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 2023
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 10, 2023 Amdocs Limited (“Amdocs”) issued a press release announcing financial results for the quarter ended March 31, 2023. 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.
In addition, on May 10, 2023, Amdocs also announced that it has entered into a definitive agreement to acquire the service assurance business of TEOCO for consideration of approximately $90 million in cash, subject to the satisfaction of the conditions to closing. A copy of the press release is furnished as Exhibit 99.3 to this Report of Foreign Private Issuer on Form 6-K.
The information in this Form 6-K (including Exhibits 99.1, 99.2 and 99.3) 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 10, 2023
EXHIBIT INDEX
Exhibit 99.1
Amdocs Limited Reports Second Quarter Fiscal 2023 Results
Record Quarterly Revenue of $1.22 Billion, Above Midpoint of Guidance and up 6.8% YoY
as Reported and 8.2% YoY in Constant Currency(2)
Reiterates Fiscal 2023 Revenue Growth Outlook while Tightening Expected Range to 6%-8% as Reported and 7%-9% Constant Currency(2)
Reiterates Fiscal 2023 Earnings per Share Growth Targets
Reiterates Fiscal 2023 Free Cash Flow(1) Outlook of $700 Million
Second Quarter Fiscal 2023 Highlights
(All comparisons are against the prior year)
| • | Record revenue of $1,223 million, up 6.8% as reported and up 8.2% in constant currency(2); revenue was above the midpoint of $1,200-$1,240 million guidance range |
| • | Record revenue of $829 million in North America, up 7.4%, and record revenue of $172 million in Europe, up 16.6% |
| • | Record managed services revenue of $719 million, equivalent to approximately 59% of total revenue |
| • | GAAP diluted EPS of $1.23, above the midpoint of $1.18-$1.26 guidance range |
| • | Non-GAAP diluted EPS of $1.47, at the midpoint guidance range of $1.44-$1.50 |
| • | GAAP operating income of $182 million; GAAP operating margin of 14.9%, up 220 basis points sequentially, primarily due to restructuring charges, and up 60 basis points as compared to last year’s second fiscal quarter |
| • | Non-GAAP operating income of $218 million; non-GAAP operating margin of 17.8%, up 10 basis points sequentially and up 20 basis points as compared to last year’s second fiscal quarter |
| (1) | Please refer to the Selected Financial Metrics tables below (figures may not sum because of rounding). |
| (2) | Revenue on a constant currency basis assumes exchange rates in the current period were unchanged from the prior period |
| • | Free cash flow of $259 million, comprised of cash flow from operations of $294 million, less $35 million in net capital expenditures and other(1); reiterates full year fiscal 2023 free cash outlook of $700 million |
| • | Repurchased $106 million of ordinary shares during the second fiscal quarter |
| • | Record twelve-month backlog of $4.11 billion, up 5.7% as compared to last year’s second fiscal quarter |
| • | The Board of Directors of Amdocs approved a definitive agreement on May 10, 2023, to acquire the service assurance business of TEOCO for a consideration of approximately $90 million in cash, subject to closing conditions |
JERSEY CITY, NJ – May 10, 2023 – 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, 2023.
“I am pleased with our second fiscal quarter performance as we progressed our strategy to deliver the next-generation cloud-based products and software services that global communications service providers need to unlock the potential of 5G and broadband networks, data-driven intelligence, and improved consumer and B2B experience. Record revenue of $1.22 billion was up 8.2% from a year ago in constant currency(2), driven by our best-ever quarters in North America and Europe, and we saw continued sales momentum with many cloud-related wins in the quarter. New deals included key awards with T-Mobile in the US, two new logos in Eastern Europe, and a significant cloud-migration engagement with PLDT in the Philippines. On the strategic front, we expanded our Microsoft partnership to bring a new AI-powered Customer Engagement Platform, and we sharpened our focus on the growth potential of B2B with the launch of CES23, our most advanced Customer Experience Suite yet. Additionally, we signed a definitive agreement to acquire the service assurance business of TEOCO to enhance the execution of our network automation strategy,” said Shuky Sheffer, president and chief executive officer of Amdocs Management Limited.
“Demonstrating strong execution, we maintained a high rate of project deployments in Q2, which included major milestone achievements with many of the world’s largest service providers. Driven by ongoing efficiency gains, profitability improved on a sequential and year ago basis and free cash flow generation was very strong on the back of healthy cash collections from customers. In managed services, we renewed several customer agreements which included an extended multiyear partnership with Globe in the Philippines and an expanded cloud-related engagement with a major Western European operator,” said Tamar Rapaport-Dagim, chief financial officer & chief operating officer of Amdocs Management Limited.
Sheffer concluded, “As said previously, Amdocs and our global customers are not immune to economic and industry cycles, and we continue to closely monitor the operating environment. As a key technology enabler, we believe Amdocs is positioned at the heart of a multi-year, technology-driven investment cycle centered around the major long-term trends of 5G, network automation, digital modernization, and cloud. Moreover, we believe Amdocs’ role as a trusted partner is even more relevant during this period of rapidly shifting market dynamics as we work to help service providers improve consumer and B2B experience, accelerate cost reduction, and increase efficiency. Overall, considering our strong first half performance and the visibility provided by our unique business model, we expect to deliver constant currency(2) revenue growth within a tighter range of 7% to 9% in fiscal 2023, while maintaining improved profitability and robust earnings to cash conversion for the full year.”
