Q3 2021 Amdocs Ltd Earnings Call
Good afternoon, everyone. Thank you from standing by and welcome to the kids to eat any day you 1 Amdocs earnings conference call. At this time all participants are in a listen only mode. Later, we will conduct the question answer session and instructions will follow at the time, if anyone should there be quiet since June.
The conference. Please press the Star then zero on you touched on the telephone as a reminder, this conference call may be recorded I would now like to turn the conference over to Mr. Matt Smith head of Investor Relations. Please go ahead Sir.
Thank you operator before we begin I would like to point out of the during this call. We will discuss certain financial information that is not prepared in accordance with GAAP. The company's management uses this financial information and Egencia and all the analysis in order to exclude the effects of acquisitions and other significant items that may have a disproportionate effect in the particular period.
The management believes that isolating the effects of such events enables management and investors to consistently analyze the critical components of results of operations of the Companys business and kind of a meaningful comparisons of prior periods 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 finished with.
The SEC on form 6K.
This call includes information that constitutes forward looking statements. 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.
We're not limited to the effects of general economic conditions, the duration and severity of the COVID-19 pandemic and its impact on the global economy and such other risks as discussed in our earnings release today and at greater length in the company's filings with the SEC, including our annual report on form 20-F of the fiscal year ended September 32020 filed on December 14th.
'twenty and our form 6K finish of the first quarter of fiscal 2021 of February 16, 2021, and for the second quarter of fiscal 2021 of May 'twenty 4 'twenty 'twenty 1.
Amdocs may elect to update these forward looking statements at some point in the future. However, the company specifically disclaims any obligation to do so participating on the call today are shaky Schaffert, President and Chief Executive Officer of Amdocs Management Limited and Tomorrow, the game's joint Chief financial and operating Officer. Finally, a copy of today's prepared remarks will be pose.
On the Investor Relations section from DOCSIS website. Following the conclusion of this earnings call with that I'll turn it over the <unk>.
Thank you, Matt and good afternoon to everyone joining us on the call today I am pleased of the Q3 performance, which I believe reflects the positive impact of the strategic initiatives, we execute the decision to accelerate the amdocs long term growth my comments today will lose sales to certain financial metrics on the pro forma basis, where applicable.
To provide you with the sense of the underlying business trends, excluding the financial impact of open market, which is the which we divested on December 31st is poorly announced.
The revenue was above the guidance midpoint up 9.4% for me either go on a pro forma constant currency basis.
And consistent with our expectation for a stronger second half profitability remained slightly above the high end of our target range and we generated robust free cash flow of which we returned the majority to the shareholders by way of quarterly share repurchase and that'll dividend program. The song says momentum we've seen in the recent quarters.
Also continue in Q3 on a pro forma basis 12 months backlog was our highest ever and up 10, 8% from a year ago. Additionally, our growth engine of our quantum of building 2 new business awards, including digital and 5 G system modernization cloud migration and next generation of SaaS platform for Med schools the.
The rest of the demand is positive sign of our growth strategy is well aligned with the advent of all the needs of our customers and our ongoing commitment to innovation.
Over the past several quarters, we've increased the R&D investment as a percentage of revenue and extended the lead in what we define as the 5 G value plan. The 5 G value plan integrates key capability started charging policy and monetization as well as multi access edge computing and software defined networks to support the upcoming rollout.
5 day Standalone networks. It will allows service providers to drive premium 5 day services offering an innovative business model overall.
Overall, the Amdocs ease and the could you wait for Q3 and the fiscal year to date the cash.
Got it for which belongs to our thousands of employees worldwide. Many of our people was subject to the recent escalation of the global pandemic in sales and operating regions. Yet is the company, we have maintained consistent execution and deliver great value to our customers globally around the cash to see some positive signs of improvement as vaccination.
