Key Highlights

● Second-quarter revenue rose 4.5 per cent year over year to $1.415 billion.

● Non-GAAP operating margin rose to 16.4 per cent from 15.0 per cent a year earlier.

● Cash and equivalents fell to $794.3 million from $1.301 billion at the end of 2025.

● Share repurchases totalled $409.0 million for the first half, including $85.0 million in Q2.

EPAM Systems (NYSE:EPAM), a digital engineering and software services provider, published second-quarter 2026 results on 6 August 2026. Revenue was $1.415 billion, up 4.5% on a reported basis and 3.4% in organic constant currency, which strips out currency and acquisition effects. Profitability improved faster than sales. GAAP operating margin was 10.8%, against 9.3% a year earlier, while non-GAAP operating margin reached 16.4%, up from 15.0%. GAAP diluted earnings per share were $1.97, compared with $1.56, and non-GAAP diluted earnings per share were $3.38, compared with $2.77. GAAP income from operations was $152.2 million and non-GAAP income from operations $232.7 million, while GAAP net income was $103.0 million. Six-month revenue was $2.815 billion, up 6.0%, so the second quarter was slower than the first.

Where Growth Came From

The company release, as fetched, did not break out verticals. A secondary report published on 9 August 2026 put financial services revenue at about $366 million, up 11.5%, with software and hi-tech down 1.3% and business information and media down 2.1%. We treat those vertical figures as less certain than the company's own totals. The same report described EMEA revenue up 10.9% to $582 million, the Americas up 0.5% to $806 million and Asia-Pacific down 0.3%. Total headcount was about 62,850 at 30 June, with delivery professionals of about 56,650, up 0.3% from the end of March. Our interpretation is that growth is not being driven by large hiring.

Cash and Capital Returns

Cash, equivalents and restricted cash fell to $794.3 million from $1.301 billion at the end of 2025. Operating activities used $38.8 million of cash in the first half, compared with $77.4 million generated a year earlier, and share repurchases totalled $409.0 million for the period, including $85.0 million in the second quarter. Cash use therefore reflects buybacks as well as weaker operating cash generation, and the release excerpt we read does not explain the swing in operating cash flow. On 31 August 2026, market data indicated that Engine Capital, holding about 1.5% of EPAM, was urging larger buybacks or a strategic review. EPAM and Engine did not respond to requests for comment, so this remains a report rather than a confirmed development.

An Activist Investor Is Pushing for More Buybacks

EPAM Systems grew profitability faster than revenue, but growth itself slowed sequentially and headcount barely moved, suggesting the gains came from pricing and mix rather than expansion. Market data reported in late August that activist investor Engine Capital, holding about 1.5 per cent of the company, was urging larger buybacks or a strategic review, a development neither company confirmed, adding a new variable to the third-quarter guidance that already implies slower growth than the second quarter delivered.