Fiscal 2024

Dear Fellow Shareholders,

Fiscal 2024 was an important year in Amdocs' journey. Despite a continuously challenging industry demand environment, the year was notable in several respects. We expanded activities with new and existing customers, achieved double-digit growth in cloud and further extended our industry-leading position in generative AI. Managed services delivered another record year; we executed our plan to accelerate profitability and generated robust free cash flow1, while we returned significant amount to shareholders through share repurchases and dividends.

With our industry forming the backbone of today's seamless digital world, our software and services empower service providers to provide billions of end users with amazing customer experiences, every day. We are proud of the significant role we play in driving the industry forward and would like to thank our talented and highly professional employees, all across the globe, who serve our customers with innovative software products and services designed to accelerate their migration to, and adoption of, the cloud, monetize next-generation networks, digitally transform the customer experience, and automate mission-critical operations.

FY2024 key financial highlights
(compared to FY2023)

  • Record revenue of $5.00 billion
  • GAAP operating margin of 12.6%
  • GAAP diluted EPS of $4.25, down 5.3%, including a restructuring charge of 98 cents per share, without which GAAP diluted EPS would have been $5.23 and up 16.5%
  • Non-GAAP2 operating margin of 18.4%, up 60 basis points
  • Non-GAAP2 diluted earnings per share of $6.44, up 9.0%
  • Record 12-month backlog of $4.06 billion, up 2.5% pro forma3

Fiscal 2024 was a strong year of profitable revenue growth and robust free cash flow1 generation. Full year revenue grew 2.4% as reported and 2.7% on a constant currency4 basis and included strong double-digit growth from cloud activities which now account for roughly 25% of Amdocs' total revenue. GAAP diluted EPS was down 5.3%, including a restructuring charge of 98 cents per share, without which GAAP diluted EPS would have been $5.23 and up 16.5%, and non-GAAP2 diluted EPS grew 9.0%, consistent with the midpoint of guidance and driven by sustained revenue growth, improved operating profitability and the benefits of our share repurchase activity. Focused execution was another hallmark of fiscal 2024, once again supporting strong free cash flow1 before restructuring payments of $694 million. We returned more than 100% of free cash flow back to shareholders through share repurchases and dividends. We are also pleased to report that our Board of Directors has approved the twelfth consecutive annual increase in our quarterly cash dividend, subject to shareholder approval.

Fiscal 2024 also saw year-over-year growth in all three of the geographical regions in which we operate, with North America up slightly and Europe and the Rest of the World growing by 3.3% and 8.6%, respectively, on a reported basis.

Empowering service providers to unlock the potential of GenAI and move to the cloud

During fiscal 2024, generative AI (GenAI) has been a high priority for Amdocs. We've progressed our GenAI strategy by forging strong collaboration with industry leaders such as NVIDIA, Microsoft and Amazon Web Services (AWS), and by enhancing our unique telco-grade GenAI amAIz platform with innovative new agentic capabilities that deliver immersive customer experiences with real-time interaction and visualization. Our flagship CES24 is the market-leading telco-native GenAI-led customer experience suite, and embeds CES Copilots across Amdocs Catalog, Monetization, Intelligent Networking, and many other components of the suite, with several customers already utilizing such capabilities in production.

We are at the heart of helping our customers accelerate GenAI disruption in their call-center operations and reimagine the care experience. Over the past fiscal year, we progressed our active engagement at major customers globally, enabling GenAI use cases and smart agent capabilities of the future. We were selected by one customer, in partnership with NVIDIA, to integrate our amAIz platform in their business operations, highlighting our unique role as one of the leading technology enablers in the telecommunications industry.

We also continued to see double-digit growth in our cloud business in fiscal 2024, signing a significant five-year mainframe-to-cloud migration and operation deal with AT&T. This new deal at AT&T leverages our November 2023 acquisition of Astadia, whose technology capabilities support highly sophisticated cloud migrations. Indeed, for many service providers, cloud migration is a complex multi-year journey that is still in the early phases.

Working with our strategic partners, the leading cloud providers AWS, Microsoft Azure, Google Cloud Platform and Oracle Cloud Infrastructure, we 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 operations model. In Japan, we are working with NTT Infrastructure Network Corporation (NTT InfraNet) to modernize and migrate its IT operations systems and geographic information systems (GIS) to the cloud. In Canada, TELUS has signed a multi-year managed services agreement with Amdocs to move its existing on-premise monetization operations to AWS. Vodafone Italy expanded its relationship with Amdocs to modernize and migrate its systems to the Microsoft Azure cloud, and VodafoneZiggo in Netherlands chose Amdocs to modernize and migrate its monetization engines to the public cloud, including both Amdocs and non-Amdocs applications. These deals and more, continue to position us as a leading player in migration of telcos to the cloud.

