Q4 2023 Amdocs Ltd Earnings Call

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Speaker 1: Oh no.

Okay.

Speaker 2: Thank you for standing by and welcome to MDOC's fourth quarter fiscal 23 conference call. At this time, all participants are on listen-only mode. After the speaker's presentation, there will be a question and answer session.

Thank you for standing by and welcome to the Amdocs fourth quarter fiscal 23 conference call. At this time all participants are in listen only mode. After the speaker's presentation there'll be a question and answer session.

Speaker 2: To ask a question at that time, please press star one one on your telephone as reminded.

Can I ask a question at that time, Please press star one on your telephone.

Today's call is being recorded.

Speaker 2: I will now turn the conference to the host, Mr. Matt Smith, Head of Investor Relations. Please go ahead.

Now I'll turn the conference Mr. Matt Smith head of Investor Relations. Please go ahead.

Speaker 3: Thank you, operator. Before we begin, I need to call your attention to our disclaimer statements on slide two of the presentation. Those that some of the comments today may be forward-looking statements and are subject to risks and uncertainties, including as described in Amdox's FTC filings. And then we will discuss certain financial information that is not prepared in accordance with GAAP.

Before we begin I need to call your attention to our disclaimer statements on slide two presentation.

Some of the comments today may be forward looking statements that are subject to risks and uncertainties, including us describing amdocs.

Ireland and then we will discuss certain financial information that is not prepared in accordance with GAAP.

Speaker 3: 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 6K.

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 FCC our form 6K.

Yeah.

Speaker 3: Participating on the call with me today are Shuki Shepherd, President and Chief Executive Officer of Andos Management Ltd. and Tamar Rappaport Degim, Chief Financial and Operating Officer.

Yeah.

It's been on the call with me today are President and Chief Executive Officer of Amdocs Management Limited and Tomorrow before the game Chief financial and operating officer.

Speaker 3: For today's earnings call, we are providing a presentation which can be found on the investor relations section of our website, and as always, a copy of today's prepared remarks will also be posted immediately following the conclusion of this call. On today's agenda, Shuki will recap our business and financial achievements for the four-year fiscal 2023, and we'll update you on the continued progress we've made executing against our strategic growth framework.

For today's earnings call, we are providing a presentation, which can be found on the investor Relations section of our website. There's a wide a copy of today's prepared remarks will also be posted immediately following the conclusion of this call on today's agenda will recap our business and financial achievements for the full year fiscal 2023.

Based on the continued progress we've made executing against our strategic growth framework, including our exciting developments in climate.

Speaker 3: including exciting developments in cloud and generative AI.

Speaker 3: We will finish by commenting on our financial outlook to the full fiscal year 24, after which tomorrow we'll provide additional details on our fourth quarter financial performance, our forward guidance, and our continued commitment to ESG. And with that, I'll

We keep them finish by commenting on our financial outlook for the full fiscal year 'twenty four.

Tomorrow will provide additional details on our fourth quarter financial performance are forward guidance backend commitments from ESG and without.

Speaker 4: Thanks, Matt. And good afternoon to everyone joining us on the call today. To begin, I want to sincerely thank our talented and diverse group of global employees for a successful 2023 in which we continue to bring value to our customers while developing the innovative technology that forms the backbone of today's seamless digital world.

I'll turn it over to Judy.

Thanks, Matt and good afternoon to everyone joining us on the call today.

To begin I want to sincerely, thank our talented and diverse.

Global employees.

Fiscal 2022 feet in which we continue to bring very sarcastic why developing innovative technology that supports the backbone.

He came to speed up.

Speaker 4: More so, I would like to express my deep gratitude to our employees in Israel, which in the days following the horrific attack on October 7th, have shown tremendous resilience, dedication, and commitment to AMDOS and ISHA.

Also I would like to express my deep gratitude.

I used to use way.

In the days following the recent cut back on October 7th they've shown tremendous resilience dedication and commitment to Amdocs and shop.

Speaker 4: My heartfelt sympathies go to all of those who have lost loved ones or are directly suffering because of this terrible event.

My heartfelt sympathies go out to all of those who have lost loved ones well directly stopped right because if you still believe that.

Speaker 4: As a global company, we support a development center around the world. I am proud of the way Amdocs family has come together to support one each other in recent weeks, and we will continue to give absolute priority to the safety and well-being of our people, doing everything necessary to ensure they have the support they need to navigate this difficult time.

It's a global company.

Support and development sector around the world I'm proud of the way Amdocs family has come together to support each other missile space and we will continue to give absolute.

Safety and wellbeing of our people.

Everything necessary to ensure they have all the litigations.

Yeah.

Speaker 4: With that said, I am keen to report solid fourth quarter results consistent with our guidance, wrapping up another strong year of healthy, profitable revenue growth and robust free cash flow generation in fiscal 2020. Summarizing the fiscal year,

But with that said I'm pleased to report solid fourth quarter results consistent with our guidance breaking up and not as healthy.

Healthy profitable revenue growth and robust free cash flow generation in fiscal 'twenty.

Summarizing this fiscal year highlights and spikes.

Speaker 4: Record revenue of approximately $4.89 billion grew 7.7% in constant currency as we supported our customer multi-year journey to the cloud, digital modernization, network automation, and the deployment of monetization of 5G and fiber network.

Revenue of approximately $4 eight 9 billion grew seven 7% in constant currency as we supported our customer loyalty and journey to the cloud digital modernization, that's what automation into deployment.

We will fight and fight the nationals.

Speaker 4: We are also excited to report that the revenue from cloud activities grew at a double digit rate and exceeded 20% of our Amdocs total revenue for the first time in fiscal 2021.

I'm also excited to report that revenue from cloud activities.

Double digit rates and exceeded 20% of our total revenue.

For the first time in fiscal 'twenty, it's basically.

Speaker 4: Closing 2011's backlog was record $4.15 billion, up approximately 4.5% for a year ago, and we delivered double-digit non-gap diluted EPS growth of 11.5%, well above the 10% midpoint of our original outlook, reflecting top-line growth, margin expansion, and our consistent cash return to shareholders.

But all these papers backlog was that calls for one 5 billion.

We estimate the four 5% four years ago.

The email.

non-GAAP diluted EPS goals.

Five we're at about 8% midpoint of our original outlook.

<unk> talked about gross margin expansion and a consistent cash return to shareholders.

Speaker 4: Turning to slide 8, Instance 2023 was another year of a strong market recognition and many key wins as we continue to play a key role in our customer modernization journey.

Turning to slide eight.

23 was another strong market like Alicia and many key wins as we continue to play a key role in our customer level designation Jones.

Speaker 4: We significantly expanded activities within T-Mobile cloud-based digital transformation and continue to work with AT&T's multi-year modernization.

We significantly expanded activities within T mobile cloud based digital transformation and continue to fight. It was AT&T is multi tenancy.

Speaker 4: Additionally, we won major awards at Bell Canada, 3UK, Globe, and PTT in the Philippines, and many other customers, including partnership with Disney, which handles ubiquities, providing a direct-to-consumer platform.

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Additionally, we won major awards based paradigm.

Lee U K global Pvp, the Philippines, and many other cost of sales, including partnership with Disney, which Andy will speak with you is providing a direct to consumer platform support.

Speaker 4: Our global breadth of activities in Castle Ruin translated to a strong performance across regions in fiscal 2020.

Our global presence activities in castaway translated to a strong performance across the region in fiscal 2023.

Speaker 4: North America has a record deal, as did Europe , which delivered strong double-digit growth as we progressed several armamentation projects on behalf of leading operators like Vodafone, Wintra in Italy, and PPF Group in multiple affiliates.

So in many cases local deal as did Europe, which delivered strong double digit growth as we progress several onboard. This important just on behalf of leading operators like Vodafone will enjoy an entity and PPA will be multiple appeal affiliates.

Speaker 4: Less of the world was sequential in Q4, delivering its strongest quarter in four years as we supported activities at GLOBE and PDT in the Philippines and N1 in Singapore.

The rest of the world will sequentially in Q4, delivering strongest quarter three four years.

As we supported our activities globally.

The teams are involved in Singapore.

Speaker 4: For fiscal 23, overall, the rest of the world was lower.

23 overall rest of the world was lower for the year.

Speaker 4: Focused execution was another hallmark of Fiscal 2023, as measured by a record number of project milestone achievements. Andros will continue to support 5G fixed wireless across expansion in North America, including launch at T-Mobile and AT&T, as well as the strategic mobile offering of Comcast, Charter.

What was the execution was another hallmark of fiscal package rate as measured by the number of project milestone achievements.

We continue to support <unk> wireless a course expansion in North America, including the launch at T mobile and AT&T as well as the strategic all vital for April forecast childhood epilepsies.

