Amdocs Limited

Thank you for standing by and welcome to the Amdoc's second quarter 2025 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. If your question has been answered and you'd like to remove yourself from the queue, simply press star 11 again. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Matt Smith, Head of Investor Relations. Please go ahead, sir.

Thank you. 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 Amdoxy's 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 6-K. Today's speakers participating on the call with me today are Shuki Shaffer, President and Chief Executive Officer of Amdocs Management Limited, and Tamar Rapaport-Digim, 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 second quarter, and we'll update you on the continued progress that we've made executing against our strategic growth framework, including GenAI and our continued sales momentum in cloud. Shuki will finish by discussing our financial outlook for the full fiscal year 2025, after which Tamar will provide additional details on our second quarter financial performance and forward guidance. As we communicated previously, Shuki and Tamar will compare certain financial metrics on a pro forma basis, which adjusts prior fiscal year 2024 revenue by approximately $600 million to reflect the end of certain low margin non-core business activities, which were substantially already ceased in the first quarter of fiscal 2025. 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, I am pleased to report good results for our fiscal second quarter, credit for which belongs to MDoc's global base of employees who are executing our strategy to deliver the next-gen cloud, digital, and AI-based solution our customer needs to ensure amazing experiences and seamless connectivity for billions of people each day. Among the second quarter financial highlights. Revenue of $1.13 billion was above the midpoint of our guidance and increased by 4% from a year ago in pro forma constant currency. Profitability improved by 10 basis points equationally reflecting ongoing internal efficiency gains. We generate robust free cash flow of $181 million, excluding restructuring-related payments supported by healthy customer cash collection and Non-GAAP earning per share was $1.78 above the guidance range, primarily due to a lower than expected non-GAAP effective tax rate in the quarter. Additionally, we closed the second quarter with a 12-month backlog of $4.17 billion, up by 3.5% per former from a year ago. The healthy increase in 12-month backlog was supported by a strong pipeline to deal conversion and so on on slide seven. Among the highlights, we're striking our relationship with AT&T Cricket Wireless through payment solution, dealer commission, and expedited IT services. Consumer Cellular, a new logo for Amdocs in the U.S., has selected our ConnectX solution to introduce new digital brands. And we benefit from a healthy customer demand for our fiber deployment, orchestration, and data infrastructure management offering. Prong's self-momentum in cloud also continues this quarter. We are working with Microsoft to migrate Amdocs and non-Amdocs application to the Microsoft Azure platform for a leading tier one European operator. And in Philippines, we signed an agreement to support the next phase of PLDT's cloud modernization project. As to our project execution this quarter, we successfully achieved a high number of major milestones for many of our world's largest operations. At AT&T, we are progressing the mainstream to cloud migration using the Amdocs Argenting migration paradigm, which entails migration application and operational ecosystem to operate on the cloud. We also reach notable milestone in Japan, a strategic market for Amdocs, where we deliver an advanced cloud native platform to enable AT&T InfraNet to modernize and migrate its IT operations system to the cloud. This achievement continues our momentum in Japan, where we are now supporting three flagship customers, including JCOM and Paramount, in addition to NTT InfraNet. Rounding out the operation highlights, we delivered another record quarter in managed services, which contributed roughly two-thirds of total revenue. Renewal rate also remained very high in Q2, as we signed new multi-year managed services agreements that expand end of scope of activities with Telia Norway, PDT, and M1 in Singapore. Moving now to slide eight, let me address our multi-pillar growth strategy, which is designed to provide our customer with the innovation and cutting-edge technology they need to accelerate the journey to the cloud, digitize the customer experience for consumer and B2B, monitor investment in next-generation networks, to inline automated complex network ecosystem and simplify and accelerate the adoption of generative AI. Beginning with cloud on slide nine, Qt was another strong quarter of sales momentum and best in cloud project execution. Working with our strategic partner, Microsoft, I'm excited to announce that mDocs was selected to play a critical role in facilitating the migration of both mDocs and non-mDocs applications to the Microsoft Azure platform for a Tier 1 European service provider. Under the Microsoft umbrella, Amdocs is heading the delivery of number of workstreams pivotal to the operator's strategic transition to the cloud-first architecture, which will enhance performance, accelerate innovation, and improve operational efficiency across its markets. Androx has successfully completed the first phase of its cloud modernization project for a leading Philippine services provider, PLDT, and its wireless subsidiary, Smart, migrating PLDT business critical system and legacy application to AWS. We also signed a new agreement to upgrade and migrate PLDT's data platform and additional core system in the next phase. Additionally, Telstra in Australia has engaged Amdocs to consult its segment-specific Amdocs service order management solution to a single cloud platform servicing all segments, which will provide the operator with a faster time to market for new services, greater business agility, and improved customer satisfaction. I believe our ability to win deals and execute projects in the cloud is a testament to our expertise and end-to-end cloud offerings. Moreover, we remain on track to deliver another year of double-digit growth in cloud-related revenue in fiscal 2025. Moving to digital transformation on slide 10. I'm delighted to announce that Consumer Cellular, a US wireless provider, has become the latest in a growing list of