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First Quarter Results for Fiscal 2015
Jan 27, 2015
Key highlights:
- First fiscal quarter revenue of
$906 million , within the$895-$925 million guidance range, which had already embedded a negative sequential impact of approximately$6 million from foreign currency movements. Foreign currency movements negatively affected revenue by approximately$10 million relative to the fourth quarter of fiscal 2014. Excluding foreign currency movements, revenue performance was roughly in line with the midpoint of our expectations - First fiscal quarter non-GAAP operating income of
$153 million ; non-GAAP operating margin of 16.9%; GAAP operating income of$142 million - First fiscal quarter diluted non-GAAP EPS of
$0.88 , above the$0.77-$0.83 guidance range, excluding amortization of purchased intangible assets and other acquisition-related costs, changes in fair value of certain acquisition-related liabilities and equity-based compensation expense, net of related tax effects. A lower non-GAAP effective tax rate positively impacted diluted non-GAAP EPS. Adjusting for this, diluted non-GAAP EPS was within the guidance range for the first quarter - Diluted GAAP EPS of
$0.83 for the first fiscal quarter, above the$0.60-$0.68 guidance range - Free cash flow of
$173 million for the first fiscal quarter - Repurchased
$102 million of ordinary shares during the first fiscal quarter - Twelve-month backlog of
$3.03 billion at the end of the first fiscal quarter, up$30 million from the end of the fourth quarter of fiscal 2014 - The board of directors approved a
$0.17 per share quarterly cash dividend to be paid onApril 16, 2015 , subject to shareholders' approval at theJanuary 2015 annual general meeting - Second quarter fiscal 2015 guidance: Expected revenue of approximately
$900-$930 million . Expected diluted non-GAAP EPS of approximately$0.78-$0.84 , 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. Expected diluted GAAP EPS of approximately$0.64-$0.72 - Full year fiscal 2015 revenue guidance: Reiterates fiscal 2015 revenue growth within the previous range of 2.5% to 5.5% year-over-year on a constant currency basis relative to the guidance provided last quarter. Expects fiscal 2015 reported revenue growth of 1.5% to 4.5% year-over-year reflecting a negative impact from foreign currency movements of approximately 1% relative to the guidance provided last quarter
"Our recent sales momentum has been strong with our market position enabling us to secure significant new awards with some of the world's largest carriers. As we previously announced,
Gelman continued, "
Gelman concluded, "With the visibility provided by our backlog and the pipeline of opportunity ahead of us we are encouraged by our start to fiscal 2015. As a reminder, our outlook reflects many moving parts, including with respect to macroeconomic and industry specific trends. We are focused on delivering consistent execution and operating efficiency, and we remain committed to returning cash to shareholders while retaining the capacity to execute on our long-term growth initiatives. Taking all these factors into consideration, we continue to expect diluted non-GAAP earnings per share growth of 4.5%-7.5% for the full fiscal year."
Financial Discussion of First Fiscal Quarter Results
Free cash flow was
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
Financial Outlook
Diluted earnings per share on a non-GAAP basis for the second fiscal quarter are expected to be
Quarterly Cash Dividend Program
On
Conference Call Details
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 revenue, non-GAAP research and development, non-GAAP selling, general and administrative, non-GAAP operating income, non-GAAP operating margin, non-GAAP interest and other expense, net, non-GAAP income taxes, non-GAAP effective tax rate, non-GAAP net income and non-GAAP diluted earnings per share growth. These non-GAAP measures exclude the following items:
- amortization of purchased intangible assets and other acquisition-related costs;
- changes in fair value of certain acquisition-related liabilities
- 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.
