Amdocs revenue up almost 20% in Q3, sees modest future ahead

Billing and customer management company Amdocs, reported revenue growth of 19.4% for its third quarter compared to last year’s, but CEO Dov Baharav said yesterday that the market is not growing as fast as expected.

The company met guidance with $450.2 million in revenue and saw sequential quarterly growth of 1.7%. Net income increased by $12.6 million to $63.5 million excluding acquisition-related costs and related tax effects.

During the quarter, Amdocs signed eight new contracts and a long-term framework agreement with Vodafone. The company also converted all of Bell Canada onto the Amdocs system.

“This was all accomplished in a still changing and competitive environment, which is not growing at the pace expected,” Baharav said.

New contracts include the sale of a subscribe management system to a Malaysian satellite-based PayTV multimedia group, two partner relationship management sales in Europe, a mediation platform sale of its recently acquired Xacct mediation solution and a ClarifyCRM sale to a Latin American communications provider.

Amdocs also will be providing an integrated customer management for an existing major customer. The company completed two major projects at Bell Canada and mobilkom Austria, respectively.

Amdocs expects revenue for the fourth quarter to be approximately $452 million. Baharav described this as very modest growth and extended his expectation to the coming quarters.

Since the end of the quarter, which closed June 30, Amdocs has closed two more deals. “They may not be major drivers of Q4 revenue, but they will help accelerate quarterly growth in the future,” Baharav said.

The company’s cash balance is down slightly to $1.228 billion. Amdocs chief financial officer Ron Moskovitz attributed the drop in cash balance to the re-purchase of substantially all of the company’s outstanding 2% convertible notes. He added that there have been no new developments in the ongoing SEC investigation.

Baharav said that despite the slower than expected market growth, his company can grow faster than the market by increasing market share, expanding managed services and its addressable market. He said that the addressable market in the future would include cable and OSS.