EPAM (EPAM) Q2 2026 Earnings Call Transcript
EPAM Systems reported Q2 2026 revenue of $1.415B, up 4.5% year over year, and non-GAAP diluted EPS of $3.38, up 22%. AI native revenue was $160M, over 11% of total. GAAP diluted EPS rose 26.3% to $1.97. Full-year guidance: revenue growth 3.2% to 4.2% reported and non-GAAP EPS $13.08 to $13.24.
How this was made
The 30-second read
Why it matters
Key trade inputs are the FY2026 revenue and EPS guidance ranges, Q3 revenue outlook, and cash-flow metrics (negative OCF and FCF, rising DSO) alongside margin expansion and AI-native revenue growth.
Market read
This is a full earnings and guidance disclosure with explicit AI-native revenue progress, margin improvement, and a notable working-capital/cash-flow deterioration.
What to watch
The guidance reduction is attributed to delayed large-deal contributions into early 2027, so traders should separate underlying demand strength from timing of deal awards and receivables collection.
Background
EPAM’s Q2 2026 call centers on transitioning North America sales from task-based engineering to AI-led business-case delivery, while maintaining an AI-native revenue target.
Ticker impact
EPAM reported Q2 2026 results and guided FY2026 revenue growth 3.2% to 4.2% with non-GAAP EPS $13.08 to $13.24.
Likely choppy reaction: upside from AI-native growth and margin expansion, offset by weaker cash conversion and elevated DSO.
The article discloses multiple decision-useful datapoints: AI-native revenue $160M (11% of total), margin expansion, FY EPS range, and negative OCF/FCF with DSO rising.
Market effects
Reinforces demand shift toward AI modernization and agentic services, while highlighting working-capital drag risk for services firms.
Americas growth slowed (high-tech declines offset financial services gains) while EMEA accelerated on go-to-market execution.
Signals continued AI-native monetization progress across geographies, but with delayed large-deal contributions into early 2027.
Counterpoint
Margin and AI-native growth may be masking a cash conversion problem, with elevated DSO and negative FCF suggesting earnings quality concerns until conversion normalizes.
Key entities
- public_companyEPAM Systems, Inc.
Reported Q2 2026 results, provided FY2026 and Q3 2026 guidance, and discussed AI-native revenue trajectory and cash-flow/DSO dynamics.
- executiveBalazs Fejes
CEO who discussed the faster transition from task-based services to AI modernization and the resulting growth gap.
- executiveJason Peterson
CFO who addressed cash-flow impacts from variable compensation and elevated DSO and expectations for FCF conversion in Q3 and Q4.
