EPAM Systems Cuts 2026 Revenue Outlook as Customer Spending Stays Soft, Wedbush Says

MT Newswires Live08-07

EPAM Systems (EPAM) reported better-than-expected Q2 results, but lowered its full-year 2026 revenue outlook due to prolonged customer decision-making and continued weakness in North America amid an uncertain macroeconomic environment, Wedbush said in a Friday note.

Management lowered its full-year 2026 revenue guidance to $5.632 billion to $5.686 billion from $5.675 billion to $5.812 billion due to slower customer spending and macroeconomic headwinds, while maintaining its adjusted operating margin outlook of 15.5% to 16.0%, raising its adjusted earnings per share guidance to $13.08 to $13.24, and forecasting free cash flow conversion of about 70%.

The brokerage said EPAM's Q2 revenue of $1.42 billion and margins exceeded expectations, driven by strong demand in financial services, life sciences and healthcare, as well as disciplined cost management, though North America remained a key drag, with revenue growth of less than 1% year over year.

Wedbush said EPAM's AI-native revenue exceeded $160 million in the second quarter, but many AI-led managed services deals remain unsigned and are now expected to contribute meaningfully beginning in early 2027, leaving the company's legacy business under near-term pressure.

Wedbush maintained its neutral rating on the stock with a price target to $99.

EPAM Systems shares were up over 3% in Friday trading.

Price: 96.55, Change: +3.48, Percent Change: +3.73

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