Welcome to the Amdocs First Quarter 2015 Earnings Call. My name is Ellen, and I will be your operator for today’s call. [Operator Instructions] Later we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to Matt Smith. Mr. Smith, you may begin.

Thank you, Ellen. Now before we begin, I would like to point out that during this call, we will discuss certain financial information that is not prepared in accordance with GAAP. The company’s management uses this financial information in its internal analysis in order to exclude the effects of acquisitions and other significant items that may have a disproportionate effect in a particular period. Accordingly, management believes that isolating the effects of such events enables management and investors to consistently analyze the critical components and results of operations of the company’s business and to have a meaningful comparison to prior periods. 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. Also, this call includes information that constitutes forward-looking statements. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be obtained or that any deviations will not be material. Such statements involve risks and uncertainties that may cause future results to differ from those anticipated. These risks include, but are not limited to, the effects of general economic conditions and such other risks as discussed in our earnings release today and at greater length in the company’s filings with the Securities and Exchange Commission, including in our Annual Report on Form 20-F for the fiscal year ended September 30, 2014, filed on December 8, 2014. Amdocs may elect to update these forward-looking statements at some point in the future. However, the company specifically disclaims any obligation to do so. Participating on the call with me today are Eli Gelman, President and Chief Executive Officer of Amdocs Management Limited; and Tamar Rapaport-Dagim, Chief Financial Officer. With that, I’ll turn it over to Eli.

Thank you Matt and good afternoon to everyone for joining us on the call today. We’re pleased to report that the first quarter performance was consistent with our overall expectations. We announced significant new awards with Singtel in Asia Pacific and secured an influential new win at Telefónica in Brazil. We extended our relationship with U.S. Cellular moving beyond project delivery to full manage services arrangement. We bought innovative new offerings into the market including Amdocs mobile financial services and we maintain our focus on operations while maximizing the total return to shareholders. Let me now add some regional color to the company activity during the first quarter. Beginning in North America, quarterly performance was within the range of expectations and reflected the mixed expectations in customer activity and the negative impact of the movement of the U.S. and Canadian dollar exchange rate. During quarter one; we continue to help our customers in respond to rapidly changing competitive and structural dynamics in wireless and Pay TV market in North America by supporting them in the strategic initiatives. Along these lines and we’re pleased to announce today that we have entered into a five-year managed services contract with U.S. Cellular to manage the operations of a range of its business and operational support systems. In closing applications, billing operations and infrastructure support services the significant new agreement follows our recent delivery of complex transformation project for U.S. Cellular and represent the natural progression of our business model beyond live production of a project and inter-managed services arrangement, which usually comes with higher revenue and visibility. Moreover, the expansion of our relationship with this long standing customer is evidence of the ongoing value proposition we expect to provide as we’re enabling Cellular to achieve a strategic of delivering a superior customer experience.…

Thank you, Eli. First fiscal quarter revenue $906 million was within our guidance range of $895 million to $925 million, with a negative impact from foreign currency fluctuations of approximately $10 million relative to the fourth fiscal quarter of 2014. Our first quarter guidance range already embedded the negative sequential impact of approximately $6 million from foreign currency fluctuations. Revenue performance was roughly in line with the mid-point of our expectations after adjusting for the additional negative impact of foreign currency fluctuations. Our first fiscal quarter, non-GAAP operating margin was 16.9% an increase 10 basis points compared to the fourth fiscal quarter of 2014 and within our target range of 16.2% to 17.2%. We continue to expect operating margins to fluctuate within this range for the remainder of fiscal year 2015 and we would not extrapolate the continuing trend of margin expansion from the strong results in Q1. Below the operating line, non-GAAP net interest and other expense was $2.4 million in Q1. For forward looking purposes, we continue to expect a non-GAAP net interest and other expense in the range of a few million dollars quarterly due to foreign currency fluctuations. Diluted non-GAAP EPS was $0.88 in Q1 compared to a guidance range of $0.77 to $0.83. The lower effective tax rate positively impacted non-GAAP EPS in Q1 and reflected the release of accumulated reserves [for uncertain tax position] settled during the quarter and valuation allowances on deferred tax assets released during the quarter. For the full fiscal year 2015, we continue to expect non-GAAP effective tax rate to remain within the target range of 13% to 15%. Free cash flow was robust at $173 million in Q1. This was comprised of cash flow from operations of approximately $208 million less $35 million in net capital expenditures and other.…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] We do ask that you limit yourself to one initial question and one follow-up question. The first question is from Ashwin Shirvaikar from Citi.