Revenue
(All comparisons are against the prior year period)
| In millions | ||||||||
| Three months ended | ||||||||
| March 31, 2023 | ||||||||
| Actual | Guidance | |||||||
| Revenue |
$ | 1,223 | $ | 1,200 - $1,240 | ||||
| Revenue Growth, as reported |
6.8 | % | ||||||
| Revenue Growth, constant currency (2) |
8.2 | % | ||||||
| • | Revenue for the second fiscal quarter of 2023 was at the midpoint of Amdocs’ guidance, even after adjusting for a positive impact from foreign currency movements of approximately $3 million compared to our guidance assumptions |
| • | Revenue for the second fiscal quarter includes a positive impact from foreign currency movements of approximately $7 million relative to the first quarter of fiscal 2023 |
Net Income and Earnings Per Share
| ` | In thousands, expect per share data |
|||||||
| Three months ended | ||||||||
| March 31, | ||||||||
| 2023 | 2022 | |||||||
| GAAP Measures |
||||||||
| Net Income |
$ | 150,309 | $ | 158,497 | ||||
| Net Income attributable to Amdocs Limited |
$ | 149,603 | $ | 158,497 | ||||
| Diluted earnings per share |
$ | 1.23 | $ | 1.28 | ||||
| Non-GAAP Measures |
||||||||
| Non-GAAP Net Income |
$ | 179,298 | $ | 190,944 | ||||
| Non-GAAP Net Income attributable to Amdocs Limited |
$ | 178,592 | $ | 190,944 | ||||
| Non-GAAP Diluted earnings per share |
$ | 1.47 | $ | 1.54 | ||||
| • | 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 10, 2023, the Board approved the Company’s next quarterly cash dividend payment of $0.435 per share and set June 30, 2023 as the record date for determining the shareholders entitled to receive the dividend, which will be payable on July 28, 2023 |
| • | Share Repurchase Activity: Repurchased $106 million of ordinary shares during the second quarter of fiscal 2023 |
Twelve-month Backlog
Twelve-month backlog was a record $4.11 billion at the end of the second quarter of fiscal 2023, up approximately 5.7% 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 2023 Outlook
| In millions, except per share data Q3 2023 | ||
| Revenue |
$1,215-$1,255 | |
| GAAP diluted EPS |
$1.16-$1.26 | |
| Non-GAAP diluted EPS |
$1.45-$1.51 |
| • | Third quarter revenue guidance assumes immaterial sequential impact from foreign currency fluctuations as compared to the second quarter of fiscal 2023 |
| • | Third quarter non-GAAP diluted EPS guidance excludes equity-based compensation expense of approximately $0.15-$0.17 per share, amortization of purchased intangible assets and other acquisition-related costs of approximately $0.08 per share, changes in certain acquisitions related liabilities measured at fair value, and other, net of related tax effects |
Full Year Fiscal 2023 Outlook
| FY 2023, year-over-year growth | ||||
| Current Guidance | Previous Guidance | |||
| Revenue growth, as reported |
6.0%-8.0% | 5.0%-9.0% | ||
| Revenue growth, constant currency(2) |
7.0%-9.0% | 6.0%-10.0% | ||
| GAAP diluted EPS growth |
3.0%-10.0% | 3.0%-10.0% | ||
| Non-GAAP diluted EPS growth |
9.0%-13.0% | 9.0%-13.0% | ||
| FY 2023, in millions | ||||
| Current Guidance | Previous Guidance | |||
| Free cash flow(1) |
~$700 | ~$700 | ||
| • | Full year fiscal 2023 revenue guidance incorporates an expected unfavorable impact from foreign currency fluctuations of approximately 1% year-over-year, consistent with previous expectation |
| • | Non-GAAP diluted earnings per share growth excludes equity-based compensation expense of approximately $0.58-$0.63 per share, amortization of purchased intangible assets and other acquisition-related costs of approximately $0.35 per share, restructuring charges of approximately $0.15 per share, changes in certain acquisitions related liabilities measured at fair value, and other, 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 2023 |
| • | Free cash flow(1) is comprised of cash flow from operations, less net capital expenditures and other |
The forward looking statements regarding our third fiscal quarter 2023 and full year fiscal 2023 guidance 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 certain geopolitical events, the current inflationary environment, global or regional events, such as the COVID-19 pandemic and the prevailing level of macro-economic, business and operational uncertainty, which have 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 10, 2023 at 5:00 p.m. Eastern Time to discuss the Company’s second quarter of fiscal 2023 results.
To participate in the call, please register here to receive the dial-in numbers and unique access PIN. 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(2) 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, non-GAAP net income attributable to Amdocs Limited 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; |
| • | restructuring 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, revenue on a constant currency(2) 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, non-GAAP net income attributable to Amdocs Limited 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, restructuring 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 31,000 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 $4.58 billion in fiscal 2022.
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 macro-economic conditions, prevailing level of macroeconomic, business and operational uncertainty, including as a result of geopolitical events or other global or regional events such as the COVID-19 pandemic, as well as the current inflationary environment, and the effects of these conditions on the company’s clients’ businesses and levels of business activity, 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, 2022 filed on December 13, 2022 and our Form 6-K furnished for the first quarter of fiscal 2023 on February 13, 2023.
