For networking and cybersecurity here at Morgan Stanley. For any research disclosures, see morganstanley.com/research disclosures. We're delighted to have Amdocs here with us today. I have Shuky Sheffer, CEO of Amdocs. Maybe just as an overview, for those who don't know Amdocs, can you just talk about the company? What does Amdocs do? W hat is the role of Amdocs within the telco industry? Okay, so as you mentioned, we are supporting the telco industry. The large telco companies of the world are our customers: AT&T, T-Mobile, Vodafone, and others. Three are our customers. I f you look at the telco environment, there are two areas. Obviously, there is the network domain when you create all the network infrastructure, and there is the IT domain. Amdocs is in the IT domain mainly. W e support, I would say, all the monetization activities of our customers. I f you think about the environment of a customer you're familiar with, there is the mobile application and the website and the retail store. T here are the commerce engine, all the ordering engines, catalog, obviously all the billing activities, General Ledger, invoicing, AR, and then all the touching of the network system from policy system to service fulfillment to rating charging. W e are doing end-to-end activities that support all the infrastructure, what we call BSS or OSS system, all everything that our customer needs to monetize the network. Amdocs is unique in this domain in two different aspects. The first one is usually there is a typical split between product companies like Salesforce, ServiceNow, and there are the system integrators like Accenture, TCS, and Amdocs is unique because we do develop the products, and we are ranked by far the number one, is the number one product in this industry to support our customers, and we do all the services too, so we are doing both product and services. We are what we call a product-led services company, so we have all the products, we implement our products, and we operate our products in managed services, which is very different. It creates a very unique accountability model because usually in this very complex environment or projects, when something goes wrong, the product guy will say the system integrator doesn't know how to operate the product. The system integrator will say the product doesn't work, so you can never have a real accountability. In our model, we do both the product and the services. You can get real accountability, so this is, I think, one big differentiator, and the other one, we are the only one that have all the portfolio. As I mentioned, there is a list of applications that supports, and we have end-to-end. Usually in a typical RFP, it will be Amdocs versus a system integrator that tries to integrate several platforms to accommodate what we are by far the market leader in our domain. If you're looking at our blue-chip customer around the world starting here in the UK, so TRI, Vodafone, British Telecom, everything everywhere. Everyone is our customer in North America. Obviously, T-Mobile, AT&T, Bell Canada, Comcast, Charter, Rogers, TELUS in Latin America. The large groups are Telefónica, América Móvil. In Europe, definitely Vodafone is our largest customer, and we have many, many presence in APAC all over, we are by far the market leader in our domain. Okay. I n addition to having a unique portfolio and value proposition, you guys have a tech-led and outcomes-based business model. Just talk about this and the way it differentiates you versus the competition. Definitely in the new world of GenAI. T he majority of our business is we don't have what we call rate card relationship. The vast majority of our business is outcome-based. Rate card relationship is if you want to do something, you come to Accenture or TCS or whatever and say, "I want to buy 100 people from you," and then you pay by role, by location. F efinitely in today's world of GenAI, suddenly you can do the tasks not with 100 people for, and it's time and material-based. With 70 people, immediately it's impact your margin and revenue, et cetera. Amdocs is selling value proposition, which is outcome-based, meaning if we operate in an environment by managed services, we are committed to service level and KPIs. T his is how we monetize as long as we are meeting this. The idea is we are not selling people. We are selling value. The monetization model is outcome-based as long as meeting, and we have a great reputation of meeting the service level. The whole monetization model is based on outcome-based. Now we can see that mainly all the system integrators are starting to talk in this language of outcome-based, which has been our monetization model for probably many, many years. Everybody's coming around to you. All right. Can you just talk about maybe some of the transformation that has taken place in the business over the last year? You've been phasing out some of the lower margin non-core businesses and pivoting more towards AI and cloud and modernization-focused initiatives. There are definitely main trends that we follow and support in the last year. T his phasing out of $600 million of non-core low-margin business, this is we identify we are doing some activities that we don't believe are strategic and very low margin and very low visibility. I t makes sense to phase them out. It's one time and