EPAM Systems (NYSE:EPAM) Announces Earnings Results

Key Points

• EPAM Systems beat Q1 expectations, reporting adjusted EPS of $2.86 versus $2.75 expected and revenue of $1.40 billion versus $1.39 billion expected. Revenue rose 7.6% year over year.
• Despite the beat, the company cut its full-year revenue outlook to 4.0%–6.5% growth, which appears to be weighing on the stock and signaling softer near-term visibility.
• EPAM is leaning into AI as a growth driver, with pure AI revenue topping $125 million in Q1 and a reiterated $600 million AI revenue target for 2026, supported by its Anthropic partnership.

EPAM Systems (NYSE:EPAM - Get Free Report) announced its earnings results on Thursday. The information technology services provider reported $2.86 EPS for the quarter, topping the consensus estimate of $2.75 by $0.11, FiscalAI reports. EPAM Systems had a return on equity of 14.71% and a net margin of 6.96%.The company had revenue of $1.40 billion for the quarter, compared to analysts' expectations of $1.39 billion. During the same quarter in the prior year, the business earned $2.41 earnings per share. The business's revenue for the quarter was up 7.6% on a year-over-year basis. EPAM Systems updated its Q2 2026 guidance to 3.100-3.180 EPS.

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

• Q1 revenue was $1.4B (up 7.6% YoY; 3.7% organic CC) with improved GAAP and non‑GAAP profitability and EPS, but management lowered full‑year revenue growth to 4%–6.5% (organic 2.5%–5%), signaling slower near‑term visibility.
• Pure AI revenues exceeded $125M in Q1 (≈20% sequential) and EPAM reiterated a $600M AI revenue target for 2026, backed by a multi‑year Anthropic partnership and rapid certification ramp (≈1,300 Claude‑certified now; 10,000 goal by year‑end).
• Management highlighted a growing pipeline of nearly 10 large, non‑T&M AI‑enabled vendor‑consolidation and transformation opportunities that could drive outsized H2 growth if converted, though wins are being risk‑adjusted in the outlook.
• Q1 operating cash flow was negative $36M (free cash flow negative $54M), yet EPAM holds about $1B cash and repurchased $264M of shares in Q1 (≈$1.5B returned to date), with continued buybacks and selective M&A signaled for later in the year.

EPAM Systems Trading Down 4.7%

EPAM traded down $4.89 during midday trading on Friday, reaching $99.35. 2,435,713 shares of the company were exchanged, compared to its average volume of 1,519,407. The stock has a market capitalization of $5.21 billion, a P/E ratio of 14.25, a PEG ratio of 1.01 and a beta of 1.45. EPAM Systems has a one year low of $98.76 and a one year high of $222.53. The stock's 50-day simple moving average is $131.21 and its 200 day simple moving average is $168.98. The company has a debt-to-equity ratio of 0.05, a quick ratio of 2.59 and a current ratio of 2.67.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently bought and sold shares of the company. CYBER HORNET ETFs LLC acquired a new stake in EPAM Systems in the second quarter worth $27,000. Sunbelt Securities Inc. increased its position in shares of EPAM Systems by 4,233.3% in the 4th quarter. Sunbelt Securities Inc. now owns 130 shares of the information technology services provider's stock valued at $27,000 after buying an additional 127 shares in the last quarter. MUFG Securities EMEA plc acquired a new stake in EPAM Systems during the 2nd quarter worth $30,000. 1248 Management LLC bought a new position in EPAM Systems during the fourth quarter worth about $32,000. Finally, Atlas Capital Advisors Inc. bought a new position in EPAM Systems during the fourth quarter worth about $35,000. Institutional investors own 91.58% of the company's stock.

Key Stories Impacting EPAM Systems

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

• Positive Sentiment: EPAM beat Q1 estimates, reporting $2.86 in non-GAAP EPS versus $2.75 expected and revenue of $1.40 billion versus $1.39 billion expected, with sales up 7.6% year over year. EPAM Reports Results for First Quarter 2026
• Positive Sentiment: The company raised its profit outlook for the year, now expecting non-GAAP diluted EPS of $12.98 to $13.28 and GAAP EPS of $8.29 to $8.59. Reuters coverage of EPAM profit forecast increase
• Positive Sentiment: EPAM announced an applied AI partnership with Anthropic, which could support longer-term client demand and positioning. EPAM forecasts 4%-6.5% 2026 revenue growth amid applied AI partnership with Anthropic
• Neutral Sentiment: Several analysts cut price targets after the report, including Citi to $112 from $145 and Wells Fargo to $151 from $195, reflecting reduced near-term expectations but still leaving upside from current levels. Benzinga analyst updates
• Neutral Sentiment: Needham also lowered its target to $135 from $175, while keeping a buy rating, and Guggenheim trimmed its target earlier this week amid concerns about Q2 revenue outlook. Benzinga analyst updates
• Negative Sentiment: Despite the earnings beat, EPAM cut its 2026 revenue-growth outlook to 4.0% to 6.5% year over year, or 2.5% to 5.0% on an organic constant-currency basis, which appears to be the main reason investors are selling the stock. EPAM Reports Results for First Quarter 2026

Analyst Ratings Changes

EPAM has been the subject of several research reports. TD Cowen lowered their price objective on shares of EPAM Systems from $220.00 to $213.00 and set a "buy" rating for the company in a research report on Monday, April 6th. Mizuho upped their target price on shares of EPAM Systems from $199.00 to $200.00 and gave the stock an "outperform" rating in a research report on Monday, March 16th. The Goldman Sachs Group lowered shares of EPAM Systems from a "buy" rating to a "neutral" rating and lowered their price target for the company from $215.00 to $110.00 in a report on Friday. JPMorgan Chase & Co. dropped their price objective on shares of EPAM Systems from $215.00 to $183.00 and set an "overweight" rating for the company in a research report on Friday, February 20th. Finally, Susquehanna reduced their price objective on EPAM Systems from $199.00 to $167.00 and set a "positive" rating on the stock in a report on Monday, May 4th. Eight research analysts have rated the stock with a Buy rating, six have assigned a Hold rating and one has issued a Sell rating to the company's stock. According to MarketBeat.com, the stock presently has a consensus rating of "Hold" and an average target price of $160.08.

About EPAM Systems

EPAM Systems, Inc is a global provider of digital platform engineering and software development services. The company partners with clients across industries—such as financial services, healthcare, retail, and technology—to design, develop, and maintain complex software applications and digital experiences. EPAM's offerings include custom software development, application management, infrastructure management, quality assurance, and testing services, enabling organizations to accelerate digital transformation and enhance operational efficiency.

In addition to its core engineering capabilities, EPAM delivers a range of specialized services, including product design and consulting, data and analytics, cloud computing, DevOps, and cybersecurity.

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