Amdocs Limited

Company Overview

Business Model: Amdocs Limited is a leading global provider of software and services primarily to communications, entertainment, and media industry service providers. The company develops, implements, and manages solutions designed to meet customer business imperatives, create value, and enable digital transformation. Its offerings leverage technologies such as cloud, cloud-native, Artificial Intelligence (AI) including Generative AI (GenAI), microservices, DevSecOps, low-code/no-code, edge computing, Site Reliability Engineering (SRE), and open APIs. Amdocs Limited operates on an accountability model, often engaging third-party vendors for complementary products and services. A significant portion of its revenue is recurring, derived from long-term managed services agreements.

Market Position: Amdocs Limited is a leading provider of customer experience solutions in the highly competitive and fragmented communications and media industry. It targets industry leaders and contenders, serving approximately 400 service providers globally, including major telecommunications, broadband, mobile, and entertainment companies. The company differentiates itself through its over 40-year heritage, specialized industry know-how, continuous innovation in technologies like 5G, fiber, cloud, and AI, and its ability to provide high-availability, scalable, integrated, and modular applications. Amdocs Limited emphasizes end-to-end accountability from a single vendor and maintains long-term customer relationships, which provide a competitive advantage.

Recent Strategic Developments:

• Acquisitions:
  • Fiscal Year 2025: Acquired Profinit, a data science, engineering, and intelligence company, and the telco network engineering business of MOBIA, along with three other immaterial acquisitions, for an aggregate net consideration of approximately $84.0 million in cash.
  • Fiscal Year 2024: Acquired Astadia, specializing in mainframe-to-cloud migration and modernization, and another immaterial company, for an aggregate net consideration of approximately $84.0 million in cash.
  • Fiscal Year 2023: Acquired the service assurance business of TEOCO and ProCom Consulting, a digital transformation SI services and business consulting company, for an aggregate net consideration of approximately $130.3 million in cash.
• Product Launches/Enhancements:
  • Launched Amdocs CES25 (CES25), a telco-native, GenAI-led customer experience suite, spanning business, operations, and network domains, embedded with AI and Related Tools. Key components include the Customer Engagement Platform (in partnership with Microsoft), Amdocs Monetization Suite, Amdocs Intelligent Networking Suite, Amdocs Charging, Amdocs eSIM Cloud, Amdocs MarketONE, and Amdocs CatalogONE.
  • Introduced the new Amdocs amAIz telco-intelligence suite, a holistic, modular portfolio of telco-native data management, AI, Machine Learning (ML), and GenAI platforms, applications, and services.
  • Launched Amdocs Studios, a high-end digital services offering combining expertise across Quality Engineering, Data & GenAI, Cloud, and Experience & Digital Engineering.
• Strategic Partnerships: Expanded existing partnerships with NVIDIA, Microsoft, Amazon Web Services, Oracle Cloud, and Google Cloud, and entered into new collaborations to leverage GenAI platforms and enhance cloud and digital offerings.
• Business Optimization: Phased out several low-margin, non-core business activities in fiscal year 2025, which generated approximately $600 million in revenue in fiscal year 2024, to focus on long-term value addition and profitability.

Geographic Footprint: Amdocs Limited conducts business globally, with operations in North America, Europe, Eurasia, Latin America, Africa, and the Asia-Pacific region.

• Strategic Development Centers: Israel, Cyprus, and India.
• Regional Development Centers: Brazil, Canada, Mexico, the Philippines, the United Kingdom, and the United States.
• Customer Presence: Serves customers in approximately 90 countries.

Cross-Border Operations: Amdocs Limited operates through numerous subsidiaries organized under the laws of many countries, including Canada, Cyprus, India, Ireland, Israel, Switzerland, the United Kingdom, and the United States. The company engages in cross-border trade through its global operations and manages foreign currency exposure through hedging strategies. It is subject to varied legal, regulatory, and tax regimes across jurisdictions, including those related to data privacy (e.g., General Data Protection Regulation (GDPR), UK GDPR, Indian Digital Personal Data Protection (DPDP) Act, California Consumer Privacy Act (CCPA)), trade sanctions, export controls, and anti-corruption laws. The company's Israeli subsidiary benefits from tax incentives under the "Preferred Technological Enterprise" regime.

