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Amdocs (DOX) Q3 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q3 FY26)· Information Technology· Aug 5, 2026

Source: earnings call transcript

Executive summary

Amdocs Q3 FY26 — Agentic AI Strategy Drives Key Wins and Margin Expansion

Amdocs delivered solid Q3 FY26 results, meeting guidance midpoints for revenue and non-GAAP EPS, driven by strong Managed Services performance and a 20 bps operating margin improvement. The company is advancing its "Agentic era" strategy, highlighted by a significant 10-year partnership with Liberty Latin America leveraging its aOS platform. While navigating macroeconomic uncertainties, Amdocs is focused on internal transformation and expanding its addressable market through AI-driven solutions.

Highlights

5

  • Q3 revenue of $1.175 billion was consistent with the midpoint of guidance.

  • Non-GAAP diluted earnings per share of $1.84 was consistent with the midpoint of guidance.

  • Non-GAAP operating margin improved by 20 basis points year-over-year to 21.6%.

  • Managed Services delivered record revenue of $791 million, accounting for 67% of total revenue.

  • Signed a new large-scale, 10-year multiyear partnership with Liberty Latin America leveraging aOS.

Concerns

3

  • GAAP diluted EPS of $0.59 was below guidance range due to a $0.91 per share restructuring charge.

  • 12-month backlog was down $20 million sequentially, though up 2.7% year-over-year.

  • Days Sales Outstanding (DSO) increased by 5 days sequentially to 78 days.

Guidance & targets

CategoryTargetConfidence
Full fiscal year 2026 revenue growth (constant currency)
3%
high materiality
High
Full fiscal year 2026 non-GAAP diluted EPS growth
6%
high materiality
High
Full fiscal year 2026 free cash flow before restructuring payments
$710 million to $730 million
high materiality
High
Full fiscal year 2026 revenue growth (reported)
3.2% to 4%
high materiality
High
Full fiscal year 2026 revenue growth (constant currency)
2.6% to 3.4%
high materiality
High
Q4 FY26 revenue
$1.175 billion to $1.215 billion
high materiality
High
Full fiscal year 2026 non-GAAP operating margin
21.3% to 21.9%
medium materiality
High
Full fiscal year 2026 non-GAAP effective tax rate
16% to 19%
low materiality
High
Full fiscal year 2026 non-GAAP diluted EPS growth
5.5% to 6.5%
high materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Managed Services
Delivered record revenue in Q3, accounting for roughly 67% of total revenue. Renewal rates remain consistently high.
$791 million2.5%——

DOX operating KPIs by quarter

DOX operating KPIs stated on its earnings calls, by fiscal quarter
KPI Mar 2026 Q2 FY26This call Jun 2026 Q3 FY26Change vs prior quarter
12-month backlog
$4.28B Overall, we closed the quarter with 12 months backlog of $4.28 billion, up $30 million sequentially and 2.6% from a year ago. Source: earnings call transcript
$4.26B Managed Services delivered a record quarter, accounting for 67% of total revenue, and we closed the quarter with 12-month backlog of $4.26 billion, up 2.7% from a year ago. Source: earnings call transcript
-0.5%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

12-month backlog $4.26 billion end of Q3 FY26

up 2.7% YoY, down $20 million sequentially

Remains a good leading indicator of business and forward visibility.

Product announcements

ProductTypeDetails
aOS (Amdocs Agentic Telco Operating System)launch

Deals & partnerships

Liberty Latin America Large-scale multiyear strategic engagement (10 years) to manage and transform its entire end-to-end IT ecosystem leveraging aOS. 10 years

This is a flagship engagement and a major proof point of Amdocs' Agentic transformation strategy. It moves beyond traditional IT operations into an AI-driven model.

Premier provider of digital television entertainment (US) Agreement to execute a strategic billing migration program leveraging Amdocs Agentic Operating System and AI-driven migration capabilities.

Further strengthens strategic relationship with Amdocs.

Telefonica Vivo (Brazil) Expanded collaboration by extending services agreement to support customer growth and OSS modernization with Amdocs customer experience fleet.

Expansion of existing collaboration.

