UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of May 2022
Commission File Number 1-14840
AMDOCS LIMITED
Hirzel House, Smith Street,
St. Peter Port, Island of Guernsey, GY1 2NG
Amdocs, Inc.
625 Maryville Centre Drive, Suite 200, Saint Louis, Missouri 63141
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
FORM 20-F ☒ FORM 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
YES ☐ NO ☒
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- _______
On May 11, 2022, Amdocs Limited (“Amdocs”) issued a press release announcing financial results for the quarter ended March 31, 2022. A copy of the press release and the accompanying presentation are furnished as Exhibits 99.1 and 99.2 to this Report of Foreign Private Issuer on Form 6-K.
The information in this Form 6-K (including Exhibits 99.1 and 99.2) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| AMDOCS LIMITED | ||
| By: | /s/ Matthew E. Smith | |
| Matthew E. Smith | ||
| Secretary and Authorized Signatory | ||
Date: May 11, 2022
EXHIBIT INDEX
| EXHIBIT |
DESCRIPTION | |
| 99.1 | Amdocs Limited Press Release dated May 11, 2022. | |
| 99.2 | Fiscal Q2 2022 Earnings Presentation | |
Exhibit 99.1
Amdocs Limited Reports Second Quarter Fiscal 2022 Results
Record Quarterly Revenue of $1.15 Billion, up 9.2% YoY as Reported and up 10.1% YoY in Constant Currency(3)
Strong Sales Momentum & Record 12-Month Backlog of $3.89 Billion, up 9.9% YoY
Tracking in Line with the High End of Fiscal 2022 Revenue Growth Outlook
Second Quarter Fiscal 2022 Highlights
(All comparisons are against the prior year)
| • | Tracking in line with the high end of fiscal 2022 revenue growth outlook of 5.2% -7.2% as reported and 8.0% -10.0% on a pro forma(2) and constant currency(3) basis |
| • | Tracking in line with the high end of fiscal 2022 adjusted GAAP diluted EPS growth(4) outlook of 7.5% -12.5% and pro forma(2) non-GAAP diluted EPS growth outlook of 9.0% -12.0% |
| • | Record revenue of $1,145 million, up 9.2% as reported and up 10.1% in constant currency(3); revenue growth has exceeded 10% for three consecutive quarters on a pro forma(2) and constant currency(3) basis |
| • | Record revenue of $772 million in North America, up 13.7% |
| • | GAAP diluted EPS of $1.28, above the $0.96 -$1.04 guidance range, primarily due to a lower GAAP effective tax rate than anticipated in quarterly guidance(5) |
| • | Non-GAAP diluted EPS of $1.54, above the $1.22 -$1.28 guidance range, primarily due to a lower non-GAAP effective tax rate than anticipated in quarterly guidance(5) |
| • | GAAP operating income of $164 million; GAAP operating margin of 14.3% |
| (1) | Please refer to the Selected Financial Metrics tables below (figures may not sum because of rounding). |
| (2) | Pro forma growth rate excludes the financial impact of OpenMarket (which was divested on December 31, 2020) from fiscal year 2021 |
| (3) | Revenue on a constant currency basis assumes exchange rates in the current period were unchanged from the prior period |
| (4) | Adjusted GAAP excludes the gain from the sale of OpenMarket, which was divested on December 31, 2020, from the current and comparable fiscal years; fiscal 2022 GAAP diluted EPS growth outlook is expected to be (20.5)%-(17.0)% on a non-adjusted basis |
| (5) | Effective tax rate on a GAAP and non-GAAP basis in the second quarter fiscal 2022 was lower than anticipated in quarterly guidance primarily due to the release of tax reserves connected with funding decisions for the construction of the new Israel campus. This tax benefit was among the scenarios contemplated in non-GAAP effective tax rate guidance for the full fiscal year 2022, which is still anticipated to be within a range of 13.0% to 17.0%. |
| • | Non-GAAP operating income of $202 million; non-GAAP operating margin of 17.6%, up 10 basis points sequentially and unchanged as compared to last year’s second fiscal quarter while accelerating R&D investments |
| • | Free cash flow of $122 million, reflecting healthy cash collections, and comprised of cash flow from operations of $169 million, less $47 million in net capital expenditures and other(1) |
| • | Normalized free cash flow of $160 million(1) |
| • | Repurchased $130 million of ordinary shares during the second fiscal quarter |
| • | Record twelve-month backlog of $3.89 billion, up approximately $60 million sequentially and up 9.9% |
JERSEY CITY, NJ – May 11, 2022 – Amdocs Limited (NASDAQ: DOX), a leading provider of software and services to communications and media companies, today reported operating results for the three months ended March 31, 2022.
“I am excited to report another very strong quarter for Amdocs as we continued to enable our customer’s strategy to provide a superior mobile and broadband experience by supporting their long-term investments in 5G monetization, cloud adoption, digital modernization, and network automation. Record revenue of $1.15 billion was up 10.1% in constant currency(3) from a year ago, reflecting strong business activity building next-generation platforms for large customers like AT&T, T-Mobile, and Vodafone Germany under multi-year programs. Sales momentum was also strong in Q2 and included a digital transformation project award with VodafoneZiggo in Netherlands, and a new 5G policy deal which expands our footprint at a leading Tier 1 European operator. Overall, we ended the fiscal second quarter with record-high 12-month backlog of $3.89 billion, which was up nearly 10% from a year ago,” said Shuky Sheffer, president and chief executive officer of Amdocs Management Limited.
“Demonstrating great execution in Q2, we set another company record for the number of quarterly milestones deployed. Our accomplishments included the go-live of a major digital transformation project for Three UK in just 15 months, highlighting our unrivalled reputation for project delivery. This was also a record quarter in managed services, driven by
continued growth with new and existing customers. At Bell Canada, we signed a five-year managed services extension that expands our long-term strategic relationship in support of Bell’s continued cloud transformation. Additionally, we strengthened our partnership with PLDT in the Philippines, where this leading operator awarded Amdocs a three-year extension of our existing managed services agreement through 2028, in addition to future projects to support PLDT’s cloud journey,” said Tamar Rapaport-Dagim, chief financial officer & chief operating officer of Amdocs Management Limited.
Sheffer concluded, “Our growth strategy is highly aligned with the needs of the market, and we see an expanding pipeline of opportunities ahead of us which we are well positioned to monetize with our market-leading products, best-in-class execution and highly talented people. Moreover, we are tracking in line with the high end of our fiscal 2022 revenue growth outlook of 8.0% to 10.0% on a pro forma(2), constant currency(3) basis, our confidence in which is supported by the business momentum reflected in our record 12-month backlog at the halfway point in the year.”
Revenue
(All comparisons are against the prior year period)
| In Millions | ||||||||
| Three months ended | ||||||||
| March 31, 2022 | ||||||||
| Actual | Previous Guidance |
|||||||
| Revenue |
$ | 1,145 | $ | 1,110 - $1,150 | ||||
| Revenue growth, as reported |
9.2 | % | ||||||
| Revenue growth, constant currency(3) |
10.1 | % | ||||||
| • | Revenue for the second fiscal quarter of 2022 was at the high end of Amdocs’ guidance, including an immaterial impact from foreign currency movements compared to our guidance assumptions |
| • | Revenue for the second fiscal quarter of 2022 includes an unfavorable impact from foreign currency movements of approximately $2 million relative to the first quarter of fiscal 2022 |
Net Income and Earnings Per Share
| In thousands, except per share data Three months ended March 31, |
||||||||
| 2022 | 2021 | |||||||
| GAAP Measures |
||||||||
| Net income |
$ | 158,497 | $ | 119,067 | ||||
| Diluted earnings per share |
$ | 1.28 | $ | 0.91 | ||||
| Non-GAAP Measures |
||||||||
| Net income |
$ | 190,944 | $ | 148,095 | ||||
| Diluted earnings per share |
$ | 1.54 | $ | 1.13 | ||||
| • | Non-GAAP net income excludes amortization of purchased intangible assets and other acquisition-related costs, changes in certain acquisition related liabilities measured at fair value, equity-based compensation expenses, and other, net of related tax effects, in all the periods presented |
For further details of the reconciliation of selected financial metrics from GAAP to Non-GAAP, please refer to the tables below.
