Amdocs Guided Fiscal 2027 Revenue Down as Much as 18% on the T-Mobile Dispute

Amdocs guided fiscal 2027 revenue down 17.9% to 14.3% as reported, building its outlook on the possibility that its T-Mobile agreements end.

Amdocs Limited sells software and services to communications companies. Its shares trade on Nasdaq as DOX. The company reported results for the quarter ended September 30, 2026. That quarter closed its fiscal 2026 year.

The fiscal 2027 guidance fell sharply

Amdocs announced fiscal 2027 revenue growth of -17.9% to -14.3% as reported. On a pro forma constant-currency basis, the decline narrows to -11% to -7%. Pro forma constant currency strips out currency moves. It also restates the base for businesses Amdocs has exited.

The pro forma base removes about $360 million of fiscal 2026 revenue. That revenue came from exited hardware-resale activities. It also came from the divested media business.

Earnings guidance fell further than revenue. GAAP diluted earnings per share are guided down 25% to 17%. Non-GAAP diluted earnings per share are guided down 30% to 26%. Non-GAAP operating margin is guided at 19.2% to 19.8%.

Free cash flow is guided at $440 million to $500 million. That range excludes restructuring payments. The non-GAAP tax rate is guided at 16% to 19%. The guidance also includes some contribution from acquisitions, including EIS.

First-quarter guidance fell sharply too. Revenue is guided at $955 million to $995 million. GAAP diluted earnings per share are guided at $0.81 to $0.89. Non-GAAP diluted earnings per share are guided at $1.27 to $1.33.

Call reporting put the margin path in sequence. The first-quarter margin starts well below the annual midpoint, per CTech. It then improves through the year, per Zolmax. Zolmax put the annual midpoint about 210 basis points below fiscal 2026.

The T-Mobile dispute sits behind the cut

Amdocs and T-Mobile have each sent the other breach notices. Each side says the other materially breached their agreements. Both sets of notices threaten termination of the agreements. Both also threaten monetary and other relief, including in arbitration.

No termination has occurred, management said on the earnings call. Amdocs continues to serve T-Mobile as the dispute runs. The guidance assumes termination by either party could still happen. Amdocs said it is prepared to pursue its claims and defend itself. That defense includes arbitration, the release said.

Chief Executive Shimie Hortig named three T-Mobile headwinds in the release. They are the dispute, the finished USCellular integration project, and reduced discretionary spending. He called the dispute an isolated situation involving one customer, per call reporting.

Excluding T-Mobile, the rest of the business should still grow. Call reporting put that growth at a mid-single-digit rate in fiscal 2027. Hortig declined to quantify T-Mobile's share of revenue. He called the reduction major, per CTech.

The release also set a fiscal 2028 expectation. It positions the company for mid-single-digit revenue growth that year. Earnings growth is expected at a high-single-digit rate. A steadily rising dividend is part of the same expectation.

The fourth quarter itself met expectations

Fourth-quarter revenue was $1.19 billion, up 3.8% as reported. Constant-currency growth was 4.0%. Revenue landed in line with the midpoint of company guidance.

Managed services revenue was $728 million. It supplied about 61% of total revenue. It fell 3% from a year earlier.

GAAP diluted earnings per share were $1.35. That figure includes a restructuring charge of 22 cents per share. Without the charge, GAAP earnings per share would have been $1.57. That beat the $1.48 to $1.56 guidance range.

Non-GAAP diluted earnings per share were $1.98. Zacks put its consensus estimate at $1.98 a share. Earnings therefore met expectations on that frame. Revenue was essentially in line too. Zacks measured the revenue result 0.01% below its estimate.

GAAP operating income was $189 million. It includes a restructuring charge of $25.3 million. The GAAP operating margin was 15.8%. Non-GAAP operating income was $257 million. Its margin was 21.6%.

The full year held up better than the outlook

Full-year fiscal 2026 revenue was $4.7 billion. It rose 3.6% as reported and 3.0% in constant currency. Non-GAAP diluted earnings per share rose 6.0% to $7.41.

GAAP diluted earnings per share fell 7.3% to $4.68. That decline includes restructuring charges of 130 cents per share. Free cash flow was $562 million. Excluding restructuring payments of $167 million, it was $729 million.

Amdocs repurchased $511 million of its shares during the year. Fourth-quarter repurchases were $83 million. Call reporting said the buyback pace should slow in fiscal 2027.

Twelve-month backlog ended the quarter at $3.50 billion. Backlog is contracted work expected over the next twelve months. On a pro forma basis it fell 9.6% from a year earlier. It also fell about $370 million from the prior quarter. Call reporting tied the drop mainly to T-Mobile assumptions.

Growth bets arrived beside the warning

Amdocs announced an eight-year strategic agreement with AT&T. The release calls AT&T its largest customer. The deal pairs aOS with AT&T's AI-enabled delivery framework. aOS is the company's agentic operating system for telecom operators.

Three more aOS agreements came with it. They cover VodafoneThree in the UK, VEON in Eurasia, and Globe in the Philippines.

Amdocs also bought its way into insurance. It acquired EIS for about $340 million in cash. Further payment depends on performance targets being met. EIS is headquartered in San Francisco, California. Its platform covers policy administration, billing, claims, and customer engagement. Its customers include Aflac, CSAA, Allstate, Desjardins, and BNP Paribas Cardif.

The move is Amdocs' first step into insurance. Two term loans totaling $500 million were secured in October 2026. The next dividend is $0.569 a share. It is payable January 29, 2027, to holders on December 31, 2026.

The board approved a 3% increase to $0.586 a share. That increase needs shareholder approval in January 2027. It is expected to be first paid in April 2027.

Shares fell sharply in premarket trading

Amdocs shares closed on November 3 at $62.43, down 1.75%. In premarket trading on November 4, they fell to $37.55. That was a decline of 39.85% as of 6:03 a.m. Eastern, per Nasdaq. Premarket trading is thin, so the opening print may differ. The snapshot is a premarket print, not a close.

What remains unknown

What remains unknown starts with T-Mobile's revenue share. Amdocs declined to quantify it on the call. Whether either side terminates the agreements is also unknown. T-Mobile has not commented in the governed sources.

The arbitration path is unpriced as well. The release warns that litigation outcomes carry no assurance. The guided decline is not fully split either. Its dispute, exit, and spending parts are not separately quantified.

What to watch next

What to watch next starts with the cash session. Watch whether the premarket decline holds at the open. Watch for any T-Mobile statement on the notices.

Watch first-quarter results against the $955 million to $995 million revenue range. Watch the margin path against the low-start guidance. Watch backlog for any further T-Mobile-driven decline.