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WKN: A1JS9Q ISIN: US29414B1044 Ticker-Symbol: E3M 
Tradegate
18.10.19
17:49 Uhr
167,60 Euro
-2,50
-1,47 %
Branche
Software
Aktienmarkt
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EPAM SYSTEMS INC Chart 1 Jahr
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EPAM SYSTEMS INC 5-Tage-Chart
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166,80
168,10
18.10.
166,80
168,10
18.10.
14.02.2019 | 12:01
(32 Leser)
(0 Bewertungen)

Fourth quarter revenues of $504.9 million, up 26.5% year-over-year

Annual revenues of $1.84 billion, up 27.1% year-over-year

GAAP Diluted EPS of $1.05 for the fourth quarter and $4.24 for the full year

Non-GAAP Diluted EPS of $1.27 for the fourth quarter and $4.38 for the full year

NEWTOWN, Pennsylvania, Feb. 14, 2019 /PRNewswire/ -- EPAM Systems, Inc. (NYSE: EPAM), a leading global provider of digital platform engineering and software development services, today announced results for its fourth quarter and full year ended December 31, 2018.

EPAM logo

"Our focus on developing true partnerships with our customers, attracting and developing the right talent, and continuously evolving our capabilities drove our strong fiscal 2018 results," said Arkadiy Dobkin, CEO & President, EPAM. "Demand for successful transformation strategies is only increasing, and we are well-positioned to help our clients derive new business value and remain competitive."

Fourth Quarter 2018 Highlights

  • Revenues increased to $504.9 million, a year-over-year increase of $105.6 million, or 26.5%, and on a constant currency basis, revenues were up 28.9% over the corresponding period last year;
  • GAAP income from operations was $78.3 million, an increase of $26.2 million, or 50.4% , compared to $52.1 million in the fourth quarter of 2017;
  • Non-GAAP income from operations was $93.1 million, an increase of $26.1 million, or 39.0%, compared to $66.9 million in the fourth quarter of 2017;
  • Diluted earnings per share ("EPS") on a GAAP basis was $1.05, compared to $(0.58) in the fourth quarter of 2017, based on a weighted average share count of 56.9 million fully diluted shares outstanding. The fourth quarter of 2017 was negatively impacted by the $74.6 million provisional charge related to U.S. tax reform; and
  • Non-GAAP diluted EPS was $1.27, an increase of $0.26, or 25.7%, compared to $1.01 in the fourth quarter of 2017.

Full Year 2018 Highlights

  • Revenues increased to $1.84 billion, a year-over-year increase of $392.5 million, or 27.1%, and on a constant currency basis, revenues were up 26.9% year-over-year;
  • GAAP income from operations was $245.8 million, an increase of $72.8 million, or 42.1%, compared to $172.9 million in 2017;
  • Non-GAAP income from operations was $315.1 million, an increase of $80.5 million, or 34.3%, compared to $234.7 million in 2017;
  • Diluted EPS on a GAAP basis was $4.24, compared to $1.32 in 2017 based on a weighted average share count of 56.7 million fully diluted shares outstanding. GAAP diluted EPS in 2018 benefited from the recognition of $26.0 million of net deferred tax assets resulting from the implementation of changes to our tax structure in response to U.S. tax reform. GAAP diluted EPS in 2017 was negatively impacted by the $74.6 million provisional charge related to U.S. tax reform; and
  • Non-GAAP diluted EPS was $4.38, an increase of $0.92, or 26.6%, compared to $3.46 in 2017.

Cash Flow and Other Metrics

  • Cash provided by operating activities was $123.1 million in the fourth quarter of 2018, an increase from $71.2 million in the fourth quarter of 2017; and was $292.2 million in 2018, an increase from $192.8 million in 2017;
  • Cash, cash equivalents and restricted cash totaled $771.7 million as of December 31, 2018, an increase of $188.8 million, or 32.4%, from $582.9 million as of December 31, 2017; and
  • Total headcount was approximately 30,200 as of December 31, 2018. Included in this number were approximately 26,800 delivery professionals, an increase of 16.4% from December 31, 2017.

