EPAM Systems Q1 Profit Beats Street; Lifts FY25 Outlook; Names New CEO; Stock Climbs - Update

EPAM Systems

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(RTTNews) - EPAM Systems, Inc. (EPAM), while reporting weak first-quarter profit, but above market estimates, on Thursday issued second-quarter outlook, expecting higher revenues. Further, the Digital transformation services and product engineering company raised fiscal 2025 adjusted earnings and revenue outlook.

Separately, EPAM Systems announced that Balazs Fejes, EPAM's President of Global Business & Chief Revenue Officer, will become Chief Executive Officer and President. Fejes succeeds Arkadiy Dobkin, the company's Principal Founder, Chairman, Chief Executive Officer and President, who will transition to the role of Executive Chairman, on September 1.

In the pre-market activity on the NYSE, EPAM shares were gaining around 8 percent to trade at $172.00.

For the second quarter, EPAM expects earnings per share in the range of $1.67 to $1.75, and adjusted earnings per share in the range of $2.56 to $2.64.

The company expects revenues to be in the range of $1.325 billion to $1.340 billion for the quarter reflecting year-over-year growth of 16.2 percent at the midpoint of the range.

Revenue growth rate on an organic constant currency basis will be 3.8 percent at the midpoint of the range.

The Wall Street analysts on average expect the company to report earnings of $2.48 per share on revenues of $1.30 billion. Analysts' estimates typically exclude special items.

For fiscal 2025, EPAM now expects earnings per share in the range of $6.78 to $7.03 and adjusted earnings per share in the range of $10.70 to $10.95. The company previously expected earnings per share in the range of $6.78 to $7.08 and adjusted earnings per share in the range of $10.45 to $10.75.

The company raised its expected year-over-year revenue growth rate to now be in the range of 11.5 percent to 14.5 percent for 2025 and organic constant currency basis to be in the range of 2.0 percent to 5.0 percent.

The company previously expected revenue growth rate to be in the range of 10.0 percent to 14.0 percent on a reported basis, and 1.0 percent to 5.0 percent on an organic constant currency basis.

The Street is looking for earnings of $10.49 per share for the year on revenue growth of 11.47 percent.

In the first quarter, earnings decreased from last year but beat the Street estimates.

The company's bottom line came in at $73.48 million, or $1.28 per share. This compares with $116.24 million, or $1.97 per share, last year.

Adjusted earnings were $138.02 million or $2.41 per share for the period. Analysts had expected the company to earn $2.27 per share.

The company's revenue for the period rose 11.7 percent to $1.301 billion from $1.165 billion last year.

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