Programs of all out and I am happy to welcome big different teams to the offices in those parts of the World. We were able to gradually reopen that said we continue to monitor the global pandemic closely and the health of the wellbeing of our employees remains our priority I am proud of Amdocs people everywhere and I dig them for all once again for the <unk>.
Ongoing dedication and commitment to Amdocs now, let me provide some color with respect to our regional performance in Q3.
Beginning with North America, we delivered another record quarter on the pro forma revenue basis, reflecting healthy activities label with many customer of course the region.
As we said last quarter, North American service provider of accelerating multiyear investment cycle focus around the major industry trends, including digital transformation of the system modernization aligned with 5 G rollout with the focus of monetizing and delivering new services Youtube utilizing child and policy platforms.
And 1 out of 5 G mobile fixed wireless and fiber network to support fast and high highly secure broadband connectivity, which we delivered on the cloud.
And poor vision of net generation noise. This platform as we continue to see how connectivity has become a critical backbone of our society in the new hybrid work and home settings. Further to this we see of fit future of being powered by a partner of economy, which level of technology, such as multi access edge computing.
And private networks, what why being able to bring together, our rich partner ecosystem to expand monetization opportunities.
We believe as a net generation offering all of the heart of many of our North American customers investment plans and sweaters partner of swell is of value partner. We believe we will up we are well positioned to expand our scope of activities and deliver even more value to our customer.
This quarter AT&T selected Amdocs quality engineering services under the multiyear services the to provide the HL scalable enables the based quality assurance QA integrate into every step of the development process for the faster time to market with new services and build on other existing activity supporting the monetized.
Nation of AT&T consumer mobility domain. Additionally, we are progressing well of T mobile where all of zero touch service operation. We were recently selected for a program to implement net generation automation leveraging machine learning and of night tools.
Of course, our of course, our board of North American customer base at the pivot and evidence of also healthy at Horizon. We're implementing catalog. The 1 in addition to which we are now deploying a cloud native net generation oysters 5 day platform for service of network automation at the Ts Comcast charter and dish, we are executing of our previously.
Now the ballgames, while continuing to demonstrate the long term value we can bring to discuss the mill is the crystallize the future of investment plan.
Additionally, in the media segment Adobe recently signed a multiyear agreement with Amdocs to support customer retention Air force by implementing Venetia cloud the subscription billing solution part of the Amdocs market 1 platform.
So I think it all together Amdocs is at the heart of North Americas initiatives to advance 5 G. In the cloud and we look forward to further supporting our customers in what we believe is the multiyear investment cycle.
Moving to Europe revenue growth sequentially is a customer of progress digital modernization investments to support improved customer experience better operating efficiency and multiple convinced strategies.
Expanding our relationship with multinational group has long been has long been a part of Amdocs International growth strategy Europe TUI group is a good example of how we started the customer relationship by delivering the value sort of monetization project at the Irish affiliate expanded to 3 U K in the business to be the domain and now <unk>.
Expanded and now in Q3, 3 expanded the to the cost of the consumer sector with the new multiyear managed transformation of awards to provide 3 okay subscribe bill with net generation digital experiences and 5 day services. This this quarter. We also pointed out the long term standard relationship with Vodafone group.
We were selected to provide inventory and net generation of assist capabilities to support Vodafone mobile fixed and the cable offering in Germany, Romania, and Czech Republic. Additionally, we extended our agreement with Vodafone, Spain to modernize the CRM system ready for the 5 G of them.
The amount of other customer highlights this quarter.
The group British Telecom group implemented Amdocs brightbill platform to deliver easy to understand billing communications, which tens of millions of customer of course of the United Kingdom and Amdocs media, we big with the extended its multiyear content as a service engagement with German language I think the V provider of silicone.
Turning to the rest of the world revenue improved sequentially for the fourth straight quarter.
Latin America of activities included the ramp up of the previously announced do you get the amortization programs with the cloud, Brazil, Chile, and Puerto Rico. Additionally, sit out of what does national Telecom provider recently filed the 5 year extension with Amdocs to continue supporting the possibly bidding airports for the business and current consumer offerings through too.
