Amdocs Limited at Goldman Sachs Technology & Internet Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Julio Quinteros - Goldman Sachs - Analyst : Okay. Well, let me just kind of start with a couple of thoughts around the industry itself and kind of the drivers. We think about the OSS and the BSS industry, there's a lot happening kind of in the -- sort of in the front and in the background as we think about the phones that we use, the complexity of systems on the backend. Maybe talk a little bit about how DOX is positioned to benefit from some of these changes, especially around the complexity of data plans. We may have some other questions where we sort of look at what you guys do, where you sit, and understanding what the opportunity is probably the question that we get -- companies. FEBRUARY 14, 2013 / 12:00AM, DOX - Amdocs Limited at Goldman Sachs Technology & Internet Conference

Question: Julio Quinteros - Goldman Sachs - Analyst : So for you guys, if you sort of translate all that back, then the CSP has the issues you kind of contend with. They come back to you for an actual systems upgrade or systems change. And just to kind of put it into sort of an example of where exactly they need to come back to you, so how does it actually become sort of a revenue event if you will for you guys?

Question: Julio Quinteros - Goldman Sachs - Analyst : And what about on the -- if you think about the more sort of transaction oriented nature of things, whether it's turning phones on or changing plans, do you guys also benefit from kind the increase in transaction activity levels, whether it's the messaging or whether it's the number of calls or anything along those lines that actually flow through your system?

Question: Julio Quinteros - Goldman Sachs - Analyst : Okay.

Question: Julio Quinteros - Goldman Sachs - Analyst : Yes. I guess I'm just trying to juxtapose a little bit relative to like you know the guys at synchronous who are just kind of activation driven.

Question: Julio Quinteros - Goldman Sachs - Analyst : Just some potential for per-subscriber, but you think that that's more --

Question: Julio Quinteros - Goldman Sachs - Analyst : Oh, sure. Sure.

Question: Julio Quinteros - Goldman Sachs - Analyst : Got it. And I guess where I'm -- where we're kind of thinking about these questions and sort of where they're going is ultimately you have a fairly vibrant kind of end market in terms of what the communications industry is sort of going through right now. There's some opportunities for you guys to expand. So maybe if we take the emerging and separate that from the domestic side, from a growth perspective, where can you guys really pick up any tailwinds from growth right now, especially in the US? Is this just kind of sort of steady state market that we need to kind of get used to, or are there are any potential sort of kickers that could pop up on the horizon there as you think about kind of longer-term growth?

Question: Julio Quinteros - Goldman Sachs - Analyst : And just in terms of percentages, what is the percentage contribution from the emerging markets today?

Question: Julio Quinteros - Goldman Sachs - Analyst : Expected to grow double digits?

Question: Julio Quinteros - Goldman Sachs - Analyst : Got it. And you touched a little bit on the M&A subject. Maybe we can just kind of go back there real quickly because it's more turning to the domestic side. Starting to see even I guess a little bit more activity, sort of the Sprint/Clearwire situation. So when you kind of look at what's going on there, how does that sort of initially hit you guys? Is it something that you get hit with up front or is it more the process itself that can become the drag?

Question: Julio Quinteros - Goldman Sachs - Analyst : When you say AT&T is back to normal activity, where do we see that in terms of their -- where the dollars are coming from? Is that a capital expenditure, a budget trend, an operating expenditure budget trend? Maybe just kind of help map back to what is the more relevant driver for your model as you think about your relationship with AT&T as an example. Is it CapEx driven or more OpEx driven?

Question: Julio Quinteros - Goldman Sachs - Analyst : I guess I'll just go back to the $20 billion number that you cited. That would be just the capital expenditure budget for --?

Question: Julio Quinteros - Goldman Sachs - Analyst : Right. The hardware. Okay. Right.

