Raises
Fiscal 2017 Revenue Growth Outlook to 2.5-6.5% YoY in Constant
Currency
Amdocs Limited (NASDAQ:DOX) today reported that for its first
fiscal quarter ended December 31, 2016, revenue was $954.7 million,
up 1.5% or $14.1 million sequentially from the fourth fiscal
quarter of 2016 and up 3.6% as compared to last year’s first fiscal
quarter. Revenue for the first fiscal quarter of 2017 includes a
negative impact from foreign currency movements of approximately $7
million relative to the fourth quarter of fiscal 2016. The
Company's GAAP net income for the first quarter of fiscal 2017 was
$97.8 million, or $0.66 per diluted share, compared to GAAP net
income of $100.8 million, or $0.66 per diluted share, in the prior
fiscal year’s first quarter. Net income on a non-GAAP basis was
$133.6 million, or $0.90 per diluted share, compared to non-GAAP
net income of $132.0 million, or $0.86 per diluted share, in the
first quarter of fiscal 2016. Non-GAAP net income excludes
amortization of purchased intangible assets and other
acquisition-related costs and equity-based compensation expenses of
$35.8 million, net of related tax effects, in the first quarter of
fiscal 2017, and excludes such amortization and other
acquisition-related costs and equity-based compensation expenses of
$31.2 million, net of related tax effects, in the first quarter of
fiscal 2016.
“We are pleased with our first quarter results which reflect
record revenue above the midpoint of our guidance on a constant
currency basis and further signs of stabilization in North America.
Our win rate remained high and included our selection for
significant transformation projects with Vodafone Italy and a
leading communications service provider in Southeast Asia.
Additionally, we renewed important managed services arrangements
with existing customers, strengthening the base on which to further
expand our future scope of business activities. These include
five-year services extension agreements with BT, the largest
communications service provider in the UK, and Rostelecom, Russia's
national service provider,” said Eli Gelman, president and chief
executive officer of Amdocs Management Limited.
Gelman continued, “Over the last several months, we have made
significant progress in the field of Network Functions
Virtualization (NFV). We became the first information technology
company to partner with the Linux Foundation to accelerate the
global adoption of AT&T’s ECOMP platform by making it available
in open source to service providers and cloud developers in 2017.
Additionally, Orange Polska and Amdocs jointly announced the
industry’s first trial to test and assess open source ECOMP in a
live cloud environment, initially for virtual services in Poland,
and then globally across the Orange footprint. We believe our
selection as technology integrator for this landmark project
reflects the unique industry expertise we bring as a result of our
co-development of ECOMP with AT&T, and we are excited to
validate the capabilities and potential benefits of an ECOMP
deployment within the Orange network.”
Gelman concluded, “We are encouraged by our solid start to
fiscal 2017, the visibility provided by our unique business model
and record twelve-month backlog. We remain focused on delivering
consistent execution and maximizing free cash flow, the majority of
which we still plan to return to shareholders in fiscal 2017 while
retaining capacity for M&A as opportunities arise. Taking
everything into consideration, we are on-track to deliver diluted
non-GAAP earnings per share growth of 4.5-8.5% for the full fiscal
year although we will of course continue to monitor macro and
industry specific risks closely, including those which may result
from consolidation activity in North America.”
Financial Discussion of First Fiscal Quarter
Results Free cash flow was $127 million for the first
quarter of fiscal 2017, comprised of cash flow from operations of
$168 million, less $41 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 $3.18 billion at the end of the first quarter of
fiscal 2017, up $10 million from the end of the prior quarter.
Financial Outlook Amdocs expects that revenue
for the second quarter of fiscal 2017 will be approximately
$940-$980 million. Embedded within this guidance is an immaterial
sequential impact from foreign currency fluctuations as compared to
the first quarter of fiscal 2017. This outlook takes into
consideration the company’s expectations regarding macro and
industry specific risks and various uncertainties and certain
assumptions that we will discuss on our earnings conference call.
However, Amdocs notes that it cannot predict all possible outcomes,
including those resulting from AT&T’s proposed merger with Time
Warner or from other current and potential customer consolidation
activity in North America.
