Amdocs Ltd 6-K, filed Feb 1, 2023
Amdocs Ltd (DOX)
About this 6-K
Amdocs Ltd filed this 6-K on February 1, 2023.
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 January 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 January 31, 2023 Amdocs Limited (“Amdocs”) issued a press release announcing financial results for the quarter ended December 31, 2022. A copy of the press release and the accompanying presentation are furnished as Exhibits 99.1 and 99.2 to this Report of Foreign Private Issuer on Form 6-K.
The information in this Form 6-K (including Exhibits 99.1 and 99.2) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| AMDOCS LIMITED | ||
| By: | /s/ Matthew E. Smith | |
| Matthew E. Smith | ||
| Secretary and Authorized Signatory | ||
Date: January 31, 2023
EXHIBIT INDEX
| EXHIBIT NO. |
DESCRIPTION | |
| 99.1 | Amdocs Limited Press Release dated January 31, 2023. | |
| 99.2 | Fiscal Q1 2023 Earnings Presentation | |
Exhibit 99.1
Amdocs Limited Reports First Quarter Fiscal 2023 Results
Record Quarterly Revenue of $1.19 Billion, up 7.3% YoY as Reported and up 9.5% YoY in
Constant Currency(2)
Continued Sales Momentum & Strong Revenue Growth
Reiterates Fiscal 2023 GAAP Diluted EPS Growth Outlook of 3%-10% YoY
Raises Fiscal 2023 Non-GAAP Diluted EPS Growth Outlook to 9%-13% YoY
Reiterates Fiscal 2023 Free Cash Flow(1) Outlook of $700 Million
First Quarter Fiscal 2023 Highlights
(All comparisons are against the prior year)
| • | Record revenue of $1,186 million, up 7.3% as reported and up 9.5% in constant currency(2); revenue was above the midpoint of $1,155-$1,195 million guidance range |
| • | Record revenue of $813 million in North America, up 9.0% |
| • | Managed services revenue of $700 million, equivalent to approximately 59% of total revenue |
| • | GAAP diluted EPS of $1.07, toward the high end of $1.00-$1.08 guidance range, primarily due to a lower GAAP effective tax rate than anticipated in quarterly guidance, partially offset by restructuring charges |
| • | Non-GAAP diluted EPS of $1.45, above the guidance range of $1.29-$1.35, primarily due to a lower non-GAAP effective tax rate than anticipated in quarterly guidance as well as non-GAAP operating margin improvement on higher revenue |
| • | GAAP operating income of $150 million; GAAP operating margin of 12.7%, down 200 basis points sequentially and down 180 basis points as compared to last year’s first fiscal quarter, primarily due to restructuring charges |
| • | Non-GAAP operating income of $210 million; non-GAAP operating margin of 17.7%, up 10 basis points sequentially and up 20 basis points as compared to last year’s first fiscal quarter while accelerating R&D investments |
| (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 $50 million, comprised of cash flow from operations of $83 million, less $34 million in net capital expenditures and other(1); first fiscal quarter free cash flow was impacted by the timing of cash collections due around quarter-end holidays but subsequently received in January; reiterates full year fiscal 2023 free cash outlook of $700 million |
| • | Repurchased $100 million of ordinary shares during the first fiscal quarter |
| • | Record twelve-month backlog of $4.09 billion, up approximately $120 million sequentially and up 6.8% as compared to last year’s first fiscal quarter |
JERSEY CITY, NJ – January 31, 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 December 31, 2022.
“Fiscal year 2023 is off to a strong start as we continued to support our customers on their journey to modernize for the 5G and cloud era. First quarter revenue was a record $1.19 billion, up 9.5% from a year ago in constant currency(2) and driven by continued strength in North America and healthy activity in Europe. Sales momentum was also robust and included a notable new project award to support the 5G fixed wireless access strategy of a leading North American Tier 1 operator. Additionally, Amdocs was selected by Globe Telecom in the Philippines to provide a next-generation 5G charging platform for consumer and business customers. Overall, we ended Q1 with record-high 12-month backlog of $4.09 billion, up roughly 7% from a year ago”, said Shuky Sheffer, president and chief executive officer of Amdocs Management Limited.
“First quarter operating profitability improved on a sequential and year ago basis as we delivered consistent project execution and ongoing efficiency gains while maintaining a focus on R&D investment. Our managed services business also grew in Q1, compared with a year ago. Among the highlights, Dish and Amdocs signed a new managed services agreement which will offer an improved billing experience for Dish commercial customers. Additionally, we extended our relationships with several existing managed services customers under expanded multi-year engagements, including Three UK for which Amdocs is supporting the migration to a modern cloud-based data architecture to enable data-driven decision making,” said Tamar Rapaport-Dagim, chief financial officer & chief operating officer of Amdocs Management Limited.
Sheffer concluded, “Situated at the heart of a strategic multi-year 5G, digital, network automation and cloud-driven investment cycle, Amdocs is a key technology enabler with market leading products and services and a strong reputation for delivering mission critical systems transformation. While we are closely monitoring the global macroeconomic uncertainty, as a trusted technology partner we continue to see healthy levels of engagement and an attractive pipeline of opportunity as we collaborate with our customers to evaluate their next-generation requirements. Combined with our strong first quarter, and the visibility provided by our unique and resilient business model, we are raising the midpoint of our guidance for non-GAAP diluted earnings per share growth in fiscal 2023, while continuing to expect strong earnings to cash conversion for the full year.”
