EPAM Stock Gains 4% as Q3 Earnings and Revenues Beat Estimates

Core Insights - EPAM Systems, Inc. (EPAM) shares increased by 4.4% following the release of better-than-expected third-quarter 2025 results, with earnings of $3.08 per share, surpassing the Zacks Consensus Estimate by 1.99% but down from $3.12 in the same quarter last year [1][8] Financial Performance - EPAM reported third-quarter revenues of $1.39 billion, exceeding the consensus estimate of $1.37 billion, and reflecting a year-over-year growth of 19.4%, driven by advancements in artificial intelligence [2][8] - Revenue breakdown includes: - Financial Services: $337.8 million (24.2% of total revenues), up 32.7% year over year [3] - Consumer Goods, Retail & Travel: $276 million (19.8% of total revenues), up 9.9% year over year [3] - Software & Hi-Tech: $212.2 million (15.2% of total revenues), up 19.1% year over year [4] - Life Sciences & Healthcare: $159.2 million (11.4% of total revenues), up 11.8% year over year [4] - Business Information & Media: $167.6 million (12% of total revenues), up 0.1% year over year [4] - Emerging revenues: $241.6 million (17.4% of total revenues), up 38.9% year over year [4] Profitability Metrics - Non-GAAP gross profit increased by 8% year over year to $432.9 million, with a gross margin contraction of 330 basis points to 31% [5] - Non-GAAP operating income remained flat at $222.8 million year over year, with an operating margin contraction of 310 basis points to 16% [5] Balance Sheet and Cash Flow - As of September 30, 2025, EPAM had cash and cash equivalents of $1.24 billion, up from $1.05 billion as of June 30, 2025 [6] - Long-term debt stood at $25 million [6] - Generated operating cash flow of $294.7 million and free cash flow of $286.4 million during the third quarter [6] Future Guidance - For Q4 2025, EPAM expects revenues between $1.380 billion and $1.395 billion, indicating a year-over-year growth of 11.1% at the midpoint [7] - Full-year 2025 revenue guidance has been raised to a range of $5.430 billion to $5.445 billion, reflecting a 15% year-over-year growth at the midpoint [10] - GAAP diluted EPS is projected between $6.75 and $6.83, while non-GAAP diluted EPS is forecasted in the range of $11.36 to $11.44 [11]