Amdocs estimates GAAP diluted earnings per share for the second
fiscal quarter of 2017 will be $0.66-$0.74. Diluted earnings per
share on a non-GAAP basis for the second quarter of fiscal 2017 is
expected to be $0.90-$0.96, excluding amortization of purchased
intangible assets and other acquisition-related costs and
approximately $0.06-$0.07 per share of equity-based compensation
expense, net of related tax effects.
Quarterly Cash Dividend ProgramOn February 1,
2017, the Board approved the Company’s next quarterly cash dividend
payment at the new rate of $0.22 per share and set March 31, 2017
as the record date for determining the shareholders entitled to
receive the dividend, which will be payable on April 14, 2017.
Conference Call Details Amdocs will host a
conference call on February 1, 2017 at 5:00 p.m. Eastern Time to
discuss the Company's first quarter of fiscal 2017 results. To
participate, please dial +1 (844) 513-7152, or +1 (508) 637-5600
outside the United States, approximately 15 minutes before the call
and enter passcode 43552017. The call will also be carried live on
the Internet via 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
revenue, non-GAAP research and development, non-GAAP selling,
general and administrative, non-GAAP operating income, non-GAAP
operating margin, non-GAAP income taxes, 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;
- 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 revenue, non-GAAP research and
development, non-GAAP selling, general and administrative, non-GAAP
operating income, non-GAAP operating margin, non-GAAP income taxes,
non-GAAP net income and non-GAAP diluted earnings per share growth
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 items in reviewing its results and those of its
competitors, because the amounts of the items between companies can
vary greatly depending on the assumptions used by an individual
company in determining the amounts of the items.
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 revenue,
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. Please refer to the Reconciliation of Selected
Financial Metrics from GAAP to Non-GAAP tables below.
About AmdocsAmdocs is the market leader in
customer experience software solutions and services for the world’s
largest communications, entertainment and media service providers.
For more than 30 years, Amdocs solutions, which include BSS, OSS,
network control, optimization and network functions virtualization,
coupled with professional and managed services, have accelerated
business value for its customers by simplifying business
complexity, reducing costs and delivering a world-class customer
experience.
The Amdocs portfolio enables service providers to capture the
world of digital immediacy by operating across digital dimensions
to engage customers with personalized, omni-channel experiences;
creating a diversified business to capture new revenue streams;
becoming data empowered to make business and operational decisions
based on insight-based and predictive analytics; and achieving
service agility to accelerate the fast rollout of new technologies
and hybrid network services.
Amdocs and its 25,000 employees serve customers in over 85
countries. Listed on the NASDAQ Global Select Market, Amdocs had
revenue of $3.7 billion in fiscal 2016.
Amdocs: Embrace Challenge, Experience Success.
For more information, visit Amdocs at 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, Amdocs specifically disclaims any obligation
to do so. These and other risks are discussed at greater length in
Amdocs’ filings with the Securities and Exchange Commission,
including in our Annual Report on Form 20-F for the fiscal year
ended September 30, 2016 filed on December 12, 2016.
