Amdocs (NasdaqGS:DOX) Update / briefing March 23, 2026 02:00 PM ET Company ParticipantsAnthony Goonetilleke - Group President, Technology and Head of StrategyLiliana Schwartz-Brunner - General Manager and Head of Global Strategic PartnersMatthew Smith - Head of Investor RelationsPilar Abalo - Global Head of ConsultingShlomo Rosenbaum - Managing DirectorTomer Zilberman - VP of Equity ResearchNone - Video NarratorConference Call ParticipantsTimothy Horan - Managing Director and Senior AnalystMatthew SmithEver ...

Core Insights - Amdocs Limited (DOX) is recognized as a strong buy tech stock, showcasing resilience in its financial performance despite macroeconomic pressures [1][4]. Financial Performance - Amdocs reported Q1 revenue of $1.156 billion, slightly exceeding the forecast of $1.15 billion, indicating strong operational performance [4]. - The company is focusing on long-term growth and aims to lead in generative AI, aligning its results with prior guidance [4]. Strategic Developments - Amdocs introduced aOS, an agentic operating system designed for telecommunications, which integrates generative AI into business, IT, and network operations [3]. - The company secured two new clients in Western Europe, enhanced its relationship with Vodafone Germany, and renewed a multi-year contract with T-Mobile, indicating strong client engagement [4]. Market Position - Amdocs is a global telecommunications software and services provider, offering cloud-native solutions, digital transformation, CRM, billing, and network automation to various service providers [5]. - The acquisition of Matrixx Software is expected to strengthen Amdocs' position with major clients such as Verizon, Telus, and Telefonica [4].

Industry Overview - The American tech industry entered 2026 with significant size and momentum, having received approximately $178 billion in venture capital in 2024, which accounted for 57% of global venture capital [2] - In 2024, around $314 billion was raised for startups, marking a 3% increase from 2023, indicating a robust recovery in late-stage investments, particularly in infrastructure and AI [2] - AI-focused startups represented 37% of all venture funding and 17% of deals in 2024, highlighting a capital shift towards compute, model training, and applied AI layers [3] Software-as-a-Service Market - The U.S. software-as-a-service market generated about $140.7 billion in revenue in 2024 and is projected to nearly double to $271.7 billion by 2030, reflecting a compound annual growth rate of approximately 11% from 2025 to 2030 [4] Company Highlights - D-Wave Quantum Inc. (NYSE:QBTS) has a market capitalization of $6.36 billion and is noted for its leadership in quantum annealing, with a price target upside of 93.05% [9][10] - D-Wave announced a $10 million, two-year enterprise quantum computing service agreement with a Fortune 100 company, focusing on developing quantum-powered applications [11][12] - Amdocs Limited (NASDAQ:DOX) has a market capitalization of $7.68 billion and a price target upside of 28.85% [13] - Amdocs reported Q1 revenue of $1.156 billion, slightly above the forecast of $1.15 billion, and emphasized its focus on long-term growth and generative AI leadership [16][17] - Amdocs introduced aOS, an operating system designed for telecommunications, which integrates generative AI into business and operational processes [15]

Financial Data and Key Metrics Changes - Revenue for Q1 2026 was $1.16 billion, a 4.1% increase year-over-year and 3.5% in constant currency, slightly above guidance [4][24] - Non-GAAP diluted earnings per share was $1.81, exceeding guidance due to a lower-than-expected tax rate [4][26] - Non-GAAP operating margin improved by 40 basis points year-over-year to 21.6% [24][26] - The 12-month backlog increased to $4.25 billion, up $60 million sequentially and 2.7% from a year ago [5][31] Business Line Data and Key Metrics Changes - Managed services revenue was $746 million, up 2.3% year-over-year, accounting for approximately 65% of total revenue [26] - The acquisition of MATRIXX Software contributed immaterial revenue in Q1 as the deal closed late in the quarter [24][26] Market Data and Key Metrics Changes - North America revenue increased nearly 4% year-over-year, marking the fourth consecutive quarter of sequential growth [24] - Europe saw a 17% year-over-year increase, driven by organic growth and the acquisition of Profinit [24] - The rest of the world experienced a decline year-over-year but showed slight improvement sequentially [24] Company Strategy and Development Direction - The company aims to position itself as a market leader in the GenAI era, focusing on generative AI and data services [4][8] - A new multi-year agreement with T-Mobile includes managed services, software development, and AI innovation [5][6] - The acquisition of MATRIXX Software for $197 million is seen as a strategic move to enhance billing and monetization solutions [7][8] - The company is focused on expanding its global customer footprint and diversifying its market presence [6][16] Management's Comments on Operating Environment and Future Outlook - Management expects revenue growth of 1% to 5% in constant currency for fiscal 2026, reiterating guidance despite macroeconomic uncertainties [17][32] - The company is closely monitoring customer demand and spending behavior in the current economic environment [16][32] - Management expressed confidence in the long-term strategy and leadership team, with a planned transition in executive leadership [18][19] Other Important Information - The company repurchased $146 million of its shares during the quarter, with $840 million remaining in repurchase authority [30] - Free cash flow before restructuring payments was $237 million, equating to approximately 33% of the full-year target [28][30] Q&A Session Summary Question: Details on T-Mobile agreement and revenue trajectory - The new agreement with T-Mobile is a five-year contract covering managed services and AI-related activities, but revenue is expected to decline in 2026 due to lower spending [38][41] Question: Strategic value of MATRIXX acquisition - The acquisition adds a tier-two charging engine and a strong customer base, enhancing the company's capabilities in billing and monetization [44][45] Question: Unique aspects of the new agentic operating system (AOS) - AOS is a next-generation platform for GenAI that can operate on any BSS/OSS infrastructure, expected to serve as a new growth engine [53][55] Question: Progress of telcos in AI initiatives - The company is working with customers to develop various use cases, transitioning from opportunistic to strategic AI implementations [58][60] Question: Revenue guidance and T-Mobile milestones - The slight revenue beat was not due to any specific customer, and the T-Mobile agreement involves multiple ongoing activities rather than singular milestones [63][65]

Core Viewpoint - TransUnion has signed a definitive agreement to acquire the mobile division of RealNetworks, aiming to enhance mobile communications safety and reliability for businesses and consumers [1][2] Group 1: Acquisition Details - The acquisition is expected to augment TransUnion's capabilities with advanced AI and machine learning technologies, as well as real-time analytics of text, multimedia messages, and phone calls to reduce fraud [1][2] - The transaction is anticipated to close in the first half of 2026, pending customary closing conditions and regulatory approvals [5] Group 2: Fraud Prevention and Communication Solutions - Mobile phone fraud exceeds $80 billion annually worldwide, and TransUnion's solutions are designed to protect businesses and consumers while restoring trust in phone communications [2] - The integration of RealNetworks' technology is expected to enhance TransUnion's voice channel capabilities and extend its fraud prevention measures to messaging [2][3] - TransUnion's Trusted Call Solutions are designed to help businesses reach more customers by adding verified brand information and blocking fraudulent calls [3] Group 3: Strategic Benefits - The acquisition is expected to strengthen TransUnion's competitive position in the communications solutions market and open new revenue opportunities [4] - RealNetworks' mobile division is anticipated to bring strategic relationships and network integration experience with leading telecom service providers worldwide [2][4]