EPAM Systems Q1 Earnings Surpass Estimates, Revenues Rise Y/Y

EPAM Systems Inc. EPAM reported strong first-quarter 2026 results, with revenues and earnings surpassing the Zacks Consensus Estimate despite macroeconomic uncertainty. EPAM reported first-quarter non-GAAP earnings of $2.86 per share, which increased 18.7% year over year and beat the Zacks Consensus Estimates by 4%.The company’s first-quarter revenues of $1.40 billion beat the Zacks Consensus Estimates by 0.24% and increased 7.6% year over year from $1.30 billion in the prior-year quarter. On an organic constant-currency basis, revenues grew 3.7% year over year.EPAM’s Q1 in DetailEPAM Systems’ year-over-year revenue growth was driven by strong performance across most industry verticals, led by Financial Services and Software & Hi-Tech, while Business Information & Media remained weak.EPAM Systems, Inc. Price, Consensus and EPS Surprise EPAM Systems, Inc. price-consensus-eps-surprise-chart | EPAM Systems, Inc. QuoteRevenues from Financial Services (25% of total revenues) were $350.2 million, up 11.5% year over year. First-quarter revenues from Consumer Goods, Retail & Travel (19.6% of total revenues) were $273.9 million, which increased 7.2% year over year.Revenues from Software & Hi-Tech (15.1% of total revenues) were $210.7 million, up 10.9% year over year. Life Sciences & Healthcare revenues (11.7% of total revenues) were $164.1 million, which increased 5.9% year over year.Revenues from Business Information & Media (11.8% of total revenues) were $165.4 million, down 0.7% year over year. Emerging vertical revenues (16.8% of total revenues) were $235.8 million, which rose 6.8% year over year.Geographically, Americas revenues were $799.5 million, up 2.5% year over year, while EMEA revenues increased 15.9% year over year to $576 million. APAC revenues grew 1.2% year over year to $24.6 million.EPAM’s non-GAAP gross profit increased 9.9% year over year to $411.4 million, while the non-GAAP gross margin expanded 70 basis points (bps) to 29.4%.The non-GAAP operating income increased 14.2% year over year to $200.7 million. The non-GAAP operating margin expanded 80 bps to 14.3%.EPAM’s Balance Sheet & Cash FlowAs of March 31, 2026, EPAM had cash, cash equivalents and restricted cash of approximately $1.04 billion, down from $1.30 billion as of Dec. 31, 2025. Long-term debt was $165 million as of March 31, 2026.During the first quarter, cash used in operating activities was $36.4 million compared with cash generated from operating activities of $24.2 million in the year-ago quarter. Free cash flow was negative $54.2 million in the quarter against a positive free cash flow of $14.8 million in the prior-year quarter.The company continued returning capital to shareholders and spent $324 million on share repurchases during the first quarter, including $300 million under its accelerated share repurchase agreement.EPAM Updates Q2 and 2026 GuidanceFor the second quarter of 2026, EPAM Systems expects revenues to be in the range of $1.400 billion to $1.415 billion, indicating year-over-year growth of 4% at the midpoint. The Zacks Consensus Estimate for second-quarter 2026 revenues is pegged at $1.43 billion, indicating a year-over-year rise of 5.38%.For full-year 2026, EPAM now expects revenues to grow in the range of 4% to 6.5% year over year. The Zacks Consensus Estimate for the 2026 revenues is pegged at $5.79 billion, indicating a year-over-year rise of 6.2%.EPAM expects non-GAAP diluted earnings per share in the range of $12.98 to $13.28. The Zacks Consensus Estimate for 2026 earnings is pegged at $12.76, indicating a year-over-year rise of 10.96%.Zacks Rank and Stocks to ConsiderCurrently, EPAM carries a Zacks Rank #3 (Hold).Some other top-ranked stocks in the broader Zacks Computer and Technology sector are Broadcom AVGO, Celestica CLS and Samsara IOT, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Shares of Broadcom have gained 21.7% year to date. The Zacks Consensus Estimate for Broadcom’s 2026 earnings is pegged at $11.45 per share, up by a penny over the past 30 days, indicating an increase of 68% year over year.Shares of Celestica have rallied 41.7% year to date. The Zacks Consensus Estimate for Celestica’s 2026 earnings is pegged at $9.85 per share, up $1.01 over the past seven days, indicating an increase of 62.8% year over year.Samsara shares have lost 14% year to date. The Zacks Consensus Estimate for IOT’s fiscal 2027 earnings is pegged at 68 cents per share, up 11 cents over the past 60 days, indicating an increase of 21.4% year over year.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.See Stocks Now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks