Tech · $DOX
Amdocs Shares Plunge More Than 40% as T-Mobile Dispute Drives a Bleak Fiscal 2027 Outlook
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The billing-software provider guided revenue down 7% to 11% on a constant-currency basis and said both sides have issued breach notices.
By Emmanuel Cruz ·
Shares of Amdocs fell by more than 40% in premarket trading on Wednesday after the software and services provider issued a fiscal 2027 outlook that points to a sharp drop in revenue and earnings, citing an unresolved contract dispute with T-Mobile US. The drop left Amdocs with a market value of roughly $3.6 billion, according to Globes [1].
The company reported its fourth-quarter and full-year results on November 3. Fourth-quarter revenue was $1,194 million, up 3.8% from a year earlier, and non-GAAP diluted earnings per share were $1.98 versus $1.83. For the full fiscal year, which ended September 30, revenue rose 3.6% to $4,697 million and non-GAAP earnings per share reached $7.41 [2]. Those backward-looking numbers were overshadowed by the forecast. Amdocs guided fiscal 2027 revenue as reported to fall between 14.3% and 17.9%, and by 7% to 11% on a pro forma constant-currency basis. It expects non-GAAP earnings per share to drop 26% to 30% and free cash flow of $440 million to $500 million [2].
The company's 12-month backlog was $3.50 billion at the end of September, down about 9.6% from a year earlier on a pro forma basis and roughly $370 million lower than the previous quarter [2].
At the center of the outlook is T-Mobile, one of Amdocs' largest customers. Globes reported that T-Mobile accounted for 19.9% of fiscal 2025 revenue, or about $900 million, and that Amdocs signed a new multi-year generative AI agreement with the carrier in early 2026 before T-Mobile's new management began a cost-cutting push and re-examined its contracts [1]. Amdocs said both companies have issued notices alleging material breach, and the guidance reflects the risk of that dispute [2]. Light Reading reported that Chief Executive Shimie Hortig said the company would defend its position "fiercely," including through arbitration, and that T-Mobile has not terminated its agreement [3]. Amdocs has not disclosed details of the disagreement, citing confidentiality, and told investors there is no certainty about the outcome, Globes said [1][3].
Analysts focused on how contained the problem is. Light Reading said Tal Liani of Bank of America asked whether other large customers might also end their relationships with Amdocs, and that Omdia estimates T-Mobile represents about a fifth of the company's sales. Hortig described the dispute as isolated and pointed to continued business with AT&T and other operators [3]. Oppenheimer downgraded the stock to "perform" and removed its price target, Globes reported [1].
Management offered a longer-term view. Amdocs said it expects mid-single-digit revenue growth and high-single-digit earnings growth in fiscal 2028. The release also detailed an eight-year agreement with AT&T, a roughly $340 million cash acquisition of insurance technology provider EIS, and a 3% increase in the quarterly dividend to $0.586, subject to shareholder approval in January 2027 [2].
For markets, the episode shows how concentrated customer exposure can reshape a forecast overnight. Investors will watch for any formal arbitration filing, for signs that other carriers are reviewing contracts, and for first-quarter fiscal 2027 revenue, which Amdocs guided to between $955 million and $995 million [2].
Sources:
[1] Globes, "Amdocs stock slumps amid T-Mobile legal dispute", November 4, 2026. https://en.globes.co.il/en/article-amdocs-stock-slumps-amid-tmobile-legal-dispute-1001562018
[2] Amdocs, "Amdocs Limited Reports Fourth Quarter Fiscal 2026 Results & Full Year Fiscal 2026 Results" (SEC Form 6-K, Exhibit 99.1), November 3, 2026. https://www.sec.gov/Archives/edgar/data/0001062579/000119312526445966/d28441dex991.htm
[3] Light Reading, "Amdocs shares nosedive on legal bust-up with T-Mobile", November 4, 2026. https://www.lightreading.com/ai-machine-learning/amdocs-shares-nosedive-on-legal-bust-up-with-t-mobile
This article was produced with AI assistance. It is for informational purposes only and is not financial advice. StockVolt and its authors may hold positions in securities mentioned.