Amdocs Q3 2025 Earnings Call Transcript: Revenue Down 2%, Services Business Up 5%

Amdocs Limited reported Q3 2025 earnings, with CEO Shuky Sheffer highlighting business and financial achievements. The company's presentation and prepared remarks are available on its investor relations website. CFO Tamar Rapaport-Dagim will discuss financial information that is not prepared in accordance with GAAP. Amdocs' third quarter earnings release will also be furnished with the SEC on Form 6-K.

Amdocs Limited, a leading provider of software and services to communications and media companies, reported its third quarter (Q3) 2025 earnings on July 2, 2025. The company's revenue for the period was $1.14 billion, down 8.4% year-over-year (YoY) as reported but up 3.5% YoY on a pro forma constant currency basis. This performance was above the midpoint of the company's guidance range of $1,110-$1,150 million, even after adjusting for positive impacts from foreign currency movements [1].

The company's managed services revenue of $771 million, which accounted for approximately 67% of total revenue, grew by 4.1% YoY. The company also reported a record revenue of $189 million in Europe, up 7.7% compared to last year's third quarter. GAAP diluted earnings per share (EPS) was $1.39, above the guidance range of $1.30-$1.38, while non-GAAP diluted EPS was $1.72, above the midpoint of the guidance range of $1.68-$1.74 [1].

Amdocs' GAAP operating income was $202 million, with a GAAP operating margin of 17.7%, up 360 basis points compared to last year's third fiscal quarter. Non-GAAP operating income was $245 million, with a non-GAAP operating margin of 21.4%, up 280 basis points compared to last year's third fiscal quarter [1].

The company's free cash flow for the quarter was $212 million, comprised of cash flow from operations of $241 million and net capital expenditures of $29 million, including $19 million of restructuring payments. The company repurchased $135 million of ordinary shares during the third fiscal quarter [1].

Amdocs' twelve-month backlog was $4.15 billion at the end of the third quarter, up 3.0% YoY on a pro forma basis, adjusting for the phase out of certain business activities. The company expects its fiscal 2025 revenue outlook to be between 10.0%-9.0% YoY as reported and 2.4%-3.4% YoY in pro forma constant currency. Amdocs reiterates its fiscal 2025 target for double-digit total shareholder returns [1].

The company's CEO, Shuky Sheffer, highlighted the company's achievements in Q3, including a successful cloud migration for Bell Canada and the go-live of a B2B platform deployment for Optus in Australia. Sheffer also noted the company's recent wins in strategic GenAI-related deals and its continued focus on operational excellence [1].

Amdocs' CFO and COO, Tamar Rapaport-Dagim, discussed the company's financial results and the impact of certain business activities on the company's revenue and backlog. She noted that the company's 12-month backlog is healthy, and the company expects to meet its double-digit growth target in cloud for the year [1].

Amdocs' fourth quarter (Q4) 2025 revenue guidance is $1,125-$1,165 million, with GAAP diluted EPS guidance of $1.41-$1.49 and non-GAAP diluted EPS guidance of $1.79-$1.85. The company's full year (FY) 2025 revenue growth guidance is 2.4%-3.4% YoY on a pro forma constant currency basis [1].

References:
[1] https://investors.amdocs.com/news-releases/news-release-details/third-quarter-results-fiscal-2025