<unk> thousand and 26.
In Southeast Asia, we have been awarded a multiyear cloud the minutes transformation agreement with stork operation in Thailand to other than with musician platform to the new cloud native and fine jewelry. The Amdocs. He has 21 suite, enabling true to launch manage and monetize innovation, you'll 5 day services.
Before wrapping up let me highlight some of recent developments in our strategy to accelerate the communication industry journey to the cloud.
First the market any capabilities of our next generation cloud Native <unk> portfolio were recently recognized by AWS, which named Amdocs. We net of the best technical solution of the World. We are honored by this recognition, which we see as another example of the strong partnership we are forging with the leading cloud.
Wider in the industry with.
We continue to work very closely with Microsoft We have recently expanded our strategic collaboration to wide interval of the availability of our portfolio on Azure second I can't report of the post merger of business integration of soft group is progressing well, it's the leading global technology consolidate the specializing in large scale platforms.
[noise] formation for sophisticated I in enterprises, the EXPAREL T V.
Since we have acquired itself is already translating to new business opportunities and cloud operation and services.
To wrap up I'm happy with our performance for Q3 and the fiscal year to date, we expect <unk> of it is revenue growth to accelerate on a pro forma constant currency basis in fiscal 'twenty..1 supported by the positive contribution from all 3 regions in which we operate.
Our confidence in the outlook is supported by the visibility of our twinsburg backlog of go.
<unk> pipeline of opportunities in our market leading off of each reached are well aligned with the customer needs for digital money. The monetization model when the organization 5 gene cloud migration and net generation of assist platform.
Overall, we are raising our fiscal 2021 outlook for non-GAAP earnings per share growth on a pro forma basis of about 80 basis points at the midpoint or the range and we believe we are firmly on track to deliver expected double digit total shareholder returns for the full year, including I'll leave it in the news.
With that let me turn the call total MAU for our remarks.
Thank you Sophie.
Let's start with the quick housekeeping housekeeping item with respect to open the market, which was included in our reported net.
The income statement and cash flow in the first quarter of fiscal 2021, but is excluded from the second the third quarters of fiscal 2021. Following the completion of the divestiture of these assets on December 31.2020.
To provide you with the sense of the underlying business trends my comments today will refer to certain financial metrics on a pro forma basis.
The Florida financially, but the bulk of the market.
Year end comparable fiscal year period.
Third fiscal quarter revenue of $1.7 billion was above the midpoint of our <unk>.
This range of 1 point, the 4 billion to 1 point, though 8 billion.
The revenues include the positive impact from foreign currency fluctuations of approximately $3 million relative to the second fiscal quarter of 2021, and the positive impact of $5 million relative to the guidance.
On a per full of basis revenue grew by 9.4% year over year in constant currency of the third fiscal quarter.
Our third quarter revenue grew by 3.9% yield of the as reported and was up 1.
1.9% of constant currency.
Our third fiscal quarter non-GAAP operating margin of 17, 6% slightly above the high end of the long term.
<unk> of 16 in the half of 17, 5%.
It was up 50 basis points from a year ago.
Non-GAAP operating margin was unchanged in the sequential basis.
The improvement the non Apple operating margin from a year ago reflects the divestiture of open market and operational excellence initiatives, while accelerating our R&D investment in our strategic growth the means of digital society and the cloud.
Below the operating the line non-GAAP net interest and other expense was $1.2 million in Q2.
The mix of which includes interest expense related to our sort of boring and 10 year bond of.
Set by the favorable impact of foreign currency fluctuation in the quarter.
The forward looking purposes, we expect the foreign currency fluctuations, we considered the impact of non-GAAP net interest and other expense line in the range of a few million dollars on a quarterly basis.
When you look at the GAAP non-GAAP EPS.
Well the dollar of 35 from Q3 at both of our guidance range of $1.14, and as all of 'twenty.
