EPAM Systems (EPAM) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue reached $1.415 billion, up 4.5% year-over-year, with organic constant currency growth of 3.4%.

• AI-native revenues accelerated, exceeding $160 million and now represent over 11% of total revenue, with double-digit sequential growth for the sixth consecutive quarter.

• Profitability improved, with GAAP income from operations up 20.4% and non-GAAP income from operations up 14.7% year-over-year.

• Strategic partnerships expanded, including joining the OpenAI Partner Network and deepening collaborations with Google, Anthropic, and others.

• Recognized for AI and consulting leadership by Databricks, Gartner, IDC, Forrester, The Wall Street Journal, Glassdoor, and others.

Financial highlights

• GAAP gross margin improved to 30.4%; non-GAAP gross margin rose to 32%.

• GAAP diluted EPS was $1.97, up 26.3% year-over-year; non-GAAP diluted EPS was $3.38, up 22%.

• Cash flow from operations was negative $2 million in Q2, with free cash flow negative $18 million; cash and equivalents stood at $800 million.

• Net income for Q2 2026 was $103.0 million (7.3% margin), up from $88.0 million (6.5%) in Q2 2025.

• Repurchased 1.3 million shares in Q2, returning $1.6 billion to shareholders since program inception.

Outlook and guidance

• Full-year 2026 revenue growth expected at 3.2%-4.2%, with organic constant currency growth of 2%-3%.

• GAAP income from operations forecasted at 10.5%-11%; non-GAAP at 15.5%-16%.

• GAAP diluted EPS guidance: $8.22-$8.38; non-GAAP diluted EPS: $13.08-$13.24.

• Q3 2026 revenue expected at $1.410-$1.425 billion, with 1.7% year-over-year growth at midpoint.

• Long-term targets include 16%+ non-GAAP operating income margin in 2028 and $1.8B+ cumulative free cash flow from 2026–2028.