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EPAM
🇺🇸 NYSE:EPAM
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Jun 30, 2020

EPAM Q2 2020 Earnings Report

EPAM's second quarter performance exceeded expectations due to the sustained demand for its services as businesses adapted to an unpredictable environment.

Key Takeaways

EPAM Systems reported a revenue increase of 14.6% year-over-year, reaching $632.4 million in the second quarter of 2020. The company's GAAP diluted EPS was $1.14, and non-GAAP diluted EPS was $1.46. EPAM is driving new levels of collaboration, engagement and efficiency across the organization.

Revenues increased to $632.4 million, a year-over-year increase of $80.8 million, or 14.6%.

GAAP income from operations was $83.4 million, an increase of $10.5 million, or 14.5%, compared to the second quarter of 2019.

Non-GAAP income from operations was $108.2 million, an increase of $15.6 million, or 16.9%, compared to the second quarter of 2019.

Non-GAAP diluted EPS was $1.46, an increase of $0.18, or 14.1%, compared to the second quarter of 2019.

Total Revenue
$632M
Previous year: $552M
+14.6%
EPS
$1.46
Previous year: $1.28
+14.1%
Gross Profit
$213M
Previous year: $196M
+8.8%
Cash and Equivalents
$994M
Previous year: $777M
+27.8%
Free Cash Flow
$135M
Previous year: $32.4M
+315.4%
Total Assets
$2.39B
Previous year: $1.93B
+23.7%

EPAM

EPAM

Forward Guidance

The Company expects revenues to be in the range of $633 million to $643 million for the third quarter, reflecting a year-over-year growth rate of approximately 8.5% at the mid-point of the range.

Positive Outlook

  • Revenues will be in the range of $633 million to $643 million for the third quarter reflecting a year-over-year growth rate of approximately 8.5% at the mid-point of the range.
  • The Company expects that foreign currency translation will have a negligible impact on year-over-year revenue growth during the quarter.
  • For the third quarter, the Company expects GAAP income from operations to be in the range of 13% to 14% of revenues and non-GAAP income from operations to be in the range of 16.5% to 17.5% of revenues.
  • The Company expects its GAAP effective tax rate to be approximately 16% and its non-GAAP effective tax rate to be approximately 23%.
  • The Company expects GAAP diluted EPS will be in the range of $1.15 to $1.24 for the quarter, and non-GAAP diluted EPS will be in the range of $1.40 to $1.49 for the quarter.

Challenges Ahead

  • Due to heightened uncertainty related to the potential impacts of COVID-19 on the Company’s full year business results, EPAM is not providing a full year 2020 financial outlook.
  • The Company expects its GAAP effective tax rate to be approximately 16%.
  • The Company expects its non-GAAP effective tax rate to be approximately 23%.
  • The Company expects GAAP diluted EPS will be in the range of $1.15 to $1.24 for the quarter.
  • The Company expects non-GAAP diluted EPS will be in the range of $1.40 to $1.49 for the quarter.

Company Overview

Full financial data and analysis

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