Key Highlights

  • Revenue rose 2.3% to $1.426 billion, or 2.5% on an organic constant currency basis.
  • GAAP income from operations increased 21.4% to $175.9 million.
  • GAAP diluted EPS climbed 32.5% to $2.53, while non-GAAP diluted EPS rose 14.0% to $3.51.
  • The share repurchase authorization was increased by $1.5 billion, leaving $1.8 billion remaining.

EPAM Systems (NYSE:EPAM), a digital and artificial intelligence transformation company, reported third-quarter 2026 results for the period ended September 30, 2026. Revenue grew 2.3% from the prior-year quarter, while GAAP Operating Income rose faster. Chief executive Balazs Fejes said the quarter included better-than-expected results and continued Margin expansion, and the company increased its Capital return program. The release shows a company whose profit measures are growing faster than its sales.

The distinction between reported and organic growth matters for an IT services firm with operations in many currencies. Reported revenue includes the effect of exchange-rate changes on sales made outside the United States, while organic constant currency growth holds those rates fixed. Because the two figures are close in the third quarter, the company's growth is coming from its underlying Business rather than from currency movements.

Revenue and Organic Growth

Third-quarter revenue reached $1.426 billion, an increase of $32.1 million, or 2.3%, from the prior-year period. On an organic constant currency basis, which strips out currency effects and acquisitions, revenue rose 2.5%. The gap between the reported and organic figures is small, which means currency movements had little effect on the Top Line in the quarter.

The company updated its full-year 2026 revenue growth expectation to a range of 3.5% to 3.7%. That range sits above the third-quarter growth rate, which implies faster growth in the remaining quarters than the company achieved in the third quarter. The release also provides an organic constant currency range for the full year.

Operating Income and Margin Expansion

GAAP income from operations was $175.9 million, up $31.0 million, or 21.4%, from $144.9 million in the third quarter of 2025. Because operating income grew roughly ten times faster than revenue on a percentage basis, the company's Operating Margin widened meaningfully over the year. The release attributes the improvement to margin expansion across the business.

The release does not break out margin by geography or service line in its highlights. Readers can judge the drivers of the margin gain by reviewing the segment tables, which show how the company's delivery mix and cost controls changed during the period.

Investors often focus on non-GAAP EPS because it removes items that management considers unrelated to ongoing operations. The fact that GAAP EPS grew faster than non-GAAP EPS in this quarter means the reported Bottom Line improved more than the adjusted measure, a pattern that readers should confirm by checking the company's list of excluded items.

Per-Share Results and Non-GAAP Measures

GAAP Diluted Earnings per Share rose 32.5% to $2.53, an increase of $0.62. Non-GAAP diluted EPS, which excludes items the company treats as outside its core operations, was $3.51, up $0.43 or 14.0%. The gap between the two growth rates reflects the difference between the GAAP and non-GAAP adjustments in each period.

Because GAAP per-share growth exceeded non-GAAP growth, the items excluded from the adjusted measure weighed more heavily on the prior-year quarter than on the current one. Investors comparing the two sets of figures should read the reconciliation to see which items drove the difference.

A buyback authorization is a ceiling rather than a commitment to purchase a fixed amount. The remaining $1.8 billion gives the company room to repurchase shares over the coming periods, and the accelerated repurchase structure the release describes would accelerate the reduction in the share count rather than spread it evenly over time.

Capital Return and Buyback Expansion

EPAM increased its share repurchase authorization by $1.5 billion, bringing the total remaining authorization to $1.8 billion. The company also plans to enter into a $500 million accelerated share repurchase, a structure that delivers a block of shares immediately and completes the purchase over time.

The expanded authorization signals the company's intention to return capital at a larger scale than before. Repurchases lower the share count, which increases per-share earnings for a given level of net income, and that effect helps explain why GAAP EPS grew faster than operating income in the period.

Outlook

EPAM's third-quarter report pairs revenue growth of 2.3% with a 21.4% increase in GAAP operating income and a larger capital return program. The company's ability to sustain margin expansion while growing revenue at the pace of its updated full-year range will be the central question for subsequent quarters.