Core Insights - Epam reported quarterly earnings of $3.08 per share, exceeding the Zacks Consensus Estimate of $3.02 per share, but down from $3.12 per share a year ago, representing an earnings surprise of +1.99% [1] - The company achieved revenues of $1.39 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.44% and up from $1.17 billion year-over-year [2] - Epam has consistently surpassed consensus EPS and revenue estimates over the last four quarters [2] Financial Performance - The earnings surprise for the previous quarter was +6.13%, with actual earnings of $2.77 per share compared to an expected $2.61 [1] - The current consensus EPS estimate for the upcoming quarter is $2.90, with projected revenues of $1.38 billion, and for the current fiscal year, the EPS estimate is $11.11 on revenues of $5.41 billion [7] Market Position - Epam shares have declined approximately 31.2% year-to-date, contrasting with the S&P 500's gain of 15.6% [3] - The Zacks Industry Rank places Computers - IT Services in the top 30% of over 250 Zacks industries, indicating a favorable industry outlook [8] Future Outlook - The sustainability of Epam's stock price movement will largely depend on management's commentary during the earnings call and future earnings expectations [3][4] - The estimate revisions trend for Epam was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market [6]

Core Insights - EPAM Systems has raised its annual earnings forecast for the third time this year, indicating strong demand for IT consultancy services as businesses invest in modernizing their systems for artificial intelligence [1] Group 1: Financial Performance - The company’s updated earnings forecast reflects an increase in business spending on AI system modernization, which is driving revenue growth [1] Group 2: Market Trends - There is a growing trend among businesses to allocate more resources towards upgrading their technological infrastructure to incorporate artificial intelligence capabilities [1]

Core Insights - EPAM Systems, Inc. reported a third quarter revenue of $1.394 billion, reflecting a year-over-year increase of 19.4% [5][6] - The company raised its full-year revenue growth outlook for 2025 to a range of 14.8% to 15.2% [5][6] - CEO Balazs Fejes emphasized the company's focus on AI and AI-native innovation as a key driver for growth [2] Financial Performance - Third quarter revenues increased by $226.8 million compared to the same period in 2024 [6] - GAAP income from operations was $144.9 million, a decrease of 18.1% year-over-year [6] - Non-GAAP income from operations was $222.8 million, showing a slight decrease of $0.1 million compared to the previous year [6] - GAAP diluted EPS was $1.91, down 19.4% from $2.37 in the third quarter of 2024 [6] - Non-GAAP diluted EPS was $3.08, a decrease of 1.3% from $3.12 in the same quarter last year [6] Cash Flow and Shareholder Returns - Cash provided by operating activities for the first nine months of 2025 was $372.0 million, down from $428.9 million in the same period of 2024 [6] - The company repurchased $82.1 million of its stock in the third quarter and announced a new share repurchase plan for up to $1 billion [5][6] Outlook - For the full year 2025, EPAM expects revenues to be in the range of $5.430 billion to $5.445 billion, with a year-over-year growth rate of 15.0% at the midpoint [6] - The company anticipates GAAP diluted EPS to be in the range of $6.75 to $6.83 and non-GAAP diluted EPS to be between $11.36 and $11.44 [5][6] Workforce and Strategic Initiatives - Total headcount was approximately 62,350 as of September 30, 2025, with a 0.5% increase in delivery professionals since June 30, 2025 [6] - The company is investing in AI and AI-native innovation to enhance its strategic positioning in the market [2][9]

