EPAM Narrows Full-Year Growth Outlook After Slowing Sales

The Tip Desk · November 7, 2026 · 3 min read

Third-quarter revenue was $1.426 billion, up 2.3% year over year, as the company lifted full-year EPS ranges and expanded GAAP operating margin to 12.3% of sales.

EPAM Systems (EPAM), a digital and AI transformation company, reported third-quarter revenue of $1.426 billion, up 2.3% from a year earlier, as year-over-year growth slowed from 4.5% in the second quarter and 7.6% in the first.

On an organic constant-currency basis, revenue rose 2.5%, after 3.4% in the second quarter. The company said it delivered better-than-expected results, continued margin expansion, and momentum in AI-native work, and that it launched Frontier AI Services and scaled strategic partnerships and a forward-deployed engineering network.

GAAP income from operations was $175.9 million, or 12.3% of revenue, compared with 10.4% a year earlier. Non-GAAP income from operations was $238.4 million, or 16.7% of revenue, versus 16.0% a year earlier. GAAP diluted earnings were $2.53 a share, up 32.5% from $1.91. Non-GAAP diluted earnings were $3.51 a share, up 14.0% from $3.08.

Cash provided by operating activities was $288.8 million in the three months ended September 30, 2026. Cash, cash equivalents and restricted cash totaled $969.9 million at quarter-end, down from $1.301 billion at December 31, 2025. Total headcount was about 63,650, including about 57,350 delivery professionals, up 1.2% from June 30.

The board increased share-repurchase authorization by $1.5 billion, bringing remaining authorization to $1.8 billion through December 31, 2029, after terminating a prior program with $293 million remaining. EPAM said it expects to enter a $500 million accelerated share repurchase during the week of November 9, 2026, funded with cash on hand and borrowings under its existing credit facility. The company said it is committed to returning at least 50% of free cash flow to shareholders annually from 2027 through 2029. It spent about $489 million on repurchases in the first nine months of 2026, including about $80 million in the third quarter, and has returned about $1.7 billion since starting repurchase programs in 2023.

For the full year, EPAM now expects year-over-year revenue growth of 3.5% to 3.7% and organic constant-currency growth of 2.5% to 2.7%, narrowing and lowering the 3.2% to 4.2% and 2.0% to 3.0% ranges it issued after the second quarter. It now expects GAAP diluted EPS of $8.41 to $8.49 and non-GAAP diluted EPS of $13.23 to $13.31, versus prior ranges of $8.22 to $8.38 and $13.08 to $13.24. Full-year GAAP operating margin is expected at 10.7% to 10.9% of revenue and non-GAAP operating margin at 15.9% to 16.1%. Weighted average diluted shares outstanding for the year are now expected at 52.0 million.

For the fourth quarter, EPAM expects revenue of $1.405 billion to $1.420 billion, a year-over-year change of (0.2)% to 0.9%, or 0.5% to 1.6% on an organic constant-currency basis. Fourth-quarter GAAP diluted EPS is expected at $2.43 to $2.51 and non-GAAP diluted EPS at $3.50 to $3.58, with weighted average diluted shares of 49.9 million.