Speaker 4: Overseas, we execute successful deliverables at the UK, Vodafone, ExxonMobil in Southeast Asia, and many others.

<unk> success will deliver but it's a key U K waterfall extra put in southeast Asia and maybe others.

Speaker 4: Pennant Services has another record year, which includes recent multi-year expansion in the UK and expansion in Europe all over the Netherlands, as well as AT&T, Cricket, Dish Network, Globe Telecom, and other customers as reported earlier in the year.

And it sounds like.

Microbial which include at least with your expansion at the U K and expansion you're wonderful either less sweaters AT&T cricket dish network telephone and I'll just customer reported earlier in the year.

Speaker 4: We also strengthened our managed services offering, launching our next generation M-Docs cloud management platform, which integrates generative AI capabilities from our image framework to enhance operating efficiency and agility.

We also strengthened our managed services offering launching a next generation <unk> cloud management platform, which is a great general keep AI capabilities for my roommates framework to enhance operating efficiency and agility.

Speaker 4: Now, moving to slide nine, I would like to update you with respect to our growth strategy, the aim of which is to bring the market-leading innovation our customer needs to accelerate the journey to the cloud.

Now moving to slide nine I would like to update you with respect to our growth strategy, which is to be the market innovation.

Our customer needs to accelerate the gen. Two the trial.

Speaker 4: create seamless digital experiences for consumer and B2B, largely monetize new 5G services, and deliver dynamic, connected experiences with real-time automated network.

Great.

Our experiences for consumers.

Lounge, and monetize new <unk> services and <unk>.

Dynamic connected experiences with real time somebody said that falls.

Speaker 4: Let me begin our webinar with generative AI, which following the strategy we outlined last quarter, I would like to provide an update as we accelerate execution across the various domains.

In a way that we cannot debate.

Which following the strategy, we outlined last quarter I would like to provide an update as we accelerate execution across the various domains.

Simple finance they don't you may ask about the gene therapy dose.

Speaker 4: First, the infusion of generative AI into our CES product suites, including compiled capabilities and gen AI native functions in flagship products via enterprise catalogs, CPQ, and monetization plus.

These huge general general debate.

Yes.

Including copilot capabilities, and Jen Nike functions in flagship products.

Scott, a little CPU and monetization platforms.

Speaker 4: As a reminder, all of these capabilities are powered by our recently launched AMAZE Gen AI framework, which provides our profiling telco taxonomy that improve accuracy and ensure context-aware response.

If somebody might do all of these capabilities are powered by our recently launched a basic framework, which provides our propriety turbotax salomi improved accuracy and issue a context awareness sponsors.

Speaker 4: A library of industry-tabled use cases gives the package common functionality.

The library of industry titled use cases keeps this packaged functionality in it.

Speaker 5: And importantly, a robust transfer design layer that provides data security, observability, and control.

Ultimately it will pass.

This provides data security of their mobility and controls.

Speaker 4: Second, we are providing a foundation that leverages generative AI to address key telecom industry challenges by bringing together our deep telecommunication expertise and unique tests for taxonomy to help our customers accelerate their adoption of generative AI.

Second we are providing the foundation that leverages <unk> to address key telecom industry challenges by bringing together a lot of deep communication expertise and unique telcos that suddenly so what about customer accelerate their adoption of generative AI.

Speaker 5: Fair, we are building strategic partnership in the space. We clearly allow for our engagement with micro...

Well, we have been strategic partnership in the space, we play into it also.

Speaker 5: Well, we are collaborating to get Microsoft capabilities into our customer engagement platform.

<unk> with Microsoft word.

We are collaborating with Microsoft capabilities into our customer engagement platform.

Speaker 5: by leveraging Microsoft's OpenAI capabilities across our portfolio.

Microsoft's at open AI capabilities across our portfolio.

Speaker 4: Today, we also announce a partnership with NVIDIA, a world leader in AI infrastructure.

Today, We also announced a partnership with <unk> a world leader in infrastructure.

Speaker 5: Together we will focus on utilizing the NVIDIA generative AI ecosystem to accelerate adoption and innovate to realize some of the industry's largest opportunities from network operations to customer care.

Together, we will focus on utilizing being he got Genesis Sheba AI ecosystem.

So there is adoption of innovate to realize some of the industries.

And of.

Ultimate opportunity story from Naples operation to customer care.

Speaker 5: In general, we are working alongside several flagship customers to prioritize high-value developments of generative AI.

We are working alongside several our flagship customers to prioritize high value development suggestive AI.

Speaker 5: trying to focus on where we expect to achieve meaningful financial and operational benefits for customers as a result.

Trying to focus on where we expect to achieve meaningful financial and operational benefits for customers ourselves.

Speaker 4: It's important to highlight the data plays an important role in the utility of generative AI. That then, we continue to execute on our data strategy, which focus on cleansing, normalization, and clarification of the best data generated and stored by our industry, while at the same time ensuring it is readily accessible for generative AI.

It is important to highlight the data plays an important role in the utility of <unk>.

And then we continue to execute on our data strategy, which focused on cleansing the monetization and calcification of the best data generated installed by our industry. While at the same time, ensuring it is relative is evident.

This has been while generally keeping items.

Speaker 5: Finally, we continue to grow our use of generative AI capabilities to drive productivity and efficiency across Amdocs organizations, particularly in software development and operations, and we expect to generate ongoing benefits.

Finally, we continue to want to use a generative AI capabilities to drive productivity and efficiency across Amdocs organization, particularly in software development and operations and we expect these generate to generate ongoing benefits.

Moving to the cloud with slide 10.

Speaker 5: customer momentum accelerate in fiscal 2020.

First of all the momentum accelerate in fiscal 2023.

Speaker 4: Reflecting ongoing cloud programs with AT&T and T-Mobile, a new engagement with 3UK, Waterford Island, Wintre, PLDT, Bell Canada, TELUS, and Cloud of Brazil. Our wind momentum continues.

Reflecting ongoing throughout all balanced with AT&T or T mobile a new engagement with three UK, Vodafone Ireland will trade Pvt, Bell, Canada, Tailors and cloud was the Halloween.

<unk> momentum continue in Q4.

Speaker 4: AT&T Mexico extended an agreement with Amdocs to provide ongoing operations and support services for Amdocs applications being moved to the public cloud.

AT&T, Mexico extended agreement with Amdocs to provide ongoing operational support services for Amdocs application being moved to the public cloud.

Speaker 4: Andros brought his role with Rogers in alignment with the real-time rating and metering program. This extended responsibility involves leading Rogers' cloud infrastructure to facilitate seamless processes such as CI-CD pipeline, network integration, and quality engineering, testing, and product deployment of services.

What do these <unk> in alignment with the retired racing and metering program. This extended responsibility evolves, but lagging Rogers cloud infrastructure to facilitate seamless processes, such as <unk> pipeline network integration and what is the engineering testing and pilot deployments of <unk>.

Speaker 4: Additionally, Australia TPG Telecom awarded Amdocs a multi-year deal to modernize and consolidate TPG's modernization platform on AWS, replacing the current

<unk>.

Additionally, Australia TPG telephone awarded Amdocs the ones that you build.

As we modernize and consolidate cpg's modernization platform on AWS, replacing the current incumbents.

Speaker 4: A growing list of cloud customer activities reflect M-DOCK's unique telco industry expertise, robust product offerings, leading web-scale provider partnerships, and an ability to remove complexity by delivering end-to-end, fully accountable cloud migration.

I'm wondering just of cloud customer activities reflect amdocs unique telco industry expertise robust Warner cooperate leading web scale provider partnerships and an ability to remove complexity by deliberately and to wait 40 Constable cloud migration paths.

Speaker 4: Moreover, we continue to invest in our offering as we aim to further accelerate the data split cloud journey. For instance, thermic providers now have the option to migrate their M-Docs classic applications to Microsoft Azure or Oracle Cloud Infrastructure.

We continue to invest in our offering as we aim to further accelerate data splits cloud journey.

All right.

Semi provides us the option to be delays of Amdocs graphics application to Microsoft Azure Oracle cloud these transactions, enabling them to leverage existing investments, while taking advantage of our <unk> portfolio.

Speaker 5: Enabling them to leverage existing investments while taking advantage while less than two years

Speaker 5: Additionally, I am pleased to announce the recent acquisition of Astadia, which accelerates our customer cloud offering to include highly sophisticated mainstream-to-cloud migration and modernization end-to-end from consulting to managed service.

Additionally, I'm pleased to announce the recent acquisition of <unk>.

Which accelerates our customers' cloud offering to include highly sophisticated mainframe to cloud migration and modernization and Dwayne from consulting to managed services.