Capital Allocation: Returning Cash to Shareholders
| • | Quarterly Cash Dividend Program: On May 11, 2022, the Board approved the Company’s next quarterly cash dividend payment of $0.395 per share and set June 30, 2022 as the record date for determining the shareholders entitled to receive the dividend, which will be payable on July 29, 2022 |
| • | Share Repurchase Activity: Repurchased $130 million of ordinary shares during the second quarter of fiscal 2022 |
Twelve-month Backlog
Twelve-month backlog was a record $3.89 billion at the end of the second quarter of fiscal 2022, up approximately 9.9% as compared to last year’s second fiscal quarter. Twelve-month backlog includes anticipated revenue related to contracts, estimated revenue from managed services contracts, letters of intent, maintenance and estimated on-going support activities.
Third Quarter Fiscal 2022 Outlook
| In millions, except per share data | ||
| Q3 2022 | ||
| Revenue |
$1,140-$1,180 | |
| GAAP diluted EPS |
$0.97-$1.05 | |
| Non-GAAP diluted EPS |
$1.23-$1.29 |
| • | Third quarter revenue guidance assumes approximately $1 million sequential unfavorable impact from foreign currency fluctuations as compared to the second quarter of fiscal 2022 |
| • | Third quarter non-GAAP diluted EPS guidance excludes amortization of purchased intangible assets and other acquisition-related costs, changes in certain acquisitions related liabilities measured at fair value, and approximately $0.12 -$0.14 per share of equity-based compensation expense and other, net of related tax effects |
Full Year Fiscal 2022 Outlook
| FY 2022, year-over-year growth | ||||
| Current Guidance | Previous Guidance | |||
| Revenue growth, as reported |
5.2%-7.2% | 3.4%-7.4% | ||
| Pro forma(2) revenue growth, constant currency(3) |
8.0%-10.0% | 6.0%-10.0% | ||
| GAAP diluted EPS growth |
(20.5)% -(17.0)% | (23.0)% -(17.5)% | ||
| Adjusted GAAP diluted EPS growth(4) |
7.5%-12.5% | 6.0%-13.0% | ||
| Non-GAAP diluted EPS growth |
7.3%-10.3% | 6.3%-10.3% | ||
| Pro forma(2) non-GAAP diluted EPS growth |
9.0%-12.0% | 8.0%-12.0% | ||
| FY 2022, in millions | ||||
| Current Guidance | Previous Guidance | |||
| Free cash flow(1) |
~$500 | ~$500 | ||
| Normalized free cash flow(1) |
~$650 | ~$650 | ||
| • | Full year fiscal 2022 revenue guidance incorporates an expected unfavorable impact from foreign currency fluctuations of approximately 0.8% year-over-year as compared with an unfavorable impact of about 0.6% year-over-year previously |
| • | Non-GAAP diluted earnings per share growth, and pro forma(2) non-GAAP diluted earnings per share growth, excludes amortization of purchased intangible assets and other acquisition-related costs, changes in certain acquisitions related liabilities measured at fair value, approximately $0.46-$0.50 per share of equity-based compensation expense, gain from divestiture of OpenMarket and other, net of related tax effects. Adjusted GAAP diluted earnings per share growth(4), excludes gain from divestiture of OpenMarket, net of related tax effects |
| • | Non-GAAP effective tax rate is anticipated to be within a range of 13.0% to 17.0% for the full year fiscal 2022 |
| • | Free cash flow(1) is comprised of cash flow from operations, less net capital expenditures and other |
| • | Normalized free cash flow excludes expected capital expenditure of $131 million related to the new campus development in Israel, and other items |
Three Year Fiscal 2022-2024 Outlook
| • | In addition to our full year fiscal 2022 revenue guidance, we project revenue growth of 6.0% to 10% year-over-year on a constant currency(3) basis in each of fiscal years 2023 and 2024 |
| • | Projecting revenue growth on an as reported basis in each of fiscal years 2023 and 2024 is not possible without unreasonable efforts given the uncertain impact of foreign exchange rates and acquisition activity which cannot be reasonably predicted at this time |
Our third fiscal quarter 2022 and full year fiscal 2022, 2023 and 2024 forward looking projections take into consideration the Company’s current expectations regarding macro and industry specific risks and various uncertainties and certain assumptions that we will discuss on our earnings conference call. However, we note that market dynamics continue to shift rapidly and we cannot predict all possible outcomes, including those resulting from the COVID-19 pandemic, including its novel strains, which has created, and continues to create, a significant amount of uncertainty, or from current and potential customer consolidation or their other strategic corporate activities.
Conference Call and Earnings Webcast Presentation Details
Amdocs will host a conference call and earnings webcast presentation on May 11, 2022 at 5:00 p.m. Eastern Time to discuss the Company’s second quarter of fiscal 2022 results. To participate, please dial +1 (844) 513-7152, or +1 (508) 637-5600 outside the United States, approximately 15 minutes before the call and enter passcode 4136629. The conference call and webcast will also be carried live on the Internet and may be accessed via the Amdocs website at https://investors.amdocs.com. Presentation slides will be available shortly before the webcast.
Non-GAAP Financial Measures
This release includes non-GAAP diluted earnings per share and other non-GAAP financial measures, including free cash flow and normalized free cash flow, revenue on a constant currency(3) basis, non-GAAP cost of revenue, non-GAAP research and development, non-GAAP selling, general and administrative, non-GAAP operating income, non-GAAP operating margin, non-GAAP interest and other expenses, net, non-GAAP income taxes, non-GAAP effective tax rate, non-GAAP net income and non-GAAP diluted earnings per share growth. These other non-GAAP measures exclude the following items:
| • | amortization of purchased intangible assets and other acquisition-related costs; |
| • | changes in certain acquisition-related liabilities measured at fair value; |
| • | non-recurring and unusual charges or benefits (such as a gain from divestiture of OpenMarket); |
| • | equity-based compensation expense; |
| • | other; and |
| • | tax effects related to the above. |
Free cash flow equals cash generated by operating activities less net capital expenditures and other. Normalized free cash flow, a measure of our operating performance, is further adjusted to exclude net capital expenditures related to the new campus development, payments for non-recurring and unusual charges (such as capital gains tax in relation to the divestiture of OpenMarket), and payments of acquisition related liabilities. These non-
GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. Amdocs believes that non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with Amdocs’ results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Amdocs’ results of operations in conjunction with the corresponding GAAP measures.
Amdocs believes that the presentation of non-GAAP diluted earnings per share and other financial measures, including free cash flow and normalized free cash flow, non-GAAP cost of revenue, non-GAAP research and development, non-GAAP selling, general and administrative, non-GAAP operating income, non-GAAP operating margin, non-GAAP interest and other expenses, net, non-GAAP income taxes, non-GAAP effective tax rate, non-GAAP net income and non-GAAP diluted earnings per share growth when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and results of operations, as well as the net amount of cash generated by its business operations after taking into account capital spending required to maintain or expand the business.
