EY revenue rises as AI consulting offsets slowdown in deal work

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favorite tales on this weekly e-newsletter.EY reported a 4 per cent improve in annual international income on Wednesday, as a synthetic intelligence-driven rebound in consulting work was offset by shrinking exercise in its technique and deal advisory enterprise.The Large 4 accounting and consulting agency introduced in income of $53.2bn for the 12 months to the top of June, up from $51.2bn within the earlier 12 months and near the identical price of progress in fixed foreign money phrases.EY is the second of the Large 4 to report, towards a backdrop of continuous financial progress however spending restraint by shoppers. Earlier this month, rival Deloitte posted revenues up 4.8 per cent to $70.5bn, with its strongest progress in technique, danger and deal recommendation.Against this, EY’s Parthenon enterprise — which mixes advising senior executives on technique with offering due diligence and different help on mergers and acquisitions — shrank 0.4 per cent globally within the 12 months to June. It contributed $6.2bn in income, the agency stated.Mergers and acquisitions exercise had remained subdued all through EY’s fiscal 12 months ending in June, given uncertainty over tariffs and the broader international economic system, though it has picked up in current months as rates of interest have fallen. The agency merged its Parthenon technique enterprise with the remainder of its transactions enterprise in the course of the monetary 12 months.EY’s consulting enterprise posted stronger progress of 5.2 per cent, for revenues of $16.4bn. The agency stated AI-related initiatives have been a key driver because the group helped corporations rework their companies with the know-how or suggested on governance frameworks for utilizing AI.The fastest-growing a part of EY was its tax enterprise, wherein income grew 5.5 per cent to $12.7bn.The agency had deliberate to mix its technique and transactions and consulting companies with elements of the tax enterprise and spin off the brand new entity as a public firm in 2023, however the plan collapsed amid inside infighting.Beneath Janet Truncale, who took over as international chief govt in July 2024, EY has talked up the advantages of getting these advisory companies beneath the identical roof because the agency’s historic audit enterprise, which remained its largest enterprise final 12 months with $17.9bn in income, up 3.5 per cent.EY’s annual income announcement revealed its progress was strongest in Europe and the Center East, at 5.5 per cent, in distinction to Deloitte, the place it was the weakest at lower than 1 per cent.EY additionally grew its international headcount previously 12 months, in distinction to the earlier 12 months, when it had shrunk for the primary time in additional than a decade. The agency employed 406,209 individuals on the finish of June, up 3.4 per cent. The technique and transactions enterprise was the one a part of EY to chop headcount.