Primarily due to a lower than anticipated non-GAAP effective tax rate of 7% of the third fiscal quarter, which is below our annual target range of 13th of 17%.
Our Q3 tax rate reflected the favorable impact of certain tax the polymerization strategy in some of the operating jurisdiction.
Which we were able to complete in Q3, rather than the fourth quarter as originally planned.
Therefore, our expectations for the full year fiscal 2021, non-GAAP effective tax rate remain unchanged, but the.
Typically in Q4 tax rate will be higher than this annual range.
Diluted GAAP EPS was $114 for the third fiscal quarter at both of our guidance range of.
91 to 99 million also primarily due to a lower than expected effective tax rate.
No 1 is free cash flow was $179 million in the third fiscal quarter at the proximity of $10 million as compared to $169 million a year ago.
On a reported basis free cash flow was $140 million.
These local kind of cash.
Outlook for revenue growth on a pro forma basis by 30 basis points to a new range of approximately 6.3% to 7.3% year over year constant currency.
As compared to our previous range of 5% to 8% year over year.
On a reported basis, we also expect the 30 basis points improvement relative to our previous guidance range.
We now expect full year revenue growth in the range of $2.3233 year over year as compared with our previous range of 1% to 4% year over year.
The adjusted revenue outlook on a reported basis anticipates, a positive impact from foreign currency fluctuations of approximately 1 percentage year over year consistent with our previous expectations.
As previously anticipated outlook expect an acceleration in the rate of year over year revenue growth on a pro forma basis in the fiscal second half and we still expect all 3 geographical regions to deliver revenue growth on a pro forma basis for the full fiscal year 2021.
As a final note for further help with your revenue modeling will remind you that the originally planned.
For open market to contribute revenue in the range of $300 million for the full fiscal 2021.
The roughly 75% of which was expected from North America, and Europe accounting for the risk.
Regarding profitability, we continue to anticipate quarterly non-GAAP operating margins to track roughly in line with the high end of the annual target range of 16, 5 to 17, 5%.
He started book assumed for accelerated R&D investments as a percentage of total revenue to support our customers on future strategy.
With our continued focus on delivering operational excellence.
We expect the fourth fiscal quarter diluted non-GAAP EPS to be in the range of 113 to $1.19.
Our fourth fiscal quarter non-GAAP EPS guidance incorporates an expected average diluted share count was for roughly 128 million shares.
We excluded the impact of incremental future buyback activity during the fourth quarter as the level of activity will depend on market conditions.
Regarding the full year fiscal 2021, we are raising the midpoint of our outlook for non-GAAP diluted earnings per share growth by 80 basis points to a new range of 9.1% to 10, 5% of pro forma basis.
As compared to $7.5 to 10, 5% previously.
On a reported basis, we expect to deliver full year diluted non-GAAP EPS growth of 7.6% to 9% year over year.
Compared to 629% year over year previously, which also equates to an increase of 80 basis points at the midpoint.
As a reminder, this outlook includes lean book a book of market for the first fiscal quarter on wings.
We expect on non-GAAP effective tax rate to be within our annual target range of 13% to 17% for the full fiscal year 2021.
We continue to expect normalized free cash flow for the year 2021 of approximately $820 million.
This outlook is equivalent to about 8% of Amdocs market cap and represents a conversion rate of approximately 130% relative to our expectations for non-GAAP net income.
As a reminder, we expect free cash flow to convert at a rate more on par with expected non-GAAP net income over the long term.
Additionally, we increased our outlook for reported free cash flow for fiscal year 2020 wants to approximately $650 million.
The improvement of $30 million relative to our final view is related to a shift to next year of payments related to on investments in the new campus in Israel.
On a reported free cash flow outlook, therefore, anticipates expenditures of approximately $110 million in relation to the development of our new catalyst on Israel 40 million of capital gains tax in relation to the Divesture of open market and other items.
