EPAM Systems Faces Rough Waters Ahead; Stock Tanks
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 09 2024
0mins
Should l Buy EPAM?
Source: Benzinga
EPAM Systems, Inc. FY24 Q1 Results:
- Sales declined 3.8% Y/Y to $1.165 billion, beating analyst estimates.
- Adjusted income from operations was $173.6 million, down 2.6% Y/Y.
- Adjusted EPS of $2.46, down 0.4% Y/Y, exceeded consensus expectations.
- Operating cash flow in the quarter was $129.9 million.
- CEO mentioned adaptability to challenging demand environment.
Outlook for EPAM Systems, Inc.:
- Second-quarter revenue expected at $1.135 billion-$1.145 billion, below consensus.
- Adjusted EPS outlook for Q2 is $2.21-$2.29 compared to an estimated $2.44.
- FY24 revenue outlook revised to $4.575 billion-$4.675 billion.
- Adjusted EPS guidance for FY24 adjusted to $10.00-$10.30.
- Stock exposure available through Vesper US Large Cap Short-Term Reversal Strategy ETF UTRN.
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Analyst Views on EPAM
Wall Street analysts forecast EPAM stock price to rise
13 Analyst Rating
9 Buy
4 Hold
0 Sell
Moderate Buy
Current: 106.970
Low
170.00
Averages
214.70
High
246.00
Current: 106.970
Low
170.00
Averages
214.70
High
246.00
About EPAM
EPAM Systems, Inc. is a global provider of digital engineering, cloud and artificial intelligence-enabled transformation services, and a business and experience consulting partner for global enterprises and start-ups. The Company leverages AI to deliver transformative solutions that accelerate its clients' digital innovation. Through platforms like EPAM AI/RUN and initiatives like DIALX Lab, it integrates advanced AI technologies into tailored business strategies. Its services include strategy; engineering, cloud, data & analytics; artificial intelligence; cybersecurity, and CX+. Its clients operate in five main industry verticals (financial services; consumer goods, retail and travel; software and hi-tech; business information and media, and life sciences and healthcare) as well as a number of emerging verticals. Its strategy services include optimizing for growth, talent enablement, and mergers and acquisitions. Its engineering services include open source and quality engineering.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
EPAM Systems Q1 2026 Earnings Call Insights
- Revenue Growth: EPAM Systems reported $1.4 billion in revenue for Q1 2026, reflecting nearly 20% year-over-year growth, despite underperformance in North America, which still provides a robust foundation for the company's $600 million annual revenue target.
- Profitability Metrics: The non-GAAP diluted EPS for Q1 was $2.86, with a GAAP gross margin of 27.7%, indicating ongoing improvements in profitability, even amidst macroeconomic uncertainties impacting visibility.
- Cash Flow Pressures: The company experienced negative cash flow from operations of $36 million and negative free cash flow of $54 million in Q1, primarily due to higher variable compensation payments related to 2025 performance and timing issues with vendor payments, highlighting challenges in cash management.
- Strategic Partnership: EPAM announced a strategic multiyear applied AI partnership with Anthropic, aiming to build a dedicated team of over 10,000 cloud-certified architects to enhance its competitive edge in the AI space, despite risks associated with delayed client decision-making.
See More
EPAM Systems Raises Annual Profit Forecast Amid Strong AI Demand
- Profit Forecast Increase: EPAM Systems raised its annual profit forecast, reflecting strong confidence in future performance driven by robust demand for artificial intelligence technology enhancements.
- Quarterly Earnings Beat: The company exceeded market expectations in its latest earnings report, showcasing strong quarterly profit performance that highlights the sustained growth in demand for its software services amid increased corporate spending on AI.
- Strong Market Demand: As companies continue to ramp up spending on artificial intelligence technologies, EPAM Systems has seen a significant rise in demand for its software services, which not only enhances revenue potential but also strengthens its competitive position in the market.
- Strategic Investment Focus: The company's ongoing investments in AI technology indicate a strategic focus aimed at capturing market opportunities through innovation and service optimization, thereby driving long-term growth.
See More
EPAM Systems Reports Strong Q1 2026 Results Amid AI Growth
- Significant Revenue Growth: EPAM reported Q1 2026 revenues of $1.4 billion, reflecting a 7.6% year-over-year increase, which underscores the company's ongoing growth in AI transformation and digital services, further solidifying its market leadership.
- Net Income Increase: The company achieved a net income of $82.5 million, a 12.5% increase from the previous year, with earnings per share at $1.52, demonstrating successful cost control and operational efficiency, thereby boosting investor confidence.
