Amdocs Ltd (NASDAQ:DOX) Reports Q3 Fiscal 2025 Earnings Beat Amid Muted Market Reaction

Amdocs Ltd (NASDAQ:DOX) reported third-quarter fiscal 2025 results that slightly exceeded analyst expectations, though the market reaction has been muted with shares declining approximately 1.8% in after-hours trading. The company posted revenue of $1.144 billion, narrowly beating the consensus estimate of $1.141 billion. Non-GAAP diluted earnings per share came in at $1.72, marginally above the $1.73 analysts had projected.

Key Financial Highlights

• Revenue Performance: While reported revenue declined 8.4% year-over-year due to the phase-out of certain non-core business activities, pro forma constant currency revenue grew 3.5%. Managed services revenue, which accounts for 67% of total sales, reached a record $771 million, up 4.1% YoY.
• Profitability: GAAP operating margin improved to 17.7%, up 360 basis points YoY, while non-GAAP operating margin expanded to 21.4%, reflecting cost discipline and operational efficiency.
• Backlog & Guidance: The 12-month backlog stood at $4.15 billion, up 3% YoY on a pro forma basis. The company tightened its full-year revenue growth outlook to (10.0)%-(9.0)% as reported (vs. prior guidance of (10.9)%-(9.1)%) and 2.4%-3.4% in pro forma constant currency (vs. prior 1.7%-3.7%).

Market Reaction & Outlook

Despite the slight earnings beat, the stock dipped in after-hours trading, possibly reflecting investor caution around macroeconomic uncertainty and the company’s exposure to customer spending behavior. Amdocs reiterated its target for double-digit total shareholder returns in fiscal 2025, supported by share repurchases ($135 million in Q3) and a steady dividend.

For Q4, management expects revenue between $1.125-$1.165 billion and non-GAAP EPS of $1.79-$1.85, compared to analyst estimates of $1.153 billion in sales and $1.84 in EPS. The full-year revenue outlook aligns closely with consensus expectations, suggesting steady but not accelerating growth.

Strategic Developments

Amdocs highlighted several customer wins, including a digital transformation project with BT in the UK and a GenAI-related deal with a major U.S. service provider. These contracts underscore the company’s focus on cloud, AI, and managed services as key growth drivers.

For further details on earnings estimates and historical performance, visit Amdocs' earnings estimates page.

Disclaimer: This article is not investment advice. Investors should conduct their own research or consult a financial advisor before making decisions.