STOCK TITAN
  1. Home
  2. Sec-filings
  3. EPAM
  4. [8-K] EPAM Systems, Inc. Reports Material Event

EPAM Systems (NYSE: EPAM) Q2 2026 EPS jumps to $1.97

Filing Impact
(Very High)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

EPAM Systems, Inc. reported results for the second quarter ended June 30, 2026, with revenue of $1.415 billion, up 4.5% year-over-year. On an organic constant currency basis, revenue grew 3.4%. GAAP income from operations was $152.2 million, or 10.8% of revenues, and non-GAAP income from operations was $232.7 million, or 16.4% of revenues.

GAAP diluted EPS was $1.97, an increase of $0.41, or 26.3%, while non-GAAP diluted EPS was $3.38, up $0.61, or 22.0%, both compared to the second quarter of 2025. Cash, cash equivalents and restricted cash totaled $794.3 million as of June 30, 2026, and the company spent $85 million on share repurchases in the quarter and $409 million in the first six months of 2026.

For full-year 2026, EPAM expects revenue growth of 3.2% to 4.2% and organic constant currency revenue growth of 2.0% to 3.0%. GAAP diluted EPS is projected at $8.22 to $8.38 and non-GAAP diluted EPS at $13.08 to $13.24. For the third quarter, revenue guidance is $1.410 billion to $1.425 billion, with GAAP diluted EPS of $2.33 to $2.41 and non-GAAP diluted EPS of $3.38 to $3.46.

Positive

  • Q2 2026 profitability and EPS improved strongly: GAAP diluted EPS was $1.97, up $0.41 or 26.3% year-over-year, and non-GAAP diluted EPS was $3.38, up $0.61 or 22.0%, with GAAP operating margin at 10.8% and non-GAAP operating margin at 16.4%.
  • Revenue continued to grow: second quarter revenues reached $1.415 billion, a 4.5% year-over-year increase, while revenue growth on an organic constant currency basis was 3.4%, showing expansion after adjusting for foreign exchange effects.

Negative

  • Liquidity metrics weakened: cash, cash equivalents and restricted cash were $794.3 million as of June 30, 2026, a 39.0% decrease from $1.301 billion at December 31, 2025, alongside $38.8 million of cash used in operating activities in the first six months of 2026.

Filing Explained

At June 30, 2026, EPAM reported 51,585 common shares outstanding versus 54,274 at December 31, 2025.

EPAM furnishes its second-quarter results in the August 6, 2026 Form 8-K under Item 2.02; the accompanying balance sheet reports 51,585 common shares issued and outstanding at June 30, 2026, versus 54,274 at December 31, 2025.

The report states that its information, including Exhibit 99.1, is not deemed filed for Section 18 purposes and is not incorporated by reference into another Exchange Act or Securities Act filing unless specifically referenced.

Accordingly, the repurchase disclosure records capital already spent, while the share figures are period-end issued-and-outstanding balances rather than future repurchase capacity.

