Amdocs Ltd at Nasdaq Investor Conference Transcript

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

Question: George Notter - Jefferies LLC - Analyst : So, maybe just to start out a kind of an easy one for you. For maybe people at the conference who are not as familiar with Amdocs. Could you just give us a quick overview of what is Amdocs? What do you guys do? How do you play in the marketplace?

Question: George Notter - Jefferies LLC - Analyst : I was thinking about -- we picked up coverage of the stock back in December. We were doing homework on the business. The thing that just sort of dawned on me is like literally everything that happens in a telecom network is in software. There are so many categories of software here. There are 75 odd software modules spread across the OSS and BSS sectors. It was just kind of wild to see all those domains and you guys play in nearly every one of those domains. So is there sort of a network effect or a benefit that you guys get by having breadth of product portfolio? Is that part of the competitive advantage for Amdocs?

Question: George Notter - Jefferies LLC - Analyst : You talked about sort of the combination of the software components and then sort of the integration side, the services side. Have you guys talked about how much of the business is in software, how much of it is in services? Is that something you guys have kind of spelled out for folks?

Question: George Notter - Jefferies LLC - Analyst : It's project oriented.

Question: George Notter - Jefferies LLC - Analyst : You guys started breaking out the cloud revenue for the first time a few quarters ago roughly 20% of sales. I think you mentioned the 10% number a few moments ago. And I think what you're referencing is 10% of customers are now on the CES 23/24, the cloud native versions of the platform.

Question: George Notter - Jefferies LLC - Analyst : Got it. Okay. Why do you think customers by and large are so early in their journeys, right? In terms of the move to the cloud, is there -- can you talk about sort of the inertia in the market space, the customers and maybe talk about what Amdocs can do to sort of kind of control some of these customers and kind of move them down the path maybe a bit more quickly?

Question: George Notter - Jefferies LLC - Analyst : You guys just announced a deal or expansion of your relationship with AT&T. I understand that was driven by an acquisition in the Astadia deal, which I think is about moving applications off of mainframes, real traditional models into the cloud. But can you talk a bit about that? Is there any more insight you can give us under that transaction? Can you give us a sense for how big it is, or how many years it is? Can you give us a sense if that's leverageable onto other customer relationships that you have? What can you tell us there?

Question: George Notter - Jefferies LLC - Analyst : Got it. Fantastic. Okay. Can you talk a little bit about sort of -- I think the narrative in the stock right now is the stock's been soft of late of course. I think it's sort of an interesting environment, right? Because you have a lot of people who are pretty down on telecom operators, the companies, I think the perception is that maybe they're less relevant than they have been historically. The world seems to revolve around cloud providers right now. If you go to trade shows and walk around this conference, what do you think just generally about your experience and what your customers set and how healthy are they? Are the financial results and capital budgets of those operators, does that create a cap to your business or your opportunity to grow? Or like how do you think about kind of those customers and the outlook there and kind of your role there?

Question: George Notter - Jefferies LLC - Analyst : Wow.

Question: George Notter - Jefferies LLC - Analyst : Can the company get back to 6%, 7%, 8% types of growth rates? You guys put up those growth rates in the last couple of years. I think even if I look back to 2021, if I kind of account for the divestiture of open market, I think you were still growing at or above that rate.

Question: George Notter - Jefferies LLC - Analyst : Yeah. I mean it's been phenomenal growth. Now we're stepping down. We've got issues with customers trading off, kind of legacy systems against network transformation projects. You've got, as you mentioned earlier, some slower decision making. But do you see kind of a path towards some of those issues kind of working themselves out? Or is it just the company's got to sort of buckle down and fight through those things and gain share? Like how do you think about the growth algorithm here?

Question: George Notter - Jefferies LLC - Analyst : I think it's so interesting. I mean, the stock trades. You know historical forward for PE multiples like 14, stock trades at 10, 11 right now. The beta in your business is dramatically lower than the beta in the stock, right? And so is there something you can do right now to take advantage of this? Can you buy the stock back more aggressively? Is that something you guys have looked at? I realize there's a lot of free cash flow already going into the share repurchase but does that -- is there an opportunity to get more aggressive?

Question: George Notter - Jefferies LLC - Analyst : Super. That's terrific. We'll leave it right there. Tamar, thank you very much. We appreciate your time today. Thank you very much. Have a great day.