For its internal budgeting process and in monitoring the results of the business, Amdocs’ management uses financial statements that do not include amortization of purchased intangible assets and other acquisition-related costs, changes in certain acquisition-related liabilities measured at fair value, non-recurring and unusual charges or benefits, equity-based compensation expense, other and related tax effects. Amdocs’ management also uses the foregoing non-GAAP financial measures, in addition to the corresponding GAAP measures, in reviewing the financial results of Amdocs. In addition, Amdocs believes that significant groups of investors exclude these items in reviewing its results and those of its competitors, because the amounts of the items between companies can vary greatly depending on the assumptions used by an individual company in determining the amounts of the items.
Amdocs further believes that, where the adjustments used in calculating non-GAAP diluted earnings per share are based on specific, identified amounts that impact different line items in the Consolidated Statements of Income (including cost of revenue, research and development, selling, general and administrative, operating income, interest and other expenses, net, income taxes and net income), it is useful to investors to understand how these specific line items in the Consolidated Statements of Income are affected by these adjustments. Please refer to the Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP tables below.
Supporting Resources
| • | Keep up with Amdocs news by visiting the Company’s website |
| • | Subscribe to Amdocs’ RSS Feed and follow us on Twitter, Facebook, LinkedIn and YouTube |
About Amdocs
Amdocs helps those who build the future to make it amazing. With our market-leading portfolio of software products and services, we unlock our customers’ innovative potential, empowering them to provide next-generation communication and media experiences for both the individual end user and large enterprise customers. Our 30,000 employees around the globe are here to accelerate service providers’ migration to the cloud, enable them to differentiate in the 5G era, and digitalize and automate their operations. Listed on the NASDAQ Global Select Market, Amdocs had revenue of $4.3 billion in fiscal 2021.
For more information, visit Amdocs at www.amdocs.com.
This press release includes information that constitutes forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995, including statements about Amdocs’ growth and business results in future quarters and years. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be obtained or that any deviations will not be material. Such statements involve risks and uncertainties that may cause future results to differ from those anticipated. These risks include, but are not limited to, the effects of general economic conditions, the duration and severity of the COVID-19 pandemic, and its impact on the global economy, Amdocs’ ability to grow in the business markets that it serves, Amdocs’ ability to successfully integrate acquired businesses, adverse effects of market competition, rapid technological shifts that may render the Company’s products and services obsolete, potential loss of a major customer, our ability to develop long-term relationships with our customers, and risks associated with operating businesses in the international market. Amdocs may elect to update these forward-looking statements at some point in the future; however, Amdocs specifically disclaims any obligation to do so. These and other risks are discussed at greater length in Amdocs’ filings with the Securities and Exchange Commission, including in our Annual Report on Form 20-F for the fiscal year ended September 30, 2021 filed on December 9, 2021 and our Form 6-K furnished for the first quarter of fiscal 2022 on February 14, 2022.
Contact:
Matthew Smith
Head of Investor Relations
Amdocs
314-212-8328
E-mail: dox_info@amdocs.com
AMDOCS LIMITED
Consolidated Statements of Income
(In thousands, except per share data)
| Three months ended March 31, |
Six months ended March 31, |
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| 2022 | 2021 | 2022 | 2021(a) | |||||||||||||
| Revenue |
$ | 1,145,271 | $ | 1,048,734 | $ | 2,249,903 | $ | 2,135,077 | ||||||||
| Operating expenses: |
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| Cost of revenue |
741,257 | 685,515 | 1,457,975 | 1,414,231 | ||||||||||||
| Research and development |
87,064 | 75,154 | 169,009 | 150,823 | ||||||||||||
| Selling, general and administrative |
134,982 | 116,951 | 263,058 | 238,839 | ||||||||||||
| Amortization of purchased intangible assets and other |
18,317 | 21,870 | 36,064 | 41,740 | ||||||||||||
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| 981,620 | 899,490 | 1,926,106 | 1,845,633 | |||||||||||||
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| Operating income |
163,651 | 149,244 | 323,797 | 289,444 | ||||||||||||
| Interest and other expense, net |
(8,619 | ) | (3,542 | ) | (11,181 | ) | (10,032 | ) | ||||||||
| Gain from sale of a business |
— | — | 10,000 | 226,410 | ||||||||||||
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| Income before income taxes |
155,032 | 145,702 | 322,616 | 505,822 | ||||||||||||
| Income tax (benefit) expense |
(3,465 | ) | 26,635 | 30,517 | 87,123 | |||||||||||
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| Net income |
$ | 158,497 | $ | 119,067 | $ | 292,099 | $ | 418,699 | ||||||||
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| Basic earnings per share |
$ | 1.29 | $ | 0.92 | $ | 2.36 | $ | 3.21 | ||||||||
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| Diluted earnings per share |
$ | 1.28 | $ | 0.91 | $ | 2.34 | $ | 3.19 | ||||||||
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| Basic weighted average number of shares outstanding |
122,977 | 129,774 | 123,748 | 130,457 | ||||||||||||
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| Diluted weighted average number of shares outstanding |
123,821 | 130,696 | 124,571 | 131,147 | ||||||||||||
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| Cash dividends declared per share |
$ | 0.395 | $ | 0.36 | $ | 0.755 | $ | 0.6875 | ||||||||
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AMDOCS LIMITED
Selected Financial Metrics
(In thousands, except per share data)
| Three months ended March 31, |
Six months ended March 31, |
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| 2022 | 2021 | 2022 | 2021(a) | |||||||||||||
| Revenue |
$ | 1,145,271 | $ | 1,048,734 | $ | 2,249,903 | $ | 2,135,077 | ||||||||
| Non-GAAP operating income |
201,625 | 184,883 | 395,232 | 372,864 | ||||||||||||
| Non-GAAP net income |
190,944 | 148,095 | 341,079 | 301,067 | ||||||||||||
| Non-GAAP diluted earnings per share |
$ | 1.54 | $ | 1.13 | $ | 2.74 | $ | 2.30 | ||||||||
| Diluted weighted average number of shares outstanding |
123,821 | 130,696 | 124,571 | 131,147 | ||||||||||||
Free Cash Flows and Normalized Free Cash Flow
(In thousands)
| Three months ended March 31, |
Six months ended March 31, |
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| 2022 | 2021 | 2022 | 2021(a) | |||||||||||||
| Net Cash Provided by Operating Activities |
$ | 168,856 | $ | 119,736 | $ | 372,974 | $ | 536,221 | ||||||||
| Purchases of property and equipment, net (c) |
(47,271 | ) | (49,245 | ) | (104,496 | ) | (99,310 | ) | ||||||||
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| Free Cash Flow |
121,585 | 70,491 | 268,478 | 436,911 | ||||||||||||
| Tax payment on sale of business(b) |
3,193 | 25,190 | 3,193 | 25,190 | ||||||||||||
| Payments of acquisition related liabilities |
4,871 | 13,234 | 14,350 | 13,234 | ||||||||||||
| Net capital expenditures related to the new campus development |
30,109 | 24,221 | 59,416 | 42,555 | ||||||||||||
