Amdocs Limited Reports Strong Revenue Growth

Amdocs Reports Record Quarterly Revenue of $774 Million, Exceeding Guidance

ST. LOUIS, Mo., April 17 /PRNewswire-FirstCall/ -- Amdocs Limited (NYSE:
DOX) today reported that for the quarter ended March 31, 2008, revenue was
$774.3 million, an increase of 9.6% from last year's second quarter. Net
income on a non-GAAP basis was $126.6 million, or $0.58 per diluted share
(excluding acquisition-related costs, which include amortization of purchased
intangible assets, and excluding equity-based compensation expense, net of
related tax effects, of $26.8 million), compared to non-GAAP net income of
$114.5 million, or $0.52 per diluted share, in the second quarter of 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 $27.3 million). The Company's GAAP
net income was $99.9 million, or $0.46 per diluted share, compared to GAAP net
income of $87.2 million, or $0.40 per diluted share, in the second quarter of
fiscal 2007. Free cash flow for the quarter was $63.1 million, comprised of
cash flow from operations of $97.3 million less $34.2 million in net capital
expenditures and other.
"We are pleased to report that we have exceeded our plans for this quarter
and for the first half of fiscal 2008," said Dov Baharav, chief executive
officer of Amdocs Management Limited. "Our strong results are driven by an
expansion of our managed services business and by expanding our
implementations of mission-critical systems in both developed and emerging
markets. We recognize that there is uncertainty in the market as economic
conditions have become more challenging and we believe that our forecasts for
the second half of this fiscal year take this into account. Our customers
recognize that Amdocs systems including our new CES 7.5 offering can help them
to increase revenue and reduce costs; the result for Amdocs is greater
customer commitments and a strong pipeline of potential business. We continue
to see demand for projects supporting new initiatives as well as from projects
focused more on cost savings, including managed services opportunities, and we
look forward to continued growth in the second half of fiscal 2008."
In the second quarter Amdocs had numerous wins across lines of business
and geographies. The Company continued to show progress in the operational
support systems (OSS) area by winning a strategic deal with a large North
American service provider. In Europe, Amdocs signed an important CRM deal
with a large wireless carrier to help them improve their customer experience.
The Company had several wins with wireless carriers including a consulting
engagement to help a service provider introduce new, innovative offerings.
Amdocs won several new deals in emerging markets based on the Amdocs Compact
Convergence Suite.
Amdocs is continuing to expand and strengthen its position in the
broadband cable and satellite market with several wins and a recent
acquisition. In addition to the wins noted above, a large broadband cable
operator in North America has chosen Amdocs to provide self-service
capabilities including an eBill presentment and payment solution. The Company
also won service projects related to requirements scoping, which can be the
initial phase of system transformation. Shortly after the end of the quarter,
Amdocs announced the acquisition of Jacobs Rimell in order to expand its
capabilities in OSS for broadband.
Financial Outlook
Amdocs expects that revenue for the third quarter of fiscal 2008 will be
approximately $790-$805 million. Diluted earnings per share on a non-GAAP
basis for the third quarter are expected to be $0.59-$0.61, excluding
acquisition-related costs and approximately $0.06-$0.07 per share of
equity-based compensation expense, net of related tax effects. Diluted GAAP
EPS is expected to be approximately $0.45-$0.48, without taking into account
potential purchase price adjustments relating to the acquisition of Jacobs
Rimell in April 2008.
Updated fiscal 2008 guidance: Expected revenue of approximately
$3.09-$3.15 billion and diluted non-GAAP EPS of $2.31-$2.37, excluding
acquisition-related costs and approximately $0.21-$0.24 per share of
equity-based compensation expense, net of related tax effects. Diluted GAAP
EPS is expected to be approximately $1.81-$1.90, without taking into account
potential purchase price adjustments relating to the acquisition of Jacobs
Rimell in April 2008.
Amdocs will host a conference call on April 17, 2008 at 5 p.m. Eastern
Time to discuss the Company's second 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 experience(TM) -- 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 $2.84 billion in fiscal 2007, 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, 2008.

