentage impact of foreign currency exchange rates on our operating income during the three and six months ended February 28, 2025 was similar to that disclosed for revenue for each geographic market. Additionally, costs associated with our business optimization actions did not impact fiscal 2025 operating income as the actions were completed in fiscal 2024. The commentary below provides insight into other factors affecting geographic market performance and operating income for the three and six months ended February 28, 2025 compared with the three and six months ended February 29, 2024:
Current wording
We estimate that the aggregate percentage impact of foreign currency exchange rates on our operating income during the three and nine months ended May 31, 2025 was similar to that disclosed for revenue for each geographic market. Additionally, costs associated with our business optimization actions did not impact fiscal 2025 operating income as the actions were completed in fiscal 2024. The commentary below provides insight into other factors affecting geographic market performance and operating income for the three and nine months ended May 31, 2025 compared with the three and nine months ended May 31, 2024:
Previous wording
•Three Months. Operating income increased primarily due to revenue growth, partially offset by a decline in contract profitability.
Current wording
•Three Months. Operating income increased primarily due to revenue growth and an increase in consulting contract profitability.
Previous wording
•Three Months. Opera ting income decreased primarily due to a decline in contract profitability.
Current wording
•Three Months. Opera ting income increased primarily due to revenue growth.
Previous wording
•Six Months. Operating income was relatively flat as revenue growth was offset by a decline in contract profitability.
Current wording
•Nine Months. Operating income increased slightly as revenue growth was offset by a decline in contract profitability.
Previous wording
The business optimization costs reduced operating margin for the second quarter of fiscal 2024 by 70 basis points. Operating margin for thesecond quarter of fiscal 2025 was 13.5% compared to adjusted operating margin for thesecond quarter of fiscal 2024 of 13.7%. The business optimization costs reduced operating margin for the six months ended February 29, 2024 by 80 basis points. Operating margin for the six months ended February 28, 2025 was 15.1% compared to adjusted operating margin for the six months ended February 29, 2024 of 15.2%.
Current wording
The business optimization costs reduced operating margin for the third quarter of fiscal 2024 by 40 basis points. Operating margin for thethird quarter of fiscal 2025 was 16.8% compared to adjusted operating margin for thethird quarter of fiscal 2024 of 16.4%. The business optimization costs reduced operating margin for the nine months ended May 31, 2024 by 70 basis points. Operating margin for the nine months ended May 31, 2025 was 15.7% compared to adjusted operating margin for the nine months ended May 31, 2024 of 15.6%.
Previous wording
Interest income for the second quarter of fiscal 2025 was $76 million, an increase of $11 million, or 17%, over the second quarter of fiscal 2024. The increase was primarily due to a higher average cash balance. Interest income for the six months ended February 28, 2025 was $152 million, a decrease of $15 million or 9% from the six months ended February 29, 2024. The decrease was primarily due to lower interest rates and a lower average cash balance.
Current wording
Interest income for the third quarter of fiscal 2025 was $79 million, an increase of $25 million over the third quarter of fiscal 2024 primarily due to a higher average cash balance. Interest income for the nine months ended May 31, 2025 was $231 million, an increase of $10 million over the nine months ended May 31, 2024.
Previous wording
Interest expense for the second quarter of fiscal 2025 was $65 million, an increase of $54 million over the second quarter of fiscal 2024. Interest expense for the six months ended February 28, 2025 was $95 million, an increase of $70 million over the six months ended February 29, 2024. The increase for the three and six months ended February 28, 2025 was primarily due to an increase in long-term debt compared to the three and six months ended February 29, 2024.
Current wording
Interest expense for the third quarter of fiscal 2025 was $68 million, an increase of $56 million over the third quarter of fiscal 2024. Interest expense for the nine months ended May 31, 2025 was $162 million, an increase of $126 million over the nine months ended May 31, 2024. The increase for the three and nine months ended May 31, 2025 was primarily due to an increase in long-term debt compared to the three and nine months ended May 31, 2024.
Previous wording
Other income (expense), net primarily consists of foreign currency gains and losses, non-operating components of pension expense, as well as gains and losses associated with our investments. During the three and six months ended February 28, 2025, Other income (expense), net increased $38 million and $35 million over the three and six months ended February 29, 2024, respectively, primarily due to lower foreign currency exchange losses. For additional information, see Note 1 (Basis of Presentation) to our Consolidated Financial Statements under Item 1, “Financial Statements."
