Amdocs Limited (DOX) 2 Aug 232023 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Third Quarter 2023 Amdocs Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Matt Smith, Head of Investor Relations. Please go ahead.

Liz. you, Thank

forward-looking I SEC disclaimer begin, with not It call attention discuss as information may your that risks financial subject Before uncertainties, certain and and on need in that Slide prepared GAAP. our including be today comments statement of in presentation. is and X to accordance are some to Amdocs' we described our to statements filings of that notes will the we

use our these regarding the information non-GAAP you financial today's of more For Form which with reconciliations including of be measures, to X-K. measures, SEC on furnished refer we will earnings release, also

Rapaport-Dagim, call Executive Operating Officer. Chief President with the are today and on Officer Shuky Management Chief Amdocs Sheffer, Tamar Financial Participating of and me and Limited;

earnings of providing website. will of prepared section which support a Investor on copy call, our also found of posted To following are a presentation, today's the always, we the be can conclusion immediately this Relations call. be remarks And as today's

on generative on detail elaborate fiscal our outlook by commitment also third agenda, framework year and the today's of AI. made Shuky financial guidance, will the business and commenting and continued XXXX, full fiscal on recap Shuky opportunity and last strategic additional will quarter financial update our field for for to you of quarter XXXX. our growth Tamar against continued we'll progress third the executing finish the on rapidly our provide After financial forward-looking our we've which emerging include of ESG. achievements performance will On

over it turn Shuky. I'll that, with so And to

in and automation. today. monetization, employees everyone our our third begin towards fiscal as against XG hard to and for continue global modernization, solid incredible operation and call we quarter, base good network Thanks, joining for to us performance digital cloud execute talented and afternoon thanking financial growth on another to work core our contribution their pillars of like Matt, I'd the

you of a guidance on from benefits highlights slightly increased realize from we Non-GAAP basis X. ago Slide revenue and midpoint see, As year a in year a of was continued currency. X.X% can constant on basis of operational business. was Record XX billion by the $X.XX margin operating points initiatives as reported the to ago financial in above efficiency up the our

a the non-GAAP bottom-line, some mainly up the due per impact a macro billion, On anticipated earnings despite a from quarter. was backlog environment. from $X.XX effective of guidance the lower to above ago share industry tax rate was record-high $X.XX year diluted a non-GAAP in challenging than XX-month X% roughly range, and

momentum. I Among the to continued third quarter operational cloud-related report sales encouraged highlights, am

Canada, operators, Slide in As Bell with cloud-strategies support and following PLDT was TELUS shown in recently leading Brazil. to two Claro Amdocs X, quarter’s and of on wins last the European selected and

customers. won new on and deepened broad Southeast Additionally, others with and at awards many focused MX greater our we Verizon we of DISH around capturing Telkomsel our in product wallet relationships Asia, share world as and and the of more America, offering in adoption driving North and

activities exists from by logos signed first-time customers also delivered new and the in potential managed growth which record quarter contributions driven long-term Philippines, with Significant expanded services, earlier. another in Globe like longstanding

our for our to operations latest, managed I of of Additionally, am growing report signs the offering. future-ready services pleased demand component as next-gen cloud

to Vubiquity extended leading its I’d services trusted during also as world’s like to highlight the provider position streaming media, a where Amdocs QX.

iconic with we XX,XXX-plus also work technical and support their to film editing Vubiquity automation, streaming with to content our enhancement and globally VIDAA on by selected to recently support Vubiquity’s has strategy by Brasil of assessment Amdocs' engagement US. catalog were continued and in performing them. in using expand Lionsgate addition content the Disney quality closely to the We content Watch services been library, which execute industry and as to chosen leading TV services for title its

as highlight we very migration like was in Amdocs’ recently and transformation Axiata Three we of number to more AT&T, high another digital prepaid of execution at and highly XL achieved T-Mobile, Superb UK. XX in robust of a scalable Vodafone, journeys Demonstrating customers QX Indonesia. million subscribers for support surpassed our capabilities, newest project of the than milestones system

