EPAM Reports Results for First Quarter 2024 Shares Dives 27%

EPAM Systems, Inc. (NYSE: EPAM ), a leading digital transformation services and product engineering company, announced its results for the first quarter of 2024, which were down 3.8% year-over-year. The company's CEO and President, Arkadiy Dobkin, stated that the company's solid performance in the first quarter reflects its adaptability to a challenging demand environment. As the company looks forward to an eventual rebound in demand, it is refining its global operations and investing in optimized and AI-enabled delivery, consulting, partnerships, generative AI capabilities, and client-centric talent.

In the first quarter, revenues decreased to $1.165 billion, a year-over-year decrease of $45.5 million, or 3.8%. On an organic constant currency basis excluding the impact of the exit from Russia, revenues were down 4.8% compared to the first quarter of 2023. GAAP income from operations was $110.5 million, a decrease of $9.8 million, or 8.2%, compared to $120.4 million in the first quarter of 2023. Non-GAAP income from operations was $173.6 million, a decrease of $4.7 million, or 2.6%, compared to $178.3 million in the first quarter of 2023. Diluted earnings per share ("EPS") on a GAAP basis was $1.97, an increase of $0.24, or 13.9%, compared to $1.73 in the first quarter of 2023; and non-GAAP diluted EPS was $2.46, a decrease of $0.01, or 0.4%, compared to $2.47 in the first quarter of 2023.

Cash flow and other metrics showed that cash provided by operating activities was $129.9 million for the first three months of 2024, compared to $87.3 million for the first three months of 2023. The company repurchased 396 thousand shares of its common stock for $120.6 million during the first quarter of 2024 under its share repurchase program. As of March 31, 2024, the Company had $214.5 million remaining under its share repurchase authorization.

Cash, cash equivalents, and restricted cash totaled $1.990 billion as of March 31, 2024, a decrease of $52.7 million, or 2.6%, from $2.043 billion as of December 31, 2023. Total headcount was approximately 52,800 as of March 31, 2024, with approximately 47,050 delivery professionals, a decrease of 0.7% from December 31, 2023.

EPAM now expects revenues to be in the range of $4.575 billion to $4.675 billion for the full year, reflecting a year-over-year decline of 1.4% at the midpoint of the range. The company expects revenues on an organic constant currency basis excluding the impact of the exit from Russia will decline approximately 2.0% at the midpoint of the range.