EPAM Systems Q2 Earnings: Revenue And EPS Beat, Cuts Annual Revenue Outlook, CEO Highlights GenAI Expertise

EPAM Systems, Inc EPAM reported fiscal second-quarter 2024 sales declined 2.0% year over year to $1.15 billion, beating the analyst consensus estimate of $1.14 billion.

Adjusted EPS of $2.45 beat the analyst consensus estimate of $2.26.

Operating margin decreased to 10.5% from 12.3% in the year-ago period, primarily driven by increased compensation costs, including stock-based compensation expense as a percentage of revenues. 

Adjusted income from operations declined by 8.5% Y/Y, indicating operational challenges.

Cash and equivalents totaled $1.79 billion as of June-end, a decrease of 12.3% from $2.04 billion as of December-end. The company's long-term debt totaled $25.5 million.

Buyback: On August 1, 2024, the Board approved a new share repurchase program of up to $500 million.

Arkadiy Dobkin, CEO: "We are continuously improving our geographic delivery footprint, while simultaneously strengthening our transformational capabilities, including our GenAI-relevant expertise and assets, and preparing ourselves to be our clients' partner of choice once the demand environment improves."

Outlook: EPAM Systems lowered its fiscal 2024 revenue outlook to $4.590 billion—$4.625 billion (prior $4.575 billion—$4.675 billion) versus the consensus of $4.620 billion. The company also revised the fiscal 2024 outlook for adjusted EPS to $10.20-$10.40 (prior $10.00-$10.30) versus the consensus of $10.09.

EPAM Systems expects third-quarter revenue of $1.145 billion-$1.155 billion versus consensus of $1.160 billion and adjusted EPS of $2.65-$2.73 versus consensus of $2.69.

EPAM Systems stock lost 15% in the last 12 months.

Price Action: EPAM shares are trading higher by 0.40% to $209.00 premarket at last check Thursday.