EPAM Systems (NYSE:EPAM) Posts Quarterly Earnings Results, Beats Expectations By $0.10 EPS

Key Points

• EPAM reported quarterly EPS of $3.51, beating the $3.41 consensus, while revenue of $1.43 billion topped expectations and rose 2.3% year over year. The company also raised its 2026 outlook, forecasting revenue growth of 3.5%–3.7%.
• AI-native revenue exceeded $185 million, about 13% of total revenue, and EPAM raised its 2026 AI-native revenue target to at least $650 million.
• Growth remains modest and uneven: management expects only 0.5%–1.6% organic constant-currency growth in Q4 and does not anticipate a return to double-digit growth in 2027. EPAM also announced plans for substantial shareholder returns, including a $500 million accelerated repurchase and at least 50% of free cash flow returned annually in 2027–2029.

EPAM Systems (NYSE:EPAM - Get Free Report) announced its earnings results on Thursday. The information technology services provider reported $3.51 earnings per share (EPS) for the quarter, beating the consensus estimate of $3.41 by $0.10, Briefing.com reports. The company had revenue of $1.43 billion for the quarter, compared to analysts' expectations of $1.42 billion. EPAM Systems had a return on equity of 16.76% and a net margin of 7.53%. EPAM Systems's quarterly revenue was up 2.3% on a year-over-year basis. During the same quarter in the previous year, the firm earned $3.08 earnings per share.

Here are the key takeaways from EPAM Systems' conference call:

• EPAM exceeded the high end of its Q3 outlook, with revenue up 2.3% year over year and organic constant-currency growth of 2.5%. Non-GAAP operating margin rose to 16.7%, and non-GAAP diluted EPS increased 14% to $3.51.
• AI-native revenue topped $185 million, or about 13% of total revenue, with the company raising its 2026 target from $600 million to at least $650 million. EPAM also signed three large, multiyear deals in financial services and energy, expected to begin ramping in 2027.
• EPAM announced plans to return at least 50% of free cash flow annually to shareholders in 2027–2029 and expects to enter a $500 million accelerated share repurchase agreement. The board authorized $1.8 billion in repurchases through 2029.
• Growth remains uneven: software and high tech, consumer goods/retail/travel, and business information and media declined in Q3, while North America is expected to continue underperforming in Q4. Q4 organic constant-currency growth is forecast at 0.5%–1.6%, and management said a return to double-digit growth is not expected in 2027.
• Management expects 2027 non-GAAP operating margin of 15%–16% and cautioned that gross margin may be modestly lower, citing reduced benefits from Poland’s R&D tax incentive and normalizing variable compensation. The company plans continued investment in AI capabilities and go-to-market efforts.

EPAM Systems Stock Down 4.1%

Shares of NYSE EPAM traded down $6.87 on Friday, reaching $158.83. 3,339,845 shares of the company's stock traded hands, compared to its average volume of 1,262,095. The company has a quick ratio of 2.75, a current ratio of 2.76 and a debt-to-equity ratio of 0.01. The business's 50 day simple moving average is $121.86 and its two-hundred day simple moving average is $121.40. EPAM Systems has a 12 month low of $73.06 and a 12 month high of $222.53. The company has a market cap of $8.19 billion, a price-to-earnings ratio of 19.85, a price-to-earnings-growth ratio of 1.66 and a beta of 1.28.

Analyst Ratings Changes

Several equities analysts recently commented on EPAM shares. Needham & Company LLC upped their price objective on EPAM Systems from $120.00 to $200.00 and gave the company a "buy" rating in a research note on Thursday. Mizuho set a $130.00 target price on EPAM Systems in a research report on Monday, August 10th. William Blair lowered EPAM Systems from an "outperform" rating to a "market perform" rating in a research note on Thursday, August 6th. Deutsche Bank Aktiengesellschaft reaffirmed a "hold" rating and set a $85.00 price target on shares of EPAM Systems in a research report on Friday, July 10th. Finally, Weiss Ratings upgraded EPAM Systems from a "sell (d+)" rating to a "hold (c-)" rating in a research note on Friday, October 23rd. Six analysts have rated the stock with a Buy rating and eleven have given a Hold rating to the stock. According to MarketBeat, the company currently has a consensus rating of "Hold" and an average target price of $143.73.

EPAM Systems News Roundup

Here are the key news stories impacting EPAM Systems this week:

• Positive Sentiment: Third-quarter non-GAAP EPS of $3.51 topped the $3.41 consensus, and revenue of $1.426 billion exceeded estimates of $1.42 billion, rising 2.3% year over year. EPAM also raised its 2026 outlook, forecasting full-year non-GAAP EPS of $13.23–$13.31 and revenue growth of 3.5%–3.7%. EPAM Reports Results for Third Quarter 2026
• Positive Sentiment: EPAM expanded its remaining share-repurchase authorization to $1.8 billion, plans a $500 million accelerated repurchase, and committed to return at least 50% of free cash flow to shareholders annually from 2027 through 2029. It also lifted its 2026 AI-native revenue target to $650 million. EPAM shareholder-return and AI revenue plans
• Positive Sentiment: Several firms raised price targets after the results. Susquehanna lifted its target to $190 with a positive rating, while Wells Fargo raised its target to $176 and maintained an overweight rating. Susquehanna recommendations
• Neutral Sentiment: Revenue growth remains in the low single digits, which may temper enthusiasm despite the earnings beat and improved outlook. Analyst views are also mixed: Truist kept a hold rating and Wedbush a neutral rating after raising their targets. EPAM 2026 earnings guidance

About EPAM Systems

EPAM Systems, Inc is a global digital engineering and technology services company that helps organizations design, develop and modernize software and digital platforms. Its services support digital transformation initiatives across industries, including financial services, healthcare, life sciences, retail, travel and consumer products.

The company provides software engineering, product development, consulting, cloud services, data and analytics, artificial intelligence, cybersecurity, quality assurance and platform engineering.

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