Amdocs at JPMorgan Conference: Emphasizing Cloud and AI Growth

On Tuesday, 13 May 2025, Amdocs (NASDAQ:DOX) presented at the 53rd Annual JPMorgan Global Technology, Media and Communications Conference. The company’s leadership outlined strategic initiatives focusing on cloud migration and artificial intelligence, while also addressing potential macroeconomic challenges. Despite these concerns, Amdocs remains optimistic about its growth prospects and financial performance.

Key Takeaways

• Amdocs targets approximately 3% revenue growth, with a focus on cloud migration and AI.
• The company emphasizes long-term customer relationships and outcome-based agreements.
• Amdocs’ backlog increased by 3.5%, providing 90% revenue visibility for the next year.
• The firm aims for continuous margin improvement through automation and strategic M&A.
• Amdocs has not observed significant changes in customer spending despite macroeconomic headwinds.

Financial Results

• Amdocs forecasts a 3% revenue growth, driven by cloud and AI initiatives.
• The company’s backlog grew by 3.5% at the end of the second fiscal quarter, ensuring 90% visibility for the coming year.
• Amdocs aims for double-digit shareholder returns, supported by an 8-9% EPS growth and a 2% dividend yield.
• Capital allocation strategies include share buybacks and dividends, alongside strategic mergers and acquisitions.

Operational Updates

• Amdocs employs a "product-led services" model, offering IT infrastructure solutions for the telecommunications industry.
• The company is a market leader, serving major telecom providers globally with a $60 billion addressable market.
• Key growth areas include cloud migration, consumer experience enhancement, network automation, B2B automation, and GenAI.

Future Outlook

• Cloud migration accounts for 25% of Amdocs’ revenue, growing at a double-digit pace.
• The company is developing GenAI capabilities, with Nvidia as a key partner, achieving over 98% accuracy in applications.
• Amdocs plans to enhance its MACE platform, focusing on verticalized GenAI solutions for the telco domain.

Macroeconomic Concerns

• While cautious, Amdocs has not experienced significant changes in customer spending behavior due to macroeconomic factors.
• Customers prioritize growth, enhancing consumer and business experiences, and monetizing 5G investments.
• The shift to cloud infrastructure is deemed essential for agility, scalability, and security.

For more detailed insights, readers are encouraged to refer to the full conference call transcript.

Full transcript - 53rd Annual JPMorgan Global Technology, Media and Communications Conference:

Samik Chatterjee, Analyst, JPMorgan: Good afternoon, everyone. I’m Samik Chatterjee, and I cover the hardware and networking companies at JPMorgan. For the next session, have the pleasure of hosting Amdocs. And from Amdocs, I have Shuky Sheffer, who’s the President and CEO, as well as Max Meht from Finance and Investor Relations. Thank you both for coming to the conference and thank you to the audience as well.

I’ll start you off both with sort of a starter question here in terms of investors that are new to Amdocs. Maybe for us, can you start with a brief introduction of Amdocs and what the company does? What is the industry that it participates in? Thank you. Sure.

Shuky Sheffer, President and CEO, Amdocs: Hi, everyone. So we, as you mentioned, we are serving the telco industry or the service provider, and Amdocs is doing mainly in the IT infrastructure domain, and we support what we call BSS, or SS system, all the support system of the customer, or the billing and other, we’ll talk in more details. I think there is something very fundamental different in Amdocs that is important, because I think this is part of our differentiation. There are many product companies, like, you know, the Salesforce of the world. There are system integrators like Accenture, Infosys, other.

MDocs is what we call product led services, meaning we create the products. By the way, our products are the number one leading products in the market. We do all the implementation services around the product, and we operate the product, which is, creates a very unique accountability model, because usually these are very complex projects. When things go wrong, the product guy will say, the system integrator will know how to implement, the system integrator will say the product is not working, so it creates a very unique accountability model that we do. If you look at the we do everything, almost everything in the IT domain.

We don’t do HR, we don’t do ERP, but if you look at the IT domain from the channels, from the website, the mobile application, catalog, all the ordering capture, all the handling system, all the billing related type of system, from billing, account receivable, invoicing, AR, general ledger, and all the systems actually provision the service to the network, like all the fulfillment system, provisioning system, writing, charging, policy, etcetera. So pretty much the suite of product is from end to end. By the way, we are very unique. We are the only company that have all the breadth of the product. So we touch billions of people in the world.

