And welcome to the Second Quarter 2021 Amdocs Earnings Conference Call. At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session. Also, please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Mr.
Matt Smith, Head of Investor Relations. Thank you. Please go ahead.
Thank you, operator. Before we begin, I would like to point out that This financial information in its internal analysis in order to exclude the effect 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 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 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 These risks include, but are not limited to, the effects of general economic conditions, the duration and with the Securities and Exchange Commission, including in our annual report on Form 20 F for the fiscal year ended September 30, 2020, filed on December 14, 20 and our Form 6 ks furnished for the Q1 of fiscal 2021 on February 16, 2021. Amdocs may elect to update Executive Officer of Amdocs Management Limited and Tamar Rapaport De Guillem, Joint Chief Financial and Operating Officer. And finally, a copy of today's prepared remarks will be posted on the Relations section of Amdocs' website following the conclusion of this earnings call. With that, I'll turn it over to Shuky.
Thank you, Matt, and good afternoon to everyone joining us on the call today. I am pleased to report another strong financial performance in our 2nd fiscal quarter. My comments today will refer to certain financial metrics on a pro form a basis where applicable to provide you with the sense of the underlying business trends excluding the financial impact of OpenMarket, which we divested December 31 as previously announced. Revenue in fiscal Q2 was well above the midpoint of our guidance and up 5.7% for a year ago on a pro form a constant currency basis. Operating profitability exceeded the high end of our target range as we balance accelerated R and D as a percent of revenue with continued focus on operational excellence.
Free cash flow generation was also robust driven by the successfully Delivery of project invoicing milestone and healthy cash collection with customer. During Q2, we returned a record quarter cash amount of more than $400,000,000 to shareholders by the way of share repurchases and dividends. This includes the net proceeds from open market in line with the commitment we made to shareholders in the prior quarter. Cloud domain by utilizing our strong balance sheet to acquire Source Group, a leading global cloud consultancy business for a net consideration of roughly $75,000,000,000 in cash. Before moving on, let me take a moment to address the situation in India where the COVID-nineteen pandemic has recently My thoughts are with our Indian employees, their family members and the community at large during this extremely challenging time.
To those who have suffered personal loss, I would like to express my deepest sympathies and to those whose health has been impacted by the virus, I offer my warmest wishes and hope that you quickly make a full and speedy recovery. Our priority is the health and well-being of our employees We are investing resources to provide support for those most affected by the pandemic, which include making vaccination available faster From an operational perspective, we can leverage the scale and the flexibility of our global delivery model and our Extending capabilities in other parts of the world such as the U. S. And the U. K.
Where the state of the pandemic is much improved and our Call development and delivery centers in Israel where activities are pretty much back to the offices. We are monitoring in the daily to ensure business continuity for our customers. I am proud of our employees And I want to thank them for all their dedication and commitment throughout the pandemic and their ability to collaborate with Anne and support one another during this difficult time. Now let me provide some color regarding our regional performance during Q2. Beginning with North America, We delivered our best ever quarter on a pro form a basis as a healthy level of customer activity continues throughout the region.
As North America emerges from the pandemic, 5 gs network and fast and secure broadband connectivity has become recognized as a backbone of society. Service provider investing heavily in fiber and 5 gs deployment as witnessed in the many 1,000,000,000 of dollar they allocated in the recent To monetize their investment and maximize ROI, service provider must bring exciting new 5 gs offers and services to the consumers and enterprise customers. To meet this need, our customers are in a multiyear investment cycle In digital and 5 gs system modernization, cloud migration and next generation OSS platform for networks, All of which Amdocs is well positioned to support with our cloud native products and IP based services. Let me At AT and T, we are executing a wide scope of activities under the Forreo's managed services deal we announced November 2019, on top of which we are accelerating new programs to modernize its consumer mobility domain, support the journey to the cloud and deploy 5 gs monetization solution leveraging open edge charging and policy capabilities. In T Mobile, we Accelerating the digital transformation under the strategic multi year agreement we announced last quarter, implementing the AmdocsONE In the form of multi year managed services engagement.