Thank you. Hi. Congratulations on the results and obviously, great to see the statement on the share repurchase about 50/50, as well as the higher dividend. I guess my first question is, recently we seem to have seen quite good traction in incremental signings by existing clients, as well as some new clients. Do you see a greater urgency than before among your telecom clients to transform themselves? What is driving that now, as opposed to before?

To say clearly Ashwin that we see a more -- an urgency, I would not go as far that because assume the timing of the contracts are usually after a long process of sales and proof-of-concept and sometime long negotiations and so I don’t that as a well cycle of sales have been shortened which was would be an indication also of an urgency that they’re giving up on something. On the other hand, I think the level of those three factors I think that helped sign more deals and luckily or smartly they’re coming our way. The first one is competition, the competition both in Latin America, in Southeast Asia almost in any market as we know Philippines, Indonesia, Singapore, Australia as well as the competition in North America that you are more exposed to is intensifying. So competition usually drives higher tendency to and propensity to do something. So I think that the level of competition all across the world even in Europe it’s quite true. The second one is M&A and the corporate development structure and it is under major change and very high dynamics all around the world look just at the British market, look at the UK market within the last few weeks only three announced that they’re going to buy all two from Telefónica, British Telecom as well as back into the wireless space by buying EE which was a combination of Deutsche Telekom and Orange from few years ago, Vodafone definitely will have to respond to something and they just bought capital wireless or quadruple play offering you see the same thing in Spain, you see the same thing -- and these are the market that you didn’t see it before. In Germany, the market is going from five carriers to three carriers and more or less where Telefónica is buying E plus. So I think M&A or I don’t know what’s the situation in North America now we see it going to Mexico, the Mexican market would be under transformation which is kind of the second driver. And the fifth driver is, the need to provide really a superior customer experience, the customers are becoming more and more demanding, the environment itself is more and more complex and carriers needs to transform now to provide superior customer experience. We wrote the book on these things and we can deliver these things and I think the end result of these three factors are working so these are the ways as they call them, as I usually call them and we write them successfully.

Right. That's very good to hear. One factor that maybe you did not stress on as much is with regards to some of the newer areas that Telecom companies are trying to get into, maybe related to the internet of things, connected home, connected car all those things, as well as mobile money where you obviously signed a good contract here. How much of the incremental opportunity could that be this year, as well as, say, over the next couple of years?

It’s a great question I think the direction that you’ve identified are absolutely right and we actually have quite strong offerings on almost any one of them we didn’t announce all of them so we’ll not go through all the details, we definitely announced the Amdocs mobile financial services and we have some really nice view slight up this quarter with this offering. We enhance the big data analytics specific applications specific targeted big data in different use cases but we are also active in the Internet of things and in many other connected homes, connected car and many other initiatives. We just held last week -- a session on Internet of Things with more than 100 people showing up from 10 different industries including many of our competitors and other industry this is not competing. So we’re active in those areas. But as I mentioned on the MFS as well, these are usually small in the beginning and tend to see the growth over time. So we see that as a longer term investment, obviously we’re trying, we’re making sure that in the meantime we’ll meet the revenue and EBIT and the guidance so that regular BSS transformation, managed services, OSS, and many others but those are important because they will provide us the growth of the next generation and generation after that. And these are all activities that are happening as we speak and that are gaining momentum I would say around most of the world this is in the developed market, other than MFS which is emerging market. So revenue will follow later in a bigger sense but the activities are happening right now. And I do not obviously start mentioning the net authorization and the net optimization and that we have, this actually could be quite sizeable projects when they come to fruition but again it’s on the run way don’t take off that quickly.

