Amdocs Ltd 6-K, filed Nov 9, 2022
Amdocs Ltd (DOX)
About this 6-K
Amdocs Ltd filed this 6-K on November 9, 2022.
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 November 2022
Commission File Number 1-14840
AMDOCS LIMITED
Hirzel House, Smith Street,
St. Peter Port, Island of Guernsey, GY1 2NG
Amdocs, Inc.
625 Maryville Centre Drive, Suite 200, Saint Louis, Missouri 63141
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
FORM 20-F ☒ FORM 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
YES ☐ NO ☒
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-
On November 8, 2022, Amdocs Limited (“Amdocs”) issued a press release announcing financial results for the quarter ended September 30, 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: November 8, 2022
EXHIBIT INDEX
| EXHIBIT |
DESCRIPTION | |
| 99.1 | Amdocs Limited Press Release dated November 8, 2022. | |
| 99.2 | Fiscal Q4 2022 Earnings Presentation | |
Exhibit 99.1
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Amdocs Limited Reports Fourth Quarter & Full Year Fiscal 2022 Results
Record Fiscal 2022 Revenue of $4.58 Billion, up 6.7% YoY as Reported and up 10.3% YoY in Pro Forma(2) Constant Currency(3)
Continued Sales Momentum & Record 12-Month Backlog of $3.97 Billion, up 7.6% YoY
Expects Fiscal 2023 Revenue Growth of 4.0%-8.0% YoY as Reported and 6.0%-10.0% YoY in Constant Currency(3)
Full Year Fiscal 2022 Highlights
(All comparisons are against the prior year)
| • | Record revenue of $4,577 million, up 6.7% as reported and up 10.3% on a pro forma(2) basis in constant currency(3), including record revenue of $3,100 million in North America |
| • | GAAP diluted EPS of $4.44, down 16.5% as reported, and up 13.3% after adjusting(4) for a gain from previously announced divestiture of OpenMarket in the prior fiscal year |
| • | Non-GAAP diluted EPS of $5.30, up 12.1% on a pro forma(2) basis and 10.2% as reported |
| • | Free cash flow of $530 million, reflecting healthy annual cash collections, and comprised of cash flow from operations of $757 million, less $227 million in net capital expenditures and other(1) |
| • | Normalized free cash flow of $665 million(1), equating to a conversion rate of roughly 102% compared to non-GAAP net income |
| • | Record twelve-month backlog of $3.97 billion, up approximately $20 million sequentially and up 7.6% as compared to last year’s fourth fiscal quarter |
| (1) | Please refer to the Selected Financial Metrics tables (figures may not sum because of rounding). |
| (2) | Pro forma growth rate excludes the financial impact of OpenMarket (which was divested on December 31, 2020) from fiscal year 2021 |
| (3) | Revenue on a constant currency basis assumes exchange rates in the current period were unchanged from the prior period |
| (4) | Adjusted GAAP excludes the gain from the sale of OpenMarket, which was divested on December 31, 2020, from the current and comparable fiscal years |
Fourth Quarter Fiscal 2022 Highlights
(All comparisons are against the prior year’s fourth quarter)
| • | Record revenue of $1,167 million, up 7.3% as reported and up 9.5% in constant currency(3); revenue was slightly above the midpoint of $1,145-$1,185 million guidance range, despite unfavorable foreign currency movements of roughly $9 million compared to our guidance assumptions |
| • | Record revenue of $794 million in North America, up 9.9% |
| • | Managed services revenue of $715 million, equivalent to approximately 61% of total revenue |
| • | GAAP diluted EPS of $1.05, toward the high end of $0.98-$1.06 guidance range |
| • | Non-GAAP diluted EPS of $1.29, at the midpoint of $1.26-$1.32 guidance range |
| • | GAAP operating income of $172 million; GAAP operating margin of 14.7% |
| • | Non-GAAP operating income of $205 million; non-GAAP operating margin of 17.6%, unchanged sequentially and up 10 basis points as compared to last year’s fourth fiscal quarter while accelerating R&D investments |
| • | The board of directors approved a 10% increase in the Company’s quarterly cash dividend payment from $0.395 per share to $0.435 per share, anticipated to be first paid in April 2023, subject to shareholder approval at the January 2023 annual meeting |
JERSEY CITY, NJ – November 8, 2022 – Amdocs Limited (NASDAQ: DOX), a leading provider of software and services to communications and media companies, today reported operating results for the fourth fiscal quarter and full fiscal year ended September 30, 2022.
“Fiscal 2022 was a landmark year for Amdocs, and I could not be prouder of our talented employees and our many amazing achievements. We delivered accelerated full year revenue growth of 10.3% on a pro forma(2) constant currency (3) basis as we executed our strategy to support the industry’s need for digital modernization, 5G monetization, cloud, and network automation with market-leading innovation. Strong sales momentum throughout fiscal 2022 continued in Q4 and included a five-year agreement to migrate Amdocs systems to the cloud for AT&T Mexico. Additionally, we are working with Rogers to move existing Amdocs services and applications to Rogers’ private cloud. Overall, we ended fiscal 2022 with record-high 12-month backlog of $3.97 billion, up approximately 8% from a year ago”, said Shuky Sheffer, president and chief executive officer of Amdocs Management Limited.
“Amdocs’ reputation for project execution is unrivalled in our industry, as demonstrated by a record number of production milestones achieved for our customers in Q4 and the full 2022 fiscal year. At the same time, we maintained consistent profitability and generated robust free cash flow, primarily driven by strong levels of customer cash collections throughout the fiscal year. Fiscal year 2022 was also a record year in managed services where recent customer activity included new long-term strategic agreements that strengthen and broaden our relationships with Charter in North America, Telefonica Hispanoamerica in Argentina, Chile and Peru, and SES in Europe,” said Tamar Rapaport-Dagim, chief financial officer & chief operating officer of Amdocs Management Limited.
Sheffer concluded, “We are confident in our unique and resilient business model given the strategic and mission critical nature of our products and services that we provide under multi-year customer engagements. While we are not immune to the current macro uncertainty, our role as a trusted partner is especially valuable during such times as we work to help service providers improve customer experience, accelerate cost reduction, and increase efficiency with our digital, cloud, automation and 5G monetization capabilities. Taking everything into consideration, we are positioned to deliver fiscal year 2023 revenue growth in line with the midpoint of our long-term target range of 6% to 10% on a constant currency(3) basis while delivering strong earnings to cash conversion.”
