DOX - Earnings call transcript Q4 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Q4 2020 Amdocs’ Earnings Conference Call. At this time all participants are in a listen only-mode. After the speakers’ presentation there will be question and answer session. [Operator Instructions] It is now my pleasure to introduce Head of Investor Relations, Matt Smith.

Matt Smith

Thank you, operator.

GAAP. would will point that discuss prepared accordance I this that is begin, in we call, certain with we like out to during not Before financial information in The period. its exclude Company’s effect and have that acquisitions significant of this in a management financial disproportionate the internal in effect order uses analysis to items may other information a particular operations investors components the periods. believes of such comparison of and that and management critical the isolating meaningful effects the and to management business analyze Accordingly, enables consistently a Company’s to of results events have prior to

for be For Form use refer reflected reasonable including assurance severity you risks assumptions, that information are the Also, information effects includes and X-K. year including XX, with the no involve annual with in and These will to may the and the on forward-looking results fiscal we non-GAAP the may and global we reconciliations forward-looking XX, September our earnings statements on based today’s upon financial filings furnished release, other in which the this update February Commission although today expectations May third Company’s statements will XXXX, can in the COVID-XX at call uncertainties statements XXXX on as more measures, XXXX. fiscal of on XX, quarter the in economic Amdocs the XX-F regarding are at constitutes quarter earnings we any XXXX, elect for report economy, our general some to for XX, the give on believe August XX, such expectations conditions, that filed and fiscal the quarter that pandemic but fiscal those limited its to cause second XXXX, our not Securities obtained also be on Such risks the fiscal in anticipated. point of and Form length that from deviations measures, and of impact on of first Form statements, ended forward-looking SEC these to, with such of future or XXXX be Exchange of XXXX, December not release and material. differ our duration risks will XXXX greater furnished discussed include, X-K these our of future. the

the Tamar Amdocs Company Operating and Shuky Participating However, today Rapaport-Dagim, disclaims call and are on President specifically with Management Chief so. Sheffer, Limited; joint Financial do of Officer Executive obligation me any and to the Chief Officer.

Finally, a website Relations Shuky. with that, the of prepared today’s of Amdocs’ Investor I it posted following remarks be over the earnings this call. section of copy turn conclusion to And will will on

Shuky Sheffer

financial I fiscal X.X% backlog, the pandemic, million only reflected we the best-ever year-over-year the pleased to long-term outlook growth everyone joining delivered sequentially $XXX strategic which revenue our wrap highlights, earnings pace summary fourth for faster growing see quarterly with diluted in for acceleration global up operating cash have quick collections. I results, afternoon accelerate to growth sequential our quarter which and I’m profitability call maintained Matt, around execution, the operating to are accelerated achieved XXXX, Amid the important share and you, and that to our include per for R&D in investments some we also expectation growth. record a as cloud. that, which in performance XX-month ahead. in sales our reviewing Thank fourth additional for year stable of non-GAAP report and taken our quarter our earnings to momentum consistent fiscal our Among to want today. good pleased record I quarter full-year fourth to we us address plan With begin our steps after revenue by including XG and quarter. return will the grew of

the as of both which per provided guidance X% share while in earnings X% revenue reported, As the revised to was end up fiscal grew non-GAAP XXXX, QX. we were full higher the year year-over-year, at of

generate extraordinary in agreements. three quarters Managed earnings to model model normalized $XXX recurring solid our Our free A business strength million cash our fiscal we modest proud financial made from grateful customer streams. and million XXXX, their and which year. ability the accounted revenues to customers initial portion by professionalism our under to ongoing visibility recurring pandemic. our throughout is engagements of proof generate growth was our revenue revenue revenue commitment which to our XXXX, XXXX, possible $XXX employees multiyear further Overall, in product-led of to fiscal meet base pandemic which during commitments global testament the I’m fiscal and services large their whom I’m a target of These technology roughly flows flow of Services exceeded of provided for the our and performance total and talented of a stable in with the highly ability our for by for

as time. we me Additionally, ensure in needs essential world to continued difficult services this our let in customers thank partner for again the trust their the Amdocs

life end-to-end our strategic customer platform activity of of and activities. positive Beginning region, me open a automate regional Across being supported the finished are business BSS M&A. regarding included we America. which where with like growth modular let year, We broader customer North provide and the implemented Now AT&T to at OSS and our business cycle. Comcast from the streamline contribution a some color better-than-expected scale

in the with North of last to are supportive strategic media, that Service domain. dynamics started America, in the we market XG program consumer favorable and growth. mobility modernize outlook providers regional quarter, modernization, continuing cloud the where are AT&T, Regarding digital investments including Amdocs the said in

