Ladies and gentlemen, thank you for standing by and welcome to the Q3 2022 Amdocs Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] It is now my pleasure to introduce, Head of Investor Relations, Matt Smith.

Thank you operator. Before we begin, I need to call your attention to our disclaimer statement on slide 2 of the presentation. It notes that some of our comments today may be forward-looking statements and are subject to risks and uncertainties as described in Amdocs' SEC filings and that we will discuss certain financial information that is not prepared in accordance with GAAP. For more information regarding our use of non-GAAP financial measures including reconciliations of these measures, we refer you to today's earnings release, which will also be furnished with the SEC on Form 6-K. Participating on the call with me today are Shuky Sheffer, President and Chief Executive Officer of Amdocs Management Limited; and Tamar Rapaport-Dagim, Chief Financial and Operating Officer. To support today's earnings call, we are providing a presentation, which can be found on the Investor Relations section of our website. And as always a copy of today's prepared remarks will be also posted immediately following the conclusion of this call. On today's agenda, Shuky will recap our business and financial achievements for the third quarter of fiscal 2022 and we'll update you on the continued progress we have made executing against our strategic growth framework. Shuky will finish by commenting on our financial outlook after, which Tamar will provide additional details on our third quarter financial performance and guidance. As a reminder our comments today will refer to certain financial metrics on a pro forma basis where applicable to provide you with a sense of the underlying business trends excluding the financial impact of open market, which we divested on December 31, 2020. And with that I'll turn it over to Shuky.

Thanks Matt, and good afternoon to everyone joining us on the call today. I'm happy to report a solid third quarter financial performance, reflecting strong demand for our product and services expertise across our core strategic growth pillars of 5G monetization, cloud adoption, digital modernization and network automation. As you can see from the highlights on slide 6, we delivered record revenue of $1.16 billion in Q3, which was at the midpoint of guidance despite unfavorable foreign currency headwind as compared with other assumptions. Adjusting for currency revenue was up 10.8% year-over-year. Additionally, we maintained robust sales momentum, which translates to a record 12 months backlog of $3.95 billion, up 10% from a year ago and the fifth consecutive quarter of roughly double-digit year-over-year growth in the ski living indicator. On the bottom line, we delivered a non-GAAP earnings per share of $1.27, which was better than the midpoint of our guidance. Overall, we successfully achieved our financial targets for revenue, profitability and non-GAAP diluted earnings per share for the quarter despite volatile foreign currency markets and inflation-related cost pressures, which we successfully navigated with a continued focus on operational access across all aspects of our business. Now turning to slide 7. Let me address the key operating highlights of our Q3 performance. To begin our global business activity was strong led by yet another record quarter in North America. While we're closely monitoring the uncertain global macroeconomic environment and potential headwinds, we believe our customers remain committed to their most strategic initiatives central to which is the innovation of Amdocs is delivering in respect to digital modernization, 5G and fiber rollout and monetization, the journey to the cloud and network automation. In addition to North America, we continue to grow Europe as a strategic long-term growth engine for Amdocs.…

Thank you, Shuky, and hello everyone. Thank you for joining us. As a reminder, my comments today will refer to certain financial metrics on a pro forma basis, which exclude the financial impact of OpenMarket, which we divested on December 31, 2020. Turning to our financial highlights on slide 15. I'm happy with our third quarter results, which follow a very strong first half performance we already delivered. Record Q3 revenue of $1.16 billion, was up 8.8% year-over-year as recorded, primarily driven by yet another record performance in North America. Q2 revenue was at the midpoint of guidance despite an unfavorable impact from foreign currency movements of approximately $7 million compared to our guidance assumptions and relative to the second quarter of fiscal 2022. Additionally, revenue was up 8.8% in constant currency from a year ago, marking the fourth consecutive quarter of better than 10% revenue growth on a pro forma constant currency basis. During Q3, foreign currency headwinds primarily impacted our performance in Europe. Adjusting for which revenue showed additional initial signs of acceleration as the ramp-up of recent project awards kicked in. Moving down the income statement. Our Q3 non-GAAP operating margin of 17.6% was consistent with the prior quarter and year ago period, as we offset the effects of accelerated R&D investments and a competitive labor environment with our relentless focus on operational excellence, including the ongoing implementation of automation and other sophisticated tools designed to continue to improve efficiency. As a reminder, our foreign currency hedging program is designed to protect our for stability and free cash flow generation rather than revenue and we are once again pleased that this strategy has proven effective for the volatile currency market of Q3. On the bottom line, non-GAAP diluted EPS of $1.27 was above the midpoint of our…