2019 Outlook - Full Year and First Quarter

Full Year

  • Revenue growth for 2019 will be at least 22%. The Company expects that foreign currency translation will have a 1% unfavorable impact on full year reported revenues. The Company expects revenue growth on a constant currency basis will be at least 23%;
  • The Company expects GAAP income from operations to be in the range of 12.5% to 13.5% of revenues and non-GAAP income from operations to be in the range of 16% to 17% of revenues;
  • The Company expects its GAAP effective tax rate to be approximately 16% and its non-GAAP effective tax rate to be approximately 23%; and
  • The Company expects GAAP diluted EPS will be at least $4.45 for the full year, and non-GAAP diluted EPS will be at least $5.06 for the full year. The Company expects weighted average share count for the year of 57.9 million diluted shares outstanding.

First Quarter

  • Revenues will be at least $518 million for the first quarter, reflecting a year-over-year growth rate of at least 22%. The Company expects foreign currency translation to have a 3% unfavorable impact on year-over-year revenue growth during the quarter. The Company expects year-over-year revenue growth on a constant currency basis to be at least 25%;
  • For the first quarter, the Company expects GAAP income from operations to be in the range of 12% to 13% of revenues and non-GAAP income from operations to be in the range of 16% to 17% of revenues;
  • The Company expects its GAAP effective tax rate to be approximately 12% and its non-GAAP effective tax rate to be approximately 23%; and
  • The Company expects GAAP diluted EPS will be at least $1.00 for the quarter, and non-GAAP diluted EPS will be at least $1.16 for the quarter. The Company expects weighted average share count for the quarter of 57.5 million diluted shares outstanding.

Conference Call Information

EPAM will host a conference call to discuss results on Thursday, February 14, 2019 at 8:00 a.m. Eastern time. The live conference call will be available by dialing +1 (877) 407-0784 or +1 (201) 689-8560 (outside of the U.S.). A webcast of the conference call can be accessed at the Investor Relations section of the Company's website at http://investors.epam.com. A replay will be available approximately one hour after the call by dialing +1 (844) 512-2921 or +1 (412) 317-6671 (outside of the U.S.) and entering the conference ID 13686259. The replay will be available until February 28, 2019.

About EPAM Systems
Since 1993, EPAM Systems, Inc. (NYSE: EPAM) has leveraged its software engineering expertise to become a leading global product development, digital platform engineering, and top digital and product design agency. Through its 'Engineering DNA' and innovative strategy, consulting, and design capabilities, EPAM works in collaboration with its customers to deliver next-gen solutions that turn complex business challenges into real business outcomes. EPAM's global teams serve customers in over 25 countries across North America, Europe, Asia and Australia. EPAM is a recognized market leader in multiple categories among top global independent research agencies and was one of only four technology companies to appear on Forbes 25 Fastest Growing Public Tech Companies list every year of publication since 2013. Learn more at http://www.epam.com/ and follow us on Twitter @EPAMSYSTEMS and LinkedIn.