global a for OpenAI use field service large-language our to to industry’s across the the Amdocs most open-source Amdocs technology carrier-grade to empowers very Generative generative to a in The the from AI. and we AI Earlier cases service and expertise, models. consumer of telecom to telecom establish AI enterprise also and Moving Gen leader provisioning deploy the potential advanced and launch amAIz, providers the cutting-edge benefit ecosystem, from priority enterprise-grade AI such experience telco-specific rapidly creates highlight architecture of framework the network resulting Amdocs customer for Slide as expansion those earlier partnership. this step like with immense of Amdocs QX, the an and to this market-leading follows on providers customers. X, announced foundation AI The strategic framework emerging from generative our amAIz capabilities, era. important as capitalizing combines year a partnership strategic which of important framework in marks Microsoft towards I’d with industry’s Generative amAIz the

which already which lifecycle, Gen and reduction. can many the harnessed development so organizational program launched cost drive to Gen use company-wide software functions, in ways progress. XX has internally the efficiency, our also many AI identified the services more managed far program than are in accelerate cases, operational a has of be agility, corporate and activities to Spanning Amdocs AI

pillars experiences launch deliver to for operations BXB; XG with monetize with customers. transforming Accelerate seamless ensuring and have help expansion experiences the real-time, our addressable automated growth in networks journey provide respect cloud; dynamic new systems by of strategic update a let we services; IT market you driven the digital consumer create progress which innovation and and and connected our market-leading by major to a to Now, bring me our

the which are in of X early Slide still providers service potential of on the stages value maximizing. with Starting cloud,

suite the including an Amdocs, our path. most, migration will fully cloud cloud-native a capabilities ability end-to-end, multi-year accountable delivering proven of journey simplify the product and by For to will our complexity be that require

we with the cloud multiple X this earlier, in quarter. deals highlighted As signed Americas Tier operators

transformation supporting First, by on-premise, applications essential Canada’s Bell Amdocs cloud. is digital moving to the

Second, move flexible models. Google Amdocs and is collaborating with unlock be TELUS cost TELUS new Canada on-premise to more applications efficient in to helping business Cloud, and

reflects new we’re Brazil our in sales industry Overall, opportunities cloud our unique the infrastructure combination our of Claro we momentum cloud, enterprise the are strategic the at believe Third, expertise, business, which and in improving recent unlocking market, on-premise cloud and consumer and pleased with moving to partnerships. cost-effectiveness. the we

for experience Slide for XX, to Marking a modernization and Moving revenue, to and with exciting milestone completed of journey, providing digital customer engagement security, down path service software significant a system the services the Spain’s this it operator, providers in customers. to enabling successful cost customers. modernization Spain’s BXB and stability, reduce new consumer improved Vodafone multi-year while of of Vodafone and transformation performance continue Amdocs grow digital recently improve delivery

South Indonesia, Sunrise’s and Infinite presentment to new digitally-led our Melon Cloud And quarter: experience. launch DISH wide successfully Amdocs’ to billing new in IoT has its enhanced capabilities this platform range for provide Amdocs which Telkomsel a deliver quickly a SaaS-based highlights primary their other eSIM them with an we devices. Africa, management Swiss at agreement partnership successfully sell providing We monetization enterprise and this products subscribers, Digital, an to consumer enabler, business strengthened of operator Boost upgraded network worldwide selected signed for on and services a customers. an virtual to customers. with Southeast enabling In Asia, innovative capabilities, Among with mobile operator eSIM connectivity thereby and increase Amdocs platform agility for their customers IoT secondary in implemented enabling

XG, Operating will most the Turning simplify selected device System provide service emerge is solutions we XG to use Amdocs future monetization can over need and home its few and Wireless for to and XG generation cases on networks the the Internet XG the now Internet Fixed they customer unlock one XG powerful T-Mobile to support to continues Home XX, of automate market Amdocs’ say standalone Slide from potential to true management, and years. monetize customers. with global next rollout next providers of as they to