We are of encouraged momentum by area. in positive signs this

XG providers around Open innovative including to computing, T-Mobile has reality, mutual remote AT&T vehicle-to-vehicle XG This strategic Labs, partners the news IoT In new our hard monetize partnership, are our postpaid, XG monetization service is solution of focused XG, helping and selected continue with advancements gaming, the on AT&T from Innovation domain demonstrate collaborating strategic working to cloud, recent XG and founding as Amdocs more. of other support media, to customer capabilities mobile of for to accelerate wave and highlights of ability today’s communication, and XG with respect our we much T-Mobile’s which launch by to XG experiences. in enterprise new more. sales one future. that the demonstrated the quickly which of As services, and is BXB, exciting XG collaborating T-Mobile, bring we network the and deleveraged experience At edge Openet acquisition way

corporate have and XXXX accelerate proven we new customers leader the and development American fiscal desire is transformation very expertise, verticals. its across digital best a project of for services in transformation partner their teaming and the and to customer and forward Finally, this we frame capabilities This different methodologies experience-driven we projektXXX, have a financial you, a delivery deleverages design, with Combined with group, won North to as the experience banking a of been to of acquired digital to we notable look experience employees. with Amdocs’ consultancy operation. where selected remind which

of wins Germany ongoing and our region’s Europe. We providers project quarter, delivered some largest deal includes like in Spain. which new to the with best-ever now activity Moving service Vodafone

U.K. Services and at content During via the ready Sky and and X,XXX servicing and its provisioning U.K. a AGI significant technology AWS converged high This includes for services of at under quarter cloud. first maintained provide to affiliates. was deal extended Media, media. XG Virgin award into complex UHD content win Israel’s QX, process Virgin that deal Bulgaria, processing European also hours agreement Media’s Sky charging a platform we successfully VOD whereby Managed signing selected content project and Sky was project our completed Vubiquity’s provide AX to And of busy in XK licensing multiyear Vubiquity rate with transformation a digital over IP a to in partnership a Vubiquity multiyear Cellcom cloud-based the

the the customer healthy expanding against Regarding ahead, expected executing we further our by throughout and our sustain year growth Europe in region. footprint to backlog

sequential Turning in technology slightly South catalog Demonstrating Korea. we the world, successfully leadership rest Corporation drag to our in deployed the improved fourth quarter. XG, of X in the for KT

Amdoc’s In innovation for to one services and XG the to accelerate first end to added, reached customer a and frequent in broader Plus, telecom business its South selected bundles. Amdocs’ India’s new multiyear modern mobile Airtel fastest-growing agreement customers Services, LGU Managed of Enabling digital has with Korea, benefit new plays and cloud-native X more in of migrate system. to we XG services. providers Additionally, the solution catalog launch

data multiyear existing our include extended Vivo, expansion Telefónica scope Amdocs’ with Brazil, solutions. to the of in While agreement an management

rest in activity the trends of in extended orientation Latin comments, world, we are healthy I likely quarter. fourth market Asia, America across macro challenges in ahead, summarize Southeast in believe the the activities year of ongoing the entire to project and quarterly the To customer region. my the regional fluctuate, Regarding reflecting fiscal our leadership

One the customers reflect of time wins approaching focusing invests ownership the project spending. innovation, bringing cloud, reduce we to journey such are is their in increasing domain and agility, the the many point, to domain where strategic to to today. meet the speed is Our provider realize business industry demand unique a of fast tipping telecom which as are service our the cost of needed that innovation is believe we market

the industry Amdocs providers the communication to is services uniquely with than the expertise need a cloud. very highly experience heart our customer As provider of of XXX the the technology and is more Amdocs’ accelerate environment and which model, us to transform of service trusted customer way service differentiated journey by an they Providing intimate BSS/OSS product-led work. understanding worldwide. position in to we us have communication the partner, the

already ready include journey corporate capabilities. as every migration to in consultancy, innovation to with customer These Our Amdocs and development best-in-class Amdocs approach CICD customers’ data and shorten new cloud-native and has legacy supporting tailored fresh are bring the constantly agility services, platform, drive BSS/OSS - teams using our BSS/OSS a made as products carried ops enhance well and that application services we and time and offer we are range value. which dev to cloud. investing and cloud-native modernization, of the application for customer services a non-Amdocs

Additionally, move up Amdocs multiyear packaged XG. to in operation, AT&T’s open market accountability the which to [indiscernible] The next-generation service addition cloud as a cloud hybrid offer offering cloud operations selection Amdocs monetizing in including designed agreement. for by to speed of is cloud of customer its optimized secure well-proven solution, end-to-end and is charging demonstrated operation, cloud under the the

in Spain existing Amdocs Additionally, Vodafone newest on to products, customers Globe Germany. other or modernize and chosen many new are Telecom cloud-native including already

with deliver wide integrated services see to to cloud Amdocs’ Looking coming a an promote which we as addressable a help we accelerate time and BSS customers. grow a capabilities. Google closely of and We we modernize best-in-class market ahead, in Cloud utilizing multiyear for new Over market we To service be This providing happy accelerate dollars. firms cloud other cloud-native AWS. world cloud opportunities Azure all believe will with as will offering providers be formulate the to and future migrate agreement Microsoft are well services range implemented to billions strategy forward premium the and potential the build AWS the look for help current to to working expanded are that pipeline strategies. to Amdocs’ and their strategic gel announce gradually ensure To today and and Amdocs’ growth, the like system, of customers with of years. cloud jointly

a One move focus $XXX divesting and who divestiture our OpenMarket primary agreement while starting with of including As Equity is Those followed initiatives. MMS messaging Infobip With being are the a a cash of core another global OpenMarket other which this messaging part we for million subsidiary the Partner nonstrategic to domains, for institutional today investor. and X-way know strategic you our to on on Amdocs a SMS, growth leading other and an of for company X-way strategic as is mobile application-to-person assets Amdocs solution enterprises transaction, may and provider of laser-focused solution.