Financial Performance

Revenue Analysis

Profitability Metrics:

• Gross Margin: 38.0%
• Operating Margin: 16.1%
• Net Margin: 12.5%

Investment in Growth:

• R&D Expenditure: $340.8 million (7.5% of revenue)
• Capital Expenditures: $104.0 million
• Strategic Investments: $84.0 million in cash for four business acquisitions in fiscal year 2025, including Profinit and MOBIA's telco network engineering business.

Currency Impact Analysis:

• Approximately 70% to 80% of revenue and 50% to 60% of operating costs are denominated in, or linked to, the U.S. dollar, which is the functional currency.
• Foreign exchange rate fluctuations can materially affect results, particularly during economic instability.
• Amdocs Limited employs hedging strategies for significant net exposures in major foreign currencies (e.g., Canadian dollar, European Euros for revenue; New Israeli Shekels, Indian Rupees for costs) and certain balance sheet items.
• The company does not hedge all currency exposure, especially where costs are prohibitively expensive.
• Foreign exchange loss was $5.9 million in fiscal year 2025, primarily due to currency volatility and hedging costs.
• Hedging instruments partially offset foreign currency impact, with $11.2 million in net gains reclassified into earnings from cash flow hedges in fiscal year 2025.

Business Segment Analysis

Amdocs Limited manages its operations as one operating segment, providing software products and services primarily for the communications and media industry service providers. The Chief Operating Decision Maker evaluates operating results on a consolidated net income basis.

Managed Services

Financial Performance:

• Revenue: $2,995.8 million (+3.1% YoY)
• Operating Margin: Not explicitly stated for the segment, but managed services engagements are noted to be less profitable in early stages, with margins improving over time due to automation, AI, operational efficiencies, geographical mix changes, and GenAI solutions.
• Key Growth Drivers: Long-term recurring revenue streams, cash flow generation, modernization and consolidation of customer systems, adoption of automation tools, AI, and GenAI-powered agentic solutions to manage services.

Product Portfolio:

• Includes management of data center operations, IT infrastructure, cloud operations, application management and ongoing support, management of end-to-end business processes, and managed transformations (modernizing legacy systems while operating them, often to cloud infrastructure).
• Services360 platform supports agile and reliable operations with automated tasks and advanced technologies.
• Embracing GenAI for streamlining application management, dynamic operational issue resolution, and improving resiliency.

Market Dynamics:

• Driven by service providers' need for operational efficiency, cost reduction, and faster time to market for new services.
• Addresses the shift from in-house management to vendor solutions.
• Supports customers' journey towards zero-touch operations.

Geographic Revenue Distribution:

• Revenue from managed services arrangements accounted for approximately $3.00 billion of total revenue in fiscal year 2025. Geographic distribution of this specific segment revenue is not explicitly disaggregated in the filing.

International Operations & Geographic Analysis

Revenue by Geography:

International Business Structure:

• Subsidiaries: Principal operating subsidiaries in Canada, Cyprus, India, Ireland, Israel, Switzerland, the United Kingdom, and the United States. The vast majority are wholly-owned.
• Joint Ventures: A legal entity co-owned with Union Investments and Development Limited for the Ra’anana, Israel campus is consolidated, with Union's portion classified as non-controlling interest.
• Licensing Agreements: Not explicitly detailed for international business structure, but the company licenses software components from third parties.

Cross-Border Trade:

• Export Markets: Not explicitly detailed, but global operations imply exports of software and services.
• Import Dependencies: Not explicitly detailed.
• Transfer Pricing: The main subsidiary in India signed an Advance Pricing Agreement (APA) with Indian tax authorities covering April 1, 2017, to March 31, 2027, increasing certainty regarding its transfer pricing model.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: $551.3 million used to repurchase 6.3 million ordinary shares at an average price of $87.38 per share in fiscal year 2025. As of September 30, 2025, $986.4 million remained authorized under the May 2025 repurchase plan.
• Dividend Payments: $224.4 million in cash dividends paid in fiscal year 2025.
• Dividend Yield: Not explicitly stated, but quarterly dividends were $0.527 per share in FY2025, with an approved increase to $0.569 per share for April 2026 (subject to shareholder approval).
• Future Capital Return Commitments: Board approved a quarterly dividend of $0.527 per share payable January 30, 2026, and an increase to $0.569 per share for April 2026 (subject to shareholder approval).

