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Amdocs (DOX) Q3 Earnings and Revenues Surpass Estimates
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Amdocs Limited (DOX - Free Report) reported better-than-expected results for the third quarter of fiscal 2023.
The company reported third-quarter non-GAAP earnings of $1.57 per share, which surpassed the Zacks Consensus Estimate of $1.47 and came above management’s guidance of $1.45-$1.51. The non-GAAP earnings gained 23.6% from the year-ago quarter’s earnings of $1.27 per share.
Amdocs reported record revenues of $1.24 billion, which surpassed the consensus mark of $1.23 billion and were within management’s guidance range of $1.215-$1.255 billion. Compared with the year-ago quarter, revenues were up 6.5% on a reported basis and 6.9% on a constant-currency basis.
Amdocs’ top-line performance was primarily driven by continued strength in North America and healthy activity levels among top consumers in Europe. However, foreign currency movements subdued the figure.
North America reported record revenues of $831 million (67.2% of the total revenues), highlighting a 5.4% year-over-year increase. Europe revenues (15.2% of the total revenues) of $187 million increased 28.2% year over year. Rest of the World revenues (17.6% of the total revenues) fell 3.7% year over year to $217.8 million. Our model estimates for North America, Europe and Rest of the World were pegged at $837.8 million, $164.3 million and $228.5 million, suggesting growth of 6.3%, 12.5% and 1%, respectively.
Managed services revenues grew 0.3% year over year to $720 million. The company ended the third quarter of fiscal 2023 with a 12-month backlog of $4.14 billion, up $30 million sequentially and $190 million year over year. Our model estimates for managed services revenues and backlog were pegged at $741 million and $4.19 billion, respectively.
The non-GAAP operating income increased 7.8% year over year to $220 million, while the operating margin expanded 20 basis points to 17.8%. The year-over-year improvement in the non-GAAP operating margin was mainly driven by the company’s consistent project execution and ongoing efficiency gains.
Balance Sheet and Cash Flow
Amdocs had cash and short-term investments of $749.5 million as of Jun 30, 2023 compared with $861.6 million as of Mar 31, 2023.
In the third quarter of fiscal 2023, net cash provided by operating activities was $172.6 million, down from $294.4 million in the previous quarter and up from $166.8 million in the year-ago period. Free cash flow was $144 million compared with the previous quarter’s $259.4 million and the year-earlier quarter’s $125.9 million.
During the first nine months of fiscal 2023, net cash provided by operating activities was $550.3 million and free cash flow was $452.5 million.
In the fiscal third quarter, the company repurchased shares worth $129 million and paid out $52 million in dividends. Amdocs’ board approved the new increased quarterly cash dividend rate of 43.5 cents per share. The dividend will be paid out on Oct 27, 2023, to shareholders of record as of Sep 29.
FY23 Guidance Update
For fiscal 2023, the company now anticipates revenue growth of 6.3-7.1% on a reported basis, which tightened from the previous guidance range of 6-8%. On a constant-currency basis, revenues are projected to increase in the band of 7.2-8% year over year compared with previously estimated 7-9% band.
The updated fiscal 2023 outlook reflects an expected unfavorable foreign currency impact of approximately 0.9% on a year-over-year basis compared with the previous forecast of roughly 1%. Adjusted earnings are now estimated to grow in the 11-12% band, which tightened from the previous range of 9-13%.
For the fourth quarter of fiscal 2023, the company projects revenues between $1.220 billion and $1.260 billion and adjusted earnings in the range of $1.38-$1.44 per share.
Zacks Rank & Stocks to Consider
Currently, Amdocs carries a Zacks Rank #3 (Hold). Shares of DOX have gained 8.2% over the past year.
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Amdocs (DOX) Q3 Earnings and Revenues Surpass Estimates
Amdocs Limited (DOX - Free Report) reported better-than-expected results for the third quarter of fiscal 2023.
The company reported third-quarter non-GAAP earnings of $1.57 per share, which surpassed the Zacks Consensus Estimate of $1.47 and came above management’s guidance of $1.45-$1.51. The non-GAAP earnings gained 23.6% from the year-ago quarter’s earnings of $1.27 per share.
Amdocs reported record revenues of $1.24 billion, which surpassed the consensus mark of $1.23 billion and were within management’s guidance range of $1.215-$1.255 billion. Compared with the year-ago quarter, revenues were up 6.5% on a reported basis and 6.9% on a constant-currency basis.
