Amdocs (DOX) Q4 2024 earnings summary

Executive summary

• Fiscal 2024 delivered record revenue of $5.0 billion, up 2.4% year-over-year as reported and 2.7% in constant currency, with double-digit cloud growth now at 25% of total revenue and record results across all regions.

• Managed services revenue reached $2.9 billion, representing 58% of total revenue, with near 100% renewal rates and strong business model visibility.

• Strategic focus shifted to higher-margin areas: cloud, next-gen monetization, and generative AI, with phase-out of $600 million in low-margin, non-core activities.

• Achieved highest operating profitability in years, with non-GAAP operating margin at 18.4%, up 60bps year-over-year, and non-GAAP EPS at $6.44, up 9.0%.

• Returned over 100% of free cash flow to shareholders, with a 12th consecutive annual dividend increase and robust share repurchase activity.

Financial highlights

• Q4 2024 revenue was $1.26 billion, up 2.1% year-over-year in constant currency and slightly above guidance midpoint; non-GAAP operating margin improved to 18.7%.

• Non-GAAP diluted EPS for Q4 was $1.70; GAAP EPS was $0.76, impacted by an $83 million restructuring charge.

• Fiscal 2024 non-GAAP diluted EPS grew 9% to $6.44; GAAP diluted EPS was $4.25, down 5.3% due to restructuring.

• Free cash flow for FY24 was $619 million after restructuring; 12-month backlog at year-end was $4.06 billion, up 2.5% year-over-year.

• DSO at 74 days, up 5 days year-over-year.

Outlook and guidance

• Fiscal 2025 pro forma revenue growth expected between 1%-4.5% in constant currency, excluding phased-out activities.

• Double-digit cloud growth anticipated again in 2025.

• Non-GAAP operating margin projected at 21.1%-21.7%, up 300 basis points from 2024.

• Non-GAAP diluted EPS growth expected at 6.5%-10.5% for 2025; free cash flow guidance of $710-$730 million.

• Dividend increase of 10% proposed, raising quarterly payout to $0.527 per share, subject to shareholder approval.