Financial Performance - Third quarter revenues reached $1.394 billion, representing a year-over-year increase of 19.4%[5] - GAAP diluted EPS for the third quarter was $1.91, a decrease of 19.4% compared to $2.37 in the same quarter of 2024[6] - Non-GAAP diluted EPS was $3.08, down 1.3% from $3.12 in the third quarter of 2024[6] - Expected GAAP diluted EPS for the full year is projected to be in the range of $6.75 to $6.83[8] - The company anticipates fourth quarter revenues to be between $1.380 billion and $1.395 billion, reflecting year-over-year growth of 11.1%[8] - Revenue growth reported for the three months ended September 30, 2025, was 19.4%, while organic constant currency revenue growth was 7.1%[22] - Net income for the three months ended September 30, 2025, was $171,794 thousand, compared to $179,086 thousand for the same period in 2024, reflecting a decrease of 4.3%[22] - Diluted earnings per share for the three months ended September 30, 2025, was $3.08, down from $3.12 in the same period of 2024[22] - Expected revenue growth for Q4 2025 is projected at 11.1%, with an organic constant currency growth of 4.4%[30] - Full year 2025 revenue growth is expected to be 15.0%, with organic constant currency growth at 4.6%[30] Shareholder Actions - The company repurchased $82.1 million of stock in the third quarter and announced a new share repurchase plan for up to $1 billion[5] Operational Metrics - Total headcount as of September 30, 2025, was approximately 62,350, with a 0.5% increase in delivery professionals since June 30, 2025[8] - Cash provided by operating activities for the first nine months of 2025 was $372.0 million, down from $428.9 million in the same period of 2024[8] - Operating margin for the three months ended September 30, 2025, was 10.4%, down from 15.2% in the same period of 2024[22] - GAAP income from operations as a percentage of revenues for Q4 2025 is estimated to be between 10.0% and 11.0%[30] - Non-GAAP income from operations as a percentage of revenues for Q4 2025 is projected to be between 15.5% and 16.5%[30] Tax and Expenses - The company expects a GAAP effective tax rate of approximately 25.0% for the full year[8] - The effective tax rate for GAAP is approximately 24.0% for Q4 2025, while the non-GAAP effective tax rate is approximately 23.0%[30] - Stock-based compensation expenses for the three months ended September 30, 2025, were $21,149 thousand, up from $19,576 thousand in the same period of 2024, an increase of 8.0%[23] - Stock-based compensation expenses are expected to be 3.2% of revenues for the full year 2025[30] Balance Sheet - Total assets increased to $4,843,300 thousand as of September 30, 2025, up from $4,750,473 thousand at December 31, 2024, representing a growth of 1.96%[21] - Total current liabilities increased to $835,262 thousand as of September 30, 2025, compared to $821,039 thousand at December 31, 2024, an increase of 1.5%[21] - Total equity increased to $3,726,843 thousand as of September 30, 2025, compared to $3,631,151 thousand at December 31, 2024, an increase of 2.6%[21] Other Initiatives - The company has committed $100 million for humanitarian support in Ukraine, which includes expenses related to the ongoing crisis[24] - The company incurred $11,028 thousand in cost optimization charges during the three months ended September 30, 2025, related to restructuring initiatives[25] - The impact of foreign exchange rates is expected to reduce revenue growth by 2.4% in Q4 2025[30] - Inorganic revenue growth is anticipated to decline by 4.3% for Q4 2025[30]

Core Insights - EPAM Systems, Inc. has launched Agentic QA™, an AI-native testing solution aimed at addressing the challenges of accelerated software and product development cycles [2][3] - The solution integrates AI capabilities with traditional testing methods to enhance efficiency, scalability, and reduce testing efforts for clients [1][3] Company Overview - EPAM Systems, Inc. has been a leader in digital engineering and transformation services since 1993, focusing on software engineering expertise to help clients navigate transformation challenges [6][8] - The company emphasizes the integration of AI technologies into business strategies to drive innovation and competitive advantage [7][8] Industry Context - The demand for innovative testing solutions is growing as organizations face limitations with traditional testing methods, which are often inadequate for modern software development needs [2][4] - According to Gartner, test automation, particularly enhanced by generative AI technologies, is becoming essential for software engineering leaders to mitigate business risks [4][12]

Group 1 - The article focuses on value investing in Asia, particularly in the Hong Kong market, targeting stocks with significant discrepancies between price and intrinsic value [1] - The investment strategy emphasizes deep value balance sheet bargains, such as net cash stocks and low price-to-book (P/B) stocks, as well as wide moat stocks that represent high-quality businesses [1] - The author provides monthly updates and watch lists for value investors seeking investment opportunities in the region [1]

