EPAM Systems Q4 Beats Estimates but Guides Below on GAAP EPS, Shares Plunge 16%
EPAM Systems posted Q4 revenue of $1.41 billion, up 12.8% Y/Y, and adjusted EPS of $3.26, topping estimates with a 16.3% operating margin. It guided fiscal Q1 GAAP EPS of $1.32–1.40 and 2.9% organic revenue growth—well below estimates—sending shares down 16% to a 52-week low.
1. Fourth-Quarter Performance
EPAM delivered Q4 revenue of $1.41 billion, up 12.8% year-over-year, and adjusted EPS of $3.26, surpassing consensus by $0.10. Organic constant-currency revenue rose 5.6%, operating income reached $230 million with a 16.3% margin, and total headcount increased 2.7% to 62,850.
2. Cash Flow and Share Buybacks
Operating cash flow climbed to $282.9 million from $130.3 million a year earlier, while cash and equivalents edged up to $1.301 billion. EPAM repurchased 1.16 million shares for $223.5 million in the quarter, leaving $776.5 million available under its buyback authorization.
3. Guidance and Outlook
For fiscal Q1, EPAM forecasts revenue of $1.385–1.400 billion and adjusted EPS of $2.70–2.78, with GAAP EPS of $1.32–1.40 and organic growth of about 2.9% at midpoint. Full-year 2026 guidance targets $5.703–5.866 billion in revenue, adjusted EPS of $12.60–12.90 and 3%–6% organic constant-currency growth.
4. Market Reaction
Shares plunged 16.5% in premarket trading to $140.01, near the 52-week low of $138.14, as investors reacted to the weaker-than-expected GAAP EPS guidance and slowing organic growth outlook.