Item 2.02 Results of Operations and Financial Condition Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01 Financial Statements and Exhibits Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Q2 2026 Revenue $1,414,767 (in thousands) Revenues for the three months ended June 30, 2026
Q2 2026 GAAP diluted EPS $1.97 Three months ended June 30, 2026; up 26.3% year-over-year
Q2 2026 non-GAAP diluted EPS $3.38 Three months ended June 30, 2026; up 22.0% year-over-year
Cash, cash equivalents and restricted cash $794.3 million As of June 30, 2026
Share repurchases H1 2026 $409.0 million Amount spent on share repurchases during the first six months of 2026
Q2 2026 GAAP operating margin 10.8% of revenues Income from operations as a percentage of revenues in Q2 2026
Total headcount approximately 62,850 Total employees as of June 30, 2026
2026 GAAP EPS guidance $8.22 to $8.38 Full-year 2026 projected GAAP diluted EPS range
organic constant currency basis financial
"Management also compares revenues on an “organic constant currency basis,” which is a non-GAAP financial measure"
A measurement of a company’s growth that shows results excluding the effects of recent acquisitions, disposals or one-time events (organic) and after removing the impact of currency swings (constant currency). Think of it as comparing the same business over time on a level playing field so investors can see whether underlying sales or profits are truly growing, rather than changing because of deals or foreign exchange moves.
non-GAAP income from operations financial
"Non-GAAP income from operations was $232.7 million, an increase of $29.8 million"
Non-GAAP income from operations is a measure of a company's profit from its core business activities, calculated without including certain expenses or income that are typically added back or excluded in standard accounting reports. It provides a clearer picture of how well the company's main operations are performing by removing items like one-time costs or gains that might distort the overall results. Investors use it to better understand the company's ongoing profitability, separate from unusual or non-recurring items.
Cost Optimization charges financial
"Cost Optimization charges include employee separation costs incurred in connection with the programs"
humanitarian support in Ukraine financial
"Humanitarian support in Ukraine includes expenses related to EPAM's $100 million humanitarian commitment"
weighted average diluted shares outstanding financial
"The Company now expects weighted average diluted shares outstanding for the year to be 52.2 million"
The weighted average diluted shares outstanding is the average number of common shares that would exist during a reporting period after adding in all potential shares from options, warrants, convertible debt or other instruments that could be turned into stock, with each added only for the portion of the period it applies. Investors use it to show how earnings per share could be reduced if promises to issue more shares are fulfilled, similar to estimating how a pizza is split if some extra people might join partway through a meal.
Revenue $1.415 billion up 4.5% year-over-year
GAAP diluted EPS $1.97 up $0.41, or 26.3%, year-over-year
Non-GAAP diluted EPS $3.38 up $0.61, or 22.0%, year-over-year
GAAP operating margin 10.8% of revenues increased from 9.3% of revenues in Q2 2025
Non-GAAP operating margin 16.4% of revenues increased from 15.0% of revenues in Q2 2025
Guidance

For full-year 2026, EPAM expects revenue growth of 3.2% to 4.2% and organic constant currency growth of 2.0% to 3.0%, GAAP operating margin of 10.5% to 11.0%, non-GAAP operating margin of 15.5% to 16.0%, GAAP EPS of $8.22 to $8.38, and non-GAAP EPS of $13.08 to $13.24. For Q3 2026, revenue is guided to $1.410 billion to $1.425 billion, with GAAP EPS of $2.33 to $2.41 and non-GAAP EPS of $3.38 to $3.46.

AI-generated analysis. How Rhea-AI works. Not financial advice.

See more from StockTitan in Google Search and AI answers. Adds StockTitan as a preferred source · opens Google
Add on Google
Understanding 8-K Material Events →

FAQ

How did EPAM (EPAM) perform financially in Q2 2026?
EPAM reported Q2 2026 revenue of $1.415 billion, up 4.5% year-over-year. GAAP diluted EPS was $1.97 and non-GAAP diluted EPS was $3.38, representing 26.3% and 22.0% year-over-year increases, respectively, compared to the second quarter of 2025.

What revenue growth guidance did EPAM (EPAM) give for full-year 2026?
For 2026, EPAM expects the year-over-year revenue growth rate to be 3.2% to 4.2%. On an organic constant currency basis, revenue growth is expected to be in the 2.0% to 3.0% range, reflecting guidance adjusted for acquisitions and foreign exchange impacts.

What EPS guidance did EPAM (EPAM) provide for 2026 and Q3 2026?
EPAM expects 2026 GAAP diluted EPS of $8.22 to $8.38 and non-GAAP diluted EPS of $13.08 to $13.24. For Q3 2026, GAAP diluted EPS guidance is $2.33 to $2.41, with non-GAAP diluted EPS guided to $3.38 to $3.46.

