Amdocs Reports Strong Q3 Results with Record Revenue

Amdocs Limited, a prominent provider of software and services for communications and media companies, has announced impressive financial results for the third quarter of fiscal year 2024. The company’s revenue for this quarter hit a record $1.25 billion, showing a nearly 2% increase compared to the previous year.

In addition to the record revenue, Amdocs reported a substantial 12-month backlog of $4.25 billion and is on track to meet its fiscal year 2024 financial guidance, which includes projected revenue growth and non-GAAP diluted earnings per share (EPS) growth of approximately 9%. The company attributed its performance to strong demand for cloud solutions and significant advancements in generative AI, alongside its ongoing commitment to environmental sustainability.

### Key Highlights:
– Record Q2 revenue of $1.25 billion, nearly 2% growth year-over-year.
– Non-GAAP operating margin reached 18.6%, the highest in several years.
– Record 12-month backlog of $4.25 billion at the end of Q3.
– Major cloud solution agreements with AT&T, TELUS, and VodafoneZiggo.
– Advancements in generative AI with a leading global operator partnership.
– Cloud-related services accounted for over 20% of total revenue last year, with expectations for continued double-digit growth in fiscal 2024.
– A significant reduction of 55% in CO2 emissions since fiscal 2019, and recognition by Time Magazine as one of the world’s most sustainable companies.

### Company Outlook:
– Amdocs anticipates consistent revenue growth and non-GAAP diluted EPS growth for the remainder of fiscal 2024.
– The company is poised for growth driven by non-GAAP diluted EPS growth and dividend yield.
– The full impact of the AT&T deal is expected to be realized by mid-2025.
– Amdocs remains open to both accelerated share buybacks and M&A opportunities.

### Concerns:
– Current macroeconomic factors and industry pressures are affecting growth rates.
– Customers are cutting capital expenditures to focus on free cash flow.
– Achieving historical growth rates is becoming increasingly difficult, with potential growth rates more likely to be in the middle single digits if macroeconomic conditions improve.

### Opportunities:
– Amdocs is strategically positioned to capitalize on growth in cloud services and generative AI.
– The company’s cloud-related activities are expected to continue experiencing double-digit growth in the upcoming fiscal year.
– Mergers and acquisitions in the industry may provide long-term benefits for Amdocs.

### Areas Lacking Guidance:
– No specific guidance has been disclosed for fiscal year 2025.
– An improvement in the overall demand environment is necessary for a noticeable acceleration in growth.

### Q&A Highlights:
– Amdocs is on track to fully realize the AT&T deal’s impact by mid-2025.
– The company prioritizes shareholder returns and is considering buybacks and M&A for cash allocation.

In summary, Amdocs Limited showcased resilience and a strategic focus during Q3 of fiscal year 2024, achieving record revenues and maintaining a strong backlog. Its investments in cloud solutions and generative AI appear to be yielding positive results. Despite facing industry pressures, Amdocs remains committed to its financial strategy and is optimistic about future growth while also prioritizing sustainability efforts.