Amdocs Ltd (NASDAQ: DOX) rallied 5.65% to trade around $89 in the pre-market session on Wednesday, outperforming the broader markets. The stock is currently trading about 30% below its 52-week high of $128 reached last August. The surge came after the software and services provider reported better-than-expected fiscal first-quarter 2025 results. Revenue of $1.11 billion for the quarter ended December 31 was slightly above the midpoint of guidance, despite negative foreign currency impacts. Profitability improved significantly, with non-GAAP operating margin increasing 310 basis points year-over-year to 21.2%, driven by the phaseout of certain low-margin business activities. Notably, the company achieved a healthy 12-month backlog of $4.14 billion, reflecting a 2.7% year-over-year increase on a pro forma basis. Amdocs continued its strong momentum in cloud services, with double-digit growth expected again this year. Additionally, managed services revenue represented 66% of total revenue, providing stable and recurring revenue streams.

Looking ahead, Amdocs reiterated its fiscal 2025 revenue growth guidance of 1% to 4.5% on a pro forma constant currency basis. The company expects to deliver another year of double-digit growth in its cloud business. Amdocs is targeting double-digit total shareholder returns for the fifth consecutive year in fiscal 2025, factoring in its non-GAAP diluted earnings per share growth guidance of 6.5% to 10.5% and a dividend yield of more than 2%. The company's pipeline remains robust across its growth domains, including cloud, digital modernization, monetization, and network automation. Amdocs is actively working to convert several large, mature business opportunities across various geographies.

In a statement, Amdocs President and CEO Shuky Sheffer expressed confidence in the company's ability to deliver the cloud, digital, and generative AI solutions that service providers need to grow revenue, improve efficiency, and drive next-generation customer experiences.