Dov Baharav – President, CEO Ron Moskovitz - CFO Eli Gelman - COO Tom O'Brien - VP of Investor Relations

Tom Roderick - Thomas Weisel Partners Liz Grausam - Goldman Sachs Tal Liani - Merrill Lynch Sterling Auty - J.P. Morgan Scott Sutherland – Wedbush Morgan Ashwin Shirvaikar - Citigroup Shaul Eyal - CIBC World Markets Daniel Meron - RBC Capital Markets Mike Latimore - Raymond James Ben Abramovitz – ICAP Securities James Alexander – Jefferies Marianne Wolk - Susquehanna

Good day, everyone and welcome to the Amdocs first quarter 2007 earnings release conference call. Today's call is being recorded and webcast. At this time I would like to turn the call over to Mr. Tom O'Brien. Please go ahead sir. Tom O’Brien: Thank you, Robbie. I'm Tom O'Brien, Vice President of Investor Relations for Amdocs. Before we begin I would like to point out that during this call we will discuss certain financial information that is not prepared in accordance with GAAP. The company's management uses this financial information in its internal analysis in order to exclude the effect of acquisitions and other significant items that may have a disproportionate effect in a particular period. Accordingly, management believes that isolating the effects of such events enables management and investors to consistently analyze the critical components and results of operations of the company's business, and to have a meaningful comparison to prior periods. For more information regarding our use of non-GAAP financial measures, including reconciliations of these measures, we refer you to today's earnings release, which will also be furnished to the SEC on Form 6-K. Also, this call includes information that constitutes forward-looking statements. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be obtained or that any deviations will not be material. Such statements involve risks and uncertainties that may cause future results to differ from those anticipated. These risks include, but are not limited to, the effects of general economic conditions, and such other risks as discussed in our earnings release today and at greater length in the company's filings with the Securities and Exchange Commission, including in our annual report on Form 20-F, filed on December 13, 2006. Amdocs may elect to update these forward-looking statements at some point in the future; however, the company specifically disclaims any obligation to do so. Participating in the call today are Dov Baharav, President and Chief Executive Officer of Amdocs Management Limited; Eli Gelman, Executive Vice President and Chief Operating Officer; and Ron Moskovitz, Chief Financial Officer. Following Dov and Ron's comments, we'll open the call to Q&A. Now let me turn the call over to Dov Baharav.