Revenue
(All comparisons are against the prior year period)
| In millions | ||||||||||||||||
| Three months ended | Twelve months ended | |||||||||||||||
| September 30, 2022 | September 30, 2022 | |||||||||||||||
| Actual | Previous Guidance |
Actual | Previous Guidance |
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| Revenue |
$ | 1,167 | $ | 1,145 - $1,185 | $ | 4,577 | — | |||||||||
| Revenue growth, as reported |
7.3% | — | 6.7% | 6.2% - 7.2% | ||||||||||||
| Revenue growth, constant currency(3) |
9.5% | — | — | — | ||||||||||||
| Pro forma(2) revenue growth, constant currency(3) |
— | — | 10.3% | 9.6% - 10.6% | ||||||||||||
| • | Revenue for the fourth fiscal quarter of 2022 was slightly above the midpoint of Amdocs’ guidance, despite unfavorable foreign currency movements of roughly $9 million compared to our guidance assumptions |
| • | Revenue for the fourth fiscal quarter includes an unfavorable impact from foreign currency movements of approximately $12 million relative to the third quarter of fiscal 2022 |
| • | Revenue for the full year fiscal 2022 includes an unfavorable impact from foreign currency movements of approximately 1.4% year-over-year |
Net Income and Earnings Per Share
| In thousands, except per share data | ||||||||||||||||
| Three months ended September 30, |
Twelve months ended September 30, |
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| 2022 | 2021 | 2022 | 2021(a) | |||||||||||||
| GAAP Measures |
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| Net income |
$ | 128,936 | $ | 123,525 | $ | 549,501 | $ | 688,374 | ||||||||
| Diluted earnings per share |
$ | 1.05 | $ | 0.97 | $ | 4.44 | $ | 5.32 | ||||||||
| Non-GAAP Measures |
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| Net income |
$ | 157,548 | $ | 147,470 | $ | 655,147 | $ | 621,820 | ||||||||
| Diluted earnings per share |
$ | 1.29 | $ | 1.16 | $ | 5.30 | $ | 4.81 | ||||||||
| • | 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, gain from divestiture of OpenMarket and other, net of related tax effects, in all the periods presented |
| • | In fiscal year 2021, the GAAP net income includes a gain from divestiture of OpenMarket, net of related tax effects, at the amount of $1.44 per share, which is excluded from the Non-GAAP net income |
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 November 8, 2022, the Board approved the Company’s next quarterly cash dividend payment of $0.395 per share and set December 30, 2022 as the record date for determining the shareholders entitled to receive the dividend, which will be payable on January 27, 2023 |
| • | The Board also approved a 10% increase in the Company’s quarterly cash dividend payment to $0.435 per share, which is anticipated to be first paid in April 2023, provided that the increase is approved by shareholders at the January 2023 annual general meeting of shareholders |
| • | Share Repurchase Activity: Repurchased $108 million of ordinary shares during the fourth quarter of fiscal 2022 |
Twelve-month Backlog
Twelve-month backlog was a record $3.97 billion at the end of the fourth quarter of fiscal 2022, up approximately 7.6% as compared to last year’s fourth 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.
First Quarter Fiscal 2023 Outlook
| In millions, except per share data | ||||
| Q1 2023 | ||||
| Revenue |
$ | 1,155-$1,195 | ||
| GAAP diluted EPS |
$ | 1.00-$1.08 | ||
| Non-GAAP diluted EPS |
$ | 1.29-$1.35 | ||
| • | First quarter revenue guidance assumes approximately $7 million sequential unfavorable impact from foreign currency fluctuations as compared to the fourth quarter of fiscal 2022 |
| • | First 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 | ||
| Revenue growth, as reported |
4.0%-8.0% | |
| Revenue growth, constant currency(3) |
6.0%-10.0% | |
| GAAP diluted EPS growth |
3.0% - 10.0% | |
| Non-GAAP diluted EPS growth |
8.0%-12.0% | |
| In millions | ||
| FY 2023, | ||
| Free cash flow(1) |
~$700 | |
| • | Full year fiscal 2023 revenue guidance incorporates an expected unfavorable impact from foreign currency fluctuations of approximately 2% year-over-year |
| • | Non-GAAP diluted earnings per share growth excludes amortization of purchased intangible assets and other acquisition-related costs, changes in certain acquisitions related liabilities measured at fair value, approximately $0.61-$0.69 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 |
The forward looking statements regarding our first 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 November 8, 2022 at 5:00 p.m. Eastern Time to discuss the Company’s fourth quarter of fiscal 2022 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(3) basis, non-GAAP cost of revenue, non-GAAP research and development, non-GAAP selling, general and administrative, non-GAAP operating income, non-GAAP operating margin, non-GAAP interest and other expenses, net, non-GAAP income taxes, non-GAAP effective tax rate, non-GAAP net income and non-GAAP diluted earnings per share growth. These other non-GAAP measures exclude the following items:
| • | amortization of purchased intangible assets and other acquisition-related costs; |
| • | changes in certain acquisition-related liabilities measured at fair value; |
| • | non-recurring and unusual charges or benefits (such as a gain from divestiture of OpenMarket); |
| • | equity-based compensation expense; |
| • | other; and |
| • | tax effects related to the above. |
Free cash flow equals cash generated by operating activities less net capital expenditures and other. Normalized free cash flow, a measure of our operating performance, is further adjusted to exclude net capital expenditures related to the new campus development, payments for non-recurring and unusual charges (such as capital gains tax in relation to the divestiture of OpenMarket), and payments of acquisition related liabilities. These non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. Amdocs believes that non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with Amdocs’ results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Amdocs’ results of operations in conjunction with the corresponding GAAP measures.
Amdocs believes that the presentation of non-GAAP diluted earnings per share and other financial measures, including free cash flow and normalized free cash flow, non-GAAP cost of revenue, non-GAAP research and development, non-GAAP selling, general and administrative, non-GAAP operating income, non-GAAP operating margin, non-GAAP interest and other expenses, net, non-GAAP income taxes, non-GAAP effective tax rate, non-GAAP net income and non-GAAP diluted earnings per share growth when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and results of operations, as well as the net amount of cash generated by its business operations after taking into account capital spending required to maintain or expand the business.
For its internal budgeting process and in monitoring the results of the business, Amdocs’ management uses financial statements that do not include amortization of purchased intangible assets and other acquisition-related costs, changes in certain acquisition-related liabilities measured at fair value, non-recurring and unusual charges or benefits, equity-based compensation expense, other and related tax effects. Amdocs’ management also
uses the foregoing non-GAAP financial measures, in addition to the corresponding GAAP measures, in reviewing the financial results of Amdocs. In addition, Amdocs believes that significant groups of investors exclude these items in reviewing its results and those of its competitors, because the amounts of the items between companies can vary greatly depending on the assumptions used by an individual company in determining the amounts of the items.
Amdocs further believes that, where the adjustments used in calculating non-GAAP diluted earnings per share are based on specific, identified amounts that impact different line items in the Consolidated Statements of Income (including cost of revenue, research and development, selling, general and administrative, operating income, interest and other expenses, net, income taxes and net income), it is useful to investors to understand how these specific line items in the Consolidated Statements of Income are affected by these adjustments. Please refer to the Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP tables below.
