Amdocs Limited Reports Quarterly Revenue Growth of 14%

Amdocs Reports Record Annual Revenue of $3.16 Billion

Key highlights:

- Fourth quarter revenue increased to $825 million, in line with guidance

- Fourth quarter non-GAAP operating income of $148 million, an increase of 16% over prior year fourth quarter

- Fourth quarter diluted non-GAAP EPS, excluding acquisition-related costs, restructuring charges and equity-based compensation expense, net of related tax effects, of $0.54; foreign exchange rate losses reflected in interest expense reduced EPS by $0.08 per share

- Diluted GAAP EPS of $0.38 for the quarter

- Strong free cash flow of $145 million for the quarter, comprised of cash flow from operations of $178 million less $33 million in net capital expenditures and other

ST. LOUIS, Nov. 5 /PRNewswire-FirstCall/ -- Amdocs Limited (NYSE: DOX) today reported that for its fiscal fourth quarter ended September 30, 2008, revenue was $825.3 million, an increase of 13.6% from last year's fourth quarter. Net income on a non-GAAP basis was $117.2 million, or $0.54 per diluted share, compared to non-GAAP net income of $120.7 million, or $0.54 per diluted share, in the fourth quarter of fiscal 2007. Non-GAAP net income excludes amortization of purchased intangible assets, equity-based compensation expenses and restructuring charges of $34.5 million, net of related tax effects, in the fourth quarter of fiscal 2008 and excludes such amortization and compensation expenses of $24.5 million, net of related tax effects, in the fourth quarter of fiscal 2007. The Company's GAAP net income for the fourth quarter of fiscal 2008 was $82.7 million, or $0.38 per diluted share, compared to GAAP net income of $96.2 million, or $0.43 per diluted share, in the prior year's fourth quarter.

"Fiscal 2008 was a good year for Amdocs as we achieved record revenues," said Dov Baharav, chief executive officer of Amdocs Management Limited. "Revenue in the fourth quarter was up 13.6% and non-GAAP operating income rose to $148 million, an increase of 16.4% compared to the prior year fourth quarter. Our earnings per share were adversely impacted by the unprecedented extreme volatility in exchange rates and the rapid strengthening of the U.S. dollar against other currencies, adversely affecting certain balance sheet items denominated in other currencies which reduced fourth quarter earnings per share by $0.08. Absent this, our non-GAAP diluted earnings per share would have been within our guidance range of $0.61 to $0.63."

In the fourth quarter Amdocs had numerous wins across lines of business and geographies. These wins include new business with Comcast, which will deploy customer care, billing and OSS (operational support systems) products based on Amdocs CES 7.5. Another customer in the cable and satellite market has chosen Amdocs Enterprise Product Catalog. Amdocs signed a six-year managed services agreement to support MetroPCS, a provider of advanced wireless services, using Amdocs CES 7.5 capabilities. In Europe, Amdocs was chosen by Debitel, the largest provider of mobile services in Germany, to provide a single billing platform to support its consolidated operations. Vodafone has selected Amdocs OSS fulfillment products for deployments in key European locations. International Telecommunications Company in the Ukraine has selected Amdocs Compact Convergence offering for real-time charging and service delivery across its CDMA network.

Baharav continued, "The financial volatility that we experienced in the fourth quarter is accompanied by economic uncertainty and these factors are impacting our outlook for fiscal 2009. Amdocs expects that revenue for the first quarter of fiscal 2009 will be approximately $785-$810 million. Foreign exchange in particular is a headwind in the first quarter of fiscal 2009, accounting for all of the decrease in forecasted revenue when compared to the fourth quarter of fiscal 2008. We are not seeing cancellations of existing projects and in fact we have signed some significant new deals in the past few weeks. Our growth engines, including emerging markets, cable and satellite and managed services, are right for this environment. However, our ability to forecast the level of new signings later in the fiscal year is impacted by these unprecedented market conditions. While we cannot today commit to guidance for the full year, we are managing our expenses under the assumption that fiscal 2009 revenue could be flat to low single-digit percentage growth for the year with operating margins similar to what we saw in the fourth quarter. This assumes that foreign exchange rates stay relatively stable compared to mid-October levels and that economic conditions do not deteriorate materially from what we see today."

As reported, GAAP EPS per diluted share for the fourth quarter of fiscal 2008 was $0.38. Non-GAAP EPS per diluted share was $0.54 for the quarter, (excluding acquisition-related costs which include amortization of purchased intangible assets, and excluding restructuring charges and equity-based compensation expense, net of related tax effects). The excluded pre-tax restructuring charges amounted to approximately $12 million, reducing GAAP EPS per diluted share by $0.04. The charges consist primarily of severance and other employment related obligations incurred in connection with Amdocs' measures designed to align its operational structure to its expected future growth and to improve efficiency. During the quarter, rapid and large foreign exchange rate changes, especially the strengthening of the U.S. dollar, caused the Company to record foreign exchange rate losses of approximately $17 million net of tax, or $0.08 per diluted share. These losses were primarily due to revaluation of assets and liabilities denominated in other currencies.

