Amdocs share price tanks as T-Mobile US dispute weighs heavily

• Amdocs sees full fiscal year revenues rise 3.6% to $4.7bn
• But a legal dispute with T-Mobile US has cast a shadow over its fiscal 2027 forecast
• Amdocs chief acknowledges either company could terminate deal, impacting the vendor’s profitability outlook
• Issues come amid a raft of new deals announced with AT&T, Vodafone Business and more

Despite reporting a 3.6% rise in its full fiscal year revenues to almost $4.7bn, Amdocs saw its  share price plunge by around 42% following news of a contract dispute with T-Mobile US, which prompted the vendor’s CEO, Shimie Hortig, to warn of “major headwinds” for its coming fiscal year.

Both Amdocs and T-Mobile US have issued notices to one another, according to the vendor, claiming the other party has “materially breached one or more of the agreements” (which involve Amdocs supplying software and professional services to the telco), with both threatening to terminate the contract. In its statement, Amdocs acknowledged the standoff could result in arbitration or legal action. 

Speaking on a results call, Hortig said: “Looking into fiscal 2027, our guidance reflects major headwinds from T-Mobile due to a recent dispute, the completion of the integration project of the USCellular customers and reduction in T-Mobile’s discretionary spending. That said, the rest of our business remains robust and continues showing growth in fiscal 2027.”

He added: “This is an isolated situation with a large customer resulting in a revenue decline in our outlook, [which, in turn, is] resulting in a significant decline in our revenue and profitability outlook for next year.”

The dispute has been going on for months, according to Amdcos, but escalated into a legal dispute during the most recent quarter. Hortig declined to share more information about the situation, citing its confidential nature. However, markets reacted negatively, with the vendor’s share price slumping by about 42% in pre-market trading to $36.36 on the Nasdaq exchange, as Amdocs revealed that its revenues are likely to decline by between 7% and 11% in the coming financial year (pro forma at constant currency rates), especially if the deal is terminated. 

Hortig did not comment on exactly how much Amdocs expects the dispute to impact the company’s sales but, on the vendor’s earrings call, said: “I can just tell you that it’s a major – right now, in our assumption for next year – it’s a major reduction. Without it, we could have shown significant growth in the business of the company.”

And now for the good news

It wasn’t all negative, however, as Amdocs unveiled several new wins. During the financial year, it bagged key contracts with the likes of Veon, Liberty Latin America, Globe, Comcast and Millicom, and unveiled two new deals, with Vodafone and AT&T.

Vodafone Business – the enterprise arm of UK operator VodafoneThree – has turned to Amdocs to consolidate and upgrade its legacy business support systems (BSS) onto an agentic platform.

Vodafone Business will deploy Amdocs aOS, which the vendor launched earlier this year, to bring agentic AI capabilities to its operations as part of an effort to simplify customer journeys.

aOS is an agentic architecture that enables communication service providers to execute complex, end-to-end workflows across any BSS and OSS environment – not just those provided by Amdocs itself.

According to Amdocs, aOS will make it easier for Vodafone’s B2B customers to buy, manage and support new services, while giving the operator more flexibility to introduce new offerings.

“Our ambition is to give every business customer a simpler, faster and more consistent experience, backed by the UK’s best network and the right digital foundations,” said Jon Ryan, business enablement director at VodafoneThree. “Together with Amdocs, we are consolidating our B2B systems and transforming how we operate, introducing agentic capabilities that can automate workflows, continuously evolve and respond to changing customer needs. That will help us serve our customers better and create a stronger platform for growth.”

AT&T deal

Vodafone Business wasn’t the only win Amdocs announced alongside its financial results: It also revealed it has agreed an expansion of its longstanding partnership with AT&T through an eight-year agreement to modernise its business and customer operations with aOS.

The partnership will see AT&T leverage aOS alongside its own AI-enabled delivery framework in an effort to simplify operations, boost efficiency and enhance customer experiences.

Amdocs has worked with the US operator, building, in its own words, “decades of trust” and the collaboration will see them work together as “one delivery team”, sharing responsibility for implementing the modernisation project faster and with reduced costs.

“AT&T is changing how we build and operate technology so we can move faster and deliver more for our customers,” said Jeremy Legg, chief technology officer at AT&T. “AI delivers the greatest value when it is grounded in the business, technology and people it supports. By bringing together our shared expertise, we can simplify complex work, improve efficiency and bring new products and experiences to customers faster – helping people and businesses do more in a connected world.” 

Amdocs also announced similar multi-year agreements with Hungary’s Magyar Telekom, part of the Deutsche Telekom Group; Integratel Perú; and Globe in the Philippines.

Insurance acquisition

Amdocs has also announced a new acquisition, entering the insurance technology market through a $340m deal to acquire EIS.

EIS provides a cloud-native, agentic multi-line platform spanning policy administration, billing, claims and customer engagement for large insurers, such as Aflac, CSAA, BNP Paribas and others.

Amdocs said the acquisition “significantly expands its addressable market” and the company sees insurance as a “strategic long-term growth and diversification opportunity”.

The vendor noted that it plans to combine EIS technology with its aOS platform.

- James Pearce, Editor, TelecomTV