EPAM Systems Reports Better-Than-Expected Q3 2024 Results

In a recent report, EPAM Systems demonstrated stronger-than-expected performance in Q3 2024, highlighting positive revenue growth and increased client engagement across various sectors. The company remains optimistic about future growth, especially following its strategic acquisition of NEORIS.

Date: 08-11-2024

AI Rating: 7

EPAM Systems has reported going beyond expectations in their third-quarter results of 2024, showing significant strengths in key areas:

Revenue Growth: The company achieved a revenue of 1.168 billion, representing a year-over-year increase of 1.3% on a reported basis. Even after accounting for exit impacts from Russia, they managed to sustain consistent year-over-year growth, indicative of robust client engagement.
Strong Operating Performance: Operating income from operations was recorded at 177 million, constituting 15.2% of revenue, which indicates substantial improvements in profitability compared to previous quarters. Non-GAAP income was also up, reinforcing operational strength.
Free Cash Flow: In Q3, EPAM generated free cash flow of 237 million, marking the highest level of free cash flow in its history, which is a strong indicator of financial health.
Profit Margins: GAAP gross margin climbed to 34.6%, helped significantly by government incentives in Poland, indicating enhanced profitability and efficient cost management.
Client Engagement: EPAM's results reflected a recovery in client trust leading to higher budget shares, which is essential for sustaining revenue growth going forward.
Sector Growth: There was notable growth in verticals, particularly life sciences and financial services, which saw increases in demand and spending from clients. This suggests a favorable market position for EPAM in these sectors.

Despite macroeconomic uncertainties, EPAM's proactive strategies and expansion efforts, including the NEORIS acquisition, position the company favorably for capturing market share as demand stabilizes and grows.

Stocks: EPAM