During the third fiscal quarter, we repurchased $90 million of our ordinary share as part of our share repurchase program.
Regarding our capital allocation plans, we remain on track to withstand a majority of our mobile ex cash flow to shareholders in the form of our quarterly dividend and share repurchase program in fiscal 2021.
As of June 30, we had roughly $1.1 billion.
So on capacity for share repurchase remaining <unk>.
This amount includes $1 billion authorized under the new share repurchase plan, which was approved by our board in the prior quarter and each will execute at the company's discretion going forward.
Overall, we remain on track for pro forma revenue growth acceleration improved book stability and strong free cash flow for the full year fiscal 2021, the combination of which firmly positions us to deliver double digit total shareholder return of approximately 12%, including the midpoint of our new pro forma non-GAAP earnings per share.
Growth guidance clubs of dividend yield.
Before we go to Q&A I'm pleased to say that we have just published on new corporate social responsibility report, which covers the year 2020 up until June 2021.
The report details how despite the pandemic, we have managed not just to maintain but to grow our extensive CSR initiatives worldwide, many of which had to be quickly reinvented as we adapted to the restrictions around us.
Examples of essential pandemic related initiatives to support the communities in which we live and work includes on 19 medical equipment computers were more planning.
<unk> for the <unk> as well as establishing a call center for thousands of isolating senior citizens to connect with their loved ones on line.
The report also highlights our increased focus on diversity and inclusion as well.
Well as a successful sustainability efforts with leadership ranking for Michael Bobbi and CDP, the carbon disclosure project as well as being included for the second consecutive year in the S&P Dow Jones Sustainability Index North America.
With that concerning back for the operator, and we are happy to take your questions.
Okay.
Thank you ma'am, ladies and gentlemen, if you have a question at this time. Please press star and then the number 1 key on your touch tone telephone if gets doesn't hasn't been answered or you wish day move yourself from the queue basketball on key.
Please note that we will only allow 1 initial question and 1 follow up question.
Pretend that we have our first question from the line on <unk> from J P. Morgan. Your line is open you may ask your question.
Alright.
Thank you.
First question is around how we should be thinking about the kind of pro forma growth in the backlog number relative to what should we what we should be thinking about how that flows into growth in revenue. Once we get past kind of all of this divestiture of income net and everything moving forward.
So Jack on Hi, Tamara speaking.
Just to clarify when we talk about the backlog and the fact that it's growing 10, 8%. This is already on a pro forma basis. So we made sure to eggs to take out the noise. If you will of open markets from the comparable number was last year. So you will see the actual real trend in sales.
Of the 12 months that we're very happy with the business momentum we are seeing.
With signs actually business across all key regions, so not on <unk>.
I cannot say that there is coming just from 1 specific place actually very happy to say balanced across many accounts. Many regions. We've talked about several examples during the prepared remarks, so we will be happy to elaborate.
Thus, we are enjoying now the relevance of our offering to the industry investment cycle in cloud 5 G. Digital transformation will continue into 2.
To continue to see very well fit between what we prepared in terms of our offering in terms of our products.
And in terms of the customer demands and.
And as we've always said backlog is a good leading indicator, but you shouldnt take it literally is the 1 to 1 ratio necessarily for for revenue growth and.
And in general when we are looking on backlog, it's adding to the visibility of the business the whole meaning of the backlog just to give you some confidence about what we have already on.
<unk> business was the business that we have high level of predictability on so we're very encouraged to see the improved visibility as represented by the backlog.
Okay, Great and then.
<unk> in your remarks, you mentioned signing a bid.
And this will deal with Adobe on it.
That's just an interesting vertical we think about right from companies like yourselves software companies with subscription revenue model. So can.
Can you give us any kind of an idea of maybe.
Outside of Europe, pure telecom or media, how big the opportunity might be for this year.
And the technology or software method.
So as you mentioned when this shows a very robust subscription billing.
<unk> model.
Adobe actually is going to use it for the substitution module for the product and services.