- Strong Cash Flow: As of March 31, 2026, EPAM's cash and cash equivalents stood at $1.036 billion, although down from the previous period, it maintains solid liquidity, providing a buffer for future investments and expansion.
- Optimistic Outlook: EPAM anticipates full-year revenue growth between 4% and 6.5% for 2026, with Q2 revenue growth expected at 4%, indicating that the company's continued investment in AI markets will drive future growth potential.
See More
EPAM Systems Q1 Earnings Exceed Expectations
- Earnings Beat: EPAM Systems reported a Q1 non-GAAP EPS of $2.86, surpassing expectations by $0.11, indicating strong performance and enhanced profitability in the competitive landscape.
- Revenue Growth: The company achieved Q1 revenue of $1.4 billion, reflecting a 7.7% year-over-year increase and exceeding market expectations by $10 million, showcasing steady growth in customer demand and market share.
- Full-Year Outlook: EPAM now anticipates a full-year revenue growth rate between 4.0% and 6.5%, with organic constant currency growth projected between 2.5% and 5.0%, reflecting confidence in future market conditions and strategic planning.
- EPS Projections: The company expects GAAP diluted EPS to range from $8.29 to $8.59 and non-GAAP diluted EPS from $12.98 to $13.28, both above consensus estimates, indicating a sustained enhancement in profitability.
See More
EPAM Systems Q1 Earnings Announcement Scheduled
- Earnings Release Date: EPAM Systems is set to announce its Q1 earnings on May 7 before market open, with consensus EPS estimate at $2.75, reflecting a 14.1% year-over-year increase, and revenue estimate at $1.39 billion, up 6.9%, indicating the company's sustained profitability and growth potential.
- Strong Historical Performance: Over the past two years, EPAM has exceeded EPS and revenue estimates 100% of the time, demonstrating the company's reliability in financial forecasting and bolstering market confidence.
- Expectation Revision Dynamics: In the last three months, EPS estimates have seen 7 upward revisions and 6 downward adjustments, while revenue estimates experienced 6 upward and 8 downward revisions, reflecting market divergence and uncertainty regarding the company's future performance.
- Strategic Investment and Growth: EPAM projects $600 million in AI-native revenues by 2026, indicating the company's strategic positioning in the rapidly growing AI market and accelerating client demand, which further enhances its long-term growth outlook.
See More
EPAM and Anthropic Partner to Enhance Enterprise AI Capabilities
- Strategic Partnership: EPAM Systems has announced a multi-year strategic partnership with Anthropic aimed at accelerating the delivery of safe and reliable enterprise-grade AI, helping organizations convert AI investments into tangible business value.
- Integration of Expertise: By combining EPAM's deep engineering expertise with Anthropic's Claude models, enterprises can simplify complex legacy operations and automate workflows, thereby enhancing overall operational efficiency.
- Enhanced Data Analysis: This collaboration enables clients to analyze large-scale datasets, leveraging EPAM's engineering excellence alongside Anthropic's advanced technology to drive data-driven decision-making and improve market competitiveness.
- Future Growth Potential: As enterprises increasingly demand AI investments, this partnership not only provides clients with trusted solutions but also opens new growth opportunities for both EPAM and Anthropic in the rapidly evolving AI market.
See More
EPAM Systems Q1 2026 Earnings Call Insights
- Revenue Growth: EPAM Systems reported $1.4 billion in revenue for Q1 2026, reflecting nearly 20% year-over-year growth, despite underperformance in North America, which still provides a robust foundation for the company's $600 million annual revenue target.
- Profitability Metrics: The non-GAAP diluted EPS for Q1 was $2.86, with a GAAP gross margin of 27.7%, indicating ongoing improvements in profitability, even amidst macroeconomic uncertainties impacting visibility.
- Cash Flow Pressures: The company experienced negative cash flow from operations of $36 million and negative free cash flow of $54 million in Q1, primarily due to higher variable compensation payments related to 2025 performance and timing issues with vendor payments, highlighting challenges in cash management.
- Strategic Partnership: EPAM announced a strategic multiyear applied AI partnership with Anthropic, aiming to build a dedicated team of over 10,000 cloud-certified architects to enhance its competitive edge in the AI space, despite risks associated with delayed client decision-making.
See More
EPAM Systems Raises Annual Profit Forecast Amid Strong AI Demand
- Profit Forecast Increase: EPAM Systems raised its annual profit forecast, reflecting strong confidence in future performance driven by robust demand for artificial intelligence technology enhancements.
