DOX · Amdocs Limited

Amdocs delivered solid second quarter fiscal 2026 results, with revenue of $1.172 billion — 3.9% higher year-over-year on a reported basis and 2.2% in constant currency — exceeding the midpoint of its $1.150–$1.190 billion guidance range. The outperformance was broad-based: North America grew 2.2%, Europe achieved record revenue of $192 million (+6.2%), and Rest of World rose 8.0% to $226 million. Managed services contributed $759 million (65% of total revenue), reflecting continued resilience in recurring engagements. While GAAP operating margin declined 190 basis points year-over-year to 15.6%, management attributed this primarily to one-time costs associated with the CFO leadership transition and a prior-quarter benefit from acquisition-related liability adjustments. In contrast, Non-GAAP operating margin improved 20 bps to 21.5%, underscoring underlying operational discipline. Earnings also beat expectations: GAAP diluted EPS of $1.28 and Non-GAAP diluted EPS of $1.78 both landed above their respective guidance ranges. Free cash flow totaled $80 million ($97 million excluding $17 million in restructuring payments), supporting Amdocs’ capital return strategy — it repurchased $138 million in shares and declared a $0.569 quarterly dividend. Critically, the Company announced the planned retirement of CFO Tamar Rapaport-Dagim after 22 years and the internal promotion of Tal Rozenfeld, reinforcing stability in financial leadership. Guidance for full-year fiscal 2026 was tightened — revenue growth now projected at 2.6%–4.6% as reported (previously 1.5%–5.5%) and 2.0%–4.0% in constant currency — while free cash flow outlook remains unchanged at $710–$730 million, excluding restructuring. Twelve-month backlog rose to $4.28 billion (+2.6% YoY), and liquidity was strengthened via a new $800 million commercial paper program and an upsized $800 million revolving credit facility, positioning Amdocs to fund strategic initiatives including its emerging agentic platform, aOS.