At one point on Thursday, Accenture’s stock was down almost 8%. This dramatic drop-off comes as the company is already starting to feel the effects of stricter federal spending policies. The revenue impact is due to the Department of Government Efficiency, led by the Trump administration’s former tech czar, cutting contracts. This dramatic slide comes in response to deepening worries about the largely solar dependent firm’s future as economic and geopolitical clouds continue to darken.
The harsher federal spending efforts are starting to put a damper on Accenture’s top line. In FY 2024, federal contracts were about 8 percent of Accenture’s worldwide revenue, which is $61.7 billion global revenue. In the Americas, they represented a full 16% of the company’s revenue. The company is the latest in a growing list of U.S. corporate giants to feel the bite of retaliatory action taken by the Trump administration.
Accenture’s Federal Services business has suffered recent contract defeats at the hands of the U.S. government in the wake of these reviews. The U.S. General Services Administration has directed all federal agencies to closely re-examine their contracts. They’re zeroing in on the 10 highest-paid consulting firms contracting with the U.S. government.
While we continue to believe our work for federal clients is mission-critical, we anticipate ongoing uncertainty as the government's priorities evolve and these assessments unfold. - Julie Spellman Sweet
A lot of the new procurement actions have been put on ice while the new administration works to bring the federal government’s operations more smoothly run. This slowdown is bleeding into Accenture’s top-line sales and bottom-line revenue. Accenture’s chief executive officer, Julie Spellman Sweet, spoke to some of these challenges on a recent earnings call.
Accenture’s shares have tanked 22% in the last month alone and the stock is almost nearly 15% YTD. The firm is beginning to see a rise in uncertainty in the global economic and political spheres. This would be a significant reversal from Accenture’s first quarter FY 2025 earnings report in December.