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IR firm sponsors transcript of micro-cap company: Consulting company sponsors company's transcript in sector of interest: Learn more, or email Zack Miller for details. Dov Baharav: Thank you, Tom. Good afternoon, ladies and gentlemen. We are pleased to report solid results for the first quarter of fiscal 2007. Revenue grew 18% and non-GAAP earnings per share grew 26%. We continue to make progress in important projects for customers such as AT&T and Sprint Nextel. Integration of recent acquisition is going well with Cramer contributing some important wins this quarter. We see demand in the market, and while we know that we face challenges, we are encouraged by our prospects for fiscal 2007. I would like to spend a minute now and give you our perspective on the demand environment. As we said in our press release last week, major service providers around the world continue to embark on transformation and convergence projects. Because of our wide and robust product offering and the depths of our services capabilities, Amdocs is uniquely positioned to be selected for these projects, which typically are very large and complex. Therefore as these projects are awarded, we believe that we will continue to win more than our fair share of this business. After evaluating our first quarter results and looking at our projections for the remainder of fiscal 2007, several things were clear to us. First, our existing business remains strong. Second, we also saw that some business which had been projected to materialize this year might be coming in a little more slowly than originally anticipated. As a result, our revenue as we estimate for fiscal 2007, is slightly lower. These transformation projects require major decisions by service providers. In our view, the demand drivers which have been seen for many quarters now, are still in place. The need for service providers to cope with consolidation, convergence and competition remain as great as ever. Third, it's important to note that in the current quarter we continue to sign new business with customers around the world. Some of these wins were discussed in our press release today, and they include the release of our new Amdocs 7 Suite and wins in OSS. We remain very focused on the main growth drivers in our industry. These are OSS, content and QPass. In the OSS area, this was the first full quarter with Cramer as part of Amdocs and we are very pleased with what we are seeing. Post-merger integration has gone very well and Cramer is producing strong results. Indeed, we have seen that in some cases service providers are actually starting their transformation projects in the network area. Content, some carriers have announced that the growth of content and data revenue is now greater than the loss of revenue from voice. We believe that this is an indication that content is a strong growth catalyst for Amdocs with activity led by QPass. During Q1, we announced our intention to acquire Sig Value, a company which supports service providers offering prepaid billing in emerging markets. We made our first investment in Sig Value back in 2001 while we evaluated this company, it's fabulous technology and the market that it serves. We expect Sig Value to help Amdocs to execute on our strategy of expanding our business in new emerging markets. The majority of new subscribers worldwide are expected to come from prepaid customers in emerging markets. We believe Sig Value expands our ability to win in this market. We operate in a challenging and changing environment with much uncertainty, but Amdocs will continue to evolve and adapt as well. We believe that our strategy will continue to bring us success in 2007 and beyond. Let me now turn the call over to Ron Moskovitz for a financial review. Ron Moskovitz: Thank you Dov. Our first quarter revenue was $691 million, representing growth of 18%. Our non-GAAP EPS, which excludes acquisition-related costs and equity-based compensation expense net of related tax effects, was up 26% to $0.53 per diluted share. Non-GAAP EPS was positively impacted by a favorable tax rate which I will elaborate on in a minute. GAAP EPS was $0.42 cents per diluted share. I'll spend a minute now on a few items. Please note that I am referring to the results excluding acquisition-related items, restructuring charges and equity-based compensation expense. License revenue was up this quarter, due in part to strong activity related to our OSS business, including Cramer. This is the first full quarter with Cramer and we are seeing results from our BSS/OSS strategy ahead of expectations. Operating margins were 17.4% this quarter, down 90 basis points from last quarter. The main drivers of the decrease were as follows: When we look at the operating margin expectations for the year compared to our previous expectations, we see slightly lower margins as we are continuing to invest in R&D and sales and marketing, even though revenue expectations for the year are slightly lower. While we are taking measures to reduce spending in some areas to reflect slightly reduced revenue expectations, we continue to focus our efforts on our strategy of growth, even if it has some short-term impact on margins. As these investments pay off they will help to drive growth both in revenue and in profitability. As mentioned in our press release today, we are taking some restructuring and cost containment measures which will result in a pretax charge of approximately $6 million to $9 million in the second quarter. Other income increased this quarter due to some positive foreign currency impact. We may see some decrease in this line item next quarter. In the first quarter of fiscal 2007, the company successfully resolved a tax audit of a prior fiscal year that resulted in the release of certain tax results and a decrease in income tax expense for the quarter. The company expects its non-GAAP effective tax rate for fiscal 2007, excluding the tax effect of acquisition-related costs, restructuring charges and equity based compensation expense, to be between 14% and 17%. Free cash flow in the quarter was $49 million. Included in this number was $50 million in CapEx, an increase as we had forecasted. Free cash flow in the second quarter will be impacted by the annual bonus payment to employees, which are accrued throughout the year and primarily paid in January. DSOs at the end of the quarter was 55 days, down slightly from last quarter, even though our unbilled receivables increased during the quarter. As we reach certain contract milestones over the next few quarters, this unbilled balance should decrease. Deferred revenue was $211 million this quarter, a decrease of $42 million from last quarter. We expect to continue to see fluctuations in this balance as it has been impacted by some very large advance payments from a few customers. As these payments continue to be recognized in revenue, the deferred balance will decrease. It's difficult for us to predict when we will receive large advance payments, so therefore difficult to forecast deferred revenue. For Amdocs, deferred revenue is actually a subset of backlog as it represents only a part of the revenue that we expect to recognize over the next 12 months. Our 12 months backlog, which includes contract, committed revenue for services contracts, letters of intent, maintenance and estimated ongoing support activities, was $2.09 billion at the end of the quarter, an increase in of $40 million from the fourth quarter. Looking forward, our guidance for the second quarter of fiscal 2007 is for revenue of approximately $705 million and non-GAAP EPS of $0.49 to $0.51, excluding the effect of acquisition-related charges, restructuring charges and excluding equity-based compensation expense of approximately $0.05 to $0.06 per share, net of related tax effects. Diluted GAAP EPS is expected to be approximately $0.35 to $0.39 per share. Our EPS guidance for Q2 is based on a fully diluted share count estimate of approximately 223 million shares. We are giving a range for EPS in Q2, as we are still evaluating the timing and impact of some of our cost reduction efforts and also what will be our effective tax rate for the quarter. For fiscal year 2007, our updated guidance is for revenue of approximately $2.83 billion to $2.91 billion; and non-GAAP EPS in the range of $2.02 to $2.12, excluding the effect of acquisition-related charges, restructuring charges and excluding the effect of employee equity-based compensation expense of approximately $0.21 to $0.24 per share net of related tax effects. Diluted GAAP EPS is expected to be approximately $1.54 to $1.68 per share. Our fiscal 2007 guidance is based on a fully diluted share count estimate of approximately 224 million shares. With that, let me turn it back to Dov. Dov Baharav: Thank you, Ron. The guidance that Ron just gave translates to revenue growth of 14% to 17% and non-GAAP EPS growth from 9% to 15%. This growth is very much in line with the growth and the strategy of the company and where we are focused. At this time, let me open the call to Q&A.

