NYSE$EPAM

EPAM Systems Inc. · Q2 2021 earnings

Q2 2021 earnings · · Investor relations

Briefing

Reported strong second quarter results and raised full year outlook.

EPAM Systems reported strong second quarter results with revenues of $881.4 million, up 39.4% year-over-year. GAAP diluted EPS was $1.94, an increase of 70.2%, and Non-GAAP diluted EPS was $2.05, an increase of 40.4% on a year-over-year basis. The company raised its full year 2021 outlook, expecting revenue growth to be at least 37% and GAAP diluted EPS to be in the range of $7.70 to $7.89.

  • Revenues increased to $881.4 million, a year-over-year increase of 39.4%.
  • GAAP income from operations was 14.2% of revenues and Non-GAAP income from operations was 17.6% of revenues.
  • GAAP diluted EPS was $1.94, an increase of 70.2%, and Non-GAAP diluted EPS was $2.05, an increase of 40.4% on a year-over-year basis.
  • EPAM raised full year 2021 outlook and now expects revenue growth to be at least 37%, GAAP diluted EPS to be in the range of $7.70 to $7.89 and Non-GAAP diluted EPS to be in the range of $8.25 to $8.44.

Headline financials

Total Revenue

$881M

Previous: $632M+39.4%
EPS (adj)

$2.05

Previous: $1.46+40.4%
Operating Margin

14.2%

Previous: 13.2%+7.6%
Non-GAAP Operating Margin

17.6%

Previous: 17.1%+2.9%
Capital Expenditures

-$33.8M

Previous: -$40.5M+16.7%
Free Cash Flow

$80.9M

Previous: $26.1M+210.0%
Net Income

$115M

Previous: $66.6M+72.1%
Operating Income

$125M

Previous: $83.4M+50.2%
Gross Profit

$298M

Previous: $213M+39.8%
Cash & Equivalents

$1.28B

Previous: $994M+29.1%
Total Assets

$2.96B

Previous: $2.39B+24.0%
Stock-Based Comp

$23.9M

Previous: $19.4M+22.9%

Revenue & EPS history

EPAM · Revenue · Quarterly

$881M

Q2 2021+39.4%vs Q2 2020
Beat estimate in 16 of 16 quarters(100%)
ActualEstimate

Forward guidance

EPAM expects revenues for the third quarter of 2021 to be in the range of $957 million to $965 million, reflecting a year-over-year growth rate of approximately 47% at the mid-point of the range. The company expects GAAP diluted EPS to be in the range of $1.89 to $1.96 and non-GAAP diluted EPS to be in the range of $2.15 to $2.22.

Tailwinds

  • Revenues will be in the range of $957 million to $965 million on a GAAP basis for the third quarter reflecting a year-over-year growth rate of approximately 47% at the mid-point of the range.
  • Foreign currency translation will have an approximate 1% favorable impact on year-over-year reported revenue growth.
  • Year-over-year revenue growth on a constant currency basis to be approximately 46% at the mid-point of the range.
  • Acquisitions will contribute approximately 4.5% to reported revenues.
  • Non-GAAP diluted EPS will be in the range of $2.15 to $2.22 for the quarter.

Headwinds

  • GAAP income from operations to be in the range of 13.5% to 14.5% of revenues.
  • Non-GAAP income from operations to be in the range of 17% to 18% of revenues.
  • GAAP effective tax rate to be approximately 13%.
  • Non-GAAP effective tax rate to be approximately 23%.
  • GAAP diluted EPS will be in the range of $1.89 to $1.96 for the quarter.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q2 2021

Historical avgQ2 2021

+1.0%

Avg return

Earnings day

+0.3%

Avg return

5 days after

+1.5%

Avg return

30 days after

58%

33 / 57 earnings

Positive

+15.5%

Q2 2022

Best reaction

-26.4%

Q1 2024

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+0.0%-11.1%-8.3%
Q4 2025-17.9%-23.2%-18.0%
Q3 2025+4.4%+12.0%+26.5%
Q1 2025+12.9%+17.4%+11.9%
Q4 2024-12.8%-18.4%-32.1%
Q3 2024+15.2%+21.2%+21.1%
Q2 2024-7.2%-5.4%-1.6%
Q1 2024-26.4%-24.9%-29.0%
Q4 2023+12.2%+7.1%+7.5%
Q3 2023+11.1%+12.9%+19.5%
Q2 2023+4.3%+2.8%+9.1%
Q1 2023-14.3%-14.1%-4.0%
Q4 2022-7.7%-11.8%-23.7%
Q3 2022-4.4%-2.2%+13.1%
Q2 2022+15.5%+13.4%+11.4%
Q1 2022+11.0%+2.2%+6.3%
Q4 2021-1.6%-5.0%-34.6%
Q3 2021+3.7%+5.5%-12.2%
Q2 2021+5.1%+6.2%+13.1%
Q1 2021-0.2%-1.6%+4.6%
Q4 2020-4.0%-5.1%-3.1%
Q3 2020+4.1%-4.9%-1.2%
Q2 2020+1.3%+0.6%+7.5%
Q1 2020+0.1%-0.8%+6.8%
Q4 2019-3.6%-9.6%-30.0%
Q3 2019+6.1%+11.9%+17.7%
Q2 2019+3.8%+5.5%+7.3%
Q1 2019+0.4%-1.2%+3.7%
Q4 2018+3.4%+4.1%+13.3%
Q3 2018+5.7%+4.6%+9.0%
Q2 2018-4.9%-0.2%+8.7%
Q1 2018+9.6%+7.4%+6.8%
Q4 2017+1.4%+0.7%+6.1%
Q3 2017+10.0%+11.2%+9.3%
Q2 2017-1.3%-3.2%-2.9%
Q1 2017+3.5%+3.7%+10.0%
Q4 2016+4.3%+7.1%+7.7%
Q3 2016-1.6%+1.6%+1.2%
Q2 2016-5.0%-4.9%+0.8%
Q1 2016+0.5%
Q4 2015+8.7%
Q3 2015-8.9%
Q2 2015-5.0%
Q1 2015-0.8%
Q4 2014+6.9%
Q3 2014-2.4%
Q2 2014+5.1%
Q1 2014+6.3%
Q4 2013-7.6%
Q3 2013-1.5%
Q2 2013+7.1%
Q1 2013-0.1%
Q4 2012+4.4%
Q3 2012+8.1%
Q2 2012+4.4%
Q1 2012-11.8%
Q4 2011+8.0%
Q3 2011
Q2 2011
Q1 2011
Q4 2010
Q3 2010
Q2 2010
Q1 2010

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