Amdocs (NASDAQ:DOX) reported fiscal second-quarter 2026 revenue and non-GAAP earnings above the midpoint of its guidance, while newly appointed Chief Executive Officer Shimie Hortig used the company’s earnings call to outline a strategy centered on “agentic” artificial intelligence for telecom operators.
The software and services provider said revenue for the quarter was approximately $1.172 billion, up 3.9% year over year as reported and 2.2% in constant currency. Non-GAAP diluted earnings per share were $1.78, $0.02 above the midpoint of the company’s guidance. GAAP diluted EPS was $1.28.
Hortig said Amdocs’ results reflected “solid” execution, with growth in North America, record revenue in Europe and a strong performance in Rest of World. The company ended the quarter with 12-month backlog of $4.28 billion, up $30 million sequentially and 2.6% from a year earlier.
Amdocs Sets Focus on Agentic AI for Telecom
Hortig, who recently stepped into the CEO role, described the current wave of agentic AI as a major opportunity for communications service providers to transform IT and network systems, simplify complexity and speed the launch of new offerings.
“I strongly believe that Amdocs is in the best position to lead our customers and turn this agentic opportunity into reality,” Hortig said, citing the company’s telecom domain expertise, engineering background, experience with mission-critical systems and history of outcome-based customer engagements.
The company recently launched aOS, its Amdocs Agentic Operating System for telecom, at Mobile World Congress. Hortig said Amdocs has already signed initial commercial agreements to launch and implement aOS with customers including Cricket, Lumen, Bell Canada, EchoStar and PLDT.
At PLDT, Hortig said early results showed that more than 90% of customer requests are now resolved through the aOS platform, enabling faster handling times and higher productivity in retail stores.
In response to analyst questions, Hortig said aOS opportunities are starting small and are not yet a meaningful contributor to the current fiscal year outlook, but he said customer discussions are expanding. Some customers are discussing broader responsibilities for Amdocs to help transform operations and deliver savings and business benefits, he said.
Quarter Includes New Deals and Project Milestones
Amdocs highlighted several customer wins and extensions during the quarter. Hortig said the company signed an expanded multi-year managed services agreement with AT&T’s Cricket Wireless, including dealer onboarding modernization intended to improve partner experience and support faster market expansion.
Other deals cited on the call included a five-year agreement with Vodafone Spain covering CRM and OSS modernization, along with support and enhancement services. In South Korea, KT extended a multi-year agreement with Amdocs to upgrade, modernize and operate its charging system, supporting faster service rollout and 5G monetization.
The company also pointed to momentum for its cloud-based platform offerings. Hortig said connectX added new customers including Vantta Wireless, which plans to launch a mobile service with AT&T using AI-driven connectivity, and Cuatro Mobile, a U.S.-based MVNO serving Hispanic communities. A leading operator in Singapore also went live with the platform, he said.
Amdocs eSIM was selected by Cielo in Brazil for payment terminal connectivity and by MobiFone in Vietnam for zero-touch customer activation, according to Hortig.
The company also reported project milestones with customers including AT&T, Optimum, Vodafone Germany, Elisa and PLDT. Hortig said Amdocs is now servicing a significant portion of AT&T’s 5G standalone subscribers on its next-generation charging platform and played a role in the launch of AT&T’s OneConnect plan. Brightspeed also went live with Amdocs Resource Manager.
Margins Improve as Company Invests in AI
Chief Financial and Operating Officer Tamar Rapaport-Dagim said non-GAAP operating margin was 21.5%, up 20 basis points from a year ago. She attributed the improvement to cost and efficiency gains from operational excellence, automation and AI-based tools, while noting the company is also investing in its aOS platform.
Managed services revenue was $759 million, up 1.6% from the prior year and representing roughly 65% of total revenue, consistent with recent quarters. Rapaport-Dagim said renewal rates remained “typically high” during the quarter.
Regionally, North America revenue was $754 million, up more than 2% year over year but slightly lower sequentially due to normal fluctuations in customer activity. Europe revenue reached a record $192 million, up more than 6% year over year, reflecting organic growth and the impact of the Matrix acquisition. Rest of World revenue rose 8% to $226 million, the highest since fiscal third-quarter 2024.
Cash Flow, Capital Returns and Acquisition
Amdocs reported free cash flow before restructuring payments of $97 million in the quarter. Including $17 million of restructuring payments, reported free cash flow was $80 million. Rapaport-Dagim said the company has already achieved nearly 50% of its fiscal 2026 free cash flow target.
The company repurchased $138 million of shares during the quarter and paid $57 million in cash dividends. As of March 31, 2026, Amdocs had up to $702 million of remaining repurchase authority.
Amdocs also acquired the business of Connect44, a European provider of end-to-end network planning, building and management solutions, for approximately $21 million net in cash at closing, plus potential future contingent consideration.
The company ended the quarter with approximately $214 million in cash and aggregate borrowings of roughly $900 million, including $650 million in senior notes due June 2030 and $250 million in short-term financing arrangements. Amdocs also established a U.S. commercial paper program of up to $800 million and upsized its revolving credit facility to $800 million.
Guidance Reaffirmed, CFO Transition Announced
Amdocs reiterated the midpoint of its full-year fiscal 2026 constant-currency revenue growth guidance at 3%, while tightening the range to 2% to 4%. On a reported basis, the company now expects revenue growth of 2.6% to 4.6%, with foreign currency expected to provide a roughly 0.6% benefit.
For the third fiscal quarter, Amdocs guided for revenue of $1.155 billion to $1.195 billion. The company also reiterated the midpoint of its fiscal 2026 non-GAAP diluted EPS growth outlook at approximately 6%, within a tightened range of 5% to 7%.
Rapaport-Dagim said Amdocs expects fiscal 2026 free cash flow of $710 million to $730 million, excluding payments under its current restructuring program, and expects to return the majority of free cash flow to shareholders.
The call also included the announcement of a CFO transition. Rapaport-Dagim said she plans to retire after nearly 20 years as CFO and 22 years overall with Amdocs. Hortig thanked her for her service and said Tal Rosenfeld, a 20-year Amdocs finance executive, will become the company’s next CFO.
“I believe he’s undoubtedly the best person for this role,” Rapaport-Dagim said, adding that she had been preparing Rosenfeld for the position as part of an internal succession plan.
About Amdocs (NASDAQ:DOX)
Amdocs (NASDAQ: DOX) is a global software and services provider specializing in solutions for communications, media and entertainment companies. The company designs, develops and integrates revenue management, customer experience and digital services platforms that enable service providers to launch and monetize new offerings, streamline operations and enhance subscriber engagement. Amdocs' product suite encompasses billing and order management, customer relationship management, digital commerce and network function virtualization, supported by professional services for implementation, integration and managed operations.
Founded in 1982 and structured as a separate public company in 1998, Amdocs has its corporate headquarters in Chesterfield, Missouri, and maintains major development centers in Ra'anana, Israel.
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