At Verizon, we are implementing Amdocs Catalog 1, our cloud native platform designed To rapidly create and launch new 5 gs services offering and we are now progressing an additional program in the network domain, which leverages Amdocs Neo, our cloud native, net generation OSS 5 gs platform for services and network automation. MiWay allows service providers to harness the power of cloud based virtualized network that are more dynamic, agile and scalable. Around Cable and Media, we are also busy. We just completed successful subscriber migration for Altice USA Following its acquisition of Service Electric Cable TV last year and we are continuing to implement our BSS and OSS platform for Comcast Business. At Charter, we are deploying our system to support Spectrum Mobile under a multiyear managed services agreement we announced last And we were recently selected by DISH to provide a cloud based billing for enterprise and wholesale customers on its next generation 5 gs network.
Amdocs Media's Vindicia also extended its long term engagement with Vimeo, which will continue to use Vindicia cloud based on a pro form a basis as we continue to program digital transformation project to support improved customer experience, Operating efficiency and multiple convergence strategies for our customers. During the quarter, We saw continued demand for OpenEdge 5 gs charging and policy solution, which a major Tier 1 operator in the UK Recently implemented on the AWS public cloud to support its global IT platform. In Italy, we expanded an existing relationship with Sfasbeth, We selected Amdocs to monetize its mission critical inventory system as part of a transformation to create a 5 gs ready platform To grow and differentiate its business and we expanded our relationship with SCS, a world leading content connectivity solution provider We selected Amdocs end to end testing framework to automate its flow validation process. Turning to the rest of the world, Revenue grew over year and we began to see yearly but encouraging sign of recovery in Latin America. Amdocs was selected by America Movil to deliver a digital transformation in Claro, Chile and Claro, Puerto Rico and Amdocs has signed a 3 year agreement with Claro Brazil to support Claro's postpaid business and to provide services and solutions for its digital transformation.
In Chile, BigWiki extended its long term relationship with VTR, part of the Liberty Global And we signed a multi year agreement with Telefonica and Spam to provide content licensing and processing for Movistar PLAY service in the 5 markets including Argentina, Chile and Peru. In Southeast Asia, Globe Telecom in the Philippines implemented our net generation cloud native catalog 1 and digital 1 platform for its enterprise business, which We completed a seamless migration of Airtel wireless postpaid customer to Amdocs modern digital business system And we signed a new deal to provide OpenEdge charging for the data management product on Microsoft Azure for AIM-one Limited in Singapore. Moving on, let me update you on the strategy to grow by accelerating the communication industry journey to the cloud. As we outlined few quarters ago, Amdocs bring a full range of product and services With which to offer every customer a ready and tailor made journey to the cloud. I am pleased to report We see an attractive and expanding pipeline of opportunities, which we hope to accelerate with the recent step we've taken to solidify Our leadership in this domain.
First, we are today pleased to announce the acquisition of Source Group, a leading global technology consultancy Specializing large cloud transformation for sophisticated high end enterprise customer in different industries such as Communication and Financial Services across North America, Asia Pacific and Australia. Sales Group is part of our wide Cross company's investment in the cloud and brings a proven cloud migration platform, deployment and landing zone framework Entrusted Design Processes alongside its deep partnership with AWS, Microsoft Azure and Google Cloud. The acquisition also complements our portfolio of cloud native product and services and further expands and diversifies our customer base allowing us to implement Cloud at scale. We are delighted the Innovative Sales team is joining Amdocs. We are proud to bring such Great professionals and practices to our industry.
2nd, I am pleased to announce an expanded strategic collaboration with Microsoft To widen the availability of our portfolio on Azure, the collaboration will enable service provider to transform with cloud native solution and cloud services and deploy 5 gs networks in the cloud with Azure for operators, automated by Amdocs NIO Suite and monetized by Amdocs We have also extended our multiyear strategic agreement with AWS to include Vindica's subscription management portfolio provided on AWS Global Cloud. To wrap up, let me briefly comment on the outlook for the remainder of our fiscal year 2021. We are raising our guidance for the full year revenue growth to reflect our solid performance in the 1st 2 quarters and our expectation for a stronger second Our confidence is supported by the visibility of our 12 months backlog, which is up more than 9% for a year ago On a pro form a basis and they believe that there is a rich pipeline of opportunities across our operating regions, which are working hard which we are working hard to monetize by executing our growth strategy. We are focused on profitability and the disciplined use of cash. We now expect it to deliver a double digit total shareholder return in the fiscal 2021, including an improved outlook for pro form a non GAAP earnings per share growth plus our dividend yield.
