Amdocs at Nasdaq Investor Conference: Strategic Growth Amid Uncertainty

On Wednesday, 11 June 2025, Amdocs (NASDAQ:DOX) presented at the Nasdaq Investor Conference 2025, providing a strategic overview of its operations and future plans. CEO Shuky Schafer highlighted the company’s leadership in the communications sector while acknowledging challenges posed by the current macroeconomic environment. The presentation underscored Amdocs’ focus on innovation and stable revenue streams.

Key Takeaways

• Amdocs is focusing on cloud migration, 5G monetization, and generative AI integration.
• The company reported a 4% year-over-year revenue increase in Q2.
• Amdocs maintains a cautious outlook due to macroeconomic uncertainties.
• Partnerships with NVIDIA, AWS, and Microsoft are pivotal for technological advancements.
• A significant portion of Amdocs’ revenue is derived from recurring and managed services.

Financial Results

• Q2 Performance: Amdocs reported a 3.5% increase in its twelve-month backlog and a 4% revenue growth year-over-year on a pro forma constant currency basis.
• Revenue Composition: 65% of revenue comes from managed services, with 75% being recurring, providing stability.
• Dividend Yield: The company offers a dividend yield of approximately 2% to 2.5%.
• Profitability Guidance: The profitability is guided at 21.4% at the midpoint for the year.

Operational Updates

• Cloud Migration: Amdocs is at the forefront of cloud migration, with 20% of its revenue in Norway being cloud-related.
• 5G Monetization: The company is actively monetizing 5G capabilities, a key growth area.
• B2B Expansion: Investments are being made in automating the B2B domain.
• Network Automation: Network virtualization is being leveraged for optimization and deployment.
• Generative AI: Amdocs is embedding generative AI into its products and processes, with a strategic partnership with NVIDIA enhancing real-time data processing.

Future Outlook

• Growth Strategy: Amdocs is focusing on cloud migration, 5G monetization, B2B expansion, network automation, and generative AI.
• Market Opportunity: The addressable market is estimated at approximately $60 billion.
• Cautious Approach: The company remains cautious due to uncertainties like interest rates and geopolitical tensions.
• Innovation: Heavy investments in R&D, particularly in generative AI, are a priority.

Q&A Highlights

• Key Partnerships: Amdocs has strong alliances with NVIDIA for GenAI, and AWS and Microsoft for cloud solutions.
• Competitive Landscape: Internal IT departments of customers are seen as the largest competitors.
• Stability: Amdocs boasts 90% visibility into its twelve-month backlog.
• Market Leadership: The company is confident in maintaining its leadership in the communications domain.

In conclusion, Amdocs remains committed to innovation and leveraging strategic partnerships, despite facing macroeconomic challenges. For more detailed insights, readers are encouraged to refer to the full transcript.

Full transcript - Nasdaq Investor Conference 2025:

Jack Caswell, Senior Vice President and Head of Listings, Nasdaq: All right. Right on time, we’ll get going here. Well, good morning, everybody. Thank you for joining us here today. My name is Jack Caswell.

I’m with Nasdaq. I’m the Senior Vice President and Head of our Listings for Western And Central U. S. And fortunate to have a great conversation forthcoming. Maybe we’ll start, just so I don’t butcher it, with both of you, and Matt, introducing yourselves for the group.

Shuky Schafer, CEO, Amdocs: Morning, everyone. Shuky Schafer, I’m the CEO of Amdocs. And Matt?

Jack Caswell, Senior Vice President and Head of Listings, Nasdaq: Matthew Smith, Head of Investor Relations for Amdocs. Perfect. Well, thank you both for coming here. So maybe we’ll just level set for the group, for the investors that are unfamiliar with Amdocs and your incredible story. Let’s start with just a brief history on the company and really the mission critical role you play within the global communications industry?

Shuky Schafer, CEO, Amdocs: So as Gerardius said, Amdocs operates mainly in the, what we call, the communication in the service provider industry. I think probably in this domain, it’s probably in the last thirty years. So we actually were fortunate to build our position through all the wireless buildup that started in the ’90s. And just to explain a bit what Amdocs is doing is everyone is using broadband at home, consumer content. It’s about connectivity, any type of broadband connectivity through five gs, so your broadband at home, fixed wireless, everything.