I mean, we are very proud with our customer base. I mean, obviously in The US, everyone familiar with T Mobile, AT and T, large customer, Comcast, Charter, Verizon, your cellular, consumer cellular, and pretty much everyone in North America. Canada, Bell, Rogers, Stellas, everyone is using Latin America, all the large groups of Telefonica, America Mobile, in Brazil, in Europe. We work with the largest group, you know, three, and all the large groups in Europe, and we are by far the market leader in APAC between Singapore, Optus, Stercom Syndromesia, Exelukam Indonesia, Maxis Malaysia. So we are, I think, far the market leader in our domain.

And we do what we call mission critical system for our customer. So everything about monetization, the ability of our customer to monetize those services is running throughout Amdocs platform. So in many places of the world, if you land and open the phone, very good chance that there is Amdocs is doing the monetization behind this service provider. And, as I mentioned, it’s a very mission critical type of system, and even if you take some stress point like, you know, 02/2008, ’2 ’9, the financial crisis, or COVID, this has to work. Mean, this is the backbone of every service provider.

Are doing it for many years. If you look at the fundamentals of the company, 66% of our revenue, two thirds, is what we call managed services. This is long term agreement of operation that we are doing for our customers. We do a lot of transformation projects to our customer. 75% of our revenue is recurring, and if you look at our twelve months backlog visibility, it’s about roughly 90% visibility we

Very good earning to cash conversion, since, you know, it’s not simple to stop Amdocs, and we do good service, and we expect that our customer will expect it. Very disciplined capital allocation. We return, as I said, very good earnings to cash conversion, and very disciplined capital allocation. We returned the vast majority of the free cash flow to our shareholders with our buyback and our dividend, and that’s it. Thank

Samik Chatterjee, Analyst, JPMorgan: you. So maybe talk about the competitive landscape here a bit, and when you went through the kind of customers you work with, automatically a question comes up is how much of the software stack is or do the customers potentially want to in source and have their own development programs around versus come to an Amdocs versus leverage another external? And I know you classified it as you do the mission critical applications, but do you run into a lot of competitors that probably are not only involved in mission critical but are doing some of their applications as well for the service provider customer.

Shuky Sheffer, President and CEO, Amdocs: So if you look at we try to give, I would say, our suite of products and services. We calculate roughly $60,000,000,000 of service addressable market for mDocs. There is no, given what I said before, that there are product companies, see, there is no real other mDocs. I mean, and so we have different competitors. Like we have system integrators, like Accenture of the World, we have Salesforce, and other, and no one have this bringing this very unique value proposition.

So overall, I think that we have a good win ratio against competition, and I think that one of another key differentiator given what we do, so all our customers will tell you that Amdocs always deliver. This very, very difficult, yes, it’s complex project, there’s ups and downs, but eventually I think we deliver to our customers. I think that, as I said, there is no, if you talk about competitive landscape, there is no like another MDOCs with this unique. So in many cases, in the RFP situation, we see MDOCs, and the other side we see two, three products, because no one have the breadth of product that we have, with some system integrator that is trying to stitch it all together. I think that, know, you don’t ask me, go to Gartner.

They will tell you Amdocs is by far the market leader. They have the best delivery capabilities, and they have the best product in the market.

Samik Chatterjee, Analyst, JPMorgan: Got it, got it. And you did reference the geographies in which you’re strong, including The U. S. And outside, particularly APAC, but can you put some numbers around them, like what do you believe your market share is in The U. S.

Versus maybe some of the other geographies, and where do you see opportunity in terms of market share?

Shuky Sheffer, President and CEO, Amdocs: I start with that, back to your previous question, you can argue that half of the spend today is internal IT, of the 60,000,000,000 that I was talking about. So you need to assume that all the internally customer spending, so you can say that they are the largest customer comparing to other companies that I mentioned. I think that in many customers, and I think we work with our customer to make sure there is a good allocation, what they would like to acquire from Amdocs and what are the services they think the value that Amdocs can bring comparing to what they do internally. And geography wise, obviously, we are very strong in North America. So actually, if you look at it when Amdoc started, we are pretty much known in APAC.

We have a very strong position in North America. Over the years, I think we developed a lot of business both in Europe, and Latin America, and APAC, to become the market leader over there. But we started from North America, and we have obviously roughly 60% of our revenue is coming from North America.