Speaker 4: Moving to slide 11, Androx remains critical to enabling our customers' digital modernization journeys, including the B2B segment, where service providers have potential to improve their market position with next-generation IT, including the Androx Customer Engagement Platform we launched in partnership with Microsoft.

Moving to slide 11.

And also remain critical to enabling our customer data modernization journey, including the B to B segment, where service provided a potential to improve the market position with next generation.

Including the Amdocs customers issued platform village in partnership with Microsoft.

Speaker 4: Just a reminder, Endos is already progressing two of the world's largest B2B transformation projects in contrast in T-Mobile.

It is a reminder industries already progressing.

Of the worlds largest b to B transformation project in Comcast and T mobile.

Speaker 4: Another great example is Australia Optus, which recently elected to modernize its enterprise operation with Envloke's cloud-native B2B portfolio, enabling it to simplify and accelerate the same journey for Optus agents with end-to-end automated order fulfillment.

Another Great example, is Australia offices, which recently elected to modernize its enterprise operation with Amdocs cloud native B to B portfolio.

Enabling them to simplify and accelerate the <unk> gel for <unk> agents with end to end automated order fulfillment.

Speaker 4: Elsewhere, Endof is working with India's Bharti Erthan to accelerate digital transformation in implementing an innovative monetization platform and automating billing processes to enhance end-to-end user experience.

Elsewhere, <unk> Goldman with Lithia about yesterday, so accelerated digital transformation and implementing a you know basically.

Inflation platform and automated billing processes to enhance end to end user experience.

Speaker 4: In Dubai, we work with Etisalat by EN to revolutionize their in-store retail experience with one of the world's first AI-enabled 10-core autonomous stores, providing a personalized next-generation experience for shoppers. And Endless collaborates with Public Mobile, Canada's first 5G subscription phone services, for an easy application that enables customers to activate and manage their services completely digitally.

Dubai.

He said that but yeah.

Evolution is the install we did experience with one of the world's first AI enabled deadbolt with total store, providing a person like next generation experience for shoppers.

And that does put up rates with public bolt by Canada first strategy subscription for services or anything application that they need.

Customer to activate and managed ourselves completely digitally.

Speaker 4: Bringing together communication and media, Android Smart Case 1 platform is enabling A1 group to enter next week with the A1 portfolio services offering a cost-efficient smart home.

Bringing together communication and media annual smoke as one platform is everything Avon book strength through next week with the Avon portfolio services offering across six markets.

Speaker 4: Hughes, part of the Liquid team, earned its fourth Netflix Preferred Fulfillment Partner of the Year award for the Americas region, making them the highest performing partner since the program launched.

Jewish total delinquency and defaults.

And suppose next weeks, we felt fulfillment possible data hall for the Americas region, making it the highest performing partner since the program launched.

Speaker 4: Turning to 5G monetization on slide 11, slide 12. We continue to help service providers launch and monetize innovative offerings for the 5G standalone area.

Turning to slide <unk> organization on slightly slight tweaks, we continue to have service providers launch and monetize innovative offering for the five D Standalone area.

Speaker 4: M-DOCS currently has more than 20 cloud-based charging projects in production.

<unk> currently has more than 20 cloud based charging projects in production.

Speaker 5: across a range of public, private, and hybrid environments, including the limited speed in North America.

Of course, the range of public private and hybrid environments.

The limit CSP in North America.

Speaker 5: This quarter, we want a multi-year managed service extension with a leading take on sub-Saharan Africa, which includes a BSS modernization to monetize 5G and data products while improving capital satisfaction.

This quarter, we won a multiyear managed service expansion with a leading telco in sub Sahara Africa, which includes the BSS modernization to monetize by Jeep and data products, while improving customer satisfaction.

Speaker 4: ATN International from the Caribbean selected Ardux to transform their monetization operation, demonstrating people can step forward to achieving their strategic goals of becoming a truly customer-centric organization.

H M International the Caribbean selected Amdocs to transform their monetization operation demonstrating people to step forward to achieving the strategic goal of becoming a truly customer centric organization.

Turning to network automation on site Celgene itself 93 was the Eagles progress Julien mutually supportive and successful expansion of dish wireless despite the open ran network.

Speaker 4: FISL23 was a year of progress during which we supported successful expansion of this wireless 5G open R network, hitting and exceeding FCC commitments to reach 70% of the US population. Other islets include key projects with call technology in the UK, in Canada, Verizon, and the strategic acquisition of Tioco's service assurance business to strengthen our unique end-to-end service operational.

Net exceeding FCC commitments with 70% of population.

It includes key projects with call technology in the UK.

Ananda Verizon and the strategic acquisition of <unk> service assurance business to strength, our unique end to end service orchestration Oakland.

Speaker 4: More recently, Androx acquired Qualcomm Consulting, a U.S.-based digital transformation services and business consulting company primarily serving operators.

More recently and also quite welcome consulting the U S based digital transformation services with visa consulting company, primarily serving operators in North America.

Speaker 4: Finally, the goal is to move for AMTOPS, providing us with an expanded offering to better support telcos and newly emerging fiber operators.

Possibly the most move rentals, providing guests with an expanded offering to better support telcos and newly emerging five year operate those.

Speaker 4: that are focused on accelerating the rollout of fiber networks in the U.S. and the rest of the world. An example is SummitBot.

Our focus on accelerating the rollout of fiber networks in the U S and the rest of the awards and example is savvy broadband a Florida based fiber optics service provider, which has selected amdocs for a multiyear deal to athletes there'll be assessing how is this ecosystem.

Speaker 4: Florida-based fiber optics service provider, which has selected Amdocs for a multi-year deal to uplift their BSS and OSS.

Speaker 4: Today, we also announced that M-DOCKS has joined AWS Integrated Private Wireless as a strategic integrator, enabling service providers to unlock new innovations in mobile private networks for enterprise customers by bringing together M-DOCKS mobile private network solutions with AWS's reliable and secure infrastructure services.

Today, We also announced Amdocs with John AWS integrated private wireless is a strategic integrated enabling service providers.

Innovations in mobile private networks to our enterprise customers by bringing together <unk> mobile private network solution with AWS reliable and secure infrastructure services.

Speaker 4: Moving to slide 14, fiscal 23 can be summarized as a highly successful year in which we maintain a market's high win rates, accelerate customer and revenue

Moving to slide 14, this is our 20.

'twenty three can be summarized as a highly successful year in which we.

Maintain and markets high win rate.

Accelerate customer and revenue momentum in cloud.

Speaker 5: establish technology and ease of leadership in generative AI, and reinforce our customer reputation for superb project execution and seamless mission-critical operations.

Established technology and these are the leadership in general at Upi.

To reinforce our customer reputation for superior project execution, and seamless mission critical operation support.

Speaker 4: Taking a moment to review the current environment on slide 15.

Taking a moment to review the current environment on slide 16.

Speaker 4: Amdocs continues to serve large addressable markets, the size of which has expanded significantly in recent years, as we focus our strategy on delivering innovation to full-service providers to advance their journey to the cloud-based 5G and fiber networks, generative AI, and improved consumer and B2B experience.

I am just continues to sell large addressable market the size of which has expanded significantly in recent deals as we focused our strategy on delivering innovation and service providers.

Batesville journey to the cloud based by fiber networks that LTV and.

An improved consumer experience.

Speaker 4: Androx is also a relatively resilient business model with highly recurring revenue streams resulting from our support of mission-critical systems under long-term engagements, including many services.

It's also relatively resilient business model with high recurring revenue streams, resulting from our support of mission critical system under the longest under long term engagements, including managed services.

Speaker 4: To remind you, however, animals are not immune to an increased level of macrouncertainty and immunosuppression.

We my view always there and you'll see not immune to an increased level of macro uncertainty and industry pressure.

Speaker 4: Signs of which we shared with you last quarter, is some operators began to prioritize strategic modernization programs while reducing discretionary spending, including investment to enhance legacy.

Signs of which we share with you that.

Was there some operators begin to prioritize strategic model deflation programs, while reducing discretionary spending including investments to enhance legacy systems.

Speaker 4: Turning to our outlook on slide 16, we expect revenue growth within a range of 1% to 5% for the full fiscal 2021.

Turning to our outlook on slide 16, we expect revenue of loss within the range of 1% to 5% for the full fiscal 2024.

Speaker 4: On one hand, our full year outlook reflects the previously mentioned impact of Mark 1 certainty and industry pressure, as well as revenue headwinds attributable to reduce legacy system investment of roughly

On one hand.

Full year outlook reflects the previously mentioned impact of smartphones certainty industry question as well as revenue headwinds attributable to reduce legacy system investment of roughly 3%.

Speaker 5: With that said, we expect another year of double digits.

With that said.

We expect another year of double digits.

Growth in the cloud.