For the fiscal year ended September 30, 2008, revenue increased by 11.5% to $3.16 billion. Fiscal 2008 net income on a non-GAAP basis was $499.6 million, or $2.29 per diluted share (excluding acquisition-related costs, which include amortization of purchased intangible assets and in-process research and development write-off, and excluding restructuring charges and equity-based compensation expense, net of related tax effects, of $120.7 million), compared to non-GAAP net income of $473.9 million, or $2.14 per diluted share, in fiscal 2007 (excluding acquisition-related costs, which include amortization of purchased intangible assets, in-process research and development write-off and other, and excluding restructuring charges, and equity-based compensation expense, net of related tax effects, of $108.9 million). The Company's GAAP net income in fiscal 2008 was $378.9 million, or $1.74 per diluted share, compared to GAAP net income of $364.9 million, or $1.65 per diluted share, in fiscal 2007.

Financial Outlook

Amdocs expects that revenue for the first quarter of fiscal 2009 will be approximately $785-$810 million. Foreign exchange in particular is a headwind in the first quarter of fiscal 2009, accounting for all of the decrease in forecasted revenue when compared to the fourth quarter of fiscal 2008. Amdocs expects diluted earnings per share on a non-GAAP basis for the first quarter to be $0.54-$0.57, excluding acquisition-related costs and approximately $0.05-$0.06 per share of equity-based compensation expense, net of related tax effects. Estimated diluted GAAP EPS will not be known until after preliminary purchase price accounting adjustments for the ChangingWorlds Limited acquisition have been determined.

Amdocs will host a conference call on November 5, 2008 at 5 p.m. Eastern Time to discuss the Company's fourth 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.

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

About Amdocs

Amdocs is the market leader in customer experience systems innovation, enabling world-leading service providers to deliver an integrated, innovative and the intentional customer experienceTM -- at every point of service. Amdocs provides solutions that deliver customer experience excellence, combining the software, service and expertise to help its customers execute their strategies and achieve service, operational and financial excellence. A global company with revenue of $3.16 billion in fiscal 2008, Amdocs has more than 17,000 employees and serves customers in more than 50 countries around the world. 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, 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, 2007 filed on December 3, 2007 and on Form 6-K furnished on February 11, May 6 and August 11, 2008.

                                  AMDOCS LIMITED

                        Consolidated Statements of Income

                      (in thousands, except per share data)

                               Three months ended       Twelve months ended
                                  September 30,             September 30,
                              --------------------    -----------------------
                               2008         2007         2008          2007
                              -------      -------    ---------     ---------
     Revenue:
       License                $41,917      $46,266     $135,487      $159,357
       Service                783,360      680,423    3,026,609     2,676,816
                              -------      -------    ---------     ---------
                              825,277      726,689    3,162,096     2,836,173
     Operating expenses:
       Cost of license            462          869        2,729         3,914
       Cost of service        530,428      461,692    2,023,562     1,792,468
       Research and
        development            57,252       55,515      225,492       230,444
       Selling, general and
        administrative        103,171       95,299      404,134       370,194
       Amortization of
        purchased intangible
        assets                 20,385       19,174       86,687        74,959
       Restructuring charges,
        in-process research
        and development and
        other (1)              12,116            -       13,896         6,761
                              -------      -------    ---------     ---------
                              723,814      632,549    2,756,500     2,478,740
                              -------      -------    ---------     ---------
     Operating income         101,463       94,140      405,596       357,433

     Interest (expense)
      income and other, net   (11,842)      13,638       11,955        50,566
                              -------      -------    ---------     ---------
     Income before income
      taxes                    89,621      107,778      417,551       407,999

     Income taxes               6,910       11,535       38,645        43,062
                              -------      -------    ---------     ---------
     Net income               $82,711      $96,243     $378,906      $364,937
                              =======      =======    =========     =========
     Basic earnings per
      share                   $  0.40      $  0.46     $   1.83      $   1.76
                              =======      =======    =========     =========
     Diluted earnings per
      share (2)               $  0.38      $  0.43     $   1.74      $   1.65
                              =======      =======    =========     =========
     Basic weighted average
      number of shares
      outstanding             205,164      209,371      206,590       207,846
                              =======      =======    =========     =========
     Diluted weighted
      average number of
      shares outstanding      217,479      224,033      219,606       223,256
                              =======      =======    =========     =========

    (1) Restructuring charges, in-process research and development and other
        for the twelve months ended September 30, 2008 includes restructuring
        charges of $12,116 and in-process research and development of $1,780.