Revenue
(All comparisons are against the prior year period)
| In Millions | ||||||||
| Three months ended | ||||||||
| December 31, 2022 | ||||||||
| Actual | Previous Guidance |
|||||||
| Revenue |
$ | 1,186 | $ | 1,155- $1,195 | ||||
| Revenue growth, as reported |
7.3 | % | ||||||
| Revenue growth, constant currency(2) |
9.5 | % | ||||||
| • | Revenue for the first fiscal quarter of 2023 was above the midpoint of Amdocs’ guidance, even after adjusting for a positive impact from foreign currency movements of approximately $9 million compared to our guidance assumptions |
| • | Revenue for the first fiscal quarter includes an unfavorable impact from foreign currency movements of approximately $3 million relative to the fourth quarter of fiscal 2022 |
Net Income and Earnings Per Share
| In thousands, except per share data |
||||||||
| Three months ended | ||||||||
| December 31, | ||||||||
| 2022 | 2021 | |||||||
| GAAP Measures |
||||||||
| Net income |
$ | 129,872 | $ | 133,602 | ||||
| Net income attributable to Amdocs Limited |
$ | 129,667 | $ | 133,602 | ||||
| Diluted earnings per share |
$ | 1.07 | $ | 1.07 | ||||
| Non-GAAP Measures |
||||||||
| Non-GAAP Net income |
$ | 176,542 | $ | 150,135 | ||||
| Non-GAAP Net income attributable to Amdocs Limited |
$ | 176,337 | $ | 150,135 | ||||
| Non-GAAP Diluted earnings per share |
$ | 1.45 | $ | 1.20 | ||||
| • | 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, restructuring charges, gain from divestiture of OpenMarket 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 January 31, 2023, the Board approved the Company’s next quarterly cash dividend payment at the new increased rate of $0.435 per share, as approved at the January 2023 annual general meeting of shareholders and set March 31, 2023 as the record date for determining the shareholders entitled to receive the dividend, which will be payable on April 28, 2023 |
| • | Share Repurchase Activity: Repurchased $100 million of ordinary shares during the first quarter of fiscal 2023 |
Twelve-month Backlog
Twelve-month backlog was a record $4.09 billion at the end of the first quarter of fiscal 2023, up approximately 6.8% as compared to last year’s first 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.
Second Quarter Fiscal 2023 Outlook
| In millions, except per share data Q2 2023 | ||
| Revenue |
$1,200-$1,240 | |
| GAAP diluted EPS |
$1.18-$1.26 | |
| Non-GAAP diluted EPS |
$1.44-$1.50 |
| • | Second quarter revenue guidance assumes approximately $4 million sequential positive impact from foreign currency fluctuations as compared to the first quarter of fiscal 2023 |
| • | Second quarter non-GAAP diluted EPS guidance excludes amortization of purchased intangible assets and other acquisition-related costs, changes in certain acquisitions related liabilities measured at fair value, and approximately $0.13-$0.15 per share of equity-based compensation expense and other, net of related tax effects |
Full Year Fiscal 2023 Outlook
| FY 2023, year-over-year growth | ||||||||
| Current Guidance | Previous Guidance | |||||||
| Revenue growth, as reported |
5.0%-9.0% | 4.0%-8.0% | ||||||
| Revenue growth, constant currency(2) |
6.0%-10.0% | 6.0%-10.0% | ||||||
| GAAP diluted EPS growth |
3.0%-10.0% | 3.0%-10.0% | ||||||
| Non-GAAP diluted EPS growth |
9.0%-13.0% | 8.0%-12.0% | ||||||
| FY 2023, in millions | ||||||||
| Current Guidance | Previous Guidance | |||||||
| Free cash flow(1) |
~$ | 700 | ~$ | 700 | ||||
| • | Full year fiscal 2023 revenue guidance incorporates an expected unfavorable impact from foreign currency fluctuations of approximately 1% year-over-year as compared with an unfavorable impact of approximately 2% year-over-year previously |
| • | Non-GAAP diluted earnings per share growth excludes amortization of purchased intangible assets and other acquisition-related costs, changes in certain acquisitions related liabilities measured at fair value, restructuring charges, approximately $0.57-$0.63 per share of equity-based compensation expense, 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; first half free cash flow is tracking in line with expectations for the full year fiscal 2023, taking into consideration the normal seasonal timing of annual bonus payments in the second quarter |
The forward looking statements regarding our second 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, 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 January 31, 2023 at 5:00 p.m. Eastern Time to discuss the Company’s first 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.
