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    Earnings call· Jun 2026(Q3 FY26)

    AMDOCS Q3 FY26 earnings call DOX

    Aug 5, 2026 Source

    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

    9
    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

    1
    SegmentRevenueYoYQoQMargin
    Managed Services
    Delivered record revenue in Q3, accounting for roughly 67% of total revenue. Renewal rates remain consistently high.
    		$791 million2.5%——

    Operational metrics

    14
    Non-GAAP operating margin
    21.6%up 20 bps YoY, up 10 bps sequentially
    Q3 FY26

    Improved as the company balanced growth investments with strategic efforts to reshape cost structure and drive efficiency.

    Cash and investments balance
    $206 million
    as of June 30, 2026

    Healthy cash balance at quarter-end.

    Aggregate borrowing
    $930 million
    as of June 30, 2026

    Total borrowing at quarter-end.

    Commercial paper program outstanding
    $200 million
    as of June 30, 2026

    Part of short-term financing.

    Revolving credit facility available
    $520 million
    as of June 30, 2026

    Ample liquidity to support ongoing business needs.

    Shares repurchased
    $143 million
    Q3 FY26

    Amount of shares repurchased during the quarter.

    Remaining repurchase authority
    $560 million
    as of June 30, 2026

    Remaining authorization for share repurchases.

    Cash dividend paid
    $60 million
    Q3 FY26

    Dividend payment in the third fiscal quarter.

    Free cash flow conversion rate
    roughly 90%
    FY26

    Relative to expected non-GAAP net income for the full fiscal year.

    DSO
    78 daysup 2 days YoY, up 5 days sequentially
    Q3 FY26

    Days Sales Outstanding.

    Unbilled receivables net of deferred revenue
    increased by $98 millionYoY
    Q3 FY26

    Increased versus a year ago and by $68 million sequentially.

    Restructuring charge
    $0.91
    Q3 FY26

    Impacted GAAP diluted EPS, resulting from acceleration of internal transformation.

    FX impact on revenue
    negligible
    Q3 FY26

    Negligible impact from foreign currency movement versus guidance assumptions.

    Inorganic growth contribution
    roughly half
    FY26

    Expected inorganic contribution to fiscal 2026 growth.

    Industry KPIs

    4
    MetricValueDetails
    Headcount dso78 daysdays
    Rpo current rpo$4.26 billionUSD
    Genai ai book of business10 engagementsengagements
    Ai agentic channel product adoption10 engagementsengagements

    Orderbook & backlog

    1
    12-month backlog$4.26 billionend of Q3 FY26

    up 2.7% YoY, down $20 million sequentially

    Remains a good leading indicator of business and forward visibility.

    Product announcements

    1
    ProductTypeDetails
    aOS (Amdocs Agentic Telco Operating System)launch

    Deals & partnerships

    4
    Liberty Latin AmericaLarge-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 providerMultiyear 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

    2
    Macroeconomic, geopolitical, business, and operational uncertaintycurrent business environment

    not quantified

    Mitigation: Closely monitoring customer spending behavior.

    Cost of Agentic AI technology and tokensfuture

    unknown

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

    What to watch in Q4 FY26

    5

    aOS Engagement Evolution

    next quarter and beyond
    Current10 engagements, including Liberty LatAm
    TargetEvolution 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.

    Q&A highlights

    5

    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 read6 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    06

    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.

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