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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| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenue |
$ | 1,223,304 | $ | 1,145,271 | $ | 2,409,024 | $ | 2,249,903 | ||||||||
| Operating expenses: |
||||||||||||||||
| Cost of revenue |
795,485 | 741,257 | 1,552,334 | 1,457,975 | ||||||||||||
| Research and development |
89,274 | 87,064 | 185,000 | 169,009 | ||||||||||||
| Selling, general and administrative |
143,328 | 134,982 | 286,550 | 263,058 | ||||||||||||
| Amortization of purchased intangible assets and other |
12,940 | 18,317 | 28,253 | 36,064 | ||||||||||||
| Restructuring charges |
— | — | 24,536 | — | ||||||||||||
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| 1,041,027 | 981,620 | 2,076,673 | 1,926,106 | |||||||||||||
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| Operating income |
182,277 | 163,651 | 332,351 | 323,797 | ||||||||||||
| Interest and other expense, net |
(2,938 | ) | (8,619 | ) | (7,901 | ) | (11,181 | ) | ||||||||
| Gain from sale of a business |
— | — | — | 10,000 | ||||||||||||
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| Income before income taxes |
179,339 | 155,032 | 324,450 | 322,616 | ||||||||||||
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| Income tax expense (benefit) |
29,030 | (3,465 | ) | 44,269 | 30,517 | |||||||||||
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| Net income |
$ | 150,309 | $ | 158,497 | $ | 280,181 | $ | 292,099 | ||||||||
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| Net income attributable to noncontrolling interests |
706 | — | 911 | — | ||||||||||||
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| Net income attributable to Amdocs Limited |
$ | 149,603 | $ | 158,497 | $ | 279,270 | $ | 292,099 | ||||||||
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| Basic earnings per share attributable to Amdocs Limited |
$ | 1.24 | $ | 1.29 | $ | 2.32 | $ | 2.36 | ||||||||
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| Diluted earnings per share attributable to Amdocs Limited |
$ | 1.23 | $ | 1.28 | $ | 2.30 | $ | 2.34 | ||||||||
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| Cash dividends declared per ordinary share |
$ | 0.435 | $ | 0.395 | $ | 0.830 | $ | 0.755 | ||||||||
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| Basic weighted average number of shares outstanding |
120,516 | 122,977 | 120,585 | 123,748 | ||||||||||||
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| Diluted weighted average number of shares outstanding |
121,359 | 123,821 | 121,430 | 124,571 | ||||||||||||
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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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| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenue |
$ | 1,223,304 | $ | 1,145,271 | $ | 2,409,024 | $ | 2,249,903 | ||||||||
| Non-GAAP operating income |
217,737 | 201,625 | 427,275 | 395,232 | ||||||||||||
| Non-GAAP net income |
179,298 | 190,944 | 355,840 | 341,079 | ||||||||||||
| Non-GAAP net income attributable to Amdocs Limited |
178,592 | 190,944 | 354,929 | 341,079 | ||||||||||||
| Non-GAAP diluted earnings per share |
$ | 1.47 | $ | 1.54 | $ | 2.92 | $ | 2.74 | ||||||||
| Diluted weighted average number of shares outstanding |
121,359 | 123,821 | 121,430 | 124,571 | ||||||||||||
Free Cash Flows
(In thousands)
| Three months ended March 31, |
Six months ended March 31, |
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| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Net Cash Provided by Operating Activities |
$ | 294,476 | $ | 168,856 | $ | 377,702 | $ | 372,974 | ||||||||
| Purchases of property and equipment, net (a) |
(35,119 | ) | (47,271 | ) | (68,822 | ) | (104,496 | ) | ||||||||
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| Free Cash Flow |
$ | 259,357 | $ | 121,585 | $ | 308,880 | $ | 268,478 | ||||||||
Normalized Free Cash Flow (b) for the three and six months ended March 31, 2022: $159,758 and $345,437, respectively, excluding net capital expenditures related to the new campus development of $30,109 and $59,416, respectively, payment for acquisition related liability of $4,871 and $14,350, respectively, and tax payment on sale of business of $3,193.
| (a) | The amounts under “Purchase of property and equipment, net” include proceeds from sale of property and equipment of $255 and $555 for the six months ended March 31, 2023 and 2022, respectively. |
| (b) | Since Q12023, the Normalized Free Cash Flow is no longer applicable. |
AMDOCS LIMITED
Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP
(In thousands)
| Three Months Ended March 31, 2023 | ||||||||||||||||||||||||
| GAAP | Amortization of purchased intangible assets and other |
Equity based compensation expense |
Changes in certain acquisitions related liabilities measured at fair value |
Tax effect |
Non-GAAP | |||||||||||||||||||
| Operating expenses: |
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| Cost of revenue |
$ | 795,485 | $ | — | $ | (10,061 | ) | $ | (1,159 | ) | $ | — | $ | 784,265 | ||||||||||
| Research and development |
89,274 | (1,703 | ) | 87,571 | ||||||||||||||||||||
| Selling, general and administrative |
143,328 | (9,597 | ) | 133,731 | ||||||||||||||||||||
| Amortization of purchased intangible assets and other |
12,940 | (12,940 | ) | — | ||||||||||||||||||||
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| Total operating expenses |
1,041,027 | (12,940 | ) | (21,361 | ) | (1,159 | ) | — | 1,005,567 | |||||||||||||||
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| Operating income |
182,277 | 12,940 | 21,361 | 1,159 | — | 217,737 | ||||||||||||||||||
| Interest and other expense, net |