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 December 31, |
||||||||
| 2022 | 2021 | |||||||
| Revenue |
$ | 1,185,720 | $ | 1,104,632 | ||||
| Operating expenses: |
||||||||
| Cost of revenue |
756,849 | 716,718 | ||||||
| Research and development |
95,726 | 81,945 | ||||||
| Selling, general and administrative |
143,222 | 128,076 | ||||||
| Amortization of purchased intangible assets and other |
15,313 | 17,747 | ||||||
| Restructuring charges |
24,536 | — | ||||||
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| 1,035,646 | 944,486 | |||||||
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| Operating income |
150,074 | 160,146 | ||||||
| Interest and other expense, net |
(4,963 | ) | (2,562 | ) | ||||
| Gain from sale of a business |
— | 10,000 | ||||||
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| Income before income taxes |
145,111 | 167,584 | ||||||
| Income taxes |
15,239 | 33,982 | ||||||
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| Net income |
$ | 129,872 | $ | 133,602 | ||||
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| Net Income attributable to noncontrolling Interests |
205 | — | ||||||
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| Net Income attributable to Amdocs Limited |
$ | 129,667 | $ | 133,602 | ||||
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| Basic earnings per share |
$ | 1.07 | $ | 1.07 | ||||
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| Diluted earnings per share |
$ | 1.07 | $ | 1.07 | ||||
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| Basic weighted average number of shares outstanding |
120,652 | 124,502 | ||||||
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| Diluted weighted average number of shares outstanding |
121,500 | 125,304 | ||||||
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| Cash dividends declared per share |
$ | 0.395 | $ | 0.36 | ||||
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AMDOCS LIMITED
Selected Financial Metrics
(In thousands, except per share data)
| Three months ended | ||||||||
| December 31, | ||||||||
| 2022 | 2021 | |||||||
| Revenue |
$ | 1,185,720 | $ | 1,104,632 | ||||
| Non-GAAP operating income |
209,538 | 193,607 | ||||||
| Non-GAAP net income |
176,542 | 150,135 | ||||||
| Non-GAAP net income attributable to Amdocs Limited |
176,337 | 150,135 | ||||||
| Non-GAAP diluted earnings per share |
$ | 1.45 | $ | 1.20 | ||||
| Diluted weighted average number of shares outstanding |
121,500 | 125,304 | ||||||
Free Cash Flows
(In thousands)
| Three months ended | ||||||||
| December 31, | ||||||||
| 2022 | 2021 | |||||||
| Net Cash Provided by Operating Activities |
$ | 83,226 | $ | 204,118 | ||||
| Purchase of property and equipment, net(a) |
(33,703 | ) | (57,225 | ) | ||||
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| Free Cash Flow |
$ | 49,523 | $ | 146,893 | ||||
Normalized Free Cash Flow(b) for the three months ended December 31, 2021: $185,679, excluding net capital expenditures related to the new campus development of $29,307 and payment for acquisition related liability of $9,479.
| (a) | The amounts under “Purchase of property and equipment, net”, include proceeds from sale of property and equipment. There were no such proceeds in the three months ended December 31, 2022, while there was $269 for the three months ended December 31, 2021. |
| (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 December 31, 2022 | ||||||||||||||||||||||||||||
| Reconciliation items | ||||||||||||||||||||||||||||
| GAAP | Amortization of purchased intangible assets and other |
Equity based compensation expense |
Changes in certain acquisitions related liabilities measured at fair value |
Restructuring charges | Tax effect |
Non-GAAP | ||||||||||||||||||||||
| Operating expenses: |
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| Cost of revenue |
$ | 756,849 | $ | — | $ | (8,655 | ) | $ | (125 | ) | $ | — | $ | — | $ | 748,069 | ||||||||||||
| Research and development |
95,726 | — | (1,484 | ) | — | — | — | 94,242 | ||||||||||||||||||||
| Selling, general and administrative |
143,222 | — | (9,351 | ) | — | — | — | 133,871 | ||||||||||||||||||||
| Amortization of purchased intangible assets and other |
15,313 | (15,313 | ) | — | — | — | — | — | ||||||||||||||||||||
| Restructuring charges |
24,536 | — | — | — | (24,536 | ) | — | — | ||||||||||||||||||||
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| Total operating expenses |
1,035,646 | (15,313 | ) | (19,490 | ) | (125 | ) | (24,536 | ) | — | 976,182 | |||||||||||||||||
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| Operating income |
150,074 | 15,313 | 19,490 | 125 | 24,536 | — | 209,538 | |||||||||||||||||||||
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| Interest and other expense, net |
(4,963 | ) | — | — | — | — | — | (4,963 | ) | |||||||||||||||||||
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| Income taxes |
15,239 | — | — | — | — | 12,794 | 28,033 | |||||||||||||||||||||
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| Net income |
$ | 129,872 | $ | 15,313 | $ | 19,490 | $ | 125 | $ | 24,536 | $ | (12,794 | ) | $ | 176,542 | |||||||||||||
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| Net income attributable to noncontrolling interests |
205 | — | — | — | — | — | 205 | |||||||||||||||||||||
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| Net income attributable to Amdocs Limited |
$ | 129,872 | $ | 15,313 | $ | 19,490 | $ | 125 | $ | 24,536 | $ | (12,794 | ) | $ | 176,337 | |||||||||||||