The next question is from SK Prasad Borra with Goldman Sachs.

Thanks for taking my questions. A couple, if I may, firstly, if you can talk about the opportunity for Amdocs-related investments by web 2.0 players like Google, Facebooks of the world? So beyond the telcos, what kind of investments are you making and how do you intend to tap that market? The second one is on the managed services business. Can you give us any indication around the pipeline what you see for second half this year?

or : As for the managed services, it’s hard to really give you accurate prediction, but I can assure you that we’re working on managed services arrangements or bids or activities in Latin America, in Europe, in North America, in Asia-Pacific, so in all the regions some of them are moving kind of naturally from a delivery mode as we did in new servers to managed services mode. That’s one of the reasons why we allow delivery project so much, because they provide us opportunity to also stabilize the relationship through managed services deal, not always but in many cases. So some of those of this nature, some are on the expense of our competitors taking away managed services components with a better offering. And some are completely new thing that goes with the transformation that we’re working on, so we have actually quite a rich pipeline for managed services and we see some growth in the managed services in recent quarters. And we hope to continue this trend, it’s not guaranteed because the timing of those managed services are not always easy to predict.

And does that have any bearing on the margins? You did mention on some of the points how things change between the quarters. Should we be aware of any impact on a quarter by quarter basis because of the timing of the managed services contracts?

Not necessarily. We may fluctuate for other reasons through quarter-to-quarter within the guidance range but I don’t expect any material impact coming from that in particular.

Usually managed services in general represents some pressure in the beginning, because we transform, we invest in the software that we’re going to operate and we monetize in higher profitability at the longer -- at the second phase of the project, but I don’t think that we expect to see fluctuation because of specific managed services deals in the near future. We are just giving you the best exposure to what we see which is some type of fluctuation and we don’t want people to measure it and start extrapolating this early. Obviously we are very happy with the expansion in this quarter to 16.9. And we’re trying our best in any given quarter but it may fluctuate. Overall, as we said before we keep on focusing very much on the operational aspects of the business on doing the same thing with less people and more sophisticated methods. And as such overall, you see the operating margins gripping up but sometime it’s lumpy and the overall direction as we hope to A. stay in the range and B. to improve within the range.

The next question is from Shaul Eyal with Oppenheimer. Please go ahead.

Thank you. Hi, good afternoon, and congratulations for solid results even in a tough foreign exchange environment. Eli, I want to go back to some of the comments you made in response to Ashwin's question regarding some of the consolidation taking place in Europe right now. Do you think, given we have, I don't know how many, what is it 200, 300 even more than that carriers in about 20-something, close to 30 different European countries? I know there was some consolidation in prior years, but I'm surprised we haven't seen that process being accelerated or getting accelerated over the course of the past few years. Do you think we're on the verge of seeing some acceleration in that respect over the next probably three, four, five years?

So Shaul it’s really hard to predict I would tell you that the stronger market in Europe in my view is the UK, Germany, Scandinavia and maybe couple of others out of the 28 countries in Europe. Now we’re seeing it already in Germany and in the UK, so maybe this is an indication because usually stronger markets will allow themselves to do something and be the leader. You see some consolidation already in Spain as well when Ono being picked up by Vodafone and you see other activities there. Now whether it will become also true to France or to Belgium or to Russia or other places along the continent, it’s a little bit hard to predict but I think that once its there, more people will look at it and say well it make sense because otherwise they cannot maintain this level of competition and most of them and lot of them are not making money, not most of them. So it’s early indication, we are definitely -- we are trying to get the maximum out of the consolidating environment in the UK and Germany, but again it’s hard to predict the outcome because we just announced it recently like in the last months or two all around Europe. So maybe it’s differently we are going after the UK market and then German market in a big way. We have some activities obviously with some markets already that we want to expand it. Just my last comment as I mentioned in my prepared remarks. We actually see potential of growth in Europe, so despite the currency, despite the area I think because we are focused on the right target and in the time. So far Europe was throughout the last couple of years was not so bad for us.

