Over 40% of Amdocs employees are in India

Eli Gelman

Only 19% of the company's workforce is in Israel.

Four out of every 10 employees at Amdocs Ltd. (Nasdaq: DOX) work in India, according to the company's expanded report for the 2017 fiscal year delivered to the US Securities and Exchange Commission (SEC). Amdocs's fiscal year ends in September, and the report concerns the year ending in September 2017.

Amdocs, managed by CEO Eli Gelman, provides IT solutions and systems to communications companies. The company's market cap is $9.5 billion. According to the expanded report, Amdocs had 24,670 employees at the end of its fiscal year, 4.4% more than in 2016. While the number of the company's employees in Israel and the US declined, the number of its employees in India and the "rest of the world" surged.

Amdocs currently has 4,614 employees in Israel, 19% of its workforce and 1% fewer than in the preceding year. The number of Amdocs's employees in the US was down 3.2% to 4,346, while the number of the company's employees in India jumped 9.6% to 9,960, just over 40% of its total workforce. The number of Amdocs's employees in the rest of world rose by the same rate, reaching 4,192.

Major dependence on 10 customers

Amdocs's employees exercised over two million options during the past year at an average exercise price of $39.60. The company's share price rose 13% during the fiscal year, and its share price on Nasdaq averaged $61.20, meaning that exercising the employees' options reflected a benefit of $48 million. Amdocs allocated two million options to its employees in 2017 with an average exercise price of $58.80, compared with the current share price of $65.40. Amdocs employees held seven million options at the end of September, of which two million are in the money and immediately exercisable.

The average exercise price of these exercisable options was $40.30, reflecting a benefit of $58 million. The report also stated that 15 executives at Amdocs received an aggregate total of 112,000 options during the past year at an average exercise price of $58.60. Amdocs provided no figures for the individual remuneration of its executives, but said that the 15 executives' remuneration had cost the company a total of $6.9 million in the 2017 fiscal year, up from $6.3 million in the preceding year.

The aggregate worldwide space rented by Amdocs totals 316,000 square meters. The company spent $66 million on rent and maintenance for its sites around the world. Among other things, the company rents 85,000 square meters in Ra'anana, 13,000 square meters in Sderot, and 2,400 square meters in Nazareth. Several days ago, Amdocs announced a partnership with businessperson George Horesh for the purpose of buying the land previously purchased by Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) in Ra'anana in 2015 and building a new campus for Amdocs. Amdocs's net investment involving the purchase of the land and the construction of a new campus for Amdocs is likely to be as much as $350 million over 4-5 years, and will be financed from the company's internal resources.

Amdocs had $980 million in cash at the end of its 2017 fiscal year. The company notes in its expanded report that it bought back 5.5 million of its shares over the past year at a total cost of $341 million. The report also indicates that Amdocs acquired US company Kenzan Media, a software services company providing cloud computing services, around the end of the year. The price of the acquisition was not announced, because it was not significant for Amdocs. At the same time, in the last quarter of its fiscal year, Amdocs recognized $18 million for the acquisition, so it appears that this was the price for Kenzan Media. Amdocs paid $260 million for the three companies in 2016, including Israeli company Pontis.

Amdocs's revenue continues to be largely dependent on its 10 largest customers, which accounted for 71% of its revenues over the past year (down from 73% in 2016). The company's largest customer is communications company AT&T, which accounts for nearly $1.3 billion of Amdocs's revenue, 33%, the same proportion as in 2016.

Published by Globes [online], Israel Business News - www.globes-online.com - on December 13, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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