Amdocs Limited

Good afternoon, everyone. Thank you for standing by and welcome to the Q3 2021 Amdocs Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. Any instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touchtone cell phone. As a reminder, this conference call may be recorded. I would now like to turn the conference over to Mr. Matt Smith Head of Investor Relations. Please go ahead, sir.

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 6K. 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 released today and at greater length in the company's filings with the SEC, including our annual report on Form 20F for the fiscal year ended September 30, 2020, filed on December 14, 2020, And our Form 6K finished for the first quarter of fiscal 2021 on February 16, 2021, and for the second quarter of fiscal 2021 on May 24, 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. Participating on the call today are Shuki Sheffer, President and Chief Executive Officer of Amdocs Management Limited, and Tamar DeGinn, Joint Chief Financial and Operating Officer. Finally, a copy of today's prepared remarks will be posted on the investor relations section of Amdocs' website following the conclusion of this earnings call. And with that, I'll turn it over to Shuki.

Thank you, Matt, and good afternoon to everyone joining us on the call today. I am pleased with our Q3 performance, which I believe reflects the positive impact of the strategic initiative we executed this year to accelerate Amdocs' long-term growth. My comments today will refer to certain financial metrics on a performer basis that are applicable to provide you with a sense of the underlying business trends, excluding the financial impact of open markets, which we divested on December 31st, as previously announced. Revenue was above the guidance midpoint, up 9.4% from a year ago on a performer constant currency basis, and consistent with our expectation for a stronger second half. Profitability remains slightly above the high end of our target range, and we generate robust free cash flow, of which we return the majority to the shareholders by way of quarterly share repurchase in our dividend program. The strong sales momentum we've seen in the recent quarters also continue in Q3. On a performance basis, 12 months backlog was our highest ever, and up 10.8% from a year ago. Additionally, our growth engines are contributing to new business awards, including digital and 5G system modernization, cloud migration, and next-generation OSS platforms for networks. The breadth of demand is a positive sign of our growth strategy is well aligned with the ever-evolving needs of our customers and our ongoing commitment to innovation. Over the past several quarters, we increased our R&D investment as a percentage of revenue and extended our lead in what we define as the 5G value plan. The 5G value plan integrates key capabilities such as charging, policy, and monetization, as well as multi-access edge computing and software-defined networks to support the upcoming rollout of 5G standalone networks that will allow service providers to drive premium 5G services offering an innovative business model. Overall, Amdocs is executing well for Q3 and the fiscal year to date, the credit for which belongs to our thousands of employees worldwide. Many of our people were subject to the recent escalation of the global pandemic in certain operating regions, yet as a company, we have maintained consistent execution and delivered great value to our customers. Globally, we are encouraged to see some positive signs of improvement as vaccination programs are all out. and I'm happy to welcome back different teams to the offices in those parts of the world where we're able to gradually reopen. That said, we continue to monitor the global pandemic closely, and the health and the well-being of our employees remains our priority. I'm proud of Amdos people everywhere, and I thank them once again for their ongoing dedication and commitment to Amdos. Now, let me provide some color with respect to our regional performance in PewTree. Beginning with North America, we delivered another record quarter on a performer revenue basis, reflecting healthy activities level with many customers across the region. As we said last quarter, North American service providers are accelerating multi-year investment cycle focus around major industry trends, including digital transformation and system modernization aligned with 5G rollout, with the focus of monetizing and delivering new services utilizing charging and policy platforms. and roll out of 5G mobile, fixed wireless, and fiber network to support fast and highly secure broadband connectivity, which we deliver on the cloud, and provision on next-generation OSS platforms as we continue to see how connectivity has become a critical backbone of our society in our new hybrid work and home settings. Further to this, we see a future being powered by a partner economy which levered technologies such as multi-access edge computing and private networks, while being able to bring together rich partner ecosystems that expand monetization opportunities. We believe that our next generation offerings are at the heart of many of our North American customers. Investment plans, as well as a value partner, we believe we are well positioned to expand our scope of activities and deliver even more value to our customers. This quarter, AT&T selected Amdoc's quality engineering services under