Got it. Eli, sticking on the European point and ongoing consolidation, the handful of situations we have seen over the course of the past few years, the ones in which Amdocs, let's say, was not involved, who were the prime consolidators of the system integrators that were chosen to do some of those assignments?

Actually in Europe if it wasn’t us it was no one. What you are seeing in Europe is actually people buying and then sitting on the asset as a holding company or something. Only now you see more focused effort to use the brand. Telefonica announced that they want to use the brand of o2 plus E-plus in the stronger way in Germany. Vodafone is quick to respond obliviously Virgin Telecom is not going to stay behind. You see these trends only recently before that I don’t think that had been a lot of a consolidated and people that enjoyed its way in a significant way.

The next question is from Tom Roderick with Stifel.

Yes, hi, Matt VanVliet on for Tom. Building on the last question about consolidation in Europe, especially with some of the Galaxy customers that you've had success with, how do you anticipate that consolidation playing out in those sales cycles? Are you expecting them to maybe pause on some of these transformational projects because they're out looking to spend capital elsewhere or does that have to be a part of the consolidation strategy?

Well Matt, I don’t know but I can tell you what I think would make sense, and then we will have to follow-up on that closely with this company. When we have seen it in a very clear way North America and I think that this is not any different -- we actually have seen it also in Telefonica in the activity Latin American and the Singapore Telecom, in Asia-Pacific; when a carrier buys another Company, the sooner they will streamline the back end systems, the better the operation will be. The idea that to buy a company and you make synergies or the savings of consolidating the two CFOs to one is not a good idea. And it’s not the synergies. You have seen our AT&T grew throughout the years, [indiscernible] at that time, that’s exactly the situation with Singapore Telecom, the exactly situation with Telefonica, imagine that one of their reasons that Telefonica was pushing faster on a very significant project for them in Vivo that we want is because of their plans to buy GVT, it’s a consolidation again we need to prepare company A before you add this company B. And in case that backend systems are the only thing that makes the joint company look coherent to the end consumer and then customer, otherwise it’s just a configuration of corporates. So again, now I am predicting it’s always dangerous that it will repeat itself in Europe, so if Vodafone is buying more assets or two or anyone of those they would try to consolidate. If you ask me sometime Telefonica would like to consolidate their operations in Germany there was no point to buy company and to stay to live them alone. If a Vodafone wants to make some value out of the acquisition of Kabel Deutschland which is in Vodafone D2 in Germany buying the number one cable and satellite and broadband company in Germany. Again it’s a consolidation of backend system. So I don’t think we are saying it because we are IT company that provides backend systems. I think that this is really the reality of a good consolidation. So, the potential is there. Obviously we are encouraged and proud with the development of our relationship with Telefonica the development and relationship with Vodafone, with Telenor; these are all the names that are going to most likely consolidate the content in this way or another. So now -- if we can do it and what rate and what pace and how fast and so on and so forth. But I can tell you that we have the offering and we think the strategy is to consolidate back end systems. Now we hope that one plus one will give us the three.

Great and then nice announcement on the win in Brazil. Does this put a pause in any of the sales cycles on the other Telefonica properties in Latin America and maybe even in Europe as you prove out the scale again, or are you able to continue to push forward as the implementation gets done?

We’re pushing forward and with all steamy hand in parallel all over the world.

[Operator Instructions] And the next question is from Tavy Roesesner with Barclays. Please go ahead.

Yes, thank you for taking my question. I was wondering if you could share your views on external growth opportunities and perhaps what type of targets you could be having under your radar?

