Amdocs Q2 2026 Earnings Call Transcript

Quartr
Provided by Quartr
May 13, 2026

Key Takeaways

  • Positive Sentiment: Amdocs reported a solid Q2 revenue of $1.17 billion and non-GAAP EPS of $1.78, both above the midpoint of guidance, with year-over-year growth in North America and record revenue in Europe.
  • Positive Sentiment: The company secured several meaningful contract wins and extensions, including expanded managed services with Cricket Wireless, a 5-year CRM/OSS modernization deal with Vodafone Spain, and a multi-year charging system extension with KT.
  • Positive Sentiment: Amdocs said its new aOS agentic operating system is getting early traction, with initial commercial agreements from Cricket, Lumen, Bell Canada, EchoStar, and PLDT; PLDT is already seeing over 90% of customer requests resolved through the platform.
  • Neutral Sentiment: Management reiterated full-year fiscal 2026 guidance, including 3% constant-currency revenue growth at the midpoint and roughly 6% non-GAAP EPS growth, while noting it is still monitoring customer spending amid macro uncertainty.
  • Positive Sentiment: Cash generation remained strong, with $97 million in free cash flow before restructuring in Q2 and the company on track for $710 million to $730 million for fiscal 2026, supporting continued shareholder returns and liquidity.
AI Generated. May Contain Errors.
Earnings Conference Call
Amdocs Q2 2026
00:00 / 00:00

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Operator

Thank you for standing by, and welcome to the Amdocs second quarter 2026 earnings conference call. Now I'd like to introduce your host for today's program, Matt Smith, Head of Investor Relations. Please go ahead, sir.

Matt Smith
Matt Smith
Head of Investor Relations at Amdocs

Thank you, John. Before we begin, I need to call your attention to our disclaimer statement on slide two of the presentation. It notes that some of our comments today may be forward-looking statements and are subject to risks, uncertainties, and other important factors, including as described in Amdocs' SEC filings, and that we will discuss certain financial information that is not prepared in accordance with GAAP. For more information regarding our use of non-GAAP financial measures, including reconciliations of these measures, we refer you to today's earnings release, which will also be furnished with the SEC on Form 6-K. Participating on the call with me today are Shimie Hortig, President and Chief Executive Officer of Amdocs Management Limited, and Tamar Rapaport-Dagim, Chief Financial and Operating Officer. To support today's earnings call, we are providing a presentation which can be found on the investor relations section of our website.

Matt Smith
Matt Smith
Head of Investor Relations at Amdocs

As always, a copy of today's prepared remarks will also be posted immediately following the conclusion of this call. On today's agenda, Shimie will recap our business and financial achievements for the second fiscal quarter 2026, and he'll also present his vision as Amdocs' new CEO for the agentic era. Shimie will finish by addressing our financial and business outlook, after which Tamar will provide additional details on our second quarter financial performance and guidance for the full fiscal year 2026. With that, I'll turn it over to Shimie.

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

Thank you, Matt, and good afternoon to everyone joining us today for Amdocs Fiscal second quarter 2026 earnings call. I'm pleased to join you today live from our Amdocs New Jersey offices. When I spoke to you in February, I talked about my excitement to lead Amdocs in its next chapter. Several weeks into the CEO role, and after spending more time with our customers, partners, and global teams, I'm even more excited and convinced about the opportunity ahead of us. As laid out on slide six, today I will divide my comments into two parts. First, I will begin by laying out some initial thoughts on the future vision for Amdocs, where we plan to become the primary partner of choice to our customers in their agentic journey, leveraging our unique domain expertise and deep industry knowledge.

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

From there, I will highlight the company's solid second quarter performance, including new deals we have won and the operations milestones achieved for our customers that reflect the strength and discipline of our global teams. To begin, on slide eight, I want to spend a few minutes sharing my initial view on how I'm thinking about Amdocs in the agentic era, what is changing in our industry, what I believe Amdocs is uniquely positioned to do, and my vision on how we plan to turn this opportunity into meaningful outcomes for our customers. The agentic era is an exciting opportunity for our industry and for our customers.