Balance Sheet Position:

• Cash and Equivalents: $325.0 million as of September 30, 2025.
• Total Debt: $650.0 million in Senior Notes maturing in June 2030, bearing interest at 2.538% per annum.
• Net Cash Position: -$325.0 million (Total Debt - Cash and Equivalents).
• Credit Rating: Not disclosed.
• Debt Maturity Profile: Senior Notes mature in June 2030. Revolving Credit Facility (unsecured $500 million) matures in July 2029, with no outstanding borrowings as of September 30, 2025.

Cash Flow Generation:

• Operating Cash Flow: $749.1 million in fiscal year 2025.
• Free Cash Flow: $645.1 million in fiscal year 2025 (calculated as operating cash flow less capital expenditures and restructuring payments).
• Cash Conversion Metrics: Not explicitly detailed, but operating cash flow reflects healthy cash collections.

Currency Management:

• Cash holdings by major currencies: Not explicitly detailed, but short-term interest-bearing investments are primarily U.S. dollar-denominated.
• Natural hedging through operational diversification: Not explicitly stated as a strategy, but the global distribution of revenue and costs implies some natural hedging.
• Financial hedging instruments and strategies: Utilizes foreign exchange forward contracts and options to hedge significant net exposures in major foreign currencies for revenue, operating costs, and certain balance sheet items.

Operational Excellence

Production & Service Model: Amdocs Limited's operational philosophy is centered on developing, implementing, and managing mission-critical software and services for communications and media service providers. The company combines deep industry knowledge, advanced methodologies, industry best practices, and pre-configured tools to deliver consistent results and minimize customer risks. It invests significantly in ongoing training for its personnel in industry knowledge, software technologies, and management capabilities. The company has a reputation for reliably delivering quality solutions, leveraging a scalable global resource allocation model and continuous operational excellence, automation, and efficiency improvements.

Global Supply Chain Architecture: Key Suppliers & Partners:

• Cloud Providers: Amazon Web Services, Microsoft Azure, Google Cloud, Oracle Cloud.
• Technology Partners: NVIDIA, Databricks, Intel, BMC, Snowflake, Redhat, Dell EMC, VMware, Hewlett Packard Enterprise, IBM.
• Software Suppliers: Microsoft, CouchBase, Syncsort, Red Hat, Oracle, CA, IBM, Hewlett-Packard.
• Hardware Suppliers: EMC, InfiniDat, IBM, Hewlett-Packard (for data storage).
• System Integrators: Engages third-party system integrators for complementary products and services.

Facility Network:

• Manufacturing: Not applicable as a software and services company.
• Research & Development: Strategic development centers in Israel, Cyprus, and India. Regional development centers in Brazil, Canada, Mexico, the Philippines, the United Kingdom, and the United States. Focus areas include network control, optimization, orchestration, network functions virtualization, 5G, fiber, LTE, small cells, Wi-Fi, big data analytics, AI, GenAI, Natural Language Processing (NLP), digital, commerce, entertainment domains, and foundational technologies like microservices and cloud platforms.
• Distribution: Not explicitly detailed, but global operations imply a distributed service delivery model.
• Total Facilities: Approximately 3.2 million square feet worldwide, including owned facilities in Ra’anana, Israel, and significant leases in Canada, Cyprus, India, Israel, the Philippines, Mexico, the United Kingdom, and the United States.

Operational Metrics:

• Workforce: 26,969 employees as of September 30, 2025, down from 29,058 in 2024 and 30,695 in 2023.
• Restructuring Charges: $80.5 million in fiscal year 2025, down from $131.1 million in fiscal year 2024, reflecting ongoing operational excellence, automation, and internal deployment of GenAI-based tools.
• Carbon Footprint: Achieved an absolute reduction of 49% in Scope 1 & 2 greenhouse gas emissions and approximately 50% in Scope 3 by the end of fiscal year 2024, compared to 2019 levels, surpassing Science Based Targets Initiative goals.

