Amdocs (NASDAQ: DOX) is a leading provider of software and services to approximately 400 of the largest communications and media companies in the world. For example, Amdocs delivers a technological path for their customers’ migration to the cloud, deployment of 5G networks and transformation into digital service providers to provide connectivity services, content and applications (apps) on any device through digital and non-digital channels. The company is deeply integrated with the operations of its clients and has divided its business into several functionally distinct segments. One of those divisions manages the big logistical challenge of enabling automated customer care by providing mobile and online access to account information, bill payment and the millions of monthly messages those interactions create. Furthermore, merger and acquisition activity among their customers requires systems consolidation to ensure a consistent operational and customer experience. These customers include name brand telecommunications firms like America Movil, AT&T, Bell Canada, Singtel, Telefonica, Telstra, T-Mobile, Verizon and Vodafone, as well as broadband, mobile and entertainment providers such as Altice USA, Charter, Comcast, DISH, J:COM, Rogers Communications and Sky. Amdocs also holds relationships with hundreds of content owners and distributors around the globe, including MGM and Warner Bros. Discovery. These customers utilize the company’s software and services to the tune of $5 billion in annual revenue and generate 18-19% non-GAAP operating margin. What’s more is the subscriber nature of the business produces a predictable 75% recurring revenue stream and a robust $700 million in free cash flow, which is returned to shareholders in the form of dividends and share buybacks. If industry participants are interested in a broad understanding of the latest IT developments in communications and media, Amdocs represents a great box seat to watch that match.
