Epam Systems (EPAM) Q3 2026 Earnings Report
MX:EPAM Q3 2026 EPS Results
- Actual EPS
- MXN 65.73
- Consensus EPS
- MXN 63.78
- Beat/Miss
- Beat by +MXN 1.95
- One Year Ago EPS
- MXN 57.68
MX:EPAM Q3 2026 Revenue Results
- Actual Revenue
- MXN 26.78B
- Expected Revenue
- MXN 26.58B
- Beat/Miss
- Beat by +MXN 200.81M
- YoY Revenue Growth
- +2.56%
Earnings Announcement Details
- Quarter
- Q3 2026
- Date
- 11/05/2026
- Time
- Before Open
- Conference Call
- Thursday, November 5, 2026
Epam Systems's next earnings date is estimated for February 18, 2027, based on past reporting schedules.
Q3 2026 Earnings Call Audio
Q3 2026 Earnings Slide Deck
Q3 2026 Earnings Call Summary
The call was broadly positive: Q3 revenue, profitability, EPS, AI-native revenue, strategic deal wins, partnerships, and shareholder returns all exceeded or improved against expectations. However, the company continues to face weak North American performance, declines in several non-AI and cyclical verticals, Q4 growth deceleration, macroeconomic volatility, and a stated expectation that double-digit growth will not return in 2027. The number and strength of the highlights significantly outweighed the lowlights.
EPAM expects at least $650 million in AI-native revenues in 2026, compared with its original target of $600 million, and full-year 2026 revenue growth in the range of 3.5%-3.7%, with foreign exchange expected to have a positive impact of approximately 1% and organic constant currency growth in the range of 2.5%-2.7%; GAAP income from operations is expected in the range of 10.7%-10.9%, non-GAAP income from operations in the range of 15.9%-16.1%, GAAP effective tax rate at 27%, non-GAAP effective tax rate at 24%, GAAP diluted EPS in the range of $8.41-$8.49, non-GAAP diluted EPS in the range of $13.23-$13.31, and weighted average share count of 52 million fully diluted shares outstanding. Q4 revenue is expected in the range of $1.405 billion-$1.420 billion, with year-over-year growth in the range of -0.2% to positive 0.9%, approximately 0.7% negative foreign exchange impact, organic constant currency growth positive and in the range of 0.5%-1.6%, GAAP income from operations in the range of 11.5%-12.5%, non-GAAP income from operations in the range of 16%-17%, GAAP effective tax rate approximately 26%, non-GAAP effective tax rate approximately 24%, GAAP diluted EPS in the range of $2.43-$2.51, non-GAAP diluted EPS in the range of $3.50-$3.58, and weighted average share count of 49.9 million diluted shares outstanding; free cash flow conversion rate is forecasted to be above 100%. For 2027, non-GAAP income from operations is currently expected to operate in the 15%-16% range, with large deals ramping in Q1 and greater contributions in Q2, while the company is not expecting a further increase in gross margin and may operate at modestly lower levels of gross margin.
- Q3 Revenue and Profitability Outperformed ExpectationsQ3 revenue was $1.426 billion, up 2.3% year-over-year and 2.5% on an organic constant currency basis, exceeding the high end of the outlook range. GAAP income from operations grew 21.4% year-over-year to $176 million, while non-GAAP income from operations grew 7% to $238 million.
- Strong EPS GrowthGAAP diluted EPS increased 32.5% year-over-year to $2.53 from $1.91, while non-GAAP diluted EPS increased 14% to $3.51 from $3.08.
- AI-Native Revenue MomentumAI-native revenue exceeded $185 million in Q3, representing approximately 13% of total revenue versus approximately 11% in the prior quarter and delivering sequential double-digit growth. EPAM raised its 2026 AI-native revenue expectation to at least $650 million from its original $600 million target.
- Gross Margin ImprovementGAAP gross margin improved to 31.3% from 29.5% year-over-year, while non-GAAP gross margin increased to 32.8% from 31.0%. Management attributed the improvement to pricing gains, better fixed-fee profitability, improved efficiency in India, and higher-margin AI-native revenue.
- Financial Services and Healthcare Led Vertical GrowthFinancial services revenue grew 13.7% year-over-year, driven by insurance and asset management clients. Life sciences and healthcare revenue increased 9.9%, primarily driven by life sciences and medical technology clients.
- EMEA Remained the Geographic Growth LeaderEMEA revenue increased 5.8% year-over-year, or middle single digits, despite foreign exchange headwinds. Growth was supported by financial services, life sciences and healthcare, and energy.
- Large Strategic Deal WinsEPAM signed three large, multi-year strategic deals during the quarter in financial services and energy. The deals are expected to begin ramping in 2027, with greater contributions expected in Q2 2027. The broader pipeline contains more than 10 deals, generally ranging from high tens of millions of dollars to more than $100 million in total contract value.