European products and new delivered charging next-generation for recently XG-ready, we innovative enhanced solution enable major to agility for a operator a services. Additionally, to market time and

monetization and consumers platform. By enterprises will be MX prepaid streams, their while to of One to agility leveraging edge continue launch increasing to and and networks to of true adopters its engine XG with working leading Amdocs’ is digital standalone the a are we cutting MVNO which our drive early power prepaid new revenue to experiences selected able offerings, Singapore, efficiency. has and delighted bring Limited, network operator MX platform where monetization

and announced I’m Amdocs’ business expertise Turning Amdocs previously dynamic to end-to-end and offering, a closed Service of assuring acquisition to service to market. the XG recent included equipping service services unique on Assurance RAN, examples, domain thereby enabling over TEOCO’s customer of next on say we XX% experiences. the cloud, monetization automation generation orchestration network successful US recognized DISH XG reaches of culminating by that Amdocs’ expand services a which Among public rollout core network of the voice comprehensive network continues on be XG to the implemented the now in network services, happy June in deliver quality XX, the to Slide its XX, population. of the

automation. the with Orchestration platform include addition LIVE Function service Operations have Additionally, engagement to to in support Engineering in we enabling and in Network improved network in XG we automation, platform our Verizon, expanded went and which onboarding continued

within Now, I’d business like the to about operating make points our current few a

of industry, major a engagement presented opportunity ensure position to heart automation, high around the is well long-term multiyear, as Moreover, competitive to on that cycle at as their enabler trusted we and their investment Slide remain large technology view trends of strongly is begin, global the and this we believe service investment to cloud. the pipeline partner modernization, a a communications network we we customer which centered Therefore, technology-driven to long-term see cycle, in markets. monetize. Amdocs levels providers continue sitting participate to environment, key XX. must respective and believe digital To of positioned XG, the of continue in Amdocs of

modernization investment of Amdocs The the we systems. some of lieu this now programs. is of at activity to expand and uncertainty to which many is, weigh in the pressure current spending our future programs further of in modernization are legacy ideally decisions beginning industry on strategic multi-year prioritizing heart already economic placed customers with however, enhance are journey to customers, these scope and

applications we incumbent these also these some Given dynamics of are provider growth. headwind to nevertheless customers, are presenting for revenue legacy the business

greater operating our are to investments and include resource Gen together dynamics, long-term improvement expected expenditures our to from we margins. automation, capabilities, continued, primarily operational led adjust excellence even the proactive leadership, measures gradual and these and emphasis gains benefits To by on These growth to sophisticated allocation, AI-related in adoption appropriate while tools, of continued maintaining efficiency of cost optimize growing of taking measures future business and resulting strategic our ensure growth areas. with our and an

growth everything currency. the slightly year for fiscal of Wrapping guidance is original midpoint XX% our range together, revenue the X% tracking constant XXXX X% below to of now full in

we our the are fiscal bottom-line, for the second fiscal outlook 'XX in the growth diluted On per non-GAAP time of earnings midpoint this for share raising year.

full are expected cash deliver par to flow conversion including outlook dividend the returns total income. running, reiterating we shareholder million year $XXX for year, with well a expected of for third are equating we yield. non-GAAP Overall, on double-digit to our the net our roughly free on-track approximately rate Additionally, fiscal

me for With remarks. the call her Tamar to let turn that, over

guidance, X.X% constant Thank I financial Slide joining and results Service QX revenue the Record on Shuky, compared $X.XXX last reported for and positive currency. the clarify, the a us. closed was highlights everyone. to of the our On third you approximately QX acquisition you foreign solid million am from pleased To you, a day in of guidance our was June TEOCO’s of see revenue was XX. Assurance billion increased up on Thank which fiscal approximately of with revenue above quarter, for assumptions. the deal of business from no X.X% quarter impact as in can midpoint $X basis, the slightly including contribution XX. there hello the movements year-over-year of currency

