Latest news with #EPAMSystems
Yahoo
05-06-2025
- Business
- Yahoo
EPAM Q1 Earnings Call: Leadership Transition and AI Demand Shape Outlook
Digital engineering services company EPAM Systems (NYSE:EPAM) fell short of the market's revenue expectations in Q1 CY2025, but sales rose 11.7% year on year to $1.3 billion. Its non-GAAP EPS of $2.41 per share was 6.1% above analysts' consensus estimates. Is now the time to buy EPAM? Find out in our full research report (it's free). Revenue: $1.3 billion (11.7% year-on-year growth) Adjusted EPS: $2.41 vs analyst estimates of $2.27 (6.1% beat) Adjusted Operating Income: $175.8 million vs analyst estimates of $167.3 million (13.5% margin, 5.1% beat) Revenue Guidance for Q2 CY2025 is $1.33 billion at the midpoint, above analyst estimates of $1.3 billion Management raised its full-year Adjusted EPS guidance to $10.83 at the midpoint, a 2.1% increase Operating Margin: 7.6%, down from 9.5% in the same quarter last year Constant Currency Revenue rose 12.6% year on year (-4.3% in the same quarter last year) Market Capitalization: $9.95 billion EPAM's first quarter results were shaped by a blend of organic growth and strategic acquisitions, with CEO Arkadiy Dobkin highlighting progress in AI-related offerings and the return of some clients previously lost to competitors. Dobkin explained, 'Our performance this quarter was driven by meaningful progress and strengthening client engagement, enhancing cross-selling efforts, and continuing to deliver advanced complex solutions.' Management also pointed to supplier consolidation trends and increased demand for quality-driven execution as factors supporting sequential momentum. The company saw double-digit year-over-year revenue growth, with contributions from both core business and recent acquisitions, despite ongoing margin pressures from compensation increases and lower profitability in acquired units. Looking ahead, EPAM's updated guidance reflects management's expectation of continued demand for its AI and digital transformation services, alongside a carefully managed leadership transition. Dobkin stated, 'We are encouraged by the incremental demand we continue to see for our AI capabilities, as focus on productivity and efficiency gains turns into more comprehensive AI native transformation programs.' Management cautioned, however, that macroeconomic uncertainty remains, particularly in the second half of the year, and that visibility into client spending is still limited. CFO Jason Peterson added that while client budgets appear intact, 'all indications are that [current trends] would carry through into Q3,' with the company monitoring for any changes. The company raised its full-year adjusted EPS outlook and expects sequential growth into the next quarter, though it remains mindful of potential headwinds. Management attributed quarterly results to increased AI-related demand, successful client re-engagement, and contributions from recent acquisitions, while also noting ongoing macroeconomic challenges and margin pressures. Leadership transition announced: Founder Arkadiy Dobkin will move to Executive Chairman in September, with Balazs Fejes (President of Global Business and Chief Revenue Officer) set to become CEO, ensuring continuity as the company enters a new phase focused on AI-driven transformation. AI-driven client demand: Management reported double-digit growth in AI-related revenues and highlighted that the majority of top clients are expanding their use of EPAM's AI consulting and engineering services. Early-stage AI projects are maturing into larger, production-scale engagements, particularly in industries such as oil and gas and manufacturing. Supplier consolidation benefits: EPAM is seeing business return from clients who previously left for lower-cost competitors. Dobkin noted that 'clients who had prioritized cost above all else in selecting partners are now returning to EPAM,' citing the importance of proven delivery quality and expertise. Acquisition impact and diversification: Recent acquisitions, including NEORIS and FD, contributed materially to financial services and emerging verticals, though management acknowledged that these additions lowered overall margins due to integration costs and profitability differences. Geographic and talent footprint expansion: EPAM continued to grow its delivery hubs in India, Central and Eastern Europe, and Latin America. The company highlighted net headcount growth in these regions and the importance of balancing junior and senior talent to support evolving client needs. Management expects future performance to be driven by sustained AI-related demand, operational efficiency, and the ability to adapt to evolving client priorities amid ongoing macroeconomic uncertainty. AI and digital transformation momentum: EPAM anticipates that growing client interest in AI native transformation programs will remain a primary driver of revenue, with many projects expanding in scale and complexity. Management emphasized partnerships with cloud and platform providers to enhance its AI value proposition. Operational focus and margin improvement: The company plans to improve gross margins by increasing utilization and driving productivity, while managing compensation and integration costs from acquisitions. CFO Jason Peterson highlighted a renewed focus on utilization and noted that seasonal factors should benefit margins in the second half of the year. Cautious outlook amid uncertainty: Despite strong first-half momentum, management acknowledged that macroeconomic risks and potential demand softening in the fourth quarter could temper growth. The company remains vigilant in monitoring client spending and is prepared to adjust hiring and investment levels as needed. In the coming quarters, the StockStory team will monitor (1) the pace and size of AI-related project expansion and how quickly early-stage engagements mature, (2) the progression of the CEO transition and any strategic shifts under incoming leadership, and (3) improvements in margin from operational actions and acquisition integration. Additional attention will be paid to client spending patterns and the impact of macroeconomic factors on demand. EPAM currently trades at a forward P/E ratio of 16.2×. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it's free). Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
25-05-2025
- Business
- Yahoo
Is Now An Opportune Moment To Examine EPAM Systems, Inc. (NYSE:EPAM)?