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

For communication service providers globally, the agentic revolution is a unique moment in time to fundamentally transform their IT and network ecosystems in a nonlinear fashion, simplifying complexity, rethinking critical workflows end to end, and unlocking the ability to accelerate the launch of new offerings. I strongly believe that Amdocs is in the best position to lead our customers and turn this agentic opportunity into reality. Let me break down the reasons why. First, we have in Amdocs decades of deep industry knowledge and domain expertise. We have an industry context based on our telco taxonomy, ontology, and the core business workflows that will power the agentic era. This is our native language. Second, Amdocs has strong engineering pedigree, a commitment to innovation, and a long history of leading our customers through major technological shifts.

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

Third, we understand what it takes to design, build, deliver, and operate mission-critical systems, we are therefore best placed to lead our customers through the complex agentic transformation. Fourth, we have always been, and will continue to be, an outcome-based company. Amdocs has long supported customers under long-term engagement committed to predefined KPIs, this remains highly relevant as our customers look for measurable GenAI-driven outcomes. To support this vision, our focus will be on the following areas highlighted on slide nine. We will evolve our product portfolio to be agentic and automated. Our portfolio is already moving in this direction with Amdocs aOS, our agentic operating system for telco. We will partner with each customer to design a tailored agentic roadmap.

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

We recognize that every service provider has a unique baseline, and we will guide each to a fully agentic operation that unlocks meaningful value. We'll also continue to work closely with leading AI and cloud partners to accelerate this vision, taking a strategic ecosystems approach in support of our customers' agentic journey. We will accelerate our internal transformation to become a GenAI native organization. We are leading by example and deploying agentic technologies and capabilities across our own engineering, delivery, and operations. We'll adjust our way of working and become a more agile organization. This vision sets the foundation for a stronger future at Amdocs in the agentic era, one defined by a sharper technology focus and greater agility. It positions Amdocs to expand our addressable market in telco. It also presents a potential opportunity to extend our reach into a new industry.

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

With that said, we are still in the process of refining our strategy, and we'll continue to update you as things progress over the next couple of quarters. I also realize that this is going to be a journey. In this context, I'm glad to report that we have already made initial progress. I will explain more on slide 10. At Mobile World Congress last quarter, we officially launched aOS, Amdocs Agentic Operating System purpose-built for telco. So far, we have received excellent feedback from the market, and I'm happy to share that we already have several initial commercial agreements with customers to launch and to implement aOS. This includes the following customers: Cricket, Lumen, Bell Canada, EchoStar, and PLDT.

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

In PLDT, we can already report early signs of business success, where more than 90% of customer requests are now resolved through the aOS platform, enabling faster handling times and higher productivity in the retail stores. Let me turn to part two and address the key financial highlights, significant deals, and operational milestones we achieved for the second fiscal quarter. Starting on slide 12, our second quarter results were solid, with revenue of $1.17 billion and non-GAAP diluted earnings per share of $1.78, both above the midpoint of our guidance. Our results included year-over-year revenue growth in North America, as well as record revenue in Europe and a strong revenue performance in Rest of the World.

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

Non-GAAP operating margin improved by 20 basis points from a year ago as we continue to balance our investment for growth with the focus on operational excellence. Overall, we closed the quarter with 12 months backlog of $4.28 billion, up $30 million sequentially and 2.6% from a year ago. Beyond the already mentioned aOS wins this quarter, we secured several significant deals which demonstrate wide-ranging demand for our products and services and the confidence customers have in Amdocs. Slide 13 highlights many of these deal wins, but here are a few examples. In AT&T Cricket Wireless, we signed an expanded multi-year extension of our managed services agreement, including dealer onboarding modernization to enhance partner experience and drive faster market expansion. In Vodafone Spain, we secured a five-year agreement covering CRM and OSS modernization alongside long-term support and enhancement services.

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

In South Korea, KT has extended its multi-year agreement with Amdocs to upgrade, modernize, and operate its charging system, empowering faster service rollout and advanced 5G monetization. Our cloud-based platform solution also generated significant customers momentum in Q2. connectX added multiple new names, including Vantta Wireless, which will launch a unique mobile service with AT&T using AI-driven connectivity. Cuatro Mobile, a U.S.-based MVNO servicing Hispanic communities. In Singapore, a leading operator went live with the platform to accelerate digital modernization. Additionally, Amdocs eSIM was chosen by Cielo in Brazil to support payment terminal connectivity and by MobiFone in Vietnam for seamless zero-touch customer activation. Amdocs project execution was another highlight for the company in Q2. We achieved a high number of project milestones across different programs for flagship customers such as AT&T, Optimum, Vodafone Germany, Elisa, and PLDT.