How strong was EPAM’s (EPAM) cash position and cash flow in 2026 year-to-date?
As of June 30, 2026, EPAM held $794.3 million in cash, cash equivalents and restricted cash. For the first six months of 2026, cash used in operating activities was $38.8 million, compared with cash provided by operating activities of $77.4 million in the same period of 2025.

How much stock did EPAM (EPAM) repurchase in 2026 so far?
During the first six months of 2026, EPAM spent $409.0 million on share repurchases under its program, including $85.0 million in the second quarter. These repurchases reduced diluted weighted average shares outstanding, which are expected to be 52.2 million for full-year 2026.

What operational margins did EPAM (EPAM) report for Q2 2026?
In Q2 2026, EPAM’s GAAP income from operations margin was 10.8% of revenues, compared with 9.3% a year earlier. Non-GAAP income from operations margin was 16.4%, up from 15.0%, reflecting higher profitability after adjusting for specified non-GAAP items.
0001352010false00013520102026-08-062026-08-06


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported):  August 6, 2026
EPAM SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware1-3541822-3536104
(State or other jurisdiction of incorporation)(Commission File Number)(IRS Employer Identification No.)
41 University DriveSuite 20218940
NewtownPennsylvania
(Address of principal executive offices)(Zip Code)

267-759-9000
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
  
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
  
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 

Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on which Registered
Common Stock, par value $0.001 per shareEPAMNew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02. Results of Operations and Financial Condition.
On August 6, 2026, EPAM Systems, Inc. (the “Company” or “EPAM”) issued a press release and an infographic discussing its results of operations for the second quarter ended June 30, 2026. A copy of the press release is attached as Exhibit 99.1 to this report and is incorporated by reference into this Item 2.02.
The information in this report, including Exhibit 99.1 attached hereto, is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise be subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, except as expressly stated by specific reference in such a filing. 
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits

99.1  Press release dated August 6, 2026, announcing results of operations of EPAM Systems, Inc. for the quarter ended June 30, 2026
101 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.
104 The cover page from this Current Report on Form 8-K, formatted as Inline XBRL.


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: August 6, 2026
By:/s/ Jason Peterson
Name:Jason Peterson
Title:Senior Vice President, Chief Financial Officer and Treasurer





Exhibit 99.1
logo_new.gif                
EPAM Reports Results for Second Quarter 2026
•Second quarter revenues of $1.415 billion, up 4.5% year-over-year
•Second quarter GAAP income from operations increased to 10.8% of revenues from 9.3%, and non-GAAP income from operations increased to 16.4% of revenues from 15.0%, on a year-over-year basis
•Second quarter GAAP diluted EPS of $1.97, an increase of $0.41, or 26.3%, and non-GAAP diluted EPS of $3.38, an increase of $0.61, or 22.0%, on a year-over-year basis
•Continued to return capital to shareholders, spending $85 million in the second quarter on share repurchases and $409 million since the beginning of the year
•For the full year, EPAM now expects the year-over-year revenue growth rate to be in the range of 3.2% to 4.2% and now expects the year-over-year revenue growth rate on an organic constant currency basis to be in the range of 2.0% to 3.0%
•For the full year, EPAM now expects its GAAP diluted EPS to be in the range of $8.22 to $8.38, and non-GAAP diluted EPS to be in the range of $13.08 to $13.24
Newtown, PA, USA — August 6, 2026 — EPAM Systems, Inc. (NYSE: EPAM), a leading digital and AI transformation company, today announced results for its second quarter ended June 30, 2026.
“Our second quarter results came in better than expected with continued AI-native momentum and ongoing profitability improvement, reflecting solid execution against our multi-year strategy,” said Balazs Fejes, CEO & President, EPAM. “As we continue to expand our strategic partnerships and leverage our 30+ years of engineering DNA to build the next generation forward-deployed engineering organization, our conviction in the strategy, the team and our commercial transformation is high.”
Second Quarter 2026 Highlights
•Revenues increased to $1.415 billion, a year-over-year increase of $61.3 million, or 4.5%. On an organic constant currency basis, revenues were up 3.4% compared to the second quarter of 2025;
•GAAP income from operations was $152.2 million, an increase of $25.7 million, or 20.4%, compared to $126.5 million in the second quarter of 2025;
•Non-GAAP income from operations was $232.7 million, an increase of $29.8 million, or 14.7%, compared to $202.9 million in the second quarter of 2025;
•Diluted earnings per share (“EPS”) on a GAAP basis was $1.97, an increase of $0.41, or 26.3%, compared to $1.56 in the second quarter of 2025; and
•Non-GAAP diluted EPS was $3.38, an increase of $0.61, or 22.0%, compared to $2.77 in the second quarter of 2025.