Tavy, what do you mean by external?

Like acquisitions.

So, I thought that’s what you mean about, I was falling for time. The truth is that I cannot give you the specifics but I can elaborate a little bit about the logic that we’re applying. You know that we have a very good track record of acquisition through the years from ‘99 I think was first acquisition and on. But we’re very, very careful to choose acquisition that support our strategy and we always go through the strategic process flows and then the execution of the strategy could be either by or make or partner or anything in between the combination thereof. Since we are adjusting our strategy all the time we’re getting into more opportunities to buy technology or market share or whatever in the market and we have currency and we have a good track record of identifying company but not less important we have a very good record on the PMI, on the post merger integration. But we are very careful in doing that. So first of all because we are very cognizant to the shareholders money that the shareholders money that we are spending. And secondly because statistics does not necessarily work for us, our strategy is very good but the industry statistics on IT acquisition are not really something to write down about. So we are looking at almost any dimension of growth that we have, also to see at any given time, weather can accelerate growth and we can accelerate activity. That is to say that on the core we don’t need much technology but we can consolidate customer base and expand the customer base and offer more customers the CS 9 platform in a way like introducing customer transformation. And this in the core when it goes to network and network applications obviously it’s a new field up until now we made several acquisitions on the optimization on the policy and rest of it is in R&D but we all the time looking for technology to accelerate the network domain. The same goes with BDA, we decide so far to make internally but we’re looking to run all the time to look at this. I can tell you that this topic is high so we don’t tend to spend a lot of money for very little revenue and no EBIT. So we’re very prudent in that execution. I’m just trying to tell you that we’re looking at entire industry and any dimension we’re very active in M&A and the second we do once every quarter to small one, medium one, whatever a big one it’s just the matter of when the entire conditions are aligned and this is why I mentioned also at the -- market we have to drive part of that. We have targets but we have to have a very clean line of side before we should feel so this was kind of the behind the message.

And the next question is from Sterling Auty with JPMorgan.

I wonder if you could characterize for us the size of the projects that are falling out of the funnel, meaning the ones that you're completing versus the ones that you're currently signing up? So looking at the backlog growth, the $30 million, obviously the transformational deals are great to see. But what I'm curious about is, are the size of these transformational deals similar to what you've seen in the past or what do the characteristics look like?

So Sterling first of the backlog is one of the best indications you can have for the overall activity which are kind of the concrete stuck in our hands. In general, I will tell you that some of the new transformations that we are talking about are significant and pivotal and the importance of them and also they are not small. Now, we had big transformation over the years and we had execution in big transformation and we have new ones. Now whether the summation of all of them is that or that, I think the backlog is probably the best indication we can give in terms of growth of that business. Now not to mention if it’s very, it’s not a linear calculation because when you think about the transformation being over basically doesn’t go back to zero it goes back to ongoing support, but more than that in many situation we have finished the first transformation but we may start right after that another one, it could be the mention of going from revenue management transformation, to customer management it could be going into from single track which could be wireless to a wire line maybe that on to cable or video. So as I mentioned of the multiplayer and you can go to managed services which will actually change the equation of what you are looking for. I would say genuine we are expanding all the time a number of people we need for project. So let’s call a backlog and it grow as of the growth of the company and I think this is probably one of the better answer I can give you.

I would add that would more costly projects, the complexity level of these projects is the need around supporting it, it is obviously an advantage for us, in terms of selling advantage as well as the ability to execute such complexity of projects. Usually, there's some correlation, also, to size; whether you'd go with a quad play transformational projects relative to wireless only or wire line only. And then other interesting point is that we are seeing more opportunities in which we are moving from the project activity to the follow-up and a service activity which is highly important in the business model that we are trying to push. So whether we could be the example of we were already in the out of the deal structure, they have committed for several years of some application maintenance and support whether it could be U.S. Cellular where we first completed material steps of the transformation and on later I will manage to move into managed services. I definitely see that as a positive trend.

