EPAM Systems Achieves Impressive Growth in Q3
EPAM Systems, Inc. (NYSE: EPAM) saw its stock price climb after releasing its third-quarter results, reflecting a solid financial performance. The company reported a year-on-year sales growth of 19.4%, reaching $1.394 billion, surpassing analysts' expectations, which were set at $1.376 billion.
Revenue Drivers
When adjusting for constant currency, the company's revenue increased by 7.1% compared to the previous year. This steady growth illustrates EPAM's resilience and ability to adapt in a competitive landscape.
EPS Performance
The adjusted earnings per share (EPS) for the quarter stood at $3.08. While this marked a slight decrease from the previous year's $3.12, it still exceeded the consensus estimate of $3.03.
Operational Highlights
EPAM’s adjusted operating income was reported at $222.8 million, slightly down from $222.9 million in the same period last year. The operating margin, however, showed a decline from 19.1% to 16.0%, indicating some pressures on profitability amidst the growth.
Cash Flow and Total Cash Position
One encouraging figure was the rise in operating cash flow, which increased to $294.6 million from $242.0 million a year earlier. However, total cash decreased by 3.6% to $1.244 billion, compared to $1.290 billion at the end of the previous year.
Share Repurchase Plan
In a strategic move, EPAM repurchased 493,000 shares for $82.1 million during the third quarter. As of September 30, 2025, the company completed its previously authorized $500 million share buyback program. Following this, a new share repurchase initiative was announced by the Board of Directors, authorizing purchases up to $1.0 billion.
Updates on Workforce
EPAM's total workforce increased to approximately 62,350 employees, with about 56,100 being professionals engaged in delivery services. This marks a 0.5% rise since the end of June 2025, reflecting the company's ongoing investment in talent to fuel growth.
CEO Insights
EPAM CEO Balazs Fejes commented on the company's strategic focus on harnessing artificial intelligence (AI), talent development, and partnerships. These efforts aim to strengthen EPAM's engineering capabilities while positioning the company to thrive in the rapidly evolving AI-driven corporate landscape.
Future Guidance
Looking forward, EPAM has guided its fourth-quarter revenue projections between $1.380 billion and $1.395 billion, just above the $1.374 billion consensus. For EPS, the expectation is set between $3.10 and $3.18, higher than the $2.91 estimate.
Annual Revenue Outlook Raised
For the full year, EPAM upgraded its revenue growth target to a midpoint of 15%, up from the previous 14%. The company now expects organic constant-currency growth to reach 4.6% at the midpoint, rising from 4%.
Projected full-year revenue is anticipated to be between $5.430 billion and $5.445 billion, marking an increase from the prior guidance of $5.343 billion to $5.437 billion—and above the consensus estimate of $5.407 billion.
Adjusted EPS Expectations Enhanced
The latest forecast for adjusted EPS has also seen an uplift, now estimated at $11.36–$11.44, compared to the prior figure of $10.96–$11.12, surpassing the analysts' expectation of $11.13.
Forecasts on Margins
EPAM anticipates a GAAP operating margin of 9.4%–9.7%, amended from the previous guidance of 9.0%–10.0%. For adjusted operating margin, the projections have also been slightly adjusted to 15.0%–15.3% from 14.5%–15.5%.
Moreover, GAAP EPS is now forecasted to fall within the range of $6.75–$6.83, down from the earlier guidance of $6.48–$6.64 and slightly below the expectation of $6.73.
Stock Performance Reflection
After these announcements, EPAM shares were noted to be trading higher by approximately 4.41%, reaching $168.00 in premarket activity, showing investor confidence in the company's strategic direction.
Frequently Asked Questions
What were EPAM's Q3 earnings?
EPAM reported an adjusted EPS of $3.08, slightly down from $3.12 a year prior but exceeding the consensus estimate of $3.03.
What is EPAM's revenue growth outlook for the full year?
The company raised its revenue growth outlook to 15% at midpoint, indicating robust performance and expectations.
How did EPAM perform in terms of share repurchases?
EPAM repurchased 493,000 shares valued at $82.1 million during Q3, concluding its previous $500 million buyback program.
What are the management's comments on future strategies?
CEO Balazs Fejes highlighted ongoing investments in AI and talent, aiming to enhance EPAM's engineering capabilities and market position.
What are the future revenue and EPS projections?
The company forecasts Q4 revenue between $1.380 billion and $1.395 billion and expects adjusted EPS of $3.10–$3.18.
