Q2 2024 Amdocs Ltd Earnings Call Transcript
Key Points
- Amdocs Ltd (DOX) achieved record revenue of $1.25 billion, up 2.0% from a year ago in constant currency, slightly better than the midpoint of guidance.
- Non-GAAP operating margin improved by 60 basis points year-over-year and 30 basis points sequentially, driven by ongoing initiatives to accelerate profitability.
- Record 12-month backlog of $4.3 billion, up approximately 3% from a year ago, reflecting Amdocs Ltd (DOX)'s market leadership and healthy sales momentum.
- Successful execution of strategic growth initiatives, including advancements in generative AI and cloud services, contributing to strong market positioning.
- Solid financial outlook for the full fiscal year 2024, with expected revenue growth of between 1.7% to 3.7% on a constant currency basis and non-GAAP diluted earnings per share growth of between 7% and 11%.
- Revenue growth projection for fiscal 2024 was revised down by approximately 50 basis points due to slower pipeline to sales conversion.
- North America revenue declined by 0.7% from a year ago, primarily due to slower pipeline to sales conversion.
- Challenges in converting deals in the pipeline to sales, particularly with large deals taking longer to close.
- Free cash flow expectations for fiscal 2024 reduced to approximately $700 million from previous outlook of approximately $750 million, mainly due to timing of collections related to payment milestones.
- Persistent macro uncertainty and industry pressure impacting the business environment and potentially affecting future performance.
Good day, and thank you for standing by. Welcome to the Second Quarter 2024 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 Matt Smith, Head of Investor Relations. Please go ahead.
Thank you, operator. Before we begin, I need to call your attention to our disclaimer statement on Slide 2 of the presentation. It notes that some of our comments today may be forward-looking statements and are subject to risks and uncertainties, including as described in Amdocs' SEC filings, and that we will discuss certain financial information that is not prepared in accordance with GAAP. For more information regarding our use of non-GAAP financial measures, including reconciliations of these measures, we refer you to today's earnings release, which will also be furnished with the SEC on Form 6-K.
Participating on the call with me today are Shuky Sheffer, President and Chief
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