EPAM Cuts Q2, FY23 Guidance On Demand Uncertainty; Stock Down In Premarket

(RTTNews) - Software solutions company EPAM (EPAM) on Monday announced that it is reducing its second quarter and full year 2023 outlook due to further deterioration in the near-term demand environment.

For the second quarter of the year, the company has revised down its guidance for earnings per share to be in the range of $1.75 to $1.82 from the previous estimate of $1.82 to $1.90.

Adjusted earnings are now expected to be in the range of $2.33 to $2.40 per share, down from from previously expected range of $2.38 to $2.46 per share.

Revenue for the quarter is now expected to be in the range of $1.160 billion to $1.170 billion reflecting a year-over-year decrease of 2.5%, compared to earlier expected range of $1.195 billion to $1.205 billion.

On average, analysts polled by Thomson Reuters expect earnings of $2.41 per share on revenues of $1.2 billion for the quarter. Analysts' estimates typically exclude special items.

Looking ahead for the full year 2023, the company now expects earnings per share to be in the range of $7.28 to $7.68 and adjusted earnings per share to be in the range of $9.80 to $10.20. Previously, the company expected earnings per share to be in the range of $8.11 to $8.31, and adjusted earnings per share to be in the range of $10.60 to $10.80 for the year.

Revenues are now expected to be in the range of $4.65 billion to $4.8 billion, reflecting a year-over-year decrease of 2%, compared to the previous expected range of $4.95 billion to $5 billion.

The Street estimate for full-year earnings is $10.71 per share on revenue of $4.96 billion.

"After careful assessment of changes in our May and June forecast data, we have come to understand that pipeline conversions are occurring at slower rates than previously assumed and we are also seeing some reduction in the total pipeline", the company said in a statement.

In premarket activity, shares of EPAM were trading at $232.89 down 10.65% or $27.65 on the New York Stock Exchange.