(2,938 | ) | (2,938 | ) | ||||||||||||||||||||
| Income taxes |
29,030 | 6,471 | 35,501 | |||||||||||||||||||||
| Net income |
150,309 | 12,940 | 21,361 | 1,159 | (6,471 | ) | 179,298 | |||||||||||||||||
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| Net income attributable to noncontrolling interests |
706 | 706 | ||||||||||||||||||||||
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| Net income attributable to Amdocs Limited |
$ | 149,603 | $ | 12,940 | $ | 21,361 | $ | 1,159 | $ | (6,471 | ) | $ | 178,592 | |||||||||||
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| Three Months Ended March 31, 2022 | ||||||||||||||||||||||||||||
| 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 |
$ | 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 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
AMDOCS LIMITED
Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP
(In thousands)
| Six Months Ended March 31, 2023 | ||||||||||||||||||||||||||||
| GAAP | Amortization of purchased intangible assets and other |
Equity based compensation expense |
Changes in certain acquisitions related liabilities measured at fair value |
Restructuring charges |
Tax effect |
Non-GAAP | ||||||||||||||||||||||
| Operating expenses: |
||||||||||||||||||||||||||||
| Cost of revenue |
$ | 1,552,334 | $ | — | $ | (18,716 | ) | $ | (1,284 | ) | $ | — | $ | — | $ | 1,532,334 | ||||||||||||
| Research and development |
185,000 | (3,187 | ) | 181,813 | ||||||||||||||||||||||||
| Selling, general and administrative |
286,550 | (18,948 | ) | 267,602 | ||||||||||||||||||||||||
| Amortization of purchased intangible assets and other |
28,253 | (28,253 | ) | — | ||||||||||||||||||||||||
| Restructuring charges |
24,536 | (24,536 | ) | — | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total operating expenses |
2,076,673 | (28,253 | ) | (40,851 | ) | (1,284 | ) | (24,536 | ) | — | 1,981,749 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Operating income |
332,351 | 28,253 | 40,851 | 1,284 | 24,536 | — | 427,275 | |||||||||||||||||||||
| Interest and other expense, net |
(7,901 | ) | (7,901 | ) | ||||||||||||||||||||||||
| Income taxes |
44,269 | 19,265 | 63,534 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net income |
280,181 | 28,253 | 40,851 | 1,284 | 24,536 | (19,265 | ) | 355,840 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net income attributable to noncontrolling interests |
911 | 911 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net income attributable to Amdocs Limited |
$ | 279,270 | $ | 28,253 | $ | 40,851 | $ | 1,284 | $ | 24,536 | $ | (19,265 | ) | $ | 354,929 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Six Months Ended March 31, 2022 | ||||||||||||||||||||||||||||||||
| 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 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
AMDOCS LIMITED
Condensed Consolidated Balance Sheets
(In thousands)
| As of | ||||||||
| March 31, 2023 |
September 30, 2022 |
|||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 623,404 | $ | 573,377 | ||||
| Short-term interest-bearing investments |
238,163 | 244,603 | ||||||
| Accounts receivable, net, including unbilled of $166,866 and $157,165, respectively |
991,486 | 946,777 | ||||||
| Prepaid expenses and other current assets |
251,883 | 238,390 | ||||||
|
|
|
|
|
|||||
| Total current assets |
2,104,936 | 2,003,147 | ||||||
| Property and equipment, net |
797,023 | 794,287 | ||||||
| Lease assets |
157,587 | 176,884 | ||||||
| Goodwill and other intangible assets, net |
2,798,295 | 2,841,137 | ||||||
| Other noncurrent assets |
606,329 | 574,938 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 6,464,170 | $ | 6,390,393 | ||||
|
|
|
|
|
|||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Current liabilities |
||||||||
| Accounts payable, accruals and other |
$ | 934,907 | $ | 955,658 | ||||
| Lease liabilities |
38,319 | 43,336 | ||||||
| Deferred revenue |
351,671 | 253,686 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
1,324,897 | 1,252,680 | ||||||
| Lease liabilities |
120,170 | 138,378 | ||||||
| Long-term debt, net of unamortized debt issuance costs |
645,404 | 645,117 | ||||||
| Other noncurrent liabilities |
744,138 | 793,940 | ||||||
| Total Amdocs Limited Shareholders’ equity |
3,586,141 | 3,517,769 | ||||||
| Noncontrolling interests |
43,420 | 42,509 | ||||||
|
|
|
|
|
|||||
| Total equity |
3,629,561 | 3,560,278 | ||||||
|
|
|
|
|
|||||
| Total liabilities and equity |
$ | 6,464,170 | $ | 6,390,393 | ||||
|
|
|
|
|
|||||
AMDOCS LIMITED
Consolidated Statements of Cash Flows
(In thousands)
| Six months ended March 31, |
||||||||
| 2023 | 2022 | |||||||
| Cash Flow from Operating Activities: |
||||||||
| Net income |
$ | 280,181 | $ | 292,099 | ||||
| Reconciliation of net income to net cash provided by operating activities: |
||||||||
| Depreciation, amortization and impairment |
103,086 | 101,071 | ||||||
| Amortization of debt issuance cost |
287 | 279 | ||||||
| Equity-based compensation expense |
40,851 | 34,578 | ||||||
| Gain from sale of a business |
— | (10,000 | ) | |||||
| Deferred income taxes |
(27,357 | ) | (35,879 | ) | ||||
| Loss from short-term interest-bearing investments |
1,625 | 1,333 | ||||||
| Net changes in operating assets and liabilities, net of amounts acquired: |
||||||||
| Accounts receivable, net |
(53,485 | ) | (140,863 | ) | ||||
| Prepaid expenses and other current assets |
(20,416 | ) | 3,848 | |||||
| Other noncurrent assets |
(245 | ) | 3,042 | |||||
| Lease assets and liabilities, net |
(3,928 | ) | (67 | ) | ||||
| Accounts payable, accrued expenses and accrued personnel |
(38,602 | ) | (22,006 | ) | ||||
| Deferred revenue |
81,959 | 102,997 | ||||||
| Income taxes payable, net |
(11,245 | ) | 27,378 | |||||