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: Primary focus on major communications and media companies, involving senior management, IT and network personnel, and user groups (finance, customer service, marketing).
• Channel Partners: Cooperates with strategic partners and other third parties, including independent sales agents, information systems consultants, and system integrators. Has value-added reseller agreements with leading hardware and software vendors.
• Digital Platforms: Not explicitly detailed as a distribution channel for Amdocs Limited's own products, but its offerings enable customers to provide services through digital channels.

Customer Portfolio: Enterprise Customers:

• Tier 1 Clients: Includes some of the largest telecommunications companies globally (e.g., América Móvil, AT&T, Bell Canada, Singtel, Telstra, T-Mobile, Verizon, Telefónica, Vodafone), as well as broadband, mobile, and entertainment providers (e.g., Charter Communications, Comcast, DISH, J:COM, Optimum, Rogers, Sky). Also serves small to midsized communications businesses, Mobile Virtual Network Operators (MVNOs), satellite operators, and providers of media and other services (e.g., financial services).
• Strategic Partnerships: Collaborates with customers to offer rich portfolios including media, entertainment, enterprise enablement, Internet of Things (IoT), and digital lifestyle services.
• Customer Concentration: AT&T accounted for 25.9% of revenue in fiscal year 2025 (24.5% in FY2024). T-Mobile accounted for 19.9% of revenue in fiscal year 2025 (22.6% in FY2024). Excluding the phase-out of low-margin activities, percentages for AT&T and T-Mobile remained roughly stable. The ten largest customers accounted for approximately 70% of revenue in fiscal years 2025 and 2024.

Regional Market Penetration:

• North America: 65.8% of total revenue in fiscal year 2025.
• Europe: 15.6% of total revenue in fiscal year 2025, with growth in Finland and Poland.
• Rest of the World: 18.6% of total revenue in fiscal year 2025, with expansion in the United Arab Emirates and Japan.
• Growth Markets: Expanding into emerging markets such as Latin America, Africa, Eurasia, India, Southeast Asia, and the Middle East, where service providers focus on customer experience and increasing capacity for data and content.

Competitive Intelligence

Global Market Structure & Dynamics

Industry Characteristics: The market for customer experience solutions in the communications and media industry is highly competitive and fragmented. Key trends include ongoing digital transformation, migration to the cloud, increasing adoption of AI (especially agentic AI), next-generation networks (5G standalone, Fixed Wireless Access (FWA), fiber), and industry consolidation. Service providers are focused on growing new revenue streams, cost reduction, and efficient operations, while also expanding into new business models (e.g., B2B2x, mobile private networks, network-as-a-service) and partnering with suppliers for rich offerings (media, entertainment, IoT). Over-the-top (OTT)-focused players and device manufacturers continue to increase competition.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• BSS/OSS and CRM/Digital Systems Providers: CSG International, Netcracker (an NEC subsidiary), Oracle, Pegasystems, Salesforce, SAP, ServiceNow.
• System Integrators and IT Services Providers: Accenture, Cap Gemini, Cognizant, DXC Technology, Infosys, Kyndryl, Tata Consultancy Services, Tech Mahindra, Wipro (some of whom Amdocs Limited also cooperates with).
• Network Equipment Providers: Ciena, Ericsson, Huawei, Nokia (some of whom Amdocs Limited also cooperates with and some of whom also have BSS/OSS offerings).
• Niche Domain Players: Matrixx (charging), Hansen (catalog), Aria Systems, Stripe, Zuora (subscription billing), Deluxe Media, Evergent (media), Slalom (cloud consulting), Material+, Work & Co (experience design).

Regional Competitive Dynamics: Competition is expected to increase across all categories. Amdocs Limited differentiates by its industry focus, ability to enable new business models, high-quality and scalable applications, strategic partnerships, flexible delivery models, and end-to-end accountability.