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| Normalized Free Cash Flow |
$ | 159,758 | $ | 133,136 | $ | 345,437 | $ | 517,890 | ||||||||
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| (a) | Since January 1, 2021, OpenMarket results are not included in the Consolidated Statements of Income given its divestiture. |
| (b) | Tax payment related to capital gain from divestiture of OpenMarket, which was completed on December 31, 2020. |
| (c) | The amounts under “Purchase of property and equipment, net” include proceeds from sale of property and equipment of $555 and $136 for the six months ended March 31, 2022 and 2021, respectively. |
AMDOCS LIMITED
Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP
(In thousands)
| Three months ended March 31, 2022 |
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| Reconciliation items | ||||||||||||||||||||||||||||
| GAAP | Amortization of purchased intangible assets and other |
Equity based compensation expense |
Changes in certain acquisitions related liabilities measured at fair value |
Other | Tax effect |
Non-GAAP | ||||||||||||||||||||||
| Operating expenses: |
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| Cost of revenue |
$ | 741,257 | $ | — | $ | (8,070 | ) | $ | (1,820 | ) | $ | — | $ | — | $ | 731,367 | ||||||||||||
| Research and development |
87,064 | — | (1,375 | ) | — | — | — | 85,689 | ||||||||||||||||||||
| Selling, general and administrative |
134,982 | — | (8,392 | ) | — | — | — | 126,590 | ||||||||||||||||||||
| Amortization of purchased intangible assets and other |
18,317 | (18,317 | ) | — | — | — | — | — | ||||||||||||||||||||
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| Total operating expenses |
981,620 | (18,317 | ) | (17,837 | ) | (1,820 | ) | — | — | 943,646 | ||||||||||||||||||
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| Operating income |
163,651 | 18,317 | 17,837 | 1,820 | — | — | 201,625 | |||||||||||||||||||||
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| Interest and other expense, net |
(8,619 | ) | — | — | — | 1,100 | — | (7,519 | ) | |||||||||||||||||||
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| Income tax (benefit) expense |
(3,465 | ) | — | — | — | — | 6,627 | 3,162 | ||||||||||||||||||||
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|||||||||||||||
| Net income |
$ | 158,497 | $ | 18,317 | $ | 17,837 | $ | 1,820 | $ | 1,100 | $ | (6,627 | ) | $ | 190,944 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Three months ended March 31, 2021 |
||||||||||||||||||||||||||||
| Reconciliation items | ||||||||||||||||||||||||||||
| GAAP | Amortization of purchased intangible assets and other |
Equity based compensation expense |
Changes in certain acquisitions related liabilities measured at fair value |
Other | Tax effect |
Non-GAAP | ||||||||||||||||||||||
| Operating expenses: |
||||||||||||||||||||||||||||
| Cost of revenue |
$ | 685,515 | $ | — | $ | (5,582 | ) | $ | (394 | ) | $ | — | $ | — | $ | 679,539 | ||||||||||||
| Research and development |
75,154 | — | (1,012 | ) | — | — | — | 74,142 | ||||||||||||||||||||
| Selling, general and administrative |
116,951 | — | (6,781 | ) | — | — | — | 110,170 | ||||||||||||||||||||
| Amortization of purchased intangible assets and other |
21,870 | (21,870 | ) | — | — | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total operating expenses |
899,490 | (21,870 | ) | (13,375 | ) | (394 | ) | — | — | 863,851 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Operating income |
149,244 | 21,870 | 13,375 | 394 | — | — | 184,883 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Interest and other expense, net |
(3,542 | ) | — | — | — | (375 | ) | — | (3,917 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Income tax (benefit) expense |
26,635 | — | — | — | — | 6,236 | 32,871 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net income |
$ | 119,067 | $ | 21,870 | $ | 13,375 | $ | 394 | $ | (375 | ) | $ | (6,236 | ) | $ | 148,095 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
AMDOCS LIMITED
Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP
(In thousands)
| Six months ended March 31, 2022 |
||||||||||||||||||||||||||||||||
| Reconciliation items | ||||||||||||||||||||||||||||||||
| GAAP | Amortization of purchased intangible assets and other |
Equity based compensation expense |
Changes in certain acquisitions related liabilities measured at fair value |
Gain from sale of a business |
Other | Tax effect |
Non-GAAP | |||||||||||||||||||||||||
| Operating expenses: |
||||||||||||||||||||||||||||||||
| Cost of revenue |
$ | 1,457,975 | $ | — | $ | (15,217 | ) | $ | (793 | ) | $ | — | $ | — | $ | — | $ | 1,441,965 | ||||||||||||||
| Research and development |
169,009 | — | (2,598 | ) | — | — | — | — | 166,411 | |||||||||||||||||||||||
| Selling, general and administrative |
263,058 | — | (16,763 | ) | — | — | — | — | 246,295 | |||||||||||||||||||||||
| Amortization of purchased intangible assets and other |
36,064 | (36,064 | ) | — | — | — | — | — | — | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total operating expenses |
1,926,106 | (36,064 | ) | (34,578 | ) | (793 | ) | — | — | — | 1,854,671 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Operating income |
323,797 | 36,064 | 34,578 | 793 | — | — | — | 395,232 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Interest and other expense, net |
(11,181 | ) | — | — | — | — | (2,505 | ) | — | (13,686 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Gain from sale of a business |
10,000 | — | — | — | (10,000 | ) | — | — | — | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Income tax (benefit) expense |
30,517 | — | — | — | — | — | 9,950 | 40,467 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net income |
$ | 292,099 | $ | 36,064 | $ | 34,578 | $ | 793 | $ | (10,000 | ) | $ | (2,505 | ) | $ | (9,950 | ) | $ | 341,079 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Six months ended March 31, 2021(a) |
||||||||||||||||||||||||||||||||
| Reconciliation items | ||||||||||||||||||||||||||||||||
| GAAP | Amortization of purchased intangible assets and other |
Equity based compensation expense |
Changes in certain acquisitions related liabilities measured at fair value |
Gain from sale of a business |
Other | Tax effect |
Non-GAAP | |||||||||||||||||||||||||
| Operating expenses: |
||||||||||||||||||||||||||||||||
| Cost of revenue |
$ | 1,414,231 | $ | — | $ | (10,523 | ) | $ | (15,728 | ) | $ | — | $ | — | $ | — | $ | 1,387,980 | ||||||||||||||
| Research and development |
150,823 | — | (1,844 | ) | — | — | — | — | 148,979 | |||||||||||||||||||||||
| Selling, general and administrative |
238,839 | — | (13,585 | ) | — | — | — | — | 225,254 | |||||||||||||||||||||||
| Amortization of purchased intangible assets and other |
41,740 | (41,740 | ) | — | — | — | — | — | — | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total operating expenses |
1,845,633 | (41,740 | ) | (25,952 | ) | (15,728 | ) | — | — | — | 1,762,213 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Operating income |
289,444 | 41,740 | 25,952 | 15,728 | — | — | — | 372,864 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Interest and other expense, net |
(10,032 | ) | — | — | — | — | 824 | — | (9,208 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Gain from sale of a business |
226,410 | — | — | — | (226,410 | ) | — | — | — | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Income tax (benefit) expense |
87,123 | — | — | — | — | — | (24,534 | ) | 62,589 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net income |
$ | 418,699 | $ | 41,740 | $ | 25,952 | $ | 15,728 | $ | (226,410 | ) | $ | 824 | $ | 24,534 | $ | 301,067 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
AMDOCS LIMITED
Condensed Consolidated Balance Sheets
(In thousands)
| As of | ||||||||