    (2) To reflect the impact of assumed conversion of the convertible notes,
        $985 and $3,940, representing interest expense and amortization of
        issuance costs, were added back to net income for the three and twelve
        months ended September 30, 2008 and 2007, respectively.
                                       AMDOCS LIMITED
                                 Selected Financial Metrics
                           (in thousands, except per share data)

                               Three months ended        Twelve months ended
                                  September 30,              September 30,
                               -------------------    ------------------------
                                 2008       2007          2008          2007
                               --------   --------    ----------    ----------
     Revenue                   $825,277   $726,689    $3,162,096    $2,836,173

     Non-GAAP operating
      income                    147,744    126,931       563,669       492,740

     Non-GAAP net income        117,208    120,708       499,608       473,871

     Non-GAAP diluted
      earnings per share(1)    $   0.54   $   0.54    $     2.29    $     2.14

     Diluted weighted
      average number of
      shares outstanding        217,479    224,033       219,606       223,256

    (1) To reflect the impact of assumed conversion of the convertible notes,
        $985 and $3,940, representing interest expense and amortization of
        issuance costs, were added back to net income for the three and twelve
        months ended September 30, 2008 and 2007, respectively.

                                    AMDOCS LIMITED
         Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP
                                    (in thousands)

                                        Three months ended
                                        September 30, 2008
                   -----------------------------------------------------------
                                       Reconciliation items
                          ---------------------------------------------
                          Amortization
                               of                     Equity
                            purchased                  based
                           intangible Restructuring compensation  Tax     Non-
                      GAAP   assets      charges      expense    effect   GAAP
                   -----------------------------------------------------------
    Operating
      expenses:
       Cost of
        license    $    462  $     -   $     -    $     -  $      -   $    462
       Cost of
        service     530,428        -         -     (5,836)        -    524,592
       Research
        and
        development  57,252        -         -     (1,088)        -     56,164
       Selling,
        general and
        admini-
        strative    103,171        -         -     (6,856)        -     96,315
       Amortization
        of purchased
        intangible
        assets       20,385  (20,385)        -         -          -          -
       Restructuring
        charges,
        in-process
        research and
        development
        and other    12,116        -   (12,116)        -          -          -
                   -----------------------------------------------------------
     Total
      operating
      expenses      723,814  (20,385)  (12,116)   (13,780)        -   $677,533
                   -----------------------------------------------------------
                   -----------------------------------------------------------
     Operating
      income        101,463   20,385    12,116     13,780         -    147,744
                   -----------------------------------------------------------
                   -----------------------------------------------------------
     Income taxes     6,910        -         -          -    11,784     18,694
                   -----------------------------------------------------------
                   -----------------------------------------------------------
     Net income    $ 82,711  $20,385   $12,116    $13,780  $(11,784)  $117,208
                   -----------------------------------------------------------
                                         Three months ended
                                         September 30, 2007
                       -------------------------------------------------------
                                        Reconciliation items
                              -------------------------------------
                              Amortization
                              of purchased  Equity based
                               intangible   compensation
                        GAAP     assets       expense    Tax effect   Non-GAAP
                       ------------------------------------------------------- Operating
      expenses:
       Cost of license $    869  $     -     $     -    $     -     $    869
       Cost of service  461,692        -      (6,504)         -      455,188
       Research and
        development      55,515        -      (1,475)         -       54,040
       Selling, general
        and admini-
        strative         95,299        -      (5,638)         -       89,661
       Amortization of
        purchased
        intangible
        assets           19,174  (19,174)          -          -            -
                       -----------------------------------------------------
     Total operating
      expenses          632,549  (19,174)    (13,617)         -      599,758
                       -----------------------------------------------------
                       -----------------------------------------------------
     Operating income    94,140   19,174      13,617          -      126,931
                       -----------------------------------------------------
                       -----------------------------------------------------
     Income taxes        11,535        -           -      8,326       19,861
                       -----------------------------------------------------
                       -----------------------------------------------------
     Net income        $ 96,243  $19,174     $13,617    $(8,326)    $120,708
                       -----------------------------------------------------
                                    AMDOCS LIMITED
          Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP
                                    (in thousands)