Thanks Tamar. As you can probably tell from our remarks today, we are pleased we have stalled momentum and overall level of execution in Q3. And we remain confident in our strategy and ability to deliver on the full year financial targets. With that, we are happy to take your questions, Operator?

Thank you. [Operator Instructions] And our first question comes from the line of Tim Horan with Oppenheimer.

Hi. Thanks guys. Good quarter. Could you talk a little bit more on the cloud? Maybe if you can quantify a little bit more of the signs that you think you can provide your customers with flexibility? And just maybe what's competitive intensity like for you within cloud now? Thank you.

Hi Tim. I think that when we talk about cloud, it's not about TCO reduction only. I think that when we look at the holistic value moving to the cloud, it's much more beyond that. You are coming to a much more resilient environment, much more secure. Time to market is much faster. Ability to come with new innovation is much faster and obviously much more capabilities for disaster recovery. And there is also opportunity for cost reduction. So when we talk with our customer on the journey to the cloud, we are not just talking about cost reduction. It's all of the as I mentioned and the value proposition is by far a much broader than just TCO reduction.

And can you talk about the competitive intensity, like, who do you compete with these products?

I'm trying to be extremely humble. And I can tell you that when you talk about existing Amdocs customer, we are by far the market leader and the first choice for all our customers. Because if you -- I think that the migration to the cloud in an Amdocs of customer that's actually moving from one platform from Amdocs to a different platform of Amdocs, which is cloud enabled or all this immigration it's something that we are doing the best and I don't think, I don't see any Amdocs customers thinking about taking the other partners to do this. I think both because of our capabilities, because of our relationship. And I think we are the only one that understand and know our system. When we talk -- as we mentioned before, we do also a cloud activity in non-Amdocs systems. Over there obviously there is competition. This is in order to be Accenture in the world, Infosys in the world. I think we are coming with a very strong know-how based on organic know-how that we have. On top of it you can add all the consultant capabilities that we acquired with stock not consultant. So I think that we are very, very competitive also in non-Amdocs application, but in Amdocs application, I think that we are extremely well-positioned to take the industry to the cloud.

I just want to clarify that in addition to what Shuky said about migrating existing applications to the cloud, everything we bring out of our R&D shop is cloud native. So whenever a customer goes through a modernization by definition selecting Amdocs is making them cloud native ready and it's their call whether they want to deploy first on-prem, on private cloud or the public cloud, but it's all cloud native in terms of the software architecture whenever they go to modernization with our product.

It's a very good comment. All the transformation you view today in AT&T, in the new mobile and consumer platform in T-Mobile, in Vodafone, all of them are by design cloud native platforms. So all this transformation there are going to the cloud.

Thank you.

Thank you. And our next question comes from the line of Ashwin Shirvaikar with Citi. Pardon me, Ashwin, please check your mute button. Okay. One moment please. Our next question comes from the line of Tal Liani with Bank of America.

Can you hear me, Houston?

Hi, Tal.

Hey, Tal.

I don't have a question on the quarter because it's straightforward. I have a question on the environment. Some of the questions we're getting about Amdocs is what is the historical correlation between any economic slowdown and the business you have with customers. So if you can address things like in previous downturns have you seen cancellations or pushouts of orders, or what's the correlation between new orders and economic cycle? And then maybe speak about your own view on the environment, the spending environment? Thanks.

