EPAM’s second quarter results were met with a significant negative market reaction, as investors focused on the company’s underwhelming growth trajectory in North America despite outperforming market revenue and non-GAAP profit expectations. Management attributed the quarter’s performance to continued strength in AI-native services and solid gains in Financial Services and Life Sciences, while acknowledging that growth was offset by project ramp-downs in Software & Hi-Tech and persistent challenges in the Americas. CEO Balazs Fejes was direct about these issues, noting, “North America is not growing fast enough...this is not a story about waiting for the macro to turn, we own it.”
Is now the time to buy EPAM? Find out in our full research report (it’s free for active Edge members).
EPAM (EPAM) Q2 CY2026 Highlights:
- Revenue: $1.41 billion vs analyst estimates of $1.41 billion (4.5% year-on-year growth, 0.6% beat)
- Adjusted EPS: $3.38 vs analyst estimates of $3.14 (7.6% beat)
- Revenue Guidance for Q3 CY2026 is $1.42 billion at the midpoint, below analyst estimates of $1.44 billion
- Management slightly raised its full-year Adjusted EPS guidance to $13.16 at the midpoint
- Operating Margin: 10.8%, up from 9.3% in the same quarter last year
- Constant Currency Revenue rose 3.4% year on year (5.3% in the same quarter last year)
- Market Capitalization: $5.17 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 Q2 Earnings Call
- Bryan Bergin (TD Cowen): Asked about drivers behind reduced outlook and North American weakness. CEO Balazs Fejes explained that client budgets are shifting rapidly to AI modernization, outpacing the ramp-up of replacement work, and outlined steps to address sales execution gaps.
- Margaret Nolan (William Blair): Inquired about parallels between EMEA and North America go-to-market strategies and timing for a turnaround. Fejes said the transformation would take time but is modeled after successful EMEA changes, with significant revenue contribution from large deals expected in 2027.
- Puneet Jain (JPMorgan): Queried whether the sales challenge is a capability gap or messaging issue. Fejes clarified it is a business development capability gap, not delivery, and expressed optimism that new sales approaches would eventually yield results.
- Yu Lee (Guggenheim Partners): Questioned the durability of the revised outlook given the rapid shift in client demand. CFO Jason Peterson said the full-year guide is “de-risked” and expects ongoing strength in Europe and Financial Services, with underperformance likely limited to North America and Hi-Tech.
- Tyler DuPont (Wells Fargo): Sought clarification on the extent of client spend shifting away from services and on pricing dynamics. Fejes said both internal capability and client priorities are factors, while Peterson noted early-year price increases and incremental opportunities in agentic managed services.
Catalysts in Upcoming Quarters
Going forward, the StockStory team will focus on (1) the pace and success of EPAM’s North American sales transformation and ability to rebuild growth, (2) the closing and ramp-up of large AI-driven managed services deals in the pipeline, and (3) sustained margin performance amidst muted discretionary spend and evolving client technology priorities. Progress in these areas will be closely watched to assess the company’s strategic execution.
EPAM currently trades at $100.16, down from $109.87 just before the earnings. Is there an opportunity in the stock? Find out in our full research report (it’s free).
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