Amdocs Limited

Thank you for standing by, and welcome to Amdoc's fourth quarter 2022 earnings call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. I would now like to hand the call over to Matt Smith, head of investor relations. Please go ahead.

Thank you, operator. Before we begin, I need to call your attention to our disclaimer statement on slide two of the presentation. It notes that some of our comments today may be forward-looking statements and are subject to risks and uncertainties, including as described in Amdocs' SEC filings, and that we will discuss certain financial information that is not prepared in accordance with GAAP. 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. Participating on the call with me today are Shuki Sheffer, President and Chief Executive Officer of Amdocs Management Limited, and Tamar Rappaport de Gim, Chief Financial and Operating Officer. To support today's earnings call, 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, Shiki will recap our business and financial achievements for the fourth quarter and full year fiscal 2022, and we'll update you on the continued progress we have made executing against our strategic growth framework. Shiki will finish by commenting on our financial outlook for the full year fiscal 2023, after which Tamar will provide additional details on our fourth quarter financial performance and forward guidance. 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 open market, which we divested on December 31st, 2020. And with that, I'll turn it over to Shuki.

Thanks, Matt, and good afternoon to everyone joining us on the call today. Let me begin by saying how extremely proud I am of Amdoc's achievement in fiscal 2022, which in many respects was a landmark year for the company. With our industry-leading portfolio of technology and services, and global reach, we delivered on our objective to sustain accelerated and profitable revenue growth, and we did so while playing a major role in serving the mission-critical needs and strategic requirements of the global communication media industry, which was without question become more the backbone of society post the global pandemic. Of course, none of this would be possible without the dedication and commitment of our global and diverse base of more than 30,000 talented employees to whom I wish to extend my huge gratitude for making fiscal 2022 an amazing year by providing market leading innovation and exceptional service to our customers. Turning to slide seven, we wrapped up strong fiscal 2022 financial performance with solid Q4 results that were in line with our guidance despite persistent foreign currency headwinds and inflationary pressures throughout the quarter. Recapping the full year highlights. The record revenue of approximately 4.57 billion increased 10.3% on a performer constant currency basis and was consistent with our high end of our outlook for six to 10% growth as provided at the start of the fiscal year. Reflecting heavily sales momentum, We finished fiscal 2022 with record high 12-month backlog of $3.97 billion, up approximately 8% from a year ago, and we achieved record non-GAAP diluted earnings per share of $5.30, up 12.1% on a performer basis as we delivered on our targets for accelerated and profitable top-line growth. To further add, our earning-to-cash conversion exceeded 100% in fiscal 2022, resulting in a better-than-expected normalized free cash flow of $665 million, of which we returned more than 100% to shareholders via share repurchases and dividends. To provide additional color and spec to Amdoc's full-year financial performance, All three of our core operating regions grew revenue on a performer content currency basis in fiscal 2022, as shown on slide eight. The broad-based growth across geographies demonstrate that our strategy to bring product and services innovation across 5G monetization, cloud, network automation, and digital is highly relevant and well aligned with the needs of our customers worldwide. For instance, North America delivered a record yield, driven by 5G and cloud transformation projects. In addition to AT&T and T-Mobile, revenue grew across the broader North American region as we continued to expand activities with many customers, such as Comcast, Charter, Dish, Verizon, Bell Canada, and Rogers. Our efforts to further expand in Europe and the rest of the world were also apparent in fiscal 2022. We won important strategic awards with long-standing customers like Vodafone, N1 Telecom, Globe, PLDT, and Excel Axiata, and new logos like PPF Group, Vodacom, and AzarCell, which all together demonstrate Amdoc's impressive global reach. Fiscal 2022 was also a year in which we solidified our unrivaled reputation for execution. Driven by our consistent focus on operational excellence, we achieved a record number of project milestone deployments in the fourth quarter and full year fiscal 2022, including major low-lights in Q4 at Verizon, 3UK, Vivo, and Excel Akshata, to name a few. As to our gross investment, we excelled at R&D in fiscal 2022 to further extend our technological leadership as recognized by various industry analysts throughout the year. Moreover, We now have dozens of accounts using the latest versions of our cloud-native CS suite, which I believe is a testament to the rapid cadence and industry-leading capabilities of our platform. Additionally, we remain committed to M&A as a lever to accelerate our growth strategy by augmentation of R&D investments. During fiscal 2022, we accelerated the post-matter integration of DevOps Group to strengthen our cloud consulting expertise, and required one digital to expand our digital experience capability. We also initiated a move to add service assurance to our network automation portfolio with the plan acquisition of MyComOSI, which subject to sales and regulatory approval, we expect to close before the end of fiscal Q1. Turning to slide nine. Let me also say a quick word about Amdoc's approach to corporate social responsibility, which is tightly interwoven with Amdoc's business strategy. Since Amdoc is crucial to empowering our inclusively connected world, I believe we have an obligation to provide sustainable products that help our customers to advance the interests of the environment, while also taking responsibility to enable digital inclusion whenever we can. A great example is our work with Winity Telecom, which is a rolling out 4G and 5G network across remote communities in Brazil, bringing connectivity to more than 600 small municipalities and public schools to help close the gap in the digital divide. Now, let me update you on our framework for strategic growth, the key pillars of which shown on slide 10. As a reminder, our growth strategy is