Strong Revenue Growth Anchors Solid First Quarter for EPAM
EPAM Systems, a leader in digital and AI transformation, kicked off 2026 with a robust first quarter, reporting revenues of $1.4 billion—an increase of 7.6% year-over-year. Performance on an organic constant currency basis was also solid, with revenue up 3.7% versus Q1 2025. This growth reinforces EPAM’s ability to execute consistently even as macroeconomic conditions keep evolving.
| Metric | Q1 2026 | Q1 2025 | % Change |
|---|---|---|---|
| Revenue | $1,400 million | $1,302 million | +7.6% |
| GAAP Diluted EPS | $1.52 | $1.28 | +18.8% |
| Non-GAAP Diluted EPS | $2.86 | $2.41 | +18.7% |
| GAAP Operating Income | $116.8 million | $99.3 million | +17.6% |
| GAAP Operating Margin | 8.3% | 7.6% | +0.7 pts |
| Share Repurchases | $324 million (Q1 2026) | ||
Profit Margins and EPS Show Notable Yearly Expansion
Profitability grew in tandem with revenue. GAAP diluted earnings per share climbed 18.8% to $1.52, while non-GAAP diluted earnings per share increased 18.7% to $2.86. Operating margin expanded to 8.3% (up 0.7 points), reflecting ongoing efficiency and the firm’s successful cost optimization efforts. Non-GAAP operating margin was 14.3% in Q1, up from 13.5% the prior year, underlining steady margin progress.
Shareholder Returns and Strategic Cash Deployment Stand Out
Another highlight from the quarter was EPAM’s capital return program. The company spent $324 million on share repurchases in Q1, including a $300 million accelerated share repurchase. This represents aggressive shareholder capital return even as the company makes significant investments in transformation and technology initiatives.
Outlook Raised: Revenue Growth and Enhanced EPS Expectations for 2026
Looking ahead, EPAM has upgraded its outlook for the full year. The company now expects:
- Revenue growth of 4.0% to 6.5% over 2025 levels (2.5% to 5.0% on an organic constant currency basis)
- GAAP diluted EPS of $8.29 to $8.59 and non-GAAP diluted EPS of $12.98 to $13.28
- Continued strong operating margins: GAAP at 10%–11%, Non-GAAP at 15%–16%
| Guidance (2026) | GAAP | Non-GAAP |
|---|---|---|
| Diluted EPS | $8.29–$8.59 | $12.98–$13.28 |
| Operating Margin | 10%–11% | 15%–16% |
| Effective Tax Rate | 27% | 24% |
Strategic AI Investments Drive Growth Potential
Management pointed to ongoing momentum in AI-native and AI foundational readiness initiatives, suggesting a multi-year transformation that should keep EPAM well-positioned as client demand for AI and automation accelerates. With over 62,000 professionals—more than 56,500 in delivery roles—the company remains focused on leveraging its deep expertise to help clients become AI-native enterprises.
Key Takeaways: Solid Foundation for Continued Progress
EPAM’s first quarter results highlight a clear pathway for sustained growth. Profit margins are expanding, capital deployment is robust, and management’s upgraded outlook speaks to confidence in AI-driven opportunities. Investors should watch upcoming quarters for execution on new AI-related projects and further progress in margin expansion and capital returns.
Investor Note: Upcoming Conference Call
EPAM will discuss these results and additional details in a conference call today at 8:00 a.m. ET, accessible via the company's investor relations site.
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