Non-GAAP Financial Measures

EPAM supplements results reported in accordance with United States generally accepted accounting principles, referred to as GAAP, with non-GAAP financial measures. Management believes these measures help illustrate underlying trends in EPAM's business and uses the measures to establish budgets and operational goals, communicate internally and externally, for managing EPAM's business and evaluating its performance. Management also believes these measures help investors compare EPAM's operating performance with its results in prior periods. EPAM anticipates that it will continue to report both GAAP and certain non-GAAP financial measures in its financial results, including non-GAAP results that exclude stock-based compensation expenses, write-offs and recoveries, acquisition-related costs, amortization of purchased intangible assets, goodwill impairment, certain other one-time charges and benefits, changes in fair value of contingent consideration, foreign exchange gains and losses, the impact of U.S. tax reform, excess tax benefits related to stock-based compensation, and the related effect on income taxes of the pre-tax adjustments. Management also compares operating results on a basis of "constant currency," which is also a non-GAAP financial measure. This measure excludes the effect of foreign currency exchange rate fluctuations by translating the current period revenues and expenses into U.S. dollars at the weighted average exchange rates of the prior period of comparison. Because EPAM's reported non-GAAP financial measures are not calculated in accordance with GAAP, these measures are not comparable to GAAP and may not be comparable to similarly described non-GAAP measures reported by other companies within EPAM's industry. Consequently, EPAM's non-GAAP financial measures should not be evaluated in isolation or supplant comparable GAAP measures, but rather, should be considered together with the information in EPAM's consolidated financial statements, which are prepared in accordance with GAAP.

Forward-Looking Statements

This press release includes statements which may constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the accuracy of which are necessarily subject to risks, uncertainties, and assumptions as to future events that may not prove to be accurate. Factors that could cause actual results to differ materially from those expressed or implied include general economic conditions and the factors discussed in the Company's most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. EPAM undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities law.

EPAM SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Unaudited)

(In thousands, except per share data)






Three Months Ended
December 31,


Year Ended December 31,


2018


2017


2018


2017

Revenues

$

504,931



$

399,297



$

1,842,912



$

1,450,448


Operating expenses:








Cost of revenues (exclusive of depreciation and
amortization)

319,031



254,121



1,186,921



921,352


Selling, general and administrative expenses

97,447



85,430



373,587



327,588


Depreciation and amortization expense

10,183



7,696



36,640



28,562


Income from operations

78,270



52,050



245,764



172,946


Interest and other income, net

1,080



1,799



3,522



4,601


Foreign exchange (loss)/gain

(582)



(1,772)



487



(3,242)


Income before provision for income taxes

78,768



52,077



249,773



174,305


Provision for income taxes

18,803



82,951



9,517



101,545


Net income/(loss)

$

59,965



$

(30,874)



$

240,256



$

72,760


Foreign currency translation adjustments, net of tax

(6,695)



3,425



(21,338)



20,065


Unrealized loss on cash-flow hedging instruments, net of tax

(472)



-



(2,553)



-


Comprehensive income/(loss)

$

52,798



$

(27,449)



$

216,365



$

92,825










Net income/(loss) per share:








Basic

$

1.11



$

(0.58)



$

4.48



$

1.40


Diluted

$

1.05



$

(0.58)



$

4.24



$

1.32


Shares used in calculation of net income/(loss) per share:








Basic

54,031



52,879



53,623



52,077


Diluted

56,887



52,879



56,673



54,984


EPAM SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and per share data)






As of
December 31,
2018


As of
December 31,
2017

Assets




Current assets




Cash and cash equivalents

$

770,560



$

582,585


Accounts receivable, net of allowance of $1,557 and $1,186, respectively

297,685



265,639


Unbilled revenues

104,652



86,500


Prepaid and other current assets

26,171



25,309


Total current assets

1,199,068



960,033


Property and equipment, net

102,646



86,419


Intangible assets, net

57,065



44,511


Goodwill

166,832



119,531


Deferred tax assets

69,983



24,974


Other noncurrent assets

16,208



14,788


Total assets

$

1,611,802



$

1,250,256






Liabilities




Current liabilities




Accounts payable

$

7,444



$

5,574


Accrued expenses and other current liabilities

127,937



89,812


Due to employees

49,683



38,757


Deferred compensation due to employees

9,920



5,964


Taxes payable, current

67,845



40,860


Total current liabilities

262,829



180,967


Long-term debt

25,031



25,033


Taxes payable, noncurrent

43,685



59,874


Other noncurrent liabilities

17,661



9,435


Total liabilities

349,206



275,309


Commitments and contingencies




Stockholders' equity




Common stock, $0.001 par value; 160,000,000 authorized; 54,099,927 and 53,003,420
shares issued, 54,080,192 and 52,983,685 shares outstanding at December 31, 2018
and December 31, 2017, respectively