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

To highlight a few of them, in AT&T, Amdocs is now servicing significant part of AT&T's 5G SA subscribers in our next-gen charging platform, and we played a key role in the recent launch of AT&T new OneConnect Plan. In Vodafone Germany, we marked a pivotal milestone in our journey as we reached commercial launch. At Elisa in Finland, we delivered the key milestones in support of its mainframe to Google Cloud migration. I'm also pleased to share that Brightspeed, a U.S.-based fiber, broadband, and telecommunication provider, has gone live with Amdocs Resource Manager. This smooth deployment enables Brightspeed to strengthen its network, inventory management, and streamline operational processes. Now, moving back to the outlook on slide 15.

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

We are reiterating the midpoint of our revenue growth guidance of 3% in constant currency for the full year fiscal 2026, which is within tightened range of 2%-4%. Likewise, we are reiterating the midpoint of our guidance for non-GAAP diluted earnings per share growth of roughly 6% in fiscal 2026, which is within a tightened range of 5%-7%. That said, we are, of course, closely monitoring customer demand and spending behavior within the current global macroeconomic climate. To wrap it up, we believe Amdocs is best positioned to turn agentic vision into reality for our customers. We are shaping our strategy direction based on the vision and direction I discussed with you today, and we will continue to share more over the next couple of quarters.

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

We know this is going to be a journey for us and for our customers. In this context, where we already have initial commercial engagement on aOS. We are building our strategy on strong business foundations demonstrated by our solid Q2 results, and we are on track to hit our full financial targets while monitoring our customer spending behavior within the current macroeconomic climate. Before we move to the financial overview, I would like to spend a few minutes talking about the CFO transition. First and foremost, I would like to thank Tamar for her remarkable contribution to Amdocs over the last 19 years as CFO, including the past eight years serving as both CFO and COO and 22 years overall with the company.

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

I have known her for a long time, I can say that she has been an exceptional business partner and a personal friend. Tamar played an instrumental role in the evolution of Amdocs, and I know she will be missed by the entire Amdocs family. On behalf of all of us, Tamar, please accept our sincere appreciation for your endless dedication and service to Amdocs through the years, and we wish you nothing but the best on your well-deserved retirement. I'm excited to introduce to you to Tal Rozenfeld and welcome him as Amdocs' next CFO. Tal has played a major part of Amdocs' finance organization over his impressive 20-year career with us, during which he has acquired extensive experience across senior and management roles in accounting and finance. Tal is also a proven business performer.

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

He has served as a division business leader for APAC, and he's currently General Manager, Head of Finance, where he has responsibility for managing the entire finance organization, reporting directly to Tamar. I have known Tal for his entire career in Amdocs and having worked closely with him on many occasions, I am well aware of his great leadership qualities. I strongly believe he is the best fit for this role. Congratulations, Tal, and welcome to my leadership team. I look forward to working together to take Amdocs to the next chapter. Tal will say a few words in a moment, but first, let me hand the floor to Tamar.

Tamar Rapaport-Dagim
Tamar Rapaport-Dagim
CFO and COO at Amdocs

Thank you, Shimie, for your kind words, and hello to everybody on the call today. Amdocs indeed has been a family to me, but as Shimie said, I've decided to retire and finally take some time for myself. As you can appreciate, making this decision was neither quick nor easy, but after almost 20 years as CFO, I felt that now was the appropriate time for me to retire. My decision was made easier by how seamlessly Shimie has transitioned into the CEO position over the past few months and by the strong team he has built around him. This includes Tal, of whom I could not be prouder. I personally recruited Tal to Amdocs Finance 20 years ago, and I've been preparing him for CFO as part of an internal succession plan for some time. I believe he's undoubtedly the best person for this role.

Tamar Rapaport-Dagim
Tamar Rapaport-Dagim
CFO and COO at Amdocs

Congratulations on your appointment, Tal.

