Amdocs DOX reported fourth-quarter fiscal 2024 non-GAAP earnings of $1.70 per share, which matched the midpoint of management’s guidance and increased 19.7% year over year. The figure also matched the Zacks Consensus Estimate.

In the trailing four quarters, DOX’s earnings missed the Zacks Consensus Estimate twice, matched once and beat once, with an average negative surprise of 0.3%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

DOX’s fourth-quarter fiscal 2024 revenues of $1.264 billion missed the consensus mark by 0.17%. However, compared with the year-ago quarter, revenues were up 1.7% on a reported basis and 2.1% on a constant-currency basis.

Additionally, the company’s guidance for the fiscal first quarter and fiscal 2025 fell short of the Zacks Consensus Estimate. Amdocs’ dismal outlook may pull its shares down. On a year-to-date basis, shares of Amdocs have gained 5.7% compared with the Zacks Computers - IT Services industry’s return of 15.9%.

Amdocs’ Q4 Details

Amdocs’ top-line performance was contributed well by year-over-year growth in North America and Europe and the Rest of World (RoW).

North America reported revenues of $835.8 million (66.1% of total revenues), which rose 0.2% year over year. Europe revenues (14.6% of total revenues) of $184.1 increased 4.9% year over year. RoW revenues (19.3% of total revenues) grew 4.9% year over year to $244 million. Our model estimates for North America, Europe and RoW were pinned at $834.4 million, $184.1 million and $246.3 million, respectively.

Managed services revenues rose 0.5% year over year to $721.4 million. The company ended the fourth quarter of fiscal 2024 with a 12-month backlog of $4.06 billion, up $30 million sequentially and 2.5% year over year. Our model estimates for managed services revenues and backlog were pegged at $736.4 million and $4.27 billion, respectively.

The non-GAAP operating income increased 6.8% year over year to $236.2 million, while the operating margin expanded 90 basis points (bps) to 18.7%. Non-GAAP operating margin for fiscal 2024 improved 60 bps to 18.4%.

Amdocs’ FY24 Performance in Brief

Amdocs reported fiscal 2024 revenues of $5.005 billion, lagging the consensus mark by 0.1%. The top line improved 2.4% year over year on a reported basis and 2.7% in constant currency.

Amdocs reported fiscal 2024 non-GAAP earnings of $6.44 per share, matching the consensus mark yet again. The bottom line increased 9% year over year.

DOX’s Balance Sheet & Cash Flow

Amdocs had cash and short-term investments of $514.3 million as of Sept. 30, 2024, compared with $502.2 million as of June 30, 2024.

Long-term debt was $646.3 million as of Sept. 30, slightly higher than $646.1 million as of June 30.

Cash flow from operations was $217.9 million, up from $191.5 million as of June 30, 2024. Free cash flow was $192.1 million compared with the previous quarter’s $175 million.

Amdocs Initiates Q1 and FY25 Guidance

For the first quarter of fiscal 2025, Amdocs expects revenues to be in the band of $1.095-$1.135 billion (mid-point $1.115 billion). The Zacks Consensus Estimate for revenues is pegged at $1.27 billion, suggesting a year-over-year rise of 2.1%. 

Amdocs expects non-GAAP earnings per share to be between $1.61 and $1.67. The Zacks Consensus Estimate for earnings is pegged at $1.71 per share, indicating a year-over-year rise of 9.6%.

For fiscal 2025, Amdocs expects revenues to decline between 7.7% and 10.9%, on a year-over-year basis. The Zacks Consensus Estimate for revenues is pegged at $5.19 billion, suggesting a year-over-year rise of 3.6%.

Non-GAAP operating margin is anticipated to be in the range of 21.1-21.7%
for fiscal 2025.

Non-GAAP earnings are expected to grow in the band of 6.5-10.5%. The Zacks Consensus Estimate for earnings is pegged at $7.06 per share, indicating a year-over-year rise of 9.7%.

The company expects free cash flow to be between $710 million and $730 million.

Zacks Rank & Stocks to Consider

Currently, DOX carries a Zacks Rank #4 (Sell) at present.

CyberArk Software CYBR, NVIDIA NVDA and Bilibili BILI are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. 

CYBR sports a Zacks Rank #1 (Strong Buy), while BILI and NVDA carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

CYBR shares have jumped 37.3% year to date. CyberArk Software is set to report third-quarter 2024 results on Nov. 13.

BILI shares have surged 73.3% year to date. It is slated to release third-quarter 2024 results on Nov. 14.

NVDA shares have skyrocketed 199.5% year to date. It is slated to report its third-quarter 2024 results on Nov. 20.

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