Our customers are also continuing their modernization journeys to provide their end users with an exceptional consumer and B2B customer experience. Over the past fiscal year, we have strengthened our existing relationships with North America's leading service providers as we support their ongoing digital transformations. At T-Mobile, we are deploying our next-generation, cloud-native, real-time monetization offering and expanding support for our AI and data platform there. We also reached major migration milestones at Comcast's multi-year B2B digital automation project and entered new agreements with Charter and Rogers. On the other side of the globe, Japan's J:COM selected Amdocs as a key partner in its modernization program aimed at driving operational efficiencies, elevating customer experiences and unlocking new monetization opportunities, while other customers, such as the A1 Group in Central Europe, Virgin Media O2 in the UK, and Foxtel in Australia have selected and deployed our MarketONE offering to enable easy onboarding, integration and monetization of partner services. We also launched connectX in fiscal 2024, our SaaS cloud-native platform, powered by AWS, which enables mobile virtual network operators (MVNOs) or any company to seamlessly launch a digital connectivity brand on the cloud. This new platform has already been selected by AT&T and Rizz Wireless in the US, Melon Mobile in South Africa, and Winity in Brazil, among others.

  Selected customer digital transformation, cloud and modernization projects

  • AT&T
  • T-Mobile USA
  • Charter
  • Comcast
  • J:COM
  • Virgin Media O2
  • NTT Infranet
  • Rogers
  • A1 Austria
  • TELUS
  • Etisalat
  • VodafoneZiggo
  • Winity
  • Optus
  • VF Ireland
  • Rizz Wireless
  • VF Italy
  • Melon Mobile
  • SFR
  • Telcel

Generative AI partners

  • NVIDIA
  • Microsoft
  • AWS

Driving next-generation network monetization and automation

Our next-generation monetization solutions are designed to enable service providers to benefit from the potential of 5G standalone networks, fixed wireless access (FWA), and fiber as they roll out these new networks. Over the past fiscal year, we continued to support the successful launch in numerous locations of Internet Air, AT&T's fixed wireless access offering, which runs on the cloud-native digital platform we are delivering there under our large-scale BSSe technology modernization and simplification program. In Europe, A1 Austria selected us to future-proof their monetization platforms so as to enhance agility and accelerate time to market for new offerings and improve the customer experience. We also extended our collaboration with a leading service provider in North Africa to enhance their 5G network capabilities with our cloud-native policy solution. In the fiber realm, DELTA Fiber in the Netherlands selected Amdocs to provide ongoing development support and software maintenance for their monetization systems, empowering them to unlock new opportunities for sales growth.

We also saw important progress during fiscal 2024 for our network automation solutions, which enable service providers to deliver dynamic connected experiences by streamlining and automating complex network ecosystems and real-time automated networks. In the Philippines, PLDT selected our next-generation operational support systems (OSS) platform, our key network automation offering that has been bolstered by the fiscal 2023 acquisition of TEOCO's service assurance business. Our platform is an important OSS component of PLDT's cloud modernization program and, importantly, also includes our customer service solution for case management, part of the Customer Engagement Platform we built in partnership with Microsoft. In South Africa, Cell C deployed our cloud-native Helix Service Assurance Suite to predict, identify and quickly resolve service-impacting problems and network outages, improving customer experience and ultimately delivering leading service. This solution, which won the Network AI Award at FutureNet World 2024 for the most innovative AI solution to enhance network performance, also builds on the TEOCO service assurance business acquisition. Furthermore, our solutions are supporting SES's second-generation Medium Earth Orbit (MEO) software-enabled satellite system to deliver connectivity services worldwide.

Selected next-gen monetization & network automation projects

  • A1
  • PLDT
  • Colt
  • Cell C
  • SES        
  • AT&T
  • Magyar Telekom
  • T-Magenta
  • Delta Fiber
  • TPG Telecom

Another record year for managed services, the bedrock of our recurring revenue streams

Our managed services engagements support the resilience of our business and provide the bedrock of Amdocs' recurring revenue streams, with near 100% renewal rates and multi-year engagements. Over the course of fiscal 2024 we saw that managed services revenue was mainly driven by the ongoing expansion and ramp-up of mission-critical support activities, at new customers such as Japan's NTT Infrastructure Network Corporation and long-standing Amdocs customers. We extended our multi-year engagement at Rogers in Canada to support its strategic objectives following its merger with Shaw, and also expanded into new domains such as data, testing services and more. At AT&T, we extended our existing consumer domain engagements through to 2029, alongside the five-year mainframe-to-cloud migration deal mentioned earlier; while at Charter we extended and expanded our managed services agreement which provides Spectrum Mobile with hosting and IT operational support for its mobile services. We also signed an expanded multi-year managed services agreement with Colt in the UK following its acquisition of Lumen's EMEA business last year, while a major south-east Asian service provider extended and expanded its partnership with Amdocs. This new agreement in south-east Asia includes multi-year business support systems managed services, with full cloud managed services and operations, and the management of over 100 multi-domain non-Amdocs applications across multiple public clouds, private clouds and on premise.