Question: Julio Quinteros - Goldman Sachs - Analyst : Okay. That's interesting. Got it. And then just kind of to finish the thought a little bit on the growth dynamics and what's happening with some of the domestic carriers. This big push to the cloud and to have options relative to iTunes. We had a [synchronous analyst] at the beginning of the week and sort of tout some of the stuff that they're trying to do. With the kind of managed services relationship that you guys have on the back end with AT&T, why wouldn't that be a natural place for you guys to be playing in today in terms of helping them with the storage and backup and some of the things that --

Question: Julio Quinteros - Goldman Sachs - Analyst : Got it. Maybe just going back to the emerging markets a little bit. You announced recent deals in Chile with Claro and Telefonica in Argentina. Maybe talk a little bit about Latin America as a market opportunity because it seems like that region for you guys has been -- it feels like it's been heating up and I don't know, just because it seems like there's been a lot more names there. How are you seeing that market evolve for you guys there?

Question: Julio Quinteros - Goldman Sachs - Analyst : Got it. Maybe just kind of going back to developed economies and some of the color that you guys provided on Europe as sort of I guess the weaker side of the demand that we're seeing right now. I guess the question really is how widespread was it? Is there any sort of view or color you can provide on how that impacted discretionary [productivity] and thinking through some of that?

Question: Julio Quinteros - Goldman Sachs - Analyst : Does that increased appetite for managed services also include the global delivery network for you guys? Are you offshore? Or how does that go?

Question: Julio Quinteros - Goldman Sachs - Analyst : You have headcounts spread out. In terms of headcount, you think about India versus Israel, and where else would you guys consider to be a part of your --?

Question: Julio Quinteros - Goldman Sachs - Analyst : Maybe just longer term then, is there a target? I don't recall, on the Analyst Day you guys had set out for some [explicit] mix between advancers and the emerging. Two to three years from now, where would you want to be in terms of the emerging mix versus the --

Question: Julio Quinteros - Goldman Sachs - Analyst : Sure.

Question: Julio Quinteros - Goldman Sachs - Analyst : Okay. Well we're down to a couple minutes. I just wanted to make sure if anybody else in the audience has a question, we'll go ahead and take a couple. Unidentified Audience Member What's the size of the addressable market today roughly, and what is it growing? companies. FEBRUARY 14, 2013 / 12:00AM, DOX - Amdocs Limited at Goldman Sachs Technology & Internet Conference

Question: Julio Quinteros - Goldman Sachs - Analyst : Ed, do you have one? Do you have a question? Unidentified Audience Member No. Actually, as to Julio's earlier question, this morning you announced a cloud-based UC service. Is that breakdown of the growth a question you are able to talk about?

Question: Julio Quinteros - Goldman Sachs - Analyst : One of the things that I think with Amdocs that I think we're kind of getting used to in some ways is just this approach that you guys have taken, and now you've sort of outlined it in the 50/50 framework with your cash flow. Part of it is cash flow going into strategic growth, and then the other half going into the buybacks and the dividends. You went through a period as well where you sort of had to stabilize the margins, got them to a level where I think this feels like it should be a steady state for you guys, and now it's like okay, what do we do with that underlying cash flow. So from an investor perspective, I mean is that more or less what we should kind of continue to think about as the total shareholder return profile really is about what you guys do from an earnings growth perspective and then what you give back to shareholders versus thinking of you guys as being another kind of hyper growth model two or three years from now?

Question: Julio Quinteros - Goldman Sachs - Analyst : Okay. Anyone else in the audience? I have kind of a random one about competition, and this is because Simona had just asked this about the acquisition that Oracle made of Acme Packet I believe, the announcement.

Question: Julio Quinteros - Goldman Sachs - Analyst : There's some parts of that that seem to dovetail a little bit into their own aspirations within the communication services area, and I think they already own a small billing system platform, is it Billpoint or Billserv --

Question: Julio Quinteros - Goldman Sachs - Analyst : Oracle is built on BSS, not OSS?

Question: Julio Quinteros - Goldman Sachs - Analyst : Sure. Okay. Great. I think with that we're almost done. I don't know if anybody else had any last ones? Otherwise, we'll wrap it up. I think -- you are doing a breakout, and this is actually the Monterey Room.

Question: Julio Quinteros - Goldman Sachs - Analyst : Okay. Thank you.