Samik Chatterjee, Analyst, JPMorgan: Okay, got it. Maybe talk about the opportunity that you have with the service providers, customers in terms of the way you think about growth being supported by the underlying industry growth? Maybe the question is more what do you see service service provider customers being willing to spend on a long term basis in the product areas that you’re offering? You referenced a TAM, but what have you seen that TAM grow at over a long term period?

Shuky Sheffer, President and CEO, Amdocs: So we have exchanges. We have roughly four or five, I would say, large growth engines. The number one by far is the journey to the cloud. Roughly 25% of the today we have a little bit more than $4,500,000,000 revenue. Roughly 25% of our revenue is cloud related or cloud activity related, and this is going double digit.

We are engaging pretty much every Amdocs customer in the world in trying to tailor the right journey to the cloud. And as I said, we have many engagements. Although, is a lot of activity, I know in The US it’s very common to talk in baseball terms, so everyone ask me, are you in the sixth inning, or in the, we are in the second inning in cloud. By the way, in Gen AI, I believe we are still in the warm up. But definitely, taking the industry to the cloud, engagement for every, these are long term, some of them are complex projects, will take time, not simple projects.

This is something that is going very well, and the cloud is leading from all the growth engine. The other growth engine is, you know, today everything is about consumer experience and the best monetization capabilities, so we are helping our customer to improve their catalog, their ordering, how they engage with their consumer or the businesses to make sure they are doing it in the most effective way. The third domain that we see as a growth engine is network automation. Since everything in the network is completely virtualized today, we are doing a lot of activity. So we are not competing with Ericsson or Nokia that are doing actually the core network and the radio, but doing a lot of services of network optimization and fiber rollout.

We are not digging, but we are doing all the planning, and everything that requires software and IP. This is where, in the network domain, this is where we definitely active. And the fourth growth engine, Amdocs was doing a good job to automate all the consumer experience. So if you look at the typical environment when Amdocs is working with a large customer or medium sized customer, you will see that most of the consumer domain is highly automated. It doesn’t matter what type of offering you will buy.

The enterprise is something much more complex. If you want to buy from anyone, from Verizon, from AT and T, or from Comcast nationwide connectivity offering. This is very complex. Most of them don’t have nationwide coverage, so it will be you need to buy from Comcast. Comcast will have to bring some other states that are not operated.

So addressing the B2B domain is done almost in Excel today, very slow, very inefficient, so we have and this is a growth engine for our customers who work hard to automate this. And the last but not least is obviously everything about GenAI and what we do in this domain, which is now obviously going to be a new growth engine for us. Sure, sure,

Samik Chatterjee, Analyst, JPMorgan: got it. Maybe then you can talk a bit about the MACE platform, and how do you think it’s differentiated from what your competitors offer? Okay,

Shuky Sheffer, President and CEO, Amdocs: So, when we talk about what we try to do, like always we do in generative AI, is trying to verticalize this. So, you know, we took I will give you some use cases, and what is our platform. So our platform knows the data within the telco domain, but we, even in MDOX, collapse all our activities around data, and all our activities around GenAI to be one unit, because in order for GenAI to be effective, you have to rearrange your data. The current data lakes and others does not exist, does not support it. So the most, I would say, we took 50,000 calls to the call center, ran them to speech to text, got the top 10 questions to the call center, not surprisingly, number one is why my bill this month is higher than last month.

So this is the most by the way, the average handling time of this call could be ten minutes because it’s a very complex question. You can take a very, I would say, simple approach, not using hand docs, and you can take the PDF of December and the PDF of January, send both of them to OpenAI. Accuracy will be very low, less than 50%. You know, we love OpenEye, but it will be extremely expensive because charging it by tokens, and it’s going to be huge files, and the latency will be terrible, because you need to compare. In MDocs, in our platform, given your question, we are looking at it in a different way, because we are familiar with the data, and we are familiar with all the logic, how you calculate, etcetera.

So it can happen probably because of 10 different reasons. You went out of promotion, you kids subscribed to Disney plus and some other, you didn’t have a nobody. The months before you called the call center, and you were upset. They gave you $20, you know, discount on the spot. It’s not repetitive.

So we are what we do is we are trying giving our understanding of the data and the functionality, how we are using it in our platform in a way to get the maximized results. We’ve done, and it was even published with joint PR with Nvidia. By the way, NVIDIA is our largest partner this domain. We got to like over 98% accuracy, zero latency with friction of the cost, giving when we are using our capabilities with the GPUs and infrastructure. So, are many examples like this.