Core Insights - The article highlights three companies that present strong investment opportunities despite rising valuations in the AI sector [1][2] Company Summaries Amazon - Amazon's cloud computing division, Amazon Web Services (AWS), is experiencing significant growth, with AI services becoming a multibillion-dollar business growing at triple-digit rates year over year [5][8] - AWS revenue grew 17% year over year last quarter, although some analysts express concerns about its growth rate compared to competitors [5] - The company is investing heavily in AI infrastructure, with capital expenditures expected to exceed $100 billion this year, impacting free cash flow, which fell to $18.2 billion from $53 billion in the previous year [7] - Amazon's retail operations are also thriving, with North America operating margin increasing by 190 basis points to 7.5% and international margin expanding by 290 basis points to 3.4% [8] EPAM Systems - EPAM Systems focuses on platform and application engineering and has restructured its workforce to mitigate risks from political turmoil in Belarus, Russia, and Ukraine [9][10] - The company has seen a turnaround with 18% year-over-year revenue growth in the second quarter, marking the third consecutive quarter of sequential growth [11] - EPAM is positioned to benefit from the rising demand for AI services, with expectations of 13% to 15% growth for the full year [11][12] - The stock is trading at 12.5 times analysts' estimates for 2026 earnings, indicating it is undervalued [12] ASML - ASML manufactures essential equipment for advanced semiconductor production, crucial for AI applications [14] - The company has strong demand for its extreme ultraviolet (EUV) machines, with management expecting 2026 sales to exceed 2025 levels despite challenges in the Chinese market [15][19] - ASML's stock trades at around 34 times 2026 earnings expectations, reflecting its long-term growth potential in the semiconductor industry [19]

Core Insights - EPAM Systems, Inc. has launched the AI/Run.Transform Playbook, aimed at facilitating enterprise-wide AI-native transformation through integrated consulting services [1][2][4] Group 1: AI/Run.Transform Playbook Overview - The AI/Run.Transform Playbook is a next-generation model that combines AI-native delivery, strategic consulting, and established technical expertise to accelerate AI adoption [2][3] - This playbook integrates methodologies, blueprints, tools, and accelerators to ensure meaningful AI adoption and faster revenue generation compared to traditional methods [4][5] Group 2: Strategic Importance - The playbook is designed to align technical and business strategies, addressing a critical industry need for organizations to fully realize AI's transformation potential [4][5] - EPAM aims to redefine how enterprises innovate and operate in the AI era, setting a foundation for future talent needs [5][8] Group 3: Methodologies and Tools - The playbook includes AI/Run.Blueprints, AI/Run.Talent, and AI/Run.Tools, which provide frameworks, critical thinking, and proprietary platforms to enhance AI-native delivery [7][9] - By embedding agentic workflows into the software development lifecycle (SDLC), the playbook standardizes critical elements to drive consistent and scalable results [4][5]

Core Insights - EPAM Systems, Inc. is a digital platform engineering and software development services provider with a market cap of $8.6 billion, operating globally across the Americas, Indo-Pacific, and EMEA regions [1] Financial Performance - Analysts expect EPAM to report a non-GAAP profit of $2.42 per share for Q3, reflecting a 13.9% decline from $2.81 per share in the same quarter last year [2] - For the full fiscal year 2025, adjusted EPS is projected to be $8.73, down 1.6% from $8.87 in fiscal 2024, with an expected increase of 8.3% to $9.45 per share in fiscal 2026 [3] Stock Performance - EPAM's stock has decreased by 21% over the past 52 weeks, underperforming the Technology Select Sector SPDR Fund's 23.2% gains and the S&P 500 Index's 14.5% returns during the same period [4] - Following the release of strong Q2 results, EPAM's stock rose by 4.3%, driven by increased demand for AI-related services, with Q2 revenue growing 18% year-over-year to $1.4 billion [5] Analyst Ratings - The consensus opinion on EPAM stock is moderately bullish, with a "Moderate Buy" rating from 15 analysts; nine recommend "Strong Buy," one "Moderate Buy," and five suggest "Hold" [6] - The mean price target for EPAM is $206.69, indicating a potential upside of 32.1% from current price levels [6]

Core Insights - The article compares two IT Services stocks, Epam (EPAM) and Dynatrace (DT), to determine which is more attractive to value investors [1] Valuation Metrics - EPAM has a Zacks Rank of 2 (Buy), indicating a more favorable earnings estimate revision activity compared to DT, which has a Zacks Rank of 3 (Hold) [3] - EPAM's forward P/E ratio is 13.96, significantly lower than DT's forward P/E of 31.77, suggesting EPAM may be undervalued [5] - The PEG ratio for EPAM is 1.77, while DT's PEG ratio is 2.48, indicating that EPAM has a better balance between its price and expected earnings growth [5] - EPAM's P/B ratio is 2.39, compared to DT's P/B of 5.7, further supporting the notion that EPAM is more attractively valued [6] Conclusion - Overall, EPAM demonstrates stronger estimate revision activity and more favorable valuation metrics than DT, making it a more appealing option for value investors at this time [7]