Highlights

  • EPAM Systems increased second-quarter revenue by 4.5%, while organic constant-currency growth reached 3.4% during the same reporting period.
  • GAAP diluted earnings per share rose 26.3%, supported by wider operating margins on both reported and adjusted measures.
  • The company repurchased USD 409 million of shares during the first half as its reported cash balance declined.
  • Management forecast annual organic constant-currency revenue growth of 2.0% to 3.0% and issued updated earnings guidance for 2026.

Earnings growth outstripped sales growth at EPAM Systems (NYSE:EPAM) in the second quarter of 2026, as wider margins supported the digital engineering and IT services group's results. The update released on 6 August also revised the annual outlook. Share repurchases and a lower cash balance added a capital-allocation dimension to a quarter of modest underlying revenue expansion.

Margins Drive the Earnings Comparison

Revenue reached USD 1.415 billion, up 4.5% year on year. Organic constant-currency revenue growth was 3.4%, providing a separate measure that removes currency effects and non-organic contributions.

GAAP diluted earnings per share increased 26.3% to USD 1.97. Non-GAAP diluted earnings per share rose 22.0% to USD 3.38. The earnings increases were substantially larger than the reported revenue gain.

GAAP operating margin improved to 10.8% from 9.3%, while non-GAAP operating margin rose to 16.4% from 15.0%. The two profit measures remain distinct, but both show improvement against their corresponding prior-year figures.

Annual Forecast Sets a Modest Growth Range

EPAM's revised 2026 outlook calls for reported revenue growth of 3.2%–4.2%, or 2.0%–3.0% organically in constant currency. Management forecast non-GAAP operating margin of 15.5%–16.0%.

GAAP diluted earnings per share guidance was USD 8.22–8.38, with non-GAAP diluted earnings per share of USD 13.08–13.24. These ranges are forecasts rather than completed annual outcomes.

For the third quarter, management guided revenue to USD 1.410 billion–1.425 billion and non-GAAP earnings per share to USD 3.38–3.46. The revenue range sits close to the second-quarter reported figure, providing a near-term reference point for subsequent results.

Buybacks Accompany a Lower Cash Balance

Cash, cash equivalents and restricted cash totalled USD 794.3 million at 30 June 2026, down 39.0% from USD 1.301 billion at the end of 2025.

EPAM spent USD 85 million on share repurchases during the second quarter and USD 409 million in the first half. Buybacks explain part of the cash decline, although the supplied document does not attribute the entire movement to repurchases.

Management's forecast incorporated approximately 52.2 million diluted shares for the full year and 51.4 million for the third quarter. These are guidance assumptions, distinct from the number of shares already repurchased or the cash spent on those transactions.

Workforce Changes Remain Limited

Headcount was approximately 62,850, including around 56,650 delivery professionals. Delivery staff increased 0.3% from 31 March.

The relatively small workforce change accompanied the margin improvement, but the supplied material does not identify the full operational drivers of that improvement. It would therefore be premature to attribute it to a particular staffing or utilisation initiative.

The next reporting comparison will bring together revenue delivery, organic growth and margins against management's revised ranges. Capital allocation also remains relevant after substantial first-half repurchases and the reduction in cash. The source does not confirm a date for the next earnings announcement.