|
|
AMDOCS LIMITED |
|
|
|
Consolidated Statements of Income |
|
(in thousands, except per share
data) |
|
|
|
|
|
Three months ended |
|
|
|
December 31, |
|
|
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
954,727 |
|
$ |
921,505 |
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
Cost of
revenue |
|
|
620,834 |
|
|
595,568 |
|
Research
and development |
|
|
59,990 |
|
|
62,487 |
|
Selling,
general and administrative |
|
|
124,079 |
|
|
119,548 |
|
Amortization of purchased intangible assets and other |
|
|
28,231 |
|
|
24,367 |
|
|
|
|
833,134 |
|
|
801,970 |
|
Operating income |
|
|
121,593 |
|
|
119,535 |
|
|
|
|
|
|
|
Interest and other
expense, net |
|
|
2,763 |
|
|
1,665 |
|
Income before income
taxes |
|
|
118,830 |
|
|
117,870 |
|
|
|
|
|
|
|
Income taxes |
|
|
21,037 |
|
|
17,028 |
|
Net income |
|
$ |
97,793 |
|
$ |
100,842 |
|
Basic earnings per
share |
|
$ |
0.67 |
|
$ |
0.67 |
|
Diluted earnings per
share |
|
$ |
0.66 |
|
$ |
0.66 |
|
Basic weighted average
number of shares outstanding |
|
|
146,817 |
|
|
150,631 |
|
Diluted weighted
average number of shares outstanding |
|
|
148,382 |
|
|
153,053 |
|
Cash dividends declared
per share |
|
$ |
0.195 |
|
$ |
0.170 |
|
|
|
|
|
|
|
|
|
AMDOCS LIMITED |
|
|
|
Selected Financial Metrics |
|
(in thousands, except per share
data) |
|
|
|
|
|
Three months ended |
|
|
|
December 31, |
|
|
|
2016 |
|
2015 |
|
|
|
|
|
|
|
Revenue |
|
$ |
954,727 |
|
$ |
921,505 |
|
|
|
|
|
|
|
Non-GAAP operating
income |
|
|
164,085 |
|
|
156,872 |
|
|
|
|
|
|
|
Non-GAAP net
income |
|
|
133,567 |
|
|
132,020 |
|
|
|
|
|
|
|
Non-GAAP diluted
earnings per share |
|
$ |
0.90 |
|
$ |
0.86 |
|
|
|
|
|
|
|
Diluted weighted
average number of shares outstanding |
|
|
148,382 |
|
|
153,053 |
|
|
|
|
|
|
|
|
|
AMDOCS LIMITED |
|
|
|
Reconciliation of Selected Financial Metrics
from GAAP to Non-GAAP |
|
(in thousands) |
|
|
|
|
|
Three months endedDecember 31,
2016 |
|
|
|
Reconciliation items |
|
|
|
|
|
GAAP |
Amortization of purchased intangible assets and
other |
Equity based compensation expense |
Tax effect |
Non-GAAP |
|
Operating
expenses: |
|
|
|
|
|
|
Cost of revenue |
$ |
620,834 |
$ |
- |
|
$ |
(4,998 |
) |
$ |
- |
|
$ |
615,836 |
|
Research and development |
|
59,990 |
|
- |
|
|
(899 |
) |
|
- |
|
|
59,091 |
|
Selling, general and administrative |
|
124,079 |
|
- |
|
|
(8,364 |
) |
|
- |
|
|
115,715 |
|
Amortization of purchased intangible assets and
other |
|
28,231 |
|
(28,231 |
) |
|
- |
|
|
- |
|
|
- |
|
Total
operating expenses |
|
833,134 |
|
(28,231 |
) |
|
(14,261 |
) |
|
- |
|
|
790,642 |
|
|
|
|
|
|
|
|
Operating
income |
|
121,593 |
|
28,231 |
|
|
14,261 |
|
|
- |
|
|
164,085 |
|
|
|
|
|
|
|
|
Income
taxes |
|
21,037 |
|
- |
|
|
- |
|
|
6,718 |
|
|
27,755 |
|
|
|
|
|
|
|
|
Net
income |
$ |
97,793 |
$ |
28,231 |
|
$ |
14,261 |
|
$ |
(6,718 |
) |
$ |
133,567 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months endedDecember 31,
2015 |
|
|
|
Reconciliation items |
|
|
|
|
|
GAAP |
Amortization of purchased intangible assets and
other |
Equity based compensation expense |
Tax effect |
Non-GAAP |
|
Operating
expenses: |
|
|
|