(Operator Instructions) Our first question comes from Tom Roderick - Thomas Weisel Partners. Tom Roderick - Thomas Weisel Partners: Hi, good afternoon. Thank you. I wanted to dig in a little bit here on the guidance reduction which you issued last week. The magnitude of the reduction is not necessarily tremendous, but what gives you comfort when you look at the visibility in your business and you look at the types of projects out there, what gives you comfort that this isn’t the first of many guidance reductions coming forward, given that it is a cyclical market? Do you feel that this reflects the pace of business that you have been undertaking or just a slower demand environment for new wins out there? Dov Baharav: Tom, when we are looking forward, first of all we are encouraged by the fact that the backlog is up by $40 million; that we see a lot of wins in various geographies and especially many wins in the new growth areas, like OSS. However, when we do all of our math and try to calculate what is the most probable scenario for the year, we found out that the pace of a transformation project, the growth pace, is not as fast as we expected. As we explained, it's a tough decision for a carrier to go through this transformation and the projects are coming at a slower pace than we expected. So that was the main reason for reducing the revenue projection for the year. Tom Roderick - Thomas Weisel Partners: Okay, very good. Digging a little bit deeper on the headcount reduction, Ron, can you give a little bit more detail there as far as what level of headcount reduction we're looking at here, and how fast those heads will flow off? Ron Moskovitz: We didn't disclose the exact number. It is a very small percentage of the overall workforce of the company. We expect to execute upon that in the next couple of months. To some extent, we are growing between 14% and 17% in 2007 which means that we will increase our expenses. So the cost cuts that we took right now are trimming some expenses, reducing the pace of growth of some of the expenses and actually will adjust level of expenses to the new level of revenue.

