Amdocs Q4 Earnings Meet Estimates: Will Dim Guidance Pull Stock Down?

Core Viewpoint - Amdocs reported mixed financial results for the fourth quarter of fiscal 2024, with earnings meeting expectations but revenues slightly missing consensus estimates, leading to a cautious outlook for fiscal 2025 [1][2][3]. Financial Performance - Amdocs' fourth-quarter fiscal 2024 non-GAAP earnings were $1.70 per share, a 19.7% increase year over year, matching the Zacks Consensus Estimate [1]. - Revenues for the fourth quarter were $1.264 billion, missing the consensus mark by 0.17%, but showing a year-over-year increase of 1.7% [2]. - For fiscal 2024, total revenues reached $5.005 billion, slightly below the consensus estimate, with a year-over-year growth of 2.4% [8]. Regional Performance - North America generated revenues of $835.8 million, accounting for 66.1% of total revenues, with a year-over-year increase of 0.2% [5]. - Europe contributed $184.1 million (14.6% of total revenues), up 4.9% year over year [5]. - Revenues from the Rest of World (RoW) were $244 million (19.3% of total revenues), also reflecting a 4.9% year-over-year growth [5]. Operational Metrics - Managed services revenues rose 0.5% year over year to $721.4 million, with a backlog of $4.06 billion, up 2.5% year over year [6]. - Non-GAAP operating income increased 6.8% year over year to $236.2 million, with an operating margin of 18.7%, expanding by 90 basis points [7]. Guidance and Outlook - For Q1 fiscal 2025, Amdocs expects revenues between $1.095 billion and $1.135 billion, with a midpoint of $1.115 billion, below the consensus estimate of $1.27 billion [10]. - Fiscal 2025 revenue guidance indicates a potential decline of 7.7% to 10.9% year over year, contrasting with the consensus estimate of a 3.6% increase [11]. - Non-GAAP earnings per share for fiscal 2025 are projected to grow between 6.5% and 10.5%, with a consensus estimate of $7.06 per share [11]. Balance Sheet and Cash Flow - As of September 30, 2024, Amdocs had cash and short-term investments of $514.3 million, an increase from $502.2 million as of June 30, 2024 [9]. - Free cash flow for the quarter was reported at $192.1 million, up from $175 million in the previous quarter [9].