that's it. F rom the main trends that the company is supporting the number one that we are doing for several years, it's become a significant growth engine for us. It's roughly already 30% of the business. It's growing double-digit. It's the journey to the cloud. We actually probably six years ago we decided we want to take the industry to the cloud. We created a platform for every Amdocs customer to move to the cloud. It doesn't matter if he's doing it in a way of rip and replace, pretty much like taking the legacy on-premise system and to do like a full migration to the latest and greatest cloud native system or taking an existing system and actually moving it to the cloud version of this specific system, so we created obviously a journey for every customer. This journey is still, while we have many, many customers that are doing this journey. It's still early days. If you look at the industry as a whole, the vast majority of the industry is still on-premise, and these are very complex projects. It takes some time, huge migration, lots of data, but most of our customers already started the journey with us, with their eventual move to the cloud. All our customers. This is one thing that we created a foundation probably four or five years ago, and we are deploying it across the world. The other one is definitely the GenAI transformation, and here we see what we call Horizon One and Horizon Two. Horizon One is we build a foundation. It's called amAIz, and in this foundation, actually, we help our customers to create what we call different use cases or different agents or copilots, and in this type of infrastructure, we are leveraging the fact that we are the system of record. We know the data, and we understand the domain in order to help our customers to insert in it. It It could be in the call center, in the retail store, in many. T o create these agents. Agent could support care. Agent could support upsell or agent assist or copilot. T his is something that we are doing for a while and quite successfully. I f you look at what we call Horizon Two, we are in the process of actually bringing to market what we call Cognitive Core. Cognitive Core is a GenAI layer that we can put over every Amdocs platform. It doesn't matter if it was implemented a year ago or 10 years old. A ctually, the whole dialogue with the core system will be done through agents. This is something we are going to announce next year, first quarter, probably in Mobile World Congress in Barcelona. I t's going to completely transform the way our customer is going to talk, operate, enhance their main core system. T his is something that probably we believe it will be another growth engine for Amdocs like the cloud. Got it. You've talked about a $60 billion TAM. Just how do you go about increasing your share of that opportunity with existing customers and penetrating new logos? You just listed off a list of the largest customers there are. Talk about recent strong sales momentum across your strategic domains and operating regions. When we look at our, obviously, the telco market is the same market. T here are not going to be additional AT&Ts. O ur strategy is, when we deliver value to customers, we are constantly increasing our portfolio. I f you look at the portfolio of Amdocs, what used to be 10 years ago, what is today, we expand the portfolio. Some of it is in our current domain, like in what we call more the billing, BSS, monetization, some of them in the network domain. I f you can see, we are expanding and adding more and more products to our portfolio. Now, this is one. On the other hand, we are adding to our service portfolio, which is pretty big. I can give a couple of examples for each. In the product portfolio, we added the platform around from fiber rollout, which is obviously happening all over, to eSIM platform, to marketplace platform. Today, it's very common that our customers are selling OTTs like Netflix and Amazon Prime and Disney Plus, et cetera. W e actually came with a platform that enables us to do it very simply. W e are adding a platform all the time. W e expand with our customers by adding more and more products. The other one is service portfolio. F or example, cloud migration. This is a competency that we have added not just for Amdocs system, but also for non-Amdocs system. For example, we signed a very large deal with AT&T a year ago. Actually, we are going to take all the mainframe applications of AT&T and move them to the cloud over time in a complete managed service environment. T his is, for example, a domain within AT&T that we have zero presence before, and now we are expanding. E xpanding customers in both portfolio of product and services. The other one is getting new logos. We are getting several new logos every year and also expand geographically where we can. W e don't operate in China, for example, but definitely in Europe. We are the market leader by far in APAC. Getting new customers and expanding to new geographies. B etween expanding within existing customers by adding more portfolio of product and services, getting to new customers and new geographies, we have zero presence in Japan. Now we are starting to develop presence in Japan. T his is how we expand within our addressable market. Great. GenAI, major focus of everybody, but also the telco industry. Why are you well positioned to help here? W here is the momentum? You guys noted a success with a UAE Telco. Just how long did it take to implement a solution here? And how quickly were they able to see results? The differentiation of Amdocs in GenAI will be based on things that helped us before. We see, and by the way, it's pretty common right now to see that if you take a multi-vertical platform, Agentforce, Salesforce, or others, and you try to implement it in a very complex environment like telco, it's not successful. Because when we build our platform, we understand the taxonomy. We understand the ontology. We are the System of Record. We create an environment which we call Zero Data Copy. W e don't need to create additional data environment because we own or we understand the data. We are doing the orchestration. W hen we build our solution, by the way, we don't pretend that you can take this solution to other verticals. I f you take our solution that, as I said, understand the ontology, the taxonomy, the orchestration, we understand the data, this solution can be very successful. W hen we talk about, for example, our next generation offering that we're going to come to the market is what we call Cognitive Core. What is Cognitive Core? By the way, we're still looking for the name for this. Y ou're going to put this layer on top of every Amdocs platform. It doesn't matter if it's something that was implemented five years ago or one year ago. T he whole dialogue and interaction with the core system, with the System of Record, we've done through agents. Now, you can say there are other platforms there that pretend to do the same, but in reality, it doesn't work. T he fact that the platform that we build, I understand it, as I said, understand the domain, understand how it works, all the connection, understand the data, you don't need to copy the data, help us to do this much more effectively and successfully. W e are going to announce in first quarter, as I mentioned, this new product. A ctually, the reason we believe it is going to be successful is because we understand the domain. This differentiation, understanding the data on the orchestration, helps us a lot to do it in the right way. T he future is that everything will be done through agents on top of this Cognitive Core layer. I f you want to, I will give some tangible example. There is going to be a marketing agent. Today, when you want to come, for example, before Black Friday or iPhone launch and create a new offering to the market to certain population segment, you want to do something for students under 25 that are likely to upgrade their device, and you want to plan device financing. T he marketing is dreaming about this offering, and then you need to meet with the IT, and it takes a lot of time. You need to implement it and to test it. Y ou need to think that in the future, it's going to be an agent that will talk to other agents that will say, "Okay, this is the new offering that we want to do." T he other agents will implement this in the catalog and all the system to make it work. T his is the next generation of way that we believe we will operate. C oming from really deep understanding of the domain helps us to do it successfully, comparing to other options, which are more like general purpose type of engines that find it's very difficult to operate in the telco environment. Okay. Cognitive Core in terms of AI names is pretty good. There's some pretty bad ones out there. All right. W e've often seen Telco's as laggards in technology adoption. You noted a lot are still on-premises. Many of them are still heavily reliant on internal IT. Just how are you seeing that change? H ow do we see them start to catch up by relying more on partners like Amdocs? We have done a pretty good job in expanding. We do obviously work with our IT partners. Another one of our partners, another one of our biggest competitors is IT. I f you ask me what is the biggest competitor of Amdocs, it's not Salesforce, it's not NetCracker, it's not Oracle, it's the internal IT. T hat there is a way of coexistence in a way that Amdocs is bringing all the, and in a way, we are spending hundreds of millions of dollars every year in technology. We are enjoying the fact that we see innovation from APAC and from Europe. I f you look, our products actually represent all the trends that we see around the world, and we continue to invest in R&D, so we are better positioned to come all the time with better tooling capabilities. In a way, the move to agent environment helps us because then we can obviously collaborate with the IT in a way to say, "Okay, we are going to build this environment, and the IT, you can build on top of it any agent you dream of to get the value from our core system." I t was always there. It was always this tension between our partners and the competitors. T he more everything is based on IP and technology this is what we do. I t's positioning us better. Okay. You've had a strong relationship over time with Microsoft and some of the other clouds. Just how are those relationships evolving? H ow do you see those partnerships as tailwinds to the business? For the most part, it's a partnership. It's not a competition, and obviously our platform is cloud native, so you can run any type of Azure, on AWS, on GCP. I n Microsoft collaboration was a bit