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] - 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] Market Data and Key Metrics Changes - North America revenue increased nearly 4% year-over-year, while Europe saw a 17% 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 was signed, which includes managed services, software development, and AI innovation [5][6] - The acquisition of MATRIXX Software for $197 million is expected to enhance the company's capabilities in billing and monetization solutions [7] Management's Comments on Operating Environment and Future Outlook - Management expects revenue decline with T-Mobile in fiscal 2026 due to lower spending [6][41] - The company is closely monitoring customer demand and spending behavior amid a challenging macroeconomic environment [16] - Guidance for fiscal 2026 remains at a revenue growth of 1% to 5% in constant currency [17][32] Other Important Information - The company announced the retirement of CEO Shuky Sheffer, with Shimie Hortig set to succeed him [17][19] - Free cash flow for Q1 was $237 million, equating to approximately 33% of the full-year target [28][30] Q&A Session Summary Question: Details on T-Mobile agreement - The new agreement with T-Mobile is a five-year contract covering managed services, development services, and AI-related activities, but revenue is expected to decline in 2026 due to lower spending [38][41] Question: MATRIXX acquisition strategy - The acquisition adds a new charging engine and customer base, enhancing the company's market position 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: Telcos' AI journey and pipeline opportunities - The company is actively working with customers to develop use cases for AI, transitioning from opportunistic to strategic implementations [58][60] Question: Revenue guidance and T-Mobile milestones - The slight revenue beat was not due to a specific customer but reflects overall performance, with multiple ongoing activities for T-Mobile rather than singular milestones [63][65]

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][26] - Non-GAAP diluted earnings per share (EPS) was $1.81, exceeding guidance due to a lower-than-expected tax rate [4][28] - Non-GAAP operating margin improved by 40 basis points year-over-year to 21.6% [28] 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 [28] - The 12-month backlog increased to $4.25 billion, up $60 million sequentially and 2.7% from a year ago [5][31] Market Data and Key Metrics Changes - North America revenue increased nearly 4% year-over-year, while Europe saw a 17% increase driven by organic growth and the acquisition of Profinit [26] - The rest of the world experienced a decline year-over-year but showed slight improvement sequentially [26] Company Strategy and Development Direction - Amdocs aims to position itself as a market leader in the GenAI era, focusing on generative AI and data services [4] - The company announced a multi-year agreement with T-Mobile, which includes software development and AI innovation [5][6] - Amdocs is expanding its global customer footprint and diversifying internationally through organic and inorganic growth [7][8] 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 [18][32] - The company is closely monitoring customer demand and spending behavior in the current economic environment [17] Other Important Information - Amdocs completed the acquisition of MATRIXX Software for $197 million, enhancing its capabilities in billing and monetization solutions [8] - The company is developing a next-generation AI platform, AOS, which is expected to be showcased at Mobile World Congress [11][56] Q&A Session Summary Question: Details on the T-Mobile agreement - The agreement is a five-year contract covering managed services, development services, and AI-related activities, but revenue is expected to decline in 2026 due to T-Mobile's lower spending [39][42] Question: Strategic value of the MATRIXX acquisition - The acquisition consolidates a competitor and adds a charging engine for tier-two customers, enhancing Amdocs' market position [45][47] Question: Unique aspects of the new agentic operating system (AOS) - AOS is a next-generation platform that integrates with existing BSS/OSS infrastructures, expected to serve as a growth engine for Amdocs [56][58] Question: Progress of telcos in AI initiatives - Telcos are moving from opportunistic to strategic use of AI, with AOS providing a holistic solution to leverage this technology [60][62]

Financial Data and Key Metrics Changes - Revenue for Q4 2025 was $1.15 billion, up 2.8% year-over-year in pro forma constant currency, exceeding the midpoint of guidance [6][24] - Non-GAAP diluted earnings per share (EPS) was $1.83, slightly above guidance midpoint, with a 12-month backlog of $4.19 billion, up 3.2% from a year ago [7][32] - Profitability improved by 300 basis points year-over-year, with a non-GAAP operating margin of 21.6%, up 290 basis points from the previous year [25][26] Business Line Data and Key Metrics Changes - Cloud revenue grew by double digits, contributing over 30% of total revenue, compared to roughly 25% in the prior year [26] - Managed services revenue reached a record $3 billion in fiscal 2025, up 3.1% from a year ago, with managed services accounting for 66% of overall revenue [27][28] Market Data and Key Metrics Changes - North America saw over 2% sequential improvement, marking its strongest quarter of the fiscal year, while Europe experienced a decline following a record quarter [24] - The rest of the world showed mixed trends, with expectations for continued growth despite fluctuations due to project orientation [24] Company Strategy and Development Direction - The company is focusing on cloud, digital, and generative AI solutions to support telco customers, with a strategy to enhance customer experiences and operational efficiencies [9][10] - A significant investment in generative AI is planned, with the development of a next-generation platform called Cognitive Core, aimed at transforming telecom operations [19][20] Management's Comments on Operating Environment and Future Outlook - The company is entering fiscal 2026 with a healthy backlog and strong visibility, expecting revenue growth between 1.7%-5.7% as reported [21][22] - Management acknowledged potential impacts from the uncertain global macroeconomic environment on customer demand and spending behavior [22] Other Important Information - Free cash flow for fiscal 2025 was $645 million, with a healthy cash balance of approximately $325 million and a $500 million revolving credit facility [30][31] - The company plans to return the majority of free cash flow to shareholders, including an 8% increase in quarterly cash dividends [31] Q&A Session Summary Question: Impact of AI on the telecom industry - Management discussed the gradual improvement in productivity through generative AI, emphasizing its potential to enhance operations and customer offerings [37][38] Question: R&D capital allocation - The decision to reallocate capital into R&D was driven by the need to capture growth opportunities, with ongoing productivity gains expected to support this investment [40][41] Question: Customer pricing expectations - There is ongoing dialogue with customers regarding pricing, with efforts to expand the scope of agreements to include new technologies and services [44][46] Question: Cash flow and growth expectations - Management clarified that cash flow levels are consistent, with expectations for stronger growth in the second half of fiscal 2026, despite some pressures from major customers like T-Mobile [48][49] Question: Long-term growth positioning - The company aims to establish multiple growth engines, including cloud and generative AI, to drive sustainable growth beyond current levels [56][57]