EPAM Stock Rises 6% After Q2 Earnings and Revenues Beat Estimates

EPAM Systems EPAM reported second-quarter 2025 earnings of $2.77 per share, beating the Zacks Consensus Estimate by 6.1%. This compares to earnings of $2.45 per share a year ago. These figures are adjusted for non-recurring items.

EPAM’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 7.78%.

The company's second-quarter revenues of $1.35 billion surpassed the consensus mark by 1.37%.

EPAM’s top line rose 18% year over year, demonstrating an improvement across its business segments, primarily benefiting from its latest technological innovations enabled by Gen AI.

Following the company’s stronger-than-expected top and bottom-line results and a solid earnings guidance for the full-year 2025, EPAM shares gained 6% in Thursday's trading session.

EPAM’s Q2 in Detail

EPAM’s year-over-year top-line growth was driven by the performance across its industry verticals, such as Financial Services, Software & Hi-Tech, Life Sciences and Emerging, and Business Info and Travel & Consumer segments.

Revenues from Financial Services (24.3% of total revenues) were $328.3 million, up 34.4% year over year.

Second-quarter revenues from Consumer Goods, Retail & Travel (19.8% of total revenues) were $268 million, up 6.2% year over year.

Revenues from Software & Hi-Tech (15.1% of total revenues) were $204.7 million, up 21.2% year over year.

Life Sciences & Healthcare revenues (11.6% of total revenues) were $156.5 million, up 11.7% year over year.

Revenues from Business Information & Media (12.6% of total revenues) were $170.4 million, up 2.8% year over year.

Emerging revenues (16.6% of total revenues) were $225.5 million, up 28.7% year over year.

EPAM’s non-GAAP gross profit increased 9% year over year to $407.7 million, while the gross margin expanded 140 basis points (bps) to 30.1%.

The non-GAAP operating income rose 16.3% year over year to $202.9 million. The non-GAAP operating margin expanded (20 bps) to 15.0%.

EPAM’s Balance Sheet & Cash Flow

As of June 30, 2025, EPAM had cash, cash equivalents and restricted cash of $1.05 billion, lower than $1.18 billion as of March 31, 2025.

Long-term debt was $25 million as of June 30, slightly lower than $25.1 million as of March 31.

Cash flow from operations was $53.2 million, while free cash flow was $43.4 million.

EPAM’s Q3 and 2025 Guidance

For the third quarter, EPAM expects revenues in the range of $1.365-$1.380 billion, indicating year-over-year growth of 17.6% at the midpoint. The company expects the year-over-year revenue growth rate on an organic constant currency basis to be 6.2% at the midpoint.

GAAP income from operations is expected to be in the range of 10.0% to 11.0% of revenues, and non-GAAP income from operations is anticipated in the range of 15.5% to 16.5%.

GAAP diluted earnings per share are expected to be between $1.89 and $1.97, while non-GAAP diluted EPS is projected in the range of $2.98 to $3.06.

EPAM expects its GAAP effective tax rate to be approximately 25.0% and its non-GAAP effective tax rate to be about 24.0%. Weighted average diluted shares outstanding for the quarter are expected to be 55.9 million.

For full-year 2025, EPAM now expects revenue growth in the range of 13.0% to 15.0%. On an organic constant currency basis, revenues are expected to grow between 3.0% and 5.0%.

GAAP income from operations is expected to be in the range of 9.0% to 10.0% of revenues, while non-GAAP income from operations is projected in the range of 14.5% to 15.5%.

GAAP diluted EPS is anticipated to be between $6.48 and $6.64, while non-GAAP diluted EPS is forecasted in the range of $10.96 to $11.12. The company expects its GAAP effective tax rate to be about 26.0% and its non-GAAP effective tax rate to be around 24.0%. Weighted average diluted shares outstanding for the year are expected to be 56.4 million.

Zacks Rank & Stocks to Consider

EPAM currently has a Zacks Rank #3 (Hold).

Alkami Technology ALKT, Arista Networks ANET and Amphenol APH are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. While ANET and ALKT carry a Zacks Rank #2 (Buy) each, APH sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alkami Technology shares have lost 34.5% year to date. The Zacks Consensus Estimate for Alkami Technology’s full-year 2025 earnings is pegged at 15 cents per share, up by 2 cents over the past 30 days, implying growth of 51.7% from the year-ago quarter’s reported figure.

Arista Networks shares have lost 11.9% year to date. The Zacks Consensus Estimate for ANET’s full-year fiscal 2025 earnings is pegged at 65 cents per share, up by a penny in the past 30 days, indicating year-over-year growth of 13.66%.

Amphenol shares have gained 45.1% year to date. The Zacks Consensus Estimate for Amphenol’s full-year 2025 earnings has been revised upward to $2.69 per share in the past seven days, indicating year-over-year growth of 42.33%.

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