eoq_q2xinfographicx07x26xf.jpg




Cash Flow and Other Metrics
•Cash used in operating activities was $38.8 million for the first six months of 2026, compared to cash provided by operating activities of $77.4 million for the first six months of 2025;
•Cash, cash equivalents and restricted cash totaled $794.3 million as of June 30, 2026, a decrease of $507.1 million, or 39.0%, from $1.301 billion as of December 31, 2025;
•The Company spent $409.0 million on share repurchases during the first six months of 2026 under its share repurchase program, which included $85.0 million during the second quarter; and
•Total headcount was approximately 62,850 as of June 30, 2026. Included in this number were approximately 56,650 delivery professionals, an increase of 0.3% from March 31, 2026.


2026 Outlook - Full Year and Third Quarter
Full Year

EPAM expects the following for the full year:
•The Company now expects the year-over-year revenue growth rate to be in the range of 3.2% to 4.2% for 2026 and now expects the year-over-year revenue growth rate on an organic constant currency basis to be in the range of 2.0% to 3.0%;
•For the full year, EPAM now expects GAAP income from operations to be in the range of 10.5% to 11.0% of revenues and non-GAAP income from operations to be in the range of 15.5% to 16.0% of revenues;
•The Company continues to expect its GAAP effective tax rate to be approximately 27% and its non-GAAP effective tax rate to be approximately 24%; and
•EPAM now expects GAAP diluted EPS to be in the range of $8.22 to $8.38 and non-GAAP diluted EPS to be in the range of $13.08 to $13.24. The Company now expects weighted average diluted shares outstanding for the year to be 52.2 million.
Third Quarter
EPAM expects the following for the third quarter:
•The Company expects revenues will be in the range of $1.410 billion to $1.425 billion for the third quarter, reflecting year-over-year growth of 1.7% at the midpoint of the range. The Company expects the year-over-year revenue growth rate on an organic constant currency basis to be 1.8% at the midpoint of the range;
•For the third quarter, EPAM expects GAAP income from operations to be in the range of 11.0% to 12.0% of revenues and non-GAAP income from operations to be in the range of 15.5% to 16.5% of revenues;
•The Company expects its GAAP effective tax rate to be approximately 25% and its non-GAAP effective tax rate to be approximately 24%; and
•EPAM expects GAAP diluted EPS will be in the range of $2.33 to $2.41 for the quarter, and non-GAAP diluted EPS will be in the range of $3.38 to $3.46 for the quarter. The Company expects weighted average diluted shares outstanding for the quarter to be 51.4 million.




Conference Call Information
EPAM will host a conference call to discuss the results on Thursday, August 6, 2026, at 8:00 a.m. ET. The conference call will be available live on the EPAM website at https://investors.epam.com. Please visit the website at least 15 minutes prior to the call to register for the event. For those who cannot access the live webcast, a replay will be available in the Investor Relations section of the website.

