Amdocs saw a positive market response to its Q2 results, as the company delivered revenue and non-GAAP earnings per share slightly above Wall Street expectations despite an 8.4% drop in year-on-year sales. Management attributed the quarter’s performance to ongoing growth in cloud-related projects, highlighted by new modernization deals in Europe and North America, and strong execution in managed services. CEO Joshua Sheffer credited efficiency improvements and increased adoption of the company’s digital platforms for supporting profitability during a period of industry transition, stating, “Profitability improved by 10 basis points sequentially driven by internal efficiency improvements.”

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While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Amdocs’s Q2 Earnings Call

• George Notter (Wolfe Research) asked about the significance of the British Telecom win and whether it was included in backlog. CEO Joshua Sheffer clarified the deal is incremental and was signed after quarter end, thus not yet reflected in the reported backlog.
• Shlomo Rosenbaum (Stifel) questioned the sequential dip in backlog and sought clarity on when AI deals would meaningfully lift growth. CFO Tamar Rapaport-Dagim explained that deal timing can cause short-term backlog fluctuations and that AI contributions are ramping gradually, led by data services.
• Timothy Horan (Oppenheimer) inquired about the scale of North American wins and the importance of SaaS products to incremental growth. Sheffer indicated these are large deals and that SaaS is a growing, though still relatively modest, revenue driver.
• Unidentified Analyst (Bank of America) asked about the timeline for generative AI to become a material revenue contributor. Rapaport-Dagim said 2025 is a year of exploration, with commercial deployments starting but the pace of revenue impact still evolving.
• Timothy Horan (Oppenheimer) also pressed on the sustainability of margin expansion, to which Rapaport-Dagim responded that while ongoing productivity gains are expected, future margin improvements will depend on investment needs and the balance between growth and efficiency.

Catalysts in Upcoming Quarters

Looking forward, our analysts will track (1) the rate at which cloud migration and generative AI projects transition from pilot to commercial scale, (2) the momentum of new SaaS product launches and their adoption among telecom operators, and (3) the stability of managed services renewals and expansions. Any acceleration in AI-driven deal flow or resolution of macroeconomic uncertainties could meaningfully shape Amdocs’ growth trajectory.

Amdocs currently trades at $86.46, up from $84.60 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).

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