Your next question comes from Liz Grausam - Goldman Sachs. Liz Grausam - Goldman Sachs: Hi. On the March quarter guidance the revenue is actually a bit weaker, even after your profit warning last week, than I had expected, indicating there might have been some deal slippage even out of the December quarter or the current quarter we are in. Is that the environment we're in? Not only are we seeing a slower pace of business, but there were actually some deals that you had expected to sign that just haven't come through right now? And it's not really a back end loaded issue, but a current quarter issue? Dov Baharav: I would say that the fact that we see a slower pace of growth of transformation projects has affected all of our projections for the year. So if we are looking at Q2 in comparison to Q1, the growth rate expected is at about 2%. We might see slight acceleration in Q3 and Q4. So as I said before, the new projects are coming at a slow pace and we do not expect right now, given what we have, a huge change that will affect the results of 2007. We see a lot of prospects, we have many opportunities. We talk to many customers, but between now and when the agreement will be signed, they will start recognizing revenue, it probably will have little impact on 2007. Liz Grausam - Goldman Sachs: How is your consulting division performing in this environment where your customers may be struggling a bit with signing major software and services contracts and may be looking at different strategic directions. Are you seeing an uptick in demand at all for your consulting projects? Dov Baharav: Liz, thanks for the question. In terms of the consulting division, as a matter of fact we are growing rapidly in this division. There is a demand for the consulting services and we get a very positive response from projects that we are accomplishing, mainly due to the reason that we provide not only high quality consulting, but a very practical one as well. As opposed to writing binders that will collect dust on shelves, we are coming up with tangible plans on how to improve business processes, improve IT operations for example. In general, we are growing close to 40% year over year in this specific division.

We will take our next question from Tal Liani - Merrill Lynch. Tal Liani - Merrill Lynch: Hi guys. First just a housekeeping question, your operating margin went down to 17.4% before items. Could you maybe just breakdown the impact of the Cramer consolidation versus the additional efforts you discussed versus currency fluctuations. Looking at the next quarter, you said that some of the currency fluctuation may reverse. What is the impact associated with that both ways? That's just on the numbers. More about the business, I understand where you're coming from; ‘06 was a great year in terms of huge projects you won. In ‘07 some of these projects are ending and you're waiting for the follow-on orders. This quarter is kind of puzzling, because on the one hand you're a little bit more negative on revenues; on the other hand, backlog is going up. Would you expect the backlog then to decline a little bit next quarter in the scenario that you don't get the orders that you're talking about? Or backlog, it doesn't have to correlate in the near term? Ron Moskovitz: As for the Cramer impact, I would say that it accounts for roughly two-thirds of the difference between last quarter and this quarter. The rest, as we said, there was some project investment and some slight currency impact, which was a minor part. As for the backlog, as you know from the past the backlog is lumpy and we have some difficulties to focus this on a quarter-by-quarter basis. I cannot give you a guarantee that the backlog is going to grow next quarter, but over time we sure expect the backlog to grow as the business is growing. So overall the direction is towards growth with some lumpiness between one quarter to the other. Dov Baharav: Maybe let me add, we try all the time to convey the message that backlog is not the only indicator for future growth. Maybe this quarter is an example. When we are calculating and evaluating the probability of the prospects for the rest of the year we came to conclusion that the revenue projection has to be reduced by 2% to between 14% to 17% growth, in comparison to about 2% higher revenue before, even though the backlog is growing. Because we are looking at all the projects and we see all the processes, including the pace of materializing some of the prospects. Tal Liani - Merrill Lynch: Dov, just as a follow up, on the one hand again you're reducing your guidance for the year; just slightly reducing. But on the other hand, you speak about acceleration in the third and fourth quarters. We know where it's coming from, one of your big customers, the AT&T BellSouth merger, and the Cingular system on top of it, and some other initiatives. The question I have is, do you then think that actually your full-year numbers could reassemble more your original guidance rather than the reduced guidance? What is the likelihood that eventually all of these orders come in and then the numbers actually go up again two quarters out? Ron Moskovitz: There are several scenarios, the fact that we give guidance is that we believe we could fall at any end of the range. So obviously there is some scenario that we get to the higher end of the range, but we give you a range. There is also the scenario of a downturn. So we believe that this range is reflecting the most probable scenarios and we cannot rule out doing better. Dov Baharav: To Ron’s comment, no doubt that the slower pace of transformation that we see right now may change, and specifically may change in some specific customers including AT&T, which obviously the delay of closing their BellSouth acquisition impacted some of their ability to make decisions. They're now looking into what BellSouth has and there are very few providers that can help them go through the transformation that they are committed to. As a result, there is also an option that the actual numbers will be higher than the current guidance. There is such an option; it's not a zero probability, but obviously low probability, because what we are trying to give as the guidance is the most probable.

