It has been about a month since the last earnings report for Amdocs (DOX Quick QuoteDOX - Free Report) . Shares have added about 1.3% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Amdocs due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for Amdocs Limited before we dive into how investors and analysts have reacted as of late.

Amdocs Q4 Earnings Surpass Expectations, Revenues Fall Y/Y

Amdocs reported better-than-expected fourth-quarter fiscal 2025 results. The company posted non-GAAP earnings of $1.83 per share, which came above the midpoint of the management’s guidance of $1.79-$1.85 and increased 7.6% year over year. The figure also exceeded the Zacks Consensus Estimate of $1.82.

Amdocs’ fourth-quarter revenues of $1.15 billion surpassed the consensus mark of $1.14 billion. However, compared with the year-ago quarter, revenues were down 9% on a reported basis due to the phase-out of certain business activities. Excluding the effect of phase-out business activities, revenues were up 2.8% year over year in pro forma constant currency.

Amdocs’ Q4 Details

Amdocs reported a decline in revenues across North America, Europe and the Rest of the World (RoW). North America reported revenues of $762 million (66% of total revenues), which decreased 8.8% year over year. RoW revenues (18% of total revenues) dropped 5% year over year to $208 million.

Europe revenues (16% of total revenues) of $180 million decreased 0.8% year over year. Our model estimates for North America, RoW and Europe were pinned at $743.4 million, $221.2 million and $176.7 million, respectively.

Managed services revenues rose 3.7% year over year to $748.3 million. The company ended the fourth quarter of fiscal 2025 with a 12-month backlog of $4.19 billion, up $40 million sequentially. Our model estimates for managed services revenues and backlog were pegged at $731.5 million and $4.07 billion, respectively.

The non-GAAP operating income increased 5% year over year to $248.1 million, while the operating margin expanded 290 basis points (bps) to 21.6%.

Amdocs’ Balance Sheet & Cash Flow

Amdocs had cash and short-term investments of $325 million as of Sept. 30, 2025 compared with $342.5 million as of June 30, 2025. Long-term debt was $646.9 million as of Sept. 30, 2025, almost flat to the June 30, 2025 level of $646.7 million.

During the fourth quarter, it generated an operating cash flow of $229.8 million and a free cash flow of $198.6 million. In full fiscal 2025, it generated operating cash flow and free cash flow of $749.1 million and $645.1 million, respectively.

Amdocs Initiates Guidance for Q1 & FY2026

Amdocs initiated guidance for the first quarter and fiscal 2026. For the first quarter, the company expects revenues to be in the band of $1.135-$1.175 billion (midpoint $1.155 billion). Amdocs expects non-GAAP earnings per share to be between $1.73 and $1.79. The Zacks Consensus Estimate for earnings is pegged at $1.86 per share, indicating a year-over-year rise of 12%.

For fiscal 2026, Amdocs expects revenues to grow in the 1.7-5.7% range. The on-GAAP operating margin is anticipated to be in the range of 21.3-21.9% for fiscal 2026. Non-GAAP earnings per share are expected to grow in the band of 4-8%. The Zacks Consensus Estimate for earnings is pegged at $7.60 per share, indicating a year-over-year rise of 8.9%. The company expects free cash flow between $710 million and $730 million.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a downward trend in fresh estimates.

VGM Scores

Currently, Amdocs has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock has a score of B on the value side, putting it in the top 40% for value investors.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Amdocs has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

Amdocs belongs to the Zacks Computers - IT Services industry. Another stock from the same industry, CDW (CDW Quick QuoteCDW - Free Report) , has gained 1.5% over the past month. More than a month has passed since the company reported results for the quarter ended September 2025.

CDW reported revenues of $5.74 billion in the last reported quarter, representing a year-over-year change of +4%. EPS of $2.71 for the same period compares with $2.63 a year ago.

CDW is expected to post earnings of $2.43 per share for the current quarter, representing a year-over-year change of -2%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.6%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for CDW. Also, the stock has a VGM Score of C.