project QX, a activity. its journeys as Europe across North second modernization strategic On while a customer we achieved in to best-ever declined project record continued of basis, delivered year-over-year as support the continued quarter quarter in region, activity fluctuations of the of revenue broader in on basis customers America reflecting to Rest a ramp-up. and consecutive sequential we World geographical

the ago income with our unchanged of as XX down year the prior Moving basis statement, from and non-GAAP was XX.X% quarter. compared up points margin operating a

was guidance range non-GAAP of a GAAP was $X.XX non-GAAP rate. which which range, of the also the primarily rate guidance quarter, than lower a XX.X% anticipated. tax due above of $X.XX EPS EPS diluted was effective Diluted third to bottom-line, $X.XX fiscal On effective GAAP was $X.XX, the due lower to for to the anticipated tax above than

XX, I’d our non-GAAP to provided beginning of XXXX, higher operating of Slide year. double-click margin improved the has and new the which fiscal to Moving range on at with like in in to we XX.X% line the guidance XX.X% which trended

automation, realize capabilities. our These our leadership to and strategy Gen and charges and benefits include in excellence reductions will tools efficiency our planning $XX global million of improvement million by to are to result commitment with year-over-year future use in the workforce ongoing in measures roughly in our AI-related additional fourth further expenditures to and $XX appropriate of optimize The quarter. now to work fiscal restructuring and measures aligned sophisticated take expected growing site operational model, allocation, of and led cost resource respect we profitability and which reflects gains our to

non-GAAP Looking years. operating sustain ahead, expect in last gradual we to over done as have improvement we long-term the margins,

up up XX, basis, Slide by $X.XX backlog roughly was record-high billion, QX. million was XX-month in On sequential to a Moving $XX our a backlog X%. XX-month

with we and deals QX, logos continued During existing sign to new customers.

project progressing tracking renewals managed cancellations, is backlog services are in work XXX%. no at Additionally, with and

increased backlog compared of growth quarter, although by this referenced reflecting rate was the Shuky QX, QX, XX-month business As with lower in year-over-year again the dynamics such, X% earlier.

reminder, a business, served of backlog of XX-month as leading having averaged our around years. our XX-month the As traditionally has a XX% good revenue consistently forwardlooking indicator over

equivalent managed of XX, QX, revenue record Slide to services total million a about revenue. was XX% in to Turning $XXX

year year a In fact, managed from been roughly landmark revenue fiscal with ago. XXXX up in X% in has first a months so the far services, nine

was via During of QX, stack, with extension in while over managed systems support managed Amdocs X existing Tier selected taking a a multi-year by Caribbean IT also consolidate services business operator services. agreement we an signed a operations under in to Europe. a customer its single Western

projects, the These To remind which multi-year Globe streams, business which and you, deepen sometimes include our extended our of underpin in as managed the a announced and services recent further our revenue with rates Philippines, expanded with engagements XXX% our near engagements. resiliency renewal is recurring under of this activities modernization partnership quarter relationship, example last.

positive of sheet days Now cash XX. turning and days XX X by net flow to QX DSO in offsetting highlights the narrowed aggregating and the $XXX $XXX difference The balance sequentially. days in increase by balances between receivables, sequential Slide long-term quarter. X unbilled largely previous by increased year-over-year recorded decreased on and revenue million and short-term the million the sequentially, of deferred

deferred between net fluctuates normal As with revenue receivables line the activities. and in business a quarter-to-quarter, from difference reminder, unbilled

collections was cash flow of free million, in strong million cash approximately comprised net $XXX the a flow QX. in sheet Overall, $XXX we million, operations of less flow Free customer and million period, balance of including ended QX execution balance from $XXX healthy of aggregate strong a cash borrowings roughly capital approximately and in generated expenditures. cash Reflecting of healthy $XXX cash million. $XX with we

for closed of liquidity a acquisition while ample needs $XX cash ongoing to our strategic business, Moreover, of support capacity roughly we million. have Assurance future retaining net Our Service the which the fund already reflects business TEOCO's balance consideration growth. to