Supporting Resources
| • | Keep up with Amdocs news by visiting the Company’s website |
| • | Subscribe to Amdocs’ RSS Feed and follow us on Twitter, Facebook, LinkedIn and YouTube |
About Amdocs
Amdocs helps those who build the future to make it amazing. With our market-leading portfolio of software products and services, we unlock our customers’ innovative potential, empowering them to provide next-generation communication and media experiences for both the individual end user and large enterprise customers. Our 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 macro-economic conditions, 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, 2021 filed on December 9, 2021 and our Form 6-K furnished for the first quarter of fiscal 2022 on February 14, 2022, the second quarter of fiscal 2022 on May 24, 2022 and for the third quarter of fiscal 2022 on August 15, 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 September 30, |
Fiscal year ended September 30, |
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| 2022 | 2021 | 2022 | 2021(a) | |||||||||||||
| Revenue |
$ | 1,166,504 | $ | 1,087,309 | $ | 4,576,697 | $ | 4,288,640 | ||||||||
| Operating expenses: |
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| Cost of revenue |
751,358 | 707,366 | 2,957,547 | 2,810,967 | ||||||||||||
| Research and development |
96,218 | 81,324 | 354,706 | 312,941 | ||||||||||||
| Selling, general and administrative |
129,404 | 126,015 | 528,572 | 487,255 | ||||||||||||
| Amortization of purchased intangible assets and other |
17,838 | 18,274 | 71,075 | 78,784 | ||||||||||||
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| 994,818 | 932,979 | 3,911,900 | 3,689,947 | |||||||||||||
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| Operating income |
171,686 | 154,330 | 664,797 | 598,693 | ||||||||||||
| Interest and other expense, net |
(7,399 | ) | (1,099 | ) | (26,391 | ) | (10,797 | ) | ||||||||
| Gain from sale of a business |
— | — | 10,000 | 226,410 | ||||||||||||
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| Income before income taxes |
164,287 | 153,231 | 648,406 | 814,306 | ||||||||||||
| Income taxes |
35,351 | 29,706 | 98,905 | 125,932 | ||||||||||||
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| Net income |
$ | 128,936 | $ | 123,525 | $ | 549,501 | $ | 688,374 | ||||||||
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| Basic earnings per share |
$ | 1.06 | $ | 0.98 | $ | 4.47 | $ | 5.36 | ||||||||
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| Diluted earnings per share |
$ | 1.05 | $ | 0.97 | $ | 4.44 | $ | 5.32 | ||||||||
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| Basic weighted average number of shares outstanding |
121,449 | 125,923 | 122,812 | 128,495 | ||||||||||||
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| Diluted weighted average number of shares outstanding |
122,320 | 126,820 | 123,650 | 129,284 | ||||||||||||
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| Cash dividends declared per share |
$ | 0.395 | $ | 0.36 | $ | 1.545 | $ | 1.4075 | ||||||||
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AMDOCS LIMITED
Selected Financial Metrics
(In thousands, except per share data)
| Three months ended | Fiscal year ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021(a) | |||||||||||||
| Revenue |
$ | 1,166,504 | $ | 1,087,309 | $ | 4,576,697 | $ | 4,288,640 | ||||||||
| Non-GAAP operating income |
205,337 | 190,195 | 804,894 | 750,665 | ||||||||||||
| Non-GAAP net income |
157,548 | 147,470 | 655,147 | 621,820 | ||||||||||||
| Non-GAAP diluted earnings per share |
$ | 1.29 | $ | 1.16 | $ | 5.30 | $ | 4.81 | ||||||||
| Diluted weighted average number of shares outstanding |
122,320 | 126,820 | 123,650 | 129,284 | ||||||||||||
Free Cash Flows and Normalized Free Cash Flow
(In thousands)
| Three months ended | Fiscal year ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021(a) | |||||||||||||
| Net Cash Provided by Operating Activities |
$ | 216,919 | $ | 199,713 | $ | 756,719 | $ | 925,807 | ||||||||
| Purchases of property and equipment, net (c) |
(81,819 | ) | (60,873 | ) | (227,219 | ) | (210,438 | ) | ||||||||
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| Free Cash Flow |
135,100 | 138,840 | 529,500 | 715,369 | ||||||||||||
| Tax payment on sale of business(b) |
— | 809 | 3,193 | 39,596 | ||||||||||||
| Payments of acquisition related liabilities |
1,925 | — | 16,275 | 13,234 | ||||||||||||
| Net capital expenditures related to the new campus development |
38,683 | 32,801 | 116,359 | 100,680 | ||||||||||||
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| Normalized Free Cash Flow |
$ | 175,708 | $ | 172,450 | $ | 665,327 | $ | 868,879 | ||||||||
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| (a) | Since January 1, 2021, OpenMarket results are not included in the Consolidated Statements of Income given its divestiture. |
| (b) | Tax payment related to capital gain from divesture of OpenMarket, which was completed on December 31, 2020. |
| (c) | The amounts under “Purchase of property and equipment, net” include proceeds from sale of property and equipment of $521 and $328 for the Fiscal years ended September 30, 2022 and 2021, respectively. |
AMDOCS LIMITED
Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP
(In thousands)
| Three months ended September 30, 2022 |
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| Reconciliation items | ||||||||||||||||||||||||||||
| GAAP | Amortization of purchased intangible assets and other |
Equity based compensation expense |
Changes in certain acquisitions related liabilities measured at fair value |
Other | Tax effect |
Non-GAAP | ||||||||||||||||||||||
| Operating expenses: |
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| Cost of revenue |
$ | 751,358 | $ | — | $ | (8,356 | ) | $ | 3,294 | $ | — | $ | — | $ | 746,296 | |||||||||||||
| Research and development |
96,218 | (1,538 | ) | 94,680 | ||||||||||||||||||||||||
| Selling, general and administrative |
129,404 | (9,213 | ) | 120,191 | ||||||||||||||||||||||||
| Amortization of purchased intangible assets and other |
17,838 | (17,838 | ) | — | ||||||||||||||||||||||||
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| Total operating expenses |
994,818 | (17,838 | ) | (19,107 | ) | 3,294 | — | — | 961,167 | |||||||||||||||||||
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| Operating income |
171,686 | 17,838 | 19,107 | (3,294 | ) | 205,337 | ||||||||||||||||||||||
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| Interest and other expense, net |
(7,399 | ) | 400 | (6,999 | ) | |||||||||||||||||||||||
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| Income taxes |
35,351 | 5,439 | 40,790 | |||||||||||||||||||||||||
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|
|
|
|
|
|
|||||||||||||||
| Net income |
$ | 128,936 | $ | 17,838 | $ | 19,107 | $ | (3,294 | ) | $ | 400 | $ | (5,439 | ) | $ | 157,548 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Three months ended September 30, 2021 |
||||||||||||||||||||||||||||
| Reconciliation items | ||||||||||||||||||||||||||||
| GAAP | Amortization of purchased intangible assets and other |
Equity based compensation expense |
Changes in certain acquisitions related liabilities measured at fair value |