clear and simple. Enable our customers to derive growth, improve cost efficiency, and providing amazing experiences to consumers and enterprises by bringing market-leading innovation in respect to end-to-end cloud platform and services, creating seamless digital experiences by transforming IT operations, monetizing new 5G services, and delivering dynamic connected experiences with real-time automated networks. During Q4, we made additional progress executing against each of these growth pillars, beginning with cloud. I am delighted to announce that AT&T Mexico has selected us to migrate its Amdoc system from on-premises to the cloud. This five-year agreement will enable AT&T Mexico to quickly adopt the latest 5G innovation facilitated new business models, and allow unmatched flexibility and capacity by ensuring the right IT service infrastructure to support its network evolution and growing business needs. Additionally, and prior to say that Amdocs is working with Rogers Canada to move existing Amdocs services and application to Rogers private cloud. Moving next to digital transformation, we've expanded our work with T-Mobile as they implemented Amdocs AI and data platform on the cloud to unlock business insight for an improved customer experience. We signed a multi-year strategic managed services agreement with Telefonica, East Point America, to deploy new BSS and cloud native OSS modules on the public cloud for Telefonica's entities in Argentina, Chile, and Peru, enabling cost reduction, faster time to market for new services, advanced digital capabilities, and an improved customer experience. I'm also happy to announce of our first digital transformation engagement with AzureCell and as a Bidjan-based operator, Ambrox will modernize AzureCell BSS and OSS infrastructure with the cloud-native platform to improve time to market for new product and services while increasing efficiency by digitizing and streamlining processes. Moving to 5G monetization. At Verizon, we recently went into production with Amdocs Catalog One, our cloud-native platform designed to rapidly create and launch new 5G services offering. Earlier in Q4, we also launched our next-generation Amdocs Charging, which combines the industry-leading charging and BSS capabilities of both Amdocs and OpenNet to support rapid time-to-market, and the monetization of innovative new services across standalone 5G networks and beyond. Leading service providers, including two Tier 1 operators in North America, are already using Amdox charging, and we are busy working with many others as they explore the ways to make a return on their 5G investments. To learn more about the significant market potential of future 5G use cases, we invite you to join us for a webinar on December 12th, where we will share global perspectives and insights highlighting 5G's growing contribution to innovation services, the potential economic impact across industries, as well as three world examples illustrating Amdoc's critical role in bringing 5G to life. Switching to network automation, we are continuing to broaden and strengthen our relationship with SCS a leading operator of multi-orbit satellites to deliver enhanced form of connectivity. Amdocs recently signed an important new managed services agreement with SES under which we will provide anomaly detection, monitoring, diagnostics, and remediation across SES new satellite communication systems. Amdocs is also seeing increased customer demand for private enterprise networks as society becomes more reliant on ubiquitous connectivity. As an example, Amdocs is now working with EAF, a new Brazilian communication services provider, to build a private network for the Brazilian government. Finally, I would like to quickly acknowledge Amdocs Media, where we are proud to say the juice, which is the part of ubiquity, earned a Netflix Preferred Fulfillment Partner on the Year Award for the American region. This is your third NPFP of the Year win, the most of any partner since this program launch. Additionally, Ubiquiti was recently selected by Cellcom in Israel to ensure a personalized digital content experience for Cellcom Fiverr TV viewers under a newly extended agreement. Now, moving to our fiscal year 2003 outlook, as presented on slide 11. As you expected, we are closely monitoring the global macroeconomic environment, which has become even more complex since we spoke last quarter. While Amdocs and our global customers are not immune to macroeconomic cycles, we are confident in our unique and relatively resilient business model, which result in a highly recurring revenue stream and strong business visibility from the mission critical system we support and the multi-year engagement. We're already working with our customer to optimize their plans to address the complex macroeconomic situation, helping them to improve customer experience, accelerate cost reduction, and increase efficiency by bringing our highly relevant capabilities in digital clouds and automation. We continue to see a rich pipeline of opportunity, which I believe reflects Amdoc's position as a key technology enabler situated at the heart of the 5G monetization and cloud-related investments, strategies that we believe our customer will continue to execute in the next several years. Tying everything together on slide 12. We expect to deliver full-year revenue growth of between six to 10% on a constant currency basis in fiscal 2023, consistent with the long-term guidance range we provided previously. Our visibility is supported by record 12-month backlog entering the fiscal year. We expect all three of our core operating regions to grow on a constant currency basis in fiscal 2023, with Europe and the rest of the world enjoying a stronger yield compared with fiscal 2022, as recent project awards continue to ramp up. On the bottom line, we expect non-GAAP diluted earnings per share growth of roughly 8% to 12% in fiscal 2023. The outlook assumes an increased level of profitability as compared with the 2022 fiscal year, mainly resulting from ongoing efforts to improve operational excellence through automation and other sophisticated tools, which are now yield benefits. Additionally, we expect cost saving enabled by our move to the new campus in Israel. We expect earnings to cash conversion to remain at around 100% in fiscal 2023, supporting another year of strong free cash flow generation, the majority of which we plan to return to shareholders. To summarize, we expect to deliver double-digit expected total shareholder returns for the third straight year in fiscal 2023, assuming our non-GAAP diluted earnings per share, gross guidance, plus our dividend yield of about 2%. With that, let me turn the call over to Tamar for her remarks.