EPAM Systems Q4 Earnings and Revenues Surpass Estimates

Core Insights - EPAM Systems, Inc. reported strong fourth-quarter results for 2025, with earnings of $3.26 per share, exceeding estimates by 3.16% and reflecting a 14.8% increase from the previous year [1][9] - The company's fourth-quarter revenues reached $1.41 billion, surpassing the consensus estimate of $1.39 billion, and showing a year-over-year growth of 12.8% driven by advancements in artificial intelligence [2][9] Financial Performance - Revenue growth was observed across all industry verticals except for Business Information & Media, with Financial Services generating $336.4 million (up 19.8% year-over-year) and Consumer Goods, Retail & Travel at $277.9 million (up 10.9% year-over-year) [3][4] - Software & Hi-Tech revenues were $214.9 million (up 18.1% year-over-year), while Life Sciences & Healthcare revenues increased to $155 million (up 2% year-over-year) [4] - Non-GAAP gross profit rose 11% year-over-year to $446.8 million, with a gross margin of 31.7%, down 50 basis points [5] - Non-GAAP operating income increased by 10.5% year-over-year to $230 million, with an operating margin of 15.2%, down 150 basis points [5] Balance Sheet and Cash Flow - As of December 31, 2025, EPAM had cash and cash equivalents of $1.3 billion, an increase from $1.24 billion as of September 30, 2025, with long-term debt at $25 million [6] - The company generated operating cash flow of $282.9 million and free cash flow of $268.1 million in the fourth quarter, totaling $654.9 million and $612.7 million for the full year, respectively [6] Guidance - For Q1 2026, EPAM expects revenues between $1.385 billion and $1.400 billion, indicating a year-over-year growth of 7% at the midpoint, with organic constant currency growth anticipated at 2.9% [7][10] - GAAP diluted EPS is projected to be between $1.32 and $1.40, while non-GAAP diluted EPS is expected in the range of $2.70 to $2.78 [8][10] - For the full year 2026, revenue growth is anticipated to be between 4.5% and 7.5%, with organic constant-currency growth expected to be in the range of 3% to 6% [10][11]