Prepress

Amdocs Limited Reports Quarterly Revenue Growth of 15%

Thursday 24. July 2008 - Amdocs Reports Record Quarterly Revenue of $820 Million, Exceeding Guidance

Key highlights:

– Third quarter revenue increased to $820 million, exceeding guidance of $790-$805 million

– Third quarter diluted non-GAAP EPS, excluding acquisition-related costs and equity-based compensation expense, net of related tax effects, increased to $0.61, in line with guidance of $0.59-$0.61 diluted non-GAAP EPS

– Diluted GAAP EPS of $0.46 for the quarter

– Free cash flow of $83 million for the quarter

– Fourth quarter fiscal 2008 guidance: Expected revenue of approximately $825-$835 million and diluted non-GAAP EPS of $0.61-$0.63, excluding acquisition-related costs and approximately $0.06-$0.07 per share of equity-based compensation expense, net of related tax effects. Diluted GAAP EPS is expected to be approximately $0.47-$0.50

mdocs Limited (NYSE:DOX) today reported that for its fiscal third quarter ended June 30, 2008, revenue was $820.3 million, an increase of 15.2% from last year’s third quarter. Net income on a non-GAAP basis was $132.5 million, or $0.61 per diluted share (excluding acquisition-related costs, which include amortization of purchased intangible assets and in-process research and development write-off, and excluding equity-based compensation expense, net of related tax effects, of $31.8 million), compared to non-GAAP net income of $120.6 million, or $0.54 per diluted share, in the third quarter of fiscal 2007 (excluding acquisition-related costs, which include amortization of purchased intangible assets and equity-based compensation expense, net of related tax effects, of $32.4 million). The Company’s GAAP net income was $100.7 million, or $0.46 per diluted share, compared to GAAP net income of $88.2 million, or $0.40 per diluted share, in the third quarter of fiscal 2007. Free cash flow for the quarter was $83.2 million, comprised of cash flow from operations of $115.1 million less $31.9 million in net capital expenditures and other.

“Our role as a strategic partner with our customers is translating into excellent business results for Amdocs,” said Dov Baharav, chief executive officer of Amdocs Management Limited. “We continue to provide innovative solutions to solve real-world business needs for the leading service providers around the world. Our unique combination of industry-leading integrated products, services and domain expertise provides us with growth opportunities in areas such as managed services and transformational projects in developed markets and in emerging markets around the world. We continue to see strong demand at this time but there are macro-economic uncertainties which may have an impact on our results in the future. We believe that we are well-positioned for future growth.”

In the third quarter Amdocs had numerous wins across lines of business and geographies. The Company had a win in North America with the Amdocs CES – Qpass 7.5 offering and continues to show momentum in broadband cable and satellite with wins for operational support systems (OSS) and mediation solutions. Amdocs had additional OSS success including a win in Asia Pacific, which builds on a strong existing relationship, and in Europe with Slovak Telecom. Amdocs enjoyed success in emerging markets as Bakcell in Azerbaijan selected Amdocs Compact Convergence Suite and another service provider chose Amdocs CRM.

Financial Outlook

Amdocs expects that revenue for the fourth quarter of fiscal 2008 will be approximately $825-$835 million. Amdocs expects diluted earnings per share on a non-GAAP basis for the fourth quarter to be $0.61-$0.63, excluding acquisition-related costs and approximately $0.06-$0.07 per share of equity-based compensation expense, net of related tax effects. Diluted GAAP EPS is expected to be approximately $0.47-$0.50.

Amdocs will host a conference call on July 23, 2008 at 5 p.m. Eastern Time to discuss the Company’s third quarter results. The call will be carried live on the Internet via www.InvestorCalendar.com and the Amdocs website, www.amdocs.com.

Non-GAAP Financial Measures

This release includes non-GAAP diluted earnings per share and other non-GAAP financial measures, including free cash flow, non-GAAP cost of service, non-GAAP research and development, non-GAAP selling, general and administrative, non-GAAP operating income, non-GAAP income taxes and non-GAAP net income. These non-GAAP measures exclude the following items:

— amortization of purchased intangible assets;
— in-process research and development write-off and other;
— restructuring charges;
— equity-based compensation expense; and
— tax effects related to the above.




These non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. Amdocs believes that non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with Amdocs’ results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Amdocs’ results of operations in conjunction with the corresponding GAAP measures.

Amdocs believes that the presentation of non-GAAP diluted earnings per share and other financial measures, including free cash flow, non-GAAP cost of service, non-GAAP research and development, non-GAAP selling, general and administrative, non-GAAP operating income, non-GAAP income taxes and non-GAAP net income, when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and results of operations as well as the net amount of cash generated by its business operations after taking into account capital spending required to maintain or expand the business.

For its internal budgeting process and in monitoring the results of the business, Amdocs’ management uses financial statements that do not include amortization of purchased intangible assets, in-process research and development write-off and other, restructuring charges, equity-based compensation expense, and related tax effects. Amdocs’ management also uses the foregoing non-GAAP financial measures, in addition to the corresponding GAAP measures, in reviewing the financial results of Amdocs. In addition, Amdocs believes that significant groups of investors exclude these non-cash expenses in reviewing its results and those of its competitors, because the amounts of the expenses between companies can vary greatly depending on the assumptions used by an individual company in determining the amounts of the expenses.

Amdocs further believes that, where the adjustments used in calculating non-GAAP diluted earnings per share are based on specific, identified amounts that impact different line items in the Consolidated Statements of Income (including cost of service, research and development, selling, general and administrative, operating income, income taxes and net income), it is useful to investors to understand how these specific line items in the Consolidated Statements of Income are affected by these adjustments.