Other | Tax effect |
Non-GAAP | ||||||||||||||||||||||
| Operating expenses: |
||||||||||||||||||||||||||||
| Cost of revenue |
$ | 707,366 | $ | — | $ | (6,148 | ) | $ | (3,285 | ) | $ | — | $ | — | $ | 697,933 | ||||||||||||
| Research and development |
81,324 | — | (1,145 | ) | — | — | — | 80,179 | ||||||||||||||||||||
| Selling, general and administrative |
126,015 | — | (7,013 | ) | — | — | — | 119,002 | ||||||||||||||||||||
| Amortization of purchased intangible assets and other |
18,274 | (18,274 | ) | — | — | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total operating expenses |
932,979 | (18,274 | ) | (14,306 | ) | (3,285 | ) | — | — | 897,114 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Operating income |
154,330 | 18,274 | 14,306 | 3,285 | — | — | 190,195 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Interest and other expense, net |
(1,099 | ) | — | — | — | (4,360 | ) | — | (5,459 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Income taxes |
29,706 | — | — | — | — | 7,560 | 37,266 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net income |
$ | 123,525 | $ | 18,274 | $ | 14,306 | $ | 3,285 | $ | (4,360 | ) | $ | (7,560 | ) | $ | 147,470 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
AMDOCS LIMITED
Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP
(In thousands)
| Fiscal year ended September 30, 2022 |
||||||||||||||||||||||||||||||||
| Reconciliation items | ||||||||||||||||||||||||||||||||
| GAAP | Amortization of purchased intangible assets and other |
Equity based compensation expense |
Changes in certain acquisitions related liabilities measured at fair value |
Gain from sale of a business |
Other | Tax effect |
Non-GAAP | |||||||||||||||||||||||||
| Operating expenses: |
||||||||||||||||||||||||||||||||
| Cost of revenue |
$ | 2,957,547 | $ | — | $ | (32,096 | ) | $ | 2,785 | $ | — | $ | — | $ | — | $ | 2,928,236 | |||||||||||||||
| Research and development |
354,706 | (5,631 | ) | 349,075 | ||||||||||||||||||||||||||||
| Selling, general and administrative |
528,572 | (34,080 | ) | 494,492 | ||||||||||||||||||||||||||||
| Amortization of purchased intangible assets and other |
71,075 | (71,075 | ) | — | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total operating expenses |
3,911,900 | (71,075 | ) | (71,807 | ) | 2,785 | — | — | 3,771,803 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Operating income |
664,797 | 71,075 | 71,807 | (2,785 | ) | — | 804,894 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Interest and other expense, net |
(26,391 | ) | (1,605 | ) | (27,996 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Gain from sale of a business |
10,000 | (10,000 | ) | — | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Income taxes |
98,905 | 22,846 | 121,751 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net income |
$ | 549,501 | $ | 71,075 | $ | 71,807 | $ | (2,785 | ) | $ | (10,000 | ) | $ | (1,605 | ) | $ | (22,846 | ) | $ | 655,147 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Fiscal year ended September 30, 2021(a) |
||||||||||||||||||||||||||||||||
| Reconciliation items | ||||||||||||||||||||||||||||||||
| GAAP | Amortization of purchased intangible assets and other |
Equity based compensation expense |
Changes in certain acquisitions related liabilities measured at fair value |
Gain from sale of a business |
Other | Tax effect |
Non-GAAP | |||||||||||||||||||||||||
| Operating expenses: |
||||||||||||||||||||||||||||||||
| Cost of revenue |
$ | 2,810,967 | $ | — | $ | (22,691 | ) | $ | (18,939 | ) | $ | — | $ | — | $ | — | $ | 2,769,337 | ||||||||||||||
| Research and development |
312,941 | — | (4,021 | ) | — | — | — | — | 308,920 | |||||||||||||||||||||||
| Selling, general and administrative |
487,255 | — | (27,537 | ) | — | — | — | — | 459,718 | |||||||||||||||||||||||
| Amortization of purchased intangible assets and other |
78,784 | (78,784 | ) | — | — | — | — | — | — | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total operating expenses |
3,689,947 | (78,784 | ) | (54,249 | ) | (18,939 | ) | — | — | — | 3,537,975 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Operating income |
598,693 | 78,784 | 54,249 | 18,939 | — | — | — | 750,665 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Interest and other expense, net |
(10,797 | ) | — | — | — | — | (5,046 | ) | — | (15,843 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Gain from sale of a business |
226,410 | — | — | — | (226,410 | ) | — | — | — | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Income taxes |
125,932 | — | — | — | — | — | (12,930 | ) | 113,002 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net income |
$ | 688,374 | $ | 78,784 | $ | 54,249 | $ | 18,939 | $ | (226,410 | ) | $ | (5,046 | ) | $ | 12,930 | $ | 621,820 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
AMDOCS LIMITED
Condensed Consolidated Balance Sheets
(In thousands)
| As of | ||||||||
| September 30, 2022 |
September 30, 2021 |
|||||||
| ASSETS |
||||||||
| Current assets |
||||||||
| Cash and cash equivalents |
$ | 573,377 | $ | 709,064 | ||||
| Short-term interest-bearing investments |
244,603 | 256,527 | ||||||
| Accounts receivable, net, including unbilled of $157,165 and $162,278, respectively |
946,777 | 866,819 | ||||||
| Prepaid expenses and other current assets |
238,390 | 235,089 | ||||||
|
|
|
|
|
|||||
| Total current assets |
2,003,147 | 2,067,499 | ||||||
| Property and equipment, net |
794,287 | 698,768 | ||||||
| Lease assets |
176,884 | 233,162 | ||||||
| Goodwill and other intangible assets, net |
2,841,137 | 2,881,676 | ||||||
| Other noncurrent assets |
574,938 | 630,669 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 6,390,393 | $ | 6,511,774 | ||||
|
|
|
|
|
|||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Current liabilities |
||||||||
| Accounts payable, accruals and other |
$ | 955,658 | $ | 1,007,777 | ||||
| Lease liabilities |
43,336 | 58,714 | ||||||
| Deferred revenue |
253,686 | 237,374 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
1,252,680 | 1,303,865 | ||||||
| Lease liabilities |
138,378 | 177,906 | ||||||
| Long-term debt, net of unamortized debt issuance costs |
645,117 | 644,553 | ||||||
| Other noncurrent liabilities |
793,940 | 750,266 | ||||||
| Total Amdocs Limited Shareholders’ equity |
3,517,769 | 3,592,675 | ||||||
| Noncontrolling interests |
42,509 | 42,509 | ||||||
|
|
|
|
|
|||||
| Total equity |
3,560,278 | 3,635,184 | ||||||
|
|
|
|
|
|||||
| Total liabilities and equity |
$ | 6,390,393 | $ | 6,511,774 | ||||
|
|
|
|
|
|||||
AMDOCS LIMITED
Consolidated Statements of Cash Flows
(In thousands)
| Fiscal year ended September 30, |
||||||||
| 2022 | 2021(a) | |||||||
| Cash Flow from Operating Activities: |
||||||||
| Net income |
$ | 549,501 | $ | 688,374 | ||||
| Reconciliation of net income to net cash provided by operating activities: |
||||||||
| Depreciation, amortization and impairment |
224,535 | 208,830 | ||||||
| Amortization of debt issuance costs |
564 | 548 | ||||||
| Equity-based compensation expense |
71,807 | 54,249 | ||||||
| Gain from sale of a business |
(10,000 | ) | (226,410 | ) | ||||
| Deferred income taxes |
(3,292 | ) | (50,605 | ) | ||||
| Loss from short-term interest-bearing investments |
2,728 | 1,726 | ||||||
