EPAM cuts annual revenue forecast on weak software services demand

Here are some details:

• EPAM saw mixed demand across its businesses, with weakness in the vertical serving software and technology clients partly offset by continued strength in financial services.
• Software and IT services providers are grappling with investor fears that advanced AI tools by companies such as OpenAI and Anthropic could automate some software development tasks and weigh on demand.
• Revenue from financial services clients rose 11.5% year over year, while software and hi-tech revenue fell 1.3% and business information and media revenue declined 2.1%.
• The company now expects revenue growth of 3.2% to 4.2% for 2026, compared with its prior forecast of 4.0% to 6.5%.
• EPAM forecast annual adjusted profit in the range of $13.08 to $13.24 per share, compared with its prior view of $12.98 to $13.28.
• The company expects third-quarter revenue in the range of $1.410 billion to $1.425 billion, below estimates of $1.45 billion, according to data compiled by LSEG.
• Revenue rose 4.5% to $1.42 billion for the quarter ended June 30, compared with analysts' average estimate of $1.41 billion.
• Adjusted profit came in at $3.38 per share for the second quarter, compared with estimates of $3.14 per share.

EPAM Systems on Thursday cut its annual revenue forecast, indicating a slowing demand for its software services and sending its shares down 11% in premarket trading.

The company provides a wide range of IT services including consulting, cloud and AI transformation and software engineering.