Current wording
Other income (expense), net primarily consists of foreign currency gains and losses, non-operating components of pension expense, as well as gains and losses associated with our investments. During the third quarter of fiscal 2025, Other income (expense), net decreased $24 million from the third quarter of fiscal 2024 primarily due to higher foreign currency exchange losses, partially offset by higher gains on investments. During the nine months ended May 31, 2025, Other income (expense), net increased $11 million over the nine months ended May 31, 2024. For additional information, see Note 1 (Basis of Presentation) to our Consolidated Financial Statements under Item 1, “Financial Statements."
Previous wording
Excluding the business optimization costs of $115 million and $255 million, and related reduction in tax expense of $28 million and $62 million, our adjusted effective tax rates were 18.8% and 21.2% for thethree and six months ended February 29, 2024, respectively.
Current wording
Excluding the business optimization costs of $77 million and $332 million, and related reduction in tax expense of $24 million and $86 million, our adjusted effective tax rates were 25.5% and 22.8% for thethree and nine months ended May 31, 2024, respectively.
Previous wording
Diluted earnings per share were $2.82 for the second quarter of fiscal 2025, compared with $2.63 for the second quarter of fiscal 2024. Diluted earnings per share were $6.42 for the six months ended February 28, 2025, compared with $5.73 for the six months ended February 29, 2024. For information regarding our earnings per share calculations, see Note 3 (Earnings Per Share) to our Consolidated Financial Statements under Item 1, “Financial Statements.”
Current wording
Diluted earnings per share were $3.49 for the third quarter of fiscal 2025, compared with $3.04 for the third quarter of fiscal 2024. Diluted earnings per share were $9.90 for the nine months ended May 31, 2025, compared with $8.77 for the nine months ended May 31, 2024. For information regarding our earnings per share calculations, see Note 3 (Earnings Per Share) to our Consolidated Financial Statements under Item 1, “Financial Statements.”
Previous wording
The business optimization costs of $87 million and $193 million, net of related taxes, decreased diluted earnings per share by $0.14 and $0.30 for the three and six months ended February 29, 2024, respectively. Adjusted diluted earnings per share were$2.77 and $6.04 for thethree and six months ended February 29, 2024, respectively.
Current wording
The business optimization costs of $54 million and $247 million, net of related taxes, decreased diluted earnings per share by $0.08 and $0.39 for the three and nine months ended May 31, 2024, respectively. Adjusted diluted earnings per share were$3.13 and $9.16 for thethree and nine months ended May 31, 2024, respectively.
Previous wording
Changes in diluted earnings per share for thethree and six months ended February 28, 2025 compared to adjusted diluted earnings per share for thethree and six months ended February 29, 2024 were due to the following factors:
Current wording
Changes in diluted earnings per share for thethree and nine months ended May 31, 2025 compared to adjusted diluted earnings per share for thethree and nine months ended May 31, 2024 were due to the following factors:
Previous wording
As of February 28, 2025, Cash and cash equivalents was $8.5 billion, compared with $5.0 billion as of August 31, 2024.
Current wording
As of May 31, 2025, Cash and cash equivalents was $9.6 billion, compared with $5.0 billion as of August 31, 2024.
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Current report — wording carried from elsewhere
currency translation and U.S. dollar revenue growth that was approximately 0.5% lower than our revenue growth in local currency. Assuming that exchange rates stay within recent ranges for the remainder of fiscal 2025, we estimate that our full fiscal 2025 revenue growth in U.S. dollars will be approximately equal to our revenue growth in local currency.
Current report — wording carried from elsewhere
•Three Months. Operating income was relatively flat, as revenue growth was offset by higher labor costs.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
•Three Months. Revenues increased 8% in local currency, led by growth in Public Service, Life Sciences and Consumer Goods, Retail & Travel Services. Revenue growth was driven by the United Kingdom.
Previous report — wording carried elsewhere
•Three Months. Operating income increased primarily due to revenue growth, partially offset by a decline in contract profitability.