Skip to content
    DOX
    Earnings call· Mar 2026(Q2 FY26)

    AMDOCS Q2 FY26 earnings call DOX

    May 13, 2026 Source

    Executive summary

    Amdocs Q2 FY26 — Solid Performance and Agentic Era Vision

    Amdocs delivered solid Q2 FY26 results, exceeding revenue and non-GAAP EPS guidance midpoints, driven by strong international growth and backlog expansion. The new CEO outlined a vision for Amdocs to be the primary partner in the 'agentic era' for telcos, leveraging its aOS platform and deep industry expertise. The company is accelerating internal GenAI adoption and focusing on end-to-end customer transformations, while closely monitoring the macroeconomic environment.

    Highlights

    5

    • Revenue of $1.17 billion, above midpoint of guidance.

    • Non-GAAP diluted EPS of $1.78, $0.02 above guidance midpoint.

    • Record revenue in Europe of $192 million, up over 6% YoY.

    • Rest of the World revenue grew 8% YoY to $226 million.

    • 12-month backlog of $4.28 billion, up $30 million sequentially and 2.6% YoY.

    Concerns

    3

    • Non-GAAP operating margin declined by 10 basis points sequentially to 21.5%.

    • Interest and other expenses amounted to roughly $14 million, including net losses from equity-related investment activities.

    • Diluted GAAP EPS included a restructuring charge of nearly $0.10 per share, not in guidance.

    Guidance & targets

    7
    CategoryTargetConfidence
    Full-year FY26 Revenue Growth (reported)
    2.6% to 4.6%
    high materiality
    High
    Full-year FY26 Revenue Growth (constant currency)
    2% to 4%
    high materiality
    High
    Q3 FY26 Revenue
    $1.155 billion to $1.195 billion
    medium materiality
    High
    Full-year FY26 Non-GAAP Operating Margin
    21.3% to 21.9%
    high materiality
    High
    Full-year FY26 Non-GAAP Effective Tax Rate
    16% to 19%
    medium materiality
    High
    Full-year FY26 Non-GAAP Diluted EPS Growth
    5% to 7%
    high materiality
    High
    Full-year FY26 Free Cash Flow
    $710 million to $730 million
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    North America
    Revenue was up year-over-year but slightly lower sequentially due to normal fluctuations in customer activity.
    		$754 millionup more than 2%slightly lower—
    Europe
    Delivered record quarterly revenue, driven by a mix of organic growth and the impact of the MATRIXX acquisition.
    		$192 millionup more than 6%——
    Rest of the World
    Highest revenue since fiscal Q3 2024, remaining on track to grow in fiscal 2026 due to strong sales momentum.
    		$226 million8%——

    Operational metrics

    16
    Non-GAAP operating margin
    21.5%up 20 bps YoY, down 10 bps QoQ
    Q2 FY26

    Reflecting internal cost and efficiency gains balanced against long-term growth investments, including aOS platform development.

    Interest and other expenses
    $14 million
    Q2 FY26

    Included a few million dollars for accounting of net losses of equity-related investment activities.

    Non-GAAP diluted EPS
    $1.78$0.02 above guidance midpoint
    Q2 FY26

    Primarily due to items below the operating line and a lower share count.

    Diluted GAAP EPS
    $1.28exceeded guidance midpoint
    Q2 FY26

    Due to items below operating line and lower share count, included a restructuring charge of nearly $0.10 per share and positive impact of realized/unrealized gains from equity investments.

    Managed services revenue
    $759 millionup 1.6% YoY
    Q2 FY26

    Consistent with prior quarters, renewal rates remained high.

    Days Sales Outstanding (DSO)
    73 daysdecreased by 4 days YoY, decreased by 3 days QoQ
    Q2 FY26

    Improved from prior periods.

    Unbilled receivables, net of deferred revenue
    decreased by $42 millionYoY
    Q2 FY26

    Fluctuates quarter-to-quarter in line with normal business activities and progress on multiyear engagements.

    Commercial paper program
    $800 million
    Q2 FY26

    Established in fiscal Q2.

    Revolving credit facility
    $800 millionupsized from $500 million
    Q2 FY26

    Supports commercial paper program and enhances overall funding flexibility.

    Cash balance
    $214 million
    Q2 FY26

    Healthy cash balance at quarter end.

    Aggregate borrowings
    $900 million
    Q2 FY26

    Overall debt position.

    Share repurchases
    $138 million
    Q2 FY26

    As of March 31, 2026.

    Cash dividends paid
    $57 million
    Q2 FY26

    Paid in the second fiscal quarter.

    Free cash flow conversion rate
    roughly 90%
    FY26 target

    Relative to expected non-GAAP net income.

    Free cash flow yield
    roughly 10%
    FY26 target

    Relative to Amdocs' current market capitalization.

    Restructuring charge
    $17 million
    Q2 FY26

    Included in reported free cash flow.

    Industry KPIs

    5
    MetricValueDetails
    Headcount dso73 daysdays
    Rpo current rpo$4.28 billionUSD
    Customer logo metricsMultiple new names
    Genai ai book of businessSeveral initial commercial agreements
    Net revenue dollar retentiontypically high

    Orderbook & backlog

    1
    12-month backlog$4.28 billionQ2 FY26 end

    up $30 million sequentially, up 2.6% YoY

    Good leading indicator of business and forward visibility.