With that, let me turn the call over to Thomas for her remarks.
Thank you, Shuky. Let me start with a quick housekeeping item with respect to open market, which was included in our reported numbers for the income statement and cash flow in the 1st fiscal quarter of fiscal 2021, but is excluded for the 2nd fiscal quarter of fiscal 2021 following the completed divestiture of these assets on December 31, 2020. To provide you with a sense of the underlying business trends, my comments today will refer to certain financial metrics on a pro form a which exclude the financial impact of open market from the current fiscal year and comparable fiscal year period. 2nd fiscal quarter revenue of $1,49,000,000 impact from foreign currency fluctuation of approximately $3,000,000 relative to the 1st fiscal quarter of 2021 and a negative impact of $1,000,000 relative to guidance. Additionally, Q2 revenue included a small amount of less than $2,000,000 from 2 acquisitions, which we closed in the month of March, Source Group, The cloud consulting company is Shuky mentioned and another small one which I will describe later.
On a pro form a basis, revenue grew by 5.7 by 0.1% year over year and was down 1.4% in constant currency given the comparable quarter of last year still included open market results. Our 2nd fiscal quarter non GAAP operating margin of 17.6% exceeded the high end of our long term target range of 16.5% to 17.5% and was up 30 basis points sequentially and 40 basis points from a year ago. The non GAAP operating margin improvement reflects the diversity of open market as well as initiative operational excellence, while accelerating our R and investments in our strategic growth domains of digital 5 gs and the cloud. Below the operating line, non GAAP net interest and other expense was 3 point $9,000,000 in Q2, the mix of which includes interest expense related to our short term borrowing and 10 year bond and the impact of foreign currency fluctuations. For forward looking purposes, we expect that foreign currency fluctuations will continue to impact our non GAAP net interest and other $1.13 in Q2, slightly above the midpoint of our guidance range of $1.09 to 1 $0.15 Our non GAAP effective tax rate was 18.2% in the 2nd fiscal quarter, yet we are on track to meet our annual target range of 13% to 17%.
Diluted GAAP EPS was $0.91 for the 2nd fiscal quarter, in line with the midpoint of our guidance range of $0.87 to $0.95 Normalized free cash flow was $133,000,000 in the 2nd fiscal quarter, up significantly as compared to $76,000,000 a year ago. On a reported basis, free cash flow was $70,000,000 in Q2. This was comprised of cash flow from operations of approximately $120,000,000 plus $49,000,000 in net capital expenditures and other and included the annual cash bonus payments to our employees in January for the prior fiscal year 2020 consistent with our guidance last quarter. Please refer to the reconciliation table provided in our Q2 earnings release for an explanation of the difference between normalized and reported free cash flow in the quarter and for past periods. DSO of 79 days decreased by 3 days year over year and increased by one day as compared to the prior fiscal quarter.
We remind you that DSOs may fluctuate from quarter to quarter. As of March 31, total deferred revenue exceeded Total unbilled receivable by $167,000,000 This reflects a decrease in total unbilled receivables of 19,000,000 and an increase in total deferred revenue of $8,000,000 as compared to the 1st fiscal quarter of 2021. Changes 0.54 at the end of the 2nd fiscal quarter, up approximately $50,000,000 from the end of the prior quarter. On a pro form a basis, our 12 months backlog was up roughly 9.3% year over year. As a reminder, we believe our 12 months backlog continues to serve as a good leading indicator of our forward looking revenue.