the expect majority return of divestiture OpenMarket quarterly to our the program. the shareholders to share of way next to repurchase complete proceeds and plan months, within of We the by we net few

finally our the year Turning outlook ahead. to for

currency rate time will effects our a the fiscal we the you spread remind regarding constant said expect in remain me the twice uncertainty severity X.X% Let last that that, in of the year. more accelerate than which we to revenue growth economy COVID-XX on and of global quite of in pandemic its great is to the Having remains. XXXX, and adverse X.X%

of the we in our positioned visibility supported the by as deliver our domains. record as outlook XX-months confidence well see we pipeline expanding are Our across expected growth total of Moreover, lease shareholder to remarks. the backlog almost strategic of per our X% in turn earnings her let fiscal With to yield. growth dividend that, XX% call share to XXXX, return for including X%, non-GAAP me Tamar plus the

Tamar Rapaport-Dagim

from positive included in Fourth and of quarter $XX you, fourth quarter of above guidance Openet, quarter from of billion a our our On guidance for third $X.XX fiscal of the revenue $X Thank foreign fiscal recent the fluctuations of to $X.XX currency to currency slightly acquisition midpoint performance was partial reported billion yet million not After foreign quarter compared included approximately a range. was to XXXX. of relative of approximately a billion. the Shuky. expectations of assumptions positive impact revenue $X.XX the impact basis, million adjusting our which

Our other includes XX-year was XX.X%, the to full a short-term long-term issuing operating fourth and target $X profitability fluctuations. the will was non-GAAP despite XX.X%, expense XX.X% in interest our the million bond fiscal Below above QX. we protect expense the non-GAAP and currency challenges. guidance quarter consistent for to which The related midpoint line, our that of of in interest impact net mix and COVID-XX-related with margin operating foreign of the borrowing range quarter interest of

was few continue expect currency range that in to less expense was to basis. million GAAP fluctuations was million, QX. guidance, quarterly annual $X.XX. of midpoint EPS of in fourth of in with in of flow dollars interest lines QX, For range Diluted was $XXX our Normalized fiscal $XX impact our our effective approximately to cash free the was XX% net Diluted non-GAAP of Free guidance and tax cash quarter for above will below foreign our GAAP of XX%. of was range in range other we flow comprised cash on of and expenditures $XXX million fiscal $X.XX the fourth EPS capital purposes, Consistent our to rate $X.XX guidance target in above quarter. the quarter, million This $X.XX a the non-GAAP X.X% $X.XX. fourth fiscal million $XXX other. the operations net $X.XX forward-looking

relating We to unbilled and sequential compared third DSO a customers. immaterial to deferred revenue the you narrowed fluctuate revenue we million narrowed and receivables of total transformation may table normalized primarily The of differences $X remind for in the flow an in a in to for and EBIT the as cash DSO exceeded year reported XXXX, XXXX, are gap flow the $XX income timing million net an For of reconciliation the was release decrease by refer quarter Relative non-GAAP due $XXX provided initial for year contract-specific the free of of the a are QX, our strong and of down total reflecting year-over-year change Please full this target compared collection that long-term. to fiscal the gap earnings two explanation receivable between XXX% QX $XXX fiscal by in in and prior million. delivering this from relative between fiscal period. short free million cash quarter-to-quarter. past quarter our rate in second and milestones by fiscal XX-days to million, ago, Changes XX-days XX-days the increased reflected normalized by a projects our trade in to With half. year to the better-than-expected quarter. to gap conversion the

Moving revenue receivables quarter-to-quarter, in-line expect total be with to normal from fluctuate and forward, should you to deferred [indiscernible].

mainly up Moving of record from is a existing awards XX-months new dollars XX-month year-over-year few growth billion in number. this and in quarter the sequential This on, Openet a end prior million record-high backlog logos dozen our $X.XX equivalent of benefit of of the result backlog quarter, X.X%. was of at roughly a new of backlog fourth and sequentially to a and the across million the growth end $XXX

another a and pleased backlog over good visibility our a year. model quarter new expansion continued the supporting to As and forward-looking our entering see growing of roughly to continues existing report managed serve believe we revenue, customers. it our XX-month which record Services I’m we renewal reminder, transformation of pleased performance within for comprise activities are This revenue. as Managed reflects total arrangements, XX% of high XX% fiscal indicator the of the to adoption rates, leading