    Product announcements

    4
    ProductTypeDetails
    aOS (Amdocs agentic operating system)launch
    ConnectXupdate
    Amdocs eSIMupdate
    Amdocs Resource Managerlaunch

    Deals & partnerships

    4
    AT&T Cricket WirelessExpanded multiyear extension of managed services agreement for BSS and OSS services, including dealer onboarding modernization and aOS capabilities.multiyear

    Expanded and extended managed services contract.

    Vodafone Spain5-year agreement covering CRM and OSS modernization alongside long-term support and enhancement services.5-year

    Secured agreement for modernization and support.

    KT (South Korea)Multiyear agreement extension to upgrade, modernize, and operate its charging system.multiyear

    Extended agreement for charging system upgrade.

    Connect44Acquisition of a European-based provider of end-to-end network planning, building, and management solutions.$21 million net in cash at closing plus future potential contingent consideration

    Acquired in the last week of fiscal Q2.

    Risks & headwinds

    4
    Global macroeconomic climateCurrent

    Not quantified

    Mitigation: Closely monitoring customer demand and spending behavior.

    Geopolitical, business and operational uncertaintyCurrent

    Not quantified

    Mitigation: Closely monitoring customer demand and spending behavior.

    Customer spending behaviorCurrent

    Not quantified

    Mitigation: Closely monitoring and factoring into guidance.

    Higher financing costsFY26

    Impact on non-GAAP net interest and other expenses

    Mitigation: Resulting from reduced cash balance and short-term borrowing to fund working capital.

    What to watch in Q3 FY26

    4

    aOS commercial engagement and revenue impact

    Next couple of quarters
    CurrentSeveral initial commercial agreements, not yet meaningful for FY26 revenue.
    TargetIncreased number of commercial engagements and growing revenue contribution.

    Why it matters

    AOS is central to the new CEO's vision for the 'agentic era' and expanding Amdocs' addressable market. Its adoption and monetization are key to future growth.

    Those opportunities are starting small but we know that over time⏳, they will grow. So if you ask if we embedded anything right now in this fiscal year, not yet. It's not so meaningful right now but it's definitely going to grow over time⏳.

    Q&A highlights

    6

    Given the massive investments in data centers and AI, how can Amdocs participate in this growth, either through neo-clouds, cloud, or traditional service providers building their own data centers?

    The CEO sees the 'agentic revolution' as a major opportunity for Amdocs to partner with customers in transforming their IT and network ecosystems. He believes Amdocs' deep industry knowledge and transformation capabilities position it as the best partner to bridge the gap between AI technology potential and actual adoption in mission-critical systems.

    “We believe that Amdocs with our deep knowledge on this industry, with our capability to transform organization to move through technological shift, position us as the best partner that can take them to this future.”

    asked by Tal Liani · answered by Shimie Hortig

    2 min read6 chapters

    Detailed Narrative

    01

    New CEO's Vision for the Agentic Era

    Shimie Hortig, the new CEO, outlined his vision for Amdocs to become the primary partner for customers in the 'agentic era.' He emphasized Amdocs' deep industry knowledge, engineering pedigree, and outcome-based approach as key differentiators. The company aims to evolve its product portfolio to be agentic and automated, partner with customers on tailored roadmaps, and collaborate with leading AI and cloud partners.

    02

    aOS Launch and Early Commercial Success

    Amdocs officially launched aOS (agentic operating system for telco) at Mobile World Congress, receiving positive market feedback. Several initial commercial agreements have been secured with customers like Cricket, Lumen, Bell Canada, EchoStar, and PLDT. In PLDT, aOS has already shown early business success, resolving over 90% of customer requests and improving productivity in retail stores.

    03

    Solid Q2 FY26 Financial Performance

    The company reported solid second-quarter results with revenue of $1.17 billion and non-GAAP diluted EPS of $1.78, both exceeding the midpoint of guidance. Revenue growth was driven by North America, record revenue in Europe, and strong performance in the Rest of the World. Non-GAAP operating margin improved by 20 basis points year-over-year, reflecting efficiency gains balanced with growth investments.

    04

    Significant Deal Wins and Project Execution

    Amdocs secured several significant deals, including an expanded multiyear managed services extension with AT&T Cricket Wireless, a 5-year CRM and OSS modernization agreement with Vodafone Spain, and a multiyear charging system upgrade with KT in South Korea. Project execution highlights included servicing AT&T's 5G SA subscribers, commercial launch with Vodafone Germany, and a mainframe to Google Cloud migration milestone for Elisa.

    05

    CFO Transition and Succession Plan

    Tamar Rapaport-Dagim announced her retirement after 19 years as CFO and COO, with Tal Rosenfeld appointed as the new CFO. The transition is part of a long-term internal succession plan, with Tal having extensive experience across finance and business leadership roles within Amdocs, including leading the APAC division and managing the entire finance organization under Tamar.

    06

    Enhanced Financial Flexibility and Capital Allocation

    Amdocs established a U.S. commercial paper program of up to $800 million and upsized its revolving credit facility from $500 million to $800 million to enhance financial flexibility. The company repurchased $138 million of shares and paid $57 million in cash dividends during the quarter. Amdocs expects to return the majority of its free cash flow to shareholders in fiscal 2026.

    AI-generated summary of the company’s earnings call. Not investment advice.