customers to select the Amdocs ConnectX cloud native SaaS platform to support the launch of innovative new digital brands. As a new client of Amdocs, we look forward to partnering with Consumer Cellular to help them rapidly create and deploy new plans, achieve operational excellence, and boost customer satisfaction for the roughly 4 million subscribers. Amdocs MarketOne, a SaaS-based and scalable platform that enables service providers to rapidly monetize OTT and digital consumer service experiences, is also generating healthy customer demands. MarketsOne was recently selected by C.K. Hutchinson to equip participating group companies such as Sri, Ireland, and Wintrae in Italy with the ability to grow the digital ecosystem, capture new revenue streams, and deliver enhanced customer experiences. Another of our SaaS platform, mDocs eSIM Cloud, was recently ranked number one in the global eSIM orchestration landscape for the third year running by CounterPoint Research. The accelerated adoption of eSIM globally is creating opportunities for Amdocs. For instance, Amdocs is working with Telcel, the largest mobile operator in Mexico, and the subsidiary of American Mobile, to bring innovative eSIM technology to millions of Telcel users. Turning to slide 11, Amdocs continues to be recognized as the global market leader in overall monetization platforms. Illustrating our domain strengths, Comcast has renewed its multi-year commitment to Amdoc's bill experience as the bill presented platform for its residential and business customers. And we recently modernized N1 Bulgaria's convert charging platform to reduce billing processing times and speed up customer-facing interaction. In Latin America, we signed an agreement with Movistar El Salvador for a full BSS modernization to enhance its current prepaid platform. And Amdocs was recently selected by Botswana Telecommunication to modernize its convert charging and billing platform. Moving to network automation on slide 12. Amdocs has extended its network policy platform agreement at Claro Brazil for multiple consumer line of business. And we have secured multi-year extension of our OSS engagement with Costa Rica Group OISE, reinforcing our long-standing collaboration and commitment. I also would like to highlight recent milestones at PEDT in Philippines, where we partnered with Microsoft to deliver the successful go-live of the Amdocs Customer Engagement Platform. This enterprise B2B platform was seamlessly integrated with Amdocs Intelligent Network Suite to connect customers of its needs directly to the underlying network performance in an automated end-to-end manner. Beyond wireless, Amdocs is well positioned to meet strong demand for fiber deployment, orchestration, and data infrastructure management as global service providers accelerated their fiber expansion investment to launch converged broadband and mobile services offering. Turning to slides 13 and 14. Amdocs top strategic priority is to accelerate the telco industry's adoption of GenAI. Our key technology was recently recognized at NVIDIA's GCC event during CEO Jensen Hong's keynote address, where Amdocs was spotlighted as the key partner in driving the next wave of AI innovation in telecom. This quarter, we continue to evolve the Amdocs Amaze platform in close collaboration with NVIDIA and other GenAI partners. As part of the newly introduced AMAZE platform offerings, we launch our innovating network agents, supporting both network design and deployment, as well as network operation. These agents leverage our deep OSS and mobile network design and deployment expertise coupled with NVIDIA's AI Enterprise, NVIDIA Omniverse, digital twin capabilities, and Amazon SageMaker to support accelerated network design, planning and deployment network troubleshooting and healing. Additionally, We launched Amdocs AI Factory, which is designed to help service providers monetize surging enterprise customer demand for AI-driven infrastructure, such as GPU as a service, LLMs, and vertically tailored applications, enabling them to unlock significant new revenue streams. They're offering Mary's, Amdoc's, and May's platform a genetic experience as a monetization suite with NVIDIA and Dell infrastructure to provide the full ecosystem of capabilities needed to create innovative new services. As to our commercial progress, we are running multiple POCs in several of our flagship customers, many of which are in the relatively mature stage and producing highly compelling results. Adding to the expanding pipeline of opportunity, Amdocs is naturally well-positioned to meet the new wave of demand for the data-related services needed to support Gen AI adoption. Amdocs is already playing an expanding role in supporting Gen AI-related data requirements for several customers, such as AT&T and Globe in the Philippines. As another example, I'm looking to support a T1 operator in Canada, which has a unified customer profile as part of the data and I strategy, creating a single integrated view of each customer across worldwide operations. Now, to address the current operating environment on slide 15. The level of global macroeconomic uncertainty is clearly rising in the recent months. But we believe Amdocs is relatively well-positioned to navigate the present environment due to our unique business model. As a specialty software and service provider to the global communication and media industry, Amdocs is currently directly affected by the announced tariffs. Across our serviceable market of nearly $60 billion, we continue to see a rich and encouraging pipeline which we are working hard to convert to new deals by leveraging our technology leadership, project and operational expertise, and our proven ability to support customer industry consolidation initiatives. Having said that, no company is completely immune to operating environment, and we are of course closely monitoring any indirect impact of macro conditions on us and our customer spending behavior. Bringing it all together, Considering our strong first half performance and our current level of visibility provided by our 12-month backlog, we are iterating the midpoint of our fiscal 2025 performer revenue growth outlook of 2.7% in constant currency, albeit within a tightened range of 1.7% to 3.7%. We are also on track to achieve our target of double-digit expected total share of return for the fifth consecutive year, supported by significantly improved profitability and a robust earning-to-cash conversion. With that, let me turn the call over to Tamar for her remarks.