Cloud as being one is amdocs strategic growth pillars in the last few years has exceeded 20% of revenue in fiscal 2023, as we leverage our position as the industry's technology partner of choice for most of his strategic modernization Jones.

Speaker 4: As we shared before, we believe the industry is still in the early innings of the cloud journey, a slow-term shift to which will be increasingly fueled by the arrival of generative AI.

As we shared before we believe the industry still the early innings of the cloud journey as long term sheets to reach will be increasingly fueled by the arrival of <unk>.

Speaker 5: As we've shown in Fiscal 2023, our continued efforts to improve operational excellence through automation and other sophisticated tools are in desire.

SB shown in fiscal 2023 hour continue apples through global operational excellence, so automation and other sophisticated tools you think results.

Speaker 4: Added to which is the more recent potential of generative AI to further improve efficiency across our business.

Added to which is the more recent potential general deep AI with <unk>.

Thirdly improve efficiency wholesale business.

Speaker 4: As a result, we expect to accelerate the pace of profitability improvement in fiscal 2024 as reflected by our new outlook non-GAAP operating margin in the range of 18.1% to 18.7%, the midpoint of which is 60 basis points better than the 2023 result.

As soon as that.

We expect to accelerate the pace of profitability improvement in fiscal 2024 as reflected by our new outlook non-GAAP operating margin in the range of 18.1.

18, 7% the midpoint of which is 60 basis points better than the 2022 results.

Speaker 4: Additionally, we expect to maintain L2-cash conversion at roughly 100% in Fiscal 2024, and we expect to return the majority of free cash flow-to-share orders in the U.S.

Additionally, we expect to maintain LP to cash conversion of roughly 100% at fiscal 'twenty to 'twenty four and we expect to return the majority of free cash flow to shareholders in the year ahead.

Speaker 4: Overall, we are in a great position to deliver double-digit non-gap diluted earnings per share growth for the fourth consecutive year in fiscal 2024.

Overall.

We're in a great position to deliver double digit non-GAAP diluted earnings per share. It was for the fourth consecutive year in fiscal 'twenty 'twenty four.

Speaker 5: In addition, I am pleased to say that the board has today approved a 10% increase in our quarterly cash dividend payment, equating to an analyzed yield of roughly $2.3 billion.

In addition, I am pleased to say that the board has today approved a 10% increase in AR.

Quarterly cash dividend payment eight leading to an unrealized gain of roughly two 3%.

Speaker 4: With that, let me turn the call over to Tamar Orel-Elmar.

With that let me turn the call over to demand well in months.

Speaker 6: Thank you, Shuki, and hello everyone. Thank you for joining us.

Thank you Sue Kian Hello, everyone. Thank you for joining us.

Speaker 6: And this is our solid financial results for the fourth fiscal quarter, the highlights of which you can see on slide 18.

I'm pleased with our solid financial results for the fourth fiscal quarter, the highlights of which you can see on slide 18.

Speaker 6: Record Q4 revenue of approximately $1,243,000,000 was up 6.3% year-over-year in constant currency. On a reported basis, revenue increased 6.5% and was above the midpoint of guidance, including an immaterial impact from foreign currency movements compared to our guidance assumptions.

Record Q4 revenue of approximately $1 billion and $243 million was up six 3% year over year in constant currency.

Reported basis revenue increased six 5%.

It was above the midpoint of guidance, including an immaterial impact from foreign currency movements compared to our guidance assumptions.

Speaker 6: Revenue from the acquisition of Procum Consulting in late August was immaterial this quarter.

Revenue from the acquisition of problem consulting in late August was immaterial this quarter.

Speaker 6: On a geographical basis, North America delivered a record quarter.

On a geographical basis, North America delivered a record quarter.

Speaker 6: Europe delivered strong growth of nearly 20 percent from a year ago, but declined sequentially because of normal fluctuations in project activity.

Europe delivered strong growth of nearly 20% from a year ago.

A decline sequentially because of normal fluctuations in project activity.

Speaker 6: The rest of the world grew on a sequential and year-over-year basis to post its best quarter in more than four years, primarily due to improved activity in Southeast Asia.

Of the World grew on a sequential and year over year basis to posted its best quarter in more than four years, primarily due to improved activity in southeast Asia.

Speaker 6: Moving down the income statement, our non-GAAP operating margin of 17.8 percent was up 20 basis points from a year ago and unchanged as compared with the prior quarter. On the bottom line, non-GAAP

Moving down the income statement, our non-GAAP operating margin of 17, 8% was up 20 basis points from a year ago.

Unchanged as compared with the prior quarter.

On the bottom line non-GAAP diluted EPS.

Speaker 6: of $1.42 was slightly above the midpoint of guidance and included non-GAAP effective tax rate of 21.8% which as anticipated was above our annual target rate.

On $1.42 or slightly above the midpoint of guidance and included non-GAAP effective tax rate of 21, 8%, which as anticipated was above our annual target range.

Speaker 6: Note that non-GAP diluted DPS excludes restructuring charges of $46 million incurred in the quarter.

Note that non-GAAP diluted EPS excludes restructuring charges of 46 million incurred in the quarter.

Speaker 6: Diluted gap EPS was $0.86 for the fourth fiscal quarter, which was above the guidance range of $0.67 to $0.81, primarily due to lower than anticipated risk factor in charge.

Diluted GAAP EPS was <unk> 86 cents for the fourth fiscal quarter.

It was above the guidance range of 67 to 81, primarily due to lower than anticipated restructuring charges.

Speaker 6: Summarizing fiscal 2023 on slide 19, revenue grew 7.7% in constant currency in line with our most recent guidance, but slightly below the original 8% midpoint we anticipated at the start of fiscal year.

So otherwise in fiscal 2023 on slide 19 revenue grew seven 7% in constant currency in line with our most recent guidance, but slightly below the original 8% midpoint, we anticipated at the start of fiscal year.

Speaker 6: As a new point of disclosure, revenue from cloud activities grew a double-digit rate and exceeded 20% of Amdox total revenue for the first time in fiscal 2025.

As a new point of disclosure.

Revenue from cloud activities grew a double digit rate and exceeded 20% of Amdocs total revenue for the first time in fiscal 2000 Twenty's to me.

Speaker 6: Revenue from cloud activities includes modernization projects using our CES Suite or our cloud-enabled classic version.

Revenue from cloud activities includes modernization projects using our CES suite.

Or a cloud enabled classic versions.

Speaker 6: cloud consulting, cloud migration services, and cloud operations and work.

Cloud consulting cloud migration services and cloud operations and workloads.

Speaker 6: To clarify, in some cases, cloud revenue may also overlap with revenue for managed services when above activities are provided to our customers under a multi-year managed services arrangement.

To clarify in some cases cloud revenue may also overlap with revenue for managed services when above activities are provided to our customers and our multi year managed services arrangement.

Speaker 6: On a regional basis, North America and Europe had record years in fiscal 2023, but the rest of the world saw a slight decline of roughly 2% despite growth in South Asia.

On a regional basis, North America, and Europe had record years in fiscal 2023.

The rest of the world saw a slight decline of roughly 2%.

Despite growth in southeast Asia.

Speaker 6: Further highlighting the long term diversification of our business, while we continue to expand our business in North America, and while it is still our biggest region in fiscal 2023, six of our top ten customers were located outside North America, two of which were new logos added in the spring of 2020.

Further highlighting the long term diversification of our business.

While we continue to expand our business in North America, and while it is still our biggest region in fiscal 'twenty to 'twenty three six of our top 10 customers were located outside North America.

Two of which were new logos added in the last 10 years.

Speaker 6: For comparison, a decade ago, only two of our top 10 customers were outside North America.

For comparison, a decade ago only two of our top 10 customers were outside North America.

Speaker 6: Additionally, the number of countries in which we generate annual revenue of more than $40 million has almost doubled over the 10 years.

Additionally, the number of countries in which we generate annual revenue of more than $40 million has almost doubled over the 10 years.

Speaker 6: Some of these new countries added were Italy, Germany, Mexico, India, and Malaysia.

Some of these new countries outside.

Italy, Germany, Mexico, India and Malaysia.

Speaker 6: On the bottom line, we deliver double-digit non-gap diluted earnings per share growth of 11.5% in fiscal year 2023, exceeding 10% midpoint of our initial outlook for the year and driven by strong top-line performance, non-gap operating margin improvement, and the benefits of our share repurchase activity.

On the bottom line, we delivered double digit non-GAAP diluted earnings per share growth of 11, 5% in fiscal year 2023.

Exceeding 10% midpoint of our initial outlook for the year and driven by strong top line performance non-GAAP operating margin improvement and the benefits of our share repurchase activity.

Speaker 6: Moving to slide 20, 12 months backlog was a record high at $4.15 billion, up 4.5%

Moving to slide 20.

12 months backlog was a record high.