Your next question comes from Sterling Auty - JP Morgan. Sterling Auty - JP Morgan: Outside of AT&T and BellSouth, can you talk geographically where you're seeing some of the slowdown in the uptake of the transformation projects? Dov Baharav: Well, if you are familiar with Amdocs' business, we are mainly dealing with the larger customers and larger projects. So looking at our pipeline and where we hope to get business, it's well spread. It is in Europe, the rest of the world and North America. So I would say it is everywhere. Sterling Auty - JP Morgan: But in terms of relative to your prior guidance, when you talk about a slowdown, where is the change relative to where you thought you would be? What is different now than a couple of weeks ago in terms of geography? Is it North America where you're seeing most of the slowdown with BellSouth and maybe some others? Is any of it Europe, or is it equally spread. Dov Baharav: I would say it is equally spread. You just mentioned AT&T and we talked about it, their slower pace of closing the BellSouth deal. If you're looking at the changes in Tier 1 Europe like Deutsche Telecom and their changes in management and priorities, the pace of the outsourcing project at Vodafone; you can go on and on. I would say you see a slower pace of commitment to transformation all over the world, but I really want to emphasize it's a slower pace. At the end of the day, we still grow quarter over quarter. Ron Moskovitz: And maybe to add to what Dov has said, the industry is healthy and we experienced growth. Carriers are going through the transformation and we believe that they will have to transform their BSS and OSS. We see faster pace in the OSS area that explains a lot of the wins that we have on the OSS side. We see a growth in the number of transformation projects at the BSS, but the pace is not as fast as we contemplated. So we are pleased with the growth, we are disappointed that it's not as fast as we thought it was going to be.

We will take your next question from Scott Sutherland – Wedbush Morgan. Scott Sutherland – Wedbush Morgan: Just looking at the numbers, it seems like depreciation jumped a bit. Can you talk about what number without the amortization? What was the cause behind that, and what you expect going forward? Ron Moskovitz: Depreciation growth is [inaudible] with the growth of the company. We are growing the business and the headcount in development centers around the world, especially in India in the last year. Obviously when you grow the business, there is a slight change in the cost structure. Also, you have the addition of Cramer this quarter as we have the impact of the full quarter of Cramer, so that adds to the depreciation as well. Scott Sutherland – Wedbush Morgan: What was that exact number? My second question was, you are guiding revenue up a bit this quarter, but the pro forma EPS, operating EPS is pretty much flat. Is it pretty safe to assume that operating margins come down a little bit and then grow the back half of the year? Is that driven by gross margins or is it more the OpEx reductions? Ron Moskovitz: As for next quarter we may see some slight reduction of operating margin. Keep in mind that we have given some range here, so the range is applicable to operating margins as well. Going forward for the rest of the year, we don't expect to see significant change in the gross margin compared to our previous expectations and most of the change is going to be on the operating expenses.

Your next question comes from Ashwin Shirvaikar - Citigroup. Ashwin Shirvaikar – Citigroup: Thank you for taking the question. It's on the cost structure. You mentioned low-cost delivery, particularly India, and you guys have been building that up quite nicely. My question is, could you provide us an update on how many people you have there; whether the layoffs you're doing are a net amount, basically a transfer of jobs from high-cost locations to low-cost locations; and when you will see the cost benefit from India? Ron Moskovitz: As for India, today we have slightly above 2,000 people in India, maybe close to 2,300 people. We grew this amount in the last four or five months by about 800 people. Obviously we invest a lot in training the people in knowledge transfer and so on. So as we see some benefit from the existing workforce there, the growth rate there is going to provide, over time, the benefits that we expect. We should see more and more benefits on that front as we move forward. As for the number of people, the layoffs, it's a gross amount; this is not a net amount. We keep on recruiting people in many areas and many geographies based on our business needs. It's not that we explicitly reduce the workforce at a higher cost and move the work to lower cost, that is not the case. Ashwin Shirvaikar – Citigroup: One question on unbilled AR going up. Are there milestones in the next one or two quarters? If you could go through what those milestones are to bring it down. Ron Moskovitz: The answer for the first part is yes, there are several milestones in the next couple of quarters. We are talking about specific projects which we cannot give more details on which projects or areas.