| Net changes in operating assets and liabilities, net of amounts acquired: |
||||||||
| Accounts receivable, net |
(64,978 | ) | (69,051 | ) | ||||
| Prepaid expenses and other current assets |
(3,527 | ) | (17,041 | ) | ||||
| Other noncurrent assets |
19,760 | (50,038 | ) | |||||
| Lease assets and liabilities, net |
1,394 | 9,630 | ||||||
| Accounts payable, accrued expenses and accrued personnel |
(83,932 | ) | 122,224 | |||||
| Deferred revenue |
(22,456 | ) | 193,655 | |||||
| Income taxes payable, net |
15,648 | 26,814 | ||||||
| Other noncurrent liabilities |
58,967 | 32,902 | ||||||
|
|
|
|
|
|||||
| Net cash provided by operating activities |
756,719 | 925,807 | ||||||
|
|
|
|
|
|||||
| Cash Flow from Investing Activities: |
||||||||
| Purchase of property and equipment, net (c) |
(227,219 | ) | (210,438 | ) | ||||
| Proceeds from sale of short-term interest-bearing investments |
21,948 | 18,205 | ||||||
| Purchase of short-term interest-bearing investments |
(34,275 | ) | (276,978 | ) | ||||
| Net cash paid for business and intangible assets acquisitions |
(24,430 | ) | (142,697 | ) | ||||
| Net cash received from sale of a business |
10,000 | 288,990 | ||||||
| Other |
(8,525 | ) | (6,082 | ) | ||||
|
|
|
|
|
|||||
| Net cash used in investing activities |
(262,501 | ) | (329,000 | ) | ||||
|
|
|
|
|
|||||
| Cash Flow from Financing Activities: |
||||||||
| Payments under financing arrangements |
— | (100,000 | ) | |||||
| Repurchase of shares |
(508,472 | ) | (679,996 | ) | ||||
| Proceeds from employee stock options exercises |
82,924 | 89,056 | ||||||
| Payments of dividends |
(186,073 | ) | (177,472 | ) | ||||
| Payment of contingent consideration from a business acquisition |
(18,284 | ) | (2,519 | ) | ||||
|
|
|
|
|
|||||
| Net cash used in financing activities |
(629,905 | ) | (870,931 | ) | ||||
|
|
|
|
|
|||||
| Net decrease in cash and cash equivalents |
(135,687 | ) | (274,124 | ) | ||||
| Cash and cash equivalents at beginning of period |
709,064 | 983,188 | ||||||
|
|
|
|
|
|||||
| Cash and cash equivalents at end of period |
$ | 573,377 | $ | 709,064 | ||||
|
|
|
|
|
|||||
AMDOCS LIMITED
Supplementary Information
(In millions)
| Three months ended | ||||||||||||||||||||
| September 30, 2022 |
June 30, 2022 |
March 31, 2022 |
December 31, 2021 |
September 30, 2021 |
||||||||||||||||
| North America |
$ | 794.4 | $ | 788.0 | $ | 772.2 | $ | 745.5 | $ | 722.8 | ||||||||||
| Europe |
146.4 | 146.1 | 147.2 | 142.5 | 146.8 | |||||||||||||||
| Rest of the World |
225.7 | 226.2 | 225.9 | 216.6 | 217.7 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Revenue |
$ | 1,166.5 | $ | 1,160.3 | $ | 1,145.3 | $ | 1,104.6 | $ | 1,087.3 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Three months ended | ||||||||||||||||||||
| September 30, 2022 |
June 30, 2022 |
March 31, 2022 |
December 31, 2021 |
September 30, 2021 |
||||||||||||||||
| Managed Services Revenue |
$ | 714.6 | $ | 717.9 | $ | 663.4 | $ | 659.7 | $ | 637.5 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| As of | ||||||||||||||||||||
| September 30, 2022 |
June 30, 2022 |
March 31, 2022 |
December 31, 2021 |
September 30, 2021 |
||||||||||||||||
| 12-Month Backlog |
$ | 3,970 | $ | 3,950 | $ | 3,890 | $ | 3,830 | $ | 3,690 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
# # #
Exhibit 99.2 Fiscal Q4 2022 Earnings Presentation November 8, 2022 Shuky Sheffer President & CEO Tamar Rapaport-Dagim CFO & COO
The information contained herein in this presentation or delivered or to be delivered to you during this presentation does not constitute an offer, expressed or implied, or a recommendation to do any transaction in Amdocs Limited securities or in any securities of its affiliates or subsidiaries. This presentation and the comments made by members of Amdocs management in conjunction with it include information that constitutes forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995, including statements about Amdocs’ growth and business results in future quarters. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be obtained or that any deviations will not be material. Such statements involve risks and uncertainties that may cause future results to differ from those anticipated. These risks include, but are not limited to, the effects of general 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, 2021 filed on December 9, 2021, and our Form 6-K furnished for the first quarter of fiscal 2022 on February 14, 2022, for the second quarter of fiscal 2022 on May 24, 2022, and for the third quarter of fiscal 2022 on August 15, 2022. This presentation includes non-GAAP financial measures, including non-GAAP operating margin, free cash flow, normalized free cash flow, revenue on a constant currency basis, non-GAAP net income and non-GAAP earnings per share. Free cash flow equals cash generated by operating activities less net capital expenditures and other. Normalized free cash flow, a measure of our operating performance, is further adjusted to exclude net capital expenditures related to the new campus development, payments for non-recurring and unusual charges (such as capital gains tax to be paid in relation to the divestiture of OpenMarket), and payments of acquisition related liabilities. These non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. Amdocs believes that non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with Amdocs’ results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Amdocs’ results of operations in conjunction with the corresponding GAAP measures. Please refer to the appendix for a reconciliation of these metrics to the most comparable GAAP provision. This presentation also includes pro forma metrics which exclude the financial impact of OpenMarket (divested on December 31, 2020) from fiscal year 2021. Please also review the information contained in Amdocs’ press release dated November 8, 2022 with respect to earnings for fiscal Q4 2022. 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 2022 22 – – P Pr rop opr riie et ta ar ry y & & Con Conf fiid de en nt tiia all IIn nf for orm ma at tiion on of of A Am md doc ocs s 3
Earnings call agenda Strategy & Business Performance Update 1 Shuky Sheffer, President & Chief Executive Officer Financial Review & FY2023 Outlook 2 Tamar Rapaport-Dagim, Chief Financial Officer & Chief Operating Officer Q&A 3 Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 4
President & Chief Executive Officer Strategy and Business Performance Update IIn nf for orm ma at tiion on Se Sec cu ur riit ty y L Le evel vel 0 0 – – P Pu ub blliic c. . © © 20 2022 22 – – P Pr rop opr riie et ta ar ry y & & Con Conf fiid de en nt tiia all IIn nf for orm ma at tiion on of of A Am md doc ocs s 5
FY22: landmark year for the company We delivered accelerated and profitable growth while playing a major role in serving the mission-critical needs and strategic requirements of the global communications and media industry None of this would have been possible without the dedication and commitment of our globally diverse and talented employees IIn nf for orm ma at tiion on Se Sec cu ur riit ty y L Le evel vel 0 0 – – P Pu ub blliic c. . © © 20 2022 22 – – P Pr rop opr riie et ta ar ry y & & Con Conf fiid de en nt tiia all IIn nf for orm ma at tiion on of of A Am md doc ocs s 6 6