It's 454.15 billion up four 5%.

Speaker 6: On a sequential basis, our 12-month backlog was up by $10 million in Q4.

On a sequential basis, our 12 months backlog was up by $10 million in Q4.

Speaker 6: During QE4, we continue to sign deals with new logos and existing customers. Additionally, existing deals in Backlog are progressing and our managed services renewals remain at close to 100%.

During Q4, we continue to sign deals with new logos and existing customers.

Additionally, existing deals in backlog are progressing in our managed services renewals remain close to 100%.

Speaker 6: As a reminder, our 12-month backlog has roughly averaged around 80% of forward-looking 12-months revenue over the years, and has therefore traditionally served as a good leading indicator of our business.

As a reminder, our 12 months backlog was roughly averaging around 80% of forward looking 12 months revenue over the years and is therefore traditionally served as a good leading indicator of our business.

Speaker 6: Turning to slide 21, managed services closed out another record year with strong fourth quarter revenue of $718 million, equivalent to about 58% of total revenue.

Turning to slide 21 managed services closed out another record year with strong fourth quarter revenue of $718 million equivalent to about 58%.

Speaker 6: Our managed services engagement support the resiliency of our business with recurring revenue streams, 100% renewal rates and expanded activities under multi-year engagement.

Total revenue.

Managed services engagements support the resiliency of our business with recurring revenue streams.

100% renewal rates and expanded activities and they're multiyear engagements.

Speaker 6: A great example is 3UK, which I am pleased to say has appointed Amdocs as a single supplier to simplify its IT operations under a five-year deal, which extends our relationship following the business' recent IT transformation.

A great example is me okay.

I am pleased to say has appointed Amdocs as a single supplier to simplify its operations on their five year under a five year deal with.

Which extends our relationship following the business.

<unk> transformation.

Speaker 6: As another example, we recently signed a multi-year managed services extension with Vodafone Zygo in the Netherlands under which we will be responsible for Vodafone Zygo's business systems operations for fixed line and mobile customers.

And then another example.

We recently signed a multiyear managed services extension with Vodafone zero in the Netherlands.

Which one will be responsible for Vodafone Legals business systems operations for fixed line and mobile customers.

Speaker 6: Now turning to the balance sheet and cash flow highlights on slide 22.

Now turning to the balance sheet and cash flow highlights on slide 22.

Speaker 6: DSO of 69 days decreased by 5 days year over year in Q4 and decreased by 10 days sequentially.

DSO of 69 days decreased by five days year over year in Q4 and decreased by 10 days sequentially.

Speaker 6: Unbilled receivables is higher than deferred revenue by 86 million, aggregating the short-term and long-term balance.

Unbilled receivables is higher than deferred revenue by 86 million aggregating the short term and long term balances.

Speaker 6: As a reminder, the net difference between deferred revenue and unbilled receivables fluctuates from quarter to quarter in line with normal business activity.

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

Speaker 6: Reflecting strong execution, we reported free cash flow of $698 million for the full fiscal year 2023, comprised of cash flow from operations of $823 million, plus $124 million in net capital expenditures and others.

Reflecting strong execution with reported free cash flow of $698 million for the full fiscal year 2023 comprised of cash flow from operations of $823 million less 124 million in net capital expenditures and other.

Speaker 6: Fully reported free cash flow included non-recurring restructuring payments of $20 million, which was not assumed in our annual free cash flow guidance of $700 million for fiscal 2023.

Full year reported free cash flow included nonrecurring restructuring payments of 20 million, which was not assumed in our annual free cash flow guidance of 700 million for fiscal 2023.

Speaker 6: Overall, we ended the fiscal year with a strong balance sheet and a healthy cash balance of approximately 743 million dollars, including aggregate borrowings of roughly 650 million.

Overall, we ended the fiscal year with a strong balance sheet and a healthy cash balance of approximately $743 million.

Including aggregate borrowings of roughly $650 million.

Speaker 6: Moreover, we have ample liquidity to support our ongoing business needs while retaining the capacity to fund our future growth strategy, including the acquisition of Stadia, which closed in November for a net cash consideration of seven.

Moreover, we have ample liquidity to support our ongoing business needs.

While retaining the capacity to fund our future growth strategy, including the acquisition of <unk>, which closed in November for a net cash consideration of seven <unk>.

$75 million.

Speaker 6: Sorry, $75 million with additional consideration to be paid later based on achievements of certain performance metrics.

So a 75 million with additional consideration to be paid later based on achievement of certain performance metrics.

Speaker 6: Turning to capital allocation on slide 23, we repurchased $155 million of our shares.

Turning to capital allocation on slide 23, we repurchased 155 million of our shares.

Speaker 6: in the fourth quarter and paid cash dividend of 52 million dollars.

In the fourth quarter and paid cash dividends of $52 million.

Speaker 6: Overall, we returned a total of $689 million to shareholders through share repurchases and dividends in fiscal 2023, equating to almost 100% of reported free cash.

Overall, we returned a total of $699 million to shareholders through share repurchases and dividends in fiscal 2023, equating to almost 100% of reported free cash flow.

Speaker 6: Looking ahead, we expect free cash flow of approximately $750 million in fiscal 2024, which does not include remaining restructuring payments of approximately $26 million.

Looking ahead, we expect free cash flow of approximately $750 million in fiscal 'twenty 'twenty, four which does not include the remaining restructuring payments of approximately $26 million.

Speaker 6: Our free cash flow outlook equates to a conversion rate of approximately 100% relative to non-gap net income, and a healthy free cash flow yield of roughly 7.6% relative to Amdocs current market capitalization.

Our free cash flow outlook equates to a conversion rate of approximately 100%.

Additive to non-GAAP net income and a healthy free cash flow yield of roughly seven 6% relative to amdocs current market capitalization.

Speaker 6: Regarding our capital allocations in fiscal year 2024, we expect to return the majority of our free cash with the shareholders. This includes dividends for which we are pleased to announce the proposed ingress of 10% in our quarterly cash payments.

Regarding our capital allocations in fiscal year 'twenty 'twenty four we expect to return the majority of our free cash flow to shareholders.

Dividends for which we are pleased to announce the proposed increase of 10% in our quarterly cash payments.

Speaker 6: to a rate of 47.9 cents per share, subject to shareholder approval at the annual meeting in February and represent our 11th consecutive annual dividend increase since our first payment in 20.

Our rate of $47.09 per share.

Subject to shareholder approval at the annual meeting in February and represents our 11th consecutive annual dividend increase since our first payment in 'twenty.

12.

Speaker 6: Overall, I believe fiscal 2023 was another landmark year of Amdocs, which includes record high revenue, consistent profitability improvement, robust free cash flow generation, and strong double-digit growth in non-GAAP diluted earnings per share. Now, turning to our

Overall I believe fiscal 2023 was another landmark year of Amdocs, which includes record high revenue consistent profitability improvement robust free cash flow generation and strong double digit growth in non-GAAP diluted earnings per share.

Now turning to outlook on slide 24.

Speaker 6: To begin, we're continuing to closely monitor the prevailing level of macroeconomic, geopolitical, business, and operational uncertainty, which remains elevated in the current business environment.

To begin we are continuing to closely monitor the prevailing level of macroeconomic geopolitical and business and operational uncertainty, which remains elevated in the current business environment.

Speaker 6: That's the first quarter and full year fiscal 2024 financial guidance reflects what we consider to be the most likely outcome based on the information we have today, but we cannot predict all possible scenarios.

The first quarter and full year fiscal 'twenty 'twenty four financial guidance reflects what we consider to be the most likely outcome.

On the information we have today, but we cannot predict all possible scenarios.

Speaker 6: Beginning with the top line, we expect revenue growth within the range of 1.2% to 5.2% year-over-year in constant currency in fiscal 2024, the 3.2% midpoint of which is roughly half organic.

Beginning with the top line, we expect revenue growth within the range of one 2% to five 2% year over year in constant currency in fiscal 'twenty 'twenty four.

Three 2% midpoint of which is roughly half organic.

Speaker 6: We expect a stronger second half to the fiscal year based on our expected plan of execution for bills already in the 12-month backlog, plus new opportunities which we anticipate will convert to signed deals and contribute to revenue this fiscal year.

We expect a stronger second half to the fiscal year based on our expected plan.

Sure.

Already in the 12 months backlog, plus new opportunities, which we anticipate will convert to sign deals and contribute to revenue this fiscal year.

Speaker 6: We expect another year of double-digit cloud revenue growth in fiscal 2024. Additionally, our outlook assumes no material change in the current macroeconomic backdrop and the revenue headwind of roughly 3% attributable to reduced customer investments in legacy system enhancements, among other facts.

We expect another year of double digit cloud revenue growth in fiscal 'twenty 'twenty four.