Your next question comes from Shaul Eyal - CIBC World Markets. Shaul Eyal - CIBC World Markets: Thank you. Good afternoon, guys. Two quick questions. You indicate a couple of wins on the DOC 7 platform. How many of those wins were cable related? Dov Baharav: Well there is at least one cable company that is committed to the Amdocs 7 Suite. There are several wins, not only this quarter, of existing customers that are running on earlier versions -- 6.5, 6.7 -- that are going to upgrade and there is a new win altogether that is directly going to Amdocs 7. Shaul Eyal - CIBC World Markets: Specifically on Vodafone, the win you announced back with IBM and ADS back last quarter, how is that unfolding for you guys? Dov Baharav: It is progressing well, but as we mentioned, even the transformation in Vodafone after making the decision is relatively slower than they anticipated. We have a very good working relationship with both IBM and ADS. One is going to work on the southern region of the European operators and one on the north. IBM on the south and ADS on the north. Obviously we have a very good relationship with Vodafone. We are a key provider to Vodafone all around Europe. As such, we continue to evolve with them. The plan itself is moving slower than what Vodafone expected.

Your next question comes from Daniel Meron - RBC Capital Markets. Daniel Meron - RBC Capital Markets: Thank you. A couple of questions here. First, can you give us a sense on how big was the OSS business this quarter? What kind of business do you expect from Sig Value going forward? Related to that, what kind of organic growth should we look at for ‘08 given the fact that some of the projects that you expected in ‘07 got pushed back a bit into ’08? Ron Moskovitz: The OSS, as you recall, we gave some range for the first full quarter of between $20 million to $25 million. Actually, what we did from day one is reintegrated our OSS business, the Amdocs OSS with Cramer, so we don't have an exact breakdown for Cramer. Although it was ahead of our expectations, it was slightly larger than the range we gave. Daniel Meron - RBC Capital Markets: So it was $125 million combined? Ron Moskovitz: Yes. As for Sig Value, first of all the deal is not closed yet. We expect to close it sometime around the middle of the quarter. It is not in our guidance and the impact in 2007 is supposed to be very small, since it's a very small company. Eli Gelman: We basically feel the same thing, the same way we felt a few quarters ago. I think we indicated that the organic growth in the long term should be in the range of 10% to 14%, which is double the rate of the organic growth of the IT expense in the telecom industry. Organic growth for ‘07 is about 10%, maybe slightly less than 10%, but in this range. We expect to be in the range of 10% to 14% also in ‘08. Daniel Meron - RBC Capital Markets: To follow up on that, Ron, earlier you indicated that you're looking for a 20% operating margin on a standalone basis, excluding acquisitions. On the corporate level, when do you think that you can get to 20% operating margin, given the setback you had at least this quarter and probably in the next couple quarters? Ron Moskovitz: Basically, I think we indicated that in the previous quarter. In the core business excluding what we did in the last 18 months, we achieved the target of 20%, driving better margins as we move forward. The 20% for the entire business is still our target. We try to achieve a 20% target for any business that we have. Occasionally when we buy a company where we gain new business, we bring it with lower margins and corporate leverage and we strive to achieve the 20% and up in each part of the business that we do. So at this point, there is some impact on the profitability but overall we maintain the same targets and obviously at this point we cannot commit to a timeframe.

