{
  "docId": "019dd923-622c-750b-8b98-9727cc72301c",
  "docSlug": "778e2cbfbfaa",
  "documentTitle": "Amdocs Limited (DOX)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Ben Axler",
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2019-01-23 00:00:00",
  "orientation": "landscape",
  "aspectRatio": 1.3333334,
  "pageNumber": 67,
  "pageCount": 128,
  "prevPage": 66,
  "nextPage": 68,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "overcrowded",
  "nDataPoints": 24,
  "notes": "The slide uses a combination of a stacked bar chart showing cash decline and a screenshot of a 2011 investor presentation to highlight a contradiction between historical policy and current management rhetoric.",
  "elementsJson": [
    "headline_text",
    "paragraph",
    "bar_chart_stacked",
    "screenshot",
    "callout_box",
    "footnote"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b98-9727cc72301c/67",
  "deckHref": "/decks/019dd923-622c-750b-8b98-9727cc72301c",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b98-9727cc72301c.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-9727cc72301c#slide-67",
  "components": [
    {
      "bbox": {
        "h": 0.08,
        "w": 0.12,
        "x": 0.87,
        "y": 0.65
      },
      "kind": "callout",
      "text": "Management reaffirmed this target in recent statements",
      "attrs": null,
      "subkind": "primary",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "c95b0548-4734-45f4-afb5-a1508aba3517",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.35,
        "w": 0.45,
        "x": 0.03,
        "y": 0.38
      },
      "kind": "chart",
      "text": "Amdocs Cash Balance",
      "attrs": null,
      "subkind": "bar-stacked",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "5c7bd7b6-20fd-4ef7-afcc-684404d63fb2",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.35,
        "w": 0.45,
        "x": 0.51,
        "y": 0.38
      },
      "kind": "image",
      "text": "Amdocs 2011 Investor Day Presentation",
      "attrs": null,
      "subkind": "screenshot",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "8a15034b-061d-4090-97fc-ea73aa988fed",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "metric",
      "text": "Cash balance: $500M",
      "attrs": null,
      "subkind": "primary",
      "toolName": "Quantification",
      "toolSlug": "quantification",
      "confidence": null,
      "componentId": "019dd953-0f1e-7015-9023-fb7790c06f75",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.13,
        "w": 0.94,
        "x": 0.03,
        "y": 0.16
      },
      "kind": "paragraph",
      "text": "Does Amdocs still have capacity to grow through M&A? The Company is generally cash-generative despite its flat growth, and it has no long-term debt on its balance sheet (excluding the effective loan related to the Union JV). However, we note that its cash balance has been declining steadily since FY 2015, to the point where the Company is extremely close to its stated minimum gross cash balance of $500M.1 Never in recent history has it been so close to this level. We also note that, according to management, it is imperative that Amdocs maintain a strong balance sheet to present an image of financial stability to customers, as it plays a vital role in telcos’ IT infrastructure.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "08204b46-d9a7-4b46-9bd9-d031d58d9e6f",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.94,
        "x": 0.03,
        "y": 0.85
      },
      "kind": "paragraph",
      "text": "Management’s Q4 FY 2018 earnings call was the first time in recent history that it openly and explicitly discussed the possibility of going into debt to support M&A. While this reveals that the Company is willing to lever up its balance sheet - for which it appears to have ample capacity – we question how much capacity Amdocs’ balance sheet actually has in practice, given its historical reluctance to go into debt and its commitment to maintaining a relatively robust cash balance.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "684eca81-2343-44c8-b55d-e136a8f593cb",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.02,
        "w": 0.75,
        "x": 0.03,
        "y": 0.97
      },
      "kind": "source-note",
      "text": "1. Management makes it clear on earnings calls that it includes short-term interest-bearing investments in its calculation of its cash balance.",
      "attrs": {
        "numbered": true
      },
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "a008b0f4-1f24-4302-9d43-f195f995abfc",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.06,
        "w": 0.65,
        "x": 0.31,
        "y": 0.03
      },
      "kind": "title",
      "text": "Limited Balance Sheet Flexibility Despite No Long-Term Debt",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "8ec90859-a1e2-4955-bc90-126e69e67b61",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [
    {
      "name": "ceo-quote-contradiction",
      "slug": null,
      "matchId": "d3cd93e9-33c9-4372-a73c-aa5ed6ce934a",
      "evidence": "Contrasting 2011 investor day policy with 2018 earnings call statements",
      "confidence": 0.9
    }
  ],
  "arcBeats": [],
  "loops": [
    {
      "to": 70,
      "from": 60,
      "name": "Hypothesis Test",
      "slug": "42-hypothesis-test",
      "bestFor": "Strategy validation, due diligence, research presentations",
      "matchId": "c60b7124-3faa-41ca-843c-f889942d0e7a",
      "evidence": "The deck presents a thorough analysis of Amdocs' financial performance and management practices to support the hypothesis",
      "position": 3,
      "objective": "Is the hypothesis of a 25-50% downside risk in DOX stock supported?",
      "structure": "The Hypothesis -> Test 1 (Supports/Refutes) -> Test 2 (Supports/Refutes) -> Conclusion (Validated/Pivoted)",
      "confidence": 0.8,
      "description": "State a hypothesis upfront, then systematically prove or disprove it with evidence"
    }
  ],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}