So in the service provider domain, there are two, I would say, main pillars that the one is, okay, you need to build fiber networks, you need to build to roll out radio network for the use of five gs. And then there is all the system that actually the support of this operation. So it does so if you think where is Amdoc’s role, from we operate in an end to end environment of what we call the IT, the information technology of our customers. So it’s we are not in HR or ERP, but everything runs. All the monetization, all the fulfillment, provisioning, insurance, everything is going through end of systems.

So if you connect to your service providers through a mobile app or web application or whatever, and then you want to come with new offers, all the order management, everything you order from the service to the device to and then all the way from all the billing system, account receivable, invoicing, everything, including charging, rating of all the services. So it’s the end to end support for our customer to actually to monetize the services. This is a very, very highly mission critical system. Sometimes I wonder how I can sleep at night, giving our position that the vast majority of the service provider in the world are using system. We say that roughly 3,000,000,000 people are touching mDox every day.

We are here in The UK. So here, our customer is obviously Everything Everywhere, three and Vodafone. If you go to The U. S, it’s obviously AT and T, T Mobile, some degree Verizon, Chartel, Comcast in Canada, if you guys are aware, Bell Canada, Telus Rogers in Latin America, all the big groups between the Carlslim, the America Movil and Telefonica and definitely across Europe with Vodafone and others. So and we are by far the market leader in APAC.

So if you need to think, all the services that you consume from a service provider, which it could be connectivity or content, all of them are monetizing through the systems.

Jack Caswell, Senior Vice President and Head of Listings, Nasdaq: Okay. That’s very helpful, and especially in the global nature of the business. Amdocs often highlights its unique business model. So maybe can you share a bit more about the various elements of this model, the importance to Amdoc’s market success and the way in which it supports high levels of recurring revenue, financial stability and really that visibility? So there are two, I would say,

Shuky Schafer, CEO, Amdocs: main things which differentiate Amdocs from the rest of the competition that I’m sure we’ll talk about. The one is usually, if you want to split the world in a simple way, there is the product companies of the world like Salesforce and others, and there is the system integrators of the world like Accenture, Infosys and other. And what is unique about Amdocs is what we call we are product led services company, meaning that we develop the product. We invest a lot of money to develop. We have, by far, if you go to Gartner, anyone, we have, by the best products.

So we developed a product, which is built it’s not like a multi vertical product. It’s a product which was built for telco. So we develop the product, we implement the product and then we operate the product in a managed or the services in managed services. And this creates a very unique accountability model. Why?

Because if you look probably ten, fifteen years ago, there was some type of a fight between our model, which you say, okay, this is like a full accountability model and the best of breed. So in Amdoc’s case, we are bringing the whole suite, the whole portfolio. We are responsible for implement it and to operate it. So we have a full accountability model. In the other model of operation, which still obviously is there, is what we call best of breed.

So you bring a system integrator that’s trying to stitch together different products and to get to the same outcome. And in many cases, like we know, this is very complex. I mean this is a very complex environment and one of the toughest complex environment, mainly in the same level of financial services or banking. I mean, the data is huge. I mean, it’s mission critical.

You still work all the time. How much patient do you have if you’re born, then you’ll be down for two seconds. I mean or your mobile service will not work because there was some problem in the back end. People have zero tolerance. I mean this is like if you ask my kids, what is the most important utility at home?

Is it running water or Internet? I mean it will be they will say we can we will let’s have Internet So this is why I said this is a very unique accountability model. Because in this project, if something goes wrong in the other model, not Amdocs, then the system integrator will say the product is not working. The product guys will say the system integrator doesn’t know how to operate the product, and there’s no real accountability. And the other thing is that since we are focused on the telco industry, on the communication industry, we build the whole portfolio.

So if you look at the mDocs portfolio, it’s an end to end, from the as I said, from the channels to the catalog to ordering, billing, invoicing, AR, general ledger, charging, rating, provisioning, fulfillment assurance. So it’s end to end suite, which is completely, I would say, play integrated. If you try to the competition, probably no one has the whole breadth of products. So we’ll have to bring like two, three products. So we have to bring Salesforce and maybe NetCrackCare and Matrix, like three or four companies together to have the same portfolio that Sandbox is having.

Now we need to assume, so you are getting more and more complexity because then you need to integrate three different products, and we know it’s complex. Then you have a system integrator that is not an expert, really. He is trying to stitch together all these products. So the success rate of this type of project is very low. We in Amdocs enjoy very, very high success rate.

And people will say about Amdocs, they are a great company. The products are the best. Maybe they are too opinionated. They are maybe expensive, but they always deliver. This is our claim for fame.

This is a very complex projects and huge operation. You think about this that while most of the world throughout the through the, obviously, December holiday season is taking a nap. This is the most critical time for us. I mean talking about Black Friday. I mean this is like huge operation that have to work flawlessly at any given point.

So I think, as I said, it’s a very unique business model for accountability, doing both the product and the services. It brings us some additional value. We’ll talk about this later. Comparing to the other model now, it’s not that we have 100% market share. We have a very big market share.

But definitely, if you’ll see if you check, you’ll see that our success rate is significantly higher than the competition.

Jack Caswell, Senior Vice President and Head of Listings, Nasdaq: Yes. Sticking with the competition and maybe taking it a step further, can you talk about internal IT as a key competitor and really the case for why customers will continue the gradual shift toward industry specialists like Amdocs? So as I said,

Shuky Schafer, CEO, Amdocs: from we have a lot of competition. By the way, competition is growing because we are all the time expanding the portfolio. You used to do twenty years ago, we do we used to do only billing. Now we do the whole portfolio. So obviously, whenever we expand our portfolio, we are getting new competition.

But I think that, as I said, the competition is there. Still, half of the spend, we have roughly close to $60,000,000,000 addressable market. By the way, we don’t operate in China, we don’t have any exposure to China. And so far, we don’t see any major exposure to all the tariff war, etcetera, so for what it was. And but if you look about this SEM, which is roughly $60,000,000,000 half of it is spent by internal IT.

And the rest is spent between companies like mDocs. We have $4,500,000,000 and others. So you can say that the internal IT is our main competitor. By the way, it’s also our main partner because we said we are always as good as our customer. Endox cannot if you don’t have a very strong IT team, as good as we are, I mean, it has to be a very collaborative environment to be successful together.

But definitely, the internal IT is, in a way, our largest competitor. Now I think over the years, what our customer took some decision to say, okay, what is strategic for us? And where we buy the services from somewhere like Amdocs? And you can see that they are more focused on the network domain. This is where they believe this is how they differentiate them from a network domain expertise.

In the IT domain, they rely more on Amdocs. And I think the value proposition is beyond what I said, that we sit in a place that we see when we build our product. So today, no disrespect to anyone. Most of innovation is in APAC. They are the one to deploy five gs or five gs standard oriented.

I mean Singapore, I mean, it’s a city. I mean, it’s of London. I mean, so they were able to develop five gs faster than anyone else. So we are working with Singapore Telecom. So we got a lot of experience of what will be the best way to monetize five gs or in Korea, for example, that we are operating with Korea Telecom.

So where we see it, it’s not just, okay, we are not just bringing a product. We are not throwing the product over the fence and tell the customer, okay. We also come with what we believe is best in class business processes and practices. So we see what’s happening in APAC and in North America and in Europe. And so when we come to customers beyond the regular value, it’s not just a product.

You say, this is a product. And by the way, this is the best business process to deploy converged offering of content, broadband, through fiber and mobile. So it’s beyond. So I think this is a and customer give it a lot of value. I mean, they understand that it’s not just not specifically what is going on in their market.

They get from mDox, they get a little bit breath of what is happening globally. So for the most part, now even within the IT domain, for example, customer wants all the back end system to be mDocs. They want all the, obviously, all the ordering system, catalog, all these heavy duty systems. So they have Docs and they say, we want to own the, let’s say, the mobile application because we feel that we have we know we’re touching the consumer. So there is a demarcation there.

