EPAM Systems Inc (EPAM, Financial), a leading digital transformation services and product engineering company, released its earnings report for the third quarter ended September 30, 2023, on November 2, 2023. The company reported a decrease in revenues and earnings per share (EPS) compared to the same period last year.
Financial Highlights
EPAM reported third-quarter revenues of $1.152 billion, a decrease of 6.1% year-over-year. GAAP Income from Operations was 9.9% of revenues, and Non-GAAP Income from Operations was 17.0% of revenues for the third quarter. The company's GAAP Diluted EPS was $1.65, a decrease of $0.98, and Non-GAAP Diluted EPS was $2.73, a decrease of $0.37 on a year-over-year basis.
The company initiated a Cost Optimization Program in the third quarter, which is expected to deliver over $100 million in annualized savings and reduce Company operating costs by 2.5-3.0%. For the full year, EPAM has narrowed its expected revenues to be in the range of $4.663 billion to $4.673 billion and its expected GAAP Diluted EPS to be in the range of $7.07 to $7.15. The company has increased its expected Non-GAAP Diluted EPS to now be in the range of $10.31 to $10.39.
Company's Performance and Outlook
EPAM's CEO & President, Arkadiy Dobkin, stated,
While we navigate through a challenging market landscape, we have observed indications of stability and growth in some parts of our business, which partially offsets the negative impacts in other parts of our portfolio."He attributed the solid third-quarter results to enhanced efforts in driving key client engagements, investment in strategic solution capabilities, and go-to-market partnerships.
For the fourth quarter, EPAM expects revenues to be in the range of $1.130 billion to $1.140 billion, GAAP Diluted EPS to be in the range of $1.67 to $1.75, and Non-GAAP Diluted EPS to be in the range of $2.47 to $2.55.
Financial Tables Summary
The company's cash provided by operating activities was $391.3 million for the first nine months of 2023, compared to $278.0 million for the first nine months of 2022. Cash, cash equivalents, and restricted cash totaled $1.880 billion as of September 30, 2023, an increase of 11.7% from $1.684 billion as of December 31, 2022.
EPAM's total headcount was approximately 54,600 as of September 30, 2023. Included in this number were approximately 48,500 delivery professionals, a decrease of 1.7% from June 30, 2023.
Explore the complete 8-K earnings release (here) from EPAM Systems Inc for further details.