Record annual financial performance Strong fiscal 2022 financial performance with solid Q4 results, in line with our guidance, despite FX headwinds throughout the quarter (3) (3) 12-month backlog Non-GAAP EPS Revenue Free cash flow Record $4,577m Record $3.97B Record $5.30 $665m 102% earning to (1)(2) (1)(3) Up 10.3% YoY Up 7.6% YoY Up 12.1% YoY cash conversion Consistent with the Reflecting healthy Supported by >100% returned to high-end of our outlook sales momentum Accelerated shareholders via share Hi (1)(2) of 6-10% provided and profitable repurchases and at the start of the year growth dividends 1. Pro forma. excludes the financial impact of OpenMarket (which was divested on December 31, 2020) from fiscal year 2021. 2. Constant currency. Assumes exchange rates in the current period were unchanged from the prior period 3. Non-GAAP. See reconciliation tables in appendix IIn nf for orm ma at tiion on Se Sec cu ur riit ty y L Le evel vel 0 0 – – P Pu ub blliic c. . © © 20 2022 22 – – P Pr rop opr riie et ta ar ry y & & Con Conf fiid de en nt tiia all IIn nf for orm ma at tiion on of of A Am md doc ocs s 7 7
FY22 Operational Highlights (1)(2) Growth in all 3 Technological Unrivalled execution operating regions leadership Record year in North America: Record R&D spend (i) Progressing on major transformation >30 accounts on latest CES 20+ suite projects Rapid cadence Microservices based (ii) Extended activities with many customers Cloud native, cloud agnostic FY 2020 FY 2021 FY 2022 Recognized by industry analysts Major project go-lives in Q4 Further expanded in Europe and Added capabilities though strategic M&A RoW; won strategic awards Strengthened cloud consulting expertise Longstanding Customers New Enterprise B2B and B2C Digital Migration to catalog transformation Amdocs CES Expanded digital experience capabilities Assurance capabilities to Digital network automation Transformation transformation portfolio; expected to close by end of FY Q1 1. Pro forma. excludes the financial impact of OpenMarket (which was divested on December 31, 2020) from fiscal year 2021 2. Constant currency. Assumes exchange rates in the current period were unchanged from the prior period Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 8
Committed to making a positive impact 1 example out of dozens CSR activities Corporate social responsibility is tightly interwoven with our Enable the rollout of Winity’s 4G and 5G networks across remote strategic business focus communities in Brazil at Amdocs and bringing connectivity to more will continue to be so than 600 small municipalities in fiscal 2023 and beyond to help close the gap in the digital divide IIn nf for orm ma at tiion on Se Sec cu ur riit ty y L Le evel vel 0 0 – – P Pu ub blliic c. . © © 20 2022 22 – – P Pr rop opr riie et ta ar ry y & & Con Conf fiid de en nt tiia all IIn nf for orm ma at tiion on of of A Am md doc ocs s 9
Progress in Strategic Domains Enable our customers to drive growth, improve cost-efficiency and provide an amazing experience to consumers and enterprises business value wins Migrate Amdocs systems from Enable quick adoption of latest 5G innovations, provide Cloud on-premises to the cloud flexibility & capacity growth, facilitating new business models as Mexico AT&T Mexico’s network evolves Move Amdocs services and End to end cloud applications to Rogers' private Provide flexibility & capacity growth platforms and services cloud Implement Amdocs’ AI and Unlock business insights for improved customer experience Digital transformation Data Platform on the cloud Creating seamless digital Reduce costs & deliver faster time to market for new services, BSS and cloud-native OSS Hispanoamerica modules on the public cloud advanced digital capabilities & an improved customer experience experiences by transforming (Argentina, Chile, Peru) IT operations Modernize BSS and OSS Improve time-to-market for new products and services while infrastructure with a cloud- increasing efficiency by digitizing and streamlining processes native platform Deployment of CatalogONE, Designed to rapidly create and launch new 5G service offerings 5G monetization cloud-native platform 2 tier-one operators Enable rapid time to market and the monetization of innovative new Monetization of new 5G services Amdocs Charging in North America services and use cases across standalone 5G networks and beyond Managed services Optimize experience for SES’s customers Network automation (O3b mPOWER satellite constellation) (Multi-orbit satellites operator) Delivering dynamic connected experiences with real-time, Build a private network for the Enable secure adoption of latest 5G innovations Brazilian government automated networks Preferred Fulfillment Partner of the Year award Media Digital content agreement for Provide subscribers with personalized content experiences Positive customer FiberTV viewers Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 10 momentum at Vubiquity
FY23 Outlook: Expect revenue growth in line with (1) our 6%-10% long term target While Amdocs and our global customers are not immune to macroeconomic cycles, we are confident in our unique and relatively resilient business model: Highly recurring revenue Rich pipeline of Supporting mission- with multi-year opportunities as a key critical systems engagements technology enabler As trusted long-term partner, we remain committed to helping our customers address the complex Improved macro-economic situation; Accelerated Increased customer cost reduction efficiency We bring highly relevant capabilities experience in digital, cloud and automation 1. Constant currency. Assumes exchange rates in the current period were unchanged from the prior period 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 11 11
FY23 Outlook: Expect revenue growth in all operating regions with improved profitability and robust cash flow generation A B YoY growth % margin Non-GAAP Consistent with our long-term guidance (1) − Revenue EBIT Driven by growth across all operating − (2) compared to FY22 Margin regions with Europe and Rest of World accelerate as recent awards continue to ramp-up C D earning to cash flow YoY growth Free cash Non-GAAP , in line with Driven by growth and improved (2) (2) profitability flow EPS historical performance Majority of which we plan to return to shareholders We are positioned to deliver double-digit expected total (3) shareholder returns for the third straight year in 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 IIn nf for orm ma at tiion on Se Sec cu ur riit ty y L Le evel vel 0 0 – – P Pu ub blliic c. . © © 20 2022 22 – – P Pr rop opr riie et ta ar ry y & & Con Conf fiid de en nt tiia all IIn nf for orm ma at tiion on of of A Am md doc ocs s 12 12 3. Expected total shareholder return assumes Non-GAAP EPS growth plus 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 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 13 13