- Strategic Partnership Certification ProgressEPAM earned more than 25,000 certifications in six months across Anthropic, OpenAI, Google Gemini Enterprise, and Microsoft. Certifications included more than 8,300 Claude architects, more than 5,800 OpenAI forward-deployed engineers, more than 8,700 Google Gemini Enterprise specialists, and more than 2,800 Microsoft Frontier-certified engineers. EPAM also has more than 1,100 AWS-certified AI practitioners and professionals.
- Growing AI Partnership Opportunity PipelineEPAM is tracking more than 200 opportunities across its AI-native partner cohort, including vertical use cases, domain-specific opportunities, and horizontal specializations such as cybersecurity and cyber resilience.
- Launch of Frontier AI ServiceEPAM launched its Frontier AI Service in October to help enterprises and frontier labs with high-fidelity data generation, evaluation, reinforcement learning, and benchmarking. Management said the service and related partnerships are beginning to generate new opportunities.
- Cybersecurity and AI-Native Remediation DemandEPAM reported significant demand for AI-native cybersecurity advisory, assessment, architecture, and remediation services. Management said clients are reallocating budgets to address hundreds, thousands, or tens of thousands of vulnerabilities and expects cyber remediation to become a major revenue source going forward.
- Delivery Capacity ExpandedDelivery professionals increased by approximately 700 sequentially to more than 57,350, up 2.2% year-over-year. Total headcount reached approximately 63,650 employees, and management expects net delivery headcount to grow faster in Q4 to support anticipated demand.
- Capital Return Commitment IncreasedEPAM plans to enter into a $500 million accelerated share repurchase agreement and committed to returning at least 50% of free cash flow to shareholders annually in 2027, 2028, and 2029. The board approved an $1.8 billion repurchase authorization through December 31, 2029, adding $1.5 billion of capacity. Since initiating its first repurchase program, EPAM has returned approximately $1.7 billion to shareholders.
- Improved Working Capital and Share RepurchasesDays sales outstanding improved to 78 days from 82 days in Q2 2026. EPAM repurchased approximately 700,000 shares for $80 million during Q3 at an average price of $113.06 per share.
- 2026 Full-Year Outlook IncreasedFull-year revenue growth is now expected to be 3.5%-3.7%, with organic constant currency growth of 2.5%-2.7%. GAAP operating margin is expected to be 10.7%-10.9%, non-GAAP operating margin 15.9%-16.1%, GAAP diluted EPS $8.41-$8.49, and non-GAAP diluted EPS $13.23-$13.31.
- Positive Q4 Cash Flow ExpectationsManagement expects strong free cash flow in Q4, with the free cash flow conversion rate forecasted to be above 100%.
- Early Progress in North American Go-to-Market TransformationEPAM is increasing sales capacity, stratifying accounts, changing service packaging, and expanding marketing and sales efforts in North America. Management reported encouraging results, including improving new-logo revenue and increasing traction across horizontals and verticals.
- Client Value Demonstrated Through AI and Engineering SolutionsClient examples included a 60% reduction in analysis effort and 80% reduction in discovery costs for a wealth management modernization program; $1 million in projected cost savings for a medical center; 10x cost savings for Storio Group through an agentic AI workflow; and a 20% reduction in total cost of ownership with zero downtime for a medical technology and healthcare services client migrating to AWS.
- External Recognition and Customer SatisfactionGartner named EPAM a leader in the Magic Quadrant for Custom Software Development Services for the fourth consecutive year. IDC MarketScape named EPAM a leader in multiple assessments, Whitelane ranked EPAM number one for satisfaction and delivery in Switzerland, Forbes named EPAM the world's best employer for tech, and Fast Company named EPAM a best workplace for innovators.
MX:EPAM Earnings History
| Report Date | Fiscal Quarter | Forecast / EPS | Last Year's EPS | EPS YoY Change | Press Release |
|---|---|---|---|---|---|
| Feb 18, 2027 | 2026 (Q4) | 66.09- | 61.05 | ― | ― |
| Nov 05, 2026 | 2026 (Q3) | 63.7865.73 | 57.68 | 13.96% (+8.05) | |
| Aug 06, 2026 | 2026 (Q2) | 59.1063.30 | 51.87 | 22.02% (+11.42) | |
| May 07, 2026 | 2026 (Q1) | 51.5753.56 | 45.13 | 18.67% (+8.43) | |
| Feb 19, 2026 | 2025 (Q4) | 59.1461.05 | 53.18 | 14.79% (+7.87) | |
| Nov 06, 2025 | 2025 (Q3) | 56.6957.68 | 58.43 | -1.28% (-0.75) | |
| Aug 07, 2025 | 2025 (Q2) | 48.9151.87 | 45.88 | 13.06% (+5.99) | |
| May 08, 2025 | 2025 (Q1) | 42.5345.13 | 46.07 | -2.03% (-0.94) | |
| Feb 20, 2025 | 2024 (Q4) | 51.5953.18 | 51.5 | 3.27% (+1.69) | |
| Nov 07, 2024 | 2024 (Q3) | 50.5458.43 | 51.12 | 14.29% (+7.30) |
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
