AMDOCS Q4 2021 CONFERENCE CALL SCRIPT

November 2, 2021

5:00 pm

Matthew Smith, Head of Investor Relations

Slide 2: Disclaimer

Thank you, operator. Before we begin, I would like to point out that during this call we will discuss certain financial information that is not prepared in accordance with GAAP.

The Company's management uses this financial information in its internal analysis in order to exclude the effect of acquisitions and other significant items that may have a disproportionate effect in a particular period. Accordingly, management believes that isolating the effects of such events enables management and investors to consistently analyze the critical components and results of operations of the Company's business and to have a meaningful comparison to prior periods. For more information regarding our use of non-GAAP financial measures, including reconciliations of these measures, we refer you to today's earnings release which will also be furnished with the SEC on Form 6-K.

Also, this call includes information that constitutes forward-looking statements. 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 economic conditions, the duration and severity of the COVID-19 pandemic, and its impact on the global economy, and such other risks as discussed in our earnings release today and at greater length in the Company's filings with the Securities and Exchange Commission, including in our Annual Report on Form 20-F for the fiscal year ended September 30, 2020 filed on December 14, 2020 and our Form 6-K furnished for the first quarter of fiscal 2021 on February 16, 2021, and for the second quarter of fiscal 2021 on May 24, 2021, and for the third quarter of fiscal 2021 on August 16, 2021.

Amdocs may elect to update these forward-looking statements at some point in the future; however, the Company specifically disclaims any obligation to do so.

Slide 3: Today's Speakers

Participating on the call with me today are Shuky Sheffer, President and Chief Executive Officer of Amdocs Management Limited and Tamar Rapaport-Dagim, joint Chief Financial and Operating Officer.

Slide 4: Earning call agenda

To support our earnings call today, and, in the future, we are providing a presentation which 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.

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On today's agenda, Shuky will provide an update on our recent strategic progress and business performance, and Tamar will review our financial results and outlook for fiscal year 2022.

Finally, we invite you to join us for our Fiscal 2022 Analyst & Investor business update which will be a virtual event, webcast live on Friday, November 5, at 9:30 am eastern time. Please visit the investor relations section of our website for more information.

Slide 5: Shuky Sheffer

With that, I'll turn it over to Shuky.

Shuky Sheffer, Chief Executive Officer

Thanks, Matt, and good afternoon to everyone joining us on the call today.

As Matt mentioned, today, and going forward, we are providing an earnings presentation alongside our remarks. We hope you find this additional information helpful in understanding our company as an investment opportunity.

Slide 6: CEO Strategy & Business Update

I will first start today's call by recapping our business and financial achievements for the full fiscal year 2021. Second, I will update you on the main pillars of our strategic growth framework and the significant progress we have made with key updates from the past quarter.

Finally, I'll wrap up by summarizing our expectations for another year of accelerated growth in fiscal 2022, after which Tamar will provide the detail on our financial performance and outlook, as well as perspective on the overall environment, 12-month backlog and capital deployment.

As a reminder, our comments today will refer to certain financial metrics on a pro forma basis where applicable to provide you with a sense of the underlying business trends excluding the financial impact of OpenMarket, which we divested on December 31st, 2020.

Slide 7: Thank you for a great FY21

I'm on slide 7. Let me begin by saying that I couldn't be prouder of our achievements in fiscal 2021.

This was a pivotal year in which we began to see the results of our strategy to drive accelerated revenue growth, and much credit belongs to our global base of talented employees and experienced leadership team.

Operating in a hybrid model amid the global pandemic, our people executed exceptionally well this year to meet the mission critical requirements of our customers, and they did so while embracing our culture of continuous learning and upskilling.

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I am also proud that we constantly found ways to demonstrate our corporate purpose and values, such as by providing support for the communities in which we live and work. As an example, in the Philippines, we recently ran a project to improve digital access and skills in peripheral communities, which included employees volunteering hundreds of hours to develop career planning, technology and upskilling webinars, tailor made to the needs of thousands of students from more 25 schools. This is just one inspiring story among many at Amdocs.

I would like to take this opportunity to acknowledge and thank all our people for the commitment, creativity, and dedication they have shown working together to serve our customers, partners, communities, and one another over the last year, and I am confident we have the talent, spirit, and values to achieve even more in the future.

Slide 8: Inflection point for accelerated growth

Moving to slide 8, let me address the operational and financial highlights of fiscal year 2021. I believe Amdocs is at an exciting inflection point of accelerated revenue growth and it is worth taking a moment to quickly recap some of the key factors which have led us to this point.

First, we accelerated our investments in research and development by more than 10% in fiscal year 2021 to further position us as the market leader with the best technology and most relevant offerings to support our customer's investments in industry megatrends, including digital modernization, journey to the cloud, and 5G.

Second, we divested a non-core asset, OpenMarket, and executed on the strategic acquisitions of Openetin August 2020, and Sourced Groupin March 2021 to further accelerate our technological capabilities and services expertise around 5G and the cloud.

Finally, we strengthened our competitive advantage and established ourselves as the industry's leading transformation partner to build their next-gen platforms, great examples of which include multiple project awards at AT&T, recent modernization wins at 3UK, and the digital transformation with next-gen hybrid cloud-operations we are accelerating for T-Mobile under a multi-year managed services agreement.