For its internal budgeting process and in monitoring the results of the business,
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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 LIMITED Consolidated Statements of Income (in thousands, except per share data) |
|||||
Three months ended |
|||||
December 31, |
|||||
2014 |
2013 |
||||
Revenue |
$ 906,287 |
$ 864,045 |
|||
Operating expenses: |
|||||
Cost of revenue |
573,446 |
557,403 |
|||
Research and development |
63,641 |
62,325 |
|||
Selling, general and administrative |
113,580 |
111,959 |
|||
Amortization of purchased intangible assets and other |
14,099 |
11,668 |
|||
764,766 |
743,355 |
||||
Operating income |
141,521 |
120,690 |
|||
Interest and other income (expense), net |
1,544 |
(1,404) |
|||
Income before income taxes |
143,065 |
119,286 |
|||
Income taxes |
12,075 |
17,851 |
|||
Net income |
$ 130,990 |
$ 101,435 |
|||
Basic earnings per share |
$ 0.84 |
$ 0.64 |
|||
Diluted earnings per share |
$ 0.83 |
$ 0.63 |
|||
Basic weighted average number of shares outstanding |
155,897 |
159,659 |
|||
Diluted weighted average number of shares outstanding |
158,110 |
161,845 |
|||
Cash dividends declared per share |
$ 0.155 |
$ 0.130 |
AMDOCS LIMITED Selected Financial Metrics (in thousands, except per share data) |
|||||
Three months ended |
|||||
December 31, |
|||||
2014 |
2013 |
||||
Revenue |
$ 906,287 |
$ 864,045 |
|||
Non-GAAP operating income |
152,962 |
145,323 |
|||
Non-GAAP net income |
139,485 |
122,564 |
|||
Non-GAAP diluted earnings per share |
$ 0.88 |
$ 0.76 |
|||
Diluted weighted average number of shares outstanding |
158,110 |
161,845 |
AMDOCS LIMITED Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP (in thousands) | |||||||
Three months ended | |||||||
Reconciliation items |
|||||||
GAAP |
Amortization of purchased intangible assets and other |
Equity based compensation expense |
Changes in fair value of certain acquisition-related liabilities |
Tax effect |
Non-GAAP | ||
Operating expenses: |
|||||||
Cost of revenue |
$ 573,446 |
$ - |
$ (4,244) |
$ 16,556 |
$ - |
$ 585,758 | |
Research and |
63,641 |
- |
(937) |
- |
- |
62,704 | |
Selling, general and |
113,580 |
- |
(8,717) |
- |
- |
104,863 | |
Amortization of |
14,099 |
(14,099) |
- |
- |
- |
- | |
Total operating expenses |
764,766 |
(14,099) |
(13,898) |
16,556 |
- |
753,325 | |
Operating income |
141,521 |
14,099 |
13,898 |
(16,556) |
- |
152,962 | |
Interest and other |
(1,544) |
- |
- |
3,921 |
- |
2,377 | |
Income taxes |
12,075 |
- |
- |
- |
(975) |
11,100 | |
Net income |
$ 130,990 |
$ 14,099 |
$ 13,898 |
$ (20,477) |
$ 975 |
$ 139,485 | |
Three months ended | |||||||
Reconciliation items |
|||||||
GAAP |
Amortization of purchased intangible assets and other |
Equity based compensation expense |
Tax effect |
Non-GAAP | |||
Operating expenses: |
|||||||
Cost of revenue |
$ 557,403 |
$ - |
$ (4,554) |
$ - |
$ 552,849 | ||
Research and development |
62,325 |
- |
(933) |
- |
61,392 | ||
Selling, general and |
111,959 |
- |
(7,478) |
- |
104,481 | ||
Amortization of purchased |
11,668 |
(11,668) |
- |
- |
- | ||
Total operating expenses |
743,355 |
(11,668) |
(12,965) |
- |
718,722 | ||
Operating income |
120,690 |
11,668 |
12,965 |
- |
145,323 | ||
Income taxes |
17,851 |
- |
- |
3,504 |
21,355 | ||
Net income |
$ 101,435 |
$ 11,668 |
$ 12,965 |
$ (3,504) |
$ 122,564 | ||
AMDOCS LIMITED Condensed Consolidated Balance Sheets (in thousands) | ||||
As of | ||||
December 31, 2014 |
September 30, 2014 | |||
ASSETS |
||||
Current assets |
||||
Cash, cash equivalents and short-term interest-bearing investments |
$ 1,268,573 |
$ 1,424,465 | ||
Accounts receivable, net, including unbilled of $105,611 and $134,523, respectively |
683,778 |
715,837 | ||
Deferred income taxes and taxes receivable |
158,761 |
148,346 | ||
Prepaid expenses and other current assets |
129,713 |
135,326 | ||
Total current assets |
2,240,825 |
2,423,974 | ||
Equipment and leasehold improvements, net |
284,233 |
288,956 | ||
Goodwill and other intangible assets, net |
2,100,219 |
2,106,452 | ||
Other noncurrent assets |
348,735 |
365,895 | ||
Total assets |
$ 4,974,012 |