This show is tightly integrated to our markets 1 platform and the whole idea is to give our customers and then also obviously customer like can you share the ability.
To leverage from the OTT economy.
Which usually is a subscription based so we have like a full solution based on support any.
Over the top type of <unk>.
Sales, that's also bringing integration.
The Netflix on the wall, Spotify, and others and to bring additionally subscription.
<unk> capabilities.
There is some pressure on the wall. The subscription billings is also adopt adopted on top of the of the postpaid on traditional prepaid the models.
I can tell you that the.
This offering is being used not just by our telco customers, but some other customer electrochromic.
Yes.
Okay alright, thank you.
Thank you.
Thank you Sir we have another question from the line of Ashwin <unk> share My car from Citi. Your line is open you may ask your question.
Yes.
Can you hear me okay.
Sure Alright.
Alright.
Thanks, a lot.
My question.
In regards to sugar.
<unk> net.
You spoke about demand due to the.
Digital modernization <unk> cloud next generation Oss. These are factors that that would probably be asleep.
Help you for a few quarters here.
Is there in Joseph Fusco.
Look you can provide is different by North America versus <unk>.
<unk> versus rest of world.
And then the follow up question to that is is the Europe and rest of world.
<unk>.
Is the euro for us it is sustainable.
For growth going to be so.
Sustainable.
Uh huh.
Higher levels.
So let me start from the second question on very very much. So we have a very very good pipeline in Europe for additional large deals. So we are very optimistic.
We're going to sustain this income.
Rental growth in Europe and.
For the first question I think that day, when I talk about <unk>.
The 3 for trends, so I think that day in the Jeremy to the cloud.
<unk>.
Digital modernization.
And I think that pretty much is consistent across the.
Across geographies in relates to 5 G and the integration of networks on <unk>. The U S is leading.
Europe is a close for oil and then the APAC and Latin America.
Yeah.
So this is where we see more I would say activity of moving to spending on <unk> networks.
And also America it should be the head of.
The rest of the world, but Europe is a very close for APAC is the same so I think the da Vinci really in like 18 months. So we're pretty much the trend will be completely.
Very much a balance across the different regions. There are some countries like I think that is the most advanced country.
In a 5 day stand alone is actually South Korea, which we are operating and supporting both carryover and it gives us a lot of non use domain, but to your question I think that the for.
5 G rollout.
In the U S is ahead.
Of the rest of the world, but I think it's going to be there in the next 9 to 18 months, everyone. We probably will see some balance of activity this momentum.
Understood. Thank you and then the other question.
With regards to delivery in other companies.
In the services space, obviously, you talked about.
Talent being difficult to find and so on so forth.
Whats your view with regards to.
On the supply of talent that you need for your particular set of services.
Could you comment a little bit on your.
On your on your delivery stack, if you will and if that presents.
Potentially an opportunity if you could continue to provide digital.
Cancellation expertise and <unk> per case, where others cannot.
I can start from our first of all as I mentioned, we are very proud with our capabilities resolve the issues are on pandemic is weak we have thousands on Tom will go into poised for Chrysler water is doing a great job I think of the Amdocs, we presented a lot of unique opportunities too.
Talents and I think that the real doing well is recruiting new talent in all domains by G cloud et cetera.
We have a very robust site strategy. So we're seeing that if we have some pressure on 1 side, we can obviously.
Items with other sites and so I think that day like everyone else, we see that there is a lot of demand.
For the new schemes.
Schemas cloud on others, but the thing that we're doing pretty well and being able to.
To recording these domains from <unk> to it.
I just wanted to add that.
Access to many cash.
Current pools around the world is obviously, giving us.
A lot of levers in terms of where we are on this call thing how we are on boarding employees the ability to attract talent.
In different places of the World from Guadalajara, Mexico on the way to the east.
Philippines, Philippines, and India investing in between so so that's for Mike obviously, great stability and the other point is that the internal career opportunities in Amdocs, having day unique model of doing both the software development and cutting edge technology latest.