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| Three months ended December 31, 2021 | ||||||||||||||||||||||||||||||||
| Reconciliation items | ||||||||||||||||||||||||||||||||
| GAAP | Amortization of purchased intangible assets and other |
Equity based compensation expense |
Changes in certain acquisitions related liabilities measured at fair value |
Gain from sale of a business |
Other | Tax effect |
Non-GAAP | |||||||||||||||||||||||||
| Operating expenses: |
||||||||||||||||||||||||||||||||
| Cost of revenue |
$ | 716,718 | $ | — | $ | (7,147 | ) | $ | 1,027 | $ | — | $ | — | $ | — | $ | 710,598 | |||||||||||||||
| Research and development |
81,945 | — | (1,223 | ) | — | — | — | — | 80,722 | |||||||||||||||||||||||
| Selling, general and administrative |
128,076 | — | (8,371 | ) | — | — | — | — | 119,705 | |||||||||||||||||||||||
| Amortization of purchased intangible assets and other |
17,747 | (17,747 | ) | — | — | — | — | — | — | |||||||||||||||||||||||
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| Total operating expenses |
944,486 | (17,747 | ) | (16,741 | ) | 1,027 | — | — | — | 911,025 | ||||||||||||||||||||||
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| Operating income |
160,146 | 17,747 | 16,741 | (1,027 | ) | — | — | — | 193,607 | |||||||||||||||||||||||
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| Interest and other expense, net |
(2,562 | ) | — | — | — | — | (3,605 | ) | — | (6,167 | ) | |||||||||||||||||||||
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|||||||||||||||||
| Gain from sale of a business |
10,000 | — | — | — | (10,000 | ) | — | — | — | |||||||||||||||||||||||
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|
|||||||||||||||||
| Income taxes |
33,982 | — | — | — | — | — | 3,323 | 37,305 | ||||||||||||||||||||||||
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| Net income |
$ | 133,602 | $ | 17,747 | $ | 16,741 | $ | (1,027 | ) | $ | (10,000 | ) | $ | (3,605 | ) | $ | (3,323 | ) | $ | 150,135 | ||||||||||||
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AMDOCS LIMITED
Condensed Consolidated Balance Sheets
(In thousands)
| As of | ||||||||
| December 31, 2022 |
September 30, 2022 |
|||||||
| ASSETS |
||||||||
| Current assets |
||||||||
| Cash and cash equivalents |
$ | 492,179 | $ | 573,377 | ||||
| Short-term interest-bearing investments |
242,377 | 244,603 | ||||||
| Accounts receivable, net, including unbilled of $181,895 and $157,165, respectively |
1,136,200 | 946,777 | ||||||
| Prepaid expenses and other current assets |
213,630 | 238,390 | ||||||
|
|
|
|
|
|||||
| Total current assets |
2,084,386 | 2,003,147 | ||||||
| Property and equipment, net |
798,907 | 794,287 | ||||||
| Lease assets |
158,633 | 176,884 | ||||||
| Goodwill and other intangible assets, net |
2,810,079 | 2,841,137 | ||||||
| Other noncurrent assets |
606,849 | 574,938 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 6,458,854 | $ | 6,390,393 | ||||
|
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|
|
|
|||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Current liabilities |
||||||||
| Accounts payable, accruals and other |
$ | 1,033,484 | $ | 955,658 | ||||
| Lease liabilities |
39,724 | 43,336 | ||||||
| Deferred revenue |
255,642 | 253,686 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
1,328,850 | 1,252,680 | ||||||
| Lease liabilities |
122,488 | 138,378 | ||||||
| Long-term debt, net of unamortized debt issuance costs |
645,262 | 645,117 | ||||||
| Other noncurrent liabilities |
772,329 | 793,940 | ||||||
| Total Amdocs Limited Shareholders’ equity |
3,547,211 | 3,517,769 | ||||||
| Noncontrolling interests |
42,714 | 42,509 | ||||||
|
|
|
|
|
|||||
| Total equity |
3,589,925 | 3,560,278 | ||||||
|
|
|
|
|
|||||
| Total liabilities and equity |
$ | 6,458,854 | $ | 6,390,393 | ||||
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|
|||||
AMDOCS LIMITED
Consolidated Statements of Cash Flows
(In thousands)
| Three months ended December 31, |
||||||||
| 2022 | 2021 | |||||||
| Cash Flow from Operating Activities: |
||||||||
| Net income |
$ | 129,872 | $ | 133,602 | ||||
| Reconciliation of net income to net cash provided by operating activities: |
||||||||
| Depreciation, amortization and impairment |
61,071 | 50,876 | ||||||
| Amortization of debt issuance costs |
145 | 141 | ||||||
| Equity-based compensation expense |
19,490 | 16,741 | ||||||
| Gain from sale of a business |
— | (10,000 | ) | |||||
| Deferred income taxes |
(16,973 | ) | 4,143 | |||||
| Loss from short-term interest-bearing investments |
639 | 647 | ||||||
| Net changes in operating assets and liabilities, net of amounts acquired: |
||||||||
| Accounts receivable, net |
(197,381 | ) | (84,458 | ) | ||||
| Prepaid expenses and other current assets |
16,069 | (15,696 | ) | |||||
| Other noncurrent assets |
(848 | ) | (11,835 | ) | ||||
| Lease assets and liabilities, net |
(1,251 | ) | 2,030 | |||||
| Accounts payable, accrued expenses and accrued personnel |
82,136 | (3,053 | ) | |||||
| Deferred revenue |
(6,194 | ) | 86,049 | |||||
| Income taxes payable, net |
(11,242 | ) | 16,802 | |||||
| Other noncurrent liabilities |
7,693 | 18,129 | ||||||
|
|
|
|
|
|||||
| Net cash provided by operating activities |
83,226 | 204,118 | ||||||
|
|
|
|
|
|||||
| Cash Flow from Investing Activities: |
||||||||
| Purchase of property and equipment, net(a) |
(33,703 | ) | (57,225 | ) | ||||
| Proceeds from sale of short-term interest-bearing investments |
3,734 | 5,242 | ||||||
| Purchase of short-term interest-bearing investments |
— | (34,275 | ) | |||||