Recently, our outlook assumes no material change in the current macroeconomic backdrop and the revenue headwind of roughly 3% attributable to reduced customer investments in legacy system enhancements among other factors.

Speaker 6: Our annual outlook includes first fiscal quarter revenue within a range of

Our annual outlook includes first fiscal quarter revenue within a range of.

Speaker 6: $1.225 billion to $1.265 billion and assumes a negative $5 million sequential impact from foreign currency fluctuations as compared to Q4.

One point to two 5 billion to $1 265 billion and assumes a negative 5 million sequential impact.

Foreign currency fluctuations as compared to Q4.

Speaker 6: On a reported basis, we expect full year revenue growth in the range of 1% to 5% year-over-year, which anticipates a small but unfavorable impact on foreign currency of approximately 20 basis points year-over-year.

On a reported basis, we expect full year revenue growth in the range of 1% to 5% year over year.

Which anticipates, a small but unfavorable impact from foreign currency of approximately 20 basis points year over year.

Speaker 6: Moving down the income statement, we anticipate quarterly non-GAAP operating margin within a new and improved annual target range of 18.1% to 18.7%, as shown on slide 25.

Moving down the income statement, we anticipate quarterly non-GAAP operating margin within a new and improved annual target range of 18, 1% to 18, 7% as shown on slide 25.

Speaker 6: Our new target range for fiscal 2024 continues the path of consistent margin expansion we have delivered over the years.

On your target range for fiscal 'twenty 'twenty four continues the path of consistent margin expansion, we have delivered over the years.

Speaker 6: Moreover, the 18.4% midpoint of our new range represents an accelerated improvement of 60 basis points as compared with a full year non-gap margin of 17.8% in fiscal 2023.

Moreover, the 18, 4% midpoint of our new range represent an accelerated improvement of 60 basis points as compared with our full year non-GAAP margin of 17, 8% in fiscal 2020 three.

Speaker 6: The improvement in margin will happen gradually through the year.

The improvement in margin will happen gradually through the year.

Speaker 6: This reflects the community benefit of our continual initiatives to improve operational excellence, organization, other sophisticated tools.

This reflects the cumulative benefit of our continued initiatives to improve operational excellence.

<unk> other sophisticated tools.

Speaker 6: and disciplined resource management, added to which we expect the implementation of GenAI to drive additional cost and efficiency improvements across our business.

And disciplined resource management.

Added to which we expect the implementation of journey II to drive additional cost and efficiency improvements across our business.

Speaker 6: Below the operating line, we anticipate that foreign currency fluctuations and cost of hedging will impact on non-GAAP net interest and other expense lines in the range of several million dollars on a quarterly basis.

Below the operating line, we anticipate that foreign currency fluctuations in cost of hedging when impact on non-GAAP net interest and other expense line in the range of several million dollars on a quarterly basis.

Speaker 6: We expect that our NAM gap effective tax rate will remain within an unchanged annual target range of 13 to 17 percent for the full fiscal year 2024.

We expect that our non-GAAP effective tax rate will remain within an unchanged annual target range of 13% to 17% for the full fiscal year 2024.

Speaker 6: Bringing everything together on slide 26, we expect non-gap diluted earning per share growth in the range of 8 to 12 percent for the full year fiscal 2024, the midpoint of which is expected to mark the fourth straight year of near double digit growth.

Bringing everything together on slide 26, we expect non-GAAP diluted earning per share growth in the range of 8% to 12% for the full year fiscal 'twenty 'twenty four the midpoint of which is expected to mark the fourth straight year of near double digit growth.

Speaker 6: Similarly, we expect to deliver double digit total shareholders return for the fourth year running in fiscal 2024, including our outlook for non-GAAP earning per share goals.

Similarly, we expect to deliver double digit total shareholder return for the fourth year running in fiscal 'twenty 'twenty four.

Our outlook for non-GAAP, earning per share growth.

Speaker 6: Plus a dividend yield of about 2.3% based on the newly proposed quarterly cash payment to be approved by shareholders at February's annual meeting.

Plus a dividend yield of about two 3% based on the newly proposed quarterly cash payments to be approved by shareholders at February This annual meeting.

Speaker 6: Moving to slide 27, this August , we published our latest CSR and ESG report for the period 2022 to June 2023, which we showcased with our second annual ESG webinar for investors in September .

Moving to slide 27. This August we published our latest CSR and ESG reports for the period 2022 to June 2023.

Which we showcased with our second annual ESG Webinars for investors in September.

Speaker 6: During Q4, we continued our focus on the environment, digital inclusion, and diversity, which represent key pillars of our ESG strategy.

During Q4, we continued our focus on the environment digital inclusion and diversity, which represent key pillars of our ESG strategy and.

Speaker 6: Among the highlights, we announced our path to carbon neutrality for both one and two emissions by 2024.

Among the highlights we announced our path to carbon neutrality scope, one and two emissions by 2024.

Speaker 6: launched a program to support over 1,000 women.

Launched a program to support over 1000 women.

Speaker 6: for Digital and Financial Inclusion in Mexico and recognize Hispanic Heritage Month, celebrating Latino communities in North America.

Our digital and financial inclusion in Mexico, and the recognized Hispanic Heritage month celebrating Latino communities in North America.

Speaker 6: I'd also like to make a new comment about actions we have taken following the terrible events in Israel on October 7.

I'd also like to make any comments about the actions we have taken following the terrible events in Israel on October seven.

Speaker 6: since which our primary concern has been the safety and security of our employees and their families and on providing support to them during this difficult time.

Same switch our primary concern has been the safety and security of our employees and their families and on providing support to them. During this difficult time.

Speaker 6: We are in continuous contact with all employees in Israel, sharing specific information about the support and services we can provide for them and their families.

We are in continuous contact with all employees in Israel sharing specific information about the support and services, we can provide for them.

Families.

Speaker 6: AMLOX is also supporting the wider community. Over the last several weeks, we have donated to mental and physical health care organizations and communities in Israel's south.

It looks is also supporting the wider community over the last several weeks you have donated to mental and physical health care organizations and communities in Israel South.

Speaker 6: Many AMDOPS employees have also volunteered their time to support evacuated families, local farmers, and other initiatives.

Many amdocs employees are also volunteered their time to support evacuate that families local farmers and our new initiatives.

Speaker 6: I've also been incredibly humbled and proud to hear from our employees worldwide, the vast majority of which are located outside of Israel.

I've also been incredibly humbled and proud to heal from all employees worldwide. The vast majority of which are located outside of Israel.

Speaker 6: With our support and development centers around the world, we have come together as one family to serve our customers seamlessly, providing 24 by 7 service and support to all our customers and business operations worldwide, without interruption.

With our support and development centers around the World, we have come together as one family to serve our customers seamlessly providing 24 by seven service and support to all our customers and business operations worldwide without interruption.

With that back to your shipping.

Thanks to model it.

Speaker 4: you can probably tell from our remarks today, we are pleased with our solid financial and operational performance in fiscal 2023, and we are looking forward to delivering the fourth consecutive year of double-digit non-gap earning per share growth in fiscal 2024. With that, we are

As you can probably tell from our remarks today, we are pleased with our solid financial and operational performance in fiscal 2023.

We're looking forward to delivering the fourth consecutive year of double digit non-GAAP, earning per share growth in fiscal 'twenty. Four is that we're able to take your questions.

Speaker 2: Thank you. Again, ladies and gentlemen, if you'd like to ask a question, please press star 1-1 on your telephone. Again, to ask a question, please press star 1-1. We do ask that you please limit yourself to one question and a follow-up. One moment, please.

Thank you.

Again, ladies and gentlemen, if you like to ask a question. Please press star one on your telephone again to ask a question. Please press star one one we do ask that you. Please limit yourself to one question and a follow up one moment. Please.

Speaker 2: Our first question comes from the line of Ashwin Shrekar of Citigroup, your line is open.

Our first question comes from the line of Ashwin <unk> of Citigroup. Your line is open.

Speaker 7: Thank you and good to hear from from both of you. I guess the first question I have is with regards to

Thank you and could be here from from both of you.

I guess.

The first question I have is with regards to.

Speaker 7: the double-digit EPS growth plus the dividend of course on top of that and the flexibility that you seem to have with regards to scaling up margin improvement to make up for the lower rev growth. How much visibility do you have into that scaling up of margin improvement in terms of each of the factors that you have?

The <unk>.

The double digit EPS growth plus the dividend of course on top of that.

And the flexibility that you seem to have with regards to.

Scaling up margin improvement to make up for the lower Rev Rec.

How much visibility do you have into that scaling up of margin improvement in terms of each of the factors that you have named.