While EPAM Systems, Inc. (NYSE:EPAM) might not have the largest market cap around , it received a lot of attention from a substantial price increase on the NYSE over the last few months. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock's share price. However, could the stock still be trading at a relatively cheap price? Let's take a look at EPAM Systems's outlook and value based on the most recent financial data to see if the opportunity still exists. Our free stock report includes 1 warning sign investors should be aware of before investing in EPAM Systems. Read for free now. The share price seems sensible at the moment according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. In this instance, we've used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock's cash flows. We find that EPAM Systems's ratio of 24.21x is trading slightly below its industry peers' ratio of 29.05x, which means if you buy EPAM Systems today, you'd be paying a decent price for it. And if you believe that EPAM Systems should be trading at this level in the long run, then there's not much of an upside to gain over and above other industry peers. So, is there another chance to buy low in the future? Given that EPAM Systems's share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility. Check out our latest analysis for EPAM Systems Future outlook is an important aspect when you're looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let's also take a look at the company's future expectations. With profit expected to grow by 41% over the next couple of years, the future seems bright for EPAM Systems. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation. Are you a shareholder? EPAM's optimistic future growth appears to have been factored into the current share price, with shares trading around industry price multiples. However, there are also other important factors which we haven't considered today, such as the track record of its management team. Have these factors changed since the last time you looked at EPAM? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio? Are you a potential investor? If you've been keeping an eye on EPAM, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the optimistic forecast is encouraging for EPAM, which means it's worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop. If you want to dive deeper into EPAM Systems, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 1 warning sign for EPAM Systems you should know about. If you are no longer interested in EPAM Systems, you can use our free platform to see our list of over 50 other stocks with a high growth potential. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
08-05-2025
- Business
- Yahoo
Top Stock Movers Now: AB InBev, Molson Coors, Eli Lilly, and More
U.S. equities gained at midday when the U.S. and U.K. struck a new trade deal. EPAM Systems beat quarterly results, raised its outlook, and announced a new CEO. Match Group is cutting jobs and undergoing a reorganization as its earnings and revenue slid.U.S. equities advanced at midday as President Donald Trump announced a new trade deal with the United Kingdom. The Dow Jones Industrial Average, S&P 500, and Nasdaq all rose. EPAM Systems (EPAM) shares took off when the business tech provider posted better-than-expected results and raised its outlook as its IT services revenue grew, and it introduced a new CEO. Axon Enterprise (AXON) also beat profit and sales forecasts and boosted its guidance on demand for the Taser maker's new artificial intelligence (AI) policing tool. U.S.-listed shares of Anheuser-Busch InBev (BUD) climbed after the world's biggest beer company's profit exceeded estimates as it cut costs. The outcome wasn't the same for AB InBev rival Molson Coors Beverage Company (TAP), which saw shares tumble when the brewer lowered its guidance and announced plans to reduce spending on concerns macroeconomic conditions will cause a drop in consumer spending. Shares of Match Group (MTCH) slid when the operator of dating apps announced layoffs and a reorganization after profit and sales declined. Shares of Eli Lilly (LLY) and other pharmaceutical firms fell on a report President Trump will move to slash Medicare drug prices. Oil futures gained. Gold prices dropped. The yield on the 10-year Treasury note increased. The U.S. dollar was up on the euro and yen, and was little changed against the pound. Most major cryptocurrencies traded higher. Read the original article on Investopedia Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
08-05-2025
- Business
- Yahoo
EPAM Systems (NYSE:EPAM) Reports Revenue Growth But Decline In Net Income
EPAM Systems recently announced that its Principal Founder Arkadiy Dobkin will transition to Executive Chairman, while Balazs Fejes will assume the role of CEO later this year. This leadership change follows EPAM's Q1 earnings report, which showed increased sales but a drop in net income and EPS. The company's stock rose 10% over the last month, influenced by positive market trends driven by a new U.S.-U.K. trade deal. Additionally, EPAM's updated revenue guidance, projecting notable growth, and expanded collaboration with Amazon Web Services, likely added weight to the positive market movement. Every company has risks, and we've spotted 1 weakness for EPAM Systems you should know about. We've found 19 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. EPAM Systems' leadership transition, involving Arkadiy Dobkin and Balazs Fejes, arrives at a critical juncture as the company aims to expand its AI initiatives and global footprint. These changes could bolster its service offerings and revenue streams, aligning with the growing demand for AI transformation. However, geopolitical risks and pricing pressures pose challenges to these ambitions. The increased sales and partnerships mentioned earlier may positively impact future earnings forecasts, yet the company's long-term performance has been mixed. Over the past five years, EPAM's