AMDOCS LTD Q3 FY2025 earnings call

• Financial highlights: Revenue of $1.14B up 3.5% pro forma constant currency, exceeded midpoint of guidance; non-GAAP diluted EPS $1.72, $0.01 above midpoint; 12-month backlog $4.15B, up 3% pro forma.
• Wins: Positive sales momentum in cloud with key modernization deals; Gen AI and data services saw conversion of POCs to commercial success, including strategic deals with Consumer Cellular, e& UAE; project execution: near record deployments at AT&T, Comcast, etc.
• Growth strategy: Built to address customer strategic imperatives like cloud adoption, Gen AI, data services; unique tech-led business model integrates technology across platforms, deployments, etc.
• Customer developments: BT awarded digital transformation project; Comcast extended Bill presenter solution use; Telstra extended OSS digitization; AT&T renewed managed services; Claro Brazil, Globe Telecom, etc. had engagements.

In Q3, revenue was $1.14 billion, up 3.5% from a year ago in pro forma constant currency. Managed Services revenue was a record $771 million in Q3, up 4.1% from a year ago, accounting for roughly 2/3 of total revenue. Regionally, North America improved 1% sequentially, Europe had year-over-year revenue growth of nearly 8% (record quarter), and Rest of the world had mixed trends with Southeast Asia growth partially offset by weakness in Latin America.

• Expect revenue growth of roughly 2.9% in pro forma constant currency at midpoint of fiscal 2025 outlook, an improvement of about 20 basis points from prior guidance.
• Non-GAAP operating margin expected to be 21.1%-21.7% for fiscal 2025, with ~230 basis points from phaseout of low-margin business and 60-70 basis points from operational excellence, automation, Gen AI.
• Non-GAAP diluted EPS growth expected within 8%-9% range for full fiscal 2025, midpoint 8.5% unchanged from prior outlook.

• Uncertain global macroeconomic environment impacting customer spending behavior, which is closely monitored.

Q: Tal Liani asked about Gen AI revenue contribution and broader demand trends.

A: Gen AI seeing conversion of POCs to commercial deals, with data layer investment important; demand trends still uncertain due to macroeconomic factors, but navigating same environment as prior quarters