EPAM Systems EPAM reported first-quarter 2025 non-GAAP earnings of $2.41 per share, which beat the Zacks Consensus Estimate by 6.2%. The bottom line decreased from the year-ago quarter’s earnings of $2.46 per share.

EPAM’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 8.32%.

The company's first-quarter revenues of $1.3 billion surpassed the consensus mark by 1.37%.

EPAM’s top line rose 11.1% 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 12.88% in Thursday's trading session.

EPAM Systems, Inc. Price, Consensus and EPS Surprise

EPAM Systems, Inc. price-consensus-eps-surprise-chart | EPAM Systems, Inc. Quote

EPAM’s Q1 Details

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, partially offset by softness in Business Info and Travel & Consumer.

Revenues from Financial Services (24.1% of total revenues) were $314 million, up 29.3% year over year.

First-quarter revenues from Consumer Goods, Travel and Retail (19.6% of total revenues) were $255.5 million, down 1.4% year over year.

Revenues from Software and Hi-Tech (14.6% of total revenues) in the fourth quarter were $190 million, up 10.5% year over year.

Life Science and Health revenues (11.9% of total revenues) were $155 million, up 10.5% year over year.

Revenues from Business Info and Media (12.5% of total revenues) were $167 million, down 2.2% year over year.

Emerging revenues (17.8% of total revenues) were $221 million, up 22.8% year over year.

EPAM’s non-GAAP gross profit increased 5.7% year over year to $374.2 million while the gross margin contracted 170 basis points (bps) to 28.7%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

The non-GAAP operating income witnessed 1.3% year-over-year growth to $175.8 million. The non-GAAP operating margin contracted 140 bps to 13.5%.

EPAM’s Balance Sheet & Cash Flow

As of March 31, 2025, EPAM had cash, cash equivalents and restricted cash of $1.18 billion, lower than $1.29 billion as of Dec. 31, 2024

Long-term debt was $25.1 million as of March 31, slightly lower than $25.2 million as of Dec. 31.

Cash flow from operations was $24.2 million, while free cash flow was $14.8 million.

Story Continues

EPAM’s Q2 and FY25 Guidance

For the second quarter, EPAM expects revenues in the band of $1.325-$1.34 billion, indicating year-over-year growth of 16.2% at the midpoint.

The Zacks Consensus Estimate for second-quarter revenues is pegged at $1.28 billion, indicating year-over-year growth of 10.2%.

Non-GAAP operating margin is anticipated to be in the range of 14-15% of revenues. Non-GAAP earnings per share are expected between $2.56 and $2.64 for the second quarter.

The Zacks Consensus Estimate for earnings is pegged at $2.27 per share, indicating a year-over-year decrease of 7.7%.

EPAM revised its guidance for full-year 2025. It now expects revenues to grow in the range of 11.5% to 14.5% from the previously initiated guidance of 10% to 14%.

The Zacks Consensus Estimate for revenues is pegged at $5.27 billion, indicating year-over-year growth of 11.4%.

Non-GAAP operating margin is expected in the range of 14.5-15.5% of revenues. Non-GAAP earnings per share are now expected to be between $10.70 and $10.95, up from the previously estimated guidance of $10.45-$10.75.

The Zacks Consensus Estimate for earnings is pegged at $10.49 per share, indicating year-over-year growth of 3.4%.

Zacks Rank and Stocks to Consider

Currently, EPAM carries a Zacks Rank #4 (Sell).

Amphenol APH, Juniper Networks JNPR and Upwork UPWK are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. APH, JNPR and UPWK sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

APH shares have gained 26.4% for the past year. The Zacks Consensus Estimate for APH’s full-year 2025 earnings is pegged at $2.62 per share, up by 4 cents over the past seven days, suggesting a growth of 38.6% from the year-ago quarter’s reported figure.

JNPR shares have gained 4.8% in the past year. The Zacks Consensus Estimate for JNPR’s full-year fiscal 2025 earnings have been revised upward to $2.09 in the past 30 days reflecting a year-over-year growth of 21.5%.

UPWK shares have gained 38% over the past year. The Zacks Consensus Estimate for UPWK’s full-year 2025 earnings is pegged at $1.14 per share, implying a rise of 9.62% from the year-ago quarter’s levels.

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