total return dropped by 24.91%, reflecting challenges in sustaining growth and profitability over the extended period. In contrast, the company's performance relative to the US IT industry shows it underperformed, with the IT industry returning 18.3% over the past year compared to EPAM's own performance. A key issue is whether the updated revenue guidance and expansion strategy can support the analyst consensus price target of US$213.97. Given the current share price of US$157.88, there is a potential for a significant rise, but this depends on executing growth strategies amidst market uncertainties. Analysts forecast a slower expected annual profit growth of 9.1% per year, which is below the US market average of 13.9%, potentially tempering some enthusiasm about meeting or exceeding projected price targets. Gain insights into EPAM Systems' past trends and performance with our report on the company's historical track record. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NYSE:EPAM. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
08-05-2025
- Business
- Yahoo
EPAM (NYSE:EPAM) Beats Q1 Sales Targets, Stock Soars
Digital engineering services company EPAM Systems (NYSE:EPAM) reported Q1 CY2025 results exceeding the market's revenue expectations , with sales up 11.7% year on year to $1.30 billion. Guidance for next quarter's revenue was optimistic at $1.33 billion at the midpoint, 2.8% above analysts' estimates. Its non-GAAP profit of $2.41 per share was 6.1% above analysts' consensus estimates. Is now the time to buy EPAM? Find out in our full research report. Revenue: $1.30 billion vs analyst estimates of $1.28 billion (11.7% year-on-year growth, 1.6% beat) Adjusted EPS: $2.41 vs analyst estimates of $2.27 (6.1% beat) Revenue Guidance for Q2 CY2025 is $1.33 billion at the midpoint, above analyst estimates of $1.30 billion Management raised its full-year Adjusted EPS guidance to $10.83 at the midpoint, a 2.1% increase Operating Margin: 7.6%, down from 9.5% in the same quarter last year Constant Currency Revenue rose 1.4% year on year (-4.3% in the same quarter last year) Market Capitalization: $9.02 billion "We reported strong first quarter results amidst a dynamic macroeconomic landscape, which highlights our unique differentiation in supporting our clients through their transformation journeys," said Arkadiy Dobkin, CEO and President at EPAM. Founded in 1993 during the early days of offshore software development, EPAM Systems (NYSE:EPAM) provides digital engineering, cloud, and AI transformation services to help global enterprises and startups modernize their technology systems and create digital products. Examining a company's long-term performance can provide clues about its quality. Any business can have short-term success, but a top-tier one grows for years. With $4.86 billion in revenue over the past 12 months, EPAM is one of the larger companies in the business services industry and benefits from a well-known brand that influences purchasing decisions. As you can see below, EPAM's sales grew at an exceptional 14.9% compounded annual growth rate over the last five years. This shows it had high demand, a useful starting point for our analysis. We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. EPAM's recent performance shows its demand has slowed significantly as its revenue was flat over the last two years. We can dig further into the company's sales dynamics by analyzing its constant currency revenue, which excludes currency movements that are outside their control and not indicative of demand. Over the last two years, its constant currency sales averaged 1.6% year-on-year declines. Because this number is lower than its normal revenue growth, we can see that foreign exchange rates have boosted EPAM's performance. This quarter, EPAM reported year-on-year revenue growth of 11.7%, and its $1.30 billion of revenue exceeded Wall Street's estimates by 1.6%. Company management is currently guiding for a 16.2% year-on-year increase in sales next quarter. Looking further ahead, sell-side analysts expect revenue to grow 10% over the next 12 months, an improvement versus the last two years. This projection is healthy and implies its newer products and services will catalyze better top-line performance. Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next. Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals. EPAM has done a decent job managing its cost base over the last five years. The company has produced an average operating margin of 12%, higher than the broader business services sector. Looking at the trend in its profitability, EPAM's operating margin decreased by 3.3 percentage points over the last five years. This raises questions about the company's expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. This quarter, EPAM generated an operating profit margin of 7.6%, down 1.9 percentage points year on year. This reduction is quite minuscule and indicates the company's overall cost structure has been relatively stable. We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company's growth is profitable. EPAM's spectacular 14% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded. In Q1, EPAM reported EPS at $2.41, down from $2.46 in the same quarter last year. Despite falling year on year, this print beat analysts' estimates by 6.1%. Over the next 12 months, Wall Street expects EPAM's full-year EPS of $10.82 to stay about the same. We were impressed by EPAM's optimistic revenue guidance for next quarter, which blew past analysts' expectations. We were also glad its EPS guidance for next quarter outperformed Wall Street's estimates. On the other hand, its constant currency revenue missed significantly. Zooming out, we think this quarter featured some important positives. The stock traded up 7.6% to $171.50 immediately after reporting. Indeed, EPAM had a rock-solid quarterly earnings result, but is this stock a good investment here? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
