Good day, and thank you for standing by. Welcome to the Q2 2022 Amdocs Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your first speaker today, Matthew Smith, Head of Investor Relations. Sir, you may begin.

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, joint 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 also be posted immediately following the conclusion of this call. On today's agenda, Shuky will recap our business and financial achievements for the second 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 second 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'd like to begin on Slide 6 with a huge thank you to our thousands of employees worldwide. Following a great Q1, our second quarter was also very strong, and I could not be more pleased with our operational and financial execution for the fiscal year-to-date. Last quarter, we provided the guidance for the annual constant currency revenue growth of between 6% to 10% over the next three fiscal years. And on the strength of our recent performance, I can already say that we are tracking at the high end of this range on a pro forma basis for the current fiscal year to date. I believe such great performance is a testament to our market leadership and the successful education of our highly relevant growth strategy, the credit of which belongs to our global and diverse base of incredibly talented employees across all dimensions of our business. I could not be proud of Amdocs' people, and I'm highly confident that we are well positioned for future success. Now moving to Slide 7, let me address our second quarter operational highlights. To begin, overall, business activity was very strong as we continue to enable our customer strategy to provide a superior customer experience by supporting the highly necessary investment in 5G and product monetization, cloud adoption, digital modernization and network automation. Activity was particularly high in North America, where Amdocs is in the heart of the major strategic long-term investment occurring at our large and long-standing customers. For instance, we continue to support the multiyear modernization of AT&T consumer domain, which is the core to its strategic focus on 5G and connectivity. We are also glad to be core part of T-Mobile's modernization journey, where we are…

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 14. I'm very happy with our exceptional performance in the second fiscal quarter, which followed an already strong start to the year. Record Q2 revenue of $1.15 billion was up 10.1% year-over-year, driven by our best-ever quarter in North America and sequential growth in Europe and rest of the world. Revenue was in line with the high end of guidance, including an immaterial impact from foreign currency movements compared to our guidance assumptions. Moving down the income statement. Our Q2 non-GAAP operating margin of 17.6% was up 10 basis points sequentially, and unchanged as compared with a year ago, as accelerated R&D investments and the effect of the competitive labor environment were more than offset by our relentless focus on operational excellence, including the ongoing implementation of automation and other sophisticated tools, designed to continuously improve efficiency. On the bottom line, non-GAAP diluted EPS of $1.54 was above the high end of our guidance range. Diluted non-GAAP EPS includes a non-GAAP effective tax rate of 1.6%, which was much lower than we anticipated for the quarter, primarily due to release of tax reserves connected with funding decisions for the construction of our new campus in Israel. This tax benefit was among the scenarios contemplated in our non-GAAP effective tax rate guidance for the full fiscal year 2022, which is still anticipated to be within a range of 13% to 17%. Diluted GAAP EPS was $1.28 for the second fiscal quarter, which was also above the guidance range of $0.96 to $1.04,…

Thanks, Tamar. Well, as you can probably tell from our remarks today, we are excited by our first half performance, our recent strategic progress and the strong outlook we have provided for the first fiscal year. With that, we are happy to take your questions. Operator?

[Operator Instructions] Your first question will come from Ashwin Shirvaikar with Citi. Your line is open.

Thank you, and congratulations on the solid quarter here. So maybe I can ask both my questions together. The first one is just given the trends in the solid backlog, is it reasonable to assume this sort of growth rate could continue into fiscal '23? And to be sure, this is a directional question, I'm obviously not looking for 2023 guidance. And then the second question partially related is Bell Canada renewal. Is there any like price discounting or revenue margin impact -- revenue or margin impact that we should worry about? Or are you just absorbing this kind of impact?

Let me start with the second question for Bell Canada. I think we discussed it before. We never renew an agreement as what we call an apples-to-apples. So the new agreement is a comprehensive agreement, both for managed services and both for cloud transformation. We are very happy with this agreement and does not imply any pressure on our numbers.

Regarding the looking forward and how we should read into the 12 months backlog as a leading indicator, so by definition, it's a 12-month backlog, meaning it covers half two of the current fiscal year and the first half of the next fiscal year. And definitely, the fact we are tracking already for several quarters at the neighborhood of the 10% year-over-year growth of the backlog is showing the great conversion and momentum we are seeing in signing new business in continuing to see this 100% renewal rate in managed services, everything that we talked about, which gives us strong confidence. As you said, it's a bit too early to guide for 2023, but the momentum is there. The pipeline is strong. The fact we're seeing this growth in all the key three regions is very encouraging. As I said already in the prior quarter, Europe is expected to accelerate in the second half of the year. By the way, most of the currency impact we are talking about on the company level is impacting our Europe numbers. So we believe that on a constant currency basis, Europe is already growing and is going to accelerate in the second half of the year. And also the momentum we are continuing to see in terms of the relevance of the offering we bring to market, to the growth strategic pillars and the investment areas of our customers. As we said before, we continue to see all indications that those investment areas are multiyear investment domains, so not only the programs we are running are already secured for many of these cases for many years, also the investment plans we are seeing by dialogue with our customers.

Your next question will come from Will Power with Baird. Your line is open.

Hi, guys. This is Charlie Erlikh on for Will. Thanks for taking the question. Tamar, I'm just looking at the third quarter guidance and the full year guidance. And I think if my math is right, it implies that Q4 revenue was down sequentially a bit from Q3. Am I doing my math right? Is that correct? And if so, what would be the cause of that?

No, it's not correct. And this is why we -- look, talking about midpoint, it's not correct. Obviously, the reason we are giving both the range, but also targeting and saying very clearly, we believe the most likely scenario is that we end the year at the high end of the range of 8% to 10%. We need to give a range in order to take care of different scenarios that may play out, but we are confident in the outlook that we're giving. And no, I don't think we should see a sequential decline.

Okay. No, that's helpful.

The short answer is no.

Yes. And then on the R&D investments that you talked about; can you just talk a little bit more about what those investments are going towards?

I mean, obviously, given our position, we see a lot of opportunity to continue to enhance our products to support all the new use cases that will exist and are developing right now, both for consumer and B2B. So it's in the network domain, in our monetization platform, it's across the board. And we always try as much as we can to be ahead of the market, developing our products to be ready to take it to market. So it's mainly in the same pillars, but getting to the next level of capabilities.

[Operator Instructions] And I'm showing no further questions at this time. I will now hand it back over to Matthew Smith for closing remarks.

Thank you very much, everybody, for joining the call this evening. And if you do have any further questions, please contact us here in the Investor Relations group. With that, have a great night. Thanks.

This concludes today's conference call. Thank you for participating. You may now disconnect.