| Net cash paid for business acquisitions |
— | (23,885 | ) | |||||
| Other |
(835 | ) | (548 | ) | ||||
|
|
|
|
|
|||||
| Net cash used in investing activities |
(30,804 | ) | (110,691 | ) | ||||
|
|
|
|
|
|||||
| Cash Flow from Financing Activities: |
||||||||
| Repurchase of shares |
(100,021 | ) | (170,904 | ) | ||||
| Proceeds from employee stock options exercises |
14,589 | 6,012 | ||||||
| Payments of dividends |
(47,735 | ) | (44,956 | ) | ||||
| Payment of contingent consideration from a business acquisition |
(453 | ) | (6,153 | ) | ||||
|
|
|
|
|
|||||
| Net cash used in financing activities |
(133,620 | ) | (216,001 | ) | ||||
|
|
|
|
|
|||||
| Net decrease in cash and cash equivalents |
(81,198 | ) | (122,574 | ) | ||||
| Cash and cash equivalents at beginning of period |
573,377 | 709,064 | ||||||
|
|
|
|
|
|||||
| Cash and cash equivalents at end of period |
$ | 492,179 | $ | 586,490 | ||||
|
|
|
|
|
|||||
AMDOCS LIMITED
Supplementary Information
(In millions)
| Three months ended | ||||||||||||||||||||
| December 31, 2022 |
September 30, 2022 |
June 30, 2022 |
March 31, 2022 |
December 31, 2021 |
||||||||||||||||
| North America |
$ | 812.7 | $ | 794.4 | $ | 788.0 | $ | 772.2 | $ | 745.5 | ||||||||||
| Europe |
168.7 | 146.4 | 146.1 | 147.2 | 142.5 | |||||||||||||||
| Rest of the World |
204.3 | 225.7 | 226.2 | 225.9 | 216.6 | |||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Revenue |
$ | 1,185.7 | $ | 1,166.5 | $ | 1,160.3 | $ | 1,145.3 | $ | 1,104.6 | ||||||||||
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|
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|
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|
|||||||||||
| Three months ended | ||||||||||||||||||||
| December 31, 2022 |
September 30, 2022 |
June 30, 2022 |
March 31, 2022 |
December 31, 2021 |
||||||||||||||||
| Managed Services Revenue |
$ | 699.8 | $ | 714.6 | $ | 717.9 | $ | 663.4 | $ | 659.7 | ||||||||||
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|
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|||||||||||
| As of | ||||||||||||||||||||
| December 31, 2022 |
September 30, 2022 |
June 30, 2022 |
March 31, 2022 |
December 31, 2021 |
||||||||||||||||
| 12-Month Backlog |
$ | 4,090 | $ | 3,970 | $ | 3,950 | $ | 3,890 | $ | 3,830 | ||||||||||
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|||||||||||
# # #
Exhibit 99.2 Fiscal Q1 2023 Earnings Presentation January 31, 2023 Shuky Sheffer President & CEO Tamar Rapaport-Dagim CFO & COO
The information contained herein in this presentation or delivered or to be delivered to you during this presentation does not constitute an offer, expressed or implied, or a recommendation to do any transaction in Amdocs Limited securities or in any securities of its affiliates or subsidiaries. This presentation and the comments made by members of Amdocs management in conjunction with it include information that constitutes forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995, including statements about Amdocs’ growth and business results in future quarters. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be obtained or that any deviations will not be material. Such statements involve risks and uncertainties that may cause future results to differ from those anticipated. These risks include, but are not limited to, the effects of general 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. 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 January 31, 2023 with respect to earnings for fiscal Q1 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 Information Security Level 0 – Public. © 2023 – Proprietary & Confidential Information of Amdocs 4
President & Chief Executive Officer Strategy and Business Performance Update IIn nf for orm ma at tiion on Se Sec cu ur riit ty y L Le evel vel 0 0 – – P Pu ub blliic c. . © © 20 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
Strong Start to Fiscal Year 2023 I am pleased to report for which go to our around the world 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 6 6
Positioned to Deliver another Year of Consistent and Profitable Growth in Fiscal 2023 2 Revenue 12-month backlog Non-GAAP EPS Record $1.19B $4.1B Above guidance range Reflects better (1) Up 9.5% YoY, Up ~7% from a year profitability, higher above guidance ago, on continued sales revenue and lower than midpoint momentum expected non-GAAP effective tax rate 1. Constant currency. Assumes exchange rates in the current period were unchanged from the prior period 2. Non-GAAP. See reconciliation tables in appendix IIn nf for orm ma at tiion on Se Sec cu ur riit ty y L Le evel vel 0 0 – – P Pu ub blliic c. . © © 20 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 7 7
Q1-23 Operational Highlights Strong value-driven Unrivalled execution Technology & product engagements and operations leadership Continued sales momentum and Another great quarter of successful project deepened our long-standing relationship Maintained high level of R&D investment execution including major project milestone with key customers: MWC in Barcelona: opportunity to introduce our latest innovative products and services Americas: Brazil Europe: Tier 1 operator Direct outcome of our: Southeast Asia: in Malaysia (i) Highly skilled workforce Continued to diversify (ii) Unique global delivery model Amdocs’ customer base: (iii) Regional site strategy which is constantly refined as we optimize our Remain committed to disciplined M&A Communications: global talent pool Constantly evaluating a broad pipeline of strategic M&A opportunities Media: new projects and extension in past Delivered flawless operational support to year our customers over the peak retail volume of Black Friday and holiday season Information Security Level 0 – Public. © 2023 – Proprietary & Confidential Information of Amdocs 8
