EPAM Systems reported higher revenue, operating margins and earnings per share for the third quarter, and raised its planned returns to shareholders. The digital and AI services company also increased its share-repurchase authorization and committed to returning at least half of its free cash flow to shareholders annually from 2027 through 2029.
The results cover the three months ended September 30, 2026. EPAM also updated its full-year revenue and earnings outlook.
Key details
- Revenue reached $1.426 billion, up $32.1 million, or 2.3%, from a year earlier. On an organic constant-currency basis, revenue grew 2.5%.
- Operating profitability improved. GAAP operating income rose 21.4% to $175.9 million, equal to 12.3% of revenue versus 10.4% a year earlier. Non-GAAP operating income increased 7.0% to $238.4 million, with the margin rising to 16.7% from 16.0%.
- Earnings per share increased. GAAP diluted EPS was $2.53, up 32.5% from $1.91. Non-GAAP diluted EPS was $3.51, up 14.0% from $3.08.
- The company expanded its buyback capacity. Its board approved a repurchase authorization of up to $1.8 billion, replacing the prior $1 billion authorization. EPAM said the increase was $1.5 billion and that total remaining authorization is now $1.8 billion.
- EPAM plans a $500 million accelerated share repurchase, which it said it expects to enter into the following week.
- The company set a shareholder-return commitment for 2027–2029: it intends to return at least 50% of free cash flow to shareholders each year during that period.
- Full-year revenue guidance is now 3.5% to 3.7% year-over-year growth, including 2.5% to 2.7% growth on an organic constant-currency basis.
- Full-year diluted EPS guidance is $8.41 to $8.49 on a GAAP basis and $13.23 to $13.31 on a non-GAAP basis.
The quarter showed modest revenue growth alongside higher operating margins and earnings. The larger repurchase authorization, planned accelerated buyback and multi-year free-cash-flow commitment set out a more substantial, defined capital-return plan.