I am pleased to report another record quarter for managed services arrangements, which comprise roughly 61% of total revenue. This performance reflects high renewal rates, the adoption of our managed transformation model and continued expansion of activities within existing customers. To clarify, the open market business was not The 2nd fiscal quarter was approximately $1,200,000,000 including aggregate borrowing of roughly 750,000,000 Our balance sheet reflects the acquisition of Source Group, a leading global technology consultancy for a net consideration of roughly $75,000,000 in cash. Additionally, we recently completed 2 small acquisitions, 1 in March, but still within fiscal Q2 and the second in April. In the Firstmall acquisition, Project Tutu, our Digital Experience Group subsidiary, acquired ADK for a net consideration of roughly $14,000,000 in cash.
Based in Boston, ADK is a user an application development company, which complements Project 202's capabilities and has a diversified list of global enterprise customers, including Santander Bank, Mercer and Brown Forman. ClearBridge Mobile is the 2nd small acquisition ClearBridge is a Toronto based mobile app development company, which provides user centric design and engineering service for telcos such as Belkananda Rogers and non telco customers like Yes Network and TD Bank. For all three recent acquisitions, Additional consideration may be paid later based on the achievement of certain performance indicators. As additional color on use of capital, in early May, We repaid the $100,000,000 of short term bank loan we took on during the early part of the COVID-nineteen pandemic last year. We have ample liquidity to support our ongoing business needs while retaining the capacity to fund our future strategic growth investments as and when the right opportunities arise.
Additionally, we are committed to maintaining our investment grade rating. Now turning to the outlook, the prevailing level of macroeconomic business and the operational uncertainties surrounding the magnitude and duration of The COVID-nineteen pandemic remains elevated, including the recently escalated situation in India. The midpoint of our revenue guidance reflects what we consider to be the most likely outcomes based on the information we have today, but we cannot predict all possible scenarios. We expect revenue for the 3rd fiscal quarter of 2021 to be within a range of $1,040,000,000 to $1,080,000,000 Our Q3 revenue guidance anticipates a negative sequential impact of approximately $3,000,000 from foreign currency fluctuations. Additionally, our guidance incorporates the benefit of the recently completed acquisitions I just discussed.
Regarding the full year 2021, we are raising our outlook for revenue growth on a pro form a basis to a new range of approximately 5% 8% year over year constant currency as compared to our previous range of 3.5% to 7.5% year over year. The new outlook equates to an improvement of roughly 100 basis points at the midpoint of the range, about half of which is attributable to core business and the other half from recently completed M and A. On a reported basis, we now expect full year revenue growth in the range of 1% to 4% year over year as compared with our previous range of negative 0.3 percent to plus 3.7 percent year over year. The adjusted revenue as compared to a positive impact of 1.2 previously. Additionally, our outlook remains consistent with previous guidance for an acceleration in the rate of year over year growth on a pro form a basis in the first in the sorry, the 2nd fiscal half.
Moreover, we still expect to see all three geographical regions To further help with your modeling, we remind you that we originally planned for open market to contribute revenue in the range of $300,000,000 for the full year fiscal 2021, Roughly 75% of which was expected from North America with Europe accounting for the rest. Regarding profitability, We continue to anticipate quarterly non GAAP operating margins to track roughly in line with the high end of the annual target range of 16.5% to 17.5%. This outlook assumes accelerated R and D investment as a percent of total revenue to support our customers and future strategy, balanced with our Continued focus on delivering operational excellence. We expect the 3rd fiscal quarter diluted non GAAP EPS To be in the range of $1.14 to 1 $0.20 Our 3rd fiscal quarter non GAAP EPS guidance incorporates expected average dilution share count of roughly 128,000,000 shares. We excluded the impact of incremental future share buyback activity during the 3rd fiscal quarter as the level of activity will depend on market conditions.
