EPAM Earnings Prediction
The chart below shows how EPAM performed 10 days before and after its earnings report, based on data from the past quarters. Typically, EPAM sees a +6.02% change in stock price 10 days leading up to the earnings, and a +1.69% change 10 days following the report. On the earnings day itself, the stock moves by -4.06%. This data can give you a slight idea of what to expect for the next quarter's release.
EPAM Key Earning Data
2024/Q4
Year Over Year
Quarter Over Quarter
Total Revenue
1.25B
7.87%
6.92%
Gross Margin
28.32%
-2.58%
-13.84%
Operating Margin
10.94%
3.40%
-27.88%
Net Margin
8.27%
-1.90%
-29.20%
EPS
1.80
8.43%
-24.05%
No Data Available
EPAM Earnings Analysis
Epam Systems Inc Corporation (EPAM.N) Earnings Conference Call
Positive
Earnings Per Share Beat: EPAM Systems, Inc. reported an EPS of $2.84, exceeding expectations of $2.75, indicating strong financial performance.
Organic Revenue Growth Return: The company achieved mid-single-digit growth in Q4, marking a return to organic revenue growth for the first time since Q1 of 2023.
Verticals Year-Over-Year Growth: Four out of six verticals experienced year-over-year growth, with notable performance in life sciences, healthcare, software, high tech, and financial services.
Regional Growth Performance: The Americas and APAC regions led year-over-year growth, showcasing strong performance across geographies.
Improving Client Sentiment: Client sentiment is improving, with higher buying signals and increased trust in EPAM's capabilities, particularly in AI-related services.
Talent Pool Expansion: The company successfully executed its global business strategy, expanding its talent pool through acquisitions like NEORIS and First Derivative, which added nearly 6,000 employees.
Workforce Expansion and Growth: EPAM's workforce grew by 16.3% year-over-year, reflecting both acquisitions and solid organic growth, with a total headcount of 61,200 employees.
AI Engagement Surge: The company reported a significant increase in engagement with GenAI initiatives, with 75% of top clients involved in AI projects, generating about $50 million in Q4 from AI-native programs.
Financial Services Growth: EPAM's financial services vertical saw a strong year-over-year growth of 15.9%, driven by strength in banking, insurance, and payment sectors.
Strong Liquidity Position: The company ended Q4 with $1.3 billion in cash and cash equivalents, indicating a strong liquidity position.
Negative
Organic Revenue Decline: Despite beating earnings expectations, the company reported a decline in organic revenue growth of 1% year-over-year on a constant currency basis, indicating challenges in sustaining growth without acquisitions.
Travel Sector Revenue Decline: The travel and consumer vertical experienced a significant decline of 5.7% in organic revenue, highlighting weaknesses in this sector.
Business Media Revenue Decline: The business information and media vertical also saw a decline of 4.7% in organic revenue, reflecting ongoing challenges in this area.
Gross Margin Decline: Gross margin decreased to 30.4% from 31.1% year-over-year, negatively impacted by compensation increases and lower profitability from recent acquisitions, which could raise concerns about cost management.
SG&A Cost Increase: SG&A as a percentage of revenue increased to 17.4%, partly due to higher costs associated with recent acquisitions, indicating potential inefficiencies in integrating new businesses.
Decline in Cash Flow: Cash flow from operations decreased to $130 million from $171 million year-over-year, raising concerns about cash generation capabilities amid recent acquisitions.
Decline in Free Cash Flow: Free cash flow also declined to $115 million from $161 million in the same quarter last year, suggesting tighter cash management and potential liquidity issues.
Profitability Outlook Concerns: The company anticipates running at lower profitability levels in 2025 due to increased compensation costs and limited ability to improve pricing, which could impact investor confidence.
2025 Revenue and Profit Outlook: The guidance for 2025 indicates a challenging environment with expected flat organic revenue growth in Q1 and pressures on profitability, suggesting ongoing market uncertainties.
EPAM FAQs
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EPAM Earning Call Sentiment
EPAM Systems, Inc. (NYSE:EPAM) Q4 2024 Earnings Call Transcript
EPAM.N
-2.31%Positive
The earnings call presents a mixed picture. While Q4 revenue and EPS saw growth, margins declined due to compensation increases and recent acquisitions, posing profitability concerns. The cautious revenue guidance and macroeconomic risks further temper expectations. However, the company's focus on AI and strategic acquisitions could provide long-term benefits. The Q&A highlighted cautious optimism, but management's lack of specificity on certain issues adds uncertainty. Overall, the stock is likely to remain relatively stable in the short term, leading to a neutral sentiment.