$XXX fiscal cash million, the borrowings includes fourth quarter approximately of of Our the was at balance end aggregate XXX.

balance acquisition have of returning for to Openet remain our and a right million ample $XXX of the that September to ongoing liquidity we believe arise. our Our fund with comfortable business balance net the We sheet and roughly cash. opportunities XX capacity while growth sheet support strategic when reflects consideration in investments needs, the

our Additionally, we maintaining to investment-grade credit rating. committed are

$XX fiscal million our shares of we fourth current the During authorization. repurchased our ordinary quarter, under

September of repurchases forward. going date, had will As for XX, million the of no share roughly stated authorized expiration $XXX discretion capacity with which execute we Company’s at we

possible but future evaluate to as the outlook. impacted business to the Now revenue macroeconomic today, on cannot the turning guidance customers prevailing you scenarios predict we based The remains and be continue our be modality our what elevated. may surrounding magnitude investment. of have reflects that and and of materially the midpoint to all strategic business likely pace of of outcomes remind their level pandemic we information we COVID-XX and duration the we outlook The our most consider priorities

still outlook OpenMarket’s excludes per GAAP guidance is remarks share pro XXXX. XXXX the year Where applicable includes fiscal provide full and QX revenue which guidance, fiscal The fiscal that our will closed. and yet for update point, earnings the of $X.XXX the in our forma outlook. first not year few range we XXXX on OpenMarket is full-year additional transaction the billion. in With close an following as divestiture XXXX fiscal will of OpenMarket to XXXX to within for within months, said, billion revenue be we expected next the to $X.XXX our quarter As which, of expect

fluctuations. revenue sequential Our immaterial an currency from impact QX foreign anticipates guidance

growth currency X.X% range the positive expect deliver we Regarding fluctuations as X% roughly year-over-year the growth of with of on provide X.X reported. to includes the the to from growth our activity expect year-over-year XXXX, approximately of in you full year additional an outlook the projections, year. the This revenue from to To and accelerated rate points of foreign X% to in fiscal point year-over-year in impact we contribute color half of growth Openet. of second fiscal ramp-up customer the acceleration

to year-over-year. We are of a our regions. revenue across constant X.X% full is end of We geographical of to with fiscal year X anticipate our in with XX.X% we key unchanged both operating higher currency XX.X% be expected roughly XXXX. range fact to margins the the over basis, consistent to of pleased all also the X.X% an deliver non-GAAP range to target On expect be total the growth generated

growth As focused maintaining to within consistent operate future pandemic, while R&D to increasing and we remain continue support the our our the we strategy. profitability environment investments of protecting on execution ongoing

non-GAAP XX%. rate diluted above to of of effective of tax the first We $X.XX XX% to quarter expect the be $X.XX. the the within be annual to high end slightly range a QX, With net expect respect we to to fiscal EPS range

guidance the share of depend activity at quarter non-GAAP We quarter million the an share levels excluded future first will the buyback fiscal fiscal of roughly on activity count XXX during of incorporates incremental EPS average conditions. expected first impact Our market shares.

of year, expect non-GAAP deliver year-over-year. to growth fiscal full the diluted to X% X% For we EPS

to and XX% used be the repurchase non-GAAP the of the to fiscal our given pro our in achieve net to forma growth per a earnings basis, be market to open earnings the diluted within the the The rate revenue assuming expect quarters majority effect Openet share for On per of range we remaining diluted expected tax in non-GAAP Amdocs’ annual the year fiscal of fiscal We and accretive share accelerate full thereafter. XXXX, to non-GAAP target fiscal XXXX. expect full impact program of same the the our of year are proceeds XX% year effective post share on XXXX is in divestiture, closing. neutral

flow XXX% is to We equivalent expect income. fiscal non-GAAP to a net of free $XXX XXXX our roughly which conversion for expectations normalized cash approximately rate relative of for million

free expenditures expect cash We reported Israel campus anticipated fiscal XXXX $XXX and year in development other new flow of items. of for approximately cash our includes relation flow Reported free to in $XXX million, our million.

additional a we be for fiscal expect XXXX capital point, As companies. expenditure peak year an new to year the of

of cash expect of assess financial share prevailing fiscal we to markets of the normalized flow Regarding fiscal carefully of our in the deployment our in in form to industry to return status allocation majority repurchases, the and conditions. capital XXXX, shareholders will we plans, dividend, the capital pandemic, for having XXXX. free Moreover, the regard outlook M&A, our COVID-XX the

into happy increase dividend current Finally, per on yield to are approved can about operator, our to in dilutive in quarterly a the would shareholder and which meeting it the in rate in we EPS non-GAAP equate yield meeting growth $X.XX or turn our shareholders consideration, we is approved of it almost of share return the XX% dividend to take announce share increase per XX% If at are we to that, Taking XXXX. annual in January. to the some to X.X% pleased With of your the expect quarter, plus January, proposed price the questions. fiscal dividend annual total new by we yield. midpoint, back

