Amdocs Limited

Thank you for standing by. Welcome to the Amdocs Limited first quarter 2024 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 1-1 again. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Mr. Matt Smith, Head of Investor Relations. Please go ahead, sir.

Thanks, John. 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 4 and 6K. Participating on the call with me today are Shuki Sheffer, President and Chief Executive Officer of Andox Management Limited, and Tamar Rapoport de Guim, 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, Shuki will recap our business and financial achievements for the first quarter fiscal 2024, and we'll also update you on the continued progress we've made executing against our strategic growth framework, including generative AI and our continued sales momentum in cloud. Shuki will finish by discussing our financial outlook for the full fiscal year 2024, after which tomorrow we'll provide additional details on our first quarter financial performance, our forward guidance, and also our continued commitment to ESG. So with that, I'll turn it over to Shuki.

Thanks, Matt. And good afternoon to everyone joining us on the call today. I'm pleased to report a solid start to the fiscal year. Many thanks for which go to our amazing people around the world who work hard to deliver the innovation and value our customer needs on their journey to cloud-based 5G, fixed wireless access, and fiber networks, improve digital consumer and B2B experiences, and harness the power of generative AI. The first fiscal quarter financial highlights appear on slide 7. Record revenue of $1.25 billion was up 5% from a year ago and in line with the midpoint of our guidance. Non-GAAP operating margins increased by 40 basis year-over-year and 30 basis points equationally as our initiative to accelerate profitability yield results. Non-GAAP earnings per share was $1.56, consistent with the midpoint of our expectation, and we close Q1 with a record 12-month backlog of $4.21 billion, up approximately 3% from a year ago, and healthy acceleration of $60 million on a sequential basis. Our record 12-month backlog position reflects healthy first quarter sales momentum as highlighted on slide 8. We deepen our relationship with key North American customers such as AT&T and T-Mobile and striking our international footprint by expanding existing activities as large operators such as Vodafone Germany, A1 Telecom Austria, Miger Telecom in Hungary, and Etisalat by EN in the UAE. Additionally, we added new logos like Finetworks in Spain and Delta Fiber in the Netherlands and achieved another quarter of strong sales momentum in cloud with migration awards at operators in Canada, Southeast Asia, and a new project with NTT InfoNet in Japan. Q1 also notable for Amdoc's consistent project execution. We successfully completed major implementation at several large-scale customer around the world, thereby creating foundation for future business expansion. Amdocs was instrumental in supporting the merger integration of T-Mobile, and continue to support T-Mobile's modernization journey to offer an unparalleled consumer and B2B consumer experiences in the industry. Elsewhere, Amdocs enabled seamless migration of 14 million customers to a new omnichannel platform in 3UK and the conversion of around 138 million subscribers to our latest cloud-based charging technology for a leading operator in Southeast Asia. At Claro Puerto Rico, Amdoc's full digital transformation for prepaid offering was completed, covering 100% of stores. Amdocs also extended its software and maintenance agreement with Claro Brazil until 2026, supporting over 40 million subscribers. For Telcel Mexico, we upgraded and migrated an existing Amdocs campaign management solution to AWS, migrating in an on-premise architecture with a secure cloud-based solution. From an operational perspective, we provide flawless global support to our customers under Managed Services engagement during the peak retail sales period of Black Friday and the holiday season. To remind you, our Managed Services business forms the bedrock of Amdoc's high recurring revenue streams, in support of which we sign expanded long-term agreements with customers such as Charter in the U.S. and Claro in Chile and Puerto Rico in Kuwait. Rounding out our operational highlights, Amdocs continue to bring cutting-edge technology and fresh innovation to market this quarter, reflecting our long-term commitment to deliver customer values to R&D and strategic M&A. Later this month, we'll introduce the newest version of Amdocs Customer Experience Suite and service offering at the Mobile World Congress, including our latest generative AI offering innovation. We expect to demonstrate our technology leadership across all domains from customer experience to the network. Now, let me update you on the growth strategy, which is focused on delivering the market-leading innovation our customers need to simplify and accelerate industry adoption of generative AI, accelerate the journey to the cloud, create seamless digital experiences by transforming customer journeys from consumer and B2B, unlock future market potential of true 5G standalone network with next-generation solution, and deliver dynamic connected experiences with real-time automated network. Beginning on slide nine, generative AI remains a strategic priority for Amdocs. As generative AI gradually moves to a carrier-grade implementation state, service providers are looking to companies like Amdocs to do the on-the-ground work to deploy the technology and deliver the business benefits. We see this reflected in the great progress we have made across the three core pillars of our generative AI strategy over the last quarter. First, PowerBar and generative AI framework AMAZE, Amdocs flagship CS24 suite now benefits from generative AI across BSS, OSS, and network domains. Customers adopt our latest products such as our customer engagement platform, Amdocs CPQ Pro, Amdocs Catalog, or Amdocs Intelligent Network Suite will therefore benefit from embedded native generative AI powered co-pilot assistance. Second, our generative AI use case factory continues to accelerate the introduction of new generative AI use cases that address the communication industry key business imperatives, a test of which we gave in our generative AI investor webinar in December. The initial results are promising. With Bill Inquirer, for instance, CSPs can better solve customer billing-related inquiries and recommend alternative products. This instantly transformed traditional care agents to super agents while increasing cold deflection rates by up to 20% and reducing average handling time by almost 