Amdocs boasts record managed services revenue in fiscal Q3

Israeli BSS powerhouse Amdocs appeared to come through its first full quarter operating under pandemic restrictions pretty much unscathed.

Thanks to healthy growth in North America, and what it called a "record" quarter in managed services revenue during fiscal Q3 (ended June 30), which was up 4.6% year-on-year to $604 million, total turnover exceeded mid-point guidance and beat analyst estimates.

At a shade over $1 billion – helped just a little by a positive impact of foreign currency movements ($5 million) – revenue crawled up 0.1% compared with pre-COVID Q3 2019.

Business as usual
Shuky Sheffer, Amdocs CEO, seemed in ebullient mood.

"The pace of deal signings accelerated during Q3 and included an agreement to support Bell Canada's cloud-native strategy, an enterprise digital transformation project in the Philippines and our first-ever modernization award at Three UK," he said.

The Israeli firm opened up its twelve-month backlog – which includes the likes of anticipated revenue related to contracts, estimated revenue from managed services contracts, letters of intent, maintenance and estimated on-going support activities – to show $3.48 billion worth of business as of June 30.

That's up $20 million from the end of the previous quarter, and up 2.4% compared with Q3 2019.

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"We are on track to generate normalized free cash flow of $500 million in fiscal 2020, which is slightly better than the original guidance we provided at the beginning of the year," added Sheffer.

GAAP net income dipped, though, from $131.4 million in Q3 2019 to $120.4 million.

Excluding any impact from the Openet acquisition, which is expected to be done and dusted in fiscal Q4, Amdocs anticipates full-year reported revenue growth of 1.1%-2.1%, compared with previous guidance of (0.5%) -2.5%.

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— Ken Wieland, contributing editor, special to Light Reading

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