Operator

of with Thank you. the comes Instructions] Power [Operator first Our question from Baird. line Will

William Power

the to great that. Maybe is just Thanks on revenue my great. accelerated expectation the growth see for year. And question taking first next for Okay, questions.

efforts. could why seeing talk to I some might And of As if caution lower just you of pieces potential end. guidance the trends you are versus the broadly wonder the that transformation, are what providers, service the you about look end at you driving and growth the of is those from the now lead digital towards that higher revenue get areas that could what

Shuky Sheffer

is Shuky. actually, of the further demand three reason Hi. areas. in a different growth, for It lot The we see

First you data transformation. as one, mentioned,

I COVID-XX this. think accelerate

we the pretty whole the with change be consumer the to engagement across all to geographies. experience. it best is much completely way People and see So consistent want with digitized

by And is the in is The third capabilities, process Everyone new the one we is second XG America. Openet migration cloud. with required, then already XG. systems, definitely accelerating. something is betting that, mentioned the jump the either XG. script, the obviously, North - in the is Dominate This one to the we of moving best cloud. requires our policy to acquisition, the monetization is are that or the All in charging believe customers the as process product have and new the the market. I within

with jump whole that And journey will system to We moving ourselves we end trend system the to be we and of very Obviously, the with cloud the contributor are and to announced the accelerated partnership for a going of it as the system, this a to this coming today. every offering AWS see with robust cloud. main believe accelerate. to system, to cloud legacy we new a our is both

William Power

just that my nice it Okay. already follow-up, coming And is back seems maybe generating Openet, to for some like opportunities.

does the going. fiscal growth win? integration look are of now for that closed there. as what been any couple you hearing And revenue How just love to XXXX, is contribution color hear you that from more include is that of I customers it X.X% kind would Just for months. the AT&T new carrier at So a

Shuky Sheffer

want abate I Openet, value the First, possibly XG policy - And the solution, are cloud-native that we get policy. and think if for together need your with with both to to your network, that and move system. to you you everyone actually a to XG charging to bringing charging

nice are So QX. including a We announced to with product. traction. see for question, immediate is regions one. We all But very outlook, all We PMI. which We had of answer some AT&T it, largest of it We across of in your demand. the demand lot of AT&T, type the regarding pleased is And we announced is in QX. see we the probably yes, win ongoing rate yes. see a in the this very

able customers to product, combination are to bring the a a the of with be incumbency of if the to great customer across or very solution and We successful. prove all end world, Openet great they

William Power

Okay, great. Thank you.

Operator

Oppenheimer. question next And with the Thank Eyal Shaul comes from you. line of your

Shaul Eyal

Thank you, Tamar Shuky, Matt. record congrats milestones. some wanted also you specifically on have and Congrats to Shuky, ask announced. afternoon contracts the also achieving I AT&T. on good many about

largest sales is some customer, Do at that else you portfolio. with are there your divisions think expanding currently Given its under you product can you go with services penetrate group or approach where AT&T, your or not can service? further

Shuky Sheffer

network I all, operating the domain. domains, domain, UVerse, AT&T. data mean, we in the consumer in many obviously, are of domain, First the in broadband, the Mexico, in DIRECTV, AT&T

media, obviously, media. activity word with the So are on in our we

we mobility and new buying AT&T the as best say, we is consumer I would think the think project we reported for but last transformation, see This domain, opportunities progress us. we started our I So is, all I quarter, main, in is AT&T. strategic products. a that see

are from policy use on Openet. with to quarter, announcement it, solution and going they this of charging the top also Now our

the you to If hear be XG this pushing we looks and AT&T very new AT&T. is obviously, them very engine happy the can announcement, with in it And new XG mobility AT&T the main to to solution support offering. growth like successful general help are for in

Shaul Eyal

Shuky, Tamar when even Openet factor when contribution out, quarterly at look when Got foreign we or revenues, the is, it. and my we And we exclude the follow-up exchange.

So did revenues grow sequentially?

Tamar Rapaport-Dagim

midpoint those reasons. guidance, Yes, of ahead of And absent was absolutely, even absolutely. the it

the midpoint this while of and was taking Openet the positive were of we taking FX, out guidance contributing range. out So factor even impact nicely of ahead

Shuky Sheffer

after another segmental quarter us. as we And quarter, we growth. is return one This to record said, for

Tamar Rapaport-Dagim

the $XX million and Openet, FX and Openet came FX simple, it without sequentially without to So make top. on the

Shaul Eyal

Congrats mile on stones. again those Understood. job. Good

Tamar Rapaport-Dagim

Shaul. Thanks

Shuky Sheffer

Thank you.

Operator

And you. of Thank Shirvaikar the our next comes with line from Ashwin question Citi.

