How is EPAM Systems (EPAM) responding to AI disruption fears?

Sonal Goyal

28 October 2026 05:16 PM AEDT

How is EPAM Systems (EPAM) responding to AI disruption fears?

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Key Highlights

Second-quarter 2026 Revenue was US$1.415 billion, up 4.5% year on year, or 3.4% on an organic constant-currency basis.
Third-quarter revenue is guided to US$1.410 billion to US$1.425 billion, with non-GAAP Diluted Earnings per Share of US$3.38 to US$3.46.
EPAM repurchased US$409 million of shares in the first half, and cash fell 39.0% to US$794.3 million.

Modest growth

EPAM Systems, Inc. (NYSE:EPAM) reported second-quarter 2026 results on 6 August 2026. Revenue was US$1.415 billion, up 4.5% year on year, or 3.4% on an organic constant-currency basis. GAAP Operating Margin was 10.8% and non-GAAP operating margin 16.4%. GAAP diluted earnings per share were US$1.97, up 26.3%, and non-GAAP diluted earnings per share were US$3.38, up 22.0%.

Cash, cash equivalents and restricted cash were US$794.3 million at 30 June 2026, down 39.0% from US$1.301 billion at the end of 2025. EPAM repurchased US$85 million of shares in the quarter and US$409 million in the first half.

Guidance

For the third quarter, EPAM guided to revenue of US$1.410 billion to US$1.425 billion, about 1.7% growth at the midpoint, and non-GAAP diluted earnings per share of US$3.38 to US$3.46. Its updated full-year outlook calls for revenue growth of 3.2% to 4.2%, or 2.0% to 3.0% organically in constant currency, non-GAAP operating margin of 15.5% to 16.0% and non-GAAP diluted earnings per share of US$13.08 to US$13.24.

On a GAAP basis, the company guided to third-quarter diluted earnings per share of US$2.33 to US$2.41 and full-year GAAP earnings per share of US$8.22 to US$8.38, with a GAAP operating margin of 10.5% to 11.0% for the year. These are management forecasts.

A new AI service

On 5 October 2026, EPAM announced a new frontier AI service for generative AI and autonomous agents. The effect of the launch on revenue has not been quantified.

Concerns about AI disruption to IT services providers form the background to the company's positioning, and the new service is part of EPAM's response.

What to watch

EPAM has indicated that it will report third-quarter results on 5 November 2026. Items to watch include whether revenue lands within the US$1.410 billion to US$1.425 billion range, how the full-year outlook changes, and how quickly Capital is deployed on Buybacks given the lower cash balance.

Organic growth of 3.4% in the second quarter against reported growth of 4.5% also shows that currency and other non-organic items added about 1.1 percentage points to reported growth. The next report should show whether that gap persists, and management commentary on client Demand will be of particular interest.

FAQs

Q: What were EPAM's second-quarter 2026 results?

A: Revenue was US$1.415 billion, up 4.5%, or 3.4% organically in constant currency. Non-GAAP diluted earnings per share were US$3.38, up 22.0%.

Q: What is EPAM's third-quarter guidance?

A: EPAM guided to revenue of US$1.410 billion to US$1.425 billion and non-GAAP diluted earnings per share of US$3.38 to US$3.46. That is about 1.7% growth at the midpoint.

Q: When does EPAM report third-quarter results?

A: EPAM has indicated that it will report third-quarter results on 5 November 2026.

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