Striving for Excellence in Amdocs’ Approach to ESG Included as a Included for The new state-of- Amdocs India Improved our th member of the the 4 the-art campus recognized as environmental consecutive year in Israel has been 2023 one of the Most disclosure in the LEED Gold Preferred Bloomberg rating at CDP Dow Jones certified for its Workplaces in from Gender- Sustainability sustainable IT sector & IT B to A- Index for NA design and Equality Enabled Services operations for 2022 – 2023 Index We are dedicated to making a positive impact 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 9 9
Progress in Strategic Domains (1/4) Enable our customers to drive growth, improve cost-efficiency and provide an amazing experience to consumers and enterprises Tier One Operator in Southeast Asia win win win Cloud-hosted Intelligent Modernization and Migration of existing Cloud Networking Suite migration of Amdocs Amdocs’ BSS suite to a workloads from on- modern cloud premises to the cloud infrastructure Journey to the cloud: accelerate business value business value business value cloud adoption Enables provisioning of Enables greater flexibility Enables improving advanced 5G services and capacity, an security, operability and improved customer resiliency while defining experience and adoption the journey towards a full of 5G innovations cloud-native environment 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 10 10
Progress in Strategic Domains (2/4) Enable our customers to drive growth, improve cost-efficiency and provide an amazing experience to consumers and enterprises win win win Digital Several new projects, Modernization of cloud- AI-driven data insights including upgrade to the based data architecture transformation new Amdocs Data Hub for under a multi-year Mobile & B2B on the cloud managed services deal Creating seamless digital experiences by business value business value business value transforming IT Enable greater flexibility Enables timely Enables business growth, operations and capacity, improved recommendations and time-to-market agility, and customer experience and suggestions based on operational efficiencies rapid adoption of the data-driven decision through AI-driven insights latest 5G innovations making 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 11 11
Progress in Strategic Domains (3/4) Enable our customers to drive growth, improve cost-efficiency and provide an amazing experience to consumers and enterprises Tier One Operator in NA win win win win win 5G Home Operating 3- year extension for Online charging and Modernization of Next-gen charging System ongoing support monetization billing infrastructure revenue platform services modernization management systems Monetization business value business value business value business value business value of new 5G services and Simplifies internet Enables Enables faster time Enables Fast-track and device contextualized and to market for new monetization of development for support of management, differentiated 5G offerings new standalone Amdocs’ Turbo exciting new automates charging and offerings with 5G services while 5G use cases customer support Catalog platforms flexible price plans reducing and introduces operating costs enhanced security features for fixed wireless broadband customers 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 12 12
Progress in Strategic Domains (4/4) Enable our customers to drive growth, improve cost-efficiency and provide an amazing experience to consumers and enterprises Leading Australian Operator win win win win Network Operational support Delivery of digital System Integration Deployment of cloud- system (OSS) infrastructure services services for vRAN native network automation modernization as part of Colt’s optimization suite continuous Delivering modernization journey dynamic business value business value business value business value connected Provides increased Empower Colt Drives mass scale of Maximizes network experiences with performance, business customers and automation, and performance and real-time, agility and cost- employees around the deployment accessibility and automated savings world efficiency benefits of greater flexibility, scalability, networks and automation 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 13 13
Looking Ahead: Reiterating FY2023 Revenue (1) Growth Outlook of 6%-10% constant currency While Amdocs and our global customers are not immune to economic cycles and we continue to closely monitor the current period of global macro uncertainty, we remain confident in our growth outlook Well-situated at the Continue to see We bring highly relevant Unique business capabilities in digital, cloud heart of the multi- healthy levels of model highly and automation helping year 5G, network engagement and recurring revenue our customers to automation, attractive pipeline streams and strong address the complex digital and cloud- of opportunity as business visibility macro-economic resulting from our driven investment we collaborate situation support of mission cycle as a key with our customers technology enabler critical systems to evaluate their Improved customer and strong delivery under multi-year needs experience reputation engagements Accelerated cost reduction Increased efficiency 1. Constant currency. Assumes exchange rates in the current period were unchanged from the prior period Information Security Level 0 – Public. © 2023 – Proprietary & Confidential Information of Amdocs 14
