Amdocs Earnings: Guidance Cuts After T-Mobile Dispute
Amdocs earnings warned next-year revenue and EPS would fall sharply after a T-Mobile contract dispute and business exits, increasing trading volatility.
KEY TAKEAWAYS
- Amdocs' fiscal 2027 guidance forecasts reported revenue down 14.3% to 17.9% and non-GAAP EPS down 26% to 30%.
- About $360 million of fiscal 2026 revenue is expected not to recur, widening the fiscal 2027 shortfall.
- Multiple law firms announced securities-fraud investigations tied to the company's T-Mobile disclosures.
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Amdocs reported fiscal 2026 results on Nov. 3, 2026, in line with guidance, but warned that fiscal 2027 revenue and profit would decline sharply due to a contract dispute with T‑Mobile, completed integrations, and business exits.
Fiscal 2026 Results and Fiscal 2027 Outlook
Amdocs said full-year fiscal 2026 revenue reached $4.7 billion for the year ended Sept. 30, 2026, up 3.6% year over year. Non-GAAP diluted earnings per share (EPS) rose 6% to $7.41. For the fourth quarter, revenue was $1.2 billion, up about 3.8% year over year, with non-GAAP diluted EPS of $1.98.
The company’s fiscal 2027 outlook projects a sharp decline, forecasting reported revenue down 14.3% to 17.9% year over year and non-GAAP diluted EPS down 26% to 30%. It expects a non-GAAP operating margin between 19.2% and 19.8%, roughly 210 basis points below fiscal 2026, and a non-GAAP effective tax rate of 16% to 19%. The guidance assumes the possibility that either party could terminate agreements with T‑Mobile and reflects Amdocs’ best estimates as of Nov. 3. The company said actual results could differ materially depending on any legal proceeding or settlement.
Amdocs attributed about 760 basis points of the revenue decline to exited hardware-resale activities and the media-business divestiture. Approximately $360 million of fiscal 2026 revenue is not expected to recur because of those exits.
T‑Mobile Contract Dispute and Business Impact
Amdocs said its fiscal 2027 assumptions reflect a recent dispute over agreements with T‑Mobile that escalated into a legal dispute during the fourth quarter. The company described the matter as a contractual legal dispute, not a government investigation. Its guidance reflects headwinds from this dispute, the completion of the UScellular customer integration project, and reduced discretionary spending by T‑Mobile.
Management told investors no agreements had been terminated as of the Nov. 3 earnings call. Outside the T‑Mobile-related work, the company expects the rest of its business to grow at a mid-single-digit rate in fiscal 2027.
Securities-Fraud Investigations
On Nov. 4, 2026, four law firms announced securities-fraud investigations related to Amdocs’ disclosures about T‑Mobile. The firms—Howard G. Smith, Glancy Prongay Wolke & Rotter, Frank R. Cruz, and Hagens Berman—issued solicitation-style notices seeking potential federal securities-law claims. None reported a filed complaint, regulatory finding, or court ruling.
Amdocs expects fiscal 2028 to return to mid-single-digit revenue growth, high-single-digit earnings growth, and a steadily rising dividend.