                                        Twelve months ended
                                         September 30, 2008
                   -----------------------------------------------------------
                                    Reconciliation items
                          ---------------------------------------------
                          Amortization Restructuring
                               of       charges and    Equity
                            purchased   in-process     based
                           intangible  research and compensation  Tax     Non-
                      GAAP   assets    development    expense    effect   GAAP
                   -----------------------------------------------------------
     Operating
      expenses:
       Cost of
       license     $   2,729  $     -   $     -   $     -  $      -  $   2,729
       Cost of
        service    2,023,562        -         -   (23,547)        -  2,000,015
       Research
        and
        development  225,492        -         -    (4,714)        -    220,778
       Selling,
        general and
        admini-
        strative     404,134        -         -   (29,229)        -    374,905
       Amortization
        of purchased
        intangible
        assets        86,687  (86,687)        -         -         -          -
       Restructuring
       charges,
       in-process
       research and
       development
       and other      13,896        -   (13,896)        -         -          -
                   -----------------------------------------------------------
     Total
      operating
      expenses     2,756,500  (86,687)  (13,896)  (57,490)        -  2,598,427
                   -----------------------------------------------------------
                   -----------------------------------------------------------
     Operating
      income         405,596   86,687    13,896    57,490         -    563,669
                   -----------------------------------------------------------
                   -----------------------------------------------------------
     Income taxes     38,645        -         -         -    37,371     76,016
                   -----------------------------------------------------------
                   -----------------------------------------------------------
     Net income    $ 378,906  $86,687   $13,896   $57,490  $(37,371) $ 499,608
                   -----------------------------------------------------------
                                       Twelve months ended
                                       September 30, 2007
                   -----------------------------------------------------------
                                      Reconciliation items
                             -------------------------------------------
                                      Restructuring
                          Amortization  charges,
                               of      in-process    Equity
                            purchased research and   based
                           intangible development compensation  Tax     Non-
                      GAAP   assets    and other    expense    effect   GAAP
                   -----------------------------------------------------------
     Operating
      expenses:
       Cost of
        license    $   3,914  $     -    $    -   $     -  $      -  $   3,914
       Cost of
        service    1,792,468        -         -   (25,418)        -  1,767,050
       Research
        and
        development  230,444        -         -    (6,574)        -    223,870
       Selling,
        general and
        admini-
        strative     370,194        -         -   (21,595)        -    348,599
       Amortization
        of purchased
        intangible
        assets        74,959  (74,959)        -         -         -          -
       Restructuring
        charges,
        in-process
        research and
        development
        and other      6,761        -    (6,761)        -         -          -
                   -----------------------------------------------------------
     Total
      operating
      expenses     2,478,740  (74,959)   (6,761)  (53,587)        -  2,343,433
                   -----------------------------------------------------------
                   ----------------------------------------------------------- Operating
      income         357,433   74,959     6,761    53,587         -    492,740
                   -----------------------------------------------------------
                   -----------------------------------------------------------
     Income taxes     43,062        -         -         -    26,373     69,435
                   -----------------------------------------------------------
                   -----------------------------------------------------------
     Net income    $ 364,937  $74,959    $6,761   $53,587  $(26,373) $ 473,871
                   -----------------------------------------------------------
                                      AMDOCS LIMITED
                         Condensed Consolidated Balance Sheets
                                      (in thousands)

                                                              As of
                                                  ----------------------------
                                                  September 30,  September 30,
                                                       2008           2007
                                                  ------------     -----------
    ASSETS

    Current assets
    Cash, cash equivalents and short-term
     interest-bearing investments                   $1,244,378     $1,179,280
    Accounts receivable, net, including unbilled
     of $48,264 and $43,870 respectively (*)           573,764        473,847
    Deferred income taxes and taxes receivable          84,515        117,623
    Prepaid expenses and other current assets          102,930         98,746
                                                    ----------     ----------
        Total current assets                         2,005,587      1,869,496

    Equipment, vehicles and leasehold
     improvements, net                                 317,081        283,839
    Goodwill and other intangible assets, net        1,796,922      1,792,588
    Other noncurrent assets (*)                        459,473        399,427
                                                    ----------     ----------
    Total assets                                    $4,579,063     $4,345,350
                                                    ==========     ==========

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Current Liabilities
    Accounts payable and accruals                   $  600,285     $  592,937
    Short-term portion of capital lease
     obligations and other financing arrangements        1,660          2,055
    Deferred revenue (*)                               197,851        174,526
    Deferred income taxes and taxes payable             30,228        205,960
                                                    ----------     ----------
        Total current liabilities                      830,024        975,478
    0.50% Convertible notes                            450,000        450,000
    Noncurrent liabilities and other                   493,848        319,629
    Shareholders' equity                             2,805,191      2,600,243
                                                    ----------     ----------
    Total liabilities and shareholders' equity      $4,579,063     $4,345,350
                                                    ==========     ==========

    (*) Certain amounts in prior period financial statements have been
        reclassified to conform to the current period presentation.

SOURCE Amdocs Limited



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