Speaker 4: I'm actually good to hear you. And we have a very good visibility. As a reminder, we are talking for at least for the last three years about all the automation, the improvement we are doing, and then best-in-class processes, and many, many sophisticated tools that we are implementing post-urbanization, both on operation and development lifecycle.

Yeah.

Hi, Ashwin good to hear you and we have a.

Very good visibility.

As a reminder, we are talking for at least for the last three years about old automation improvements, we're doing in best in class processes and many many sophisticated tools that we have of it.

Implementing across the organization, both on operation and development lifecycle. Additionally, if you remember we announced already in Q3 that we are doing gave a cost cut.

Speaker 5: Additionally, if you remember, we announced already in Q3 that we are doing a cost-cut process in M-Docs that they actually almost completed in Q4.

A process in Amdocs that they actually were almost completed in Q4.

Speaker 5: I think another layer that we increasingly see impacting our portability is all the innovation that we see and the efficiency from generative AI. So you need to assume that the majority of the post-cutting, not all, but the majority was taking place already in Q4. So we wanted to bring it in a position that in 2024, we are going to realize all the benefits of this activity. So I would say, I would argue that it would be a very good thing.

I think another layer that we increasingly seeing it impacting our profitability is all the innovation that we see and they appreciate the format generally cube out so you need to assume that the majority of the cost cutting not all but the majority was taken place already in Q4. So we wanted to be in a position that we.

To play a 'twenty 'twenty four we were able to realize the full benefits of this of this activity.

I would say I would add there would be a very good visibility.

Speaker 7: understood and then want to get a little deeper into sort of.

Understood and then.

Want to get a little deeper into sort of the revenue growth range, 1% to 5% how much of that is.

Speaker 7: Revenue growth range 1 to 5%. How much of that is a, I guess, inorganic contribution? And with regards to the revenue headwind of the 3% that's going to attributable to.

It is a.

I guess inorganic.

Contribution and with regards to the revenue headwind of two 3% that's kind of attributable to.

Speaker 7: reduce customer investment in legacy for a system enhancement. Could you give an example of the kind of work that that might entail? And I know you mentioned cloud, but it would seem to me that in a time like this, you know,

Reduced customer investment in legacy sort of system.

Enhancement.

Give you an example.

Kind of work that that might entail and I know you mentioned cloud.

But it would seem to me that in a time like this.

Speaker 7: the whole range of what you have should be beneficial with regards to selling to clients, I mean, network automation and some of the other factors also. So, could you maybe… So, let me start with…

The whole range of what you have.

It should be beneficial with regards to <unk>.

Selling to new clients two minutes network automation and some of the other factors also.

So.

Could you give me those.

Yes.

Speaker 8: Let me start with the second question, because I forgot the first one. So the,

Out west.

Let me start with the second question because I forgot the first one so so.

Yeah.

Speaker 8: In most of our customers, and he's talking about our big customers, and this is like T-Mobile, AT&T, Vodafone, and many others across the world, we are in the last several years, started a very significant modernization program.

In most of our customers is talking about are big customer and this is.

T Mobile AT&T, you bought the phone and maybe auto exposed to the world.

We we got hurt.

The loss severity started the very significant modernization programs.

Speaker 4: They need to think that their customer was spending both in building the new platforms. This is the new, most all of them are cloud platforms.

Do you need to think that the customer was spending both in building. The new platform. This is the new most all of them are cloud platforms with the <unk>.

Speaker 8: with all the new capabilities of the M-Docs new platform, including some generative AI capabilities, while we continue to run from them in managed services, and both at the same time, we are doing development on the legacy platform that we are running.

All the new capabilities of the Amdocs, new platform, including some charity of AI capabilities, why we continue to answer them in managed services and both at the same time we are.

Doing development on the legacy platform that we're running for them by the way. This is a most of them. This is the system that will be a core system today, because the modernization program.

Speaker 4: By the way, in most of them, this is the system that are the core system today, because the modernization program are just starting, and we are in the process of building the new platform.

I'll just stop there because we are in the process of building the new Brussels.

Speaker 5: So at the same time, we spend money to develop both on the legacy platform and hence.

So at the same time to spend money with us both on the legacy platform enhancements and building. The next generation platform, which is the future although the operational.

Speaker 8: and building the next generation plus which is the future of all the operational parts.

Speaker 4: Now, what we shared with you already last quarter is that given the headwinds that everyone is experiencing because of the macro environment and some of the headwinds the industry is facing, they have done prioritization. So they want to double down on the monetization platform while reducing the spend on the legacy platform.

Now what we shared with you over the last quarter.

Given the headwinds.

Everyone is experiencing because of the macro environment.

Several days during the day the slate spacing.

Our organization so they want to double down all the whole digitization platform.

By reducing the spend on the legacy console.

I hope this is a bit clarify what we meant.

Speaker 6: With respect to the first question about the inorganic contribution, at the midpoint it's roughly half, coming from those recent acquisitions we talked about.

With respect to the first question about the inorganic contribution at the midpoint, it's roughly half coming from those recent acquisitions, we talked about.

Speaker 6: So we feel that looking in terms of the overall picture, on the one hand, we are very excited about our growth pillars. We talked about the cloud continuing to grow double digits. On the other hand, we do see some macro impact on this discretionary spending to enhancing legacy systems. But I think the important point is that our customers are modernizing and building the next generation stack with us.

So we feel that.

Looking in terms of the overall picture on.

On the one hand, we are very excited about our growth pillars, we talked about the cloud continuing to grow double digits on the other than we do see some macro impact.

On this discretionary spending to enhance and legacy systems, but I think the important point is that our customers are modernizing and building the next generation stack with us.

Speaker 6: So that's a really important factor as we're looking into the future, and we're continuing to see very good win rates with new customers joining us.

So that's really important in fact, as we're looking into the future.

And we're continuing to see very good win rate with new customers joining us.

Got it okay. Thanks.

Thank you one moment please.

Speaker 2: Our next question comes from the line of Paul Leoni of Bank of America. Your line is open.

Our next question comes from a lot of Polyone of Bank of America. Your line is open.

Speaker 9: Hi, I think it was me. I didn't hear the name.

Hi, I think it was me I Didnt hear the name.

Speaker 9: Two questions. First, hello, hello. Two questions. First, so cloud is at least 20% and growing at least 10%. So that means it contributes 2% to the growth.

Two questions.

Hello, Hello, two questions first.

So cloud is at least 20% and growing at least 10% so that means it contributes 2% to the growth.

Speaker 9: So if I take your guidance for next year and I remove the cloud, it's between minus one to plus three percent.

So if I take your guidance for next year and I remove the cloud.

It is between minus one to plus 3%.

Speaker 9: that's the growth for next year. So give us the historical perspective in times of slowdown. What happened to spending or what happens to amdocs when customers reduce spending?

That's the growth for next year, so well keep us the historical perspective in times of slow down what happens to spending or what happens to amdocs swing customers reduced spending.

Speaker 9: how long down cycles kind of lasted, and just in general, what did companies do and what they didn't do during slowdown?

How long down cycles kind of lasted and just in general what good companies do and what they didn't do during slowdowns.

Speaker 9: Another kind of follow-up question on the same topic is, do you think that this one is different given that the strength was so strong, I mean, the cycle was so strong in the last two years?

Another kind of follow up question on the same topic is it do you think that this one is different given that the strength was so strong I mean, the cycle was so strong in the last two years.

Speaker 9: Does it mean that maybe the slowdown is going to linger a little bit more than historical? I'm just asking it because we see it in other areas.

Does it mean that maybe the slowdown is going to linger a little bit more than historical.

I'm, just asking it because we see it in other areas.

Speaker 9: So that's my first question. My second question is quick. It's easy, it's about hedging.

So that's my first question My second question, it's quick it's easy it's about hedging.

Speaker 9: Can you tell us, given that there is a war in Israel, sometimes the currency kind of fluctuates. What's your hedging strategy? For how long do you do it? And what's typically the policy around it?

Can you tell us given that there is a war in Israel, sometimes the currency kind of fluctuate what's your hedging strategy for how long do you do it in and what's typically the policy around it. Thanks.

Speaker 8: Let me try to start with the first question and then Tamar will take the second.

But let me try and stop as the first question.

The amount.

We can take the second one.

Speaker 8: I don't necessarily agree to your mathematics. We grew over 70% last year. And you need to think that the cloud was part of the growth engine, a double-digit, if we did not disclose it. And now we're also expanding.

I don't necessarily agree to you.

The mathematics.

We grew over 7% loss and use of things that the cloud was part of the growth engine.

The double digit that you do not disclose the number also in 2023.

Speaker 8: Now, going to next year, when we talk about the impact of the 3%, and this is another phenomenon that I want to explain. The phenomenon is that when most of the legacy enhancement projects are part of, you know, it was like, I want to say like it was almost business as usual. I mean, we have large system that we are having all the time. We have teams in place. We are doing the projects. And the revenue was pretty much.