For the greatest on the planet and at the same time, having real time experience in delivering projects 2 leading customers around the world is a very unique opportunity that we can provide that target for the employees as well as existing employees that.
Translates to high level of near term on mobility that adds to the capability of people to find their careers I move within the company.
Got it thank you for those points.
Congratulations on the quarter.
Thank you. Thank you.
Yes.
Thank you Sir our next question comes from the line of <unk> from Bank of America. Your line is open.
Hi.
Congrats on a great quarter on guidance I have a question on the negatives or potential negatives. The first 1 is your software it sometimes depends on equipment that is being installed by carriers, whether its <unk> base stations or even switches and routers.
And how much of an impact do you see from the supply constraints that your customers are seeing we are hearing from the equipment vendors. They can ship what they what they're being asked to ship and the question is does it cause any delays on your end to deploy the software.
Hi, Charles.
The answer is very short those going <unk> the majority of implementation.
Software implementation and monetization system on the cloud so there is no.
Obviously on the no that does no impact there.
The network deployments, we are mainly doing planning so it is not.
So I don't think we see any impact on the equipment itself so to.
To tell you the truth before you ask this question it was not even aware that there is an issue. So I don't think there was any impact on us.
Good to be on the good side on the software side.
Second question is another another negative potential negative which is.
Delta variant.
We are seeing.
The return of restrictions across the board in worldwide.
Does it have any does it impose any risk to your ability to deploy or did you factor in anything in your guidance.
Actually.
The majority of the Amdocs employees worldwide B walk you from home and then definitely in India, which we are allowed to work force.
So we want to bring employees back to the offices because.
This is the right thing to do by the way we advanced a lot in the last quarter. We gave origination program. The vast majority of our employees in India. Overall vaccinated. This quarter. So I don't see I think that day.
The only thing its impact on us that we are more bullish on for getting back toward the employees back to the office and you don't start to innovate together within the offices. So this probably could slow down.
It will be giving the delta impact.
But other than this.
We deployed this quarter the record high deployments over 100.
The production implementation without issues doing while the vast majority of the employees are working from home we have the right capabilities methodologies. So.
As I said, the only impact that we saw that we could get the employees' part going back to the office, but there was no impact on our ability to deliver on the services.
And the fact that our again travel restrictions and maybe even meeting restrictions with customers. It also doesn't have an impact.
And I can tell you that.
Zone.
The budget for the vast majority of our customers are still not yet meeting, obviously indices and moving to work together on a couple of months for ideal choice.
I don't think there is an impact and we are working on this environment for the last 18 months.
We became very good on that.
That said, we saw that we could bring employees faster to the office, we do see where do we do meet customers. Even in this environment I think that this quarter on <unk>.
Increasing face to face customer meeting comparing to before.
So again.
Obviously, if you'd like to meet our customer facing sales, we will want to bring.
Employees back to the office and are seeing Delta probably will slow it down, but I don't think those impacts on our business.
Great. Thank you.
Thank you Tom.
Thank you again, everyone. If you have a question at this time. Please press star and then the number 1 key on your attached on the telephone.
We have another question from the line of Tim Horan from Oppenheimer. Your line is open you may ask your question.
Hi, Good evening. This is actually Edward Yang on behalf of Tim Horan.
Sure No..1 is early days, but could you provide an update on the Verizon relationship.
I think they were taking the catalog 1 and neo product from your portfolio, how is experienced in there and the opportunity to expand that business.
I can share some but still but I can tell you the day programs ongoing web.
I assume that we continue to create trust could sink.
Verizon like bolt on products and our people.
And.
Without giving more information I can tell you that while we are doing that there was some discussion about other opportunities.
When it will be more mature we gladly.
Sure This review, but overall, it's moving well.
Perfect and then as a follow up could you comment on.
