News Release

Key highlights:

• First fiscal quarter revenue of $807 million, compared to the $805-$825 million guidance range. Foreign currency movements negatively affected revenue by approximately $6 million sequentially relative to the fourth fiscal quarter of 2011
• First fiscal quarter non-GAAP operating income of $133 million; non-GAAP operating margin of 16.5%; GAAP operating income of $109 million
• First fiscal quarter diluted non-GAAP EPS of $0.64, compared to the $0.61-$0.67 guidance range, excluding amortization of purchased intangible assets and other acquisition related costs and equity-based compensation expense, net of related tax effects
• Diluted GAAP EPS of $0.53 for the first fiscal quarter, compared to the $0.49-$0.57 guidance range
• Free cash flow of $121 million for the first fiscal quarter
• Twelve-month backlog of $2.69 billion at the end of the first fiscal quarter, up $20 million from the end of the fourth fiscal quarter of 2011
• Repurchased $140 million of ordinary shares during the first fiscal quarter
• Second quarter fiscal 2012 guidance: Expected revenue of approximately $800-$820 million and diluted non-GAAP EPS of $0.62-$0.68, excluding amortization of purchased intangible assets and other acquisition-related costs and approximately $0.05-$0.06 per share of equity-based compensation expense, net of related tax effects. Diluted GAAP EPS is expected to be approximately $0.50-$0.58
• Fiscal 2012 guidance: At least 11-13% non-GAAP EPS growth expected in fiscal 2012. Expected revenue growth of 5-6% on a constant currency basis and expected reported revenue growth of 4-5% including the effects of foreign currency fluctuations

ST. LOUIS, Feb. 1, 2012 /PRNewswire via COMTEX/ -- Amdocs Limited (NYSE: DOX) today reported that for its first fiscal quarter ended December 31, 2011, revenue was $807.0 million, down 0.6% sequentially from the fourth fiscal quarter of 2011 and up 4.1% as compared to last year's first fiscal quarter. Net income on a non-GAAP basis was $111.3 million, or $0.64 per diluted share, compared to non-GAAP net income of $99.8 million, or $0.52 per diluted share, in the first quarter of fiscal 2011. Non-GAAP net income excludes amortization of purchased intangible assets and other acquisition related costs and equity-based compensation expenses of $18.5 million, net of related tax effects, in the first quarter of fiscal 2012 and excludes such amortization and other acquisition related costs and equity-based compensation expenses of $26.4 million, net of related tax effects, in the first quarter of fiscal 2011. The Company's GAAP net income for the first quarter of fiscal 2012 was $92.7 million, or $0.53 per diluted share, compared to GAAP net income of $73.4 million, or $0.38 per diluted share, in the prior year's first fiscal quarter.

"During the first fiscal quarter, our market leading position continued to translate into healthy demand across our portfolio. Our results benefitted from strong performance in the emerging markets and Europe, somewhat tempered by slower spending at AT&T in conjunction with the cancellation of the merger with T-Mobile. In the emerging markets, our global market position and track record of successful implementations continue to result in new, influential deals with some of the largest carriers in these regions. Additionally, we are seeing healthy and diverse business activity in Europe with minimal impact to date from macroeconomic uncertainty in the region. In North America, AT&T's mid-December withdrawal of its bid for T-Mobile USA caused some spending slowdown in our largest customer, while the rest of the region performed as expected," said Eli Gelman, chief executive officer of Amdocs Management Limited.

Gelman continued, "During the quarter, we signed several key strategic wins, including the agreement with Comcast announced today and three deals in Latin America. These wins are strong evidence that the investment decisions we made over the last year were focused in the right areas and are supporting exciting new activities. First, the cable industry continues to progress forward with gradual transformation. The multi-year agreement with Comcast demonstrates that Amdocs is partnering with leading cable operators to realize their vision. Additionally, the new business in Latin America further establishes Amdocs as a leader in providing next-generation customer experience systems in one of the fastest growing emerging markets."

Gelman concluded, "We continue to demonstrate our belief in the future success of Amdocs by repurchasing our shares. Since resuming the buy-back program in April 2010, we have repurchased approximately $1.2 billion of our ordinary shares as of December 31, 2011, or roughly 20% of our shares outstanding. Incorporating our repurchase activity thus far in fiscal 2012, we are raising our fiscal 2012 non-GAAP earnings per share outlook to at least 11-13% year-over-year growth, compared to our prior outlook of at least 10-12% growth. This outlook does not include any future repurchase activity. Our earnings forecast factors in expected revenue growth of 5-6% on a constant currency basis and a revised reported revenue growth outlook of 4-5% including the effects of foreign currency fluctuations. The pace of reacceleration at AT&T is one of the largest variables to consider within our revenue outlook range."

Financial Discussion of First Fiscal Quarter Results

Free cash flow was $121 million for the quarter, comprised of cash flow from operations of $150 million less $29 million in net capital expenditures and other.

Twelve-month backlog, which includes anticipated revenue related to contracts, estimated revenue from managed services contracts, letters of intent, maintenance and estimated on-going support activities, was $2.69 billion at the end of the first quarter of fiscal 2012.

Financial Outlook

Amdocs expects that revenue for the second quarter of fiscal 2012 will be approximately $800-$820 million. Diluted earnings per share on a non-GAAP basis for the second fiscal quarter are expected to be $0.62-$0.68, excluding amortization of purchased intangible assets and other acquisition-related costs and approximately $0.05-$0.06 per share of equity-based compensation expense, net of related tax effects. Amdocs estimates GAAP diluted earnings per share for the second fiscal quarter will be $0.50-$0.58.

Conference Call Details

Amdocs will host a conference call on February 1, 2012 at 5:00 p.m. Eastern Time to discuss the Company's first fiscal quarter results. The call will be carried live on the Internet via the Amdocs website, http://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 operating margin, non-GAAP income taxes and non-GAAP net income. These non-GAAP measures exclude the following items:

• amortization of purchased intangible assets and other acquisition related costs;
• 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 operating margin, 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 and other acquisition related costs, 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, interest and other expense, net, 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.

Please refer to the Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP tables below.

About Amdocs

For 30 years, Amdocs has ensured service providers' success and embraced their biggest challenges. To win in the connected world, service providers rely on Amdocs to simplify the customer experience, harness the data explosion, stay ahead with new services and improve operational efficiency. The global company uniquely combines a market-leading BSS, OSS and network control product portfolio with value-driven professional services and managed services operations. With revenue of $3.2 billion in fiscal 2011, Amdocs and its over 19,000 employees serve customers in more than 60 countries.

Amdocs: Embrace Challenge, Experience Success.

For more information, visit Amdocs at http://www.amdocs.com/.

This press release includes information that constitutes forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995, including statements about Amdocs growth and business results in future quarters. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, 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 future results to differ from those anticipated. These risks include, but are not limited to, the effects of general economic conditions, Amdocs ability to grow in the business markets that it serves, Amdocs ability to successfully integrate acquired businesses, adverse effects of market competition, rapid technological shifts that may render the Company's products and services obsolete, potential loss of a major customer, our ability to develop long-term relationships with our customers, and risks associated with operating businesses in the international market. Amdocs may elect to update these forward-looking statements at some point in the future; however, the Company specifically disclaims any obligation to do so. These and other risks are discussed at greater length in the Company's filings with the Securities and Exchange Commission, including in our Annual Report on Form 20-F for the fiscal year ended September 30, 2011 filed on December 8, 2011.

SOURCE Amdocs