UPDATE: EPAM Systems (EPAM) Tops Q1 EPS by 13c, Revenues Beat; Offers FY21 EPS Guidance Above Consensus, 2Q EPS/Revs. View Above Consensus

EPAM Systems (NYSE: EPAM) reported Q1 EPS of $1.81, $0.13 better than the analyst estimate of $1.68. Revenue for the quarter came in at $780.8 million versus the consensus estimate of $764.57 million.

"Our strong start to 2021 highlights the rapid pace of digital transformation, application modernization and the need for new business models across industries," said Arkadiy Dobkin, CEO & President, EPAM. "Our global expertise in integrated consulting, software engineering, and cloud-native technology, serves as the foundation for our current and future growth. EPAM continues to attract and onboard global talent at an accelerated rate as we position the company to bring even more comprehensive solutions to our clients as they navigate a very dynamic business environment."

GUIDANCE:

EPAM Systems sees Q2 2021 EPS of $1.88-$1.95, versus the consensus of $1.74. EPAM Systems sees Q2 2021 revenue of $853-861 million, versus the consensus of 791.34 million.

EPAM Systems sees FY2021 EPS of $7.54-$7.76, versus the consensus of $7.43.

Second Quarter

The Company expects the following for the second quarter:

• Revenues will be in the range of $853 million to $861 million on a GAAP basis for the second quarter reflecting a year-over-year growth rate of approximately 35.5% at the mid-point of the range. The Company expects foreign currency translation will have an approximate 3% favorable impact on year-over-year reported revenue growth and expects year-over-year revenue growth on a constant currency basis to be approximately 32.5% at the mid-point of the range. The Company expects acquisitions will contribute approximately 2.5% to reported revenues;
• For the second quarter, the Company expects GAAP income from operations to be in the range of 13.5% to 14.5% of revenues and non-GAAP income from operations to be in the range of 16.5% to 17.5% of revenues;
• The Company expects its GAAP effective tax rate to be approximately 11% and its non-GAAP effective tax rate to be approximately 23%; and
• The Company expects GAAP diluted EPS will be in the range of $1.76 to $1.83 for the quarter, and non-GAAP diluted EPS will be in the range of $1.88 to $1.95 for the quarter. The Company expects weighted average diluted shares outstanding for the quarter of 59.0 million.

Full Year

As a result of a stronger demand environment, the Company now expects the following for the full year:

• The Company now expects revenue growth for 2021 to be at least 29% on a GAAP basis. The Company expects that foreign currency translation will have an approximate 1% favorable impact on full year reported revenues and revenue growth on a constant currency basis will be at least 28%. The Company expects acquisitions will contribute approximately 2% to reported revenues;
• For the full year, the Company expects GAAP income from operations to be in the range of 13.5% to 14.5% of revenues and non-GAAP income from operations to be in the range of 16.5% to 17.5% of revenues;
• The Company expects its GAAP effective tax rate to be approximately 12% and its non-GAAP effective tax rate to be approximately 23%; and
• The Company now expects GAAP diluted EPS to be in the range of $7.09 to $7.31 for the year, and non-GAAP diluted EPS to be in the range of $7.54 to $7.76 for the year. The Company now expects weighted average diluted shares outstanding for the year of 59.0 million.

For earnings history and earnings-related data on EPAM Systems (EPAM) click here.

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