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EPAM Stock Gains 4% as Q3 Earnings and Revenues Beat Estimates
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Key Takeaways
EPAM's Q3 earnings of $3.08 per share beat estimates, while revenues grew 19.4% year over year.
AI innovations boosted performance across all business verticals, led by Financial Services.
The company raised 2025 revenue guidance to 15% growth at the midpoint, reflecting stronger momentum.
EPAM Systems, Inc. (EPAM - Free Report) shares gained 4.4% on Thursday after the company released better-than-expected third-quarter 2025 results. EPAM reported third-quarter earnings of $3.08 per share, beating the Zacks Consensus Estimate by 1.99%. However, the bottom line declined by 4 cents from the year-ago quarter’s earnings of $3.12.
The company's third-quarter revenues of $1.39 billion surpassed the consensus mark of $1.37 billion. EPAM Systems’ top line rose 19.4% year over year, demonstrating an improvement across its business segments, primarily benefiting from its latest technological innovations enabled by artificial intelligence.
EPAM’s Q3 in Detail
EPAM’s year-over-year top-line growth was driven by the performance across every industry vertical. Revenues from Financial Services (24.2% of total revenues) were $337.8 million, up 32.7% year over year. Third-quarter revenues from Consumer Goods, Retail & Travel (19.8% of total revenues) were $276 million, which rose 9.9% year over year.
EPAM Systems, Inc. Price, Consensus and EPS Surprise
Revenues from Software & Hi-Tech (15.2% of total revenues) were $212.2 million, up 19.1% year over year. Life Sciences & Healthcare revenues (11.4% of total revenues) were $159.2 million, which jumped 11.8% year over year.
Revenues from Business Information & Media (12% of total revenues) were $167.6 million, up 0.1% year over year. Emerging revenues (17.4% of total revenues) were $241.6 million, which surged 38.9% year over year.
EPAM’s non-GAAP gross profit increased 8% year over year to $432.9 million, while the gross margin contracted 330 basis points (bps) to 31%.
The non-GAAP operating income remained flat on a year-over-year basis at $222.8 million. The non-GAAP operating margin contracted 310 bps to 16%.
EPAM’s Balance Sheet & Cash Flow
As of Sept. 30, 2025, EPAM had cash, cash equivalents and restricted cash of $1.24 billion, higher than $1.05 billion as of June 30, 2025.
Long-term debt was $25 million as of Sept. 30.
During the third quarter, it generated operating cash flow and free cash flow of $294.7 million and $286.4 million, respectively. In the first nine months of 2025, it generated operating cash flow and free cash flow of $372 million and $345 million, respectively.
EPAM’s Q4 and 2025 Guidance
For the fourth quarter, EPAM Systems expects revenues in the range of $1.380-$1.395 billion, indicating year-over-year growth of 11.1% at the midpoint. The company expects the year-over-year revenue growth rate on an organic constant currency basis to be 4.4% at the midpoint.
GAAP income from operations is expected in the range of 10%-11% of revenues, and non-GAAP income from operations is anticipated in the band of 15.5%-16.5%.
GAAP diluted earnings per share are forecast between $2.00 and $2.08, while non-GAAP diluted EPS is projected in the range of $3.10-$3.18.
EPAM expects its GAAP effective tax rate to be approximately 24% and its non-GAAP effective tax rate to be about 23%. Weighted average diluted shares outstanding for the quarter are expected to be 55.1 million.
For the full-year 2025, EPAM now expects revenues in the $5.430-$5.445 billion range, indicating 15% year-over-year growth at the midpoint. Earlier, it had forecasted growth in the range of 13%-15%. On an organic constant-currency basis, revenues are expected to grow 4.6%, up from the previous projection of a 4% increase.
GAAP income from operations is expected in the range of 9.4%-9.7% of revenues, while non-GAAP income from operations is projected in the range of 15%-15.3%.
GAAP diluted EPS is anticipated between $6.75 and $6.83, while non-GAAP diluted EPS is forecasted in the range of $11.36-$11.44. The company expects its GAAP effective tax rate to be about 25% and its non-GAAP effective tax rate to be around 24%. Weighted average diluted shares outstanding for the year are expected to be 56.2 million.
EPAM’s Zacks Rank & Stocks to Consider
EPAM Systems currently has a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for Reddit’s full-year 2025 earnings is pegged at $2.35 per share, revised upward by 23.7% over the past seven days and suggests a year-over-year increase of 170.6%. Reddit shares have soared 13.1% year to date.
The Zacks Consensus Estimate for DocuSign’s fiscal 2026 earnings has moved upward by 5 cents over the past 60 days to $3.69 per share, calling for an increase of 3.9% year over year. DocuSign shares have plunged 22.5% year to date.
The Zacks Consensus Estimate for Amphenol’s full-year 2025 earnings has moved northward to $3.22 per share from $3.03 over the past 30 days, implying 70.4% year-over-year growth. Amphenol shares have surged 98.9% year to date.