The same if you want to upsell. So, you want to check what is the best offer for this customer. It’s a package of mobile, broadband, Disney plus Netflix, and others. So we also developing agents to support it. The way we look at it is, rather than building a bespoke use case for a certain functionality, We are coming to our customer, and we’re offering, and we have a couple of good success, what we call AI factory.

So we are laying down infrastructure that’s from some of it. Nvidia, our infrastructure, and you can build use cases in a standardized way using the data in the most efficient way, using this environment, and then it’s easy. So all the heavy lifting is in the first one when you build this factory infrastructure, but then add more and more and more use cases on top of it is easier.

Samik Chatterjee, Analyst, JPMorgan: Okay, good. So just to think about it in sort of how the benefit accrues to a customer, there is cost reduction as a part of the tangible benefit here. But what are you getting in terms of feedback from customers in terms of revenue synergies or more customer retention? What does that revenue aspect look like in terms of tangible benefit for the customer?

Shuky Sheffer, President and CEO, Amdocs: I think, you know, our relationship our business model with customers is a bit different. We don’t have what we call a rate card relationship. So people are not buying from Amdocs, saying I want 100 people in this rate, in this location. We are paid, and our agreements are outcome based. So it means if we have a large amount of service agreement, we need to meet billing accuracy, and order fallout, and many, many parameters.

So it’s not like a rate card type of relationship. Obviously, our customers know that we do have efficiencies in the business, and we show them TCO reduction over time. But at the same time, since we are doing a good job, we are expanding within our customer domain. And we can expand in different ways. Do a lot of activities in our customer today of moving application to the cloud, which are not Amdocs.

They saw that we have a very good competency to do, obviously, for the Amdoc system. We are doing it also for the non Amdoc system. We added additional capability lately that we have capacity to move mainframe application to the cloud. The mobile guys, like T Mobile, don’t have so much mainframe, but all the other ones that have carry on, like all legacy copper network, fixed line network, they have a lot of, so we actually acquired a company a couple of years ago, and it comes with technology how we automate the so moving application to the cloud from mainframe. So I think what we try to do with our customer is to find a win win while we share with them some the efficiency that we gain in GenAI, and GenAI is going significantly to change our software development life cycle and operation.

We share with them. On the other hand, they see that we are doing a good job, and they give us more scope. So it’s a I think in many cases, when we renew agreements, etcetera, we try to find a win win while we can expand the scope and increase our revenue. At the same time, the customer can enjoy some of the benefits of the automation that we are introducing, SooGen I, to our operation.

Samik Chatterjee, Analyst, JPMorgan: Got it, okay. You guided to double digit growth for cloud in fiscal twenty twenty five. Just help us understand the overall TAM that you see relative to just cloud specifically and your share in that category. And when you think about sort of growth in terms of the sort of capabilities there, like how would you think about growth in Gen AI versus network automation versus digital modernization?

Shuky Sheffer, President and CEO, Amdocs: General answer, it’s not that easy to call revenue that we get per growth engine. In many cases, it ticks the boxes on some. So if like a new monetization project or transformation project, and this is all definitely on the cloud, so how do you call it? Is it under monetization? Because many of the things that we do tick the box in more than one, more than one growth engine, but move to the cloud is probably the leading one, because we see it, and also the way, say Amdocs is not a typical B2B company, because I would call it probably B to 70, because there are seventy’s if you took also groups in the world, like account Vodafone, there’s one customer also.

We are running different opcos in Vodafone. There are probably 70 large service providers in the world that spend 90% of the money. This is our target. We are not going to, you know, it’s very small. So I think that overall, when you think about cloud, the right now definitely kicking.

If you ask me how many mDocs customer completed, the move to the cloud is less than handful. Vast majority are still in the this is, as I said, it’s large complex program. It takes time together. So it will take years to so this growth engine is here to stay double digit going forward. Gen AI is picking up.

It’s picking up actually more in the data domain, even compared to the use cases, because as I said, in order to be able to leverage Gen AI, you need to completely redesign your data, and now you access the data. We are working with our partner from Microsoft and AWS to move the data to the next generation platform. So, Gen AI has an impact, obviously. It will become an important growth engine in the future, and it will become also important element of our internal activity in Gen AI, which impact every part of the company. Know, corporate wise, I mean, we don’t buy creative anymore.