Amdocs Limited Price, Consensus and EPS Surprise
Amdocs Limited price-consensus-eps-surprise-chart | Amdocs Limited Quote
Quarterly Details
Amdocs’ top-line performance was primarily driven by continued strength in North America and healthy activity levels among top consumers in Europe. However, foreign currency movements subdued the figure.
North America reported record revenues of $831 million (67.2% of the total revenues), highlighting a 5.4% year-over-year increase. Europe revenues (15.2% of the total revenues) of $187 million increased 28.2% year over year. Rest of the World revenues (17.6% of the total revenues) fell 3.7% year over year to $217.8 million. Our model estimates for North America, Europe and Rest of the World were pegged at $837.8 million, $164.3 million and $228.5 million, suggesting growth of 6.3%, 12.5% and 1%, respectively.
Managed services revenues grew 0.3% year over year to $720 million. The company ended the third quarter of fiscal 2023 with a 12-month backlog of $4.14 billion, up $30 million sequentially and $190 million year over year. Our model estimates for managed services revenues and backlog were pegged at $741 million and $4.19 billion, respectively.
The non-GAAP operating income increased 7.8% year over year to $220 million, while the operating margin expanded 20 basis points to 17.8%. The year-over-year improvement in the non-GAAP operating margin was mainly driven by the company’s consistent project execution and ongoing efficiency gains.
Balance Sheet and Cash Flow
Amdocs had cash and short-term investments of $749.5 million as of Jun 30, 2023 compared with $861.6 million as of Mar 31, 2023.
In the third quarter of fiscal 2023, net cash provided by operating activities was $172.6 million, down from $294.4 million in the previous quarter and up from $166.8 million in the year-ago period. Free cash flow was $144 million compared with the previous quarter’s $259.4 million and the year-earlier quarter’s $125.9 million.
During the first nine months of fiscal 2023, net cash provided by operating activities was $550.3 million and free cash flow was $452.5 million.
In the fiscal third quarter, the company repurchased shares worth $129 million and paid out $52 million in dividends. Amdocs’ board approved the new increased quarterly cash dividend rate of 43.5 cents per share. The dividend will be paid out on Oct 27, 2023, to shareholders of record as of Sep 29.
FY23 Guidance Update
For fiscal 2023, the company now anticipates revenue growth of 6.3-7.1% on a reported basis, which tightened from the previous guidance range of 6-8%. On a constant-currency basis, revenues are projected to increase in the band of 7.2-8% year over year compared with previously estimated 7-9% band.
The updated fiscal 2023 outlook reflects an expected unfavorable foreign currency impact of approximately 0.9% on a year-over-year basis compared with the previous forecast of roughly 1%. Adjusted earnings are now estimated to grow in the 11-12% band, which tightened from the previous range of 9-13%.
For the fourth quarter of fiscal 2023, the company projects revenues between $1.220 billion and $1.260 billion and adjusted earnings in the range of $1.38-$1.44 per share.
Zacks Rank & Stocks to Consider
Currently, Amdocs carries a Zacks Rank #3 (Hold). Shares of DOX have gained 8.2% over the past year.
Some better-ranked stocks from the broader Computer and Technology sector are NVIDIA Corporation (NVDA - Free Report) , Salesforce (CRM - Free Report) and Meta Platforms (META - Free Report) . While NVIDIA sports a Zacks Rank #1 (Strong Buy), Salesforce and Meta carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NVIDIA’s second-quarter fiscal 2024 earnings has been steady at 92 cents per share over the past 90 days. For fiscal 2024, earnings estimates have moved up by 13 cents to $7.79 in the past 30 days.
NVDA's earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing twice, the average surprise being 0.26%. Shares of the company have soared 134.3% in the past year.
The Zacks Consensus Estimate for Salesforce’s second-quarter fiscal 2024 earnings has been revised southward by a penny to $1.60 per share over the past 60 days. For fiscal 2024, earnings estimates have moved up by 4 cents to $7.44 in the past 60 days.
CRM's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 15.5%. Shares of the company have gained 16.3% in the past year.
The Zacks Consensus Estimate for Meta Platforms' third-quarter 2023 earnings has been revised upward by 15.1% to $3.44 per share over the past seven days. For 2023, earnings estimates have moved north by 7.9% to $12.94 in the past seven days.
META’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, missing once, the average surprise being 19%. Shares of the company have surged 86.2% in the past year.