About EPAM Systems
EPAM (NYSE:EPAM) is a global leader in AI transformation engineering and integrated consulting, serving Forbes Global 2000 companies and ambitious startups. With over thirty years of expertise in custom software, product and platform engineering, EPAM empowers organizations to become AI-Native enterprises, driving measurable value from innovation and digital investments. Recognized by industry benchmarks and leading analysts as a leader in AI, EPAM delivers globally while engaging locally, making the future real for clients, partners, and employees.
We are proud to be recognized by Forbes, Glassdoor, Newsweek, Time Magazine, Great Place to Work and kununu as a Most Loved Workplace around the world.
Learn more at www.epam.com and follow us on LinkedIn.




Non-GAAP Financial Measures
EPAM supplements results reported in accordance with United States generally accepted accounting principles, referred to as GAAP, with non-GAAP financial measures. Management believes these measures help illustrate underlying trends in EPAM’s business and uses the measures to establish budgets and operational goals, communicate internally and externally, for managing EPAM’s business and evaluating its performance. Management also believes these measures help investors compare EPAM’s operating performance with its results in prior periods. EPAM anticipates that it will continue to report both GAAP and certain non-GAAP financial measures in its financial results, including non-GAAP results that exclude stock-based compensation expenses, acquisition-related costs including amortization of acquired intangible assets, impairment of assets, expenses associated with EPAM's humanitarian commitment to its professionals in Ukraine, employee separation costs incurred in connection with restructuring programs, certain other one-time charges and benefits, changes in fair value of contingent consideration, foreign exchange gains and losses, excess tax benefits and tax shortfalls related to stock-based compensation, and the related effect on income taxes of the pre-tax adjustments. Management also compares revenues on an “organic constant currency basis,” which is a non-GAAP financial measure. This measure excludes the effect of acquisitions by removing revenues from an acquired company in the twelve months after completing an acquisition and foreign currency exchange rate fluctuations by translating current period revenues into U.S. dollars at the weighted average exchange rates of the prior period of comparison. Because EPAM’s reported non-GAAP financial measures are not calculated in accordance with GAAP, these measures are not comparable to GAAP and may not be comparable to similarly described non-GAAP measures reported by other companies within EPAM’s industry. Consequently, EPAM’s non-GAAP financial measures should not be evaluated in isolation or supplant comparable GAAP measures, but rather, should be considered together with the information in EPAM’s consolidated financial statements, which are prepared in accordance with GAAP.
Forward-Looking Statements
This press release includes estimates and statements which may constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the accuracy of which are necessarily subject to risks, uncertainties, and assumptions as to future events that may not prove to be accurate. Our estimates and forward-looking statements are mainly based on our current expectations and estimates of future events and trends, which affect or may affect our business and operations. These statements may include words such as “may,” “will,” “should,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate”or similar expressions. Those future events and trends may relate to, among other things, developments relating to the war in Ukraine and escalation of the war in the surrounding region, political and civil unrest or military action in the geographies where we conduct business and operate, difficult conditions in global capital markets, foreign exchange markets, global trade and the broader economy, the adoption and implementation of artificial intelligence technologies by EPAM and its clients, and the effect that these events may have on client demand and our revenues, operations, access to capital, and profitability. Other factors that could cause actual results to differ materially from those expressed or implied include general economic conditions, the risk factors discussed in the Company's most recent Annual Report on Form 10-K and the factors discussed in the Company's Quarterly Reports on Form 10-Q, particularly under the headings “Management's Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors”and other filings with the Securities and Exchange Commission. Although we believe that these estimates and forward-looking statements are based upon reasonable assumptions, they are subject to several risks and uncertainties and are made based on information currently available to us. EPAM undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities law.