50%. Third, We continue to evolve AMAZE in strong collaboration with our web-scale partners and industry leaders, including Microsoft and NVIDIA, to accelerate the development of generative AI application and services. To summarize, we believe Amdocs have already established a leading role as the dominant industry technology enabler, capable of helping service providers to fully harness the power of generative AI by simplifying and accelerating the path to adoption. Amdoc's position is evidenced by our active engagement, including several pilots, and close collaboration with several of our large flagship customers, for which we are enabling the important generative use cases of the future. We are laser-focused on delivering measurable business results. Moving to cloud on slide 10. The strong sales momentum of last fiscal year carried in 2Q1. reflecting growing market recognition of our telco industry expertise and ability to provide end-to-end, fully accountable cloud migration paths. During Q1, we won several new deals, including the start of a cloud migration program with a large D1 operator in Canada, and the upgrade of the move to the cloud of a legacy CS9 platform for a leading service provider in Southeast Asia. Additionally, we secured a cloud transformation and managed services agreement with NTT InfraNet, a subsidiary of Japan's NTT Group, under which we will migrate NTT InfraNet's legacy IT system to the cloud and deliver cloud security and operation services using Armdoc's cloud management platform. Moving into digital modernization on slide 11, we further strengthen our existing relationship with North America's leading communication service providers, including continued support of T-Mobile modernization journey to offer exceptional consumer and B2B customer experience. At Comcast, we achieved major migration milestones related to its multi-year B2B digital transformation. In support of charter spectrum services, we extended and expanded our managed service activities under new multi-year agreements, which include the Amdocs charging and mediation solution. And we are working with Altice to expand their mobile sales solution, allowing them to sell services to businesses, customers through mobile, e-commerce, and point-of-sale channels. Our digital expertise also resonating in Europe and the rest of the world, where our product and services are highly relevant. A1 Telecom Austria recently selected Amdoc subscription marketplace to enable easy onboarding integration and modernization of partner services. In Spain, when our first project with Finetwork, we selected Amdoc's AI-based digital brand suite as a service to enable triple-play fiber TV and mobile services. We reached an agreement to embark on a BSS modernization journey of a leading service provider in Central Europe. And in the UAE, we started our collaboration with Etisalat by ENT with a multi-year enterprise factory engagement to accelerate and modernize their entire testing lifecycle across IT and user acceptance testing. Turning to slide 12. We continue to deliver flexible solution service provider needs to launch and capture new revenue modernization opportunities such as fixed wireless access in the 5G standalone area. We are excited that AT&T is leveraging our cutting-edge BSS platform, part of Amdoc CSS Suite, to enable the successful commercial launch of AIA, AT&T's internet air broadband services, that is now available in 59 locations across the country. And we are looking forward to the next successful phase of this program. In Europe, Meiger Telekom, Hungary's leading service provider, elected to deploy Amdoc's policy in charging control function, and we reached an agreement with Magenta Telecom in Austria to upgrade Amdoc's online charging system to support the 5G standalone modernization journey. Additionally, we extended our collaboration with leading service providers in North Africa to enhance their 5G network capabilities with our cloud native policy solution and deliver an improved user experience for their customers. Amdocs was also chosen by Delta Fiber, a leading fiber and cable network operator in the Netherlands. to provide ongoing development support and software maintenance for the monetization engine, empowering them to unlock new opportunities for sales growth. Turning to network automation. We recently announced Amdoc's new end-to-end service orchestration solution, elements of which is already deployed at some customers. Service providers can now harness the power of virtualization, cloud, 5G slicing, and edge technologies to streamline the orchestration of complex new services. The solution also integrates last year acquisition of Tioco service assurance business, which in the first quarter won two deals with leading Western European operators, including the major expansion of Tioco's system to transmission, mobile and co-run domains at one customer, and then upgrade and move to the cloud at the other. Turning to slide 14, let me say a few words about the state of the current operating environment. First, while macro uncertainty and industry pressure persist, the overall operating environment remains mostly unchanged as compared to our initial assumption at the start of the fiscal year. We remain confident in our relatively resilient business model from which we generate highly recurring revenue streams resulting from our support of mission-critical system under long-term engagement, including managed services. Third, we continue to see a rich pipeline of opportunities to help our customers on their multi-year journeys to modernize four cloud-based 5G fixed wireless access and fiber networks. improve digital consumer and B2B experiences. Generative AI, where we believe Amdocs already has dominant position as the industry-leading enabler. Fourth, we believe Amdocs is strongly positioned as the highly relevant and trusted partner to help our customer accelerate efficiency and productivity gains, enabling future long-term cost savings. Wrapping everything together on slide 15. We are reiterating our guidance for constant currency revenue growth of between 1.2% to 5.2% in fiscal 2024, which includes another year of expected healthy double-digit growth in cloud activities. Additionally, Ongoing efforts to achieve our expected pace of profitability improvement this year are yielding results as we implement automation, sophisticated tools, and generative AI capabilities to improve efficiency across our business. Overall, assuming the midpoint of our guidance, we are on track to deliver double-digit, non-gap, diluted earnings per share growth for the fourth straight year in fiscal 2024. With that, Let me turn the call over to Tamar for her remarks.