Engine Capital Urges EPAM Systems to Launch $750 Million Share Buyback

Hedge fund Engine Capital, owning 1.5% of EPAM, demands the company buy back $750 million in shares, consider a sale, reform management incentives, and renew the board. EPAM trades at 5.4x EV/EBITDA, below peers and sector M&A multiples, with shareholder returns down 36% YoY and 82% over five years. The company has $794 million in free cash and no debt. EPAM's AI-native revenue reached $160 million in Q2 2026, targeting $600 million for the year. The board has not yet responded to the demands.

Engine Capital, owning 1.5% of EPAM Systems, urged the board to initiate aggressive share buybacks using $750M in cash and future free cash flow, potentially retiring 60-80% of shares by 2028, or conduct a strategic review including a possible sale. EPAM's shares have declined over 40% year-to-date.

Engine Capital urges EPAM to consider buybacks or a sale, citing undervaluation. The firm also seeks governance changes. EPAM's market value is $6.1 billion. Shares rose 3.5% following the announcement. Engine suggests $750 million in cash could retire 60-80% of shares by 2028.

EPAM Systems (EPAM) shares rose 3.4% after activist investor Engine Capital, holding a 1.5% stake, urged the company to initiate a $750 million accelerated share repurchase program using existing cash. Engine Capital also suggested exploring a potential sales process for EPAM, according to a letter sent to the company's board.

Activist investor Engine Capital urged EPAM Systems to accelerate share buybacks, potentially using an accelerated share repurchase (ASR) program worth $750 million. The investor also suggested exploring strategic alternatives, including a potential sale, and governance changes. Engine Capital argues that faster buybacks can boost earnings per share and signal confidence in the company's balance sheet.

EPAM Systems' stock fell 3.7% after JPMorgan downgraded it to Neutral with a $120 price target, citing commercial reorganization challenges. The company had previously cut its full-year revenue growth outlook to 3.2%-4.2%. Other analysts also expressed caution, while broader market declines added to the pressure.