• Revenue: $1.13 billion, up 4% year-over-year in pro forma constant currency.
  • Free Cash Flow: $181 million, excluding restructuring-related payments.
  • Non-GAAP Earnings Per Share (EPS): $1.78, above guidance range.
  • 12-Month Backlog: $4.17 billion, up 3.5% pro forma from a year ago.
  • Non-GAAP Operating Margin: 21.3%, improved by 10 basis points sequentially.
  • Managed Services Revenue: $747 million, up 3.7% year-over-year.
  • Cash Balance: Approximately $324 million.
  • Share Repurchase: $135 million repurchased; new $1 billion share repurchase plan authorized.
  • Dividend Payments: $54 million in the second fiscal quarter.
  • Warning! GuruFocus has detected 4 Warning Sign with DGII.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Amdocs Ltd (NASDAQ:DOX) reported revenue of $1.13 billion for the second quarter, exceeding the midpoint of their guidance and marking a 4% increase from the previous year in pro forma constant currency.
  • The company achieved a 10 basis point improvement in profitability sequentially, reflecting ongoing internal efficiency gains.
  • Amdocs Ltd (NASDAQ:DOX) generated robust free cash flow of $181 million, excluding restructuring-related payments, supported by healthy customer cash collection.
  • The 12-month backlog increased to $4.17 billion, up by 3.5% pro forma from a year ago, indicating strong future revenue visibility.
  • Amdocs Ltd (NASDAQ:DOX) continues to see strong sales momentum in cloud services, with significant projects involving major partners like Microsoft and AWS, and expects double-digit growth in cloud-related revenue for fiscal 2025.

Negative Points

  • Despite the positive revenue growth, reported revenue declined by 9.4% from a year ago due to the phaseout of certain low-margin business activities.
  • The company is facing a challenging macroeconomic environment with rising global uncertainty, which could impact customer spending behavior.
  • There is a potential risk of foreign currency fluctuations impacting financial results, as indicated by a $2 million negative impact in the second quarter.
  • Amdocs Ltd (NASDAQ:DOX) is closely monitoring the indirect impact of macroeconomic conditions on customer spending, which could affect future growth.
  • The company has yet to see significant material contributions from AI-related projects, with many initiatives still in the proof-of-concept stage.

Q & A Highlights

Q: Can we focus on AI a minute? Are you starting to see material contributions to revenue growth from AI or improvements to the product? How are you working with NVIDIA on AI? Is cloud growth accelerating, and is AI helping that growth? 
A: We see GenAI activities strongly connected with data, which overlaps with cloud as data moves to platforms like Microsoft and AWS. This supports revenue growth. We see good signs of POCs maturing into real deals, which will be more evident in future quarters. Our collaboration with NVIDIA has progressed, especially in network automation, building on NVIDIA tools.

Q: Great improvement to the margins here. Are you using AI to improve your own productivity much? Can you continue the pace of margin improvements going forward? 
A: We are actively working on three pillars: offering GenAI-enabled products, using GenAI tools for software development and operations, and improving efficiencies. We see progress in deploying these tools, which supports our productivity and efficiency improvements.

Q: Can you talk about customer spending behavior this quarter versus last quarter? Are clients changing anything due to macroeconomic risks? 
A: We haven’t seen any change in customer spending behavior. They were cautious before due to macroeconomic factors, but there hasn’t been a change in the last few months.

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Source: https://finance.yahoo.com/news/amdocs-ltd-dox-q2-2025-073406839.html