Regarding the full year fiscal 21, we are raising our outlook for non GAAP diluted earnings per share growth to a new range of 7.5% to 10.5% on a pro form a basis As compared to 5.5% to 9.5% previously, the improved outlook is mainly the result of better business fundamentals. On a reported basis, we expect to deliver fully diluted non GAAP EPS growth of 6% to 9% year over year as compared to 4% to 8% year over year previously. As a reminder, this outlook includes the impact of open market for the 1st fiscal quarter only. We expect our non GAAP effective tax rate to be within the annual target range of 13% to 17% for the full fiscal year 2021. We now expect Normalized free cash flow for the fiscal year 2021 of approximately $820,000,000 which is slightly improved from our prior guidance of 800,000,000 The outlook is equivalent to about 8% of Amdocs market cap and represents a conversion rate of roughly 130% Relative to our expectations for non GAAP net income.
As a reminder, we expect free cash flow to convert at a rate more on par with our Additionally, we now expect slightly better reported free cash flow Our reported free cash flow outlook anticipates expenditures of roughly $140,000,000 in relation to the development of our new campus in Israel, $40,000,000 of capital gain tax in relation to the divestiture of Open Market and other items. As previously stated, we expect fiscal 2021 to be the peak year of capital expenditure for the new campus. Note that the gap between the expected free cash flow on a normalized and reported basis has widened primarily due to the tax in relation to the Capital gain of open market. During the 2nd fiscal quarter, we repurchased $360,000,000 of our ordinary shares under our current authorization, including roughly $260,000,000 funded by the net proceeds from open market, As we committed to in the previous quarter, roughly $100,000,000 of our share repurchases in Q2 were executed as part of the regular share repurchase Regarding our capital allocation plans for the rest of fiscal 2021, we expect to return a majority of our normalized free cash flow to shareholders in the form of Quarterly dividend and share repurchase programs subject to factors such as the statute, status of COVID-nineteen pandemic, the outlook for M and A, Financial Markets and Prevailing Industry Conditions.
As of March 31, we had roughly $228,000,000 of authorized capacity for share Additionally, our Board has today authorized another share repurchase plan of $1,000,000,000 which we will execute at the company's Overall, we remain on track to deliver accelerated pro form a revenue growth, improved profitability and strong free cash flow in fiscal 2021. The combination of which now supports an outlook for double digit total shareholders' return of roughly 11%, including the 9% midpoint of our pro form a non GAAP earnings per share, growth guidance plus our dividend yield. With that, we can turn it back to the operator, and we are happy to take your questions.
Also, participants who queues up will be requested to ask Your first question comes from the line of Ashwin Shirvaikar from Citi. Your line is open.
Thank you. Hi, Shuky. Hi, Tamar. Congratulations. It's a very solid quarter, healthy outlook raise.
And that's actually my first question. Is with regard to the outlook, I get the You know, half of the improvement is because of acquisition, but the other part, the inorganic piece, In which areas has sort of the velocity of client demand risen? Are you seeing bigger project sizes or the speed of Signed work coming in faster. What's been the important change that you observed?
That's actually very exciting because in general, we are seeing very positive momentum across 5 gs, cloud, digital transformation. So we are continuing to see that momentum building up. We tried to give some color to the prepared remarks on the momentum we're seeing in North America, very broad based, including key existing customers like AT and T and T Mobile, all the way to new logos such as Verizon. Very happy also with the fact that Europe is continuing to play well for us, starting to see policy in charging Awards happening in Europe in conjunction with continued digital transformations and also rest of the world that is Grown for the Q3 in a row sequentially and back to year over year growth, that's very important. And with some even encouraging signs in CALA, which has been more of the slower part of the regions in the recent pandemic here.
So It's very encouraging both from regional point of view as well as the growth pillars that we're seeing.
Got it. Understood. And then with Regards to sourced and the other 2 smaller acquisitions, they have non telecom clients, including say financial services, for example. Is the intent to keep those clients grow the non telecom piece Incrementally, any thoughts on that?
So you're right. Both SORCE and the other acquisition bought some financial services customer. Definitely, the main reason that we acquired the companies will support our strategy, Soles to Support our strategy for the journey to the cloud, they are really top notch consultant. We got a lot of knowledge, Top knowledge consultants see capabilities in AWS, Azure And Google, definitely we are going to leverage in our taking the industry to the cloud of the comms and media industry. Having said that, They brought us some financial services customer.
