Amdocs Limited

Good day and thank you for standing by. Welcome to the Amdocs third quarter 2024 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised, today's call is being recorded. I would like to hand the conference over to your speaker today. Matthew Smith, please go ahead.

Thank you, Kevin, and 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 finished with the SEC on form 6K. Participating on the call with me today are Shuki Sheffer, President and Chief Executive Officer of Amdox Management Limited, and Tamar Rapoport-DeGim, Chief Financial and Chief 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 third quarter fiscal 2024, and we'll 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 fall year fiscal 2024, after which Tamar will provide additional details on our third quarter financial performance, our forward guidance, and our continued commitment to ESG. And 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 solid results for our third fiscal quarter and would like to thank our employees globally for the commitment to helping our customer provide seamless connectivity and amazing user experience to billions of end users each day. The key financial highlights of the quarter can be found on slide seven. Future revenue was a record $1.25 billion, up nearly 2% from a year ago in constant currency, and in line with the midpoint of our guidance after adjusting for unfavorable foreign currency movements. Notably, non-GAAP operating margin was 18.6%, was the highest in many years, rising by 80 basis points year over year, and 20 basis points sequentially, as we continue to benefit from our ongoing margin expansion initiative. Non-GAAP earnings per share was $1.62, consistent with the higher end of our expectation, and we ended Q3 with a record-setting 12-month backlog of $4.25 billion, up approximately 3% from a year ago. Demonstrating our confidence in MDoc's unique business model, and the future success of the company, we also increased our pace of buyback activity in Q3, repurchasing approximately $169 million of Amdoc shares. Turning to Q3 operational highlights on slide 8. Demand for Amdoc's cloud solution remained especially strong, highlighted by the significant five-year cloud deal we recently announced with AT&T, and newly signed partnership agreements to support the long-term cloud migration journeys at Telus in Canada and Vodafone Ziggo in the Netherlands. Customer demand was also healthy across our broader strategic domain of digital modernization, 5G and fiber monetization, and network automation, as reflected by significant New Deal awards at AT&T and Charter in the U.S., A1 Telecom in Austria, and PLDT in Globe in the Philippines. As to generative AI, I am happy to announce an important award with a leading global operator, which has chosen to integrate mDocs GenAI telco-specific AMAZE platform in its business operation. From an operational perspective, we deliver consistent execution and a substantial number of deployments, including major project milestone achievements with customers such as AT&T and U.S. Cellular, Vodafone Italy, Vodafone Germany, and SCS, an European satellite communication provider, PDT in the Philippines, and Optus in Australia. Among the highlights, we successfully transitioned Claro Brazil's on-premise infrastructure to Oracle Cloud Infrastructure, or CI, for about 48 million subscribers. demonstrating Amdoc's capability to efficiently manage the type of large-scale customer projects that underpins our high market win rate and the reputation as a dependable partner. Q3 was also a record quarter in managed services, reflecting the ongoing ramp-up mission-critical support activities and new logos and long-standing customers, such as Rogers, where we newly expanded a multi-year engagement is creating a pull-through of our latest cloud-native offering, like enterprise catalog and charging. Now, moving to slide nine, let me add some color around the growth strategy, which to remind you is designed to provide the market-leading innovation and technology our customers need to accelerate the journey to the cloud, digitally transform the customer experience and consumer in B2B, monetize the future market potential of 5B standalone networks, fixed wireless access, and fiber, deliver dynamic connectivity experience by streaming and automation complex network ecosystems, and simplify and accelerate the adoption of generative AI. Starting with cloud on slide 10, market interest and sales momentum for AmpDoc's cloud solution remained strong. With a growing list of service providers choosing us as a primary technology partner, to support the cloud migration in core and surrounding systems alike. For many service providers, cloud migration is a complex, multi-year journey that is still in the early phases. Armdok's cloud strategy is thereof designed to help service providers simplify and accelerate their journey to the cloud by offering an end-to-end suite of unique products and services delivered under a fully accountable cloud operational model. The journey typically begins with Amdoc's cloud consulting and planning expertise, in addition to which we also support product deployment, including Amdoc's latest CES suite or cloud-enabled classic version, the migration of Amdoc's and non-Amdoc's application, including mainframe, cloud-managed services or cloud ops, and the benefits of our intimate partnership with Azure, AWS, and Google Cloud. Furthermore, we continue to enhance our cloud services portfolio with a combination of organic investment and strategic M&A to provide additional benched beachhead from which to accelerate the industry journey to the cloud. A prime example is the last November acquisition of Astadia, which contributed high sophisticated mainstream to cloud migration capabilities that are now supporting the previously announced expansion of our cloud activities in this new domain at AT&T. Among other recently signed deals, Telus in Canada signed a multi-year managed services agreement with Amdocs to migrate its monetization operation