EPAM’s latest quarter saw a significant positive reaction from the market, reflecting outperformance versus Wall Street expectations for both revenue and adjusted earnings. Management credited the company’s progress to rapid expansion in AI-native services, which grew to represent a higher proportion of total sales. CEO Balázs Fejes highlighted new strategic deal signings and continued momentum in financial services and life sciences as core contributors. The company also pointed to improved operating margins, with Fejes noting, "Profitability, led by the gross margin, improved again, and adjusted earnings per share remained strong."
Is now the time to buy EPAM? Find out in our full research report (it’s free for active Edge members).
EPAM (EPAM) Q3 2026 highlights:
- Revenue $1.43 billion vs S&P analyst consensus of $1.42 billion (2.3% year-on-year growth, 0.5% beat)
- Adjusted EPS $3.51 vs S&P analyst consensus of $3.41 (3.1% beat)
- Revenue guidance $1.41 billion at the midpoint for Q4 2026, below analyst estimates of $1.42 billion
- Adjusted EPS guidance Management slightly raised its full-year adjusted EPS guidance to $13.27 at the midpoint
- Operating margin 12.3%, up from 10.4% in the same quarter last year
- Constant currency revenue rose 2.5% year on year (7.1% in the same quarter last year)
- Market capitalization $8.13 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our top 5 analyst questions from EPAM’s Q3 earnings call
- Bryan Bergin (TD Cowen) asked about the ramp profile and margin impact of the new large deals. CFO Jason Peterson explained ramping contributions in the first half of next year, with early margin pressure but longer-term normalization.
- Maggie Nolan (William Blair) questioned whether EPAM is displacing incumbents or gaining share from vendor consolidation. CEO Balázs Fejes clarified most large deals are expansions with existing clients, leveraging AI-forward approaches to take share from both internal teams and other service providers.
- Jonathan Lee (Guggenheim) inquired about the size and composition of the strategic deal pipeline and success with new logos. Fejes responded that new logos are a minority, and the pipeline remains robust, though closing large deals is a multi-quarter process.
- David Grossman (Stifel) pressed on the drivers behind margin improvement and the outlook for gross margin given reduced R&D tax benefits. Peterson highlighted price gains, improved efficiency, and higher profitability from AI-native revenue, but cautioned on future margin headwinds.
- Tyler DuPont (Wells Fargo) asked if growth in AI-native revenues is offsetting declines in non-AI business. Fejes said AI-native growth is strong but non-AI areas are pressured, with the company’s narrow definition of AI-native excluding some AI-assisted work.
Catalysts in upcoming quarters
In the coming quarters, the StockStory team will be watching (1) the ramp-up and client impact of newly signed large deals, (2) measurable improvement in North American growth and the effectiveness of ongoing go-to-market changes, and (3) expansion of AI-native and cybersecurity offerings. Additional milestones will include new deal signings, progress in underperforming verticals, and the realization of efficiency gains from operational transformation.
EPAM currently trades at $156.95, up from $137.40 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).
Our favorite stocks right now
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
