Amdocs Q4 Earnings Surpass Estimates, Revenues Decline Y/Y

Amdocs Limited DOX reported better-than-expected fourth-quarter fiscal 2025 results. The company posted non-GAAP earnings of $1.83 per share, which came above the midpoint of the management’s guidance of $1.79-$1.85 and increased 7.6% year over year. The figure also exceeded the Zacks Consensus Estimate of $1.82.

In the trailing four quarters, DOX’s earnings outpaced the Zacks Consensus Estimate thrice while matching once, with an average surprise of 1.6%.

Amdocs’ fourth-quarter revenues of $1.15 billion surpassed the consensus mark of $1.14 billion. However, compared with the year-ago quarter, revenues were down 9% on a reported basis due to the phase-out of certain business activities. Excluding the effect of phase-out business activities, revenues were up 2.8% year over year in pro forma constant currency.

Amdocs’ Q4 Details

Amdocs reported a decline in revenues across North America, Europe and the Rest of the World (RoW). North America reported revenues of $762 million (66% of total revenues), which decreased 8.8% year over year. RoW revenues (18% of total revenues) dropped 5% year over year to $208 million.

Europe revenues (16% of total revenues) of $180 million decreased 0.8% year over year. Our model estimates for North America, RoW and Europe were pinned at $743.4 million, $221.2 million and $176.7 million, respectively.

Managed services revenues rose 3.7% year over year to $748.3 million. The company ended the fourth quarter of fiscal 2025 with a 12-month backlog of $4.19 billion, up $40 million sequentially. Our model estimates for managed services revenues and backlog were pegged at $731.5 million and $4.07 billion, respectively.

The non-GAAP operating income increased 5% year over year to $248.1 million, while the operating margin expanded 290 basis points (bps) to 21.6%.

Amdocs’ Balance Sheet & Cash Flow

Amdocs had cash and short-term investments of $325 million as of Sept. 30, 2025 compared with $342.5 million as of June 30, 2025. Long-term debt was $646.9 million as of Sept. 30, 2025, almost flat to the June 30, 2025 level of $646.7 million.

During the fourth quarter, it generated an operating cash flow of $229.8 million and a free cash flow of $198.6 million. In full fiscal 2025, it generated operating cash flow and free cash flow of $749.1 million and $645.1 million, respectively.

Amdocs Initiates Guidance for Q1 & FY2026

Amdocs initiated guidance for the first quarter and fiscal 2026. For the first quarter, the company expects revenues to be in the band of $1.135-$1.175 billion (midpoint $1.155 billion). The Zacks Consensus Estimate for revenues is pegged at $1.14 billion, suggesting a year-over-year increase of 3%.

Amdocs expects non-GAAP earnings per share to be between $1.73 and $1.79. The Zacks Consensus Estimate for earnings is pegged at $1.86 per share, indicating a year-over-year rise of 12%.

For fiscal 2026, Amdocs expects revenues to grow in the 1.7-5.7% range. The Zacks Consensus Estimate for revenues is pegged at $4.7 billion, suggesting a year-over-year increase of 3.8%.

The on-GAAP operating margin is anticipated to be in the range of 21.3-21.9% for fiscal 2026. Non-GAAP earnings per share are expected to grow in the band of 4-8%. The Zacks Consensus Estimate for earnings is pegged at $7.60 per share, indicating a year-over-year rise of 8.9%.

The company expects free cash flow between $710 million and $730 million.

DOX’s Zacks Rank and Stocks to Consider

Currently, Amdocs carries a Zacks Rank #3 (Hold).

Reddit Inc. RDDT, Amphenol APH and DocuSign DOCU are some better-ranked stocks that investors can consider in the Zacks Computer and Technology sector. Reddit and Amphenol each sport a Zacks Rank #1 (Strong Buy) at present, while DocuSign carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Reddit’s full-year 2025 earnings is pegged at $2.35 per share, revised upward by 23.7% over the past 30 days and suggests a year-over-year increase of 170.6%. Reddit shares have soared 27.4% year to date.

The Zacks Consensus Estimate for Amphenol’s full-year 2025 earnings has been revised upward to $3.22 per share from $3.03 per share 30 days ago, implying 70.4% year-over-year growth. Amphenol shares have surged 106.6% year to date.

The Zacks Consensus Estimate for DocuSign’s fiscal 2026 earnings has moved northward by 2 cents over the past 60 days to $3.69 per share, calling for an increase of 3.9% year over year. DocuSign shares have plunged 23.4% year to date.

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