Is Accenture's Prudent Cash Management Fueling Shareholder Returns?

Accenture ACN generated $10.9 billion in free cash flow (FCF) in fiscal 2025, marking a 26.2% rise from the previous year. A double-digit increase in the operating cash flow and a fairly controlled CapEx led to this growth, providing Accenture with the muscle to return value to shareholders while preserving its financial latitude.

The operating cash flow increased 25.6% year over year in fiscal 2025. This is caused by a significant improvement in working capital management due to a hefty increment in deferred revenues, and accrued payroll and related benefits.

In addition to this cash retention, Accenture maintained its CapEx at $600 million, which is a meager amount compared with its $69.7-billion top line. This well-stitched cash management strategy enabled the company to exit its fiscal year with a cash balance of $11.5 billion compared with the year-ago $5 billion, marking a more than 2X rally.

This financial prowess provided a sufficient cushion for the company to return $8.3 billion to its shareholders. Nearly $4.6 billion was in the form of share repurchases and $3.7 billion worth of dividends. The company’s total outstanding share buyback of $7.9 billion and 622 million total shares outstanding as of Aug.31, 2025, highlight share repurchase opportunities, which will boost EPS.

A 10% increase in dividends payable in November solidifies Accenture’s steady upward trajectory for dividend payments, underlining confidence in the company to generate consistent shareholder returns.

These returns did not compromise ACN’s balance sheet strength, evidenced by a nearly $10 billion increment in total asset position and approximately $3 billion expansion in shareholders’ equity. Banking on this, we are highly optimistic about what Accenture envisions for fiscal 2026.

An anticipation of operating cash flow ranging from $10.8 billion to $11.5 billion and shareholder return of at least $9.3 billion. These expectations display the company’s confidence in its cash conversion abilities and balanced investment and returns, highlighting prudent cash stewardship central to shareholder value.

ACN’s Price Performance, Valuation & Estimates

Accenture has experienced a 37.9% decline over the past year compared with a 16% fall in its industry. ACN has underperformed its industry peers, Cerence’s CRNC and TaskUs’ TASK 295.6% and 10.2% growth, respectively.

1-Year Share Price Performance

From a valuation standpoint, ACN trades at a forward price-to-earnings ratio of 16.87, below the industry’s 25.87. The stock is trading at a premium when compared with Cerence’s 13.78 and TaskUs’ 8.23.

P/E - F12M

Accenture and Cerence have a Value Score of B. TaskUs carries a Value Score of A.

The Zacks Consensus Estimate for ACN’s earnings for fiscal 2026 and 2027 has moved up 1% over the past 30 days.

ACN carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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