Looking Ahead: Raising FY2023 Non-GAAP EPS Growth Outlook D A Raising the midpoint of YoY growth(1) 6%−10% (1) our outlook Revenue − Reiterating full year revenue growth guidance − North America, Europe and Rest of World each (1) Jan-23 expected to grow over the full year Nov-22 9%−13% B 8%−12% On track to achieve our FY23 YoY growth Non-GAAP Non- YoY growth 17.5%−18.1% % margin EBIT GAAP guidance of improved level of profitability 11% midpoint (2) (2) 10% midpoint Margin EPS Reflects strong Q1 financial performance and commitment to further improve C profitability by: Reiterating FY23 FCF generation of Free cash Accelerating automation − $700M and ~100% conversion rate (2) Driving efficiency flow − Majority of which we plan to return to shareholders Tightly managing costs − (3) We are positioned to deliver double-digit expected total shareholder returns for the third straight year in fiscal 2023 1. Constant currency. Assumes exchange rates in the current period were unchanged from the prior period 2. Non-GAAP. See reconciliation tables in appendix 3. Expected total shareholder return assumes Non-GAAP EPS growth plus dividend yield (based on fiscal year end closing share price); FY2023E assumed 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. . © © 2023 2023 – – 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 15 15 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 11/8/22
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. . © © 2022 2022 – – 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 16 16
Q1 2023 Results Q1 2023 Revenue vs. Guidance $ Millions Q1 Revenue Above guidance midpoint, even with $9M foreign currency tailwind vs guidance $1,186 million (1) +7.3% YoY, +9.5% constant currency $1,186 $1,175 Above guidance midpoint ($1,155M - $1,195M) (2) Q1 Non-GAAP Operating Margin Original 1F23 Q1F23A Guidance (midpoint) 17.7%, +20bps YoY revenue, +7.3% YoY as reported +10 bps QoQ and within annual (1) and YoY constant currency target range of 17.5% - 18.1% Q1 2023 Revenue by Region quarter in North America $ Millions Europe as projects ramp-up Q1 GAAP Diluted EPS Rest of World non-GAAP operating margin ~$204 $1.07 while maintaining high levels of R&D Toward higher-end of guidance investments ($1.00 - $1.08) North Europe America ~$169 (2) ~$813 Q1 Non-GAAP Diluted EPS $1.45 1. Constant currency. Assumes exchange rates in the current period were unchanged from the prior period 2. Non-GAAP. See reconciliation tables in appendix Above guidance range ($1.29 - $1.35) Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 17 17 Confidential Information of Amdocs
12-Month Backlog Record Quarterly 12-Month Backlog in Q1F23 12-month backlog growth has accelerated $ Billions year-over-year over the past several quarters $4.09 $3.97 $3.95 Record-high level as of $3.89 $3.83 December 31, 2022 ~ +6.8% (1) (1) YoY ~ +6.8% YoY, QoQ (1) $3.69 (1) Q4F21 Q1F22 Q2F22 Q3F22 Q4F22 Q1F23 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 18 18 Confidential Information of Amdocs
Managed Services Revenue: Q1 2023 $ Millions Managed services arrangements support Managed Services business model $700 $660 resiliency with highly recurring revenue streams, multi-year ~ +6.1% engagements and YoY high renewal rates, and may also include ~ +6.1% YoY large-scale digital Q1F22 Q1F23 ~59% of total revenue transformation projects Revenue management system modernization, including multi-year managed services extension Migration to modern, cloud-based data architecture under a multi-year managed services extension managed Close to Provision of AI-driven data insights, implemented on public services contract cloud and delivered under multi-year managed services renewals 100% agreement New managed services agreement which will offer an improved billing experience for Dish commercial TV customers. Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 19 19 Confidential Information of Amdocs
(2) DSO’s Q1 2023 Free cash flow bridge 87 days $34 $83 +8 days YoY and +13 days QoQ DSO’s may fluctuate from quarter to quarter * $50 Deferred revenue > unbilled -$39 million QoQ Deferred revenue: -$6M QoQ Unbilled receivables: +$33M QoQ Items fluctuate from quarter to quarter in line with normal business activities. Cashflow from Net capex Reported FCF Operations Q1 2023 cash collections impacted by *Figures may not sum due to rounding timing of quarter-end holidays, but payments in January Cash, Credit Facility & Debt Position Liquidity: Cash + Credit Facility $ Millions, as of December 31, 2022 1H FY2023 free cash flow $1.2 billion with expectations, taking into consideration normal seasonal timing of annual bonus Credit payments in Q2 Facility $500 Ample liquidity including available $500M revolving credit facility liquidity to support ongoing business needs while retaining the capacity to fund Cash future strategic growth investments ~$735 $650 Baa2 BBB 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 20 20 Confidential Information of Amdocs