AMDOCS LIMITED

Consolidated Statements of Income

(in thousands, except per share data)

Three months ended Six months ended
March 31, March 31,
---------------------- ------------------------
2008 2007 2008 2007
--------- --------- ----------- -----------
Revenue:
License $ 32,109 $ 37,526 $ 58,326 $ 69,270
Service 742,172 668,835 1,458,205 1,328,123
--------- --------- ----------- -----------
774,281 706,361 1,516,531 1,397,393
Operating expenses:
Cost of license 938 1,016 1,712 2,085
Cost of service 493,956 446,860 964,697 881,981
Research and
development 56,088 57,734 112,103 118,202
Selling, general
and administrative 98,666 91,280 196,331 180,450
Amortization of
purchased
intangible assets 21,753 18,912 43,506 36,610
Restructuring charges,
in-process research
and development and
other - 6,761 - 6,761
--------- --------- ----------- -----------
671,401 622,563 1,318,349 1,226,089
--------- --------- ----------- -----------
Operating income 102,880 83,798 198,182 171,304

Interest income and
other, net 8,822 10,899 17,638 22,638
--------- --------- ----------- -----------
Income before income
taxes 111,702 94,697 215,820 193,942

Income taxes 11,843 7,526 20,297 13,429
--------- --------- ----------- -----------
Net income $ 99,859 $ 87,171 $ 195,523 $ 180,513
========= ========= =========== ===========
Basic earnings per
share $ 0.48 $ 0.42 $ 0.94 $ 0.87
========= ========= =========== ===========
Diluted earnings
per share (1) $ 0.46 $ 0.40 $ 0.89 $ 0.82
========= ========= =========== ===========
Basic weighted average
number of shares
outstanding 206,759 207,293 207,437 206,867
========= ========= =========== ===========
Diluted weighted
average number of
shares outstanding 219,786 222,499 220,912 222,608
========= ========= =========== ===========

(1) To reflect the impact of assumed conversion of the convertible notes,
$985 and $1,970, representing interest expense and amortization of issuance
costs, were added back to net income for the three and six months ended March
31, 2008 and 2007, for the purpose of computing diluted earnings per share.

AMDOCS LIMITED
Selected Financial Metrics
(in thousands, except per share data)

Three months ended Six months ended
March 31, March 31,
--------------------- ------------------------
2008 2007 2008 2007
--------- ---------- ----------- -----------

Revenue $774,281 $706,361 $1,516,531 $1,397,393

Non-GAAP operating
income 138,046 121,437 269,317 241,966

Non-GAAP net income 126,647 114,471 249,937 232,587

Non-GAAP diluted
earnings per share (1) $ 0.58 $ 0.52 $ 1.14 $ 1.05

Diluted weighted average
number of shares
outstanding 219,786 222,499 220,912 222,608

(1) To reflect the impact of assumed conversion of the convertible notes,
$985 and $1,970, representing interest expense and amortization of issuance
costs, were added back to net income for the three and six months ended March
31, 2008 and 2007, for the purpose of computing diluted earnings per share.

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

Three months ended
March 31, 2008
-----------------------------------------------------
Reconciliation items
----------------------------------
GAAP Amortization Equity based Tax Non-
of purchased compensation effect GAAP
intangible expense
assets
-----------------------------------------------------

Operating expenses:
Cost of license $ 938 $ - $ - $ - $ 938
Cost of service 493,956 - (5,431) - 488,525
Research and
development 56,088 - (1,146) - 54,942
Selling, general
and administrative 98,666 - (6,836) - 91,830
Amortization of
purchased
intangible assets 21,753 (21,753) - - -
-----------------------------------------------------
Total operating
expenses 671,401 (21,753) (13,413) - 636,235
-----------------------------------------------------

Operating income 102,880 21,753 13,413 - 138,046
-----------------------------------------------------

Income taxes 11,843 - - 8,378 20,221
-----------------------------------------------------

Net income $ 99,859 $ 21,753 $ 13,413 $ (8,378) $126,647
-----------------------------------------------------

Three months ended
March 31, 2007
-----------------------------------------------------------
Reconciliation items
----------------------------------------
Restructuring
charges
in-process
research
Amortization and
of develop- Equity
purchased ment based
intangible and compensation Tax Non-
GAAP assets other expense effect GAAP
-----------------------------------------------------------