Slide on capital allocation to XX. Turning

success of new expiration has our of remaining was million billion and cash, generate repurchase the there Amdocs $XXX of stated to under our as confidence $X.X authorization, This a Reflecting quarter, in company's June authorized XX. we $XXX roughly future our our ability of today the with current Board date. repurchased of million shares plan which share no

Between have the $X.XX repurchase we authority. authorizations, up of remaining two billion to

fiscal to Additionally, full million. the million roughly in flow we In of respect $XXX XXXX, the reiterating dividend cash outlook are paid of our we free quarter. year third fiscal cash $XX

to restructuring Excluding charges earlier. the payments referenced related

to income cash and equates capitalization. conversion flow current market healthy rate and roughly Amdocs' flow with yield of outlook free relative net non-GAAP roughly Our free par to a on X% assumes a cash

to repurchases our to XXXX, free vast quarterly dividend cash expect we capital program. payments now by Regarding our majority allocations year shareholders return and our way of fiscal flow in of the share

Now in business environment turning the and and outcomes full the possible to our outlook remains XXXX which on cannot information To fiscal of elevated all but we we scenarios. the guidance financial Slide consider likely that we to monitor most begin, quarter closely prevailing reflects to XX. uncertainty, level the on are predict business continuing the fourth have operational be current what based year today, we macroeconomic

of constant now outlook. to range the year the midpoint to of within previous expect X% We approximately guidance midpoint full are our currency, X.X% X% This year-over-year assuming of XX% revenue year. XXXX yet our growth original for X%, X% well of fiscal slightly is below we in the our range

our of reminder, or an to outlook which fiscal contribution growth materialized. XX year activity, revenue the inorganic for initial never points a expected As included basis roughly

X%. anticipates On less compared year-over-year, approximately a which is to X% currency The we X.X% reported X.X% as previous an of of to outlook with than expect year-over-year previously. slightly new year-over-year impact our basis, now unfavorable X.X% growth revenue foreign assumption X% of

business. outlook quarter billion, $X.XX contribution $X.XX immaterial fourth TEOCO's a includes of an Our the consolidation within Assurance from fiscal range and revenue to of billion Service

to the continue on the range margin anticipate range quarterly hedging We to currency interest of Below expense and to the a foreign fluctuations basis. fluctuate around dollars net target XX.X% of our in down of other our non-GAAP non-GAAP lines operating XX.X%. we cost in few impact a income will that the Moving midpoint of million anticipate line, statement. operating quarterly annual

XXXX. year that above XX.X% of points and rate than the growth points of but we within unchanged to per QX. the an issued midpoint end roughly high earnings to beginning guidance fiscal expect everything of expect XX% the target at year, outlook better we range XX% Bringing fiscal XX% The diluted than annual XXX the now the roughly non-GAAP original For basis which previous range effective the our share together, year. basis XX% fiscal in our higher the will first for of within non-GAAP our tax full of remain is in range XX XXXX,

your our excluded restructuring charge anticipated results. modeling from non-GAAP QX the will financial For be purposes,

on to total fiscal XXXX, of year double-digit track third EPS expected are the for dividend we our expected Overall, of return running deliver X%. nearly growth in our shareholders' sum the non-GAAP assuming and yield

let which Before say passing has many full through ESG, is selected thrilled been we online value and business service Shuky, quick say customers. highlights are me suite this priorities adult for a a that provide we and quarter, strategic management other film the about the by of Vubiquity sits services and to women. Amdocs power words streaming of on at to operations, it DNA back few Among deliver to core which to Amdocs content to HERFLIX, free a focused subscription embedded

diversity believes more we and contribute championing media representative Amdocs to this that matters the of to by landscape inclusive a narratives, partnership lead allows presentation believe that and the our society. reflects female Amdocs