Q4 2022 Results Q4 2022 Revenue vs. Guidance $ Millions Q4 Revenue Despite $9M foreign currency $1,167 million headwind vs guidance (2) +7.3% YoY, +9.5% constant currency Slightly above guidance midpoint $1,167 $1,165 ($1,145M - $1,185M) (3) Q4 Non-GAAP Operating Margin Original Q4F22 Q4F22A Guidance (midpoint) 17.6%, +10bps YoY Above midpoint of annual target revenue, +7.3% YoY as reported range of 17.2% - 17.8%, and (2) Q4 2022 Revenue by Region and YoY constant currency stable QoQ $ Millions quarter in North America Q4 GAAP Diluted EPS non-GAAP operating margin $1.05 Rest of World while accelerating R&D investments ~$226 Higher-end of guidance ($0.98 - $1.06) North Europe America ~$146 (3) ~$794 Q4 Non-GAAP Diluted EPS 1. Pro forma metrics exclude the financial impact of OpenMarket (which was divested on December 31, 2020) from fiscal year 2021. $1.29 2. Constant currency. Assumes exchange rates in the current period were unchanged from the prior period Midpoint of guidance 3. Non-GAAP. See reconciliation tables in appendix ($1.26 - $1.32) Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 14 14 Confidential Information of Amdocs
Revenue Growth (2) Very strong growth in Y/Y% growth constant currency North America, both at (1) (2) FY2021 & FY2022 are pro forma constant currency top two customers and 10.3% the broader region Initial guidance 7.0% midpoint (1)(2) Europe grew on ~8% YoY ramp-up of new project activities (1)(2) (1)(2) FY2021 FY2022 revenue, +6.7% YoY as reported and Growth in Southeast Asia (1) (2) pro forma constant currency and Latin America (3) non-GAAP operating margin: (3) Non-GAAP EPS Y/Y % Growth (1) FY2021 & FY2022 are pro forma 6 of top 10 customers (3) 12.1% non-GAAP diluted EPS: Initial located outside North (1) 9.8% pro forma guidance America in FY2022 midpoint ~10% YoY Number of countries with over $40M annual 1. Pro forma metrics exclude the financial impact of OpenMarket (which was divested revenue has almost on December 31, 2020) from fiscal year 2021. FY2021 FY2022 2. Constant currency. Assumes exchange rates in the current period were doubled in the last unchanged from the prior period decade 3. Non-GAAP. See reconciliation tables in appendix Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 15 15 Confidential Information of Amdocs
12-Month Backlog Record Quarterly 12-Month Backlog in Q4F22 12-month backlog growth has accelerated $ Billions $3.97 $3.95 year-over-year over the past several quarters $3.89 $3.83 Record-high level as of $3.69 September 30, 2022 (1)~ +7.6% (1) YoY $3.59 ~ +7.6% YoY, +$20M QoQ (1) (1) Q3F21 Q4F21 Q1F22 Q2F22 Q3F22 Q4F22 Leading Indicator 12-month backlog includes: • Anticipated revenue related to contracts • Estimated revenue from managed services contracts 12-month backlog • Letters of intent typically covers ~80% of • Maintenance forward 12-month revenue• Estimated ongoing support activities Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 16 16 Confidential Information of Amdocs
Managed Services Revenue: Q4 2022 $ Millions Managed services arrangements support Managed Services business model $715 resiliency with highly $638 recurring revenue streams, multi-year ~ +12% engagements and YoY high renewal rates, and may also include ~ +12.1% YoY large-scale digital Q4F21 Q4F22 ~61% of total revenue transformation projects Expanded managed services agreement, providing ongoing support for Charter’s growth of Spectrum mobile. Multi-year agreement to deploy new BSS and cloud-native OSS modules on public cloud in managed Close to Argentina, Chile and Peru services contract renewals 100% Multi-year agreement provides anomaly detection, monitoring, diagnostics, and remediation across SES’s new satellite communications system. Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 17 17 Confidential Information of Amdocs
(2) DSO’s Q4 2022 Free cash flow bridge Reported FCF vs. Normalized FCF, $ Millions 74 days +1 days YoY and -8 days QoQ $217 $82 DSO’s may fluctuate from quarter to quarter $176 $135 Deferred revenue > unbilled $41 -$7 million YoY Deferred revenue: -$23M YoY Unbilled receivables: -$16M YoY Items fluctuate from quarter to quarter in line with normal business activities. Cashflow Net capex Reported FCF Israel Normalized from Campus & FCF Operations Other (2) Normalized free cash flow of *Figures may not sum due to rounding in FY2022, guidance of $650 million Cash, Credit Facility & Debt Position Liquidity: Cash + Credit Facility $ Millions, as of September 30, 2022 $1.3 billion liquidity to support ongoing business needs while retaining the Credit $500 Facility Ample liquidity including available capacity to fund future strategic $500M revolving credit facility growth investments ~$818 Cash $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 18 18 Confidential Information of Amdocs
Q4 2022 Cash Returned to Shareholders Dividend Growth $ Millions Board authorized new quarterly dividend payment: Dividends, $48 43.5 cents, +10% New payment subject to shareholder Share approval at Amdocs annual meeting in repurchases, January 2023 $108 As of September 30, roughly $0.5B of share repurchase authorization capacity remained (1) free cash flow (FCF) (1) outlook of in FY2023, equating to Normalized FCF : Three-year historical trend and FY2023E outlook ~100% cash conversion 140% 102% 100% (1) 88% (2) % Normalized FCF / free cash flow yield 100% (1) Non-GAAP Net Income FY2023E 104% 100% Expects to return the of free 99% guidance: % of Normalized FCF cash flow to shareholders in FY2023 return Returned to Shareholders majority $869 (1) Normalized FCF ($M) $700 $665 $527 1. Non-GAAP. See appendix tables for reconciliation of normalized FCF 2. Yield = expected reported free cash flow of $700M in FY2023 as a (3) percentage of Amdocs’ market capitalization as of November 8, 2022 FY2020 FY2021 FY2022 FY2023E 3. Expected FY2023 FCF on a reported basis; normalized FCF disclosure to be (Guidance) discontinued Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 19 19 Confidential Information of Amdocs
Revenue Growth (4) YoY% Growth Constant Currency (1) (4) FY21 and FY22 revenue is pro forma constant currency 10.0% 10.3% Expect midpoint of 7.0% ~6%-10% YoY guidance 4.1% 6.0% 2.4% (1)(4) (4) (1)(4) (4) Revenue growth of in FY2023E, FY2019 FY2020 FY2021 FY2022 FY2023E (5) including from MYCOM OSI Non-GAAP operating margin target to (3) Total Shareholder Return new and improved range of (2) Non-GAAP Diluted EPS Growth YoY % + Dividend Yield (1) FY21 and FY22 non-GAAP EPS growth is presented pro forma Targeting expected total ~12%* 14.1% shareholder returns for the year running 11.7% 12.0% 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. ~8%-12% YoY 9.8% 5.3% guidance 2. Non-GAAP. See reconciliation tables in appendix 8.0% 6.9% 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% 1.7% 2.0% 2.3% 11/8/22 (1) (1) 4. Constant currency. Assumes exchange rates in the current period were FY2019 FY2020 FY2021 FY2022 FY2023E unchanged from the prior period Non-GAAP Diluted EPS Growth Dividend Yield Total Shareholder Return 5. Subject to certain regulatory approvals the acquisition is expected to close before the end of the first quarter fiscal 2023 Information Security Level 0– Public© 2022 – Proprietary & *Non-GAAP EPS growth of 10%, plus ~2% dividend yield Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 20 20 Confidential Information of Amdocs
Q&A Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 21 21
