Amdocs drama: Stock crashes 45%
The software company's stock crashed in after-hours trading following a weak forecast for fiscal year 2027. In the background: A sharp dispute with T-Mobile.
Amdocs, a veteran software company, saw its stock plummet by around 45% in after-hours trading on Wall Street after delivering a disappointing forecast for the fiscal year 2027. This harsh forecast stemmed from a contentious legal battle between Amdocs and American telecommunications giant T-Mobile, one of Amdocs' key clients for years. Both companies accused each other of breaching their agreements, leading to threats to terminate their contracts and pursue legal action for financial remedies.
According to Amdocs, the legal dispute factored into their conservative forecast for 2027, which included the possibility of T-Mobile terminating their agreement. The company reported a 9.6% decline in the order backlog for the next year, now estimated at $3.5 billion. While the outlook for the fiscal year 2026, which ended in September, was stable, with revenues of $4.7 billion—slightly up from the previous year—and fourth-quarter revenues of $1.19 billion, these results failed to impress investors.
Despite the financial troubles, Amdocs took steps to diversify its operations. They extended a strategic contract with AT&T for another eight years to further integrate the aOS operating system platform. Additionally, Amdocs entered the insurance market for the first time, acquiring EIS, a technology provider for the insurance industry, for about $340 million in cash with potential for additional payments contingent on achieving specific targets.
The acquisition marks Amdocs' first entry into this sector, aiming to broaden its addressable market.
Written by urgent.news from Jerusalem Post Tech & Start-Ups's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