Obviously, it changed the way we do legal. I mean, so this is more like a corporate stuff. But the vast majority of the employees of Amdocs are software developers and in operation, and we are starting to introduce many tools to the software development life cycle, and also to operation, that over time will get a lot of benefit and help us to continue to automate what we do.

Samik Chatterjee, Analyst, JPMorgan: Okay, got it, okay. I’ll ask you a few questions that are more macro driven, but we’ve been asking most of our companies, just given the insights you and your seat have with customers and you’re talking to customers daily, like how concerned are you that we’re going into a more significant slowdown in the macro in the back half? Are your customers showing any caution or concerns about that?

Shuky Sheffer, President and CEO, Amdocs: I can tell you, Trump Trump said, never say never, but, and when he told the, you know, the prime minister of Canada that never say never. But when we look at, you know, the macro environment that existed in 2024 is relatively the same right now. I mean, still high interest rates, all these things that happened before that did impact some spending behavior, things a bit slower, this has not changed for 2024. On the other hand, we did not see any erosion that connected to the saga of the last two, three months. Tariff in general, so far we are not directly impacted.

Software and services are not part of it. I think also our customers are not too much impacted, because they said that if iPhone will be cost more, they will, you know, hold this additional cost to the consumer, and I guess they have long term agreement with the network providers, so they’re not exposed to any yes, if suddenly there’s going to be something and AWS or Azure, anyone will start to increase their pricing, it will impact everyone. But right now, we did not see any change in the spending behavior, which is connected to what happened in the last two, three months in our customer. And actually, enjoy a very nice F1. We grew revenue 4% quarter over quarter.

Our twelve months backlog, which is, as I said, represents 90% visibility, grew a little bit over 93.5%, and we did not see any impact. Obviously, are cautious like everyone else, you know, checking the environment all the time, but we did not see any change in our spending behavior. Our customers focus on growth, they focus on improving the consumer and business experiences, they focus on monetizing five gs. They’ve done a major, major investment in five gs. They’ve done nicely, you know.

They were able to increase a little bit the pricing for five gs services, but the next generation of services in five gs yet to be offered like quality of service. Today, in Boston, it doesn’t matter who will be your service provider, no one can give you guarantee latency and speed. You’re paying and it’s like best effort. When you implement five gs standalone, you can start to offer this type, and I’m sure people will pay premium for this. If you’re going to be in a sporting event, and during the event you want to triple your speed, you can buy boost for five So all these models and five gs monetization, I’m sure will happen.

Everyone is going to invest in Gen AI to be able to get better address the consumer in a better way, to develop a lot of internal sophisticated tools. So this thing will continue to happen, and everyone must move to the cloud. I mean, moving to the cloud is not about TCO. By the way, in many cases, it’s even more expensive. But if you want to be able to have the agility, elasticity, scalability, highly secured environment, better time to market.

The only way to do it is to move to the cloud, so this is why I’m sure this will continue to go forward.

Samik Chatterjee, Analyst, JPMorgan: And maybe just so maybe one more before we move to some of your earnings commentary. In a slower macro, and I know your customers will continue to spend because these are essential billing systems they need to continue to spend and they need to support what they’re doing on the cloud. But at the same time, no business is completely immune to a macro. What have you seen in the past in terms of where are these sort

Shuky Sheffer, President and CEO, Amdocs: of levels Look, we suffer like everyone else. Look at sales force growth rate from 20 to whatever it says. So, we enjoy, like everyone else, post COVID, and we grew the company in three years, twenty five percent compounded, between ’21, ’20 ’2, ’20 ’3. And then like everyone, we started to face, by the way, similar to what you see that the accenture of the world is, by the way, we are not exposed to any government dodge type of So we saw some pressure in 2024. It was the way our customers have done it, remember we are doing for them two activities at the same time in many cases.

We are running and operating the legacy platform, while at the same time we help them to build the next generation. So they put the brakes on legacy. We said they put most of the investment in the future. So this is what causes some headwind, definitely in ’24. Right now, we saw this stabilizing, so we don’t think and now the question is when it will start to creep up.

Now, as I said, the macro did not change so much from this perspective, from last year.