With these and other deals, fiscal 2024 was another record year for managed services in terms of revenue. Our managed services agreements comprised approximately 58% of our total revenue for the financial year. As these deals are long term, they provide, along with our 12-month backlog, strong visibility into our business going forward.

Selected customer managed services engagements and deployments

  • Rogers
  • Colt
  • Verizon
  • Vodafone Germany
  • True
  • A1 Group
  • Claro
  • Charter
  • AT&T
  • Optus
  • TMO US
  • Three UK
  • NTT Infranet
  • PLDT
  • Globe

ESG: Seeking to make a difference

As we work with our customers and partners to create a better-connected world, we seek to make a difference, and we incorporate this commitment into our business culture, innovation, products and operations. Indeed, environmental, social and governance (ESG) considerations are integral to our operations, and we seek to follow a comprehensive approach in our sustainability journey. We are committed to diversity, equity and inclusion, believing a gender diverse, multi-cultural and multi-generational workforce provides strength and a competitive advantage. Our achievements have been recognized by independent organizations. We were included in TIME magazine's list of the World's Most Sustainable Companies (2024) and on the 2023 S&P Dow Jones Sustainability Index (DJSI) North America, placed in the S&P Global's Corporate Sustainability Assessment (CSA) Yearbook, and received high ratings in the Carbon Disclosure Project (CDP) and EcoVadis sustainability ratings.

We place high value on protecting the environment and minimizing negative environmental impacts that may be created by our operations and seek to create sustainable products and services. We remain committed to our long-term climate change goal of becoming carbon neutral in our business operations (Scopes 1 and 2) by 2040 and also to reach 100 percent electricity from renewable sources by 2040. We are also proud that we have reduced our Scope 1 and Scope 2 tCO2e (tonnes of carbon dioxide equivalent) emissions by 55% since fiscal 2019.

We also place great emphasis on enriching the lives of our employees, as encapsulated in our new employer brand "Live Amazing. Do Amazing", which we launched in fiscal 2024. Our efforts focus on providing a people-centric work environment, understanding that flexibility is key, ensuring opportunities for growth and professional development, embracing a culture of continuous learning and upskilling, and significantly expanding our employee well-being programs and investments. We also believe in the importance of empowering employees to make an impact, both through their professional work in developing innovative products and solutions and through volunteering in digital inclusion programs, STEAM education, and environmental awareness programs in the communities in which we work.

Healthy pipeline and innovative technology position Amdocs for continued growth and operating margin expansion

While we continue to operate in a challenging industry demand environment, the conditions of which are yet to improve, we see a healthy pipeline of opportunities across our strategic areas of focus of cloud, next-generation monetization platforms and GenAI. We believe we are positioned to maintain our high market win-rate by leveraging our pedigree for innovative technology, our market-leading portfolio, premier execution and highly talented people.

Our cloud-related activities in fiscal 2024 were around 25% of total revenue, contributing double-digit growth for the fiscal year, while our GenAI strategy is gaining momentum as we start to shift from production pilots to commercial customer engagements.

We remain laser-focused on continued operational excellence and ongoing efficiency initiatives to drive profitability gains and are phasing out several low-margin, non-core businesses that are becoming commoditized and hold little potential for long-term value addition or profitability enhancement.

We remain confident in our relatively resilient business model of recurring revenue streams as we support our customers' mission-critical systems. Adjusting for the phase out of low-margin, non-core business activities mentioned above, this leads us to expect pro forma3 revenue growth of between 1% to 4.5% in fiscal 2025 in constant currency4. Importantly, we expect our non-GAAP2 operating margin to surpass 21% for the first time in fiscal 2025 and expect to deliver GAAP diluted earnings per share growth of 25.0% to 33.0% and 6.5% to 10.5% non-GAAP2 diluted earnings per share growth.

We want to conclude this letter by thanking our shareholders, customers, partners and employees for your trust and confidence in Amdocs. We look forward in fiscal 2025 to continuing to help those who shape the future to make it amazing for billions of people around the world.

Shuky Sheffer
President and Chief Executive Officer

Eli Gelman
Chairman of the board

1 Free cash flow is calculated as cash flow from operating activity less net capital expenditures and other.

2 For further details of reconciliation of selected financial metrics from GAAP to Non-GAAP, please refer to the tables on pages 12-15.

3 For comparison purposes, pro forma excludes the financial impact resulting from the phase out of certain business activities in the current fiscal year period and comparable fiscal year period. These activities, which generated revenue of approximately $600 million in fiscal 2024, were substantially ceased in the first quarter of fiscal 2025.

4 Revenue on a constant currency basis assumes exchange rates in the current period were unchanged from the prior period.