We will take our next question from Mike Latimore - Raymond James. Mike Latimore - Raymond James: I was just looking for a few more revenue segments here, maybe QPass contribution in the quarter as well as DST? Dov Baharav: We don't give specific breakdowns for QPass in this quarter, because it's well integrated into our activity today. As for DST, I can give you some measure of our overall cable business which around, I believe, 9%. Tom will verify it in a minute. To add about QPass, we very encouraged by the progress of QPass. We see a lot of interest among many carriers; we see growth in the content. We see that the revenue from digital services and content for wireless carriers is equal or larger than the reduction in the ARPU in voice. So it looks like a substantial growth area for the carriers, where we with QPass are very well positioned to enjoy the growth and help our customer and build a nice business here. Ron Moskovitz: Mike, the cable business accounted for 9% of our business this quarter. Mike Latimore - Raymond James: Thanks. And managed services, is that still in the 35% range? Ron Moskovitz: The managed services is slightly above 35%. Mike Latimore - Raymond James: We see a little bit of a slowdown here in your core business. Does that make you more likely to try to go after the financial services market in ’07, or does that not really change your eventual interest in financial services? Dov Baharav: I would say the fact that we have a slight slowdown in the growth rate of the core business doesn't change our view regarding the telecom industry. We think it's a healthy industry, we think that we have a substantial growth engine and as Eli said, we think that the organic growth moving forward will be 10% to 14%. Now, financial services is an area that we are focusing in 2007. We do not expect substantial revenue in 2007 so I would say it's too early to start seeing it as our future growth engine.

Your next question comes from Ben Abramovitz – ICAP Securities. Ben Abramovitz – ICAP Securities: Good evening. Quick question, you talked about the carriers basically slowing down their transformation. What would cause the carriers in your discussions with them to slow down some of these transformations even further? Or on the opposite end of that, what would the carriers need to see in the marketplace to actually accelerate some of their transformations as they have discussions with you. Ron Moskovitz: Well, we indicated that the growth rate of the transformation projects is not as fast as we expected. So we don't see a slowdown of the activity; that is very wrong. We see growth, but not as fast as we expected. Now, the reason is that in some cases there is more competition, in some countries the competition is not as fast. For example, in the United States the wireline companies are facing stiff competition from cable companies. It's not the case in Europe. So they experience a reduction in the number of access lines, but not with the same impact as in the United States. The same in some other countries. So some carriers are starting the transformation more in the OSS and later on, moving to the BSS. So we feel that moving forward, the transformation will occur and we will see the growth happening and we see consolidation in the market. We see carriers are moving to convergence and we will see the transformation. Amdocs is the company that is best positioned to help them. Dov Baharav: If you want in a one liner, there are three Cs that cause a higher rate of transformation. One is convergence. If the company is moving into more bundled services and they need to modernize the systems, they would go for the transformation because the current legacy system cannot support the convergence. That is the first C. The second C is the consolidation, when companies are buying each other, Telefonica with O2 and AT&T with everybody around, more or less, they have to consolidate systems as well and that's usually a trigger for transformation projects. The third one is competition among the carriers, either between wireless companies or wireline and wireless companies with the cable companies and any other permutation. So where would we see more? The larger the Cs are, the more likely that these carriers will go through a transformation. Ben Abramovitz – ICAP Securities: License revenue has essentially been running flat for about a year, on a quarterly basis. With some of the new acquisitions you made, do you expect to see license revenue start to pick up next quarter? If not, then what would we have to see in the marketplace to change some of the mix of your revenues to maybe improve some of the margins? Ron Moskovitz: First of all, we do expect to see growth in the license, maybe even in the next quarter. On the other end, this is something that we discussed all along. The consolidation by itself changes, to some extent, the mixture between license and services as the big consolidators are paying less to license less customers, and they are making up the services on top of that. However, as part of our strategy we accelerated the functionality that we sell and the variety of products that we have in the marketplace is by far larger. So overall, we expect license to grow over the years, maybe even considerably.

