Second Quarter 2026
Filed Aug 5, 2026Second quarter revenues of $1.415 billion, up 4.5% year-over-year, with GAAP diluted EPS of $1.97 and non-GAAP diluted EPS of $3.38.
Revenue increased 4.5% year-over-year, operating-income margins improved on both a GAAP and non-GAAP basis, and GAAP and non-GAAP diluted EPS rose 26.3% and 22.0%, respectively. Cash used in operating activities for the first six months and lower third-quarter midpoint revenue growth are the principal offsets.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $1.415 billion | – | 4.5% |
| Revenue, organic constant currency basisnon-GAAP | . | – | 3.4% |
| Income from operationsGAAP | $152.2 million | – | 20.4% |
| Income from operations as a percentage of revenuesGAAP | 10.8% of revenues | – | – |
| Income from operationsnon-GAAP | $232.7 million | – | 14.7% |
| Income from operations as a percentage of revenuesnon-GAAP | 16.4% of revenues | – | – |
| Net incomeGAAP | $ 102,979 | – | – |
| Diluted EPSGAAP | $1.97 | – | 26.3% |
| Diluted EPSnon-GAAP | $3.38 | – | 22.0% |
| Revenue, six months ended June 30GAAP | $ 2,814,828 | – | – |
| Income from operations, six months ended June 30GAAP | 268,990 | – | – |
| Net income, six months ended June 30GAAP | $ 185,500 | – | – |
Full Year 2026 and Third Quarter 2026 outlook
- RevenueFull year: year-over-year revenue growth rate in the range of 3.2% to 4.2%; year-over-year revenue growth rate on an organic constant currency basis in the range of 2.0% to 3.0%. Third quarter: revenues in the range of $1.410 billion to $1.425 billion, reflecting year-over-year growth of 1.7% at the midpoint of the range; year-over-year revenue growth rate on an organic constant currency basis of 1.8% at the midpoint of the range.
- Tax rateFull year: GAAP effective tax rate of approximately 27% and non-GAAP effective tax rate of approximately 24%. Third quarter: GAAP effective tax rate of approximately 25% and non-GAAP effective tax rate of approximately 24%.
- NoteFull year GAAP income from operations in the range of 10.5% to 11.0% of revenues and non-GAAP income from operations in the range of 15.5% to 16.0% of revenues.
- NoteFull year GAAP diluted EPS in the range of $8.22 to $8.38 and non-GAAP diluted EPS in the range of $13.08 to $13.24.
- NoteFull year weighted average diluted shares outstanding of 52.2 million.
- NoteThird quarter GAAP income from operations in the range of 11.0% to 12.0% of revenues and non-GAAP income from operations in the range of 15.5% to 16.5% of revenues.
- NoteThird quarter GAAP diluted EPS in the range of $2.33 to $2.41 and non-GAAP diluted EPS in the range of $3.38 to $3.46.
- NoteThird quarter weighted average diluted shares outstanding of 51.4 million.
Capital returns
- The Company spent $409.0 million on share repurchases during the first six months of 2026 under its share repurchase program, which included $85.0 million during the second quarter.
What drove it
- Revenues increased to $1.415 billion, a year-over-year increase of $61.3 million, or 4.5%.
- On an organic constant currency basis, revenues were up 3.4% compared to the second quarter of 2025.
- The CEO cited continued AI-native momentum, ongoing profitability improvement, strategic-partnership expansion, and commercial transformation.
- Total headcount was approximately 62,850 as of June 30, 2026, including approximately 56,650 delivery professionals, an increase of 0.3% from March 31, 2026.
Concerns
- Cash used in operating activities was $38.8 million for the first six months of 2026, compared to cash provided by operating activities of $77.4 million for the first six months of 2025.
- Cash, cash equivalents and restricted cash decreased by $507.1 million, or 39.0%, from December 31, 2025.
- Third-quarter revenue guidance reflects year-over-year growth of 1.7% at the midpoint of the range, while second-quarter revenue increased 4.5% year-over-year.