54



53


Additional paid-in capital

544,700



473,874


Retained earnings

759,533



518,820


Treasury stock

(177)



(177)


Accumulated other comprehensive loss

(41,514)



(17,623)


Total stockholders' equity

1,262,596



974,947


Total liabilities and stockholders' equity

$

1,611,802



$

1,250,256


EPAM SYSTEMS, INC. AND SUBSIDIARIES

Reconciliations of Non-GAAP Financial Measures to Comparable GAAP Financial Measures

(Unaudited)

(In thousands, except percent and per share amounts)


Reconciliation of revenue growth at constant currency to revenue growth as reported under GAAP is presented in the table below:







Three Months Ended
December 31, 2018


Year Ended
December 31, 2018

Revenue growth at constant currency(1)

28.9

%


26.9

%

Foreign exchange rates impact

(2.4)

%


0.2

%

Revenue growth as reported

26.5

%


27.1

%


(1)

Constant currency revenue results are calculated by translating current period revenues in local currency into U.S.
dollars at the weighted average exchange rates of the comparable prior period.

Reconciliation of various income statement amounts from GAAP to non-GAAP for the three months and years ended
December 31, 2018 and 2017:



Three Months Ended December 31, 2018


Year Ended December 31, 2018


GAAP


Adjustments


Non-GAAP


GAAP


Adjustments


Non-GAAP

Cost of revenues (exclusive of
depreciation and amortization)(2)

$

319,031



$

(4,410)



$

314,621



$ 1,186,921


$

(27,245)



$ 1,159,676

Selling, general and administrative
expenses(3)

$

97,447



$

(8,081)



$

89,366



$

373,587



$

(33,998)



$

339,589


Income from operations(4)

$

78,270



$

14,792



$

93,062



$

245,764



$

69,344



$

315,108


Operating margin

15.5

%


2.9

%


18.4

%


13.3

%


3.8

%


17.1

%

Net income(5)

$

59,965



$

12,359



$

72,324



$

240,256



$

7,754



$

248,010


Weighted average diluted shares
outstanding(6)

56,887



-



56,887



56,673



-



56,673


Diluted earnings per share

$

1.05





$

1.27



$

4.24





$

4.38



Three Months Ended December 31, 2017


Year Ended December 31, 2017


GAAP


Adjustments


Non-GAAP


GAAP


Adjustments


Non-GAAP

Cost of revenues (exclusive of
depreciation and amortization)(2)

$

254,121



$

(6,416)



$

247,705



$

921,352



$

(20,868)



$

900,484


Selling, general and administrative
expenses(3)

$

85,430



$

(6,625)



$

78,805



$

327,588



$

(33,281)



$

294,307


Income from operations(4)

$

52,050



$

14,897



$

66,947



$

172,946



$

61,711



$

234,657


Operating margin

13.0

%


3.8

%


16.8

%


11.9

%


4.3

%


16.2

%

Net (loss)/income(5)

$

(30,874)



$

87,500



$

56,626



$

72,760



$

117,542



$

190,302


Weighted average diluted shares
outstanding(6)

52,879



3,065



55,944



54,984



-



54,984


Diluted (loss)/earnings per share

$

(0.58)





$

1.01



$

1.32





$

3.46






















Items (2) through (5) above are detailed in the table below with the specific cross-reference noted in the appropriate
item.