Risk Assessment Framework

Strategic & Market Risks

Global Market Dynamics:

• Communications Industry Dependence: Highly dependent on conditions in the communications industry, including global economic conditions, industry consolidation, new competitors, commoditization of services, and regulatory changes.
• Macroeconomic Conditions: Exposure to geopolitical events, pandemics, inflationary environment, trade disputes, and foreign exchange rate fluctuations, which can reduce customer spending and lengthen sales cycles.
• Technology Disruption: Risk of failure to adapt to changing market conditions and new technologies (e.g., 5G standalone, FWA, fiber, cloud, AI/GenAI), potentially leading to obsolescence of products/services or inability to retain/attract customers.
• Customer Concentration: Dependence on a limited number of significant customers (AT&T: 25.9% of revenue; T-Mobile: 19.9% of revenue in FY2025), with the loss or significant decrease in business from any major customer posing a material risk.

Operational & Execution Risks

Global Supply Chain Vulnerabilities:

• Supplier Dependency: Reliance on third-party vendors for products, services, cloud offerings, and internal operations, exposing Amdocs Limited to supply disruptions, cost increases, and security vulnerabilities if vendors fail or increase costs.
• Regional Disruptions: Operations in various countries (e.g., Israel, India, Cyprus, Brazil, Canada, Mexico, Philippines, UK, US) expose the company to political instability, civil violence, threats of terrorism (e.g., Middle East conflict, India-Pakistan tensions), health emergencies, and extreme weather.
• Trade Restrictions: Exposure to changes in trade policies, tariffs, and trade restrictions (e.g., Russia-Ukraine conflict) that may impair trade and impact regional ecosystems.

Financial & Regulatory Risks

Currency & Financial Risks:

• Foreign Exchange: Exposure to fluctuations in exchange rates between the U.S. dollar and other currencies (e.g., New Israeli Shekels, Indian Rupees, Canadian dollar, European Euros), which can impact revenue and operating costs. Hedging strategies may not fully eliminate exposure.
• Interest Rate Risk: Sensitivity of interest expense and income to changes in interest rates, affecting cash investments and borrowings.
• Credit & Liquidity: Exposure to credit risk of customers, particularly those affected by adverse business conditions or high leverage, potentially impacting payment ability. Volatility in capital markets may affect investment portfolio.
• Tax Regulations: Changes in tax legislation, termination of tax benefits (e.g., in India, Israel), or challenges by tax authorities (e.g., OECD Base Erosion and Profit Shifting (BEPS) Pillar 2 implementation in Guernsey, Israel, other jurisdictions) could adversely affect the effective tax rate.

Regulatory & Compliance Risks:

• Multi-Jurisdictional Compliance: Subject to stringent, complex, and evolving laws and regulations globally, including data privacy (GDPR, UK GDPR, Indian DPDP Act, CCPA), trade sanctions, export controls, and anti-corruption laws (e.g., U.S. Foreign Corrupt Practices Act, U.K. Bribery Act). Non-compliance can lead to penalties, fines, litigation, and reputational harm.
• AI and Related Tools Regulation: Evolving legal and regulatory frameworks for AI and GenAI (e.g., EU AI Act) pose risks related to intellectual property, privacy, cybersecurity, and operational compliance, potentially requiring significant resource expenditure to adjust offerings across jurisdictions.

Geopolitical & External Risks

Country-Specific Risks:

• Political Risk: Operations in regions like the Middle East (Israel) are directly influenced by political, economic, and military conditions, with potential for disruptions and increased costs due to hostilities.
• Economic Risk: Volatile economic conditions in emerging markets, hyperinflation, and capital restrictions can adversely affect international operations.
• Regulatory Changes: Local law changes affecting operations, including immigration and work permit laws, and Environmental, Social, and Governance (ESG)-related legal and regulatory requirements.

Innovation & Technology Leadership

Research & Development Focus: Amdocs Limited makes significant investments in R&D to enhance existing products, introduce new offerings, and adopt new technologies.