Israel ESG be all Amdocs dimension of enable renewable by recent key will in energy strategy in powered our that from support of which to is agreement we cosigned Park the environment a Another XXXX.

an ESG ESG back month to recent follow and of Shuky. webinar you, forward initiatives our corporate to we to and new our this that, later social With to in publish now a responsibility in which expect with fuller Investor account ESG September. providing strategy XXXX, report, look XXXX We

Thank Tamar. you,

from our year, and dynamics to the As and of today, solid remarks questions. you your environment. uncertainty that, global happy our financial operational we fiscal of with pleased can tell final notwithstanding the position we quarter as are With the enter probably industry we are take macro

first Rosner from line with Barclays. [Operator Instructions] comes Tavy Our the of question

Is bit the to mentioned a around do due for couple it getting? Is you're guidance certain push of midpoint pushback evolving lowering from a of how about slightly next you certain quarter little a you Can see product? And that geography? kind industry of You pressure. the of kind back? it the talk

Thank you for the question, Tavy.

just the I remind facts. want several to So

any XX% to as all, business grow. pretty is roughly solid. you see don't First services know, of our be of continue actually, -- We will business managed

we As very deals. see and the mentioned cloud-related strong all I last of momentum quarter this quarter,

that this more to see we see some but of last in cloud more can announced today, You you customers great this. deals and really momentum quarter, in around activities, momentum see and our our and we a taking the

modernization At for time, in also that and T-Mobile, see others. we Three are largest large doing same program our the acceleration we customer, all AT&T, the Vodafone,

platform have see acceleration we remember, from if -- we we at most running next-generation where some in you program. we So the any customers, pressure, don't of a real or platform What legacy any the And -- we the are if we see while modernization cancellation the these you we our same in parallel, know projects. in car time. -- platform both for the are customers building

what as speak. question, this usually that or to we enhancing to So to see legacy continue pressure see And what program also to that we prioritization we some by current with on and prioritizing comparing the we the domain is are more in them more modernization we see platform other lately the much done legacy your reflect But customer, doing comparing the are enhance them we maintain that area our we them. system they for current is continue -- of see we -- acceleration.

this running our with in what we actually in see deploy all, business platform pressure. money is platform. current what see this, that the efforts current The a call can spend that to next-generation tell we our why lot of the day, and I legacy downs we and you system all customer some So is spending. and area ups attention at today. Historically, we the of end the is the

the will platform. or the reason it's next to pressure. the generation key this and gave And not reflecting need year, like X.X% I the when materialize. building this or we from unfortunately, numbers. assurance this service -- guidance this beginning while we contribution something at of the together This is -- also was you as in roughly But company in another -- this this are that the that a did still MYCOM bringing at reminder, invest you that start recall, is we So can with my acquisition you remember the platform anticipate

So a this that not guidance. investment of But obviously is think story part main the all, current all is just long make short, revenue the our platform. to from in legacy in I the pressure or is coming

slides would mostly And follow-up, helpful. emphasize a perhaps the where it understand the as new the is maybe talk you be strategic most domains, strategic the of interesting to the That's because new coming like from, to presentation, initiatives? seem domain. the domains And growth really about like and

is of get most So infrastructure, new say can existing of would legacy, perhaps like how existing kind sense really call from business, but growth the the we it is fair than it nowadays that -- to much a the is coming domains rather new? I of

For at monetization are least by any the program. mean you not that customers part, or this I or of way. are systems start Amdocs point running there some at not -- did right. don't many, have the too legacy are most current that

growth robust is right. But engine. current the running while this perfectly running still customers very, So the modernization building actually investing these legacy. heavily business. customers The is because you're very was is to reflecting coming are plan the a platform on more what their that I from growth the in platform still are

automation, said, that maintain in heavily -- think As see, modernization. a said, Everything while that are this see. to not are platform. in lot the this activities more many, we customers have monetization. modernization that the I of phenomena giga deals But related a And overall, in many to This this of customers yet platform that network current investing pillar, cloud-related course, in this continue is mentioned, is and momentum transformation monetization, we -- around general. I I as XG we we is investing as I

this for in to continue invest legacy the will a So customer, they platform. lot

just maybe questions. And housekeeping

basis? kind acquisition on you revenue XX-month they of will a bring if look the You mentioned of what -- at it contribution

starting It QX, will starting and build be naturally along then we we as we XXXX. believe move itself roughly X.X%, up we as is through so that's -- -- said slower said before, that specifically insignificant, ramping and move it as in the up contribution why we will