- The filing identifies risks related to the war in Ukraine and escalation in the surrounding region, political and civil unrest or military action, global capital markets, foreign exchange markets, global trade, the broader economy, AI adoption, and client demand.
What to watch
- Third-quarter revenue in the range of $1.410 billion to $1.425 billion.
- Third-quarter organic constant currency revenue growth rate of 1.8% at the midpoint of the range.
- Third-quarter GAAP income from operations in the range of 11.0% to 12.0% of revenues and non-GAAP income from operations in the range of 15.5% to 16.5% of revenues.
- Progress against full-year revenue growth guidance of 3.2% to 4.2% and full-year organic constant currency revenue growth guidance of 2.0% to 3.0%.
- Cash flow and the level of additional share repurchases following $409.0 million spent during the first six months of 2026.
Balance sheet and cash flow
- Cash used in operating activities was $38.8 million for the first six months of 2026, compared to cash provided by operating activities of $77.4 million for the first six months of 2025.
- Cash, cash equivalents and restricted cash totaled $794.3 million as of June 30, 2026, a decrease of $507.1 million, or 39.0%, from $1.301 billion as of December 31, 2025.
Analysis
EPAM reported second-quarter revenue of $1.415 billion, up 4.5% year-over-year, while organic constant currency revenue increased 3.4%. The company described continued AI-native momentum, strategic-partnership expansion, and commercial transformation. Delivery-professional headcount was approximately 56,650, up 0.3% from March 31, 2026, within total headcount of approximately 62,850.
Profitability improved faster than revenue. GAAP income from operations increased 20.4% to $152.2 million and reached 10.8% of revenues, compared with 9.3% in the second quarter of 2025. Non-GAAP income from operations increased 14.7% to $232.7 million and represented 16.4% of revenues, compared with 15.0%. GAAP diluted EPS rose 26.3% to $1.97, while non-GAAP diluted EPS increased 22.0% to $3.38.
Capital allocation remained focused on repurchases. EPAM spent $85.0 million on share repurchases during the second quarter and $409.0 million during the first six months of 2026. Cash, cash equivalents and restricted cash totaled $794.3 million as of June 30, 2026, down $507.1 million, or 39.0%, from December 31, 2025. Cash used in operating activities was $38.8 million in the first six months, versus cash provided by operating activities of $77.4 million in the prior-year period.
The full-year outlook calls for year-over-year revenue growth of 3.2% to 4.2%, including organic constant currency growth of 2.0% to 3.0%, with GAAP diluted EPS of $8.22 to $8.38 and non-GAAP diluted EPS of $13.08 to $13.24. Third-quarter revenue guidance is $1.410 billion to $1.425 billion and reflects 1.7% year-over-year growth at the midpoint, with organic constant currency growth of 1.8% at the midpoint. Investors should focus on whether AI-native momentum translates into the guided growth rate while the company sustains its operating-income margin ranges and improves operating cash flow.
Management, verbatim
Our second quarter results came in better than expected with continued AI-native momentum and ongoing profitability improvement, reflecting solid execution against our multi-year strategy.
Balazs Fejes, CEO & President
As we continue to expand our strategic partnerships and leverage our 30+ years of engineering DNA to build the next generation forward-deployed engineering organization, our conviction in the strategy, the team and our commercial transformation is high.
Balazs Fejes, CEO & President
Not in the filing
stated, not guessed- Prior outlook was not provided, so comparisons of actual results with prior guidance are unavailable.
- Segment revenue, segment growth, and segment drivers were not reported.
- Gross profit and gross margin were not reported.
- Third-quarter and full-year revenue guidance in dollars was not provided for the full year.
- Quarterly operating cash flow, free cash flow, debt, dividends, and dividend guidance were not reported.
- Prior-quarter revenue, operating income, net income, EPS, and margin comparisons were not reported.
- The complete prior-year six-month net income figure is truncated in the provided filing text.
- Six-month diluted EPS, gross margin, and non-GAAP six-month results were not provided in the available filing text.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.