Amdocs Limited

Thank you for standing by. Welcome to the Amdocs Limited fourth 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 this session, you'll need to press star 11 on your telephone. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Matthew Smith, head of investor relations. Please go ahead, sir.

Thank you, Jonathan. 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 AMDOCSIS SEC filings, and that we will discuss certain financial information that's 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 6-K. Participating on the call with me today are Shuki Sheffer, President and Chief Executive Officer of Vandox Management Limited, and Tamar Rappaport-Dighiem, 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 fourth quarter and fourth fiscal year 2024, and we'll update you on the continued progress we have 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 fourth fiscal year 2025, after which tomorrow we'll provide additional details on our fourth quarter financial performance and forward guidance. And with that, I'll turn it over to Shuki.

Thank you, Matt, and everyone joining us on the call today. Starting on slide six, Fiscal 2024 was another important year in Endoc's journey, my thanks for which goes to our thousands of employees worldwide who continuously serve our customers with innovative software products and services designed to accelerate the migration and adoption of the cloud, monetize next-generation networks, digitally transform the customer experience, and automate their mission-critical operations. Despite a continuously changing industry demand environment, the year was notable in several respects. We expand activities with new and existing customers, winning important deals with AT&T, T-Mobile, Charter, and Rogers in North America, Vodafone Ziggo in the Netherlands, Excel and PLDT in Southeast Asia, and NTT in Japan. We achieved double-digit growth in clouds, which now accounts for roughly 25% of total revenue, and further extend our industry-leading position in GenAI. Many services delivered another record year. We execute our plan to accelerate profitability, and we return more than 100% of free cash flow back to shareholders for a purchase and dividends. Summarizing our fiscal 2024 financial performance on slide 7, we delivered record revenue of $5 billion up 2.7% from a year ago in constant currency, achieved non-GAAP operating margin of 18.4%, an improvement of 60 basis points year-over-year, and met our commitment to deliver double-digit total sharehold return for the fourth consecutive year in fiscal 2024, reflecting non-GAAP earnings per share growth of 9% plus our dividend yield. As to the fourth quarter, we closed the year with strong sales momentum, which includes several important deal rates. At T-Mobile, we want significant projects to deploy Amdoc's next generation monetization platform under the major multi-year digital transformation program we are supporting. Strong sales momentum continues in the cloud, with key awards at AT&T Infinite in Japan and Vodafone Italy. And we maintain a high renewal rate in managed services, signing expanded multi-year engagement with a Tier 1 operator in Southeast Asia and Telia in Denmark. I am also encouraged by the market's rapid adoption of MDoc SaaS-based platform ConnectX, as the comprehensive solution from MVNOs and MVNDs, and we are making steady progress in generative AI, where we have expanded activities to support T-Mobile's mission to revolutionize the customer experience. Regarding Project 4 execution, Q4 included successful product deployments at AT&T, T-Mobile, 3OK, A1 Bulgaria, PDT in the Philippines, among others. At AT&T, we achieve major production milestones related to the consumer modernization and simplification program, commence the migration of application from mainstream to the cloud under our new five-year agreement, and collaborate with Cricut Wireless to implement a new commission calculation system. Our reputation for consistent execution also extends to our customer industry consolidation strategies. Industry consolidation sometimes creates short-term business uncertainty, but often results in long-term opportunities for Amdocs to bring our post-merger integration and modernization expertise, as we see following Colt's acquisition of Lumen EMEA business last year, and for other U.S. and European customers that are currently progressing consolidation strategies. Now, moving to slide nine. We remain confident in our multi-pillar growth strategy, which is designed to provide our customers with the market-leading innovation and technology they need to accelerate the journey to the cloud, digitally transform the customer experience from consumer and B2B, monetize the future market potential of next-generation networks, deliver dynamic connected experiences by streaming-line automating complex network ecosystems, and to simplify and accelerate adoption of generative AI. Beginning with the cloud. Amdoc's unique ability to support complex multi-year cloud journeys as a primary technology partner continue to drive strong sales momentum in Key4. Amdoc was recently selected to modernize Vodafone Italy's business platform by implementing cloud-ready and cloud-native solution and migrating its business support system to the Microsoft Azure cloud. Structured under an extended five years agreement, this modernization initiative will empower Vodafone Italy to deliver faster, higher quality, and next-generation services and experiences to its customers, enhance operational efficiency, and reduce costs. Additionally, we expanded our relationship with NTT InfraNet in Japan. We selected Amdocs to modernize and migrate core system applications to the cloud under a business transformation and many services agreements that will enable great cost control, increase efficiency, and improve business capabilities. Cloud accounts for roughly 25% of MDoc's total revenue in fiscal 2024. And with this recent award adding to a strong book of business and an attractive pipeline of opportunities, we are positioned for another year of double-digit growth in cloud in fiscal 2025. Moving to digital modernization on slide 11. MVNE.pl is a digital-driven mobile virtual network enabler in Poland that selected MDocs Telco in a box SaaS-based ConnectX solution under a five-year agreement to launch an innovative telecom ecosystem that empowers communities across the country to create and manage their own telecom brands with under-precedent speed and affordability. We are delighted by the rapid adoption of ConnectX, which has positioned Amdocs in the forefront on the MV&E and MV&O market with a growing