Operating
expenses:
Cost of
license $ 1,016 $ - $ - $ - $ - $ 1,016
Cost of
service 446,860 - - (6,005) - 440,855
Research and
development 57,734 - - (1,587) - 56,147
Selling,
general and
administ-
rative 91,280 - - (4,374) - 86,906
Amortization
of purchased
intangible
assets 18,912 (18,912) - - - -
Restructuring
charges,
in-process
research and
development
and other 6,761 - (6,761) - - -
-------------------------------------------------------------
Total
operating
expenses 622,563 (18,912) (6,761) (11,966) - 584,924
-------------------------------------------------------------
Operating
income 83,798 18,912 6,761 11,966 - 121,437
-------------------------------------------------------------
Income taxes 7,526 - - - 10,339 17,865
-------------------------------------------------------------
Net income $ 87,171 $ 18,912 $ 6,761 $11,966 $(10,339) $114,471
-------------------------------------------------------------

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

Six months ended
March 31, 2008
-----------------------------------------------------
Reconciliation items
----------------------------------
GAAP Amortization Equity based Tax Non-
of purchased compensation effect GAAP
intangible expense
assets
------------------------------------------------------

Operating expenses:
Cost of license $ 1,712 $ - $ - $ - $ 1,712
Cost of service 964,697 - (11,713) - 952,984
Research and
development 112,103 - (2,522) - 109,581
Selling, general
and
administrative 196,331 - (13,394) - 182,937
Amortization of
purchased
intangible assets 43,506 (43,506) - - -
-------------------------------------------------------
Total operating
expenses 1,318,349 (43,506) (27,629) - 1,247,214
-------------------------------------------------------

Operating income 198,182 43,506 27,629 - 269,317
-------------------------------------------------------

Income taxes 20,297 - - 16,721 37,018
-------------------------------------------------------

Net income $ 195,523 $ 43,506 $ 27,629 $(16,721) $ 249,937
-------------------------------------------------------

Six months ended
March 31, 2007
------------------------------------------------------------
Reconciliation items
---------------------------------------
Restructuring
charges
in-process
research
Amortization and
of develop- Equity
purchased ment based
intangible and compensation Tax Non-
GAAP assets other expense effect GAAP
-----------------------------------------------------------

Operating
expenses:
Cost of
license $ 2,085 $ - $ - $ - $ - $ 2,085
Cost of
service 881,981 - - (12,327) - 869,654
Research
and
development 118,202 - - (3,365) - 114,837
Selling,
general and
administ-
rative 180,450 - - (11,599) - 168,851
Amortization
of purchased
intangible
assets 36,610 (36,610) - - - -
Restructuring
charges,
in-process
research and
development
and other 6,761 - (6,761) - - -
------------------------------------------------------------
Total
operating
expenses 1,226,089 (36,610) (6,761) (27,291) - 1,155,427
------------------------------------------------------------

Operating
income 171,304 36,610 6,761 27,291 - 241,966
------------------------------------------------------------

Income taxes 13,429 - - - 18,588 32,017
------------------------------------------------------------

Net income $ 180,513 $36,610 $ 6,761 $27,291 $(18,588) $232,587
------------------------------------------------------------

AMDOCS LIMITED
Condensed Consolidated Balance Sheets
(in thousands)

As of
--------------------------------
March 31, September 30,
2008 2007
-------------- ----------------

ASSETS

Current assets
Cash, cash equivalents and short-term
interest-bearing investments $1,181,797 $1,179,280
Accounts receivable, net, including
unbilled of $41,300 and $43,870
respectively (*) 568,503 473,847
Deferred income taxes and taxes
receivable 108,959 117,623
Prepaid expenses and other current
assets 113,463 98,746
-------------- ----------------
Total current assets 1,972,722 1,869,496

Equipment, vehicles and leasehold
improvements, net 296,288 283,839
Goodwill and other intangible assets,
net 1,772,346 1,792,588
Other noncurrent assets (*) 464,047 399,427
-------------- ----------------
Total assets $4,505,403 $4,345,350
============== ================

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities
Accounts payable and accruals $ 581,437 $ 592,937
Short-term portion of capital lease
obligations and other financing
arrangements 2,178 2,055
Deferred revenue (*) 209,226 174,526
Deferred income taxes and taxes payable 35,882 205,960
-------------- ----------------
Total current liabilities 828,723 975,478
0.50% Convertible notes 450,000 450,000
Noncurrent liabilities and other 502,986 319,629
Shareholders' equity 2,723,694 2,600,243
-------------- ----------------
Total liabilities and shareholders'
equity $4,505,403 $4,345,350
============== ================

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

Thomas G. O'Brien, Treasurer and Vice President of Investor Relations of
Amdocs Limited, +1-314-212-8328, dox_info@amdocs.com