EPAM Systems EPAM reported fourth-quarter 2024 non-GAAP earnings of $2.84 per share, which beat the Zacks Consensus Estimate by 3.3%. The bottom line increased from the year-ago quarter’s earnings of $2.75 per share.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
EPAM’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 8.32%.
The company's fourth-quarter revenues of $1.25 billion surpassed the consensus mark by 3.3%.
EPAM’s top line rose 7.9% year over year, demonstrating an improvement across its business segments, primarily benefiting from its latest technological innovations enabled by Gen AI.
Despite the stronger-than-expected top and bottom-line results, EPAM released an underwhelming earnings guidance for the first quarter and full-year 2025, which couldn’t surpass the Zacks Consensus Estimate. Shares of EPAM have lost 24.7% in the past year and the weak guidance is unlikely to boost the stock price.
EPAM Systems, Inc. Price, Consensus and EPS Surprise
EPAM Systems, Inc. price-consensus-eps-surprise-chart | EPAM Systems, Inc. Quote
EPAM’s Q4 Details
EPAM’s year-over-year top-line growth was driven by the performances across its industry verticals, such as Financial Services, Software & Hi-Tech, Life Sciences and Emerging, partially offset by softness in Business Info and Travel & Consumer.
Revenues from Financial Services (22.5% of total revenues) were $280.9 million, up 15.9% year over year.
Fourth-quarter revenues from Consumer Goods, Travel and Retail (20.1% of total revenues) were $250.6 million, down 3% year over year.
Revenues from Software and Hi-Tech (14.6% of total revenues) in the fourth quarter were $182 million, up 2.1% year over year.
Life Science and Health revenues (12.2% of total revenues) were $142 million, up 7.7% year over year.
Revenues from Business Info and Media (13.7% of total revenues) were $171.1 million, down 3.9% year over year.
Emerging revenues (16.9% of total revenues) were $211.8 million, up 24.8% year over year.
EPAM’s non-GAAP gross profit increased 5.3% year over year to $402.1 million while the gross margin contracted 80 basis points (bps) to 32.2%.
The non-GAAP operating income witnessed 3.9% year-over-year growth to $208.2 million. The non-GAAP operating margin contracted 60 bps to 16.7%.
EPAM’s Balance Sheet & Cash Flow
As of Dec. 31, 2024, EPAM had cash, cash equivalents and restricted cash of $1.29 billion, lower than $2.04 billion as of Sept. 30, 2024
Long-term debt was $25.2 million as of Dec. 31, slightly lower than $25.3 million as of Sept. 30.
Cash flow from operations was $130.3 million while free cash flow was $114.5 million. Cash provided by operating activities was $559.2 million for the 12 months of 2024.
EPAM Initiates Q1 and FY25 Guidance
For the first quarter, EPAM expects revenues to be in the band of $1.275 - $1.29 billion, indicating year-over-year growth of 10% at the midpoint.
The Zacks Consensus Estimate for first-quarter revenues is pegged at $1.27 billion, indicating year-over-year growth of 8.75%.
Non-GAAP operating margin is anticipated to be in the range of 12.5- 13.5% of revenues. Non-GAAP earnings are expected between $2.22 and $2.32 per share for the first quarter.
The Zacks Consensus Estimate for earnings is pegged at $2.57 per share, indicating a year-over-year increase of 4.5%.
EPAM initiated its guidance for full-year 2025. It expects revenues to grow in the range of 10.0-14.0%.
The Zacks Consensus Estimate for revenues is pegged at $4.69 billion, indicating year-over-year growth of 0.04%.
Non-GAAP operating margin is expected to be in the range of 14.5-15.5% of revenues. Non-GAAP earnings are now expected to be between $10.45 and $10.75 per share.
The Zacks Consensus Estimate for earnings is pegged at $10.78 per share, indicating year-over-year growth of 1.8%.
Zacks Rank and Stocks to Consider
Currently, EPAM carries a Zacks Rank #3 (Hold).
Celestica CLS, Arista Networks ANET and Pitney Bowes PBI are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. CLS and PBI sport a Zacks Rank #1 (Strong Buy) each while ANET carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CLS’ 2025 earnings has been revised 31 cents upward to $5.67 per share over the past 30 days, indicating a 6.78% year-over-year increase. CLS shares have risen 251.2% in the past year.
The consensus mark for ANET’s 2025 earnings has been revised upward by a penny to $2.42 per share over the past 60 days, indicating a 6.6% year-over-year increase. ANET shares have gained 60.2% in the past year.
The consensus estimate for PBI’s 2025 earnings has been revised nine cents downward to $1.21 per share over the past seven days, indicating a 47.6% year-over-year decline. PBI shares have gained 172.8% in the past year.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