We are going to continue to support this financial services customer. And at the same time, we are evaluating if we can obviously push this domain and actually this customer can get some other additional service Randox, at this point is more opportunistic rather than strategic, but we are validating this opportunity.
Understood. Thank you.
Thanks.
Your next question comes from the line of Tal Liani from Bank of America, your line is open.
Hi, guys. Hope everyone is okay there given what we're seeing in the news. I wanted to ask you about, first of all, just a general question. Is there any disruption to your business given what's happening in the country? Number 1.
And number 2, I want to ask about the spending environment And your participation in 5 gs, I'm asking this question every quarter because I know you should be getting some Aside from it, and I wanted to know if you start to see any movement on carriers spending on 5 gs, Spending with Amdocs on 5 gs and what kind of projects you're seeing? Thank you.
So for your first question, there is no impact. I mean, there is some people are working from home a little bit, but as you know, yes, in the last 12 months, the majority of the vast majority of the company because of the pandemic work from home. So I can tell you clearly there's no impact. Regarding the second question, We are definitely enjoying the 5 gs trend. All our and the cloud, which are very much tightly connected.
All our new projects are in North America or the big ones are related to 5 gs. This is the consumer mobility Modernization AT and T, this is all the modernization that we do in T Mobile, which you know is pushing 5 gs. And definitely Verizon selected our catalog mainly to support the new 5 gs offering. This is true also for Europe and developed APAC. So we see a lot of activity.
And I think we said before that actually 5 gs Initiate the new modernization cycle in the monetization systems and we feel that we have the right product and services to support this A new wave of investment in the 5 gs. This is true not just for our obviously our ordering solution and billing solution, this Also for our network solution, as we mentioned, we are doing in 5 gs project with Verizon and other customers. So Because as we discussed before in order to be able to deploy 5 gs services in the best You need all the monetization systems. Obviously, you need a very sophisticated catalog and you need to make sure that all the Provisioning of the services to the network is smoothly from the ordering system down to the network. So we are very happy with this trend.
And I would say that Definitely North America, the vast majority of our projects are related to 5 gs.
Great. Thank you.
Your next question comes from the line of Tim Horan from Oppenheimer. Your line is open.
Thanks, guys. The bookings look really strong. Can you give us a sense of maybe just how that's trending Any expectations? And does this suggest a pretty good correlation to with revenue growth for next fiscal year on kind of what we're seeing with bookings now? And then maybe just secondly, I know you touched on Verizon.
Any more color on their thoughts here for more outsourcing? Thanks.
I didn't understand the second question, but I think I'll start with the first one. We are very happy with the momentum and this is why We're excited to raise the guidance for revenue for this year. So we see accelerated growth and this This is accelerated growth is because the spending trend that we see and the fact that we came very well prepared with our product and services and We see a very, very good alignment from the market trends of journey to the cloud, 5 gs, convergence, B2B and other domains, so there is a very good alignment which support our growth and this is why we see a very strong second half Of accelerated growth and we were able to raise the guidance. We are not giving at this point any guidance for The next fiscal year, but you can see here from Arturant that we are very excited about the momentum.
Two points to add here. Our 12 months backlog, the definition covers the next 12 months. So it is an important leading indicator for what we see ahead of us. Again, it cannot translate that 1 for 1 with Expected revenue growth, but it's a good indicator. The other point And it raises 9.3 percent year over year on pro form a basis.
And the other point I would say is that we are continuing to see a strong momentum in our managed services revenue, which is kind of the underlying current revenue base of our relationship with customers, on top of which we bring the new deals. So I think it's very important that this growth The nuclear is coming on top of a very robust and strong base of business that we are continuing to shift into More lengthy, I would say, and robust managed services engagements with our customers.
Thanks. And my second question was just around Verizon, Their propensity to outsource more do you think and how do you think you're positioned with the ability to kind of gain more of that outsourcing if they do so?
