Amdocs shares plunged about 44 percent in after-hours trading on Tuesday after the telecommunications software provider warned that revenue could fall by as much as 18 percent in fiscal 2027, driven by a dispute with T-Mobile, one of its largest customers, that has escalated into a legal fight. The stock was quoted near $34.50, down from a close of $62.43; if that level holds it would be the lowest price since early 2013 and would erase roughly $3 billion of market value.
The guidance is explicit about what it assumes. Amdocs expects fiscal 2027 revenue to decline 14.3 to 17.9 percent on a reported basis and 7 to 11 percent in pro forma constant currency, with non-GAAP earnings per share down 26 to 30 percent and the non-GAAP operating margin about 200 basis points lower. Chief executive Shimie Hortig said the forecast is the company’s best estimate as of today, including the case in which its agreements with T-Mobile are terminated by either party. No termination has occurred, and Amdocs continues to support T-Mobile.
The dispute concerns an agreement signed earlier this year. Both companies have issued notices alleging that the other has materially breached one or more of the agreements governing the software and services Amdocs provides to T-Mobile, and both notices include threats to terminate or pursue legal action for compensation. Hortig declined to quantify T-Mobile’s share of revenue, called the situation isolated to one customer, and said the company is prepared to defend its position, including in arbitration. T-Mobile had already cut discretionary spending with Amdocs, and a large one-time project integrating UScellular customers into T-Mobile was completed during fiscal 2026.
The underlying year was not the problem. Fiscal 2026 revenue was $4.7 billion, up 3.6 percent, and non-GAAP earnings per share were $7.41, up 6 percent, both in line with expectations. Excluding T-Mobile, management expects the rest of the business to grow in the mid-single digits in fiscal 2027 and guided to a return to mid-single-digit revenue growth in fiscal 2028. About $360 million of the reported revenue decline comes from businesses Amdocs is exiting, including the sale of its media business and hardware resale.
At the same time Amdocs agreed to acquire EIS, a United States insurance software company, for $340 million in cash, its entry into an adjacent vertical market. Oppenheimer downgraded the stock to Perform from Outperform after the results, citing the weak forecast and the uncertainty around the dispute. First-quarter fiscal 2027 revenue is guided to $955 million to $995 million, and the twelve-month backlog stood at $3.5 billion at the end of the fourth quarter, down 9.6 percent on a pro forma basis, primarily on the T-Mobile assumptions.