Ashwin Shirvaikar

good Tamar. sort of more get you and to ratcheting some want catch-up of have solidly see. a to trends. it I the The you clarification. the on X% a or earlier type up multiyear mid-single to what any outlook this Congratulations the bookings growth is words, year some rate quarter. I in is X% on Are of that other seen from sort slowdown based hi strength guess you be on that won based to there in range. permanently Shuky, Hi Is trends, to these of which seem growth, of

Tamar Rapaport-Dagim

know for just multi I Hi sense catch-up that of not we winning a deals such and the you the think is it in in deliver not signing call you are if quarters, don’t as license it. these deals most fundamental of can is and now recognize more Ashwin, fitting that of of that a revenue is multiyear. some years, It change pace our

very to is see we regions, this So are which important. momentum across very pleased

now cloud, to look healthier base are course, the tipping on, communication much fact of and the is of bit growth service that Now to rerate accelerating. feel we is it definitely The it well, are we can for And X%-ish is When growth say, is the of is multiyear revenue it that basis just at, growth are journey consistent now look that looking there. that outlook, into But seeing the opportunity. performing I provider given to we example, beginning. have growth on we on them point when we we think multiple many a the the cloud premature a the of the drivers the we the environment drivers range.

some has now. product cloud years for portfolio mated been So

helping the R&D are applications means incumbency they them operations, legacy the is the that cloud that, to addressable that that goes we have and also continuing all to providers in pedigree to tap do we have everything a including service move that by into. just and So shop of the native, cloud, opportunity out including definition market cloud way the the it see the with in in of we that course, helping are is acceleration dollars of to great starting billions opportunities

is is then between the way in market that lagging coming think American have Korea, North accelerate drivers in And XG COVID speak. I probably cloud we transformation, So more digital mature we it later of APAC. ahead there South curve that, journey combination that Europe helping momentum as is a on, to growth as with Shuky is and we like see and in accelerating the the the mentioned, that

multiyear firepower think growth. I there is enough So for

to a specific to soon maybe too guiding do. bit Now numbers,

Ashwin Shirvaikar

Got it. we color market. that consolidation have helpful. industry obviously, American number the North a very seen years, is then And for No, related uncertainty of in

with T-Mobile’s with there the with Sprint, merger I you of getting - Can opportunity you perhaps mean, or granularity regards not are that? there for incremental to are - getting I discuss know the but opportunities clarity, completed is you there. is what sort color With

Shuky Sheffer

and discussed We we to metro to the mobile today, before, obviously, are, to prior system the merger. for using as we to premerger ready Magenta help So active run be were the sprint, to obviously, also T-Mobile very used what day of net activity new and one. is the our get T-Mobile support brand and

we enjoy think, I the So as with far, mentioned successful it strategic And before, a partnership very a very looks, transition. new T-Mobile. I was it

the clarified weeks ago couple postpaid in we obviously, think a continue grow in in is the strategic they grow this their to in they - the have to which continue main product and I the them to of the to domain want earnings in services goals obviously, areas, to support all as go right continue BXB.

the building hard are pushing are media definitely, also domain. XG the the activity as in having they to very active We we And Also, there. network. are

discussion about good for what them. next with is have We them

I But future. the more you progress. them productive ongoing will happy for we what for engagement them be right are very them, make we have before, with and will with strategic and be the about when a We to said relationship enjoying report as

Ashwin Shirvaikar

you. Thank

Operator

Stifel. our line Thank of next the Tom question from Roderick with comes you. And

Thomas Roderick

my Hi about you very hi Tamar, cloud I partnership. questions, the to clearly you. journey I for Matt. Shuky, growth great to taking love hi Thank the bit more from driver. mean hear little a a potential is would her AWS

their your talk see for little data just love the trying hear the would to reasons, But just it bit be of top cloud is into today finally a a to to how modernize. sort are starting of Which whether of quickly cloud-based go-to-market move the that sort Xs, about you - Tier market variety opportunity or optimized this run about of to with think Can it to are products AWS. think then X sort to going some you to you We of embrace or telcos on on Tier more, partnership. moving how of And that. is aspect it whether might that either of is partnership.

Shuky Sheffer

Okay.

a world incumbency. move shape looking customer every the that So And great some in in Amdocs a of the we or Amdocs cloud. to obviously it is combination to form is I think have that

at market time, mentioned same Tamara native. together this of to migration this how a every new is for tools before, I so customer to the And provider, of bring path probably of using. and the the can far, in engines. end the he with And talking especially is which value. platform see and is As that together partnership, our are the customers Obviously, in looking cloud service portfolio regardless capabilities, developed us AWS, we cloud believe all in both the leader biggest we

leveraging cloud. we After cases, most next-generation between said, I now the migration a that market. the off-premise the the flow start that Managed is As what can which to And all obviously, is holistic to operation value cloud on we in unique go-to-market consultancy, do and of includes of with cloud operation, operation, hybrid cloud, the understanding capabilities very AWS call we proposition used actually Services and on-premise.

definitely both this is it. accelerate the partnership between there we say think to companies I I taking can and the engagement teams, we when can think that that actually So believe a cloud, the great - with industry I

Thomas Roderick

interesting. really juggling we here. And Looks few are apologies, a then things Outstanding. Yes. over

this on you about the interesting. talked little more But Comcast So seems section. the have arrangement Q&A may very a bit

have making with You been I they have headway - been know customer. great a time long

is On stack? this and the incremental their more BSS updating recently, commercial great Can a you of seems part have been OSS as making it some and little about talk headway. new of more side what bit you like

Shuky Sheffer

in operating Comcast several are in We domains today.