It's still early stages. I can see you that we are enjoying a very good relationship with Verizon. I think there is a Next generation, catalog 1 is our cloud native platform to support all the offering. This is going to be the master product Catalog of Verizon, we have a lot of activity in the network, in the service design and create and services around it. So, still I think so far it's moving very well ahead.
I believe that if we continue to show Value to Verizon, we can even expand the relationship.
Thank you.
Your next question comes from the line of Tom Roderick from Stifel. Your line is open.
Hi Shuky, hi Tamar, hi Matt, great to hear from you. Thank you for taking my questions. So Shuky and Tamar, I really appreciated the mid quarter You're getting a lot of questions from clients and there was some skepticism that I appreciated you taking some time to answer some of those questions. One of the themes that sort of seemed to be up for question when we did that last call was the durability of your relationship with some big Tier 1s, that you're working on. As you look at these type of projects, are they recurring revenue in nature and long standing that will extend beyond just 2021?
Tell us about the strategic nature of what you're doing there and getting tied into their future as opposed to catch up projects and Band Aid fixes that might only be for say 2021. Thank you.
Okay. So as I mentioned, there are certain pillars to our relationship with AT and T, beside the fact that we have strong partnership with AT and T probably more than 20 years. So there is the first pillar of a very significant managed services that we announced in late 2019 that we signed for 4 years. This is managed services for many, many system of AT and T. Some of them are Amdocs system and by the way, some of them are not Amdocs system.
On top of it, we discussed about the fact that we have started the modernization journey of AT and T Now if you look at AT and T, AT and T is doing very well, definitely in the mobility domain. Consumer mobility is in the heart of AT and T strategy and the fact that we were selected This is a very long term activity that we do for AT and T and this will be the next generation cloud native system of AT and T for the years to come. Additionally, we are very involved with AT and T journey to the cloud. We are working together with Microsoft and taking different application to the cloud, not the vast majority of them are not even Amdocs. And this is a very significant activity that we do with AT and T.
On top of it, as you might know, we are pretty much running The AT and T Cricket, AT and T Mexico, we are doing a lot of data related And security activity, so I would say that our partnership with AT and T is strategic than ever And we are working with AT and T in the most strategic domains of AT and T.
I hope it's clear enough. Really helpful and very clear. Thank you, Shuky. Tamar, now that we have some of the numbers on the balance sheet behind the order and ability to kind of comment a little bit further on some of the questions around liquidity. Can you kind of take us Through a little bit more on your philosophy on your strategy regarding liquidity, any recent needs to draw on the revolver?
I know question you've been getting from some investors, but maybe bigger picture, if I look at this share buyback of $360,000,000 in the quarter, That would be a pretty tough thing to do if you're having liquidity issues. So again, if you can kind of highlight some of those strategies and then Repeat what you talked about with respect to where the share buyback goes from here. Thank you.
Sure. Thanks, Tom. So I think we need to start with the fact that our business model is one that generates Consistent and healthy margins then converged into cash flow. So as we always say that Our business model should generate on par the earnings to cash conversion over time. Some years slightly less, some years more.
Specifically Obviously, it's a good place to be at. Now taking that in terms of the use of cash, we've always been Looking on the balanced approach where we can do both return of cash to shareholders, and I believe we've been very consistent about that, while the majority of our cash flow over the years have been returned to shareholders with a dividend that has been introduced already 6 or 7 years ago, increased every year in double digit Growth and share repurchase program that has been running for many years and again authorized again an upload of additional $1,000,000,000 to program. So we've been consistently returning cash while continuing to fund the M and A strategy of the company. Looking specifically into the question of the recent drone facility during the peak of the pandemic beginning period where liquidity Stress was all over the markets. We decided as a short term move to draw some money in the facility, which has been returned pretty quickly.
And then as a more strategic move, we enjoyed the historically low interest in the market, probably the lowest I've seen in the last 14, 15 years and issued a public bond for 10 years at Maintain an investment grade rating, and we are going to use this cash if and when the right strategic opportunities present themselves. In terms of return of cash to shareholders, we've been returning over the last 5 years about $500,000,000 every year to shareholders. This year, obviously, it's going to be much more. Just this quarter, we returned over $400,000,000 And over the overall fiscal year 2021, we indicated we are going to return the majority of the $800,000,000 or so So clearly, we are returning a lot of cash to shareholders, both specifically in 2021 and in a consistent manner over the last 5 years.