Leading South American provider Multiyear Managed Services agreement leveraging Amdocs full OSS stack supported by AI-driven application management, operation services, and software factory expertise. multiyear

New Managed Services agreement.

Risks & headwinds

Macroeconomic, geopolitical, business, and operational uncertainty current business environment

not quantified

Mitigation:Closely monitoring customer spending behavior.

Cost of Agentic AI technology and tokens future

unknown

Mitigation:Monitoring very carefully to balance with internal efficiencies and investments.

What to watch in Q4 FY26

aOS Engagement Evolution

next quarter and beyond
Current 10 engagements, including Liberty LatAm
Target Evolution of smaller engagements into larger, more meaningful journeys

Why it matters

Indicates successful conversion of pilot programs and broader adoption of the core Agentic strategy, driving future revenue growth.

We believe that the small engagement that started a few months ago will soon and over time, evolve to something more meaningful in just a matter of time.

Find out whether DOX delivers this. Inve re-checks your case every morning.

Q&A highlights

What type of productivity or service quality improvements can be expected from Agentic AI internally and for customers in the next few years (e.g., 10%, 30%)?

Shimie Hortig stated that Agentic transformation, particularly through expanding Amdocs' scope of responsibility with customers like Liberty Latin America, can bring significant cost reduction. Internally, Amdocs is balancing efficiencies with investments in aOS, expecting increased profitability long-term. The impact on customers depends on their willingness to adopt broad transformations.

“I believe there's definitely a potential to improve the cost structure of our customers. The same goes for us internally, and that's the fourth pillar of the strategy. We believe that this Agentic transformation by implementing internally everything that we're also partnering with our customers, the Agentic as you see, the Agentic corporation, changing the way of working and so on, will also provide us with efficiencies within the company.”

asked by Timothy Horan · answered by Shimie Hortig

2 min read 6 chapters

Detailed narrative

Agentic Era Strategy & aOS

Amdocs unveiled a 4-pillar growth strategy centered on its Agentic Telco Operating System (aOS), aiming to fundamentally transform customer IT and network operations. This strategy includes expanding into new verticals, addressing emerging Gen AI-driven needs, and internally transforming Amdocs into an "Agentic-first" organization. The company believes aOS will enable significant cost savings and accelerate time to market for its customers.

Flagship Liberty Latin America Partnership

A major 10-year strategic engagement was signed with Liberty Latin America, where Amdocs will manage and transform its entire end-to-end IT ecosystem using aOS. This deal is a key proof point for Amdocs' Agentic transformation strategy, expanding its footprint in the CALA region and demonstrating its capability to handle complex, mission-critical operations across multiple markets.

Expanding aOS Market Traction

Beyond the Liberty Latin America deal, aOS is gaining encouraging market traction with 10 customer engagements in just five months since its launch. Initial deals include Verizon, TELUS, Sunrise Switzerland, Swiss Scandinavia, and a Tier 1 Asia Pacific provider, building on earlier adoptions by AT&T Cricket, Lumen, EchoStar, Bell, and PLDT. These engagements are expected to evolve into larger, more meaningful partnerships.

Internal Agentic Transformation

Amdocs is accelerating its internal transformation to become an "Agentic-first" company, implementing agent capabilities across software development, service delivery, and operations. By running its own operations on Agentic AI, Amdocs aims to gain efficiencies and provide a strong foundation for future growth, acting as its own "customer zero" for the technology it delivers commercially.

Solid Financial Performance & Outlook

Amdocs reported Q3 revenue of $1.175 billion and non-GAAP diluted EPS of $1.84, both consistent with guidance midpoints. Non-GAAP operating margin improved by 20 basis points year-over-year to 21.6%. The company reiterated its full fiscal year 2026 outlook, including 3% constant currency revenue growth and 6% non-GAAP diluted EPS growth, and expects free cash flow of $710 million to $730 million before restructuring payments.

Managed Services Strength & Backlog

Managed Services delivered a record quarter with $791 million in revenue, representing 67% of total revenue and growing 2.5% year-over-year. The 12-month backlog stood at $4.26 billion, up 2.7% year-over-year, providing good forward visibility despite a sequential downtick. New Managed Services agreements were signed with a premier US digital TV provider, Telefonica Vivo in Brazil, and a leading South American provider.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.