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EPAM Systems Reports First Quarter 2012 Results

Revenues of $94.4 million, up 30% over first quarter 2011, led by strong growth in Europe of 62%;

Reports GAAP EPS growth of 50% and Non-GAAP EPS growth of 29% over first quarter 2011

NEWTOWN, PA, May 8, 2012 – EPAM Systems, Inc. (NYSE: EPAM), a leading software engineering and IT outsourcing (ITO) provider with development centers across Central and Eastern Europe (CEE), today reported the following financial results for its quarter ended March 31, 2012:

  • Quarterly revenues increased to $94.4 million, up 29.6% compared to the year-ago quarter.
  • GAAP income from operations was $13.8 million, an increase of 16.7% compared to $11.8 million in the first quarter of 2011.
  • Non-GAAP income from operations was $16.1 million, an increase of $3.4 million, or 26.5%, from $12.8 million in the first quarter of 2011.
  • Quarterly diluted earnings per share (EPS) on a GAAP basis was $0.27, compared to $0.18 in the year-ago quarter, or a 50% increase.
  • Quarterly diluted EPS on a non-GAAP basis was $0.31, compared to $0.24 in the year-ago quarter, or a 29.2% increase.
  • Net headcount for IT Professionals increased 25.9% to 7,310 as of March 31, 2012, from 5,806 as of March 31, 2011.

“We are very pleased with our consistently strong performance and successful start to the year,” said Arkadiy Dobkin, CEO and President of EPAM Systems. “We continue to see strong demand for our expertise in delivering high quality software-engineering services and complex, mission-critical industry solutions. We are pleased with the trends we are seeing in structural growth in IT outsourcing in Europe, and are gaining traction with clients that are diversifying their risk profile by expanding global delivery to Central and Eastern Europe.”

The Company used $4.7 million in cash from operations in the first quarter of 2012, compared to generating $0.4 million in the first quarter of 2011. As of March 31, 2012 the Company had cash and cash equivalents of $112.7 million.    

Financial Outlook

  • Second quarter 2012 revenues of between $100 million and $102 million, representing a growth rate of 25% to 27% over same quarter last year. 
  • Second quarter 2012 non-GAAP diluted EPS is expected to be in the range of $0.30 to $0.32, representing 15% to 23% growth. These non-GAAP diluted EPS estimates are based on an estimated 2012 fiscal year weighted average of 46.3 million diluted shares.
  • Full year 2012 revenue to be between $411 million and $418 million, with non-GAAP net income growth in the range of 10% to 12%.   

Conference Call Information

The Company will hold a conference call to discuss its first quarter results at 8:00 a.m. Eastern this morning. A live webcast of the call may be accessed over the Internet from the Company's Investor Relations website at Participants should follow the instructions provided on the website to download and install the necessary audio applications. The conference call also is available by dialing 877-941-4774 (domestic) or 1-480-629-9760 (international) and entering passcode 4533967. Participants should ask for the EPAM Systems first quarter earnings conference call.


A replay of the live conference call will be available approximately one hour after the call. The replay will be available on the Company's website or by dialing 1-877-870-5176 (domestic) or 1- 858-384-5517 (international) and entering the replay passcode 4533967. The telephonic replay will be available until Tuesday, May 15, 2012.

About EPAM Systems

Established in 1993, EPAM Systems, Inc. (NYSE: EPAM) is a leading global IT services provider with delivery centers throughout Central and Eastern Europe. Headquartered in the United States, EPAM employs over 7,300 IT professionals and provides services to clients worldwide using a global delivery model through its client management and delivery operations in the United States, Belarus, Hungary, Russia, Ukraine, UK, Germany, Kazakhstan, Sweden, Switzerland and Poland.

Non-GAAP Financial Measures

EPAM supplements results reported in accordance with principles generally accepted in the United States, referred to as GAAP, with non-GAAP financial measures. Management believes these measures help illustrate underlying trends in the company’s business and uses the measures to establish budgets and operational goals, communicated internally and externally, for managing the company’s business and evaluating its performance. Management also believes these measures help investors compare EPAM’s operating performance with its results in prior periods and compare EPAM and similar companies. EPAM anticipates that it will continue to report both GAAP and certain non-GAAP financial measures in its financial results, including non-GAAP results that exclude stock-based compensation expense, amortization of purchased intangible assets, foreign exchange gains and losses, and certain other non-recurring charges. However, because EPAM’s reported non-GAAP financial measures are not calculated according to GAAP, these measures are not comparable to GAAP and may not necessarily be comparable to similarly described non-GAAP measures reported by other companies within the company’s industry. Consequently, EPAM’s non-GAAP financial measures should not be evaluated in isolation or supplant comparable GAAP measures, but, rather, should be considered together with its consolidated financial statements, which are prepared according to GAAP.

Forward-Looking Statements

This press release includes statements which may constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the accuracy of which are necessarily subject to risks, uncertainties, and assumptions as to future events that may not prove to be accurate. Factors that could cause actual results to differ materially from those expressed or implied include general economic conditions and the factors discussed in our most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. EPAM undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities law.