- Quarterly Earnings Beat: The company exceeded market expectations in its latest earnings report, showcasing strong quarterly profit performance that highlights the sustained growth in demand for its software services amid increased corporate spending on AI.
- Strong Market Demand: As companies continue to ramp up spending on artificial intelligence technologies, EPAM Systems has seen a significant rise in demand for its software services, which not only enhances revenue potential but also strengthens its competitive position in the market.
- Strategic Investment Focus: The company's ongoing investments in AI technology indicate a strategic focus aimed at capturing market opportunities through innovation and service optimization, thereby driving long-term growth.
See More
EPAM Systems Reports Strong Q1 2026 Results Amid AI Growth
- Significant Revenue Growth: EPAM reported Q1 2026 revenues of $1.4 billion, reflecting a 7.6% year-over-year increase, which underscores the company's ongoing growth in AI transformation and digital services, further solidifying its market leadership.
- Net Income Increase: The company achieved a net income of $82.5 million, a 12.5% increase from the previous year, with earnings per share at $1.52, demonstrating successful cost control and operational efficiency, thereby boosting investor confidence.
- Strong Cash Flow: As of March 31, 2026, EPAM's cash and cash equivalents stood at $1.036 billion, although down from the previous period, it maintains solid liquidity, providing a buffer for future investments and expansion.
- Optimistic Outlook: EPAM anticipates full-year revenue growth between 4% and 6.5% for 2026, with Q2 revenue growth expected at 4%, indicating that the company's continued investment in AI markets will drive future growth potential.
See More
EPAM Systems Q1 Earnings Exceed Expectations
- Earnings Beat: EPAM Systems reported a Q1 non-GAAP EPS of $2.86, surpassing expectations by $0.11, indicating strong performance and enhanced profitability in the competitive landscape.
- Revenue Growth: The company achieved Q1 revenue of $1.4 billion, reflecting a 7.7% year-over-year increase and exceeding market expectations by $10 million, showcasing steady growth in customer demand and market share.
- Full-Year Outlook: EPAM now anticipates a full-year revenue growth rate between 4.0% and 6.5%, with organic constant currency growth projected between 2.5% and 5.0%, reflecting confidence in future market conditions and strategic planning.
- EPS Projections: The company expects GAAP diluted EPS to range from $8.29 to $8.59 and non-GAAP diluted EPS from $12.98 to $13.28, both above consensus estimates, indicating a sustained enhancement in profitability.
See More
EPAM Systems Q1 Earnings Announcement Scheduled
- Earnings Release Date: EPAM Systems is set to announce its Q1 earnings on May 7 before market open, with consensus EPS estimate at $2.75, reflecting a 14.1% year-over-year increase, and revenue estimate at $1.39 billion, up 6.9%, indicating the company's sustained profitability and growth potential.
- Strong Historical Performance: Over the past two years, EPAM has exceeded EPS and revenue estimates 100% of the time, demonstrating the company's reliability in financial forecasting and bolstering market confidence.
- Expectation Revision Dynamics: In the last three months, EPS estimates have seen 7 upward revisions and 6 downward adjustments, while revenue estimates experienced 6 upward and 8 downward revisions, reflecting market divergence and uncertainty regarding the company's future performance.
- Strategic Investment and Growth: EPAM projects $600 million in AI-native revenues by 2026, indicating the company's strategic positioning in the rapidly growing AI market and accelerating client demand, which further enhances its long-term growth outlook.
See More
EPAM and Anthropic Partner to Enhance Enterprise AI Capabilities
- Strategic Partnership: EPAM Systems has announced a multi-year strategic partnership with Anthropic aimed at accelerating the delivery of safe and reliable enterprise-grade AI, helping organizations convert AI investments into tangible business value.
- Integration of Expertise: By combining EPAM's deep engineering expertise with Anthropic's Claude models, enterprises can simplify complex legacy operations and automate workflows, thereby enhancing overall operational efficiency.
- Enhanced Data Analysis: This collaboration enables clients to analyze large-scale datasets, leveraging EPAM's engineering excellence alongside Anthropic's advanced technology to drive data-driven decision-making and improve market competitiveness.
- Future Growth Potential: As enterprises increasingly demand AI investments, this partnership not only provides clients with trusted solutions but also opens new growth opportunities for both EPAM and Anthropic in the rapidly evolving AI market.
See More
