Amdocs Limited

Good day and thank you for standing by. Welcome to the Q4 2021 UMDocs earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touchtone telephone. As a reminder, this conference is being recorded. I would now like to hand the conference over to your host, Mr. Matthew Smith, Head of Investor Relations for Amdocs. Mr. Smith, you may now begin.

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 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 release today and at greater length in the company's filings with the Securities and Exchange Commission, including in our annual report on Form 20F for the fiscal year ended September 30, 2020, filed on December 14, 2020, and at Form 6K, finished for the first quarter of Fiscal 21 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. Participating on the call with me today are Shuki Sheffer, President and Chief Executive Officer of Amdocs Management Limited, and Tamar Rapoport de Guim, Joint Chief Financial and Operating Officer. 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. On today's agenda, Shuki 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. And finally, we invite you to join us for our fiscal 2022 analyst and investor business update, which will be a virtual event. webcast live on Friday, November the 5th at 9.30 Eastern Time. Please visit the investor relations section of our website for more information. And with that, I'll turn it over to Shuki.

Thanks, Matt, and good afternoon to everyone joining us on the call today. As Matt mentioned, today and going forward, we are providing an early presentation alongside our remarks. We hope you find this additional information helpful in understanding our company as investment opportunities. I will start today call by recapping our business and financial achievements for the full fiscal year 2021. Second, I will update you on the main pillar of strategic growth framework and the significant progress we've made with key updates from the past quarter. Finally, I will wrap up by summarizing our expectation for another year of accelerated growth in fiscal 2022, after which tomorrow we'll provide the detail on our financial performance and outlook as well as perspective on the overall environment, 12-month backlog, and capital deployments. As a reminder, our comment today will refer to certain financial metrics on a performer basis where applicable to provide you with a sense of the underlying business trends, excluding the financial impact of the open market, which we divested on December 31st, 2020. I am on slide seven. Let me begin by saying that I could not be prouder of our achievement 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 a global base of talented employees and experienced leadership team. Operating hybrid model amid the global pandemic, our people executed exceptionally well this year to meet the mission critical requirements of our customer. And they did so while embracing our culture of continuous learning and upskilling. I'm also proud 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 skill in peripheral communities, which included employees volunteering hundreds of hours to develop career planning, technology, and upskilling webinars tailor-made to the needs of the thousands of students from more than 25 schools. This is just one inspiring story among the many at Andox. I would like to take this opportunity to acknowledge and to thank all our people for the commitment, creativity, and dedication they've 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. Moving to slide eight, let me address the operational and financial highlights of fiscal year 2021. I believe Amdoc is an exciting inflation point of accelerated revenue growth, and it's worth taking a moment to quickly recap some of the key factors which have led us to this point. First, We have set up an investment 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 offering to support our customer investments in industry megatrends, including digital monetization, journey to the cloud, and 5G. Second, we divested a non-core asset, open market, and executed a strategic acquisition of OpenNet in August 2020 and Source Group in March 2021 to further accelerate our technological capabilities and services expertise around 5G and the cloud. Finally, we stand our competitive advantage and establish ourselves as the industry-leading transformation partner to build our next-gen platforms, great example of which include multiple project awards at AT&T, recent modernization wins at 3UK, and a digital transformation win With next-gen hybrid cloud operation, we are accelerating for T-Mobile under a multi-year managed service agreement. All in all, we finished the year 2021 in a strong business and financial position you can see from the highlights on slide 9. We delivered excellent performer revenue growth of 7% in constant currency in fiscal year 2021, driven by healthy customer activity across North America, Europe, and the rest of the world. Our sales momentum continued through the fourth quarter, which ended up with a record restaurant backlog of $3.7 billion, up 10.5% from a year ago on a performer basis. We improved non-GAAP operation margin 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. We delivered on our target for double-digit total share return in fiscal 2021, including a third pro forma non-GAAP earnings per share growth of nearly 10% plus our dividend yield. Now turning to slide 10. Let me update you on the recent progress against our strategic imperatives. As a reminder, we have a simple and clear goal strategy to bring market-leading innovation to support our customer critical business needs and to provide an amazing experience to consumers and enterprises in, one, journey to the cloud to accelerate cloud adoption across all platforms for customer base. Two, 5G monetization to support exciting new 5G use cases. Three, digital modernization to enhance customer experience and transform operation. Four, network automation to deliver and automate dynamic real-time network-based services. During year four, 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 system evolution, BSEC, under the long-term agreement. BSEC is a technology modernization and simplification program focused on increasing speed to market, improved customer experience, and long-term cost effectiveness. It's previously announced Amdoc is already in the process of modernizing AT&T consumer mobility domain, and this new award expands its activity. Under the new BSCC agreement, Amdoc will provide its deep set of cloud-native products and next-gen cloud operation under a long-term agreement. Moreover, the project will be run on a Microsoft Azure, starting with AT&T's consumer basis units, which includes 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 to 5G monetization, MDocs 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 Orange to provide business support system for your first 5G standalone experimental cloud network launched this July in France. In 2021, Amdocs engaged in dozens of new 5G operational utilization projects across multiple countries and customers, including AT&T, T-Mobile, 2UK, Verizon, Korea Telecom Operation, LGU Plus Korea, and others. As more 5G standalone networks are launched around the globe, we expect growing number of service providers we see the benefit of Amdoc's expertise for unlocking the monetization potential of 5G by creating new capabilities, unique business model, and game-changing opportunities. Turning to digital modernization, we continue to see strong business momentum with several new wins this quarter. We expanded our relationship with Veeam to ramp up new digital services for its consumers and business customers in Uzbekistan and Kazakhstan under a seven-year agreement. We expanded our strategic collaboration with Globe Telecom in the Philippines to provide the Amdos catalog and commerce suite to improve digital experiences for its mobile and fixed-line customers. Finally, this quarter we continue to build the gross momentum of our network automation offering by successfully providing an end-to-end service orchestration solution for SES, the world's leading global satellite operator that enable SES to support customers with service innovation and delivery agility for its satellite-based hybrid and open cloud network. In the federal expansion of the industry-leading collaboration between the two companies, Amdocs has also been engaged by ACS to provide the network service assurance solution. We have extended our strategic partnership with Globe Telecom to include Amdocs service and network automation suite to power Globe's cloud and digital to network automation journeys quickly and easily. With that backdrop, Let me turn to slide 11 in 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 communication industry to enable our customers to create amazing experiences for consumer enterprises. We are latest focused on converting these opportunities to backlog roles in the coming quarters leveraging our cutting-edge technology, which supports the future roadmap of our customer and further extends our competitive lead in the market, our execution track records, and the highly skilled customer-centered 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 performer constant currency basis in fiscal 2022. Moreover, we are positioned to deliver a double-deal expected total share of return for the second year running in fiscal 2022, including pro forma non-GAAP diluted earnings per share grossed of 10%, assuming the mid-profile guidance range, and our dividend yield of 2% based on the new quarterly rate of 39.5 cents per share, which proposed for the shareholder approval at our upcoming annual meeting in January. With that, let me turn the call to Tamar for her remarks.