Your next question comes from James Alexander - Jefferies. James Alexander - Jefferies: Good afternoon. Could you comment on the pipeline of cable opportunities going forward here? I guess more specifically, do you think you can grow that 9% number as we go through 2007? Dov Baharav: We definitely think so. I'm not sure about the exact timing, so do not quote me in terms of ‘07, but in terms of the pipeline we see quite a lot of interest and we are going through some proof of concept and some sales cycle and some first initial stages of smaller projects with the cable companies. Their interest is through all the product line that we have, all the way through CRM. We see it in North America and we also see it in other parts of the world. So, I would say that in terms of the cable companies and the growth of companies we see a good pipeline. Altogether outside the specific cable question that you had, altogether the pipeline includes components of different products and different geographies. James Alexander – Jefferies: Thank you. Sorry if I missed this, but what was the headcount at the end of the quarter, and where do you see that going over the next couple quarters? Ron Moskovitz: We don't provide the exact headcount. It was more than 16,000 people; maybe 16,500 people, which includes administration and some sales functions as well. Now, going forward we expect that to grow, maybe not on a quarter-by-quarter basis, but overall, we expect that to keep on growing as the company grows.

Your next question comes from Marianne Wolk – Susquehanna. Marianne Wolk – Susquehanna: Hi, I just have a couple of very quick will follow-ups. When you're speaking to these large transformation prospects, are most of them giving you an open-ended sense of timing or are any of them giving you any encouragement that this is still a calendar ‘07 event? Secondly, would you mind just giving us the geographic breakdown of revenues? Ron Moskovitz: Maybe we should start with the geographic breakdown. With respect to geography, what we have is about 69% in North America, 22% in Europe and ROW accounts for 9%. Regarding the timing of the transformation project, in some cases there is a delay for maybe a year or two. In some cases it is a few months and in some cases it's going through some processes of replacing management and making decisions. So overall, the feelings that we have talking to customers in Canada and in France and in Eastern Europe and in many other places is they are going through the transformation, they need all the capabilities in order to cope with the convergence consolidation and the competition, but it takes more time. Marianne Wolk – Susquehanna: One final question, you mentioned that there's a bonus payment in January. Are you able to disclose how much that is? Ron Moskovitz: It's approximately $50 million.

Your next question comes from Tom Roderick – Thomas Weisel. Tom Roderick - Thomas Weisel Partners: I wanted to dig a little deeper here. Ron you mentioned early in the call that there have been some projects where the services cost were higher than expected due to some extra efforts. Can you give us a sense of (1) how many projects we're talking about and (2) whether we should anticipate this to continue in the coming quarter or two quarters? Dov Baharav: Tom, I'll try to shed some light on this question. First of all you need to know that we are dealing with the most complicated projects on earth and we always have one or two projects that are on a tight spot for a few months until we get into production. I would say the current situation is maybe we have two or three of them, different sizes. It's not something very significant in terms of the volume of it or the severity or the gravity of the situation. We have this mentality of speaking up to our customers. Sometimes the requirements change in the last moment and they need to accelerate some of the change requests in order to make sure that they still meet the time; but in order to meet the time, with new additional changes, you are adding some people. I would say altogether it's something that we will always have. The specifics that Ron mentioned probably will go away within the next couple months. Tom Roderick - Thomas Weisel Partners: Would you be comfortable stating that the projects that you're referencing are in good standing? You're in good standing with those customers and that you anticipate those projects to run to completion? Dov Baharav: Yes, absolutely. Nothing of these projects is, I would say, outside the scope of a normal number of bugs that you may encounter in the complexity and the size of these projects. Just that since we had a very good selling year in ‘06, we are accumulating a lot of delivery projects in ‘07.

Thank you. That is all the time we have for questions today. I would like to turn the program back over to the Amdocs speakers for any closing or additional remarks. Tom O’Brien: On behalf of the company we would like to thank you all for attending our call. This concludes the Q1 conference call.

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