| March 31, 2022 |
September 30, 2021 |
|||||||
| ASSETS |
||||||||
| Current assets |
||||||||
| Cash and cash equivalents |
$ | 593,056 | $ | 709,064 | ||||
| Short-term interest-bearing investments |
263,372 | 256,527 | ||||||
| Accounts receivable, net, including unbilled of $128,406 and $162,278, respectively |
1,022,642 | 866,819 | ||||||
| Prepaid expenses and other current assets |
223,108 | 235,089 | ||||||
|
|
|
|
|
|||||
| Total current assets |
2,102,178 | 2,067,499 | ||||||
| Property and equipment, net |
727,509 | 698,768 | ||||||
| Lease assets |
232,447 | 233,162 | ||||||
| Goodwill and other intangible assets, net |
2,907,134 | 2,881,676 | ||||||
| Other noncurrent assets |
589,835 | 630,669 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 6,559,103 | $ | 6,511,774 | ||||
|
|
|
|
|
|||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Current liabilities |
||||||||
| Accounts payable, accruals and other |
$ | 985,675 | $ | 1,007,777 | ||||
| Lease liabilities |
56,676 | 58,714 | ||||||
| Deferred revenue |
360,192 | 237,374 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
1,402,543 | 1,303,865 | ||||||
| Lease liabilities |
179,139 | 177,906 | ||||||
| Long-term debt, net of unamortized debt issuance costs |
644,832 | 644,553 | ||||||
| Other noncurrent liabilities |
728,398 | 750,266 | ||||||
| Total Amdocs Limited Shareholders’ equity |
3,561,682 | 3,592,675 | ||||||
| Noncontrolling interests |
42,509 | 42,509 | ||||||
|
|
|
|
|
|||||
| Total equity |
3,604,191 | 3,635,184 | ||||||
|
|
|
|
|
|||||
| Total liabilities and equity |
$ | 6,559,103 | $ | 6,511,774 | ||||
|
|
|
|
|
|||||
AMDOCS LIMITED
Consolidated Statements of Cash Flows
(In thousands)
| Six months ended March 31, |
||||||||
| 2022 | 2021(a) | |||||||
| Cash Flow from Operating Activities: |
||||||||
| Net income |
$ | 292,099 | $ | 418,699 | ||||
| Reconciliation of net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
101,071 | 101,298 | ||||||
| Amortization of debt issuance costs |
279 | 272 | ||||||
| Equity-based compensation expense |
34,578 | 25,952 | ||||||
| Gain from sale of a business |
(10,000 | ) | (226,410 | ) | ||||
| Deferred income taxes |
(35,879 | ) | (27,778 | ) | ||||
| Loss from short-term interest-bearing investments |
1,333 | 221 | ||||||
| Net changes in operating assets and liabilities, net of amounts acquired: |
||||||||
| Accounts receivable, net |
(140,863 | ) | (108,799 | ) | ||||
| Prepaid expenses and other current assets |
3,848 | (11,906 | ) | |||||
| Other noncurrent assets |
3,042 | (10,763 | ) | |||||
| Lease assets and liabilities, net |
(67 | ) | 7,522 | |||||
| Accounts payable, accrued expenses and accrued personnel |
(22,006 | ) | 76,427 | |||||
| Deferred revenue |
102,997 | 226,904 | ||||||
| Income taxes payable, net |
27,378 | 41,629 | ||||||
| Other noncurrent liabilities |
15,164 | 22,953 | ||||||
|
|
|
|
|
|||||
| Net cash provided by operating activities |
372,974 | 536,221 | ||||||
|
|
|
|
|
|||||
| Cash Flow from Investing Activities: |
||||||||
| Purchase of property and equipment, net (c) |
(104,496 | ) | (99,310 | ) | ||||
| Proceeds from sale of short-term interest-bearing investments |
13,142 | 4,258 | ||||||
| Purchase of short-term interest-bearing investments |
(34,275 | ) | (200,088 | ) | ||||
| Net cash paid for business and intangible assets acquisitions |
(24,497 | ) | (87,600 | ) | ||||
| Net cash received from sale of a business |
10,000 | 290,789 | ||||||
| Other |
(2,958 | ) | 562 | |||||
|
|
|
|
|
|||||
| Net cash used in investing activities |
(143,084 | ) | (91,389 | ) | ||||
|
|
|
|
|
|||||
| Cash Flow from Financing Activities: |
||||||||
| Repurchase of shares |
(300,929 | ) | (450,074 | ) | ||||
| Proceeds from employee stock options exercises |
50,550 | 78,438 | ||||||
| Payments of dividends |
(89,366 | ) | (85,934 | ) | ||||
| Payment of contingent consideration from a business acquisition |
(6,153 | ) | (1,462 | ) | ||||
|
|
|
|
|
|||||
| Net cash used in financing activities |
(345,898 | ) | (459,032 | ) | ||||
|
|
|
|
|
|||||
| Net decrease in cash and cash equivalents |
(116,008 | ) | (14,200 | ) | ||||
| Cash and cash equivalents at beginning of period |
709,064 | 983,188 | ||||||
|
|
|
|
|
|||||
| Cash and cash equivalents at end of period |
$ | 593,056 | $ | 968,988 | ||||
|
|
|
|
|
|||||
AMDOCS LIMITED
Supplementary Information
(In millions)
| Three months ended | ||||||||||||||||||||
| March 31, 2022 |
December 31, 2021 |
September 30, 2021 |
June 30, 2021 |
March 31, 2021 |
||||||||||||||||
| North America |
$ | 772.2 | $ | 745.5 | $ | 722.8 | $ | 686.1 | $ | 679.1 | ||||||||||
| Europe |
147.2 | 142.5 | 146.8 | 155.7 | 148.8 | |||||||||||||||
| Rest of the World |
225.9 | 216.6 | 217.7 | 224.5 | 220.8 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Revenue |
$ | 1,145.3 | $ | 1,104.6 | $ | 1,087.3 | $ | 1,066.3 | $ | 1,048.7 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Three months ended | ||||||||||||||||||||
| March 31, 2022 |
December 31, 2021 |
September 30, 2021 |
June 30, 2021 |
March 31, 2021 |
||||||||||||||||
| Managed Services |
||||||||||||||||||||
| Revenue |
$ | 663.4 | $ | 659.7 | $ | 637.5 | $ | 650.5 | $ | 634.6 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| As of | ||||||||||||||||||||
| March 31, 2022 |
December 31, 2021 |
September 30, 2021 |
June 30, 2021 |
March 31, 2021 |
||||||||||||||||
| 12-Month Backlog |
$ | 3,890 | $ | 3,830 | $ | 3,690 | $ | 3,590 | $ | 3,540 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
# # #
Exhibit 99.2 Fiscal Q2 2022 Earnings Presentation May 11, 2022 Shuky Sheffer President & CEO Tamar Rapaport-Dagim CFO & COO
The information contained herein in this presentation or delivered or to be delivered to you during this presentation does not constitute an offer, expressed or implied, or a recommendation to do any transaction in Amdocs Limited securities or in any securities of its affiliates or subsidiaries. This presentation and the comments made by members of Amdocs management in conjunction with it include information that constitutes forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995, including statements about Amdocs’ growth and business results in future quarters. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be obtained or that any deviations will not be material. Such statements involve risks and uncertainties that may cause future results to differ from those anticipated. These risks include, but are not limited to, the effects of general economic conditions, the duration and severity of the COVID-19 pandemic, and its impact on the global economy, Amdocs’ ability to grow in the business markets that it serves, Amdocs’ ability to successfully integrate acquired businesses, adverse effects of market competition, rapid technological shifts that may render the Company's products and services obsolete, potential loss of a major customer, our ability to develop long-term relationships with our customers, and risks associated with operating businesses in the international market. Amdocs may elect to update these forward-looking statements at some point in the future; however, Amdocs specifically disclaims any obligation to do so. These and other risks are discussed at greater length in Amdocs’ filings with the Securities and Exchange Commission, including in our Annual Report on Form 20-F for the fiscal year ended September 30, 2021 filed on December 9, 2021, and our Form 6-K furnished for the first quarter of fiscal 2022 on February 14, 2022. This presentation includes non-GAAP financial measures, including non-GAAP operating margin, free cash flow, normalized free cash flow, revenue on a constant currency basis, non-GAAP net income and non-GAAP earnings per share. Free cash flow equals cash generated by operating activities less net capital expenditures and