Now going to next year, when we talk about the impact of the 3% and this is another phenomenon.

To explain.

This phenomenon is that win.

The legacy enhancement.

Projects.

It looks like.

I want to say like a well almost business as usual I mean, we have large large systems.

Avi goes down with teams in place we're doing the projects and the revenue was the.

Speaker 5: When we have a headwind of 3% in this domain, you need to assume that to cut, this spending happens very fast.

Pretty much the Q when.

When we have the headwind of 3% in this domain and you need to assume it's two cats, you're spending had been very fast.

Speaker 8: So when customers decide, because of the pressure, to prioritize modernization over a legacy, the cutting spending is almost.

So when customers decide because of the pressure to.

He always does mobilization oakville.

<unk>.

Over the legacy.

Cutting spending is almost <unk> what was the acronym <unk>.

Speaker 5: On the other hand, all the new programs, and there are many of them, new wins that we won in actually last quarter and all the fiscal 23, it takes time to ramp these projects up. I can give you one example. We announced for UK, it's a very significant amount of services that we've signed last quarter. We are going, if I'm not correct, to start to recognize full revenue only towards the Q3 next year.

The new programs in many of them in new wins that we won and actually last quarter and they're all a early fiscal 'twenty three it takes time to ramp these projects up and then give it. One example, we announced the UK. It's a very significant managed services since we've signed last quarter.

We are going to start to recognize revenue only towards the Q3 next year.

Speaker 5: And we won a mini transformation program last year. We need to put the teams in place. We need to write paths to go through the phases. So sometimes it can take us a quarter or two.

We won a mini transformation program last year.

To put the teams in place we need to empower them to go through the phases. So sometimes it's going to take us a quarter or two.

Speaker 8: from the time that we win the project until we start to ramp up and recognize revenue. So the phenomena, while the headwind of the legacy revenue is almost immediate, replacing this revenue takes some time when you build up. This is why we also see that we see acceleration in sequential growth in half.

From the time that we read the project until we start to ramp up in the local guys living so the phenomena why the headwind of the <unk>.

Dan.

Legacy <unk>.

Revenue is almost immediate.

Placing these revenue will take some time when you build up this is why we also see that we see acceleration in sequential growth in half two.

Speaker 8: while we have all these ramp-up programs in place and all the wins that we've gone through in the last...

As always ramp up programs will be in place in all the ways that.

We've gone through a last year.

Speaker 8: Regarding the cycle, I don't think we can predict right now. As you are right, we've gone through this cycle for many years. I don't think if we predict this one will be longer than others. I can tell you another data point that I believe that at some point our customer will have to continue to invest also in legacy because right now this is the whole thing.

Decided to I don't think we can predict right now.

Right.

Gone through these cycles.

Many of these I don't think if we predicted this fund will be longer than others I can't tell you another data point.

I believe that at some point our customers will have to continue.

To invest also on legacy because because right now this is the whole system. This is how they compete in the market. So you cannot completely dry up legacy and at some point if you want to compete you need to invest.

Speaker 8: This is how they compete in the market. So you cannot completely dry up legacy. And at some point, if you want to compete, you need to invest. I think it's an important point that I want to mention. But I'm not sure I can tell right now if this cycle is longer or not, because we've been in this cycle before. And I think at some point, we have to invest, because the modernization program is taking years.

Its important point that I want to mention but I am not sure I can tell right now.

Cycle is longer or not because we've seen these cycles before and I think at some point it would have to invest because the modernization program taking years.

Speaker 5: You're talking a very, very complex modernization programs that until all the subscribers will be migrated from the legacy platform to the new one, it will take years. So I don't think that they can keep the legacy system without investment because this is the tools to compete right now. And Shuki.

Looking at very very complex motivation programs. This does <unk> all day.

Sky built will be migrated from the legacy platform to the new one it would take years. So I don't think that they can keep their legacy system yourself investment because this is the tools to compete right now.

And should keep on modernization programs.

Speaker 9: Sorry, if you don't mind, before the hedging, if you don't mind, just to follow up on what Shuki said. If a modernization program starts.

Sorry.

If you don't mind before before.

Before the hedging if you don't mind just to follow up on what you said.

Modernization program starts.

Speaker 9: then the customer continues at the scheduled pace. What's the risk that they say, you need to migrate customers to modern systems, et cetera. What's the risk that this part slows down or that it's more challenging for customers to slow down modernization program?

Then the customer continues.

The scheduled pace, what's the risk as they say.

You know you need to migrate customers to more than systems et cetera, what's the risk that this spark slows down or that it's more challenging for our customers to slowdown modernization.

Programs.

Speaker 8: We did not see any slowdown in modernization because, remember, when talking about modernization, this is moving the value for our customers. It's moving to the cloud, much more agent environment. As we mentioned already, all the new implementation of use cases

We did not see any slowdown in modernization because they met bill when talking about the modernization. The this is moving.

Value for our customers is moving to the cloud much more HR environment.

As we mentioned already.

All the new Plymouth.

The limitation of use cases.

Speaker 8: generative AI capabilities are targeted to new platforms and not to the legacy platforms. So if you want to get to these capabilities and to be able to successfully compete in the market with a very strong platform on the cloud, a very fast time to market, and many, many other things you need to modernize. We did not see any slowdown in modernization. If any, some customers resort to the ratio.

<unk> capabilities are targeted to new platform with most of the legacy platform. So if you want to get to this capability capabilities to be successfully to be able to successfully.

A compete.

Compete in the market. These are very strong.

Platform on the cloud.

Very fast time to market and many many other things.

Things you need to modernize we did not see any slowdown in utilization if any.

The acceleration.

Speaker 10: So just added from that point, drawing from past down scenarios, whether it's the financial crisis or even the midst of the COVID.

No just I listen that on drilling from past down scenario as well as the financial crisis, so well even in the midst of the coffee.

Speaker 3: We did not see any modernization projects slow down. So just to back up, what we are seeing right now is not surprising. And in terms of the- Did you get my point? Did you get my point that I just mentioned that when you replace, sometimes when you replace legacy revenue, sometimes it takes some time to catch up? I fully understand it. Now I understand.

We did not see any modernization cause a slowdown.

I'll just come back up I don't know, what we're seeing right now is not surprising.

And in Canada.

Did you get my point that I, just mentioned that they would you would place sometimes when you replace legacy revenue.

It takes some time to catch up.

I fully understand it now I understand it absolutely.

Okay.

Speaker 6: So regarding the currency and then our hedging in general, we are looking forward for hedging on an ongoing basis. So we're not waiting for a certain market opportunity as we want to protect the bottom line, which means practically in the near term, when we look, for example, on Q1 2024, or even on fiscal 24 as a whole, we're already coming into the year with pretty high coverage of our hedging.

Omar.

Well it is on the currency and then our hedging.

In general we are looking forward for our hedging on an ongoing basis. So we're not waiting for a certain market opportunity as we want to protect the bottom line, which means practically in the near term. When we look for example in Q1 2024 or even in fiscal 'twenty four as a whole.

Coming into the year with pretty high coverage of our hedging yes.

Speaker 10: Yes, taking advantage of weakness of currency, as we've seen now in the Israeli shekel, means we can improve the effective rate of our hedging for the latter part of 2024 and mainly for 2025, which, of course, we are doing as well.

Yes, taking advantage of weakness of currency as we stand now in the Israeli shekel means we can improve the effective rate because our hedging for the latter part of 'twenty four and mainly for 2025, which of course, we're doing as we speak.

Okay.

Thank you.

Yeah.

Speaker 2: Thank you. Again, ladies and gentlemen, if you'd like to ask a question, please press star 1-1 on your telephone. Again, to ask a question, please press star 1-1. One moment, please.

Thank you again, ladies and gentlemen, if you'd like to ask a question. Please press star one on your telephone again to ask a question. Please press star 111 moment. Please.

Speaker 2: Thank you. I'm showing no further questions at this time. Let's turn the call back over to Matt Smith for any closing remarks.

Thank you I'm showing no further questions at this time I'll turn the call back over to Matt Smith for any closing remarks.

Speaker 3: Thank you operator and thanks everyone for joining the call this evening. We do look forward to hearing from you very soon. And as always, if you have any additional questions, just reach out to us here in the IR group with that. Have a great evening.

Thank you operator, and thanks, everyone for joining the call. This evening, we do look forward to hearing from you very soon and as always if you have any additional questions just reach out to us here in the IR group with that and have a great evening.

Speaker 2: Thank you. Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect. Have a great day.

Thank you ladies and gentlemen, this does conclude today's conference. Thank you all participating you may now disconnect have a great day.

Okay.

Speaker 1: Thanks for watching!

Okay.

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