|
|
|
Cost of revenue |
$ |
595,568 |
$ |
- |
|
$ |
(4,124 |
) |
$ |
- |
|
$ |
591,444 |
|
Research and development |
|
62,487 |
|
- |
|
|
(842 |
) |
|
- |
|
|
61,645 |
|
Selling, general and administrative |
|
119,548 |
|
- |
|
|
(8,004 |
) |
|
- |
|
|
111,544 |
|
Amortization of purchased intangible assets and
other |
|
24,367 |
|
(24,367 |
) |
|
- |
|
|
- |
|
|
- |
|
Total
operating expenses |
|
801,970 |
|
(24,367 |
) |
|
(12,970 |
) |
|
- |
|
|
764,633 |
|
|
|
|
|
|
|
|
Operating
income |
|
119,535 |
|
24,367 |
|
|
12,970 |
|
|
- |
|
|
156,872 |
|
|
|
|
|
|
|
|
Income
taxes |
|
17,028 |
|
- |
|
|
- |
|
|
6,159 |
|
|
23,187 |
|
|
|
|
|
|
|
|
Net
income |
$ |
100,842 |
$ |
24,367 |
|
$ |
12,970 |
|
$ |
(6,159 |
) |
$ |
132,020 |
|
|
|
|
|
|
|
|
AMDOCS LIMITED |
Condensed Consolidated Balance
Sheets |
(in thousands) |
|
|
As of |
|
|
December 31, 2016 |
|
September 30, 2016 |
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
Cash, cash equivalents
and short-term interest-bearing investments |
|
$ |
940,324 |
|
$ |
1,095,723 |
Accounts receivable,
net, including unbilled of $148,364 and $134,122, respectively |
|
|
862,000 |
|
|
818,531 |
Prepaid expenses and
other current assets |
|
|
193,716 |
|
|
186,137 |
Total
current assets |
|
|
1,996,040 |
|
|
2,100,391 |
|
|
|
|
|
Equipment and leasehold
improvements, net |
|
|
325,275 |
|
|
331,728 |
Goodwill and other
intangible assets, net |
|
|
2,453,428 |
|
|
2,493,166 |
Other noncurrent
assets |
|
|
414,599 |
|
|
406,070 |
Total assets |
|
$ |
5,189,342 |
|
$ |
5,331,355 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’
EQUITY |
|
|
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
Accounts payable,
accruals and other |
|
$ |
1,053,622 |
|
$ |
992,679 |
Short-term financing
arrangements |
|
|
- |
|
|
200,000 |
Deferred revenue |
|
|
167,779 |
|
|
173,331 |
Total
current liabilities |
|
|
1,221,401 |
|
|
1,366,010 |
Other noncurrent
liabilities |
|
|
497,455 |
|
|
511,784 |
Shareholders’
equity |
|
|
3,470,486 |
|
|
3,453,561 |
Total liabilities and
shareholders’ equity |
|
$ |
5,189,342 |
|
$ |
5,331,355 |
|
|
|
|
|
|
|
AMDOCS LIMITED |
Consolidated Statements of Cash
Flows |
(in thousands) |
|
|
|
Three months ended December 31, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
Cash Flow from
Operating Activities: |
|
|
|
|
Net income |
|
$ |
97,793 |
|
|
$ |
100,842 |
|
Reconciliation of net
income to net cash provided by operating activities: |
|
|
|
|
Depreciation and amortization |
|
|
57,552 |
|
|
|
51,127 |
|
Equity-based compensation expense |
|
|
14,261 |
|
|
|
12,970 |
|
Deferred
income taxes |
|
|
7,355 |
|
|
|
(10,597 |
) |
Excess
tax benefit from equity-based compensation |
|
|
(912 |
) |
|
|
(2,868 |
) |
(Gain)
loss from short-term interest-bearing investments |
|
|
(194 |
) |
|
|
140 |
|
Net changes in
operating assets and liabilities, net of amounts acquired: |
|
|
|
|
Accounts
receivable |
|
|
(42,555 |
) |
|
|
(7,783 |
) |
Prepaid
expenses and other current assets |
|
|
(1,969 |
) |
|
|
(13,017 |
) |
Other
noncurrent assets |
|
|
(22,774 |
) |
|
|
4,518 |
|
Accounts
payable, accrued expenses and accrued personnel |
