Why Is Amdocs (DOX) Down 5.9% Since Last Earnings Report?

A month has gone by since the last earnings report for Amdocs (DOX). Shares have lost about 5.9% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Amdocs due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for Amdocs Limited before we dive into how investors and analysts have reacted as of late.

Amdocs Q1 Earnings Surpass Expectations, Revenues Rise Y/Y

Amdocs reported better-than-expected first-quarter fiscal 2026 results. DOX’s non-GAAP earnings of $1.81 per share came above the midpoint of management’s guidance of $1.73-$1.79 and increased 9% year over year.

Amdocs reported first-quarter revenues of $1.156 billion, which came above the midpoint of management’s $1.135-$1.175 million guidance range. The top line increased 4.1% on a reported basis and 3.5% on a constant-currency basis.

Amdocs’ Q1 Details

Amdocs reported a decline in revenues across North America, Europe and the Rest of the World (RoW). North America reported revenues of $765 million (66% of total revenues), which increased 3.7% year over year. Europe revenues (16% of total revenues) of $182 million soared 17% year over year.

RoW revenues (18% of total revenues) dropped 3.6% year over year to $209.5 million. Our model estimates for North America, RoW and Europe were pinned at $769.9 million, $209.2 million and $171.8 million, respectively.

Managed services revenues rose 2.3% year over year to $746 million. The company ended the first quarter of fiscal 2026 with a 12-month backlog of $4.25 billion, up $60 million sequentially. Our model estimates for managed services revenues and backlog were pegged at $760.6 million and $4.23 billion, respectively.

The non-GAAP operating income increased 6.2% year over year to $249.9 million, while the operating margin expanded 40 basis points (bps) to 21.6%.

Amdocs’ Balance Sheet & Cash Flow

Amdocs had cash and short-term investments of $247.9 million as of Dec. 31, 2025 compared with $325 million as of Sept. 30, 2025. Long-term debt was $647 million as of Dec. 31, 2025, almost flat to the Sept. 30, 2025 level of $646.9 million.

During the first quarter, it generated an operating cash flow of $220 million and a free cash flow of $188 million. During the first quarter, it repurchased shares worth $146.2 million and paid $57.2 million in dividends.

Amdocs Updates FY2026 & Q2 Guidance

For fiscal 2026, Amdocs now expects revenues to grow in the 1.5-5.5% range, instead of the earlier band of 1.7-5.7%.

The non-GAAP operating margin is still anticipated to be in the range of 21.3-21.9% for fiscal 2026. Non-GAAP earnings per share are still expected to grow in the band of 4-8%.

The company still expects free cash flow between $710 million and $730 million.

Amdocs also initiated guidance for the second quarter of fiscal 2026. For the second quarter, the company expects revenues to be in the band of $1.15-$1.19 billion (midpoint $1.17 billion).

Amdocs expects non-GAAP earnings per share to be between $1.73 and $1.79.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a downward trend in estimates revision.

VGM Scores

At this time, Amdocs has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock has a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Amdocs has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Amdocs belongs to the Zacks Computers - IT Services industry. Another stock from the same industry, ServiceNow (NOW), has gained 2.5% over the past month. More than a month has passed since the company reported results for the quarter ended December 2025.

ServiceNow reported revenues of $3.57 billion in the last reported quarter, representing a year-over-year change of +20.7%. EPS of $0.92 for the same period compares with $0.73 a year ago.

For the current quarter, ServiceNow is expected to post earnings of $0.95 per share, indicating a change of +17.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.6% over the last 30 days.

ServiceNow has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.

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