EPAM returns to growth, faces skepticism

EPAM Systems returned to year-over-year revenue growth in the first quarter, but the software engineering and consulting company is still facing investor pressure as its shares trade near one-year lows. The Newtown, Pennsylvania-based company reported first-quarter revenue of $1.400 billion on May 7, up 7.6% from a year earlier, and raised its full-year revenue and earnings guidance. (investors.epam.com) May 15 market data showed EPAM closed at $93.02, down from $104.24 on May 7 and well below the $135.40 level recorded on March 31. (investors.epam.com) Yahoo Finance historical data also showed the stock traded as low as $89.25 intraday on May 13. Balazs Fejes, EPAM’s chief executive and president, said in the earnings release that the company had delivered “a strong first quarter and solid start of the year” as it pursued a multi-year transformation tied to AI-related work. Investors, however, have focused on whether revenue growth can translate into durable margins and steadier delivery execution. (investors.epam.com) The company’s filings also continue to highlight geopolitical exposure tied to its workforce in Ukraine and Belarus. ### If revenue is growing again, why are investors still pressing the stock? (finance.yahoo.com) May 7 results showed revenue rising, but the same release put first-quarter GAAP operating margin at 8.3% and non-GAAP operating margin at 14.3%. Those figures improved from a year earlier, while still leaving investors to judge how much of the top-line recovery will flow through to profit. May 13 trading underscored that caution. Yahoo Finance data showed EPAM shares touched $89.25 intraday that day before closing at $90.39, extending a slide that followed the earnings report. (investors.epam.com) ### What did EPAM actually report for the quarter? EPAM reported first-quarter net income of $82.5 million, up from $73.5 million a year earlier, according to results carried by MarketScreener from S&P Capital IQ data. Diluted earnings per share rose to $1.52 from $1.28, while non-GAAP diluted EPS increased to $2.86 from $2.41. (investors.epam.com) Organic constant-currency revenue growth was 3.7% in the quarter, EPAM said. The company also said it spent $324 million on stock repurchases in the quarter, including a $300 million accelerated share repurchase agreement. (finance.yahoo.com) ### What are executives saying about margins and the delivery model? Balazs Fejes said the quarter reflected “steady execution and continued momentum” in AI-native and AI-readiness work. That language points to the company’s effort to show clients and investors that newer AI-related projects can support broader demand recovery. (marketscreener.com) First-quarter cash flow was weaker than the income line. EPAM said cash used in operating activities was $36.4 million in the first three months of 2026, compared with cash provided by operating activities of $24.2 million a year earlier, while cash and equivalents fell to $1.043 billion at March 31 from $1.301 billion at Dec. 31. (investors.epam.com) ### How much does the Ukraine and Belarus footprint still matter? EPAM’s 2025 annual report said about 14,100 of its global delivery, administrative and support personnel were based in Ukraine and Belarus as of Dec. 31, 2025. (investors.epam.com) The company has spent the past several years shifting staff and delivery capacity, but the filing said those countries remain involved in or affected by Russia’s invasion of Ukraine. Earlier SEC filings described Ukraine as EPAM’s largest delivery location and said the company had continued relocating employees to lower-risk locations within Ukraine and to other countries where it operates. (investors.epam.com) ### What did EPAM change in its outlook? EPAM said on May 7 that it now expects full-year 2026 revenue growth of 4.0% to 6.5%, with organic constant-currency growth of 2.5% to 5.0%. The company also raised its full-year GAAP diluted EPS forecast to $8.29 to $8.59 and its non-GAAP diluted EPS forecast to $12.98 to $13.28. (sec.gov) The SEC’s EDGAR page shows EPAM filed its quarterly report on May 7, and the company’s investor relations site lists quarterly earnings materials for the period. Those pages will be the next reference points for investors awaiting EPAM’s second-quarter update. (sec.gov 1) (sec.gov 2) (investors.epam.com)