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EPAM Systems’ (EPAM - Free Report) first-quarter 2020 non-GAAP earnings per share improved 14.4% year over year to $1.43 and also beat the Zacks Consensus Estimate by 2.1%.
Additionally, revenues in the reported quarter came in at $651.4 million, reflecting a year-over-year rise of 24.9%. The top line also surpassed the Zacks Consensus Estimate of $649 million. On a constant currency (cc) basis, revenues were up 26%.
The company is benefiting from growth across all industry verticals and geographies. Digital transformation, focus on customer engagement and product development are key catalysts.
EPAM Systems Inc Price, Consensus and EPS Surprise
EPAM Systems’ largest vertical, Financial Services, displayed 16.2% growth on a year-over-year basis. Travel & Consumer improved 14.6%.
Software & Hi-Tech was up 21.9%. Business Information & Media climbed 46%.
Life Science & Healthcare rose 26.4%. Emerging Verticals improved 30.3%, driven primarily by clients in energy and telecommunications sectors.
Geographically, EPAM Systems generated 59.9% of total revenues from North America, up 23.1% year over year.
Revenues from Europe, contributing 34.2% to total revenues, were up 28.6%.
CIS or Commonwealth of Independent States, representing 3.8% of revenues, jumped 36.8%.
APAC was up 4.7%, accounting for 2.1% of revenues.
EPAM Systems’ non-GAAP operating income improved 18.1% year over year to $105.3 million, while operating margin contracted 90 basis points (bps) to 16.2%.
Balance Sheet and Cash Flow
EPAM Systems exited the first quarter with cash and cash equivalents of $916.3 million, up from $936.6 million witnessed at the end of the prior quarter.
As of Mar 31, 2020, long-term debt was $25 million, flat sequentially.
During the March-end quarter, the company generated operating cash flow of $63.3 million
Outlook
Citing the uncertainty regarding the coronavirus pandemic, which is impacting the global business and consumer activities, EPAM didn’t issue the full-year outlook.
Nonetheless, the company has issued its guidance for the second quarter.
For the ongoing quarter, the company forecasts revenues between $590 million and $605 million, suggesting year-over-year growth of 7.5%-10.2%. The Zacks Consensus Estimate for second-quarter revenues is pegged at $608.8 million.
The company anticipates non-GAAP operating margins in the 14-16% range. Non-GAAP earnings per share are expected to be in the $1.12-$1.31 band. The Zacks Consensus Estimate for second-quarter earnings is pegged at $1.22 per share.
The long-term earnings growth rate for Inphi, Workday and NVIDIA is currently pegged at 37.6%, 26.2%, and 15.2%, respectively.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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EPAM Systems' (EPAM) Q1 Earnings & Revenues Beat Estimates
EPAM Systems’ (EPAM - Free Report) first-quarter 2020 non-GAAP earnings per share improved 14.4% year over year to $1.43 and also beat the Zacks Consensus Estimate by 2.1%.
Additionally, revenues in the reported quarter came in at $651.4 million, reflecting a year-over-year rise of 24.9%. The top line also surpassed the Zacks Consensus Estimate of $649 million. On a constant currency (cc) basis, revenues were up 26%.
The company is benefiting from growth across all industry verticals and geographies. Digital transformation, focus on customer engagement and product development are key catalysts.
EPAM Systems Inc Price, Consensus and EPS Surprise
EPAM Systems Inc price-consensus-eps-surprise-chart | EPAM Systems Inc Quote
Quarterly Details
EPAM Systems’ largest vertical, Financial Services, displayed 16.2% growth on a year-over-year basis. Travel & Consumer improved 14.6%.
Software & Hi-Tech was up 21.9%. Business Information & Media climbed 46%.
Life Science & Healthcare rose 26.4%. Emerging Verticals improved 30.3%, driven primarily by clients in energy and telecommunications sectors.
Geographically, EPAM Systems generated 59.9% of total revenues from North America, up 23.1% year over year.
Revenues from Europe, contributing 34.2% to total revenues, were up 28.6%.
CIS or Commonwealth of Independent States, representing 3.8% of revenues, jumped 36.8%.
APAC was up 4.7%, accounting for 2.1% of revenues.
EPAM Systems’ non-GAAP operating income improved 18.1% year over year to $105.3 million, while operating margin contracted 90 basis points (bps) to 16.2%.
Balance Sheet and Cash Flow
EPAM Systems exited the first quarter with cash and cash equivalents of $916.3 million, up from $936.6 million witnessed at the end of the prior quarter.
As of Mar 31, 2020, long-term debt was $25 million, flat sequentially.
During the March-end quarter, the company generated operating cash flow of $63.3 million
Outlook
Citing the uncertainty regarding the coronavirus pandemic, which is impacting the global business and consumer activities, EPAM didn’t issue the full-year outlook.
Nonetheless, the company has issued its guidance for the second quarter.
For the ongoing quarter, the company forecasts revenues between $590 million and $605 million, suggesting year-over-year growth of 7.5%-10.2%. The Zacks Consensus Estimate for second-quarter revenues is pegged at $608.8 million.
The company anticipates non-GAAP operating margins in the 14-16% range. Non-GAAP earnings per share are expected to be in the $1.12-$1.31 band. The Zacks Consensus Estimate for second-quarter earnings is pegged at $1.22 per share.
Zacks Rank and Key Picks
Currently, EPAM carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader technology sector include Inphi Corporation , Workday, Inc. (WDAY - Free Report) and NVIDIA Corporation (NVDA - Free Report) , each carrying a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term earnings growth rate for Inphi, Workday and NVIDIA is currently pegged at 37.6%, 26.2%, and 15.2%, respectively.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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