But yes, the internal IT is our largest competitor in a way, giving the spend.

Jack Caswell, Senior Vice President and Head of Listings, Nasdaq: Okay. The so with that, and you touched upon the addressable market, Can you describe Amdoc’s growth strategy going forward? So

Shuky Schafer, CEO, Amdocs: obviously, the growth strategy is evolving. Many years ago, we used to do strategy session every three years. Now then it become one year, then it become every three months because things are changing so fast. But there are some clear growth engine that’s supporting our growth in the last four or five years. The one is the move to the cloud.

The industry is still behind, moving slowly. By the way, Amdocs is the leader in moving all our customers are moving to the cloud with Amdocs. And moving to the cloud is it’s not just it’s not about TCO reduction. By the way, if you compare, you’ll see that actually cloud environment is not that cheap, even comparing to the traditional on premise environment. So moving to the cloud is about elasticity.

Our customer used to have the hardware to support Black Friday volume, which is maybe 2.5x the regular volume because of two days a year. In the cloud, you can do this. So it’s about elasticity. It’s much more secure environment. We’re talking about cyber threat, etcetera.

Time to market and the ability to deploy new services is much faster. This is the time that you really have a disaster recovery. It’s usually to the fact that you save some data center somewhere else, I mean, it’s really it’s not really so there are many, many, many aspects. So moving to the cloud is a big thing. I’m not sure it’s very in The U.

S, everything is in baseball terms. So they ask us if we are in the inning or the inning. So we are in the inning from this I mean this is our way because we have many project. In Norway, 20% of mDoc’s revenue is cloud related, it’s growing double digits, but still the industry is behind. So moving to the cloud.

Then obviously, about five gs monetization. Five gs, all the standard of change, there is much more capacity capabilities in five gs. Not everything is yet to be deployed. In today’s environment, you don’t get what we call quality of service. It’s like best effort.

So they don’t tell you, you are going to get that speed in that latency regardless where you are in London. In five gs, you can get to situations, network size and another. So the whole monetization of five gs, and this is another growth center for us in the last several years. The other one is, when we talk about B2B. So customer obviously have what they call B2C, the consumer domain, and then they have the enterprise domain.

Amdocs have done a lot and invested for many years in the consumer domain. We got it to the level of automation in the high 90s of the whole thing. B2B was left behind. Now we are investing in this in the last two, three years, it’s just much more complex. You’re coming from The U.

S. Think about if you want to if you’re a large business and you want to do a connectivity deal with Comcast or Charter or whatever one, and this is like a nationwide 50 states. You might have the infrastructure only in 20. You need to if you have Comcast, for example, you have infrastructure in 20, you need to buy from Verizon, from Lumen, from complex business. This is a growth engine to our customer, and this is another domain.

Everything around network automation in general, network was very bespoke propriety environment. that Now that network virtualization, everything has become, obviously, network optimization and around deployment, many, many things we can do in the network domain. And obviously, the last one, I’m sure we’ll talk about this that emerged lately is everything around the generative AI and data, which is definitely evolving right now.

Jack Caswell, Senior Vice President and Head of Listings, Nasdaq: Yes. And you did preface to the next question because there wouldn’t be a discussion in 2025 without hitting the topic of Gen AI. But maybe you can expand on that a little bit just around your strategy and then perhaps also on the partnership with NVIDIA.

Shuky Schafer, CEO, Amdocs: So we look in when we talk about generative AI, we believe it’s going to change mDocs in the years to come. And it’s from what we offer our customers and how it’s going to change us internally. Now I’m sure there is a there are some basic or not basic, simple, low hanging fruit in corporate. I mean in marketing, we don’t buy anymore. We create.

I mean this is but how we can optimize our legal and finance and everything, this is more. And then obviously, the most of the activity that we do is in the software development life cycle, in operation in general, our managed service operation. So and this is internally. And then externally, what we offer our customers. So let me start with what we offer our customers.

So we embed, like many others, generative AI capabilities in our generative A good example is if you look at the product catalog, which is the heart of the offering, an offering is extremely complex in the telco environment. So it’s a nice tool. Marketeer can play and plug and play and create a new offering. So we created, obviously, Generative AI.

So now rather than starting to build the offer, you can write, I want to create for the iPhone launch in September, a new offering for millennials under 25 in London that are likely to outgear the phone and our students. And rather than you will start, we will give you bring demographic information, etcetera, and try to help you. It’s like a co pilot for the marketeer to. So this is, for example, in a product domain. We mentioned about the B2B.

Today, in order to create a large B2B order, it takes weeks and weeks and weeks. So now we can get like, if you talk about serviceability and offering, so we can expedite this. We can create an offer probably which is 90% down, used to take weeks to build before. And so this is an example. This is how we’re implementing our products.

In another area is when we talk about how we embed the because we understand the data. And AI, Gemini and data comes together. The most we took a 50,000 call from a call center of one of our customer, run them from speech to text. And the most common question in the call center, not surprising, is why my bill this month is higher than last month. This is the most this is a very complex question for the call center representative to answer because it can happen for many, many reasons.

It can come from your promotion run out. You don’t know. Your kid subscribed to Disney, Amazon, you don’t even know about it. Suddenly, it’s added to you. You were pissed off.

You called the call center the months before, they gave you $20 just because they wanted to give you something to make you happy. This is not repeatable. So the way we are looking is we combine data, the understanding of the system and GenAI together rather than so you can take two PDFs of the January bill and December bill and send them to someone, OpenAI, whatever. The latency will be terrible because this is huge files. The accuracy will be less than 50%, and it was going to be extremely expensive because we for example, OpenEye, they charge by So what we show with NVIDIA, so leveraging their technology, open source, LLM, obviously, some OpenAI, so we can bring in real time the data which is relevant to the question.

And we go to like high 90s accuracy with fraction of the cost with zero latency. So this is an example of what so it’s between, you wanted to call it, co pilot, agent and definitely also from the upset. So when you call to the call center, immediately, we look what is your pattern. I mean how much you subscribe, what is your connectivity, how much you use on the network, what type of OTTs you buy Netflix. So we can create a much better so the service rep or even sort of chatbot, we can tell you this is the best package for you because this is what we see that you do.

So this is from the externally how we work with our customer. Internally, it’s going to completely change the way we develop software, the way we operate. I don’t we’re not trying to get the details, but it’s going to completely change what we do. And obviously, in the future, it will help us to be much more efficient.

Jack Caswell, Senior Vice President and Head of Listings, Nasdaq: Very much, Simon. Switching gears a bit, you had delivered strong Q2 results with twelve month backlog up 3.5% year over year and revenue up 4% year over year and a pro form a constant currency. I had to read that one.

Shuky Schafer, CEO, Amdocs: Could you share a little bit about how you’re thinking about the full revenue or full year revenue growth outlook? So we guided to close to 2.7% roughly, close to it. We are very happy with the business momentum. And we see backlog is going nicely. And but at the same time, I think like everyone else, so we reiterate our numbers last quarter.

But at the same time, yes, it depends on which day in current environment. Every day, there is new news, but we remain a bit cautious. I mean, given the macro environment, the interest rate environment, it is still our customer highly leveraged. So this is why interest rate is significant for them. Geopolitical, macroeconomics, all of this together.

So we while we reiterate the numbers, we see good growth, I mean, nice momentum in our backlog. And overall, if you talk about what is the investment thesis in Amdocs, I mean, because of so we are not a 20% growth company. But at the same time, if you look at our business model, I mean, roughly 65% of our business is what we call managed services. What does this mean? It’s a long term agreement that we run all the operation for our customer in the managed Services, meaning there’s a full end to end accountability that by the way, which is outcome based.

We are committed to service level, and this is so roughly 65% of our revenue is this type of nature. This is more like the most strategic, I would say, relationship you can get with a customer, seven year deal, five years deal that we run everything from them. 75% of our revenue is recurring, meaning it’s recurring revenue that is going on. And if you look about our since this is mission critical systems, and you can have, for the most part, it’s not that easy to shut it down. I mean if you look stress cases of February financial crisis or COVID, for example, most of the projects were not stopped.