We are offering Comcast -- mobile.

platform So nicely which there, is there is for growing very leverage Comcast. on

domain. the platform deploy Comcast. is major is we happy The nationwide. there OSS also operating BXB starting one the to that very whole in this And domain. next-generation them are the obviously in a the We this are and discussed with actually we building are we for that in enterprise in supporting And growth domain, Comcast engine domain quarter network

Thomas Roderick

Excellent. Tamar, just really quick for you.

I you think you backlog quarter contribution sure not revenue call those? I well. this and wrote to mentioned down in but then it the the the it quite the quarter for contribution reveal properly. Did already, Openet just I’m on

Tamar Rapaport-Dagim

So dollars. about within roughly Openet’s for numbers of in $XX that, QX and a contribution millions since the of have million, was that dozens two months And is we closing. few

and the both So you from existing to even high it out Openet take backlog, been if awards, logos. new the extremely in is deal contribution new

Thomas Roderick

Wonderful. appreciate it. Thank Really you, well I helpful.

Tamar Rapaport-Dagim

you. Thank

Operator

Thank you.

from with question next Our JPMorgan. comes of the line Ader Jackson

Jackson Ader

for guys. thanks questions taking my Great,

think the for How we AT&T about and the these also on Is XG How types price with of should it a about think the one of wins. gamers this one should subscriber are XG is one you they who First of AT&T these services. to win revenue then pie uses recognition new where the for similar Openet. guys. expanding time subscriber, an that someone

Tamar Rapaport-Dagim

sell a on Openet base, made solution opportunity to was think So from capabilities holistic the customers, that. including when we bit of stand-alone our pure a Openet, we play around customer and revenue to additional come professional our they maintenance a about product a mainly more When the of basis of taking license, more can much we where services.

the bigger to the think through itself product the the the our around And us way behalf as It services then for the to full systems, this so, of the will should open is capabilities. kinds But time, do pricing, share the subscriber opportunity that, the on will operations would wallet customer. yes, opportunity could be by be about you and deployment services. over the there license enables. the a spend volume migration system accordingly, license they our our existing could from revenue. we enjoy all whole with capacity the to of of something of take of be it So that itself, customers to is like all much around And

deal, full. the the of on the intent we revenue in recognition type again, So

Jackson Ader

the Great. Okay. similar maybe revenue to Amdocs OpenMarket divestiture. Tam, just how contribute just And clarifying Again, question fiscal much XXXX. then to a in did that on

as get next we sense for can So well. a year

Tamar Rapaport-Dagim

the So line the on that growth earnings we out same that if for on you, to outlook both for pro in we and XXXX in support top we it take simple make and very share. OpenMarket we XXXX, per clear made XXXX, a life forma basis, provided can

from contributed But of think we we around sold in point once OpenMarket that In to our laser-focused our of market cetera, OpenMarket, noncore the us. a of et the Obviously, expectations. that most this a based was a revenue think terms one for roughly view and is XG, of years, pricing. asset that while it being great one being will sense. the this Again, define cloud, revenue is growth and strategy time context that asset, we good is of current rose important is define the and whole Amdocs focus XX-months. the on many make for the our we forward And thing open our I on

Jackson Ader

you. thanks. Thank for Okay. simplicities thanks the

Tamar Rapaport-Dagim

Thanks.

Operator

of comes Tal line America. Liani from Our of Bank the next with question

Tal Liani

to that margins. want ask coming this I are and quarter. see margins guys. Hey quarter next question I a down on

reasons going kind So you the the And do first, outlook. then margin the see for slight I is versus street. margins the pressure want to understand what How forward. of

Tamar Rapaport-Dagim

referring What margin you are to?

Tal Liani

margin. Operating Operating margin.

Tamar Rapaport-Dagim

messages, went down, think, XX.X% up XXXX. at much attention I that not be points the margins, higher changes should too XX.X% XX.X% as into, in something look it margin up we from with along, we think a XX of basis sequentially. on end of believe So the to to we the taking we overarching all the look And said XX.X% we

which in R&D, protecting And otherwise. that focus means to account margins. to continue more on efficiencies of that, going is is while We on investing that be

definitely maintain very it feeling actually of are not. going see with we Don’t So to ability the these margins. comfortable down, kind

Tal Liani

new there XG spoke structural you time is, heading and Got it. from year. about XX%. wasn’t have XG coming with could into and what that pressure my XX%, at deals margin spreadsheet that next so but Maybe this rollouts deals announced. Street or XX.X%. the margin other some new and The was of you cycle good, the roughly a the any gross deals you Is was question see