Slide 9: Strong performance in full year fiscal 2021

All in all, we finished fiscal year 2021 in a strong business and financial position as you can see from the highlights on slide 9.

  • We delivered accelerated pro forma revenue growth of 7.0% in constant currency in fiscal year 2021, driven by healthy customer activity across North America, Europe, and Rest of World.
  • Our sales momentum continued through the fourth quarter, which we ended with record 12-month backlog of $3.7 billion, up 10.5% from a year ago on a pro forma basis.
  • We improved non-GAAP operating margins by 30 basis points and achieved our highest-ever number of customer milestones which we converted into record cash collections and record normalized free cash flow generation of $869 million for the full year.

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  • Moreover, we delivered on our target for double-digit total shareholder returns in fiscal 2021, including accelerated pro forma non-GAAP earnings per share growth of nearly 10.0%, plus our dividend yield.

Slide 10: Progress of Strategic Domains

Now, turning to slide 10, let me update you on our recent progress against our strategic imperatives. As a reminder, we have a simple and clear growth strategy to bring market- leading innovation to support our customer's critical business needs, and to provide an amazing experience to consumers and enterprises in:

  1. Journey to the cloud, to accelerate cloud adoption across all platforms of our customer base
  2. 5G monetization, to support exciting new 5G use cases
  3. Digital modernization, to enhance customer experience and transform operations
  4. Network automation, to deliver and automate dynamic, real-timenetwork-based services

During Q4, we made significant progress across each of these pillars. In cloud, we are thrilled that AT&T has selected us for next-gen cloud operations of its business support systems evolution (BSSe) under a long-term agreement.

  • BSSe is a technology modernization and simplification program focused on increasing speed-to-market, improved customer experiences and long-term cost effectiveness.
  • As previously announced, Amdocs is already in the process of modernizing AT&T's consumer mobility domain, and this new award expands that activity. Under the new BSSe engagement, Amdocs will provide its deep set of cloud-native products and next- gen cloud operations under a long-term agreement. Moreover, the project will be run on
    Microsoft Azure, starting with AT&T's consumer business units which include mobility, broadband and IoT.

Additionally, I am pleased to share that AT&T has extended through 2026 the managed services agreement signed in 2019 for the consumer domain.

Moving on to 5G monetization, Amdocs remains at the forefront of the industry working with leading service providers to enable new and exciting 5G experiences.

  • During Q4, we were selected by Orangeto provide the business support systems for Europe's first 5G Stand Alone experimental cloud network, launched this July in, France.
  • In 2021, Amdocs engaged in dozens of new 5G operations and monetization projects across multiplecountries and customers, including AT&T, T-Mobile, Three UK,
    Verizon, Korea Telecom Corporation, LGU+Korea and others.
  • As more 5G standalone networks are launched around the globe, we expect a growing number of service providers will see the benefits of Amdocs' expertise for unlocking the monetization potential of 5G by creating new capabilities, unique business models and game-changing opportunities.

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Turning to digital modernization, we continued to see strong business momentum with several new wins this quarter.

  • We expanded our relationship with Veonto ramp-up new digital services for its consumer and business customers in Uzbekistan and Kazakhstan under a seven-year agreement.

Additionally:

  • We expanded our strategic collaboration with Globe Telecomin the Philippines to provide the Amdocs Catalog and Commerce Suite to improve digital experience for its mobile and fixed-line customers.

Finally, this quarter, we continued to build the growth momentum of our network automationoffering by successfully providing an end-to-end service orchestration solution for SES, the world's leading global satellite operator, that enables SES to support customers with service innovation and delivery agility for its satellite-based hybrid and open-cloud network.

  • In a further expansion of the industry-leading collaboration between the two companies, Amdocs has also been engaged by SES to provide a network services assurance solution.
  • We have extended our strategic partnership with Globe Telecomto include the Amdocs
    Service and Network Automation suite to power Globe's cloud and digital-to-network automation journeys quickly and easily.

Slide 11: Looking ahead: sustain accelerated growth in FY2022

With that backdrop, let's turn to slide 11 and our fiscal year 2022 outlook. We believe we are in the early innings of a multi-year 5G and cloud-driven investment and transformation cycle. We see a rich pipeline of opportunities across the communications industry to enable our customers to create amazing experiences for consumers and enterprises.

We are laser-focused on converting these opportunities in to backlog growth in the coming quarters, leveraging:

  • Our cutting-edge technology, which supports the future roadmap of our customers and further extends our competitive lead in the market
  • Our execution track record and
  • A highly skilled, customer-centric talent base, delivering value to our customers around the world

Tying everything together, we expect to deliver accelerated revenue growth of roughly 8% assuming the midpoint of our guidance on a pro forma constant currency basis in fiscal 2022.

Moreover, we are positioned to deliver double-digit expected total shareholder returns for the second year running in fiscal 2022, including:

  • Pro forma non-GAAP diluted earnings per share growth of 10% assuming the midpoint of our guidance range, and

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Amdocs Ltd. published this content on 02 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 November 2021 22:31:02 UTC.