Tal Rozenfeld
Tal Rozenfeld
CFO at Amdocs

Shimie and Tamar, thank you both for your kind words. Tamar, I want to thank you personally for your mentorship, guidance, and partnership over the years. Your leadership and friendship have meant a great deal to me, and I wish you only the best. Shimie, I'm very excited by the opportunity to step into the CFO role. I'm looking forward to building on Amdocs' strong foundations and supporting you and the leadership team as we lead the company forward.

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

Thank you, Tal. Now, let's get back to business. Tamar, would you like to take us through the quarterly financial summary, please?

Tamar Rapaport-Dagim
Tamar Rapaport-Dagim
CFO and COO at Amdocs

Yes, of course. Thanks, Shimie. Q2 revenue of approximately $1.172 billion was up 3.9% year-over-year as reported. Revenue was above the midpoint of our guidance, including a positive impact from foreign currency movements of approximately $2 million compared to our guidance assumptions. In constant currency, our revenue was up 2.2% from a year ago. On a regional basis, North America revenue of $754 million was up more than 2% from a year ago, but was slightly lower on a sequential basis due to normal fluctuations in customer activity. Outside North America, our international growth continued. Europe delivered record quarter revenue of $192 million, up more than 6% year-over-year on a mix of organic growth and the impact of Matrix acquisition.

Tamar Rapaport-Dagim
Tamar Rapaport-Dagim
CFO and COO at Amdocs

Rest of the World revenue grew by 8% year-over-year to $226 million, the highest since fiscal Q3 2024. Rest of the World remains on track to grow in fiscal 2026, driven by the strong sales momentum of recent quarters. As a reminder, quarterly trends in both Europe and Rest of the World may fluctuate given project orientation of our customer activities in these regions. Shifting down the income statement, non-GAAP operating margin of 21.5% was up by 20 basis points from a year ago, reflecting internal cost and efficiency gains resulting from focus on operational excellence, automation, and the deployment of AI-based tools. Balanced against long-term growth investments, including the development and go-to-market costs of our next-generation aOS platform. On a sequential basis, non-GAAP operating margin declined by 10 basis points.

Tamar Rapaport-Dagim
Tamar Rapaport-Dagim
CFO and COO at Amdocs

As a reminder, our non-GAAP operating margin may fluctuate slightly on a quarter-to-quarter basis. Interest and other expenses amounted to roughly $14 million in Q2, which included a few million dollars for the accounting of net losses of equity-related investment activities in the quarter. On the bottom line, non-GAAP diluted DPS of $1.78 was $0.02 above the guidance midpoint, primarily due to items below the operating line and a lower share count. Diluted GAAP EPS of $1.28 exceeded the guidance midpoint also due to items below operating line and lower share count. Diluted GAAP EPS included a restructuring charge of nearly $0.10 per share, which was not included in our guidance for the quarter and the positive impact of realized and unrealized gains from equity investments among others.

Tamar Rapaport-Dagim
Tamar Rapaport-Dagim
CFO and COO at Amdocs

Turning to slide 20, managed services revenue of $759 million was up 1.6% from the prior year in the second fiscal quarter. As a share of total revenue, managed services accounted for roughly 65%, consistent with the last several quarters. Renewal rates remain typically high during Q2, underpinning our business resiliency as we signed expanded multi-year engagements with multiple customers. In North America, for instance, we expanded and extended our managed services contract with Cricket Wireless for BSS and OSS services, including aOS capabilities, driving faster time to market and improved customer experience. Moving to the balance sheet and cash flow highlights on slide 21. DSO of 73 days decreased by four days from a year ago and three days sequentially.

Tamar Rapaport-Dagim
Tamar Rapaport-Dagim
CFO and COO at Amdocs

Unbilled receivables, net of deferred revenue, decreased by $42 million versus a year ago and by $2 million sequentially in Q2, aggregating the short and the long-term balances. As a reminder, the net difference between unbilled receivables and deferred revenue fluctuates from quarter to quarter in line with normal business activities as well as our progress on multi-year engagements. Free cash flow before restructuring payments was $97 million in Q2. This includes the seasonal timing of bonus payments for the prior fiscal year, which typically occurs in the second fiscal quarter. Highlighting strong free cash flow for the year so far, we've already achieved nearly 50% of our fiscal 2026 target. Including restructuring payments of $17 million, reported free cash flow was $80 million in the quarter.

