On August 8, 2024, EPAM Systems Inc (EPAM, Financial) released its 8-K filing for the second quarter of 2024. EPAM Systems is a global IT services firm that offers platform engineering, software development, and consulting services. EPAM's largest market is North America, which represents approximately 60% of revenues. Offerings span assisting companies with new technologies, such as artificial intelligence, virtual reality, and robotics.
Performance and Challenges
EPAM Systems Inc (EPAM, Financial) reported second-quarter revenues of $1.147 billion, a 2.0% year-over-year decrease. The company faced a challenging macro-demand environment, which impacted its revenue performance. Despite these challenges, EPAM's ability to adapt and optimize operations was evident.
GAAP income from operations was $120.6 million, a 16.5% decrease compared to the same period last year. Non-GAAP income from operations also saw a decline, down 8.5% year-over-year to $174.5 million. These declines highlight the ongoing challenges EPAM faces in the current economic climate.
Financial Achievements
Despite the revenue decline, EPAM Systems Inc (EPAM, Financial) achieved a GAAP diluted EPS of $1.70, surpassing the analyst estimate of $1.58. Non-GAAP diluted EPS was $2.45, also exceeding expectations. These achievements are significant as they demonstrate the company's resilience and ability to maintain profitability in a tough market.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Revenues | $1.147 billion | $1.170 billion |
| GAAP Income from Operations | $120.6 million | $144.3 million |
| Non-GAAP Income from Operations | $174.5 million | $190.8 million |
| GAAP Diluted EPS | $1.70 | $2.03 |
| Non-GAAP Diluted EPS | $2.45 | $2.64 |
Balance Sheet and Cash Flow
EPAM Systems Inc (EPAM, Financial) reported cash, cash equivalents, and restricted cash totaling $1.792 billion as of June 30, 2024, a decrease of $251.5 million from December 31, 2023. This decrease was largely driven by share repurchases. Cash provided by operating activities was $186.9 million for the first six months of 2024, compared to $176.4 million for the same period in 2023.
Share Repurchase Program
During the second quarter of 2024, EPAM repurchased 1.160 million shares of its common stock for $214.5 million. The Board of Directors approved a new share repurchase program on August 1, 2024, authorizing the purchase of up to $500 million of EPAM common stock.
Outlook
For the full year, EPAM Systems Inc (EPAM, Financial) narrowed its expected revenue range to $4.590 billion to $4.625 billion and updated its expected GAAP diluted EPS to be in the range of $7.18 to $7.38. Non-GAAP diluted EPS is expected to be in the range of $10.20 to $10.40. For the third quarter, EPAM expects revenues to be in the range of $1.145 billion to $1.155 billion, with GAAP diluted EPS between $1.75 and $1.83, and non-GAAP diluted EPS between $2.65 and $2.73.
"With ongoing exposure to a challenging macro-demand environment, EPAM’s solid performance highlights the Company’s ability to adapt and optimize operations, while continuing to strengthen its offerings and client value propositions," said Arkadiy Dobkin, CEO & President at EPAM.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from EPAM Systems Inc for further details.