customer list, including AT&T and RISD, Wireless in the U.S., Winit in Brazil, and Mellon Digital in South Africa. Additionally, Amdocs' aspect bill experience solution was recently chosen by Convera, a global commercial payments leader, to easily simplify the billing experience and improve customer satisfaction. We are excited to be working with Convera With this, the world demonstrates that Amdoc's solution can be applicable for enterprise-scale customers beyond telco when suitable opportunities arise. Turning to monetization on slide 12. Amdocs continue to deliver cutting-edge technology to help service providers monetize their investments in next-generation networks, including wireless, 5G standalone, fixed wireless, access, and fiber. On top of the multi-year digital transformation we are delivering for T-Mobile, Amdoc has been selected for a significant project to deploy our next-generation cloud-native real-time monetization offering, giving T-Mobile customers the freedom to define their buying experiences while delivering complete business flexibility on a single, all-inclusive platform. We also expanded our partnership with Altice SFR, one of France's leading telecom providers, on a five-year deal to transform the mobile and fixed-line B2C billing system onto a single, unified platform. This consolidation will reduce operating costs and improve efficiency while unlocking additional monetization potential and enabling the delivery of a seamless, enhanced customer experience. Moving to network automation on slide 13. Undock is the prime position to support the design and build of a fiber network. investment in the U.S. and globally. Having just introduced our next generation fiber offering, which capitalized on a recent acquisition in this domain, including Procon Consulting in fiscal 2023. Demonstrating our breadth of capabilities, a leading provider of fiber optic internet service in the U.S. recently chose Amdocs to effectively manage and streamline complex fiber rollout, enabling it to accelerate sales, enhance agility, and realize new monetization opportunities in the fiercely competitive fiber-bonded markets. mDoc's growing market recognition in the network domain is also reflected by recent industry awards, including Network Technology Wender of the Year at the 2024 Network as a Service Excellence Awards and the prestigious Orchestration Award at FutureNet Asia 2024 with Amdocs service and network automation is now one two years running. Turning to slide 14, Amdocs continues to extend its position as an industry leader able to help service provider unlock the transformative potential of generative AI. First, our flagship CS24 now embeds CS copilot across Amdocs catalog, monetization, intelligent networking, and many other components of the suite. while several customers are already utilizing such capabilities in production. Second, we have collaborated with NVIDIA to enhance our generative AI platform AMAZE with innovative new agentic capabilities that deliver immersive customer experiences with real-time interaction and visualization. Our first commercial platform awards are also materializing as we successfully progress many global production trials based on AMAZE across several key domains. As we alluded last quarter, ETI Salat by E in the United Arab Emirates is selected to integrate GenAI into its business systems. Leveraging EMAs, this expanded collaboration with ETI Salat opens possibilities for new revenue opportunities, business efficiencies, and improved customer experience for the telecom pillar of ETI Salat. MDocs continues to evolve our data, AI, and generative AI platform with new capabilities designed to meet the needs of the market and to simplify and enable generative AI adoption. The platform is now equipped with custom experience inside CXI, embedded analytics, and a unified generative AI foundation, allowing service provider access to actionable custom experiences insights based on real-time data harnessed from any source. Our data AI and generative AI platform is already rallied by several service providers around the world, including Globe Telecom in the Philippines, which recently selected Amdoc's data intelligence services. Similarly, we recently signed an expanded agreement to support our data one intelligence platform at T-Mobile, which is collaborating with OpenAI to revolutionize customer experience and deliver personalized services with the first-ever AI-enabled intent-driven decision platform. Before addressing our outlook, last quarter we mentioned that we have been proactively evaluating Amdoc's portfolio of products, services, and business line in relation to our strategic investment priorities for fiscal 2025. As a result of this review process, in fiscal year 2025, we have already begun to phase out several low-margin, non-core businesses activities that are becoming commoditized and hold little potential for long-term value addition or profitability enhancement. While Tamar will provide further comment in her remarks, we believe this action will reinforce our level of business visibility including a higher share of revenue for long-term service engagement. This move also expected to sharpen our focus on higher margin strategic priorities like cloud, next generation monetization platform, and generative AI, where we are well-placed to further extend our communication industry leadership with our commitment to innovation. Wrapping everything together on slide 16, let me comment on our outlook for the coming year. We enter fiscal 2025 as an industry leader with a unique competitive position, strong 12-month backlog visibility, and a high win rate. Moreover, we believe Amdocs is well-positioned to monetize healthy pipeline market opportunities while navigating a continuously challenging demand environment. Adjusting for the phase-out of the low-margin non-corrupted activities I just discussed we expect performer revenue growth of between 1% to 4.5% in constant currency in fiscal 2025, including another year of double-digit growth in clouds. As to our profitability, we expect our known gaps operating margin to surpass 21% for the first time in fiscal 2025, a significant milestone and a better reflection of the platform, technology, and IP-based innovation we are delivering across our strategic areas of focus. Combined with robust early to cash conversion, we expect to deliver double-digit expected total shareholder return for the fifth year running in fiscal 2025. Assuming the midpoints of non-GAAP diluted earnings per share outlook of between 6.5% to 10.5% plus our dividend yield. With that, let me turn the call over to Tamar for her remarks.