Tamar Rapaport-Dagim
Tamar Rapaport-Dagim
CFO and COO at Amdocs

As a further update, in fiscal Q2, we established a U.S. commercial paper program of up to $800 million to further enhance our financial flexibility and optimize Amdocs' short-term funding mix. Proceeds from issuance under the program will be used for general corporate purposes. We also upsized our revolving credit facility from $500 million to $800 million, which supports the commercial paper program and further enhances our overall funding flexibility. Overall, we ended Q2 with a healthy cash balance of approximately $214 million, an aggregate borrowings of roughly $900 million, including our $650 million senior notes maturing in June 2030, and short-term financing arrangements of $250 million.

Tamar Rapaport-Dagim
Tamar Rapaport-Dagim
CFO and COO at Amdocs

As of March 31st, 2026, there was no outstanding borrowing amount under the commercial paper program, and $630 million remains available on the revolving credit facility. Overall, we have ample liquidity to support our ongoing business needs while retaining the capacity to fund our future strategic growth. Switching to capital allocation on slide 22. This quarter, we repurchased $138 million of our shares, leaving us with up to $702 million of remaining repurchase authority as of March 31st, 2026. We paid cash dividends of $57 million in the second fiscal quarter. In the last week of fiscal Q2, we acquired the business of Connect44, a European-based provider of end-to-end network planning, building, and management solutions for approximately $21 million net in cash at closing, plus future potential contingent consideration.

Tamar Rapaport-Dagim
Tamar Rapaport-Dagim
CFO and COO at Amdocs

Looking to fiscal 2026, we are on track to generate free cash flow between $710 million-$730 million, not including payments we expect to make under our current restructuring program. Our free cash flow outlook equates to conversion rate of roughly 90% relative to expected non-GAAP net income and translates to a healthy free cash flow yield of roughly 10% relative to Amdocs' current market capitalization. Regarding our capital allocations for the coming year, we expect to return the majority of our free cash flow to shareholders. Moving to slide 23, 12-month backlog was $4.28 billion at the end of Q2, up $30 million sequentially and 2.6% from a year ago. We believe 12-month backlog remains a good leading indicator of our business and forward visibility.

Tamar Rapaport-Dagim
Tamar Rapaport-Dagim
CFO and COO at Amdocs

Turning to our revenue outlook on slide 24, we are continuing to closely monitor the prevailing level of macroeconomic, geopolitical, business, and operational uncertainty, including our customer spending behavior in the current business environment. The third quarter and full fiscal year 2026 financial guidance reflects what we consider to be the most likely outcome based on the information we have today, we cannot predict all possible scenarios. For the full fiscal year 2026, we have tightened our revenue growth outlook to between 2.6% and 4.6% as reported, the midpoint of which is 10 basis points better than our prior outlook of 1.5%-5.5% due to foreign currency tailwinds, which are now expected to benefit by roughly 0.6% this year as compared to 0.5% previously.

Tamar Rapaport-Dagim
Tamar Rapaport-Dagim
CFO and COO at Amdocs

Consistent with our prior guidance, we expect that roughly half of the expected growth in fiscal 2026 will be inorganic in nature. On a consistent currency basis, we are reiterating the 3% midpoint of our revenue growth outlook, which we have tightened to a new range of between 2%-4% for the full fiscal year as compared to prior outlook of 1%-5%. As to the third fiscal quarter, we expect revenue of between $1.155 billion-$1.195 billion.

Tamar Rapaport-Dagim
Tamar Rapaport-Dagim
CFO and COO at Amdocs

Moving down the income statement, as we anticipated in the beginning of the fiscal year, we are now on track to deliver non-GAAP operating margins within our target range of 21.3%-21.9% in the fiscal 2026, the midpoint of which is roughly 20 basis points higher than prior fiscal year of 21.4%. Our profitability outlook reflects an intentional decision to accelerate our investment in GenAI and our next generation, the agentic operating system, including R&D, sales, and marketing, while balancing this with our focus on operational excellence and initiatives to drive efficiencies. Below the operating line, we expect non-GAAP net interest and other expenses to be impacted by higher financing costs this year, resulting from a reduced cash balance and short-term borrowing to fund working capital.