to the cloud. And Vodafone Zego in the Netherlands chose Amdocs to modernize and migrate its monetization engines to the public cloud, including both Amdocs and non-Amdocs applications. Moving to digital modernization on slide 11. AT&T has chosen ConnectX, cloud-native SaaS platform powered by AWS, enabling it to quickly launch new digital brands and services for different customer segments. Reflecting healthy market demand, this win adds to a growing list of ConnectX customers, which include Winity in Brazil and Melon in South Africa. Globe in the Philippines has chosen Amdocs to deploy its AI and data platform for the information data hub. The platform hosted on Google Cloud will enable Globe to access real-time business data from various sources and systems and use it to enhance customer experience, optimize operation, and launch personalized services. In Australia, our B2B mDocs configured price quotes CPQ platform deployed together with mDoc Catalog to support its enterprise business while simplifying and accelerating the sales journey for optus agents in australia empowering them to offer an innovative business solution to enterprise smb and wholesale customer faster than ever turning to 5g and fiber monetization on slide 12. n1 telecom austria recently selected amdocs for a multi-year project to consolidate upgrade and modernize its billing charging and catalog solution enabling fast and time-to-market, new revenue growth, operational efficiencies, and improved customer experience. This key project will also support the launch of new services and products across all customer segments, including 5G IoT and other advanced services. Amdoc's next-generation modernization offerings are also proving relevant to telcos and newly emerging fiber operators. that are investing to accelerate the rollout of fiber networks in the U.S. and internationally. Our capabilities include a full range of BSS and OSS offering to support all aspects of the fiber customer journey, including fiber service creation, ordering and activation, billing and customer support, as well as the planning automation of the fiber network rollout itself. Moving to slide 13, I'm delighted to name PLDT in the Philippines as the Southeast Asian service provider that recently selected Amdoc's end-to-end service orchestration solution, our key offering that was financed by our acquisition of Tioco's service assurance business last year. As an important component of PLDT's and OSS's cloud modernization program, Amdoc will deliver unified network inventory, service and network orchestration, and business process automation capabilities operating on the public cloud. Notably, the agreement also includes the customer service solution for case management, which is a component of the Amdoc's customer integration platform we build in partnership with Microsoft. Rounding out my strategic review, I would like to brief you on some exciting advancement in generative AI, as illustrated on slide 14. As you are aware, generative AI has been a top priority for Amdocs. We have progressed our generative AI strategy by leveraging our Amaze platform to deliver generative AI super agents that directly address our customer's most pressing business imperatives, and forging strong collaboration with industry leaders such as Nvidia, Microsoft, and AWS. I'm therefore happy to share today's news that the leading global operator is showing our Maze platform to create new revenue opportunities, drive efficiencies, and reshape customer experience. This important award in partnership with Nvidia demonstrate our commitment to innovation and highlights Amdoc's unique role as one of the leading technology enablers in the telecommunication industry with the power to help service providers fully harness the potential of data and Gen AI to deliver real-world value and savings. For instance, Amdocs is in the heart of helping our customers to accelerate GenAI-driven technology disruption in their call center operation, and to re-imagine the care experience, as we showed in a recent production trial with a North American service provider that resulted in a remarkable 60-plus percent decrease in average call handling times for bill inquiry, achieving 90 percent successful case resolution and almost 100 percent accuracy. We continue to progress our active engagement, running many pilots globally, including with our large flagship customers, to enable important GenAI use cases and smart agent capabilities of the future. Now, moving to slide 15, I would like to comment on our current market and operating position before discussing our fourth quarter outlook. We continue to operate in a challenging industry demand environment, the condition of which are yet to improve. Nonetheless, we continue to see healthy pipeline of opportunities across our strategic areas of focus, and we are positioned to maintain a high market win rate by leveraging our pedigree for innovation and technology, market-leading portfolio, best-in-class execution, and highly talented people. I'm especially pleased with our cloud-related activities, which last year exceeded 20% of total revenue and which is on track for a double-digit growth in fiscal 2024. Our Gen AI strategy is gaining momentum as we begin to make the shift from production pilots to commercial customer awards, and our commitment to operational excellence and ongoing efficiency initiatives is also bearing fruit. position us to achieve our targets for accelerated profitability gains in fiscal 2024. Wrapping everything together on slide 16, we are on track to achieve the midpoint of our guidance for constant currency revenue growth in fiscal 2024. Additionally, we are reiterating the midpoint of our guidance for non-GAAP diluted earnings per share growth of roughly 9% in fiscal 2024. which is within the tightened range of 8.5% to 9.5%. Coupled with our dividend yield of more than 2%, we are positioned to deliver double-digit expected total shareholder return for the fourth year in a row. With that, let me turn the call over to Tamar for her remarks.