![](https://www.citybiz.co/wp-content/uploads/2022/10/epam.jpg)
EPAM Systems, Inc. (NYSE: EPAM), a leading digital transformation services and product engineering company, today announced it is reducing its second quarter and full year 2023 financial outlook due to further deterioration in the near-term demand environment.
“In the weeks since our Q1 earnings call, we have seen our clients become even more cautious with spending specifically in the ‘build’ segment of the global IT services market. After careful assessment of changes in our May and June forecast data, we have come to understand that pipeline conversions are occurring at slower rates than previously assumed and we are also seeing some reduction in the total pipeline. Our revenue update is the result of our applying more conservative assumptions for the current quarter and the full year based on our recent experience. At the same time, we are encouraged by the increasing pace of new logo acquisition as well as our continued high customer retention and satisfaction rates. Once industry demand returns, EPAM will once again be well positioned for long-term growth by leveraging our unique and globally recognized engineering and transformation capabilities,” said Arkadiy Dobkin, CEO & President, EPAM.
Given the continued uncertainty in the demand environment, the Company now expects the following for the full year and second quarter:
- Revenues to now be in the range of $4.650 billion to $4.800 billion reflecting a year-over-year decrease of 2% at the midpoint of the range. Revenues on an organic constant currency basis excluding the impact of the exit from Russia will decline 2% at the midpoint of the range;
- GAAP income from operations will now be in the range of 11% to 12%, and non-GAAP income from operations will now be in the range of 15% to 16%;
- The Company continues to expect its GAAP effective tax rate to be approximately 21% and its non-GAAP effective tax rate to be approximately 23%; and
- GAAP diluted EPS to now be in the range of $7.28 to $7.68 and Non-GAAP diluted EPS to now be in the range of $9.80 to $10.20. The Company now expects weighed average diluted shares outstanding for the year of 59.3 million.
- Revenues to now be in the range of $1.160 billion to $1.170 billion reflecting a year-over-year decrease of 2.5% at the midpoint of the range. Revenues on an organic constant currency basis excluding the impact of the exit from Russia will decline 2% at the midpoint of the range;
- GAAP income from operations to continue to be in the range of 10% to 11%, and non-GAAP income from operations to continue to be in the range of 14% to 15%;
- The Company continues to expect its GAAP effective tax rate to be approximately 20% and its non-GAAP effective tax rate to be approximately 23%; and
- GAAP diluted earnings per share (“EPS”) to now be in the range of $1.75 to $1.82 and Non-GAAP diluted EPS to now be in the range of $2.33 to $2.40. The Company now expects weighed average diluted shares outstanding for the quarter of 59.3 million.
Since 1993, EPAM Systems, Inc. (NYSE: EPAM) has leveraged its advanced software engineering heritage to become the foremost global digital transformation services provider – leading the industry in digital and physical product development and digital platform engineering services. Through its innovative strategy; integrated advisory, consulting, and design capabilities; and unique ‘Engineering DNA,’ EPAM’s globally deployed hybrid teams help make the future real for clients and communities around the world by powering better enterprise, education and health platforms that connect people, optimize experiences, and improve people’s lives. In 2021, EPAM was added to the S&P 500 and included among the list of Forbes Global 2000 companies.
Selected by Newsweek as a 2021, 2022 and 2023 Most Loved Workplace, EPAM’s global multidisciplinary teams serve customers in more than 50 countries across six continents. As a recognized leader, EPAM is listed among the top 15 companies in Information Technology Services on the Fortune 1000 and ranked four times as the top IT services company on Fortune’s 100 Fastest Growing Companies list. EPAM is also listed among Ad Age’s top 25 World’s Largest Agency Companies for three consecutive years, and Consulting Magazine named EPAM Continuum a top 20 Fastest Growing Firm.
Learn more at www.epam.com and follow EPAM on Twitter and LinkedIn.