Letter to Shareholders

Fiscal 2014 was a year of significant progress for Amdocs

Demand for our products and services remained strong throughout the year and across geographies, and we entered new domains such as network software and big data analytics

Dear Fellow Shareholders,

Fiscal 2014 was a year of significant progress for Amdocs as we successfully executed some of the industry's most complex transformational projects, further invested in our market-leading portfolio with additional releases of Amdocs CES, and entered new domains such as network software and big data analytics. Moreover, demand for our products and services remained strong throughout the year and across geographies, resulting in a number of important wins that enhanced our competitive position with new and existing customers.

Overall, we exited fiscal 2014 with non-GAAP earnings per share growth that was consistent with our expectations at the beginning of the year and that reflected record revenue, slightly improved profitability and the benefits of our balanced capital allocation. In addition, the Board of Directors authorized an increase in the company's quarterly cash dividend for the second consecutive year, subject to approval by shareholders at the upcoming annual meeting. Towards the end of the first quarter we transferred the listing of our ordinary shares to the NASDAQ Global Select Market (NASDAQ) from the New York Stock Exchange. We did so in order to be included among the most innovative companies in the world, where we believe we belong, and to leverage the range of cost-effective services that accompany our NASDAQ listing while also maintaining our visibility with investors.


Our North American business delivered record revenue in fiscal 2014, despite persistent regional uncertainty resulting from consolidation activity among wireless and Pay TV service providers. Our business with AT&T continued to be particularly strong as we supported this customer in various strategic new initiatives like the connected car. We also saw major contract extensions at other large North American operators such as Sprint and Bell Canada, where we were selected to provide their next-generation charging solution, reinforcing our relationship with some of our largest customers.

In the emerging markets we focused on bringing several highly complex transformation projects into production and made significant progress expanding our strategic customer relationships. This includes the Telefónica group, where we increased our business by winning quad-play transformation deals in Peru and Chile that build on our successful projects in Argentina. In the Asia-Pacific region we deepened our ties with a leading Pay TV provider, signing a five-year managed services agreement, and were selected by FarEasTone in Taiwan to modernize its charging and billing system with real-time capabilities.

For the first time since the end of fiscal 2012 we also saw year-over-year growth in Europe, despite the difficult macro-economic challenges and regulatory pressures impacting service providers there. We significantly expanded our services at Vodafone, and are now supporting seven Vodafone group companies under our global managed services agreement with Vodafone, which we see as evidence of the value that Amdocs' managed services can deliver in Europe as operators seek greater simplicity and improved quality in their IT operations.


Following our acquisitions of Actix and Celcite in fiscal 2013 and fiscal 2014 respectively, we have continued to execute on our network software strategy, including the launch of the Amdocs Self-Optimizing Networks (SON) solution. Our value proposition in the network extends beyond the market-leading capabilities of our network optimization, operational support systems (OSS) and policy control solutions. We are uniquely able to leverage these assets with our leading capabilities in the business support systems (BSS) domain and fuse network and customer intelligence together to create value-centric network experiences – when and where it matters most for the individual subscriber. Also in the network realm, our inclusion in AT&T's Domain 2.0 supply program to support its long-term vision of the user-defined network cloud provides recognition of the cutting-edge capabilities we can bring service providers in terms of network abstraction and virtualization.

We also expanded our big data analytics offering, becoming an end-to-end provider of communications-specific big data solutions encompassing business and operational support systems (BSS/OSS), network and social media. This launch was well received by the market, which appreciated the differentiation Amdocs can bring with our industry-specific big data use cases. Furthermore, Amdocs CES 9.1 and 9.2, our most recent product suites, add new social care, small- and medium sized business (SMB) and multi-play capabilities to our portfolio, allowing service providers to give customers control of their experiences across any channel, network, service or device, as well as significantly reduce service design and implementation times for accelerated time to market for all lines of business.


Free cash flow generation of $601 million in fiscal 2014 was a new company record and comfortably supported our external growth investments for the year. The Board increased our share repurchase authorization by an additional $750 million in April 2014, and we returned about 80% of our free cash flow to shareholders in fiscal 2014 by way of our share repurchase program and our quarterly dividend program, ahead of our 50-50 policy. Our Board has also approved a close to 10% increase in our quarterly cash dividend rate to 17 cents per share, commencing in April 2015, subject to shareholder approval. Moreover, the decision to raise the dividend for a second consecutive year is further demonstration of our confidence in the future success of Amdocs and our ongoing commitment to enhancing total shareholder returns.


As we enter fiscal 2015, we remain highly focused on our execution, which includes securing new business, improving our operating efficiency and continuously expanding our offering suite with innovative new offerings such as network functions virtualization and big data analytics. Building on the foundations laid during the successful past fiscal year, we feel confident in our ability to continue providing value to our shareholders and customers over the next year as we continue to grow. We feel we have a good strategy for continued growth, a solid base for good execution and, overall, that we can generate value to our shareholders.

Thank you for your continued support, confidence and commitment.
Eli Gelman
President and CEO,
Amdocs Management Limited
Director, Amdocs Limited
Robert A. Minicucci
Chairman of the Board,
Amdocs Limited