Timothy Instructions] from next line Oppenheimer. of Our question with Horan the [Operator comes

A few questions.

to give upgrading of you sense of sense next the of magnitude about third the So I'm of on assuming what what your a is that can incremental to the the just legacy you're in about? year? guess, this? magnitude do expect that can any the of much talking here you growing, sense that you Just you us was need came or we're revenue I kind business doing reflected that whatever and some seeing percentage quarter? you the hit but Are talking how of that, us give Like And isn't of quarter business? that in here? fourth Do legacy quarter? it's your growth from,

the drivers typically Everything et we as adjustment growth existing That customers investing are modernization, the said, about right? was actually the like to to the make systems, go-to-market while stack, majority from changes approach, the in next-gen while coming cetera. talking is of pillars, future new Shuky in for of would growth, terms building

current are run next-generation managing their that while building they business So to it's something them stack. the is

growth for was existing kind capabilities while stack right the a the It's more keep future. it So of the building of never a driver.

during bit a to started consideration that for QX, QX. into that taking see have we're and We more

But have we to guiding data see as the that the is I more and momentum are we right pipeline. not we -- And again along now points happening? We emphasize course, specifically for next of move say how really year. want in will

of cancelation, any see see don't XXX% new the advantages. deals. We signings renewal rate We project

backlog want But be we've perspective. you and to a $XX of the we need phenomena. increase. overall growth can the to focus the to take to see the It's of really put And would it that into healthy. sequential seen on definitely, continuing just I So which is Also story. some in million, not big part

see the -- As seen -- in not first to new it's we this this we historically, so time that see phenomenon. is us, fluctuation not

of Okay. a sense get yes. XX%, XX% of going their what's it Great. you? of any is increase And a on a Was here. Verizon, we Just with this a in big XXX%? spend step contract up? kind of revenue sense how can Is or this

service As the you services. share Verizon orchestration this in don't orchestration strategic a you tell XG old for the which important know, I of type can this all all very the is of new is information. doing we project actually that domain,

it's not we is strategic project. quarters, in quarter project. expanded we So it's -- niche a the offering what were not prior we're It's a the expanding actually implementing this What operation service This of prior quarter, we've in orchestration. of we're service And this the the the this actually operation is expanding quarters. is actually, done what in SDOC, delivery platform. this

running also, catalog. is Just reminder, Verizon our a

our So service too. -- offering of catalog the all all are the through Verizon running offering

Okay.

to deploying Lastly, -- where could cases. your same are -- I of material this this different AI said on And mean, use the side. be think the for Can you margins? XX some you capabilities? mean with you I I the customers,

implemented. X many, we building amazing give will So example for many we what are you use customers, I cases our of

the want for in So when talk an I I to to we'll build be millennial will the And different think in And build you say, you will our you. catalog and what for will -- range, five offering be what actually can will anticipate this the Dallas in to today, you generate options offering, what -- right Tell want offering. me want area also uptake. you this four, be population will

have changer game these the this X a and offering. many like is of in to we this example, how way -- create is you So

