Amdocs Shares Plunge 44% on T-Mobile Dispute and Weak 2027 Outlook
Amdocs shares plunged 44% after issuing a weak fiscal 2027 outlook driven by a major dispute with T-Mobile. To revive growth, the software giant is acquiring EIS for $340 million to expand into the insurance tech sector.
Amdocs shares plummeted 44% in after-hours trading on Wall Street following a dismal fiscal 2027 outlook projecting a 14% to 18% revenue decline. The downward revision stems from a bitter dispute with major telecom client T-Mobile, involving mutual breach-of-contract notices and potential legal or financial actions, alongside the completion of the USCellular customer integration project.
"Looking ahead to fiscal 2027, our guidance reflects significant declines due to the dispute with T-Mobile, the completion of the USCellular integration project, and reduced spending by T-Mobile. At the same time, the rest of our business remains resilient and continues to show growth in fiscal 2027," said Shamai Hortig, CEO of Amdocs. Both companies have exchanged notices alleging material breaches of agreements governing software and services, threatening contract termination.
In a strategic move to diversify beyond the stagnant telecom billing market, Amdocs announced the acquisition of US-based insurance software provider EIS for $340 million in cash, with potential earnout payments. EIS develops core systems for policy, billing, and customer management, serving global insurers such as Allstate, Aflac, and BNP Paribas Cardif. Amdocs plans to integrate EIS technology with its aOS agentic operating system to embed AI capabilities into the insurance sector.
This expansion mirrors Amdocs' previous diversification efforts, including the 2018 acquisition of Vubiquity for $224 million, which yielded limited results. For the fiscal year ending September, Amdocs reported revenues of $4.7 billion, a 3.5% increase, while earnings per share dropped 7% to $4.68 amid restructuring efforts that included laying off about 10% of its global workforce, affecting hundreds of employees in Israel.