Tamar Rapaport-Dagim
Tamar Rapaport-Dagim
CFO and COO at Amdocs

As anticipated in the beginning of the year, we expect our non-GAAP effective tax rate to be within an annual target range of 16%-19% for the full fiscal year 2026. As summarized on slide 26, we are reiterating the midpoint of our guidance for non-GAAP diluted earnings per share growth of roughly 6% in fiscal 2026, which is within a tightened range of 5%-7% as compared to 4%-8% previously. With that, back to you, Shimie.

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

Thank you, Tamar. Thank you for everything. Again, best of luck in your future retirement. With that, we are happy to take your questions. Operator?

Operator

Certainly. Our first question for today comes from the line of Tal Liani from Bank of America. Your question please.

Tal Liani
Tal Liani
Managing Director of Equity Research at Bank of America

Hello, Tamar. First, Shuky, now you. What's gonna happen? Good luck with your retirement.

Tamar Rapaport-Dagim
Tamar Rapaport-Dagim
CFO and COO at Amdocs

Thank you, Tal.

Tal Liani
Tal Liani
Managing Director of Equity Research at Bank of America

You're breaking my heart.

Tamar Rapaport-Dagim
Tamar Rapaport-Dagim
CFO and COO at Amdocs

Sorry.

Tal Liani
Tal Liani
Managing Director of Equity Research at Bank of America

I want to ask you a few things. First, when I collectively look at your space without the details of where you're playing and et cetera, but collectively look at your space, there is tremendous investment in data centers. Customers are even buying more now because they're buying ahead of demand because of supply constraints. Cisco just reported, you know, 19% order growth outside of AI, and the environment is not that good. Some of it has to be some forward ordering. The question is, when I look at your revenues, I see some acceleration of growth, a little bit of acceleration of growth.

Tal Liani
Tal Liani
Managing Director of Equity Research at Bank of America

The question is, do you have a way to participate in this massive growth we're seeing, whether it's through NeoClouds or cloud or whether it's through service providers, your traditional customers who are also taking some of this traffic, and they also have to build data centers? Can you talk about your ability to play and benefit from the current cycle? Maybe we'll start with that. I have another question, but I'll take it one by one.

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

Hi, Tal. It's Shimie, and thank you for the question.

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

Maybe to try to explain what I was trying to paint in the vision that I described at the beginning of the call, we see the agentic revolution that is happening right now as an amazing opportunity for Amdocs. You know, we believe that we are the right partner for our customers to help them transform from where they are today to the future agentic and leveraging all the great capabilities that this technology can bring. As you know, as of today, there's a major gap between the technology and the potential and the actual adoption that we see among our customers in general, in enterprise, software and customers around the world.

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

We believe that Amdocs, with our deep knowledge on this industry, with our capability to transform organization, to move through technological shift, position us as the best partner that can take them to this future. Definitely a major opportunity for us going forward.

Tal Liani
Tal Liani
Managing Director of Equity Research at Bank of America

Got it. What changes, Shimie, what changes are you bringing to the company? You've been there less than 100 days. You know, what are your focus areas in terms of growth acceleration and addressing new opportunities and things? How long do you think also it will take you to show an impact on growth?

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

Yeah. As, as, again, as I mentioned, I think we are trying to accelerate everything that we do in the company in order to help our customers transform in this amazing technological transformation that is happening right now all over the world. The thing that I want to focus is the following. First, we want to evolve, as I mentioned, our portfolio to be agentic and automated. This is an effort that we started already, and we're continuing to focus on that as we provide our customers with the right solutions. The other thing is engagement with customers. We want to tailor to each one of them this specific roadmap, how we take them from where they are today to this future agentic end state where they can enjoy all the benefits of this technology.

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

The third thing that we wanna do is to partner strategically with the ecosystem, you know, leading AI and cloud partners that will help us and our customers to transform in this industry. Last but not least, I mentioned the internal transformation. We wanna accelerate the internal transformation and to make sure that Amdocs is a GenAI native organization, which means we're changing the way we operate, we implement agentic SDLC within the company, we change the structure of the teams, and we wanna become a much more agile organization and to lead by example this journey.

