Amdocs Limited DOX reported first-quarter fiscal 2024 results, wherein earnings missed the Zacks Consensus Estimate while revenues matched the same. However, both the top and bottom lines marked a year-over-year improvement.

The company reported first-quarter non-GAAP earnings of $1.56 per share, missing the consensus mark by a penny. The non-GAAP earnings per share matched the midpoint of management’s guidance of $1.53-$1.59. Quarterly earnings also increased 7.6% from the year-ago quarter’s $1.45 per share.

Amdocs reported revenues of $1.25 billion, which came in line with the Zacks Consensus Estimate as well as matched the midpoint of management’s guidance range of $1.23-$1.27 billion. Compared with the year-ago quarter, revenues were up 5% on a reported basis and 4.8% on a constant-currency basis.

Amdocs Limited Price, Consensus and EPS Surprise

Amdocs Limited price-consensus-eps-surprise-chart | Amdocs Limited Quote

Quarterly Details

Amdocs’ top-line performance was primarily driven by continued strength in North America and healthy activity levels among top consumers in Europe.

North America reported record revenues of $838.1 million (67.3% of the total revenues), highlighting a 3% year-over-year increase. Europe revenues (14.6% of the total revenues) of $181.4 million increased 8% year over year. Rest of the World revenues (18.1% of the total revenues) grew 10% year over year to $225.7 million. Our model estimates for North America, Europe and Rest of the World were pegged at $842.5 million, $179.1 million and $223.4 million, suggesting growth of 3.7%, 6.2% and 9.3%, respectively.

Managed services revenues grew 3.2% year over year to $722.5 million. The company ended the first quarter of fiscal 2024 with a 12-month backlog of $4.21 billion, up $60 million sequentially and $120 million year over year. Our model estimates for managed services revenues and backlog were pegged at $727.7 million and $4.20 billion, respectively.

The non-GAAP operating income increased 7.5% year over year to $225 million, while the operating margin expanded 40 basis points to 18.1%. The year-over-year improvement in the non-GAAP operating margin was mainly driven by the company’s continuous focus on improving operational excellence and the adoption of automation and artificial intelligence.

Balance Sheet and Cash Flow

Amdocs had cash and short-term investments of $601 million as of Dec 31, 2023, compared with $742.5 million as of Sep 30, 2023.

In the first quarter of fiscal 2024, net cash provided by operating activities was $182.4 million, down from $272.4 million in the previous quarter and up from $83.2 million in the year-ago period. Free cash flow was $138.6 million compared with the previous quarter’s $245.8 million and the year-earlier quarter’s $49.5 million.