• Global R&D Network: Strategic development centers in Israel, Cyprus, and India, and regional centers globally.
• Innovation Pipeline: Focuses on network control, optimization, orchestration, network functions virtualization, 5G, fiber, LTE, small cells, Wi-Fi, big data analytics, AI, GenAI, NLP, digital, commerce, entertainment domains, and foundational technologies like microservices and cloud platforms.
• Technology Development: Leverages leading-edge development technologies such as GenAI, DevSecOps, Continuous Integration/Continuous Delivery (CI/CD), and Agile methodology.
• Commercialization: Aims to commercialize new technologies and methodologies like 5G standalone networks, FWA, fiber, cloud, microservices-based architecture, DevSecOps, automation, and AI.

Intellectual Property Portfolio:

• Patent Strategy: Relies on a combination of trademarks, patents, contractual rights, trade secret law, copyrights, and non-disclosure agreements to protect proprietary software and systems.
• Licensing Programs: Licenses software components from third parties.
• IP Litigation: Faces risks of third-party claims of infringement, particularly from patent holding companies, which could lead to substantial costs, damages, or injunctions. The use of open-source software also carries potential litigation risks if license conditions are not met.

Technology Partnerships:

• Strategic Alliances: Collaborates with Amazon Web Services, NVIDIA, Microsoft, Databricks, Intel, Google, BMC, Snowflake, Oracle, Redhat, Dell EMC, VMware, Hewlett Packard Enterprise, and IBM, as well as start-up companies.
• Research Collaborations: Founding partner of Khasm Labs (formerly 5G Open Innovation Lab) and a contributor to the O-RAN Alliance, fostering development and monetization of new 5G-powered use cases and open mobile networks.

Leadership & Governance

Executive Leadership Team

International Management Structure:

• Regional leadership and reporting relationships are in place across North America, Europe, Eurasia, Latin America, Africa, and Asia-Pacific.
• The company's Chief Information Security Officer (CISO) reports to the Chief Financial Officer & Chief Operating Officer, and a steering committee led by the CFO & COO and Group President of Technology oversees cybersecurity activities.

Board Composition:

• Ten directors, nine elected at the January 31, 2025 Annual General Meeting, and one appointed in May 2025.
• Nine independent directors as defined by Nasdaq rules.
• Audit Committee: Adrian Gardner (Chair), Robert A. Minicucci, Sarah Ruth Davis. Mr. Gardner and Ms. Davis are "audit committee financial experts."
• Nominating and Corporate Governance Committee: Robert A. Minicucci (Chair), Amos Genish, John A. MacDonald.
• Management Resources and Compensation Committee: Rafael de la Vega (Chair), Robert A. Minicucci, John A. MacDonald.
• Technology and Innovation Committee: John A. MacDonald (Chair), Eli Gelman, Amos Genish, Yvette Kanouff.
• Board has a mandatory retirement age of 73 for directors, with annual waiver possibility for exceptional circumstances (granted to Mr. de la Vega and Mr. Minicucci until the 2027 Annual General Meeting).
• Directors are subject to stock ownership guidelines (6X annual cash retainer).

Regulatory Environment & Compliance

Multi-Jurisdictional Regulatory Framework: Primary Regulatory Environments:

• Guernsey: Subject to a standard corporate income tax rate of zero percent. Effective January 1, 2025, Guernsey enacted a Qualified Domestic Minimum Top-Up Tax (QDMTT) aligned with OECD/G20 Pillar Two GloBE rules, potentially resulting in a 15% minimum effective tax rate for covered profits starting October 1, 2025.
• India: Corporate tax rate of 34.94% for development centers and 27.82% for business processing operations (up to a prescribed threshold). Previously benefited from corporate income tax concessions for IT-related services until March 31, 2023. Subject to Minimum Alternative Tax (MAT) or Alternative Minimum Tax (AMT).
• Israel: General corporate tax rate of 23%. Primary Israeli subsidiary avails itself of tax benefits under the "Preferred Technological Enterprise" regime (6% corporate tax rate on Preferred Technological Income for Special Preferred Technological Enterprises, applicable since 2021). Israeli Ministry of Finance circulated draft legislation for Pillar 2 implementation for taxable periods beginning January 1, 2026.
• European Economic Area (EEA) & UK: Subject to GDPR and UK GDPR, respectively, regulating personal data processing and transfer. The UK Data Use and Access Act 2025 introduces significant changes from GDPR, potentially increasing compliance costs.
• United States: Subject to federal (U.S. Federal Trade Commission) and state (e.g., California Consumer Privacy Act, California Privacy Rights Act) data privacy and security laws.
• Other Jurisdictions: Local privacy laws introduced or enacted in Brazil, Canada, Guernsey, India, and Singapore.