| Other noncurrent liabilities |
24,991 | 15,164 | ||||||
|
|
|
|
|
|||||
| Net cash provided by operating activities |
377,702 | 372,974 | ||||||
|
|
|
|
|
|||||
| Cash Flow from Investing Activities: |
||||||||
| Purchase of property and equipment, net (a) |
(68,822 | ) | (104,496 | ) | ||||
| Proceeds from sale of short-term interest-bearing investments |
10,360 | 13,142 | ||||||
| Purchase of short-term interest-bearing investments |
— | (34,275 | ) | |||||
| Net cash paid for business acquisitions |
— | (24,497 | ) | |||||
| Net cash received from sale of a business |
— | 10,000 | ||||||
| Other |
(2,593 | ) | (2,958 | ) | ||||
|
|
|
|
|
|||||
| Net cash used in investing activities |
(61,055 | ) | (143,084 | ) | ||||
|
|
|
|
|
|||||
| Cash Flow from Financing Activities: |
||||||||
| Repurchase of shares |
(205,637 | ) | (300,929 | ) | ||||
| Proceeds from employee stock option exercises |
34,840 | 50,550 | ||||||
| Payments of dividends |
(95,370 | ) | (89,366 | ) | ||||
| Payment of contingent consideration from a business acquisition |
(453 | ) | (6,153 | ) | ||||
|
|
|
|
|
|||||
| Net cash used in financing activities |
(266,620 | ) | (345,898 | ) | ||||
|
|
|
|
|
|||||
| Net increase (decrease) in cash and cash equivalents |
50,027 | (116,008 | ) | |||||
| Cash and cash equivalents at beginning of period |
573,377 | 709,064 | ||||||
|
|
|
|
|
|||||
| Cash and cash equivalents at end of period |
$ | 623,404 | $ | 593,056 | ||||
|
|
|
|
|
|||||
AMDOCS LIMITED
Supplementary Information
(In millions)
| Three months ended | ||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | ||||||||||||||||
| North America |
$ | 829.0 | $ | 812.7 | $ | 794.4 | $ | 788.0 | $ | 772.2 | ||||||||||
| Europe |
171.7 | 168.7 | 146.4 | 146.1 | 147.2 | |||||||||||||||
| Rest of the World |
222.6 | 204.3 | 225.7 | 226.2 | 225.9 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Revenue |
$ | 1,223.3 | $ | 1,185.7 | $ | 1,166.5 | $ | 1,160.3 | $ | 1,145.3 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Three months ended | ||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | ||||||||||||||||
| Managed Services Revenue |
$ | 718.9 | $ | 699.8 | $ | 714.6 | $ | 717.9 | $ | 663.4 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| as of | ||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | ||||||||||||||||
| 12-Month Backlog |
$ | 4,110 | $ | 4,090 | $ | 3,970 | $ | 3,950 | $ | 3,890 | ||||||||||
|
|
|
|
|
|
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|||||||||||
# # #
Exhibit 99.2 Amdocs Limited NASDAQ: DOX Fiscal Q2 2023 Earnings Presentation May 10, 2023 Shuky Sheffer President & CEO Tamar Rapaport-Dagim CFO & COO Information Security Level 3 – Highly sensitive. © 2023 – Proprietary & Confidential Information of Amdocs 1
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 macro-economic conditions, prevailing level of macroeconomic, business and operational uncertainty, including as a result of geopolitical events or other global or regional events such as the COVID-19 pandemic, as well as the current inflationary environment, and the effects of these conditions on the company’s clients’ businesses and levels of business activity, 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, 2022 filed on December 13, 2022 and our Form 6-K furnished for the first quarter of fiscal 2023 on February 13, 2023. This presentation includes non-GAAP financial measures, including non-GAAP operating margin, free cash flow, revenue on a constant currency basis, non-GAAP net income, non-GAAP net income attributable to Amdocs Limited, and non-GAAP earnings per share. Free cash flow equals cash generated by operating activities less net capital expenditures and other. While in prior years Amdocs used 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, Amdocs is no longer reporting normalized free cash flow. Normalized free cash flow is not comparable to free cash flow. 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 10, 2023 with respect to earnings for fiscal Q2 2023. The press release contains additional information regarding Amdocs’ outlook for fiscal year 2023 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 2023 23 – – 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 IIn nf for orm ma at tiion on Se Sec cu ur riit ty y L Le evel vel 3 0 – – H Pu igh blilc y . s© e n 20 sit23 ive. – © Pr op 2023 rie t– aP ry rop & rCon ietarfy id & enCon tial Ifn id for en m tia at l ion Infor of m A am tion doc of s 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 2023 23 – – 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
Q2-23 solid quarter with significant achievements • Deepened relationships & • High number of successful expanded footprint with project deployments Strong existing customers execution & Sales • Record revenue quarter in operations momentum • 4 new customer logo wins managed services • Strategic partnership • Launched CES23, our most Strategic advanced suite yet, bringing achievements Innovation fresh innovation across BSS, OSS • Entered agreement to acquire the & network automation service assurance business of TEOCO • Expanded B2B domain focus for ~$90M to our talented people for their amazing energy, agility, and collaborative spirit Information Security Level 0 – Public. © 2023 – Proprietary & Confidential Information of Amdocs 6
Q2 financial highlights: Record revenue, continued sales momentum and ongoing margin improvement Non-GAAP (2) Revenue Non-GAAP EPS 12-month backlog (2) operating margin Record Record $1.47 $4.11B 17.8% $1.22B +20bps YoY Above guidance (1) Consistent with − Up ~7% YoY midpoint and up Record high guidance midpoint − (1) 8.2% YoY profitability for the last decade 1. Constant currency. Assumes exchange rates in the current period were unchanged from the prior period 2. Non-GAAP. See reconciliation tables in appendix Information Security Level 0 – Public. © 2023 – Proprietary & Confidential Information of Amdocs 7
