- EPAM Systems, Inc. (NYSE:EPAM) shares are plummeting Monday after slashing its second quarter and full year 2023 financial outlook due to sluggishness in the near-term demand environment.
- After careful assessment of changes in the company's May and June forecast data, EPAM has also seen a reduction in the total pipeline.
- Given the continued uncertainty in the demand environment, the company sees second-quarter revenues of $1.160 billion-$1.170 billion, compared with prior guidance of $1.195 billion-$1.205 billion. This reflects a year-over-year decrease of 2.5% at the midpoint of the range. The Street view stands at $1.20 billion.
- EPAM now expects Q2 non-GAAP EPS of $2.33-$2.40, compared with prior guidance of $2.38-$2.46. The Street view is pegged at $2.41.
- The company has been seeing slower pipeline conversions as its clients have become spending cautiously, specifically in the 'build' segment of the global IT services market.
- For the full year, revenues are expected to be $4.650 billion-$4.800 billion, compared with the prior forecast of $4.950 billion-$5 billion. This reflects a year-over-year decrease of 2% at the midpoint of the range. The street view is pegged at $4.96 billion.
- EPAM expects non-GAAP EPS to be $9.80-$10.20 (consensus $10.72), compared with the earlier outlook of $10.60-$10.80 for the year.
- On the positive side, EPAM is encouraged by the increasing pace of new logo acquisition and 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 of EPAM.
- Price Action: EPAM shares are trading lower by 14.12% to $223.00 in the premarket session on the last check Monday.
Why EPAM Systems Shares Are Slumping Today
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