Hi, Tal I will start and Tamar will add if I forget something. If I want to simplify it, we have two main activities with our customers. The first one a very large one is all the Managed Services operation on the -- on our current systems. These are mission-critical systems. It is not something that you can stop or hold. I mean this is run all the monetization of the organization. So, this is extremely solid -- I don't recall ever even in the biggest downturn of pandemic 2008 that this business was impacted. At the same time, as we announced and also reflected in our backlog, we have the highest number of project in the history of the company. Now, as I mentioned before in different discussions the projects we are doing today are not discretionary projects meaning that you can say that every spend is discretionary. But when you do projects on the 5G monetization, network automation, digital transformation, these projects are so strategic to our customers that I'm not saying that they are 100% immune, but at the same time probably they are the last one by far to be touched. So, I can tell you that right now while we see some customers that are much more cautious on the spending this strategic program continues as they are so strategic to the growth and to the future. Tamar?

Yes, just we've been in cycles of downturns in the last 20 years. If I'm looking on the Financial Crisis 2008 and 2009, while our Managed Services portfolio has been much smaller, we've seen exactly the phenomenon that Shuky talks about and now we are even more incumbent with more customers with Managed Services, meaning this is pretty mission critical and everything that Shuky mentioned. On top of that we have not seen cancellation of projects. What happens typically is the projects that have been secured already have been continued. There was a slower pace of signing new projects out of the pipeline. To give everything a quantification, revenue was down back then in the financial crisis one year alone. And in this year, it was down 9% reported basis, 6% constant currency only because there was a slower pace of getting in new projects. Pandemic, same story, only for one quarter though, not even full year. One quarter was slower in terms of signing new projects. But all the projects we have in the pipeline have been continuing. Managed Services we have close to 100% renewal rate for many, many years including in tougher situations. So I feel that the combination.

No, that's what. I mean as we mentioned we got another record backlog, which is 10% year-over-year. So we see a very strong momentum in sales.

So I think the combination of what we do for our customers around mission-critical systems the fact that a very high portion of our revenue is recurring in nature and the fact that customers are investing with us in their strategic domains of 5G news to the cloud, et cetera is creating a unique business model for us and also, I would say, a more sustainable investment thesis for our investors.

Got it.

This was the short answer Tal.

The second question -- final question is, what do you do with your hiring? Are you -- can you talk to us about kind of hiring this year? What are your planning for hiring? Is any plans to slow down just to address maybe economic uncertainty, or do you continue to hire according to plan?

So we are continuing to grow our staff, and frankly speaking, I prefer that this growth will come with lower attrition and less people that we need to hire in order to achieve this net growth, but the bottom line is that we are growing our staff. We are very focused while we talk about the global picture also to balance in terms of where we are growing. And I think we talked about it in the past in terms of our global delivery model and how we are thinking about, where do we have access to talent vis-à-vis where do we need to provide proximity to customers, the cost structure, et cetera. Many considerations that go into where do we hire, which skills, how do we on board effectively employees, and make it as fast as possible to productiveness. So these are all considerations we continue to focus on. With the hope that the current conditions on the macro aspect will help us reduce attrition, and improve by that the retention rate that we have with employees. Like many other companies in the tech world, this has been a challenge in the last 18 months, and we hope that will come down a bit.

But we did not stop hiring.

No, we did not stop hiring for sure. We are growing. If you noticed we actually reported on a higher number of employees this quarter versus the prior one.

Perfect. Thanks so much and congrats on a great quarter.

Tal, thank you.

Thank you. And I'm showing no further questions at this time. So with that, I'll hand the call back over to Head of Investor Relations, Matt Smith for any closing remarks.

Thanks everybody for joining the call today and for your interest in Amdocs. We do look forward to hearing from you in the coming days. And as always, please reach out to us here in the Investor Relations group with any additional questions. And with that, we'll conclude the call. Have a great evening everyone.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating and you may now disconnect.