Q2-23 operational highlights Continuous sales momentum Strong execution High rate of successful project deployment North America: Deepened Significant digital relationships & expanded modernization award footprint with existing Played an important role in the recent launch customers of fixed wireless access offering, ‘Internet Air’ Europe: strong deal activity, Several digital modernization wins, increasing market share including 2 new logos Strategy & offerings Rest of world: Strategic partnership to bring new AI-driven Cloud engagement Attractive opportunities Customer Engagement Platform Launched CES23, which includes enhanced Expanded engagements: capabilities designed to meet the complex Record revenue Major Western demands of B2B & quarter for managed European operator services Entered agreement to acquire the service assurance business of TEOCO for ~$90M Content services: Continued growth Enhance our network automation strategy by in media Preferred providing CSPs with end-to-end service Expanded & fulfillment CSP in Central America orchestration offering relationship vendor 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 2023 23 – – 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 8
Progress in strategic domains (1/4) Enable our customers to drive growth, improve cost-efficiency and provide an amazing experience to consumers and enterprises B2B customers Selected wins Business value End-to-end cloud Greater agility efficiency and migration services scalability for business-critical systems Cloud Enable improved security, operability BSS transformation in Tier 1 Central Accelerate and resiliency while defining the multiple countries European journey towards a full cloud-native operator journey to the environment cloud Expended managed services agreement for Major Western Enable operational agility, scalability, European migration & operation and ultimately, cloud at scale of non-Amdocs operator applications Information Security Level 0 – Public. © 2023 – Proprietary & Confidential Information of Amdocs 9
Progress in strategic domains (2/4) Enable our customers to drive growth, improve cost-efficiency and provide an amazing experience to consumers and enterprises B2B customers Selected wins Business value Digital Consumer and B2B Powerful insightful and transparent digital transformation experiences across all channels transformation Major Eastern Customer Improved customer loyalty and retention Creating engagement platform European operator seamless digital Harmonized, frictionless customer Eastern European Digital transformation experience across multiple channels and experiences by service provider touchpoints transforming IT operations for Premium user interface Improved customer experience consumer and Amdocs eSIM ranked number one eSIM orchestration platform by B2B customers Creating the next generation of frictionless eSIM platform experiences by offering eSIM-based Drei connectivity Austria Information Security Level 0 – Public. © 2023 – Proprietary & Confidential Information of Amdocs 10
Progress in strategic domains (3/4) Enable our customers to drive growth, improve cost-efficiency and provide an amazing experience to consumers and enterprises B2B customers Selected wins Business value 5G Leading North Network policy monetization America service Support millions of prepaid subscribers solution on AWS provider Monetization of 5G-ready new 5G monetization stack Enhanced agility and time to market for services deployed on the innovative new products and services including next- Italy cloud generation Network policy Improved management & monetization charging and control function of 5G offers and networks Hungary policy solutions Enhanced charging Enable monetization of 5G and IoT-based solutions successfully Malta services for consumers and enterprises deployed Information Security Level 0 – Public. © 2023 – Proprietary & Confidential Information of Amdocs 11
Progress in Strategic Domains (4/4) Enable our customers to drive growth, improve cost-efficiency and provide an amazing experience to consumers and enterprises B2B customers Selected wins Business value Network Automated 5G network First use case successfully demonstrated automation slice solution Delivering dynamic connected Enable seamless, advanced, safe and Drone-Aided Site and experiences with sustainable inventory access to gather Inventory Audits solution real-time, inventory information by using drones automated networks Information Security Level 0 – Public. © 2023 – Proprietary & Confidential Information of Amdocs 12
Looking Ahead: Reiterating FY2023 financial targets While Amdocs and its customer globally are not immune to economic uncertainty and market dynamics, we believe in our unique business model which produces visible, high recurring revenue B A On track to achieve our FY23 Tightening revenue Non-GAAP operating 17.5%−18.1% guidance range (2) Margin guidance of improved level of profitability C January 2023 May 2023 Reiterating FY23 non-GAAP EPS growth outlook Non-GAAP (2) 6%−10% 7%−9% (1) 9%−13% EPS Revenue YoY growth D Reiterating FY23 FCF generation of midpoint midpoint $700M and ~100% Free cash 8% 8% (3) (2) conversion rate flow YoY growth YoY growth Majority of which we plan to return to shareholders 1. Constant currency. Assumes exchange rates in the current period were unchanged from the prior period 13 2. Non-GAAP. See reconciliation tables in appendix Information Security Level 0 – Public. © 2023 – Proprietary & Confidential Information of Amdocs 13 3. Earning to cash flow conversion.