Contact:
EPAM Systems, Inc.
Mike Rowshandel, Head of Investor Relations
Phone: +1-267-759-9000 x393336
Email: mike_rowshandel@epam.com





EPAM SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share data)
Three Months Ended
June 30,		Six Months Ended
June 30,
2026202520262025
Revenues$1,414,767 $1,353,443 $2,814,828 $2,655,135 
Operating expenses:
Cost of revenues (exclusive of depreciation and amortization)985,199 964,012 1,997,251 1,916,020 
Selling, general and administrative expenses245,245 231,681 484,947 450,598 
Depreciation and amortization expense32,101 31,274 63,640 62,711 
Income from operations152,222 126,476 268,990 225,806 
Interest and other income (loss), net(1,821)3,519 (239)9,333 
Foreign exchange loss(9,850)(6,227)(7,552)(16,954)
Income before provision for income taxes140,551 123,768 261,199 218,185 
Provision for income taxes37,572 35,742 75,699 56,677 
Net income$102,979 $88,026 $185,500 $161,508 
Net income per share:
Basic$1.97 $1.56 $3.50 $2.86 
Diluted$1.97 $1.56 $3.49 $2.84 
Shares used in calculation of net income per share:
Basic52,197 56,319 52,991 56,548 
Diluted52,267 56,536 53,220 56,898 



























EPAM SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except par value)
 
As of
June 30,
2026		As of
December 31,
2025
Assets
Current assets
Cash and cash equivalents
$789,397 $1,296,077 
Trade receivables and contract assets, net of allowance of $3,939 and $6,350, respectively
1,268,036 1,108,201 
Prepaid and other current assets158,556 129,610 
Total current assets
2,215,989 2,533,888 
Property and equipment, net204,967 202,387 
Operating lease right-of-use assets, net124,999 114,875 
Intangible assets, net372,969 406,586 
Goodwill1,203,048 1,210,564 
Deferred tax assets295,947 295,115 
Other noncurrent assets156,167 138,721 
Total assets
$4,574,086 $4,902,136 
Liabilities
Current liabilities
Accounts payable
$41,551 $55,329 
Accrued compensation and benefits expenses495,961 608,232 
Accrued expenses and other current liabilities208,531 250,688 
Income taxes payable, current19,093 25,520 
Operating lease liabilities, current39,301 37,173 
Total current liabilities
804,437 976,942 
Long-term debt25,000 25,034 
Operating lease liabilities, noncurrent87,942 81,497 
Deferred tax liabilities, noncurrent74,505 76,969 
Other noncurrent liabilities62,901 63,886 
Total liabilities
1,054,785 1,224,328 
Commitments and contingencies
Equity
Stockholders’ equity
Common stock, $0.001 par value; 160,000 shares authorized; 51,585 shares issued and outstanding at June 30, 2026, and 54,274 shares issued and outstanding at December 31, 202552 54 
Additional paid-in capital
1,487,973 1,390,423 
Retained earnings
2,035,664 2,268,204 
Accumulated other comprehensive income (loss)(4,970)18,545 
Total EPAM Systems, Inc. stockholders’ equity3,518,719 3,677,226 
Noncontrolling interest in consolidated subsidiaries582 582 
Total equity3,519,301 3,677,808 
Total liabilities and equity
$4,574,086 $4,902,136 



EPAM SYSTEMS, INC. AND SUBSIDIARIES
Reconciliations of Non-GAAP Financial Measures to Comparable GAAP Financial Measures
(Unaudited)
(In thousands, except percentages and per share amounts)


Reconciliation of year-over-year revenue growth as reported on a GAAP basis to revenue growth on an organic constant currency basis is presented in the table below:
Three Months Ended
June 30, 2026		Six Months Ended
June 30, 2026
Revenue growth as reported
4.5 %6.0 %
Inorganic revenue— %— %
Foreign exchange rates(1.1)%(2.5)%
Revenue growth on an organic constant currency basis
3.4 %3.5 %

Reconciliation of various income statement amounts from GAAP to non-GAAP for the three and six months ended June 30, 2026 and 2025:

Three Months Ended
June 30, 2026		Six Months Ended
June 30, 2026
GAAPAdjustmentsNon-GAAPGAAPAdjustmentsNon-GAAP
Cost of revenues (exclusive of depreciation and amortization)(1)
$985,199 $(23,361)$961,838 $1,997,251 $(46,771)$1,950,480 
Selling, general and administrative expenses(2)
$245,245 $(39,474)$205,771 $484,947 $(82,314)$402,633 
Income from operations(3)
$152,222 $80,444 $232,666 $268,990 $164,412 $433,402 
Operating margin
10.8 %5.6 %16.4 %9.6 %5.8 %15.4 %
Net income(4)
$102,979 $73,831 $176,810 $185,500 $146,535 $332,035 
Diluted earnings per share
$1.97 $3.38 $3.49 $6.24 

Three Months Ended
June 30, 2025		Six Months Ended
June 30, 2025
GAAPAdjustmentsNon-GAAPGAAPAdjustmentsNon-GAAP
Cost of revenues (exclusive of depreciation and amortization)(1)
$964,012 $(18,232)$945,780 $1,916,020 $(42,773)$1,873,247 
Selling, general and administrative expenses(2)
$231,681 $(40,349)$191,332 $450,598 $(74,572)$376,026 
Income from operations(3)
$126,476 $76,417 $202,893 $225,806 $152,837 $378,643 
Operating margin
9.3 %5.7 %15.0 %8.5 %5.8 %14.3 %
Net income(4)
$88,026 $68,765 $156,791 $161,508 $133,298 $294,806 
Diluted earnings per share
$1.56 $2.77 $2.84 $5.18 
Items (1) through (4) above are detailed in the table below with the specific cross-reference noted in the appropriate item.


Three Months Ended
June 30,		Six Months Ended
June 30,
2026202520262025
Stock-based compensation expenses$22,833 $18,161 $45,686 $42,084 
Humanitarian support in Ukraine(a)
528 576 1,085 1,194 
Poland R&D incentives (b)
— (505)— (505)
Total adjustments to GAAP cost of revenues(1)
23,361 18,232 46,771 42,773 
Stock-based compensation expenses
23,568 20,397 50,634 44,930 
Cost Optimization charges(c)
13,940 16,275 27,336 21,586 
Humanitarian support in Ukraine(a)
1,961 3,282 4,370 7,014 
Other acquisition-related expenses
1 292 7 862 
One-time charges (benefits)4 103 (33)180 
Total adjustments to GAAP selling, general and administrative expenses(2)
39,474 40,349 82,314 74,572 
Amortization of acquired intangible assets
17,609 17,836 35,327 35,492 
Total adjustments to GAAP income from operations(3)
80,444 76,417 164,412 152,837 
Foreign exchange loss9,850 6,227 7,552 16,954 
Change in fair value of contingent consideration included in Interest and other income, net
1,435 (232)2,420 (1,969)
Impairment of financial assets356 — 356 — 
Gain on financial instrument— — — (350)
Provision for income taxes:
Tax effect on non-GAAP adjustments
(19,997)(18,291)(39,128)(38,201)
Tax shortfall related to stock-based compensation
1,743 1,106 11,592 563 
Net discrete charge (benefit) from tax planning(d)
— 3,538 (669)3,464 
Total adjustments to GAAP net income(4)
$73,831 $68,765 $146,535 $133,298 
(a)Humanitarian support in Ukraine includes expenses related to EPAM's $100 million humanitarian commitment in response to Russia's invasion of Ukraine to support EPAM professionals and their families in and displaced from Ukraine. These expenses are incremental to those expenses incurred prior to the crisis, clearly separable from normal operations, and not expected to recur once the crisis has subsided and operations return to normal.
(b)We have excluded from non-GAAP results the portion of the benefit from Poland R&D incentives related to qualifying activities performed in 2023 as it represents a nonrecurring one-time benefit.
(c)Cost Optimization charges include employee separation costs incurred in connection with the programs initiated in the second quarter of 2024 and second quarter of 2025. Consistent with the Company's historical non-GAAP policy, costs incurred in connection with formal restructuring initiatives have been excluded from non-GAAP results as these are attributable to targeted restructuring efforts and not expected to recur once the respective Cost Optimization program is completed.
(d)Net discrete charge (benefit) related to the implementation of tax planning to disregard certain foreign subsidiaries as separate entities for U.S. income tax purposes. Consistent with the Company's historical non-GAAP policy, the charge (benefit) related to the implementation of tax planning has been excluded from non-GAAP results as it is one-time and unusual in nature.


