EPAM Stock Rises 6% After Q2 Earnings and Revenues Beat Estimates

Core Insights - EPAM Systems reported Q2 2025 earnings of $2.77 per share, exceeding the Zacks Consensus Estimate by 6.1%, and up from $2.45 per share a year ago [1][8] - The company's revenues for Q2 2025 reached $1.35 billion, surpassing the consensus mark by 1.37%, reflecting an 18% year-over-year growth [2][8] - EPAM's shares increased by 6% following the strong earnings results and positive guidance for the full year [2] Financial Performance - The year-over-year revenue growth was driven by strong performance in various industry verticals, particularly Financial Services, which saw a 34.4% increase [3][8] - Revenues from Financial Services accounted for 24.3% of total revenues, amounting to $328.3 million [3] - Other segments also showed growth: Consumer Goods, Retail & Travel revenues increased by 6.2% to $268 million; Software & Hi-Tech revenues rose by 21.2% to $204.7 million; Life Sciences & Healthcare revenues grew by 11.7% to $156.5 million; Business Information & Media revenues increased by 2.8% to $170.4 million; Emerging revenues surged by 28.7% to $225.5 million [4][8] Profitability Metrics - Non-GAAP gross profit increased by 9% year over year to $407.7 million, with a gross margin expansion of 140 basis points to 30.1% [5] - Non-GAAP operating income rose by 16.3% year over year to $202.9 million, with an operating margin expansion of 20 basis points to 15.0% [5] Balance Sheet and Cash Flow - As of June 30, 2025, EPAM had cash and cash equivalents of $1.05 billion, down from $1.18 billion as of March 31, 2025 [6] - Long-term debt slightly decreased to $25 million [6] - Cash flow from operations was reported at $53.2 million, with free cash flow at $43.4 million [6] Future Guidance - For Q3 2025, EPAM expects revenues between $1.365 billion and $1.380 billion, indicating a year-over-year growth of 17.6% at the midpoint [9] - Full-year 2025 revenue growth is projected to be between 13.0% and 15.0%, with organic constant currency growth expected between 3.0% and 5.0% [11] - GAAP diluted EPS for Q3 is anticipated to be between $1.89 and $1.97, while non-GAAP diluted EPS is projected between $2.98 and $3.06 [10]