$ 5,185,277 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||
Current liabilities |
||||
Accounts payable, accruals and other |
$ 790,410 |
$ 785,548 | ||
Short-term financing arrangements |
- |
210,000 | ||
Deferred revenue |
149,027 |
156,743 | ||
Deferred income taxes and taxes payable |
61,956 |
48,456 | ||
Total current liabilities |
1,001,393 |
1,200,747 | ||
Other noncurrent liabilities |
553,719 |
588,694 | ||
Shareholders' equity |
3,418,900 |
3,395,836 | ||
Total liabilities and shareholders' equity |
$ 4,974,012 |
$ 5,185,277 |
AMDOCS LIMITED Consolidated Statements of Cash Flows (in thousands) | ||||
Three months ended December 31, | ||||
2014 |
2013 | |||
Cash Flow from Operating Activities: |
||||
Net income |
$ 130,990 |
$ 101,435 | ||
Reconciliation of net income to net cash provided by operating activities: |
||||
Depreciation and amortization |
39,709 |
35,729 | ||
Equity-based compensation expense |
13,898 |
12,965 | ||
Deferred income taxes |
(23,761) |
5,397 | ||
Excess tax benefit from equity-based compensation |
(1,126) |
(92) | ||
(Gain) loss from short-term interest-bearing investments |
(41) |
308 | ||
Net changes in operating assets and liabilities, net of amounts acquired: |
||||
Accounts receivable |
32,848 |
(3,660) | ||
Prepaid expenses and other current assets |
7,603 |
(7,596) | ||
Other noncurrent assets |
10,594 |
(14,453) | ||
Accounts payable, accrued expenses and accrued personnel |
9,602 |
34,514 | ||
Deferred revenue |
(9,049) |
20,460 | ||
Income taxes payable |
15,263 |
(4,565) | ||
Other noncurrent liabilities |
(18,117) |
6,096 | ||
Net cash provided by operating activities |
208,413 |
186,538 | ||
Cash Flow from Investing Activities: |
||||
Payments for purchase of equipment and leasehold improvements, net |
(36,732) |
(26,743) | ||
Proceeds from sale of short-term interest-bearing investments |
53,153 |
83,763 | ||
Purchase of short-term interest-bearing investments |
(49,255) |
(92,878) | ||
Net cash paid for acquisitions |
(8,099) |
(12,603) | ||
Other |
993 |
7,309 | ||
Net cash used in investing activities |
(39,940) |
(41,152) | ||
Cash Flow from Financing Activities: |
||||
Payments under financing arrangements |
(210,000) |
(200,000) | ||
Repurchase of shares |
(101,632) |
(84,019) | ||
Proceeds from employee stock options exercised |
14,497 |
36,014 | ||
Payments of dividends |
(24,291) |
(20,812) | ||
Excess tax benefit from equity-based compensation |
1,126 |
92 | ||
Other |
(3) |
(270) | ||
Net cash used in financing activities |
(320,303) |
(268,995) | ||
Net decrease in cash and cash equivalents |
(151,830) |
(123,609) | ||
Cash and cash equivalents at beginning of period |
1,103,269 |
1,014,192 | ||
Cash and cash equivalents at end of period |
$ 951,439 |
$ 890,583 |
AMDOCS LIMITED Supplementary Information (in millions) | ||||||||||
Three months ended | ||||||||||
December 31, |
September 30, |
June 30, |
March 31, |
December 31, 2013 | ||||||
North America |
$ 659.1 |
$ 662.7 |
$ 647.2 |
$ 651.7 |
$ 628.0 | |||||
Europe |
106.9 |
105.3 |
114.6 |
113.8 |
117.0 | |||||
Rest of World |
140.3 |
132.3 |
140.7 |
131.4 |
119.0 | |||||
Total Revenue |
$ 906.3 |
$ 900.3 |
$ 902.5 |
$ 896.9 |
$ 864.0 |
Three months ended | ||||||||||||||||
December 31, |
September 30, |
June 30, |
March 31, |
December 31, 2013 | ||||||||||||
Managed Services Revenue |
$ 467.1 |
$ 436.4 |
$ 438.0 |
$ 426.3 |
$ 429.3 | |||||||||||
Three months ended |
||||||||||||||||
December 31, |
September 30, |
June 30, |
March 31, |
December 31, 2013 |
||||||||||||
Customer Experience |
$ 882.4 |
$ 871.5 |
$ 870.8 |
$ 863.6 |
$ 829.6 |
|||||||||||
Directory |
23.9 |
28.8 |
31.7 |
33.3 |
34.4 |
|||||||||||
Total Revenue |
$ 906.3 |
$ 900.3 |
$ 902.5 |
$ 896.9 |
$ 864.0 |
|||||||||||
As of | |||||||||||
December 31, |
September 30, |
June 30, |
March 31, |
December 31, 2013 |
|||||||
12-Month Backlog |
$ 3,030 |
$ 3,000 |
$ 2,970 |
$ 2,940 |
$ 2,890 |
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/amdocs-limited-reports-record-quarterly-revenue-of-906m-up-49-yoy-300026576.html
SOURCE
Matthew Smith, Head of Investor Relations, Amdocs, 314-212-8328, E-mail: dox_info@amdocs.com