Q1 Fiscal 2023 Outlook $1,155 - $1,195 million Revenue GAAP EPS $1.00 - $1.08 (1) Non-GAAP EPS $1.29 - $1.35 Share Count 122 million Above high-end of annual Effective Tax Rate (1) Non-GAAP target range of 13%-17% Full Year Fiscal 2023 Outlook Firmly positioned to deliver Revenue growth 4.0% - 8.0% double-digit total As reported shareholder returns for the Revenue growth 6.0% - 10.0% (2) Constant currency third year running GAAP EPS growth 3.0% - 10.0% (1) Non-GAAP EPS growth 8.0% - 12.0% Operating Margin 1. Non-GAAP. See reconciliation tables in appendix 17.5%-18.1% (1) Non-GAAP 2. Constant currency. Assumes exchange rates in the current period were unchanged from the prior period Effective Tax Rate 13.0%-17.0% (1) Non-GAAP (1) Free cash flow $700 million Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 23 23 Confidential Information of Amdocs
Appendix Reconciliation Tables Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 24 24
AMDOCS LIMITED Selected Financial Metrics (In thousands, except per share data) Three months ended Fiscal year ended September 30, September 30, (a) 2022 2021 2022 2021 Revenue $ 1,166,504 $ 1,087,309 $ 4,576,697 $ 4,288,640 Non-GAAP operating income 205,337 190,195 804,894 750,665 Non-GAAP net income 157,548 147,470 655,147 621,820 Non-GAAP diluted earnings per share $ 1.29 $ 1.16 $ 5.30 $ 4.81 Diluted weighted average number of shares outstanding 122,320 126,820 123,650 129,284 Free Cash Flows and Normalized Free Cash Flow (In thousands) Three months ended Fiscal year ended September 30, September 30, (a) 2022 2021 2022 2021 Net Cash Provided by Operating Activities $ 216,919 $ 199,713 $ 756,719 $ 925,807 Purchases of property and (c) (81,819) (60,873) (227,219) (210,438) equipment, net Free Cash Flow 135,100 138,840 529,500 715,369 a) Since January 1, 2021, OpenMarket results are not included in the Consolidated Statements of Income given its divestiture. b) Tax payment related to capital gain from divesture of OpenMarket, (b) Tax payment on sale of business - 809 3,193 39,596 which was completed on December 31, 2020. c) The amounts under Purchase of property and equipment, net” include proceeds from sale of property and equipment of $521 and $328 for the Payments of acquisition related Fiscal years ended September 30, 2022 and 2021, respectively. liabilities 1,925 - 16,275 13,234 Net capital expenditures related to the new campus development 38,683 32,801 116,359 100,680 Normalized Free Cash Flow $ 175,708 $ 172,450 $ 665,327 $ 868,879 Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 25 25 Confidential Information of Amdocs
AMDOCS LIMITED Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP (In thousands) Three months ended September 30, 2022 Reconciliation items GAAP Amortization Equity based Changes in Non-GAAP Other Tax of purchased compensation certain effect intangible expense acquisitions assets and related liabilities other measured at fair value Operating expenses: Cost of revenue $ 751,358 $ - $ (8,356) $ 3,294 $ - $ - $ 746,296 Research and development 96,218 (1,538) 94,680 Selling, general and administrative 129,404 (9,213) 120,191 Amortization of purchased intangible assets and other 17,838 (17,838) - Total operating expenses 994,818 (17,838) (19,107) 3,294 - - 961,167 Operating income 171,686 17,838 19,107 (3,294) 205,337 Interest and other expense, net (7,399) 400 (6,999) Income taxes 5,439 35,351 40,790 Net income $ 128,936 $ 17,838 $ 19,107 $ (3,294) $ 400 $ (5,439) $ 157,548 Three months ended September 30, 2021 Reconciliation items GAAP Amortization Equity based Changes in Non-GAAP Other Tax of purchased compensation certain effect intangible expense acquisitions assets and related liabilities other measured at fair value Operating expenses: Cost of revenue $ 707,366 $ - $ (6,148) $ (3,285) $ - $ - $ 697,933 Research and a) Since January 1, 2021, OpenMarket results are not included in the development 81,324 - (1,145) - - - 80,179 Selling, general and Consolidated Statements of Income given its divestiture. administrative 126,015 - (7,013) - - - 119,002 b) Tax payment related to capital gain from divesture of OpenMarket, Amortization of purchased intangible which was completed on December 31, 2020. assets and other 18,274 (18,274) - - - - - c) The amounts under Purchase of property and equipment, net” include Total operating expenses 932,979 (18,274) (14,306) (3,285) - - 897,114 proceeds from sale of property and equipment of $521 and $328 for the Fiscal years ended September 30, 2022 and 2021, respectively. Operating income 154,330 18,274 14,306 3,285 - - 190,195 Interest and other expense, net (1,099) - - - (4,360) - (5,459) Income taxes 29,706 - - - - 7,560 37,266 Net income $ 123,525 $ 18,274 $ 14,306 $ 3,285 $ (4,360) $ (7,560) $ 147,470 Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 26 26 Confidential Information of Amdocs
AMDOCS LIMITED Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP (In thousands) Fiscal year ended September 30, 2022 Reconciliation items GAAP Amortization of Equity based Changes in certain Non-GAAP Gain from Other Tax purchased compensation acquisitions related sale of a effect intangible expense liabilities measured at business assets and other fair value Operating expenses: Cost of revenue $ - $ 2,957,547 $ - $ (32,096) $ 2,785 $ - $ - $ 2,928,236 Research and development 354,706 349,075 (5,631) Selling, general and administrative 528,572 (34,080) 494,492 Amortization of purchased intangible - 71,075 (71,075) assets and other Total operating expenses 3,911,900 (71,075) (71,807) 2,785 - - 3,771,803 Operating income 664,797 71,075 71,807 (2,785) - 804,894 Interest and other expense, net (26,391) (1,605) (27,996) Gain from sale of a business 10,000 (10,000) - Income taxes 98,905 22,846 121,751 Net income $ (10,000) $ (1,605) $ (22,846) $ 549,501 $ 71,075 $ 71,807 $ (2,785) $ 655,147 Fiscal year ended (a) September 30, 2021 Reconciliation items GAAP Amortization of Equity based Changes in certain Non-GAAP Gain from Other Tax purchased compensation acquisitions related sale of a effect intangible expense liabilities measured at business assets and other fair value Operating expenses: Cost of revenue $ 2,810,967 $ - $ (22,691) $ (18,939) $ - $ - $ - $ 2,769,337 Research and development 312,941 - (4,021) - - - - 308,920 Selling, general and 487,255 - (27,537) - - - - 459,718 administrative a) Since January 1, 2021, OpenMarket results are not included in the Amortization of Consolidated Statements of Income given its divestiture. purchased intangible assets and other 78,784 (78,784) - - - - - - b) Tax payment related to capital gain from divesture of OpenMarket, Total operating 3,689,947 (78,784) (54,249) (18,939) - - - 3,537,975 which was completed on December 31, 2020. expenses c) The amounts under Purchase of property and equipment, net” include Operating income 598,693 78,784 54,249 18,939 - - - 750,665 proceeds from sale of property and equipment of $521 and $328 for the Fiscal years ended September 30, 2022 and 2021, respectively. Interest and other (10,797) - - - - (5,046) - (15,843) expense, net Gain from sale of a 226,410 - - - (226,410) - - - business Income taxes 125,932 - - - - - (12,930) 113,002 Net income $ 688,374 $ 78,784 $ 54,249 $ 18,939 $ (226,410) $ (5,046) $ 12,930 $ 621,820 Information Security Level 0– Public© 2022 – Proprietary & Information Security Level 0 – Public. © 2022 – Proprietary & Confidential Information of Amdocs 27 27 Confidential Information of Amdocs
