Shares of EPAM Systems (NYSE: EPAM) crashed in pre-market trading at the time of publishing on Monday after the software engineering services company lowered its outlook for the second quarter and FY23.
The company now expects its Q2 revenues to be in the range of $1.160 billion to $1.170 billion, reflecting a year-over-year decline of 2.5% at the midpoint of the range, below analysts’ forecasts of $1.2 billion. Adjusted diluted EPS is projected to be between $2.33 and $2.40 per share while analysts had anticipated earnings of $2.43 per share.
In FY23, EPAM now expects revenues in the range of $4.650 billion to $4.800 billion, indicating a decline of 2% year-over-year. Adjusted earnings are projected to be between $9.80 and $10.20 per share.
Arkadiy Dobkin, CEO & President, EPAM commented on the lowered forecast, “In the weeks since our Q1 earnings call, we have seen our clients become even more cautious with spending specifically in the ‘build’ segment of the global IT services market. After careful assessment of changes in our May and June forecast data, we have come to understand that pipeline conversions are occurring at slower rates than previously assumed and we are also seeing some reduction in the total pipeline.”
In Q1, the company posted revenues of $1.21 billion, up by 3.4% year-over-year while adjusted earnings came in at $2.47 per share.
Analysts, however, are bullish about EPAM stock with a Strong Buy consensus rating based on nine Buys and one Hold.