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 2023 23 – – 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 14
Q2 2023 Results Q2 2023 Revenue vs. Guidance $ Millions Q2 Revenue Above guidance $1,223 million midpoint (1) +6.8% YoY, +8.2% constant currency Above guidance midpoint $1,223 $1,220 ($1,200M - $1,240M) (2) Q2 Non-GAAP Operating Margin Original Q2F23 Q2F23A Guidance (midpoint) 17.8%, +20bps YoY +10 bps QoQ and within annual revenue, +6.8% YoY as reported (1) and YoY constant currency target range of 17.5% - 18.1% Q2 2023 Revenue by Region $ Millions quarter in North America Q2 GAAP Diluted EPS quarter in Europe Rest of World ~$223 $1.23 non-GAAP operating margin, reflecting ongoing gains Above midpoint of guidance ($1.18 - $1.26) North Europe America ~$172 ~$829 (2) Q2 Non-GAAP Diluted EPS $1.47 1. Constant currency. Assumes exchange rates in the current period were unchanged from the prior period 2. Non-GAAP. See reconciliation tables in appendix In line with guidance midpoint ($1.44 - $1.50) Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 15 15 Confidential Information of Amdocs
12-Month Backlog Record Quarterly 12-Month Backlog in Q2F23 12-month backlog growth has accelerated $ Billions year-over-year over the past several quarters $4.11 $4.09 as of $3.97 ~ +7% YoY cc $3.95 March 31, 2023 (1) (1) $3.89 ~ +5.7% YoY $3.83 ~ +5.7% YoY, YoY cc (1) (1) Q1F22 Q2F22 Q3F22 Q4F22 Q1F23 Q2F23 Leading Indicator 12-month backlog includes: • Anticipated revenue related to contracts • Estimated revenue from managed services contracts 12-month backlog • Letters of intent typically covers ~80% of • Maintenance forward 12-month revenue• Estimated ongoing support activities Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 16 16 Confidential Information of Amdocs
Managed Services Revenue: Q2 2023 $ Millions Managed services arrangements support Managed Services business model $719 $663 resiliency with highly recurring revenue ~ +8.4% streams, multi-year YoY engagements and high renewal rates, and may also include Quarter large-scale digital Q2F22 Q2F23 ~ +8.4% YoY transformation projects ~59% of total revenue Extended partnership to reimagine Globe’s IT operations, enabled by digital transformation & cloud adaptation, for better business alignment under a multi- year managed services arrangement managed Close to Major services contract Extended multi-year agreement to migrate and Western renewals 100% operate non-Amdocs applications to the cloud European operator Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 17 17 Confidential Information of Amdocs
(2) DSO’s Q2 2023 Free cash flow bridge 74 days -7 days YoY and -13 days QoQ $35 $294 DSO’s may fluctuate from quarter to quarter $259 * Deferred revenue > unbilled +$102 million QoQ Deferred revenue: +$88M QoQ Unbilled receivables: -$14M QoQ Items fluctuate from quarter to quarter in line with normal business activities. Cashflow from Net capex Reported FCF Operations *Figures may not sum due to rounding customer cash collections, offset by normal seasonal timing of annual bonus Cash, Credit Facility & Debt Position Liquidity: Cash + Credit Facility payments in Q2 $ Millions, as of March 31, 2023 $1.4 billion 1H FY2023 free cash flow with annual target Credit Facility Ample liquidity including available $500 liquidity to support ongoing business $500M revolving credit facility needs while retaining the capacity to fund future strategic growth investments Cash ~$862 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 18 18 Confidential Information of Amdocs
Q2 2023 Cash Returned to Shareholders Quarterly Dividend $ Millions Board authorized quarterly dividend payment: Dividends, $48 43.5 cents Share repurchases, As of March 31, roughly $0.3B of share $106 repurchase authorization capacity remained (1) free cash flow (FCF) (1)(3)(4) Normalized FCF : Three-year historical trend and FY2023E outlook outlook of in FY2023, equating to roughly 100% cash conversion 140% 102% ~100% 88% (1)(3) (2) % Normalized FCF / free cash flow yield 100% (1) Non-GAAP Net Income FY2023E Expects to return the of free 104% 100% 99% (1)(3) guidance: % of Normalized FCF cash flow to shareholders in FY2023 return Returned to Shareholders majority 1. Non-GAAP. See appendix tables for reconciliation of normalized FCF $869 (1)(3) Normalized FCF ($M) $700 2. Yield = expected reported free cash flow of $700M in FY2023 as a percentage of $665 $527 Amdocs’ market capitalization as of May 10, 2023 3. FCF in FY2020, FY2021 and FY2022 is presented on a normalized basis, which mainly excludes net capital expenditures related to the new campus development; (1) (1) (1) (3) normalized FCF disclosure is no longer applicable in FY2023 FY2020 FY2021 FY2022 FY2023E 4. Refer to https://investors.amdocs.com/ and earnings reports issued on 11/2/2021 (Guidance) and 11/8/2022 for reconciliation of normalized FCF in FY2020, FY2021 and FY2022 Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 19 19 Confidential Information of Amdocs
Revenue Growth (4) YoY% Growth Constant Currency (1) (4) FY21 and FY22 revenue is pro forma constant currency Tightening 9.0% range to ~7%- 9% YoY (8% midpoint 10.3% 7.0% unchanged) 7.0% 2.4% 4.1% (1)(4) (1)(4) (4) FY2023E revenue growth outlook tightened to FY2019 FY2020 FY2021 FY2022 FY2023E (4) , midpoint unchanged non-GAAP diluted EPS (3)(5) Total Shareholder Return growth outlook (2) Non-GAAP Diluted EPS Growth YoY % + Dividend Yield (1) FY21 and FY22 non-GAAP EPS growth is presented pro forma On-track to deliver expected ~13%* 14.1% total shareholder returns for year running 13.0% 11.7% Reiterating ~9%-13% YoY 8.6% 12.1% 1. Pro forma metrics exclude the financial impact of OpenMarket (which was divested on December 31, 2020) from fiscal year 2021. non-GAAP EPS 9.8% 5.3% 9.0% growth 2. Non-GAAP. See reconciliation tables in appendix 6.9% guidance 3. Expected total shareholder return assumes Non-GAAP EPS growth plus 3.0% dividend yield (based on fiscal year end closing share price); FY2023E assumed 11% midpoint of pro forma non-GAAP EPS outlook, and dividend yield based on proposed new quarterly rate of $0.435 as of share price on 3.0% 2.0% 1.9% ~2.0% 1.7% 2.3% 11/8/22 (1) (1) 4. Constant currency. Assumes exchange rates in the current period were FY2019 FY2020 FY2021 FY2022 FY2023E unchanged from the prior period Non-GAAP Diluted EPS Growth Dividend Yield Total Shareholder Return 5. Refer to https://investors.amdocs.com/ and earnings reports issued on 11/10/2020, 11/2/2021 and 11/8/2022 for non-GAAP reconciliation in FY2019, FY2020, FY2021 and FY2022 (2) Information Security Level 0– Public© 2022 – Proprietary & *Non-GAAP EPS growth of 11%, plus ~2% dividend yield Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 20 20 Confidential Information of Amdocs