Q1 2023 Cash Returned to Shareholders Quarterly Dividend $ Millions Board authorized quarterly dividend payment: Dividends, $48 43.5 cents Share repurchases, As of December 31, roughly $0.4B of $100 share repurchase authorization capacity remained (1) free cash flow (FCF) (1)(3) 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 $869 (1)(3) 1. Non-GAAP. See appendix tables for reconciliation of normalized FCF Normalized FCF ($M) $700 $665 $527 2. Yield = expected reported free cash flow of $700M in FY2023 as a percentage of Amdocs’ market capitalization as of January 31, 2023 3. FCF in FY2020, FY2021 and FY2022 is presented on a normalized basis, which mainly (1) (1) (1) (3) excludes net capital expenditures related to the new campus development; FY2020 FY2021 FY2022 FY2023E normalized FCF disclosure is no longer applicable in FY2023 (Guidance) Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 21 21 Confidential Information of Amdocs
Revenue Growth (4) YoY% Growth Constant Currency (1) (4) FY21 and FY22 revenue is pro forma constant currency 10.0% 10.3% Reiterating midpoint of 7.0% ~6%-10% YoY guidance 4.1% 6.0% 2.4% (1)(4) (4) (1)(4) (4) On-track for revenue growth FY2019 FY2020 FY2021 FY2022 FY2023E in FY2023E non-GAAP diluted EPS outlook to (3) Total Shareholder Return from 8%-12% previously (2) Non-GAAP Diluted EPS Growth YoY % + Dividend Yield (1) FY21 and FY22 non-GAAP EPS growth is presented pro forma Positioned to deliver expected ~13%* 14.1% total shareholder returns for year running 13.0% 11.7% Expect midpoint of 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. improved 9.8% 5.3% 9.0% ~9%-13% YoY 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 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 (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 22 22 Confidential Information of Amdocs
Q&A Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 23 23
Q2 Fiscal 2023 Outlook $1,200 - $1,240 million Revenue GAAP EPS $1.18 - $1.26 (1) Non-GAAP EPS $1.44 - $1.50 Share Count 122 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 5.0% - 9.0% 4.0% - 8.0% digit total shareholder returns As reported for the third year running Revenue growth 6.0 – 10.0% 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% 8.0% - 12.0% (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 25 25 Confidential Information of Amdocs
Appendix Reconciliation Tables Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 26 26
AMDOCS LIMITED Selected Financial Metrics (In thousands, except per share data) Three months ended December 31, 2022 2021 Revenue $ 1,185,720 $ 1,104,632 Non-GAAP operating income 209,538 193,607 Non-GAAP net income 176,542 150,135 Non-GAAP net income attributable to Amdocs Limited 176,337 150,135 Non-GAAP diluted earnings per share $ 1.45 $ 1.20 Diluted weighted average number of shares outstanding 121,500 125,304 Free Cash Flows (In thousands) Three months ended December 31, 2022 2021 Net Cash Provided by Operating Activities $ 83,226 $ 204,118 (a) Purchase of property and equipment, net (33,703) (57,225) (a) The amounts under Purchase of property and equipment, net”, include proceeds from sale of property and equipment. There were no such proceeds in the three Free Cash Flow $ 49,523 $ 146,893 months ended December 31, 2022, while there was $269 for the three months ended December 31, 2021. (b) Normalized Free Cash Flow for the three months ended December 31, 2021: $185,679, excluding net capital expenditures related to (b) Since Q12023, the Normalized Free Cash Flow is no longer the new campus development of $29,307 and payment for acquisition related liability of $9,479. applicable. Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 27 27 Confidential Information of Amdocs
AMDOCS LIMITED Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP (In thousands) Three months ended December 31, 2022 Reconciliation items GAAP Amortization of Equity based Changes in certain Restructuring charges Tax Non-GAAP purchased compensation acquisitions related effect intangible assets expense liabilities measured at and other fair value Operating expenses: Cost of revenue $ 756,849 $ - $ (8,655) $ (125) $ - $ - $ 748,069 Research and development 95,726 - (1,484) - - - 94,242 Selling, general and administrative 143,222 - (9,351) - - - 133,871 Amortization of purchased intangible assets and other 15,313 (15,313) - - - - - Restructuring charges 24,536 - - - (24,536) - - Total operating expenses 1,035,646 (15,313) (19,490) (125) (24,536) - 976,182 Operating income 150,074 15,313 19,490 125 24,536 - 209,538 Interest and other expense, net (4,963) - - - - - (4,963) Income taxes 15,239 - - - - 12,794 28,033 Net income $ 24,536 $ (12,794) $ 129,872 $ 15,313 $ 19,490 $ 125 $ 176,542 Net income attributable to noncontrolling interests 205 - - - - - 205 Net income attributable to Amdocs Limited $ 129,872 $ 15,313 $ 19,490 $ 125 $ 24,536 $ (12,794) $ 176,337 Three months ended December 31, 2021 Reconciliation items GAAP Amortization of Equity based Changes in certain Non-GAAP Gain from Other Tax purchased compensation acquisitions sale of a effect intangible expense related liabilities business assets and measured at fair other value Operating expenses: Cost of revenue $ 716,718 $ - $ (7,147) $ 1,027 $ - $ - $ - $ 710,598 Research and 81,945 - (1,223) - - - - 80,722 development Selling, general and 128,076 - (8,371) - - - - 119,705 administrative Amortization of purchased intangible 17,747 (17,747) - - - - - - assets and other Total operating expenses 944,486 (17,747) (16,741) 1,027 - - - 911,025 Operating income 160,146 17,747 16,741 (1,027) - - - 193,607 Interest and other (2,562) - - - - (3,605) - (6,167) expense, net Gain from sale of a 10,000 - - - (10,000) - - - business Income taxes 33,982 - - - - - 3,323 37,305 Net income $ (10,000) $ (3,605) $ (3,323) $ 133,602 $ 17,747 $ 16,741 $ (1,027) $ 150,135 Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 28 28 Confidential Information of Amdocs
