NYSE$EPAM

EPAM Systems Inc. · Q3 2020 earnings

Q3 2020 earnings · · Investor relations

Briefing

EPAM's third quarter performance was solid, driven by an improving demand environment and the expansion of the Company's capabilities.

EPAM Systems reported revenues of $652.2 million, a 10.9% year-over-year increase. GAAP diluted EPS was $1.53, and non-GAAP diluted EPS was $1.65.

  • Revenues increased to $652.2 million, a year-over-year increase of 10.9%.
  • GAAP income from operations was $96.4 million, a 19.6% increase year-over-year.
  • Non-GAAP income from operations was $123.3 million, a 23.6% increase year-over-year.
  • GAAP diluted EPS was $1.53, a 31.9% increase year-over-year.

Headline financials

Total Revenue

$652M

Previous: $588M+10.9%
EPS (adj)

$1.65

Previous: $1.39+18.7%
Operating Margin

14.8%

Previous: 13.7%+8.0%
Non-GAAP Operating Margin

18.9%

Previous: 17.0%+11.2%
Capital Expenditures

-$50.3M

Previous: -$52.3M+3.8%
Free Cash Flow

$39.1M

Previous: $14.7M+166.0%
Net Income

$89.4M

Previous: $67M+33.5%
Operating Income

$96.4M

Previous: $80.6M+19.6%
Gross Profit

$229M

Previous: $211M+8.7%
Cash & Equivalents

$1.16B

Previous: $853M+36.1%
Total Assets

$2.56B

Previous: $2.04B+25.3%
Stock-Based Comp

$23.5M

Previous: $15.5M+51.7%

Revenue & EPS history

EPAM · Revenue · Quarterly

$652M

Q3 2020+10.9%vs Q3 2019
Beat estimate in 16 of 16 quarters(100%)
ActualEstimate

Forward guidance

The Company expects revenues to be in the range of $695 million to $705 million for the fourth quarter, reflecting a year-over-year growth rate of approximately 10.6% at the mid-point of the range.

Tailwinds

  • Revenues will be in the range of $695 million to $705 million for the fourth quarter.
  • The revenue growth rate is expected to be approximately 10.6% at the mid-point of the range.
  • GAAP income from operations is expected to be in the range of 14% to 15% of revenues.
  • Non-GAAP income from operations is expected to be in the range of 17.5% to 18.5% of revenues.
  • GAAP diluted EPS will be in the range of $1.44 to $1.54 for the quarter, and non-GAAP diluted EPS will be in the range of $1.63 to $1.73 for the quarter.

Headwinds

  • GAAP effective tax rate is expected to be approximately 15%.
  • Non-GAAP effective tax rate is expected to be approximately 23%.
  • Weighted average diluted shares outstanding for the quarter is expected to be 58.9 million.
  • Foreign currency translation will have a negligible impact on year-over-year revenue growth during the quarter.
  • Actual results may differ materially from the Company’s expectations depending on factors discussed in the Company’s filings with the Securities and Exchange Commission.

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 Q3 2020

Historical avgQ3 2020

+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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