EPAMMEDIUM SIGNALFINANCIAL10-K

EPAM shows strong revenue growth of 25% but concerning profitability decline with net income dropping 16.9% despite higher operating cash flows.

The disconnect between strong revenue growth and declining net income suggests margin compression, possibly from increased competition or higher costs in their AI transformation focus. The significant increase in share buybacks to $662M indicates management's confidence in the business despite profitability headwinds.

Comparing 2026-02-26 vs 2025-02-28View on EDGAR →
FINANCIAL ANALYSIS

EPAM delivered strong top-line growth with revenue increasing 25% to $1.5B and operating cash flow up 17% to $655M, demonstrating solid business momentum. However, net income declined 16.9% to $378M while SG&A expenses grew 13.8%, indicating margin pressure despite revenue gains. The company significantly increased share buybacks by 66% to $662M and reduced outstanding shares from 57M to 54M, suggesting management is aggressively returning capital to shareholders while investing more in operations with capex up 31%.

FINANCIAL STATEMENT CHANGES
Share Buybacks
Cash Flow
+66.4%
$398.0M→$662.2M

Share repurchases increased 66.4% — management returning capital, signals confidence in intrinsic value.

Capital Expenditure
Cash Flow
+31.4%
$32.1M→$42.2M

Capital expenditure jumped 31.4% — major investment cycle underway; assess returns on deployment.

Revenue
P&L
+25%
$1.2B→$1.5B

Revenue growing 25% — solid top-line momentum, watch margins for quality of growth.

Current Liabilities
Balance Sheet
+19%
$821.0M→$976.9M

Current liabilities rose 19% — increased short-term obligations, watch current ratio.

Operating Cash Flow
Cash Flow
+17.1%
$559.2M→$654.9M

Operating cash flow grew 17.1% — strong conversion of earnings to cash, healthy business fundamentals.

Net Income
P&L
-16.9%
$454.5M→$377.7M

Net income declined 16.9% — review whether driven by operations, interest costs, or non-recurring items.

SG&A Expense
P&L
+13.8%
$816.3M→$928.7M

SG&A increased modestly — likely reflects growth-related hiring or sales expansion investment.

Accounts Receivable
Balance Sheet
+12.1%
$265.6M→$297.7M

Receivables grew 12.1% — monitor days sales outstanding for collection efficiency.

LANGUAGE CHANGES
NEW — 2026-02-26
PRIOR — 2025-02-28
ADDED
As of February 10, 2026, there were 54,139,969 shares of common stock outstanding.
EPAM , EPAM E-Kids , EPAM AI/RUN , DIALX Lab , and the EPAM logo are trademarks of EPAM Systems, Inc.
Those future events and trends may relate to, among other things, developments relating to the war in Ukraine and escalation of the war in the surrounding region, political and civil unrest or military action in the geographies where we conduct business and operate, difficult conditions in global capital markets, foreign exchange markets, global trade and the broader economy, the adoption and implementation of artificial intelligence technologies by EPAM and its clients, and the effect that these events may have on client demand, our revenues, operations, access to capital and profitability.
Our strategy is increasingly focused on providing end-to-end AI-native transformations, which require deep expertise across all of our service lines.
We use our experience, custom tools and specialized knowledge to integrate our clients chosen strategy and create custom solutions to architect the right outcomes with built-in quality and security gates, and to accomplish the best results from digital modernization efforts.
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REMOVED
Solely for purposes of the foregoing calculation, affiliates are deemed to consist of each officer and director of the registrant, and each person known to the registrant to own 10% or more of the outstanding voting power of the registrant.
As of February 10, 2025, there were 56,888,128 shares of common stock outstanding.
Those future events and trends may relate to, among other things, developments relating to the war in Ukraine and escalation of the war in the surrounding region, political and civil unrest or military action in the geographies where we conduct business and operate, difficult conditions in global capital markets, foreign exchange markets and the broader economy, and the effect that these events may have on client demand, our revenues, operations, access to capital and profitability.
We use our experience, custom tools and specialized knowledge to integrate our clients chosen strategy and create custom solutions in order to architect the right solutions with built-in quality and security gates and accomplish the best outcome from the digital modernization efforts.
We assist our clients in creating a roadmap to set and refine their IT and business goals while identifying new and emerging cloud opportunities.
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