NYSE$EPAM

EPAM Systems Inc. · Q4 2023 earnings

Q4 2023 earnings · · Investor relations

Briefing

EPAM's Q4 2023 performance reflected navigating a volatile demand and macro-economic environment, rebalancing delivery platforms, and refining growth strategy.

EPAM Systems, Inc. reported Q4 2023 revenues of $1.157 billion, a 6.0% year-over-year decrease. GAAP diluted EPS was $1.66, a 36.4% decrease, and non-GAAP diluted EPS was $2.75, a 6.1% decrease year-over-year.

  • Revenues decreased to $1.157 billion, a 6.0% year-over-year decrease.
  • GAAP income from operations was 10.6% of revenues; Non-GAAP income from operations was 17.3% of revenues.
  • GAAP diluted EPS was $1.66, a 36.4% decrease year-over-year.
  • Non-GAAP diluted EPS was $2.75, a 6.1% decrease year-over-year.

Headline financials

Total Revenue

$1.16B

Previous: $1.23B-6.0%
EPS (adj)

$2.75

Previous: $2.93-6.1%
Operating Margin

10.6%

Previous: 13.8%-23.2%
Non-GAAP Operating Margin

17.3%

Previous: 17.8%-2.8%
Capital Expenditures

$10M

Previous: $21.5M-53.5%
Net Income

$97.6M

Previous: $155M-37.1%
Operating Income

$122M

Previous: $170M-28.1%
Gross Profit

$336M

Previous: $399M-15.6%
Stock-Based Comp

$38.2M

Previous: $31.6M+20.8%

Revenue & EPS history

EPAM · Revenue · Quarterly

$1.16B

Q4 2023-6%vs Q4 2022
Beat estimate in 13 of 15 quarters(87%)
ActualEstimate

Forward guidance

EPAM provided revenue and EPS guidance for Q1 2024 and full year 2024.

Tailwinds

  • The Company expects the year-over-year growth rate for revenues to be in the range of 1% to 4% for 2024.
  • For the full year, EPAM expects GAAP income from operations to be in the range of 9.5% to 10.5% of revenues and non-GAAP income from operations to be in the range of 14.5% to 15.5% of revenues.
  • EPAM expects GAAP diluted EPS will be in the range of $7.20 to $7.60 for the year, and non-GAAP diluted EPS will be in the range of $10.00 to $10.40 for the year.
  • The Company expects revenues will be in the range of $1.155 billion to $1.165 billion for the first quarter reflecting a year-over-year decline of 4% at the midpoint of the range.
  • EPAM expects GAAP diluted EPS will be in the range of $1.79 to $1.87 for the quarter, and non-GAAP diluted EPS will be in the range of $2.26 to $2.34 for the quarter.

Headwinds

  • This guidance also reflects a minimal contribution from inorganic revenues.
  • For the first quarter, EPAM expects GAAP income from operations to be in the range of 9% to 10% of revenues and non-GAAP income from operations to be in the range of 13.5% to 14.5% of revenues.
  • The Company expects its GAAP effective tax rate to be approximately 11% and its non-GAAP effective tax rate to be approximately 24%.
  • The Company expects weighted average diluted shares outstanding for the quarter of 59.1 million.
  • The Company expects foreign currency translation will have a negligible impact on year-over-year revenue decline during 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 Q4 2023

Historical avgQ4 2023

+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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