NEWTOWN, PA — EPAM Systems, Inc. (NYSE: EPAM) posted a 26% increase in second-quarter earnings per share and wider operating margins as revenue grew 4.5%, while the technology-services company set full-year revenue growth expectations at 3.2% to 4.2%.
Revenue rose to $1.415 billion from about $1.354 billion a year earlier, an increase of $61.3 million. Organic revenue at constant currency increased 3.4%.
GAAP income from operations climbed 20.4% to $152.2 million from $126.5 million. Operating margin expanded to 10.8% of revenue from 9.3%.
Adjusted operating income increased 14.7% to $232.7 million from $202.9 million, with adjusted operating margin rising to 16.4% from 15%.
Diluted GAAP earnings increased 26.3% to $1.97 per share from $1.56. Adjusted diluted earnings rose 22% to $3.38 per share from $2.77.
Chief Executive Officer and President Balazs Fejes characterized the quarter as better than EPAM had expected, citing profitability improvement and momentum in its artificial intelligence-related business.
“Our second quarter results came in better than expected with continued AI-native momentum and ongoing profitability improvement,” Fejes stated.
For 2026, EPAM now expects revenue to increase 3.2% to 4.2%, including organic constant-currency growth of 2% to 3%.
The company projects a full-year GAAP operating margin of 10.5% to 11% and an adjusted operating margin of 15.5% to 16%. GAAP diluted earnings are expected to range from $8.22 to $8.38 per share, with adjusted earnings of $13.08 to $13.24.
For the third quarter, EPAM expects revenue of $1.410 billion to $1.425 billion, representing year-over-year growth of about 1.7% at the midpoint. Organic constant-currency growth is projected at 1.8% at the midpoint.
Third-quarter GAAP diluted earnings are forecast at $2.33 to $2.41 per share, while adjusted earnings are expected to range from $3.38 to $3.46. EPAM projects GAAP operating margin of 11% to 12% and adjusted operating margin of 15.5% to 16.5%.
The earnings growth came alongside weaker cash-flow metrics during the first half. EPAM used $38.8 million in operating cash during the six months ended June 30, compared with $77.4 million generated during the same period last year.
Cash, cash equivalents and restricted cash fell to $794.3 million at June 30 from $1.301 billion at the end of 2025, a decline of $507.1 million, or 39%.
EPAM returned $409 million to shareholders through stock repurchases during the first half, including $85 million in the second quarter.
The company had approximately 62,850 employees at quarter-end, including about 56,650 delivery professionals. Delivery headcount increased 0.3% from March 31.
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