Accenture, a supplier of IT services, predicted yearly revenue growth on Thursday that was significantly higher than expected due to the rising use of artificial intelligence offsetting the weak increase in business expenditure and the strength of the dollar.

The company’s shares increased by more than 6% in premarket trading after falling by around 19% this year owing to market projections of lower demand for IT services as businesses cut back on expenditure due to rising interest rates and economic uncertainties.

On the other hand, Accenture has been a go-to advisor and outsourced service provider for companies moving their operations to the cloud, which has helped to partially protect the firm from corporate budget cuts.

It has also profited from companies using generative AI technology more frequently to automate tasks, which increases efficiency and lowers expenses.

Accenture’s new bookings, a measure of the worth of client contracts with a spending commitment, increased from $17.25 billion to $21.06 billion in the third quarter of last year.

Its GenAI services accounted for $900 million of those new bookings, bringing the total for the entire year to almost $2 billion.

LSEG data indicates that the business anticipates yearly sales growth of 1.5% to 2.5%, as opposed to 1.6% as predicted by analysts. Prior to Thursday, it had projected growth of 1% to 3%; however, for the fiscal year ending in August, it noted a negative foreign-exchange effect of 0.7%.

While revenue of $16.47 billion fell short of projections of $16.53 billion, it recorded a $1.93 billion quarterly profit.

With items excluded, the company’s earnings per share were $3.13, below projections of $3.15.

(Adapted from Investing.com)