Tamar Rapaport-Dagim

think structural there are is change. margin Yes, don’t you a I No. right.

more deployment Our really XX%. first operating of seeing of more deals on And of time margin more I see combination any we we more a don’t recurring kind are penetration always or offering look mature But way is and country gross new said, how have That gross it. or of revenue. generalizing margin at of a is the a in new stand-alone. of is margin ramp-up we it. customer, the focused are logo versus usually changes we It as structural

the don’t there any margins. think on we is per So that anything unique XG, should the in pressure that put se, domain

Tal Liani

it. Got

next general my question Tamar, very question. or for So maybe a is it is Shuky

et When all growth for cetera. have some targets benefiting and could look do are How You and they the this times. the from is growth after P&L, on spending sustainable think after. big going X% initiatives things forward done what for your customers And get buying in growth you you the XXXX, the and last the like you going as spending growth you look are quarter into still once only cutting companies are look you into longer the were we start recovery in years, no the year-over-year improves two of X.X%. new opportunities great et businesses, cetera, only year, next is

Tamar Rapaport-Dagim

expect So in Tal, currency, be basis. thanks our for great the The for X% mix going question. acceleration we prepared to We point reported growth on is in in the actually year that constant X.X% mentioned a average remarks XXXX.

note. the we strong we year, entered year a the understand we XXXX We XX% believe on so the over that. During high us see visibility we expect year backlog, that can in as with from the you providing exit acceleration achieving of

feel just growth strong see ahead so the result more can in of we we world double of acceleration that than we we continuation that that journey. following of that customers a coming and around the benefit I drivers a we a is growth and pipeline, that, both In of XG addition year to of year digital multiple the around COVID that, the that as ended rate see transformation lot of the understand the the

As the point well tipping of things… as

Shuky Sheffer

were So of midpoint accelerated a on bullish very Tal, a X% on bullish reported basis. on growth we

than we more and comfortable as the with growth. we Tamar actually, rate, feel growth accelerated doubled mentioned, So very the

Tal Liani

joined little bit I I a apologize. Thanks. the Great. later, call so

Shuky Sheffer

Okay.

Operator

Our next with Tavy of Barclays. question comes from Rosner line the

Unidentified Analyst

on (Ph) Reimer] for Tavy. record this touch I on [Chris and is to quarter. revenues this wanted Hi managed reported having services you

a there among how driving grow transformation. forces to manage the their you having Managed that would And geography is your in more particular at client Looking more or Services base. customers growth, behind where keen you are quantify interested the opportunity

Tamar Rapaport-Dagim

Thanks. of that by these over in the rest requires years, the We for product, we mean a the we develop world. to here managed the expanded North customer have model, sell managed the of with environment Managed license to services America the still transformation the we operating relationship. the also and But to see engagement. of managed are an both model into very use with with relationship, of the what years, managed n we to many usually managed recent and as services where in three one, a customers. a last engagement Europe that deploying managed before the It And services And to globally. years customers. that Services a customer existing we customer then services win compelling products a we truck new the engagement call in started pace managed a interesting with customer the seeing the maybe that model as prior software is it is why two actually both years, building successful part originally we transformation penetrating that couple have largest

et it as well in going it is position operating years. KPIs, cetera. of Great can recent provide accountability would cetera, our making So under of portfolio And model examples the in PLDT selling as new been live a in successful well great logos Philippines. say, software has we that on system as et as valuable predefined model whole, the I into several

for growth. manage that is that transformation a again, new is recently enabling We U.K., so deal with have to us, logo three a the signed for example,

addition In that fact existing the customers. renewal of to very expansion within rate a we have high

services growth managed drive model believe from continue us. should to we So as a

Unidentified Analyst

Okay. as on a recent might portfolio? just media, your have expansion touching other And that addressable into existing any just you M&A. And follow-up, verticals maybe your identified complement

Shuky Sheffer

Interesting question.

they are in institute that large deal, of domain. financial of call a IT the couple signed in like And consultancy a great, we in that our this actually, we So United digital a this capabilities years acquired a the the And have capabilities, a fact we over we announced the States. what deal capabilities ago. we projektXXX, project design really digital we quarter with there, in leveraging like revealing

consulting not we that, the saying we some also are are other from divesting to digital traction we see vertical our So capabilities. banking industry, obviously, but to

Unidentified Analyst

Interesting.

Okay. Thank you much very

Operator

[Operator you. Instructions] Thank and I’m further questions. showing no

over the Head for So with Relations, to that, I of any Matt will turn call remarks. Smith, further back Investor

Matt Smith

from a great evening that, our Thanks. Yes. Thank interest days. for evening, call you do you the to we have this any With And up and We please group. forward Amdocs. have you will questions, very and call much if in for hearing Investor call. in Relations wrap your coming additional the joining look the

Operator

does for program. This you thank the and today’s in Ladies conclude gentlemen, conference. participating

now disconnect. may You

Amdocs Limited (DOX) 10 Nov 202020 Q4 Earnings call transcript