other. Normalized free cash flow, a measure of our operating performance, is further adjusted to exclude net capital expenditures related to the new campus development, payments for non-recurring and unusual charges (such as capital gains tax to be paid in relation to the divestiture of OpenMarket), and payments of acquisition related liabilities. These non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. Amdocs believes that non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with Amdocs’ results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Amdocs’ results of operations in conjunction with the corresponding GAAP measures. Please refer to the appendix for a reconciliation of these metrics to the most comparable GAAP provision. This presentation also includes pro forma metrics which exclude the financial impact of OpenMarket (divested on December 31, 2020) from fiscal year 2021. Please also review the information contained in Amdocs’ press release dated May 11, 2022 with respect to earnings for fiscal Q2 2022. The press release contains additional information regarding Amdocs’ outlook for fiscal years 2022, 2023 and 2024 and certain non-GAAP metrics and their reconciliations. Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 2
Today’s Speakers Shuky Tamar Sheffer Rapaport-Dagim President & Chief Financial Officer & Chief Executive Officer Chief Operating Officer IIn nf for orm ma at tiion on Se Sec cu ur riit ty y L Le evel vel 0 0 – – P Pu ub blliic c. . © © 20 2022 22 – – P Pr rop opr riie et ta ar ry y & & Con Conf fiid de en nt tiia all IIn nf for orm ma at tiion on of of A Am md doc ocs s 3
Earnings call agenda Strategy & Business Performance Update 1 Shuky Sheffer, President & Chief Executive Officer Financial Review & Outlook 2 Tamar Rapaport-Dagim, Chief Financial Officer & Chief Operating Officer Q&A 3 Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 4
President & Chief Executive Officer Strategy and business performance update IIn nf for orm ma at tiion on Se Sec cu ur riit ty y L Le evel vel 0 0 – – P Pu ub blliic c. . © © 20 2022 22 – – P Pr rop opr riie et ta ar ry y & & Con Conf fiid de en nt tiia all IIn nf for orm ma at tiion on of of A Am md doc ocs s 5
Thank you for an exceptional first half A huge thank you to our thousands of employees worldwide. Following a great Q1, our second quarter was also very strong, and I couldn’t be more pleased with our operational and financial execution for the fiscal year to date Credit for strong performance and improved outlook belongs to our global, diverse and incredibly talented employees IIn nf for orm ma at tiion on Se Sec cu ur riit ty y L Le evel vel 0 0 – – P Pu ub blliic c. . © © 20 2022 22 – – P Pr rop opr riie et ta ar ry y & & Con Conf fiid de en nt tiia all IIn nf for orm ma at tiion on of of A Am md doc ocs s 6 6
Q2 Operational Highlights Very strong second quarter and FY22 first half Business Activity Commitment to Execution & Sales Momentum Innovation Record number of customer milestones Continued to accelerate Particularly high activity in North America deliveries R&D investment in Q2, underscoring our Unrivalled reputation for project delivery commitment to Supporting its multi-year Core part of its digital continuously bring cutting- Strengthen ability to maintain high win rate modernization of the modernization edge technology and consumer domain journey world-class products and platforms to market Multiple new strategic awards Managed Services Extension and cloud transformation Launched CES22, our latest open and modular cloud- Managed Services Extension, native, 5G suite Future cloud projects Q4 2021 Q1 2022 Q2 2022 Strong feedback received in Digital Transformation respect to our offering and Major B2B digital transformation: strategic direction Tier 1 European throughout dozens of C-level 5G Policy Solution customer executive meetings Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 7
Strong performance in Q2-FY2022 2 Revenue 12-month backlog Non-GAAP EPS Record $1.15B, Record accelerated growth $1.54 (1) of $3.89B of 10% YoY At higher end of the $1,110- Above $1.22-$1.28 guidance ~ +10% YoY $1,150 guidance range range mainly due to a lower +$60m QoQ Driven primarily by North than anticipated non-GAAP driven by robust sales America, with high activity effective tax rate for the momentum levels across top customers quarter 1. Constant currency. Assumes exchange rates in the current period were unchanged from the prior period 2. Non-GAAP. See reconciliation tables in appendix IIn nf for orm ma at tiion on Se Sec cu ur riit ty y L Le evel vel 0 0 – – P Pu ub blliic c. . © © 20 2022 22 – – P Pr rop opr riie et ta ar ry y & & Con Conf fiid de en nt tiia all IIn nf for orm ma at tiion on of of A Am md doc ocs s 8
War in Fully compliant with the applicable sanctions and export controls Stopped all new sales of our products and services in Russia Immaterial Amdocs exposure to Russia and Ukraine Ensuring the wellbeing of the employees and contractors we have in the region, and to support those who wanted to leave with their families Actively providing humanitarian aid in Ukraine and neighboring countries, including: Donation campaign Working Sponsoring Sponsoring to provide essential with temporary clothing and services via UNICEF to local housing for stipends for vulnerable children community refugees in Ukrainian kids in a and families affected volunteers Poland boarding school Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 9
Progress in Strategic Domains Helping service providers deliver seamless experiences to their consumers and enterprise customers, enabled by the innovation we bring across key domains: wins business value CLOUD MANAGED SERVICES Cloud platforms and services, which accelerate Enrich BSS platform with real-time, agile EXTENSION and cloud-ready ecosystem the multi-year journeys to the public cloud to realize operational agility, scalability and Further accelerate T-Mobile / Sprint merger BUSINESS ASSURANCE ultimately, cloud at scale synergies wins business value 5G Monetization of new 5G services based on ultra low- Enable launching of cutting-edge 5G Tier 1 5G POLICY European services and business models for its latency connectivity, immersive entertainment, and SOLUTION customer customers, while reducing operational costs connected industries wins business value DIGITAL Unified customer journey across fixed-line DIGITAL Creating seamless digital experiences: enhance and mobile, shorter average handling times, TRANSFORMATION customer experience and transform operations reduced time to market, and cost savings Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 10
Progress in Strategic Domains (cont’d) Helping service providers deliver seamless experiences to their consumers and enterprise customers, enabled by the innovation we bring across key domains: wins business value NETWORK AUTOMATION INVENTORY Improve time-to-market with innovative MODERNIZATION new services in the 5G and cloud era Real-time, automated networks to deliver Harmonization of inventory systems across INVENTORY & multiple European countries will enable dynamic connected experiences NEXTGEN OSS improved efficiency and cost savings MULTI-YEAR NETWORK Network optimization OPTIMIZATION TESTING wins business value MEDIA Ability to add entertainment subscriptions to monthly bill or bigger bundle with existing Monetize partner ecosystem and retain customers’ broadband, mobile and cable packages end-users; support content delivery and monetization and expand company's growing portfolio of new OTT partners Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 11