Tal Liani
Tal Liani
Managing Director of Equity Research at Bank of America

Got it. Last question. Tamar is leaving for some company, I think pretty well. The CFO position is extremely important, just because of timing of recognition of revenues, timing of recognition of expenses, managing operating margins, et cetera. Can you give us a little bit of details on the succession plan? I know you nominated someone with a great first name to be the successor of Tamar. You have good taste, I have to say.

Tamar Rapaport-Dagim
Tamar Rapaport-Dagim
CFO and COO at Amdocs

To add to the first name being Tal, yeah, which is a great name. First of all, I fully agree with you. I think that the fact Tal experience is very deep in terms of not only the professional, you know, he's a CPA, he was an expert in revenue recognition in his early days in the career in Amdocs. He did the SEC filing. Like, he had all the core basic things you would expect from a strong finance professional.

Tamar Rapaport-Dagim
Tamar Rapaport-Dagim
CFO and COO at Amdocs

He's also done different roles that included field support, the business support, and including several years in my management team, leading all of the finance of the business, being the very strong bridge between, let's call it, the professional finance domain and driving the business of the company and structuring the deals in the right way, recognizing the revenue in the right way, et cetera. As a leader and as someone who has definitely built strong teams around him and have been able to build not just, you know, it's not As a leader, it's just about you. It's about how you really bring the right talent, develop the right talent, create a sense of purpose. I've seen him again and again doing that in an amazing way.

Tamar Rapaport-Dagim
Tamar Rapaport-Dagim
CFO and COO at Amdocs

In some years that, I call it, I loaned Tal to the business side to lead the APAC division. I mean, I've been talking about the APAC growth for some time now. Now you know who is the person behind it. Tal did amazing job of leading the business there. Then when he came back to finance to lead finance under me, definitely it has been a big part of the succession planning. I feel while I'm sorry, Tal, that I need to say goodbye as I'm retiring, of course, we can stay in touch beyond the Amdocs capacity, I feel very comfortable that we have the best person for the job and it has been a very thorough succession process overall. You're in good hands.

Tal Liani
Tal Liani
Managing Director of Equity Research at Bank of America

Good. Thank you.

Operator

Thank you. Our next question comes from the line of Timothy Horan from Oppenheimer. Your question please.

Timothy Horan
Timothy Horan
Managing Director and Senior Analyst at Oppenheimer

Hi, guys. Tamar, congratulations and good luck.

Tamar Rapaport-Dagim
Tamar Rapaport-Dagim
CFO and COO at Amdocs

Thank you, Tim.

Timothy Horan
Timothy Horan
Managing Director and Senior Analyst at Oppenheimer

like to focus on the agentic business a little bit more. Can you give us any color on the deals and what the pipeline is looking like? Also maybe where is kind of the low-hanging fruit for customers, you know, to adopt aOS? You know, when do you think it starts to move the needle on revenue growth? Thank you.

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

Hi, Tim. Look, as we started to see, we're quite happy with the initial reaction from the market on our aOS launch. We just launched it in Mobile World Congress, since then, we have quite a lot of engagement with customers. Some of them already translate into concrete opportunities or concrete deals that we are actually implementing right now with our customer base. You know, those opportunities are starting small, we know that over time, they will grow. If you ask if we embedded anything right now in this fiscal year, not yet. It's not so meaningful right now, it's definitely gonna grow over time.

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

As I mentioned before, we are starting to have detailed discussion with each and every one of our customers on their journey, how we take them from where they are today into the future. Here, we're evolving with a lot of interesting discussions, based on aOS plus plus. Now some of our customers would like to collaborate with us and to do things together and to implement our tools. Some of them are even discussing with us broader responsibility to move to Amdocs and to help them to transform their organization and to deliver the business benefits and the savings that they're looking forward. I hope that in the next few quarters, we can share more about those discussions, but we are having some meaningful discussions with customers these days.

Timothy Horan
Timothy Horan
Managing Director and Senior Analyst at Oppenheimer

I mean, the U.S. telcos seem to be, or at least are talking about adopting AI much, much more rapidly than what you're describing. I think, you know, they're talking about slashing expenses, improving services. Are they doing this in-house? Are they using other, you know, AI companies? Are they using other competitors of yours or are they using you? You know, the commentary that they're laying out is that, you know, they're adopting AI now, and they're slashing expenses as a result of it.