|
|
68,226 |
|
|
|
59,354 |
|
Deferred
revenue |
|
|
(6,913 |
) |
|
|
(9,304 |
) |
Income
taxes payable |
|
|
(1,386 |
) |
|
|
10,267 |
|
Other
noncurrent liabilities |
|
|
(456 |
) |
|
|
3,194 |
|
Net cash provided by
operating activities |
|
|
168,028 |
|
|
|
198,843 |
|
|
|
|
|
|
Cash Flow from
Investing Activities: |
|
|
|
|
Payments for purchase
of equipment and leasehold improvements, net |
|
|
(41,736 |
) |
|
|
(38,253 |
) |
Proceeds from sale of
short-term interest-bearing investments |
|
|
67,140 |
|
|
|
100,910 |
|
Purchase of short-term
interest-bearing investments |
|
|
(67,714 |
) |
|
|
(103,599 |
) |
Other |
|
|
3,733 |
|
|
|
(332 |
) |
Net cash used in
investing activities |
|
|
(38,577 |
) |
|
|
(41,274 |
) |
|
|
|
|
|
Cash
Flow from Financing Activities: |
|
|
|
|
Payments under
financing arrangements |
|
|
(200,000 |
) |
|
|
(220,000 |
) |
Repurchase of
shares |
|
|
(80,219 |
) |
|
|
(99,964 |
) |
Proceeds from employee
stock options exercised |
|
|
23,705 |
|
|
|
15,546 |
|
Payments of
dividends |
|
|
(28,693 |
) |
|
|
(25,697 |
) |
Excess tax benefit from
equity-based compensation |
|
|
912 |
|
|
|
2,868 |
|
Other |
|
|
- |
|
|
|
(2 |
) |
Net cash used in
financing activities |
|
|
(284,295 |
) |
|
|
(327,249 |
) |
|
|
|
|
|
Net decrease in cash
and cash equivalents |
|
|
(154,844 |
) |
|
|
(169,680 |
) |
Cash and cash
equivalents at beginning of period |
|
|
768,660 |
|
|
|
1,035,573 |
|
Cash and cash
equivalents at end of period |
|
$ |
613,816 |
|
|
$ |
865,893 |
|
|
|
|
|
|
|
|
|
|
AMDOCS LIMITED |
Supplementary Information |
(in
millions) |
|
|
|
|
|
|
Three months ended |
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
|
|
2016 |
|
2016 |
|
|
2016 |
|
|
2016 |
|
|
2015 |
North America |
|
$ |
628.0 |
|
$ |
626.2 |
|
$ |
591.8 |
|
$ |
586.4 |
|
$ |
576.7 |
Europe |
|
|
118.5 |
|
|
118.9 |
|
|
126.3 |
|
|
139.2 |
|
|
128.9 |
Rest of World |
|
|
208.2 |
|
|
195.6 |
|
|
212.0 |
|
|
200.3 |
|
|
215.9 |
Total Revenue |
|
$ |
954.7 |
|
$ |
940.7 |
|
$ |
930.1 |
|
$ |
925.9 |
|
$ |
921.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
|
|
2016 |
|
2016 |
|
|
2016 |
|
|
2016 |
|
|
2015 |
Managed Services
Revenue |
|
$ |
494.2 |
|
$ |
478.5 |
|
$ |
479.2 |
|
$ |
501.1 |
|
$ |
487.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
|
|
2016 |
|
2016 |
|
|
2016 |
|
|
2016 |
|
|
2015 |
Customer
Experience |
|
$ |
937.9 |
|
$ |
924.9 |
|
$ |
908.1 |
|
$ |
902.3 |
|
$ |
894.4 |
Solutions |
|
|
|
|
|
|
|
|
|
|
Directory |
|
|
16.8 |
|
|
15.8 |
|
|
22.0 |
|
|
23.6 |
|
|
27.1 |
Total Revenue |
|
$ |
954.7 |
|
$ |
940.7 |
|
$ |
930.1 |
|
$ |
925.9 |
|
$ |
921.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of |
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
|
|
2016 |
|
2016 |
|
|
2016 |
|
|
2016 |
|
|
2015 |
12-Month Backlog |
|
$ |
3,180 |
|
$ |
3,170 |
|
$ |
3,110 |
|
$ |
3,100 |
|
$ |
3,090 |
|
|
|
|
|
|
|
|
|
|
|
Contact:
Matthew Smith
Head of Investor Relations
Amdocs
314-212-8328
E-mail: dox_info@amdocs.com
Amdocs (NASDAQ:DOX)
Historical Stock Chart
From Mar 2024 to Apr 2024
Amdocs (NASDAQ:DOX)
Historical Stock Chart
From Apr 2023 to Apr 2024