Some of the announcements that AT&T has had this quarter from pretty significant strategic moves.
The agreement with Azure for operators for instance, and also their <unk> agreement with dish what are the puts and takes.
And the effects on Amdocs business.
The most of them don't have I think an impact on amdocs and maybe some type of potential as you well aware.
Our partnering today with Microsoft.
It's AT&T and we are.
We are on the.
Obviously doing a lot of activity of translating and moving a lot of hundreds of AT&T application to the cloud this partnership with Microsoft to to the.
Microsoft's Azure platform.
Yes.
Zinc.
I cannot tell you right now specifically, but I think this agreement between AT&T.
2.
Microsoft and the net of domain, probably create some opportunities for us, giving the fact that we have very good understanding.
Of the environment and AT&T, given our experience of developing on apps together with AT&T. So I don't see any headwind on if any you see some opportunity.
Thank you.
Thank you Sir we have another question from the line of Tom Roderick from Stifel. Your line is open you may ask your question.
Hi, Brian.
And for Max has on its on for Tom. Thanks for taking my questions I wanted to start following up with that and just thinking about the AT&T and T. Mobile opportunity you mentioned quite a few wins.
Agreements with them this quarter, but just how much room is there left to grow with that relationship and kind of a merger going on.
So I think I can give you a couple of answers a everything that we're doing right now both AT&T and T mobile adjusted very initial stages, we just we.
We talked about the modernization sidekick bolstering AT&T and T mobile is obviously and Verizon that.
Started the last year and we on enjoining. This tailwind because we were selected by both to be the main monetization system for the consumer platform and T. Mobile also on the B to B platform.
So this project is a starting so the vast majority of the activity is still ahead of us.
On top of it I think that day.
There is a lot of opportunities on top of the existing activity and a good example of this we announced the deal with AT&T.
The quality engineering testing environment that we have.
On above and beyond we were doing so far.
We are moving to 70 mobile and getting additional business on top of the.
This 1 I think this time, we discussed the zero touch operation environment, an ideal so billings. So the answer is yes. There is a gloom there very much room to grow the existing activities and additionally, the activities that we mentioned which is a huge.
The relation of all the consumer businesses.
Both in T mobile on AT&T and T. Mobile also the B to B. This project just started this year.
Really initial stages and we see a lot of course ahead of us.
Got it and then just thinking about that and.
On <unk> being led by the U S. How should we look at the geographic growth going forward I think you said that open.
Open market predominantly a U S business, so theres been kind of a depression, there, but should we expect a surge in U S activity to kind of catch up for growth that you're experiencing in Europe and the rest of the world.
So just to clarify what we're providing.
On a pro forma indications, it's taking out the open market from the comparable periods in order to talk about the trends so the underlying trend that we're doing.
The pro forma adjustments for the comparable periods in which we had open market. So in order to compare apples to apples, we're seeing growth in all key regions.
We are seeing growth in North America in Europe, and in the rest of the World and are also forming also this quarter also if you can look as you can see sequentially. All 3 regions grew if you would do the year over year on a pro forma basis, all 3 regions grew so.
So we're very happy about the growth overall being down from the key region and just to add the things that Josh.
Generally speaking we are very happy with the open ex acquisition. We always has a lot of respect to open on before we acquired them now.
Part of Amdocs I don't think there is any solution in the market that is even close to the policy of charging solutions cloud based offering relative to the number 1 top notch share.
Sulfur in the market there is a lot of demand and I think it is going very well for us.
Got it thanks.
Thank you Sir no further questions at this time I will now turn the call back to Mr. Matt Smith for closing remarks, Sir.
Yes, thanks, everybody for joining the call this evening and for your interest in Amdocs and we do look forward to hearing from you in the coming days and if you have any additional questions. Please call the Investor Relations group and with that have a great evening, and we'll wrap up the call ex.
Ladies and gentlemen. This concludes today's conference call. You may now disconnect. Thank you for participating you have a per day.
Great.
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