EPAM Systems Reports Results for Second Quarter 2013

Newtown, PA — August 8, 2013 — EPAM Systems, Inc. (NYSE: EPAM), a leading provider of complex software engineering solutions and a leader in Central and Eastern European IT services delivery, today announced results for the quarter ended June 30, 2013.

"Our differentiated business model and focus on emerging technology trends has given us a clear competitive advantage in the marketplace and helped us to produce another quarter of industry-leading revenue growth. We continue to see strong demand for our complex software engineering services across our vertical markets from both new and existing clients," commented Arkadiy Dobkin, CEO and President of EPAM Systems, Inc.

Second Quarter 2013 Highlights

• Revenues increased to $133.2 million, up 28.3% year-over-year and 7.2% sequentially;
  
• GAAP income from operations was $17.5 million, an increase of $0.7 million or 4.2% from $16.8 million in the second quarter of 2012;
  
• Non-GAAP income from operations was $21.8 million, an increase of $2.7 million or 14.3% from $19.1 million in the second quarter of 2012;
  
• Non-GAAP quarterly diluted EPS was $0.40, up 8.1% from $0.37 in the year-ago quarter;
  
• Quarterly diluted earnings per share (EPS) on a GAAP basis was $0.29, flat compared to the year-ago quarter.

EPAM generated cash from operations of $8.0 million in the second quarter of 2013. At June 30, 2013, cash and cash equivalents were $107.5 million.

Reconciliations of non-GAAP financial measures to operating results and diluted EPS are included at the end of this release.

Corporate Highlights

• Forbes named EPAM number 6 in the Forbes’ list of America’s 25 Fastest-Growing Tech Companies, which includes some of the most well-respected companies in technology such as LinkedIn, Facebook, Apple, Google, and Cognizant. This list was developed to identify firms that have proven and sustainable businesses with a pipeline of innovative ideas. In order to qualify for membership in the list, Forbes requires sales growth of at least 10% for each of the past three fiscal years and over the last 12 months, as well as estimated earnings growth above 10% over the next three to five years.
  
• EPAM’s Innovation Lab project created with its long-standing client, Wolters Kluwer, won the IT Outsourcing Project of the Year category at the 2013 European Outsourcing Association ("EOA") Awards and Best Practice Showcase. The winners were announced in Amsterdam, Netherlands, on April 25, during the annual EOA Awards ceremony that celebrates best pan-European IT practices.
  
• EPAM was recognized with a Duke’s Choice Award. At the event, Oracle recognized companies for their innovative projects and significant contribution to the Java community. The Award winners were announced on April 23 at JavaOne Russia 2013 in Moscow as part of the regional JavaOne conference series.

Full Year and Third Quarter 2013 Outlook

"We remain confident that the demand for our service offerings will be strong for the balance of the year. Our technical expertise combined with the investments that we have made to expand our scope of services, both organically and through acquisitions, have positioned us for continued future growth across the geographies and verticals that we serve." concluded Mr. Dobkin.

Based on current conditions, EPAM reiterates full year guidance of expected year-over-year revenue growth in the range of 23% to 25%. Non-GAAP net income growth for 2013 is expected to be in the range of 12% to 15% year-over-year, with an effective tax rate of approximately 20%.

For the third quarter of 2013, EPAM expects revenues between $135 million and $137 million, representing a growth rate of 23% to 25% over third quarter 2012 revenues. Third quarter 2013 non-GAAP diluted EPS is expected to be in the range of $0.41 to $0.42 based on an estimated third quarter 2013 weighted average of 48.7 million diluted shares.

About EPAM Systems

Established in 1993, EPAM Systems, Inc. (NYSE:EPAM) provides software engineering solutions through its leading Central and Eastern European service delivery platform. Headquartered in the United States, EPAM employs approximately 8,900 IT professionals and serves clients worldwide from its locations in the United States, Canada, UK, Switzerland, Germany, Sweden, Netherlands, Belarus, Hungary, Russia, Ukraine, Kazakhstan and Poland.

Contact:
EPAM Systems, Inc.
Ilya Cantor, Chief Financial Officer
Phone: +1-267-759-9000 x64588
Fax: +1-267-759-8989
[email protected]