Looking ahead: Tracking at the high end of guidance in FY2022 Amdocs is well positioned to A (1)(2) Reiterating monetize a large and expanding 6.0%-10.0% FY2022-2024 pipeline of opportunity: Annual three-year revenue growth revenue target (Guidance does not depend on a growth outlook material level of M&A activity) Innovative market-leading technology Tracking at high end of guidance range B Unrivalled for both revenue and EPS: track-record of execution FY2022 Revenue growth revenue and 8.0%-10.0% 1,2 Pro forma, constant currency EPS guidance Highly skilled 3 Non-GAAP EPS growth and talented employee base 9.0%-12.0% 1 Pro forma 1. Pro forma excludes the financial impact of OpenMarket (which was divested on December 31, 2020) from fiscal year 2021. 2. Constant currency. Assumes exchange rates in the current period were unchanged from the prior period 3. Pro forma non-GAAP diluted. See reconciliation tables in appendix IIn nf for orm ma at tiion on Se Sec cu ur riit ty y L Le evel vel 0 0 – – P Pu ub blliic c. . © © 20 2022 22 – – P Pr rop opr riie et ta ar ry y & & Con Conf fiid de en nt tiia all IIn nf for orm ma at tiion on of of A Am md doc ocs s 12
Chief Financial Officer & Chief Operating Officer Financial Update & Outlook IIn nf for orm ma at tiion on Se Sec cu ur riit ty y L Le evel vel 0 0 – – P Pu ub blliic c. . © © 20 2022 22 – – P Pr rop opr riie et ta ar ry y & & Con Conf fiid de en nt tiia all IIn nf for orm ma at tiion on of of A Am md doc ocs s 13
Q2 2022 Results Q2 2022 Revenue vs. Guidance $ Millions Q2 Revenue $1,145 million (2) +10.1% YoY $1,145 $1,130 High-end of guidance ($1,110M - $1,150M) (3) Q2 Non-GAAP Operating Margin Original Q2F22 Q2F22A Record revenue in Q2 2022 Guidance (midpoint) 17.6%, +10 bps QoQ rd 3 straight quarter of +10% YoY revenue (1)(2) Above midpoint of annual growth target range of 17.2% - 17.8%, Best-ever quarter in North America and unchanged YoY Q2 2022 Revenue by Region Consistent non-GAAP operating margin $ Millions while accelerating R&D investments Q2 GAAP Diluted EPS Diluted EPS positively impacted by lower Rest of World $1.28 $226 than anticipated tax rate Above guidance high-end ($0.96 - $1.04) North America Europe 1. Pro forma metrics exclude the financial impact of OpenMarket (which was divested on December 31, 2020) from fiscal year 2021. $772 $147 (3) Q2 Non-GAAP Diluted EPS 2. Constant currency. Assumes exchange rates in the current period were unchanged from the prior period $1.54 3. Non-GAAP. See reconciliation tables in appendix Above guidance high-end Information Security Level 0– Public© 2022 – Proprietary & ($1.22 - $1.28) Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 14 14 Confidential Information of Amdocs
12-Month Backlog Record Quarterly 12-Month Backlog in Q2F22 12-month backlog growth has accelerated $ Billions $3.89 year-over-year over the past several quarters $3.83 Record-high level as of $3.69 March 31, 2022 ~ +10% (1) (1) $3.59 YoY $3.54 ~ +10% YoY, +$60M QoQ (1) $3.49 (1) Q1F21 Q2F21 Q3F21 Q4F21 Q1F22 Q2F22 Leading Indicator 12-month backlog includes: • Anticipated revenue related to contracts 12-month backlog • Estimated revenue from managed services contracts typically covers ~80% of • Letters of intent forward 12-month • Maintenance revenue • Estimated ongoing support activities Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 15 15 Confidential Information of Amdocs
Record-High Managed Services Revenue in Q2F22 $ Millions Managed services Managed Services arrangements support $663 $635 business model resiliency with highly ~ +5% recurring revenue YoY streams, multi-year engagements and Record-high level as of high renewal rates, Q2F21 Q2F22 and may also include March 31, 2022 large-scale digital ~ +5% YoY transformation projects managed Close to Philippines services contract Canada 100% renewals 5-year managed services 3-year managed services extension through 2027 extension through 2028 Support continued cloud Future projects to support transformation PLDT’s cloud journey Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 16 16 Confidential Information of Amdocs
(2) DSO’s Q2 2022 Free cash flow bridge Reported FCF vs. Normalized FCF, $ Millions 81 days +2 days YoY and +2 days QoQ DSO’s may fluctuate from quarter to quarter $169 $47 $160 $30 $8 $122 Deferred revenue > unbilled Improved by $48 million Deferred revenue: +$17M QoQ Unbilled receivables: -$31M QoQ Items fluctuate from quarter to quarter in line with normal business activities. Cashflow Net capex Reported Israel Other Normalized from & other FCF campus FCF Operations Strong normalized free cash flow of *Figures may not sum due to rounding $160 million, even with Q2 seasonal weakness due to the timing of Cash, Credit Facility & Debt Position Liquidity: Cash + Credit Facility annual bonus payments $ Millions, as of March 31, 2022 $1.4 billion Credit Ample liquidity to support ongoing Facility Ample liquidity including available $500 business needs while retaining the $500M revolving credit facility capacity to fund future strategic growth investments Cash $856 Baa2 BBB $650 Moody’s S&P 1. $650M senior note, maturing June 2030 Remain committed to maintaining 2. Non-GAAP. See reconciliation tables in appendix (1) $0 Liquidity Debt our Investment grade credit rating Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 17 17 Confidential Information of Amdocs
(1) Q2 2022 Cash Returned to Shareholders FY2022E Normalized FCF outlook $ Millions $ Millions Dividends, $44 $131 $19 $650 $500 Share repurchases, $130 As of March 31, roughly $0.7B of share Reported Israel Other Normalized Reiterating normalized free cash FCF campus FCF repurchase authorization capacity remained flow (FCF) outlook of $650M in FY2022, equating to ~100% cash (1) Normalized FCF : Three-year historical trend and FY2022E outlook conversion 140% 103% 100% (1) 88% % Normalized FCF / 100% (1) Non-GAAP Net Income Expect the majority of normalized 100% 99% 89% FY2022E free cash flow to be returned to % of Normalized FCF guidance: Returned to Shareholders shareholders by way of share return majority repurchases and quarterly cash dividend payments in FY2022 $869 (1) $650 $613 Normalized FCF ($M) $527 FY2019 FY2020 FY2021 FY2022E 1. Non-GAAP. See reconciliation tables in appendix (Guidance) Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 18 18 Confidential Information of Amdocs
Revenue Growth (4) YoY% Growth Constant Currency (1) (4) FY21 and FY22E revenue is pro forma constant currency 10.0% Tracking at 7.0% high end of 8.0% pro forma guidance 4.1% 2.4% 2.3% Tracking in line with high end of (1) (1)(4) (1)(4) pro forma outlooks for revenue FY2018 FY2019 FY2020 FY2021 FY2022E (4) (2) and diluted non-GAAP EPS growth in FY2022E (3) Total Shareholder Return (2) Non-GAAP Diluted EPS Growth YoY % + Dividend Yield (1) Firmly positioned to deliver FY21 and FY22E non-GAAP EPS growth is presented pro forma ~14%* double-digit total shareholder returns for the 11.7% Tracking at 12.0% high end of second year running 8.6% 7.6% pro forma 9.8% 1. Pro forma metrics exclude the financial impact of OpenMarket (which was 9.0% guidance 5.3% divested on December 31, 2020) from fiscal year 2021. 6.9% 6.1% 2. Non-GAAP. See reconciliation tables in appendix 3.0% 3. Expected total shareholder return assumes Non-GAAP EPS growth plus 3.0% dividend yield (based on fiscal year end closing share price); FY2022E 1.9% 1.7% 2.3% 2.1% 1.5% assumed midpoint of pro forma non-GAAP EPS outlook, and dividend yield based on proposed new quarterly rate of $0.395 as of share price on (1) (1) 11/2/21 FY2018 FY2019 FY2020 FY2021 FY2022E 4. Constant currency. Assumes exchange rates in the current period were Non-GAAP Diluted EPS Growth Dividend Yield Total Shareholder Return unchanged from the prior period Information Security Level 0– Public© 2022 – Proprietary & *Non-GAAP pro forma EPS growth of 12%, plus ~2% dividend yield Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 19 19 Confidential Information of Amdocs
Q&A Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 20 20