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EPAM Stock Gains 4% as Q3 Earnings and Revenues Beat Estimates
Key Takeaways
EPAM Systems, Inc. (EPAM - Free Report) shares gained 4.4% on Thursday after the company released better-than-expected third-quarter 2025 results. EPAM reported third-quarter earnings of $3.08 per share, beating the Zacks Consensus Estimate by 1.99%. However, the bottom line declined by 4 cents from the year-ago quarter’s earnings of $3.12.
The company's third-quarter revenues of $1.39 billion surpassed the consensus mark of $1.37 billion. EPAM Systems’ top line rose 19.4% year over year, demonstrating an improvement across its business segments, primarily benefiting from its latest technological innovations enabled by artificial intelligence.
EPAM’s Q3 in Detail
EPAM’s year-over-year top-line growth was driven by the performance across every industry vertical. Revenues from Financial Services (24.2% of total revenues) were $337.8 million, up 32.7% year over year. Third-quarter revenues from Consumer Goods, Retail & Travel (19.8% of total revenues) were $276 million, which rose 9.9% year over year.
EPAM Systems, Inc. Price, Consensus and EPS Surprise
EPAM Systems, Inc. price-consensus-eps-surprise-chart | EPAM Systems, Inc. Quote
Revenues from Software & Hi-Tech (15.2% of total revenues) were $212.2 million, up 19.1% year over year. Life Sciences & Healthcare revenues (11.4% of total revenues) were $159.2 million, which jumped 11.8% year over year.
Revenues from Business Information & Media (12% of total revenues) were $167.6 million, up 0.1% year over year. Emerging revenues (17.4% of total revenues) were $241.6 million, which surged 38.9% year over year.
EPAM’s non-GAAP gross profit increased 8% year over year to $432.9 million, while the gross margin contracted 330 basis points (bps) to 31%.
The non-GAAP operating income remained flat on a year-over-year basis at $222.8 million. The non-GAAP operating margin contracted 310 bps to 16%.
EPAM’s Balance Sheet & Cash Flow
As of Sept. 30, 2025, EPAM had cash, cash equivalents and restricted cash of $1.24 billion, higher than $1.05 billion as of June 30, 2025.
Long-term debt was $25 million as of Sept. 30.
During the third quarter, it generated operating cash flow and free cash flow of $294.7 million and $286.4 million, respectively. In the first nine months of 2025, it generated operating cash flow and free cash flow of $372 million and $345 million, respectively.
EPAM’s Q4 and 2025 Guidance
For the fourth quarter, EPAM Systems expects revenues in the range of $1.380-$1.395 billion, indicating year-over-year growth of 11.1% at the midpoint. The company expects the year-over-year revenue growth rate on an organic constant currency basis to be 4.4% at the midpoint.
GAAP income from operations is expected in the range of 10%-11% of revenues, and non-GAAP income from operations is anticipated in the band of 15.5%-16.5%.
GAAP diluted earnings per share are forecast between $2.00 and $2.08, while non-GAAP diluted EPS is projected in the range of $3.10-$3.18.
EPAM expects its GAAP effective tax rate to be approximately 24% and its non-GAAP effective tax rate to be about 23%. Weighted average diluted shares outstanding for the quarter are expected to be 55.1 million.
For the full-year 2025, EPAM now expects revenues in the $5.430-$5.445 billion range, indicating 15% year-over-year growth at the midpoint. Earlier, it had forecasted growth in the range of 13%-15%. On an organic constant-currency basis, revenues are expected to grow 4.6%, up from the previous projection of a 4% increase.
GAAP income from operations is expected in the range of 9.4%-9.7% of revenues, while non-GAAP income from operations is projected in the range of 15%-15.3%.
GAAP diluted EPS is anticipated between $6.75 and $6.83, while non-GAAP diluted EPS is forecasted in the range of $11.36-$11.44. The company expects its GAAP effective tax rate to be about 25% and its non-GAAP effective tax rate to be around 24%. Weighted average diluted shares outstanding for the year are expected to be 56.2 million.
EPAM’s Zacks Rank & Stocks to Consider
EPAM Systems currently has a Zacks Rank #3 (Hold).
Reddit Inc. (RDDT - Free Report) , DocuSign (DOCU - Free Report) and Amphenol (APH - Free Report) are some better-ranked stocks that investors can consider in the Zacks Computer and Technology sector. Reddit, DocuSign and Amphenol each sport a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Reddit’s full-year 2025 earnings is pegged at $2.35 per share, revised upward by 23.7% over the past seven days and suggests a year-over-year increase of 170.6%. Reddit shares have soared 13.1% year to date.
The Zacks Consensus Estimate for DocuSign’s fiscal 2026 earnings has moved upward by 5 cents over the past 60 days to $3.69 per share, calling for an increase of 3.9% year over year. DocuSign shares have plunged 22.5% year to date.
The Zacks Consensus Estimate for Amphenol’s full-year 2025 earnings has moved northward to $3.22 per share from $3.03 over the past 30 days, implying 70.4% year-over-year growth. Amphenol shares have surged 98.9% year to date.