Okay, and then as a follow-up, how would you characterize the pricing dynamics and the discussions in the projects today versus a year ago? Meaning whether it's competitive dynamics or other, what is the pricing environment like?

I think in general it’s fairly similar. You would be surprised, they would probably think that it will be and that we are under more pressure but I think that we always came with a value proposition and we are actually never won the price. More than that some carriers really burn badly with taking very cheap proposals not from us and then they need to call us back. There have been some announcement of write-offs in this industry god forbid it’s not us of course. So I think the realization at the end of the day that we are -- I would like to say that the only one but one of the very, very, very few that do not only sell the transformation but understand on the implications of large transformation. Where there is wireless or quadruple play which is obviously more complex, whether it’s one country or two counties like Australia and New Zealand and Singapore at the same time, whether it’s for postpaid or prepaid and postpaid convert solutions, and whether it’s connected to the OSS and some network applications. When you look at what we have been throughout the last few years, the proposition is so much ahead of the competition of that to think that you can actually getting for a low price is not -- obviously people would negotiate and negotiate hard and these companies are experts in negotiation and they get usually a good deal but it’s win-win deal. And if you ask me overall I think that the pricing environment for us is about the same. Now there are some extreme cases that we are just walk away and you should assume that when we don’t win something there is a chance of it because of price. We walk away from it if we can make money.

The next question is from Howard Smith with First Analysis.

Yes, good afternoon and congratulations on solid execution against your business plan. Probably for Tamar, but Eli, if you want to take this, that's fine as well, I wanted to get your thoughts on how you're positioned and how you alter your position, whether it be hedges or natural hedges or thinking about the business, if we were to go into a prolonged period of an appreciating dollar as some are starting to speculate now. So I know you're very well-hedged in the short-term, but how do you think about it on a multi-year basis?

We are looking at it as in multiple layers. First of all how we structure commercially the deals we go into, whether it’s on the procurement side or the sales side, trying to factor into the structuring of the deal or with the certain considerations about trying to limit exposure to the currency as much as possible. Then it goes to the overall structure of the company and trying to see how leveraged the natural hedge we may have in certain places and only the third layer would be using certain derivatives and vehicles to do the hedging on top of all of that. Our philosophy was and remains protecting the bottom-line, therefore we will probably see more of the impact of the currency fluctuations on our top-line, however so far we’ve seen the solid execution of the hedging strategy according to our objectives of protecting the bottom-line. It is a tougher problem of course in the long-term the horizon in which we can add the derivatives is limited by the cost of hedge of course. So looking longer-term, it’s becoming part of how we’re looking on the overall cost structure of the company and how we do business like any other ex-organic factor or like inflation, like oil prices, like labor wage increase. And we just have to factor it into our decision making, when we have a longer-term strategic plans in place and thinking how to operationally build the right structure there. I hope it addresses your question, but I know it’s a multiple layer answer, but that’s the reality.

No, that was great. My only follow-up would be in terms of how you structure your contracts to protect yourself, you've been through ups and downs and currencies over the years many times. Is that already built in your current contracts, or are you increasingly thinking about it or adjusting the terms this year and as we go along, more so than in the past?

The thinking about it was there before, but naturally is now let’s call it the more solid currencies moving into an environment that is extremely more volatile we are focusing on that much more in the developed part of the world. We’re historically it was probably more targeted at emerging markets and areas where we see higher volatility of currencies. So now of course we need to think about this thing in the context of currencies such as the euro and British pound, the Canadian dollar and everything has to be in the game.

We have no further questions at this time. I’d like to turn the call back to Matt Smith for closing remarks.

Thank you Ellen and thank you everyone for joining our call this evening and to your continued interest in Amdocs. We look forward to hearing from you in the coming days and if you do have any additional questions, please call the Investor Relations Group. With that have a great evening and we’ll conclude the call.