different because beyond obviously leveraging the cloud infrastructure, Microsoft expanded it also to come with what we call the customer experience layer that it's more using their platform beyond just the cloud infrastructure, and we are using their infrastructure, obviously, obviously very strong relationship with AWS, with Microsoft, deploying this across the world. We have a lot of activities of cloud migration, even for non-Amdocs. Definitely, it's included partnership with these guys. As I said, for the most part, it's partnership and not some areas there of overlap that we compete. For the most part, it's a great partnership, but we have an ecosystem. Our biggest partner today, by far, in GenAI is NVIDIA. W e're working very closely with Nvidia when we develop our platform, and they are our biggest partner in this domain, but there is an ecosystem of, obviously, this part of what we do today of coming with the right to do solution to our customers. Got it. You've always had this mix of project-based versus recurring managed services revenue. Just how do you see that mix evolving within the business? J ust how does that change the visibility you have? If you look at the fundamentals of the company, and this is the fact that I think when we ask Shuky Amdocs, so I forgot to mention that we are dealing with mission-critical systems. Even if you look at stress tests like, I don't know, COVID or financial crisis in 2009, you cannot stop Amdocs, what we do. T his is the lifeline of the companies of our customer. B ack to your question, over time, the monetization model of Amdocs, if you look at 65% of our revenue is managed services, 75% of our revenue is recurring. We have 90% visibility within our 12-month backlog, which is pretty nice. W e'll see probably over time more subscription-like models that will evolve over time. The fundamentals of the company that the majority of the revenue of the company is recurring and very large full Managed Services like 65%, these are not going to change. W e'll see more like a subscription model type of monetization model in the future. Got it. You noted some pressure on the business heading into fiscal 2026 with headwinds from T-Mobile. Just what are some of the trends with your largest customers, and just how does macro tend to influence the business? We see the same macro impact like anyone else. A little bit longer sales cycle. Everyone is now, GenAI is a little bit mixing everything, and we have a long-term relationship with all our biggest customers. Very proud from AT&T to T-Mobile to Bell, to all the big. We have a very long, I would say, relationship. We are supporting most of them, or not all of them, in full managed services, long-term agreements. W e have cycle within customer. Customer has different priorities. It's not new. We used to have it in AT&T. Now we mentioned a little bit about T-Mobile, but over time things are up and down, but we are strategic partners for all our big customers. We are supporting their core business for many years. We enjoy a very strong relationship with all of them. Got it, and then I'll end with some more CFO questions. I ask you to put your CFO hat on. You've seen improving margins over the last year. Just how has AI helped with that? And just how are you sustaining some of that margin expansion potential while investing in Cognitive Core? At the end of the day, we are an engineering company. W hen we look about GenAI, there is the internal stuff, and there is the external. So far, I talked mainly about the external. What will be our offering in the future that we are going to give our customer? Cognitive Core, different use cases, copilots, agent assist, all of this. T he Cognitive Core is what we call the Horizon Two of our offering. It's much bigger in scale. I t can grow to be, over time, a growth engine to Amdocs like the cloud. T his is what we offer our customers. Definitely, Amdocs is going right now through an internal transformation of GenAI as we are engineering an R&D company. W e are implementing GenAI in everything we do. It's everything around the software development lifecycle in the way we do R&D, the way we test, and the way we document. W e are leveraging across the board in marketing, in legal, in HR, all over. T oday, we are implementing engine that is doing the best risk allocation for employees based on location, skill, time, whatever. Th is is definitely, and it means eventually that we do more with less people. O ver time, we believe that implementation of GenAI, which is strategic for the company internally, will help us to expand our margin. Now, this year, 2026, we said that we are going to double down and invest more in GenAI capabilities, Cognitive Core. It's not just in R&D. It's sales, marketing, everything, all the ecosystem that supports it. S till, we are able to expand margin by 20 basis points because we are getting all the time, I would say, a lot of value from doing things much faster and better and cheaper using this technology. W e assume this will continue, even maybe accelerate in the future. W e see a future that we continue to expand our margin over time. Obviously, we share with our customer some of it, but also we can continue to expand our margin. All right. Well, Shuky, it was great having you here today and telling us more about Amdocs. Thank you.