Cross-Border Compliance:

• Export Controls: Subject to trade sanctions and export controls in the United States, Europe, and other countries, including those related to rapidly evolving technology (AI, GenAI, cloud services).
• Sanctions Compliance: Compliance with multi-jurisdictional sanctions (e.g., in response to Russia-Ukraine invasion).
• Anti-Corruption: Subject to anti-corruption and anti-bribery laws and regulations (e.g., U.S. Foreign Corrupt Practices Act, U.K. Bribery Act) in jurisdictions of operation.

International Tax Strategy:

• Transfer Pricing: Main Indian subsidiary signed an Advance Pricing Agreement (APA) with Indian tax authorities (April 1, 2017, to March 31, 2027) to increase certainty.
• Tax Treaties: Not explicitly detailed, but implied in international tax planning.
• BEPS Compliance: Monitoring developments related to OECD Base Erosion and Profit Shifting (BEPS) initiative, including Pillar 1 (not expected to apply) and Pillar 2 (global minimum tax rate of 15%, effective in some countries for FY2025, and in Guernsey/Israel for FY2026).

Environmental & Social Impact

Global Sustainability Strategy: Amdocs Limited integrates ESG priorities into its operations, innovation, and products, aiming for a comprehensive sustainability journey. The company is included on the S&P Dow Jones Sustainability Index (DJSI) North America, placed in S&P Global’s Corporate Sustainability Assessment (CSA) Yearbook, and received high ratings in Carbon Disclosure Project (CDP), Sustainalytics, and EcoVadis.

Environmental Commitments:

• Climate Strategy: Long-term goal of becoming carbon neutral in business operations (Scopes 1 and 2) by 2040.
• Carbon Neutrality: Achieved an absolute reduction of 49% in Scope 1 & 2 greenhouse gas emissions and approximately 50% in Scope 3 by the end of fiscal year 2024, compared to 2019 levels, surpassing Science Based Targets Initiative goals.
• Renewable Energy: Goal to reach 100% electricity from renewable sources by 2040.
• Sustainable Products: Cloud offerings are designed to help customers reduce reliance on costly, energy-consuming hardware. AI, data, and GenAI suite (amAIz) aims to optimize network operations, energy efficiency, and reduce human intervention.

Regional Sustainability Initiatives:

• Supply Chain: Global supplier ESG requirements and sustainability standards are implied by overall strategy.
• Facility Design: Ra’anana, Israel campus designed in accordance with LEED Gold standards, including advanced energy and water saving systems.

Social Impact by Region:

• Community Investment: Implements empowerment activities and initiatives, including digital inclusion programs, STEM education, and environmental awareness in operating communities.
• Labor Standards: Committed to an inclusive workplace, providing a people-centric work environment with flexibility (unlimited vacation, flexible work arrangements), opportunities for growth, professional development, and expanded employee well-being programs. Workforce diversity and inclusion are considered a competitive advantage.

Currency Management & Financial Strategy

Multi-Currency Operations: Currency Exposure:

Hedging Strategies:

• Transaction Hedging: Utilizes foreign exchange forward and option contracts to hedge a significant portion of foreign currency net exposure from revenue and expense transactions, typically for a maximum period of approximately three years.
• Translation Hedging: Uses foreign exchange forward and option contracts to hedge the net impact of variability in exchange rates on certain balance sheet items (e.g., accounts receivable, employee-related accruals) denominated in foreign currencies.
• Economic Hedging: Not explicitly detailed as a distinct strategy, but the overall hedging policy aims to reduce the impact of foreign currency on financial results.
• Effectiveness: Cash flow hedges are evaluated quarterly for effectiveness. In fiscal year 2025, $11.2 million in net gains from cash flow hedges were reclassified into earnings.
• Cost of Hedging: Foreign exchange loss of $5.9 million in fiscal year 2025 includes costs of executing the hedging policy.