Committed to ESG International Women’s Day campaign- Presented an interactive Break the map showcasing how Completed the move to Bias technology can help our the new Amdocs clients achieve Park campus ESG & sustainable in March development goals Digital inclusion - total of 60,000 hours of internet Raised ~$100,000 to support connectivity for 2,000 girls earthquake recovery in and family in India Turkey in an employee donation drive with Unicef Information Security Level 0 – Public. © 2023 – Proprietary & Confidential Information of Amdocs 21
Q&A Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 22 22
Q3 Fiscal 2023 Outlook $1,215 - $1,255 million Revenue GAAP EPS $1.16 - $1.26 (1) Non-GAAP EPS $1.45 - $1.51 Share Count 121 million In line with annual target (1) Non-GAAP Effective Tax Rate range of 13%-17% Full Year Fiscal 2023 Outlook Updated Previous On-track to deliver double- Revenue growth 6.0% - 8.0% 5.0% - 9.0% digit total shareholder returns As reported for the third year running Revenue growth 7.0% – 9.0% 6.0% - 10.0% (2) Constant currency GAAP EPS growth 3.0% - 10.0% 3.0% - 10.0% (1) Non-GAAP EPS growth 9.0% - 13.0% 9.0% - 13.0% (1) 1. Non-GAAP. See reconciliation tables in appendix Non-GAAP Operating Margin 17.5% - 18.1% 17.5% -18.1% 2. Constant currency. Assumes exchange rates in the current period were unchanged from the prior period (1) Non-GAAP Effective Tax Rate 13.0% - 17.0% 13.0% -17.0% (1) Free cash flow $700 million $700 million Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 24 24 Confidential Information of Amdocs
Appendix Reconciliation Tables Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 25 25
(a) The amounts under Purchase of property and equipment, net” include proceeds from sale of property and equipmentof $255 and $555 for the six months ended March 31, 2023 and 2022, respectively. (b) Since Q12023, the Normalized Free Cash Flow is no longer applicable. Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 26 26 Confidential Information of Amdocs
Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 27 27 Confidential Information of Amdocs
Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 28 28 Confidential Information of Amdocs
Exhibit 99.3
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Amdocs to Acquire Service Assurance Business of TEOCO to Assure and Enable
Monetization of Next Generation Dynamic Customer Experiences
JERSEY CITY, NJ – May 10, 2023 –Amdocs (NASDAQ: DOX), a leading provider of software and services to communications and media companies, today announced that it has entered into a definitive agreement to acquire the service assurance business of TEOCO. The acquisition will enable Amdocs to provide service providers with a unique end-to-end service orchestration offering, assuring the quality of service and enabling the monetization of next generation dynamic customer experiences.
“The move will enhance Amdocs’ offering by bringing key assurance expertise and capabilities in-house, enabling us to offer truly end-to-end service orchestration. In today’s dynamic and complex 5G era, such a holistic, end-to-end approach is key to delivering on the promise of amazing experiences our customers’ end users expect.” said Shuky Sheffer, President and CEO of Amdocs Management Limited. “Amdocs and TEOCO already partner in some opportunities within the service assurance domain, and this acquisition and the new seamlessly integrated offering will enable us to better serve existing and new customers.”
Amdocs is acquiring the service assurance business of TEOCO for a consideration of approximately $90 million in cash, subject to the satisfaction of the conditions to closing. Additional consideration may be paid later based on the achievement of certain performance metrics. Revenue from TEOCO is expected to be immaterial in fiscal 2023 and expected to add approximately 0.5% to total revenue in fiscal year 2024.
The impact on GAAP diluted EPS will not be known until after Amdocs completes the purchase price allocation.
The impact of the acquisition on Amdocs’ non-GAAP diluted earnings per share is expected to be neutral in the full fiscal years 2023 and 2024. Non-GAAP diluted earnings per share excludes amortization of purchased intangible assets and other acquisition-related costs, changes in certain acquisitions related liabilities measured at fair value, restructuring charges, equity-based compensation expenses and other, net of related tax effects.
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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 enterprise customers. Our 31,000 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 $4.58 billion in fiscal 2022. For more information, visit www.amdocs.com
Amdocs’ Forward-Looking Statement
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 macro-economic conditions, prevailing level of macroeconomic, business and operational uncertainty, including as a result of geopolitical events or other global or regional events such as the COVID-19 pandemic, as well as the current inflationary environment, and the effects of these conditions on the company’s clients’ businesses and levels of business activity, 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, 2022 filed on December 13, 2022 and our Form 6-K furnished for the first quarter of fiscal 2023 on February 13, 2023.
Media Contacts
Jeff Barak
Amdocs Public Relations
Tel: +972 645 3637
Email: Jeff.Barak@amdocs.com
Holly Abbott
Babel PR for Amdocs
Tel: +44 (0)7527 521057
Email: amdocs@babelpr.com / holly.abbott@babelpr.com