I mean this is I mean if, God forbid, we are not working, the organization cannot work. So we have we say we have roughly 90% visibility to our twelve months backlog, which is relatively high. And I think the at the end of the day, I think that we deliver good services We’re very connected with the strategy. So this is from this perspective.

From a we have a very disciplined capital allocation between our dividend yield, which is roughly 2% 2%. 2.5%. Are very disciplined in buyback. I mean we roughly return the vast majority of the free cash flow to our shareholders, whether so the buyback or the dividend. We and if you go back to the what is unique about because we do both the product and the services, we have much more opportunity to automate what we do.

So in typical environment, which is not Amdocs, you would have a product and you have the Systematic or Accenture or Uniphosys or whatever. And let’s say, there is some order fallout. So the Systematic, we say, we have this order fallout, Let’s run these scripts or patches and put a team that will deal in the ongoing order fallout. This will be probably the model. In the Amdocs case, because we do both, so the operational guys, they will see this order fallout, They will call, it’s the same company.

The product guys say, guys, we are seeing this order fallout. So let’s check the problem, fix it to prevent this order fallout from the root cause rather than put some patch at hand and fix it. So we try to automate most of the things that we do, both in the service in the sovereign level life cycle and the operation. We have a rough economy of scale. We have more than 50 large managed services agreements that we run.

So every efficiency automation that we are doing, we can deploy across many accounts. We were very successful in the last years to gradually increase our profitability to where we are today. I think the guidance were like 21

Jack Caswell, Senior Vice President and Head of Listings, Nasdaq: 21.4% at

Shuky Schafer, CEO, Amdocs: the midpoint. Like at the midpoint. And we are growing it nicely over here. Most of the things or the vast majority of the things that we are able to do so far will build on the all the automation that we build in the simple AI and self healing and all these tool that Gen AI is the next. It’s the future.

This is the next wave. But given the very, I would say, stable business environment and the fact that this is a high mission critical system, I think we can plan ahead. So I think that we perfected. Remember, at the end of the day, we have 28,000 employees separate from R and D centers, nearshore, offshore, onshore, I mean, and you know this is today, when you plan the resource management, it’s not. It’s skills, it’s language, it’s tax.

I mean there are so many. So we, by the way, Gen AI is a major thing, how you deploy the right people on the right time to the right project. They need to have skills. Sometimes, you need Portuguese speaking, some Spanish speaking. They need to you want to up tax, you want to optimize knowledge.

I mean it’s you don’t want to spend too much across our 10 centers around the world. So I think that between the fact that this is a lot of the business is recurring, you can plan ahead, You can invest in a lot of automation to do things much efficient. And this is what I think helped us over time to be very consistent in increasing our margin over time because of this capability. Well, we are at time. So but that said, I do want

Jack Caswell, Senior Vice President and Head of Listings, Nasdaq: to open it up to the audience if anyone has any questions.

Shuky Schafer, CEO, Amdocs: Okay.

Jack Caswell, Senior Vice President and Head of Listings, Nasdaq: Well, I think this has been an incredible story. Is there anything else that you want to leave us with? I thought that was a good wrap there.

Shuky Schafer, CEO, Amdocs: Yes. I mean, as I well, I mean, obviously, we believe that Endos will continue to be the market leader in this domain. Communication, in general, I mean, this has become like the backbone of society. I mean, all of us felt this definitely in COVID suddenly. I mean, the most important thing was and I think that we invest a lot in the future, so R and D, in GenAI.

I think we have very strong partnership. NVIDIA is our largest partner in the GenAI domain. Obviously, AWS, Microsoft are large in the cloud. In general, this is very strong partners to Amdocs. We have an amazing team, amazing team, management team and also great employees, a lot of innovation, and we are very proud of what we do, and we’ll continue to push forward.

Jack Caswell, Senior Vice President and Head of Listings, Nasdaq: Yes. Incredible customers, visibility going forward and resilient offering. And thank you because trust me, until I get that you don’t know there’s a problem until there’s a problem. So you’re the security that’s keeping us all sleeping well at night. So thank you both

Shuky Schafer, CEO, Amdocs: you all.

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