a multi-year services deal to provide agile, scalable, and DevOps-based quality assurance. QA is integrated to every step of the development process for a faster time to market with new services and build on our existing activities supporting the monetization of AT&T consumer mobility domain. Additionally, we are progressing well at T-Mobile, where our zero-touch service operation was recently selected for a program to implement next-generation automation leveraging machine learning and NI tools. Across our broader North American customer base, activity levels are also healthy. At Verizon, we're implementing Catalog One, in addition to which we are now deploying our cloud-native next-generation OSS 5G platform for service and network automation. At Altice, Comcast, Charter, and Dish, we are executing our previously announced programs while continuing to demonstrate the long-term value we can bring to this customer as they crystallize their future investment plan. Additionally, in the media segment, Adobe recently signed a multi-year agreement with Amdocs to support customer retention efforts by implementing Vindicia cloud-based subscription billing solution, part of the Amdocs MarketOne platform. Tying it all together, Amdocs is in the heart of North America's initiative to advance 5G in the cloud and we look forward to further supporting our customer in what we believe is a multi-year investment cycle. Moving to Europe, revenue grew sequentially as our customer progressed digital modernization investment to support improved customer experience, better operating efficiency, and multiple converged strategies. Expanding our relationship with multinational groups has long been a part of Amdoc's international growth strategy. UOP3 group is a good example of how we started a customer relationship by delivering value through a modelization project at the Irish affiliate. Expanded to 3UK in the business-to-business domain, and now in Q3, 3 expanded to the consumer sector with a new multi-year managed transformation award to provide 3UK subscribers with next-generation digital experiences and 5G services. This quarter, we also strengthened our long-term standing relationship with Vodafone Group. We were selected to provide inventory and next-generation OSS capabilities to support Vodafone mobile, fixed, and cable offering in Germany, Romania, and Czech Republic. Additionally, we expanded our agreement with Vodafone Spain to modernize its CRM system ready for the 5G era. Among other customer highlights this quarter, BT Group, British Telecom Group, implemented Amdoc's BrightBig platform to deliver easy-to-understand billing communications to its 10 million customers across the United Kingdom, and Amdoc's media ubiquity extended its multi-year content-as-a-service engagement with German-language IPTV providers of Silicon. Turning to the rest of the world, revenue improved sequentially for the fourth straight quarter. In Latin America, our activities included the ramp-up of the previously announced digital modernization programs at Claro Brazil, Chile, and Puerto Rico. Additionally, CETAR, Aruba's national telecom provider, recently filed a five-year extension with Amdocs to continue supporting the possible bidding efforts for the business and consumer offerings through 2026. In Southeast Asia, we've been awarded a multi-year cloud managed transformation agreement with True Corporation in Thailand to upgrade the motivation platform to the new cloud-native and 5G-ready MDoc CS21 suite, enabling True to launch, manage, and monetize innovation-new 5G services. Before wrapping up, let me highlight some of recent developments in our strategy to accelerate the communication industry journey to the cloud. First, the marketing capabilities of our next-generation cloud-native CS portfolio were recently recognized by AWS, which named MDoc's winner of the Best Telco Solution Award. We are honored by this recognition, which we see as another example of the strong partnership we are forging with the leading cloud provider in the industry. We continue to work very closely with Microsoft. We have recently expanded our strategic collaboration to widen the availability of our portfolio on Azure. Second, I can report that the post-merger business integration of Source Group is progressing well. As a leading global technology consultancy specializing in large-scale cloud transformation for sophisticated high-end enterprises, the expertise that we have acquired itself is already translating to new business opportunities in cloud operation and services. To wrap up, I'm happy with our performance for Q3 and the fiscal year to date. We expect year-over-year revenue growth to accelerate on a performant constant currency basis in fiscal 2021 supported by the positive contributions from all three regions in which we operate. Our confidence in the AdLog is supported by the visibility of our Transvaal backlog, a growing pipeline of opportunities, and our market-leading offerings, which are well aligned with the customer needs for digital modernization, 5G and cloud migration, and next-generation OSS platforms. Overall, we are raising our fiscal 2021 outlook for non-GAAP earnings per share growth on a performer basis by 80 basis points at the midpoint of the range, and we believe we are firmly on track to deliver expected double-digit total shareholder returns for the full year, including our dividend yield. With that, let me turn the call to Tamar for remarks.