EPAM SYSTEMS, INC. AND SUBSIDIARIES
Reconciliations of Guidance Non-GAAP Financial Measures to Comparable GAAP Financial Measures
(Unaudited)

The below guidance constitutes forward-looking statements within the meaning of the federal securities laws and is based on a number of assumptions that are subject to change and many of which are outside the control of the Company. Actual results may differ materially from the Company’s expectations depending on factors discussed in the Company’s filings with the Securities and Exchange Commission.
Reconciliation of expected year-over-year revenue growth on a GAAP basis to expected revenue growth on an organic constant currency basis is presented in the table below:
Third Quarter 2026Full Year 2026
(at midpoint of range)
Revenue growth
1.7 %3.2% to 4.2%
Foreign exchange rates impact
0.1 %(1.2)%
Inorganic revenue growth— %— %
Revenue growth on an organic constant currency basis
1.8 %2.0% to 3.0%
Reconciliation of expected GAAP to non-GAAP income from operations as a percentage of revenues is presented in the table below:
Third Quarter 2026Full Year 2026
GAAP income from operations as a percentage of revenues
11.0% to 12.0%10.5% to 11.0%
Stock-based compensation expenses
3.1 %3.2 %
Included in cost of revenues (exclusive of depreciation and amortization)
1.5 %1.5 %
Included in selling, general and administrative expenses
1.6 %1.7 %
Humanitarian support in Ukraine(a)
0.2 %0.2 %
Cost Optimization charges(c)
— %0.4 %
Amortization of acquired intangible assets
1.2 %1.2 %
Non-GAAP income from operations as a percentage of revenues(e)
15.5% to 16.5%15.5% to 16.0%
(e)EPAM has not included the impact of potential future one-time charges including asset impairments, unusual gains and losses, expenses incurred in connection with future cost optimization actions, and other acquisition-related expenses because the Company is unable to predict these amounts with reasonable certainty.
Reconciliation of expected GAAP to non-GAAP effective tax rate is presented in the table below:
Third Quarter 2026Full Year 2026
GAAP effective tax rate (approximately)
25.0 %27.0 %
Tax effect on non-GAAP adjustments(0.8)%(0.8)%
Tax shortfall related to stock-based compensation
(0.2)%(2.3)%
Net discrete benefit from tax planning(d)
— %0.1 %
Non-GAAP effective tax rate (approximately)
24.0 %24.0 %



Reconciliation of expected GAAP to non-GAAP diluted earnings per share is presented in the table below:
Third Quarter 2026Full Year 2026
GAAP diluted earnings per share
$2.33 to $2.41$8.22 to $8.38
Stock-based compensation expenses
0.85 3.55 
Included in cost of revenues (exclusive of depreciation and amortization)
0.39 1.66 
Included in selling, general and administrative expenses
0.46 1.89 
Humanitarian support in Ukraine(a)
0.05 0.20 
Cost Optimization charges(c)
— 0.52 
One-time charges(e)
0.02 0.03 
Amortization of acquired intangible assets
0.34 1.34 
Change in fair value of contingent consideration— 0.05 
Foreign exchange loss
0.06 0.22 
Provision for income taxes:
     Tax effect on non-GAAP adjustments
(0.28)(1.30)
     Tax shortfall related to stock-based compensation
0.01 0.26 
     Net discrete benefit from tax planning(d)
— (0.01)
Non-GAAP diluted earnings per share(e)
$3.38 to $3.46$13.08 to $13.24







Source: View Original Filing on SEC EDGAR

Filing Exhibits & Attachments

4 documents

Press Releases

Other Documents