Q3 Fiscal 2022 Outlook $1,140 - $1,180 million Revenue GAAP EPS $0.97 - $1.05 (2) Non-GAAP EPS $1.23 - $1.29 Share Count 124 million Above high-end of annual Effective Tax Rate (2) Non-GAAP Tracking at high-end of target range of 13%-17% (1) pro forma outlooks for (3) Full Year Fiscal 2022 Outlook Updated Previous revenue and diluted non- (2) GAAP EPS growth in Revenue growth 5.2% - 7.2% 3.4% - 7.4% As reported FY2022E Revenue growth 8.0% - 10.0% 6.0% - 10.0% (1) (3) Pro forma , constant currency (2) Non-GAAP EPS growth 7.3% - 10.3% 6.3% - 10.3% As reported 1. Pro forma metrics exclude the financial impact of OpenMarket (which was (2) Non-GAAP EPS growth divested on December 31, 2020) from fiscal year 2021. 9.0% - 12.0% 8.0% - 12.0% (1) Pro forma 2. Non-GAAP. See reconciliation tables in appendix Operating Margin 17.2%-17.8% 17.2%-17.8% (2) Non-GAAP 3. Constant currency. Assumes exchange rates in the current period were Effective Tax Rate unchanged from the prior period 13.0%-17.0% 13.0%-17.0% (2) Non-GAAP (2) Free cash flow $500 million $500 million (2) Normalized free cash flow $650 million $650 million Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 22 22 Confidential Information of Amdocs
Appendix Reconciliation Tables Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 23 23
AMDOCS LIMITED Selected Financial Metrics (In thousands, except per share data) Three months ended Six months ended March 31, March 31, (a) 2022 2021 2022 2021 Revenue $ 1,145,271 $ 1,048,734 $ 2,249,903 $ 2,135,077 Non-GAAP operating income 201,625 184,883 395,232 372,864 Non-GAAP net income 190,944 148,095 341,079 301,067 Non-GAAP diluted earnings per share $ 1.54 $ 1.13 $ 2.74 $ 2.30 Diluted weighted average number of shares outstanding 123,821 130,696 124,571 131,147 Free Cash Flows and Normalized Free Cash Flow (In thousands) Three months ended Six months ended March 31, March 31, (a) 2022 2021 2022 2021 Net Cash Provided by Operating Activities $ 168,856 $ 119,736 $ 372,974 $ 536,221 Purchases of property and (c) (47,271) (49,245) (104,496) (99,310) equipment, net Free Cash Flow 121,585 70,491 268,478 436,911 a) Since January 1, 2021, OpenMarket results are not included in the Consolidated Statements of Income given its divestiture. b) Tax payment related to capital gain from divesture of OpenMarket, (b) Tax payment on sale of business 3,193 25,190 3,193 25,190 which was completed on December 31, 2020. c) The amounts under Purchase of property and equipment, net” include proceeds from sale of property and equipment of $555 and Payments of acquisition related $136 for the six months ended March 31, 2022 and 2021, respectively. liabilities 4,871 13,234 14,350 13,234 Net capital expenditures related to the new campus development 30,109 24,221 59,416 42,555 Normalized Free Cash Flow $ 159,758 $ 133,136 $ 345,437 $ 517,890 Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 24 24 Confidential Information of Amdocs
AMDOCS LIMITED Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP (In thousands) Three months ended March 31, 2022 Reconciliation items GAAP Amortization Equity based Changes in Non-GAAP Other Tax of purchased compensation certain effect intangible expense acquisitions assets and related liabilities other measured at fair value Operating expenses: Cost of revenue $ 741,257 $ - $ (8,070) $ (1,820) $ - $ - $ 731,367 Research and development 87,064 - (1,375) - - - 85,689 Selling, general and administrative 134,982 - (8,392) - - - 126,590 Amortization of purchased intangible assets and other 18,317 (18,317) - - - - - Total operating expenses 981,620 (18,317) (17,837) (1,820) - - 943,646 Operating income 163,651 18,317 17,837 1,820 - - 201,625 Interest and other expense, net (8,619) - - - 1,100 - (7,519) Income tax (benefit) expense (3,465) - - - - 6,627 3,162 Net income $ 158,497 $ 18,317 $ 17,837 $ 1,820 $ 1,100 $ (6,627) $ 190,944 Three months ended March 31, 2021 Reconciliation items GAAP Amortization Equity based Changes in Non-GAAP Other Tax of purchased compensation certain effect intangible expense acquisitions assets and related liabilities other measured at fair value Operating expenses: Cost of revenue $ 685,515 $ - $ (5,582) $ (394) $ - $ - $ 679,539 Research and a) Since January 1, 2021, OpenMarket results are not included in the development 75,154 - (1,012) - - - 74,142 Selling, general and Consolidated Statements of Income given its divestiture. administrative 116,951 - (6,781) - - - 110,170 b) Tax payment related to capital gain from divesture of OpenMarket, Amortization of purchased intangible which was completed on December 31, 2020. assets and other 21,870 (21,870) - - - - - c) The amounts under Purchase of property and equipment, net” Total operating expenses 899,490 (21,870) (13,375) (394) - - 863,851 include proceeds from sale of property and equipment of $555 and $136 for the six months ended March 31, 2022 and 2021, respectively. Operating income 149,244 21,870 13,375 394 - - 184,883 Interest and other expense, net (3,542) - - - (375) - (3,917) Income tax (benefit) expense 26,635 - - - - 6,236 32,871 Net income $ 119,067 $ 21,870 $ 13,375 $ 394 $ (375) $ (6,236) $ 148,095 Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 25 25 Confidential Information of Amdocs
AMDOCS LIMITED Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP (In thousands) Six months ended March 31, 2022 Reconciliation items GAAP Amortization Equity based Changes in certain Non-GAAP Gain from Other Tax of compensation acquisitions related sale of a effect purchased expense liabilities measured business intangible at fair value assets and other Operating expenses: Cost of revenue $ 1,457,975 $ - $ (15,217) $ (793) $ - $ - $ - $ 1,441,965 Research and development 169,009 - (2,598) - - - - 166,411 Selling, general and 263,058 - (16,763) - - - - 246,295 administrative Amortization of purchased intangible 36,064 (36,064) - - - - - - assets and other Total operating 1,926,106 (36,064) (34,578) (793) - - - 1,854,671 expenses Operating income 323,797 36,064 34,578 793 - - - 395,232 Interest and other (11,181) - - - - (2,505) - (13,686) expense, net Gain from sale of a 10,000 - - - (10,000) - - - business Income tax (benefit) 30,517 - - - - - 9,950 40,467 expense Net income $ 292,099 $ 36,064 $ 34,578 $ 793 $ (10,000) $ (2,505) $ (9,950) $ 341,079 Six months ended (a) March 31, 2021 Reconciliation items GAAP Amortization Equity based Changes in certain Non-GAAP Gain from Other Tax of compensation acquisitions related sale of a effect purchased expense liabilities measured business intangible at fair value assets and other Operating expenses: Cost of revenue $ 1,414,231 $ - $ (10,523) $ (15,728) $ - $ - $ - $ 1,387,980 Research and 150,823 - (1,844) - - - - 148,979 development Selling, general and 238,839 - (13,585) - - - - 225,254 administrative Amortization of a) Since January 1, 2021, OpenMarket results are not included in the purchased intangible 41,740 (41,740) - - - - - - Consolidated Statements of Income given its divestiture. assets and other Total operating b) Tax payment related to capital gain from divesture of OpenMarket, 1,845,633 (41,740) (25,952) (15,728) - - - 1,762,213 expenses which was completed on December 31, 2020. Operating income 289,444 41,740 25,952 15,728 - - - 372,864 c) The amounts under Purchase of property and equipment, net” include proceeds from sale of property and equipment of $555 and Interest and other (10,032) - - - - 824 - (9,208) expense, net $136 for the six months ended March 31, 2022 and 2021, respectively. Gain from sale of a 226,410 - - - (226,410) - - - business Income tax (benefit) 87,123 - - - - - (24,534) 62,589 expense Net income $ 418,699 $ 41,740 $ 25,952 $ 15,728 $ (226,410) $ 824 $ 24,534 $ 301,067 Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 26 26 Confidential Information of Amdocs