So perspective. is customer from a this

We development software we the in will for of next what the be cycle, gathering, are that improvement many this SDOC, I implementing areas call from mature lot a domain quarter. life probably to we more automating testing requirements think

to of capabilities today of lot are get we But developed previously doing them a cost and the you and be I we of on we can -- that automation a our related to leadership from tell are that them going will are most thing expected AI. generative that announced part are relying

do. do is for this for development. this true So everything is from development for that managed for services software I what run mean we we

every we things also believe our lot activities in see other, could finance also contribute to our the cheaper HR faster margin in opportunities mean, I like thing, and and we last and a And good will do corporate corporate, that of expansion. and

next from comes of Citi. question with Our Ashwin the line Shirvaikar

my And mean, How moving could what does work the that question of existing cloud, with regards that is that if a doing? happens, some useful? economics of cloud. around I guess these types you're on-premise to does how provide good projects here. be that, execution you're change you your of signing the would some I when color economics to maybe

economics the I if know don't change.

we what first do. share me Let

when we is do when -- doing consulting. mainly start So we are with cloud project a

ecosystem the execution the at the the the all plan. we're true cloud we then agree, after with then look and doing doing we combination next way, the system. migration actually the of data in the And for we platform of of cloud. right come building So By system the And the the a then to for all Amdocs what of non-Amdocs step this is system. is

cloud the then is this is, said, And doing as I -- are operation. this we the operation. What

robust accountability the -- itself in very a are many they managing it's So the how we program. -- also the… the cases, way, call it By end-to-end cloud all the and

workload. The

[PNOC]. The workload,

partnership and good this of as All we know, of part recently. very have Microsoft a is with relationship and -- you strategic

you, before, can micro AI, This AI where margin we expansion automation well-architected tell big the opportunities of is I that offer our the think give future, the don't we Because we us in in expansion. investing environment implement heavily to I cloud. a future. more are is that generative services when is put generative new for definitely platforms, margin shared a there So a in the especially dynamics. X in potential you the as change in obviously, there

customer our is Maybe think move native. cloud deploying to next-gen stack, just to it… I of to can the take add, One, the we Ashwin, Xx We back cloud. it

NTT, Vodafone. Mobile,

ops, et From the to cetera. potentially modernization to consulting projects, way all cloud

help and The up cloud then approach. that more And provided and them an Amdocs to want our a such helping where product, in step our past non-Amdocs running version an migrating we modernize they want to be take are second that. over to is in examples they're And could own third the that examples they the existing from AT&T actually we've that to of the allowed time. applications gradual applications, application as we've other the cloud, in were some on-prem sometimes do to the actually and moving them

about modular in take variety they giving way. aggressive can very is a how customers can approach, them accepted and do which it. more feel wide go gradual of and very well it that to a So a they we're

customers lot So accepted very them that's well perceived by of and giving optionality. and a

to That's just very well, environment, the comprehensive. mentioned prepared business business about as your you the remarks have growth decelerating environment, the rate. useful are in dynamics I ask and

should of and planning at sit framework in how should So kind framework next here to are August, a you next can't as -- get we double-digit but for we ability give least return? you at terms this shareholder in pieces of to the of consider least year, year, how beginning and now, the for the guidance

details in So I in come are all, we term. can not -- think continue November. continue I you confident that more. double we'll guiding first But past, -- we we that definitely, it's believe talk digit we that we give will want it right to or as But We now. when think and not to more feel of this

there there the we Regarding said, , I fluctuation reflect that guidance. now, with environment. -- don't like as and think the our we full anything are macroeconomic what I environment are right was come see -- around in see I see certain the services activities we from as There increase, are these I any elements think now, revenue of there's managed what that and that us mentioned these impact from before, we we itself,

legacy that all imagine, the think headwinds, you might that some mentioned, systems areas the type some next guidance I come are activities we some I doing down we overall, are as in see took as customers. to with But quarter. of There bottom-up top-down and

further questions showing for remarks. I'm I'd Instructions] call queue turn in the Smith [Operator this to at closing like Matt to back time. no

just in everyone, and forward here reach you look Thank to the this do And from joining you, Have questions, evening. Thanks if hearing Liz, soon. for evening. We group. the great IR a call have us out to you thanks, very any lot. a

you This conference participating. concludes today's Thank for call.

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