Amdocs Limited
NASDAQ: DOX
Fiscal Q2 2024 Earnings Presentation May 8, 2024
Shuky Sheffer
President & CEO
Tamar Rapaport-Dagim
CFO & COO
The information contained herein in this presentation or delivered or to be delivered to you during this presentation does not constitute an offer, expressed or implied, or a recommendation to do any transaction in Amdocs Limited securities or in any securities of its affiliates or subsidiaries.
This presentation and the comments made by members of Amdocs management in conjunction with it can be found on the Investor Relations section of our website, and, as always, a copy of today's prepared remarks will also be posted immediately following the conclusion of this call. This presentation includes information that constitutes forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995, including statements about Amdocs' growth and business results in future quarters and years. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions,
we can give no assurance that our expectations will be obtained or that any deviations will not be material. Such statements involve risks and uncertainties that may cause
future results to differ from those anticipated. These risks include, but are not limited to, the effects of general macroeconomic conditions, prevailing level of macroeconomic, business and operational uncertainty, including as a result of geopolitical events or other global or regional events such as the October 7, 2023 attacks in Israel and evolving conflict and the COVID-19 pandemic, as well as the current inflationary environment, and the effects of these conditions on the Company's customers' businesses and levels of business activity, including the effect of the current economic uncertainty and industry pressure on the spending decisions of the Company's customers. Amdocs' ability to grow in the business markets that it serves, Amdocs' ability to successfully integrate acquired businesses, adverse effects of market competition, rapid technological shifts that may render the Company's products and services obsolete, potential loss of a major customer, our ability to develop long-term relationships with our customers, our ability to successfully and effectively implement artificial intelligence and Generative AI in the Company's offerings and operations, and risks associated with operating businesses in the international market. Amdocs may elect to update these forward-looking statements at some point in the future; however, Amdocs specifically disclaims any obligation to do so. These and other risks are discussed at greater length in Amdocs' filings with the Securities and Exchange Commission, including in our Annual Report on Form 20-F for
the fiscal year ended September 30, 2023 filed on December 13, 2023, and our Form 6-K furnished for the first quarter of fiscal 2024 on February 20, 2024.
This presentation includes non-GAAP financial measures, including non-GAAP operating margin, free cash flow, revenue on a constant currency basis, non-GAAP net income, non-GAAP net income attributable to Amdocs Limited, and non-GAAP earnings per share. Free cash flow equals cash generated by operating activities less net capital expenditures and other. While in prior years Amdocs used normalized free cash flow, a measure of our operating performance, is further adjusted to exclude net capital expenditures related to the new campus development, payments for non-recurring and unusual charges (such as capital gains tax to be paid in relation to the divestiture of OpenMarket), and payments of acquisition related liabilities, Amdocs is no longer reporting normalized free cash flow. Normalized free cash flow is not comparable to free cash flow. These non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non- GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. Amdocs believes that non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with Amdocs' results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Amdocs' results of operations in conjunction with the corresponding GAAP measures. Please refer to the appendix for a reconciliation of these metrics to the most comparable GAAP provision.
This presentation also includes pro forma metrics which exclude the financial impact of OpenMarket (divested on December 31, 2020) from fiscal year 2021.
Please also review the information contained in Amdocs' press release dated May 8, 2024 with respect to earnings for fiscal Q2 2024. The press release contains additional information regarding Amdocs' outlook for fiscal year 2024 and certain non-GAAP metrics and their reconciliations.
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Today's speakers
President & Chief Executive Officer
Chief Financial Officer & Chief Operating Officer
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Earnings call agenda
1 Strategy & business
performance update
Shuky Sheffer,
President &
Chief Executive Officer
2 Financial review &outlook
Tamar Rapaport-Dagim,
Chief Financial Officer &
Chief Operating Officer
3 Q&A
4 Information
President & Chief Executive Officer
Strategy and business performance update
5
Thanks to our amazing people around the world,
we support our customers' journeys
Close to
100%
Managed services contract renewals
Over
95%
successful
transformations
Products/ | |
Platforms | Implementation |
services |
Unique
Accountability
Model
Operations
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Q2/24 - record revenue, continued profitable growth & margin improvement
Revenue(1) | Non-GAAP | Non-GAAP EPS(3) | 12-month backlog |
operating margin(3) | |||
$1.25B | 18.4% | $1.56 | $4.23B | |||
Up ~2% YoY(2) | +60bps YoY | At guidance midpoint |
+30bps QoQ | ||
driven by our ongoing | ||
initiatives to accelerate | ||
profitability |
- Constant currency. Assumes exchange rates in the current period were unchanged from the prior period
- Revenue was up 1.8% YoY as reported and up 2.0% YoY in constant currency in Q224
- Non-GAAP.See reconciliation tables in appendix
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Up ~3% YoY
Second quarter key highlights
Healthy second quarter sales momentum
Healthy momentum in North America:
Significant 5-year deal expanding activities in a new cloud domain; extends consumer domain engagement to 2029
Secured new modernization awards at T-Mobile
5-year continuous modernization agreement
Amdocs B2B platform expanded across their product
offerings
Expanded our customer footprint intentionally
Unparalleled project execution
CatalogONE major upgrade | |
Unified BSS and OSS platform | Leading service |
provider in Ireland | |
Postpaid migration of ~55 M | |
subscribers |
Supporting mission-critical operations and customers' strategic moves
Extended and expanded our partnership
Major Southeast Asian
Digital transformation project
Connectivity and network-related deals
Subscription and content management
UK
Japan
Japan
Leading service
provider in
Southeast Asia
Australia
to full cloud managed services
Extended and expanded managed services agreement, supporting merger with Shaw
Extended and expanded managed services agreement, supporting its acquisition of Lumen's EMEA business
service provider
Canada
UK
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Strategic growth framework
Cloud | Digital | 5G, FWA Network | B2B |
and fiber |
Generative AI
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Progress in strategic domains - Generative AI
Simplify and accelerate adoption of GenAI across the telecom industry
Infusing Amdocs
CES with GenAI
Amdocs' flagship CES24 telco-native, GenAI led suite, now equipped with
CES Copilot, a set of embedded GenAI assistants, powered by amAIz; soon to be deployed at several customers
Marketing
Customer engagement
Monetization
Service & network management
10
Gen AI app factory
Introducing new GenAI use cases that address the key business outcomes of the communication industry
Billing Operation
Billing Q&A,
Charging & Policy
control
Customer Service | Network Operation |
Billing Care, | Network Resource |
Customer Insight, | Explorer, Network |
Digital Support | Issues. Analyzer |
Agent |
Sales & Ordering | Product/Marketing |
Conversional | |
Selling, B2B | Competitive Offer |
Serviceability, | Analyzer, Segment |
Order Tracking | Discovery |
Leveraging strategic partners
Extending the capabilities of Amdocs amAIz through growing collaboration with industry leaders
Accelerating innovation by leveraging Microsoft's Azure OpenAI service
Achieving production-scale cost, accuracy and latency improvements, leveraging NVIDIA's full-stack AI foundry service
Integrate AWS Gen AI tools into our amAIz platform to fuel innovation across telco domains
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Amdocs Ltd. published this content on 08 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 May 2024 21:06:18 UTC.