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

Yeah. It is true that they are implementing AI. I think in our domain, in the area that you need to deal with mission-critical systems and to transform them into the future, to become agentic and autonomous, and everything that we wanna achieve together with them, we are the best partner to do them. They're not using it with competitors. They're having those discussions with us. You know, our claim for fame was always to help our customers to transform them. In the past, it was the cloud that, you know, we moved them, and we're still moving them from on-prem to cloud. Now, obviously, the opportunity around agentic is front and center.

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

They understand that in order to do it in mission-critical systems and the complexity of what we do for them, they want to partner with us, and these are exactly the discussions that we're having right now.

Timothy Horan
Timothy Horan
Managing Director and Senior Analyst at Oppenheimer

Very helpful. Thank you, and good luck.

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

Thank you.

Operator

Thank you. As a reminder, if you do have a question at this time, please press star one one on your telephone. Our next question comes from the line of George Notter from Wolfe Research. Your question please.

Analyst at Wolfe Research

Hey, guys, this is Tim for George Notter. Congrats, Tamar, on the retirement.

Tamar Rapaport-Dagim
Tamar Rapaport-Dagim
CFO and COO at Amdocs

Thank you.

Analyst at Wolfe Research

If you could talk a little more about how you expect to progress in implementing AI internally to get efficiencies going forward. Are there any incremental new areas where you're finding use cases? Then, as a follow-up, can you give more detail in terms of how customer conversations are progressing as you drive those gains internally?

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

Yeah. Internally, again, it's a process. We've been in this process for quite some time. My goal right now and the team is mainly to accelerate. We are accelerating everything. We are done with the pilot, experimenting, trying it here and there. I'm moving it to full-blown implementation across the entire company. It includes, as I mentioned, changing the way we operate, implementing agentic SDLC, changing the way we operate our systems, leveraging the agentic tools. You know, we're going all the way to try to accelerate this internal transformation and become a more agile organization going forward. The discussions that we're having with the customers are exactly along the same lines of how we can help them do the same for their organization in our domain.

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

Some of the discussions, everyone understand that, you know, the best way to help them is if we look at the flows end-to-end. If you look at the end-to-end business flows around those, these areas, from the business requirements all the way down to the provisioning, the best way to get the best outcome of implementing those agentic is when you have an end-to-end workflow. They're engaging us right now in discussions in which we are basically expanding the footprint of what we do today, going to areas that are not done today by Amdocs. Everyone realize right now that in order to get those benefits, it's better that we get involved and help them in the end-to-end processes. Those discussions along this end-to-end responsibility to transform things for our customers are evolving.

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

As I mentioned before, I hope we can share some more updates over the next couple of quarters.

Tamar Rapaport-Dagim
Tamar Rapaport-Dagim
CFO and COO at Amdocs

Just wanna add on that to remind you, we've been a company pushing for an outcome-based business model forever.

Shimie Hortig
Shimie Hortig
President and CEO at Amdocs

Yeah.

Tamar Rapaport-Dagim
Tamar Rapaport-Dagim
CFO and COO at Amdocs

It's like that was a way of showing confidence to our customers that we believe that we can bring them the right innovative engineering solutions, as well as a commitment to deliver on certain KPIs and outcomes. We want to take conceptually the same idea and build, you know, based on what Shimie mentioned, this end-to-end ability to take business processes and push it forward with the customer to show accountability, to bring the results that they need to see. Practically, what is it that they consider success, and how do we design it into the deals we are going to sign?

Analyst at Wolfe Research

Thank you.

Operator

Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Matt Smith for any further remarks.

Matt Smith
Matt Smith
Head of Investor Relations at Amdocs

All right, John, thanks very much. Thanks everyone for joining the call tonight. If you do have any other questions, please give us a call here in the IR group. With that, have a great evening.

Operator

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

Executives
    • Matt Smith
      Matt Smith
      Head of Investor Relations
    • Shimie Hortig
      Shimie Hortig
      President and CEO
    • Tal Rozenfeld
      Tal Rozenfeld
      CFO
    • Tamar Rapaport-Dagim
      Tamar Rapaport-Dagim
      CFO and COO
Analysts
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