Samik Chatterjee, Analyst, JPMorgan: Okay. Going to your backlog, which you referenced, I think the twelve month backlog grew 3.5% on a reported basis at the end of F2Q. Your revenue growth outlook though for fiscal twenty twenty five is 1.7% to 3.7%, if I

Shuky Sheffer, President and CEO, Amdocs: get it right? I mean, main point is roughly 3%. We reiterated the number for this quarter, all numbers. By the way, if you look at the same for EPS and total shareholder return, We were pretty consistent in the last five years with double digit total shareholder return. So EPS is hovering around 89%, and dividend of 2%, so together it’s over 10 times double digits.

So we are hovering around 3%. What it was, we saw some momentum in the first half. We are October to September company, so we actually finish our Q2 right now. So we saw as you mentioned, I mean, Q2 was 4% year over year growth. We enjoy good momentum in the backlog.

And I think what is as important that we see a lot of mature pipeline in our backlog right now to close in half two, which can support our growth for next year.

Samik Chatterjee, Analyst, JPMorgan: Got it. And you highlighted a target for 300 basis points of margin expansion in the fiscal year, or maybe just

Shuky Sheffer, President and CEO, Amdocs: But this is not happening every year. This is because we exit some low margin business, but you’re right. Over the years, we’re seeing we are trying to do improve our margin. We do see margin expansion. I think that we are equipped to do it because we are doing both the product and the services.

We invest a lot in internal automation and how we are making sure that we do things better in operation, in managed services, in the software development, and we have nice pickup every year. And I believe that what will help us to continue with this trend is definitely JNDI in the future that we are already using these tools to do things much more efficiently.

Samik Chatterjee, Analyst, JPMorgan: Okay. I know you called out there’s some one off factors helping the margin expansion this year, but when you think about the long term drivers, how would you quantify that? Like what should we expect in terms of more long term margin expansion for the business?

Shuky Sheffer, President and CEO, Amdocs: It’s a tough question, but I think that you will see continuous improvement like we’ve seen in the last five, six, seven years that you see every year, we are doing a nice job in increasing the margin, and this is not because of necessarily labor arbitrage, or this is really because if you look at our business model, we have long term agreements, we can invest in automation, and then over the years of the agreement, enjoy this automation. Since we are doing many, many, like fifty minute services agreement across the company, and we can take automation that we build and own the IP and deploy it, develop once, deploy many times. So we have the ability to do it, and I think that we have a discipline on doing this. Remember, it’s a, in MDOCs, always deliver, and this is mission critical system, so when everyone is going to vacation in December, this is like the toughest between the Apple launch, Black Friday, this is the most complex time to us. What we do is also to make sure that we deliver great service to our customers.

Samik Chatterjee, Analyst, JPMorgan: Last one, I know you mentioned some acquisitions you’ve done in the past, but what’s the focus for capital allocation now? How much is it going to be about M and A versus, as you said, like

Shuky Sheffer, President and CEO, Amdocs: So we have a little bit debt at the company, almost very, very little depth. And we are doing M and A for three reasons. Everything is to support the strategy. The first reason is sometimes we consult competitors. I can give you an example.

There is also fiber rollout right now in The U. S. And we have fiber rollout capabilities about design, deployment, monetization. So we acquired a couple of boutique companies to get more scale, and to so this is about when we but sometimes we consult bigger competitors, but competition, how to consult competition, this is one. The second one is a typical buy versus build decision.

We are developing the majority of our product ourselves. I think last year we spent over close to $400,000,000 of R and D. Sometimes when we want to extend our portfolio, if there is already product out there, which is good, supporting what we need with customers, sometimes we prefer to buy the vast majority we develop ourselves, but we buy some technology. And the last reason is when we want to accelerate in a domain that we don’t believe that we have enough capabilities. In 2021, you could not recruit a cloud expert.

So we bought a couple of boutique companies and we got like 300 cloud experts injection into the company. Now, as we mentioned, data is critical for Gen AI. We bought a company in Europe that we got a couple of hundred data scientists. So we do acquisition to support strategy and domain that we believe. This is mid size or small acquisition.

We have enough capacity to continue with, as you mentioned, a very disciplined capital allocation of returning all the free cash flow to the shareholders via the buyback or the dividend, and at the same time do M and A, and I think this is what we continue to intend to do.

Samik Chatterjee, Analyst, JPMorgan: I’ll wrap it up there, but thank you. Thank you for coming to the conference. Thank you to the audience as well. Thank you.

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