Key facts
- Accenture is acquiring Dragos, runZero, and NetRise for a combined $4.18 billion.
- The company lowered its annual revenue growth forecast to 3%-4%, down from 3%-5%.
- Accenture expects fourth-quarter revenue between $17.75 billion and $18.4 billion, missing analyst estimates.
- The Iran war impacted Accenture's Middle East business by $400 million in the third quarter.
- Accenture plans to spend $9 billion on acquisitions this year, up from $5 billion previously.
Accenture announced on Thursday it would acquire industrial cybersecurity firm Dragos, asset intelligence company runZero, and device security specialist NetRise in a combined deal valued at $4.18 billion. These acquisitions aim to bolster Accenture's cybersecurity business by expanding into software for protecting industrial operations and critical infrastructure, such as power grids and factories, in response to rising AI-driven cyber threats and geopolitical tensions.
However, Accenture's shares fell more than 14% as the company revised its annual revenue growth forecast downwards to between 3% and 4%, from its previous projection of 3% to 5%. The IT consulting giant also warned of a $400 million hit to its Middle East business from the Iran war in the third quarter and indicated further impact in the fourth. CEO Julie Sweet noted that the indirect impact of the conflict began in recent weeks and that some industries are dealing with longer-term issues, such as the automotive sector already struggling before higher gas prices from the conflict added pressure.
The deals, expected to close in August or September pending regulatory approvals, will add companies with a combined annual recurring revenue of $208 million to Accenture's existing $10 billion cybersecurity business. Accenture plans to spend $9 billion on acquisitions this year, up from $5 billion previously, focusing on AI, cloud, and data projects.
Accenture now projects fourth-quarter revenue to be in the range of $17.75 billion to $18.4 billion, falling short of analysts' average estimate of $18.47 billion. In the third quarter, the company's revenue rose 6% to $18.72 billion, missing estimates. Shares of rivals Infosys, Cognizant, Capgemini, and IBM also slid between 5.5% and 10.8% amid the broader concerns.