Really helpful. Thank you, Tamar. Appreciate it.
Thanks,
Your next question comes from the line of Jackson Ader from JPMorgan. Your line is open.
Great. Thank you. So Shuky, on the Source acquisition, I think a lot of us think of docs as being able to handle complex digital transformations or moves to the cloud. So just curious what expertise does The Source Group have that maybe would be complementary to DOCS?
Hi, Jackson. SOAR's group have over 150 Top professional that understand the cloud environment extremely well, Develop their own tools, landing zone, other capabilities. When you search In the market today for client capabilities, it's not easy to get talent. What we were able to get Really top notch talent with the source group that actually we are obviously at the same time We are rescuing our employees. We have thousands and thousands of employees, which are cloud Certified AWS, Azure and more and this is a great addition, but more from the consultancy perspective that we added to our capabilities.
So it complements our cloud native system implementation capabilities, operation capabilities now we have also a very strong consultancy arm with top notch experts.
Okay, great. And then Tamar, just as a quick clarification for my follow-up. The Acquisitions in the quarter, any commentary you can give on how much they contributed to the backlog number, the ones that were actually closed Before quarter end and then any margin color you can give on this?
It was very little. Usually, what happens when we acquire those more of a consulting And development arms, their visibility of the business, the way they used to run it It's pretty low. So we are very, of course, conservative as we acquire them in terms of how much we add to the backlog. Basing that Just on signed and very high visibility business. So most sequential additions to our 12 months backlog.
As we said before, this is not sustainable, unfortunately, in this space But definitely with 50, I feel very good. If you remember our past track record, it used to be mainly quarters of $20,000,000 $30,000,000 sequential increases in 12 months backlog. So having another strong quarter with a $50,000,000 sequential addition It's definitely an indication of the strong business momentum we're seeing.
Great. Thank you.
Thanks. Your next question comes from the line of Will Power from Baird. Your line is open.
Okay, great. Thanks. Yes, I guess first a clarification and then I have a second question. I guess in the press release, you indicated The revenue is down, I think, dollars 37,000,000 sequentially. It sounds like that was principally open market.
But I just want to be clear, I think open market by would have been a fair amount more than that, right? And so that would imply some offsets. So I guess just maybe just a little clarification on that first.
Yes, absolutely. Open market, as we've indicated, was expected to generate around $300,000,000 in fiscal 2021. So if We assume for simplicity linearity, let's say, 75 a quarter. So absolutely, we've seen A positive momentum, and that's why when we are indicating the pro form a performance, We are talking about 5.7% year over year growth in Q2 pro form a constant currency. So the momentum is strong in real terms.
Okay.
All right. And then my second question, I think, I think, Ashuky had said that North America pro form a revenue was a new record. I don't know if we got an update on the other two geographies, but I guess I'd just be curious, pro form a without open market, if you looked at Europe, Rest of the world, how are those 2 trending? What are some of the puts and takes year over year there?
So as we said, about a quarter of the open market revenue was coming from Europe. So you can see that also if We take Europe, the performance has been strong on a pro form a basis. Some of that, a little piece of that has to do with currency. But even if I take out the currency impact, it's been a strong quarter for Europe year over year as well. And just to clarify, In the rest of the world numbers, there was no impact of open market.
So the open market revenue was about 3 quarters going into North America and a Going into your
And it's like the 3rd sequential growth in
In the rest of the world, yes. 3rd quarter in a row in which we're growing, yes.
Okay. All right. Thank you.
Thanks, Moe.
There are no more questions at this time. Turning the call back to Mr. Matt Smith for closing remarks.
Yes. Thank you, everyone, for joining the call today and for your interest in Amdocs. We look forward to hearing from you in the next few days. And if you have any additional Please call the Investor Relations Group. And with that, have a great evening.
Ladies and gentlemen, this concludes today's conference call. Thank you.