Amdocs: Fiscal Q1 Earnings Snapshot - A Mixed Bag of Results and Outlook

Amdocs Limited (NASDAQ:DOX), a leading provider of software and services to communications and media companies, reported its fiscal Q1 2025 earnings on February 4, 2025. The results offered a mix of positive and negative developments, with the company's revenue and profitability showing contrasting trends. Here's a snapshot of Amdocs' fiscal Q1 earnings and the key takeaways:

Revenue and Profitability:

* Revenue of $1.11 billion, down 10.9% YoY as reported and up 1.7% YoY in pro forma(1) constant currency(2)
* Managed services revenue of $729 million, equivalent to approximately 66% of total revenue and up 0.9% as compared to last year's first fiscal quarter
* GAAP diluted EPS of $1.33, above the guidance range of $1.20-$1.29
* Non-GAAP diluted EPS of $1.66, at the higher end of the guidance range of $1.61-$1.67
* GAAP operating income of $199 million; GAAP operating margin of 17.9%, up 900 basis points as compared to the fourth fiscal quarter and up 310 basis points as compared to last year's first fiscal quarter
* Non-GAAP operating income of $235 million; non-GAAP operating margin of 21.2%, up 310 basis points as compared to last year's first fiscal quarter and up 250 basis points sequentially

Twelve-Month Backlog and Cash Flow:

* Twelve-month backlog of $4.14 billion, up approximately $80 million sequentially and up 2.7% YoY on a pro forma(1) basis
* Free cash flow of $78 million, comprised of cash flow from operations of $106 million, less $27 million in net capital expenditures(4), including $23 million of restructuring payments; reiterates full year fiscal 2025 free cash outlook of $710 million to $730 million, excluding restructuring payments

Outlook and Dividend:

* Expects fiscal 2025 revenue outlook of (11.6)%-(8.5)% YoY as reported and reiterates fiscal 2025 revenue growth outlook of 1%-4.5% YoY in pro forma(1) constant currency(2)
* Reiterates fiscal 2025 target for double-digit total shareholder returns(3)
* Board approved a 10% increase in the Company's quarterly cash dividend payment from $0.479 per share to $0.527 per share, anticipated to be first paid in April 2025, subject to shareholder approval at the January 2025 annual meeting



Key Takeaways:

1. Amdocs' revenue and profitability showed contrasting trends in fiscal Q1 2025, with revenue down YoY but profitability up significantly.
2. The company's managed services business remained a significant contributor to its overall revenue and profitability, with managed services revenue accounting for approximately 66% of total revenue.
3. Amdocs' twelve-month backlog and free cash flow provided positive signals, indicating strong sales momentum and cash generation.
4. The company reiterated its fiscal 2025 revenue growth outlook and target for double-digit total shareholder returns, despite the mixed results.
5. Amdocs' board approved a 10% increase in the Company's quarterly cash dividend, reflecting the company's confidence in its financial performance and outlook.

In conclusion, Amdocs' fiscal Q1 2025 earnings offered a mixed bag of results and outlook, with revenue and profitability showing contrasting trends. Despite the mixed performance, the company reiterated its fiscal 2025 revenue growth outlook and target for double-digit total shareholder returns, indicating its confidence in its long-term prospects. Investors should closely monitor Amdocs' future developments and the broader market trends to assess the company's potential for long-term growth and value creation.