Three Months Ended
December 31,


Year Ended
December 31,


2018


2017


2018


2017

Stock-based compensation expenses

$

4,410



$

6,416



$

27,245



$

20,868


Total adjustments to GAAP cost of revenues(2)

4,410



6,416



27,245



20,868


Stock-based compensation expenses

8,042



6,071



31,943



31,539


Other acquisition-related expenses

209



570



916



1,500


One-time (recoveries)/charges

(170)



(16)



1,139



242


Total adjustments to GAAP selling, general and
administrative expenses(3)

8,081



6,625



33,998



33,281


Amortization of purchased intangible assets

2,301



1,856



8,101



7,562


Total adjustments to GAAP income from operations(4)

14,792



14,897



69,344



61,711


Change in fair value of contingent consideration included in
Interest and other income, net

-



-



(900)



-


Foreign exchange (loss)/gain

582



1,772



(487)



3,242


Provision for/(benefit from) income taxes:








Tax effect on non-GAAP adjustments

(1,855)



(2,946)



(12,862)



(12,736)


Net discrete charge/(benefit) related to U.S. tax reform

13



74,632



(29,971)



74,632


Excess tax benefits related to stock-based compensation

(1,173)



(855)



(17,370)



(9,307)


Total adjustments to GAAP net income/(loss)(5)

$

12,359



$

87,500



$

7,754



$

117,542


















(6) There was a 3,065 increase to the shares used in the calculation of diluted earnings per share on a non-GAAP
basis during the three months ended December 31, 2017 as these shares were excluded from the calculation of
diluted loss per share on a GAAP basis due to the anti-dilutive effect of these shares as a result of the net loss in
the period. There were no adjustments to GAAP weighted-average diluted common shares outstanding in the

calculation of diluted earnings per share on a non-GAAP basis during the three months ended December 31,

2018 and twelve months ended December 31, 2018 and 2017.


EPAM SYSTEMS, INC. AND SUBSIDIARIES

Reconciliations of Guidance Non-GAAP Measures to Comparable GAAP Measures

(Unaudited)

(In percent, except per share amounts)


The below guidance constitutes forward-looking statements within the meaning of the federal securities laws and is based on a number of assumptions that are subject to change and many of which are outside the control of the Company. Actual results may differ materially from the Company's expectations depending on factors discussed in the Company's filings with the Securities and Exchange Commission.


Reconciliation of projected revenue growth in constant currency is presented in the table below:






First Quarter 2019


Full Year 2019

Revenue growth at constant currency (at least)(7)

25

%


23

%

Foreign exchange rates impact

(3)

%


(1)

%

Revenue growth (at least)

22

%


22

%



(7)

Constant currency revenue results are calculated by translating current period projected revenues in local currency into U.S. dollars at the weighted average exchange rates of the comparable prior period.

Reconciliation of projected GAAP to non-GAAP income from operations as a percentage of revenues is presented in the table below:






First Quarter 2019


Full Year 2019

GAAP income from operations as a percentage of revenues

12% to 13%


12.5% to 13.5%

Stock-based compensation expenses

3.5

%


3.0

%

Included in cost of revenues (exclusive of depreciation and amortization)

1.7

%


1.4

%

Included in selling, general and administrative expenses

1.8

%


1.6

%

Amortization of purchased intangible assets

0.5

%


0.5

%

Non-GAAP income from operations as a percentage of revenues

16% to 17%


16% to 17%

Reconciliation of projected GAAP to non-GAAP effective tax rate is presented in the table below:






First Quarter 2019


Full Year 2019

GAAP effective tax rate (approximately)

12

%


16

%

Tax effect on non-GAAP adjustments

4.3

%


2.9

%

Excess tax benefits related to stock-based compensation

6.7

%


4.1

%

Non-GAAP effective tax rate (approximately)

23

%


23

%

Reconciliation of projected GAAP to non-GAAP diluted earnings per share is presented in the table below:






First Quarter 2019


Full Year 2019

GAAP diluted earnings per share (at least)

$

1.00



$

4.45


Stock-based compensation expenses

0.31



1.11


Included in cost of revenues (exclusive of depreciation and amortization)

0.15



0.54


Included in selling, general and administrative expenses

0.16



0.57


Amortization of purchased intangible assets

0.04



0.16


Foreign exchange loss

0.01



0.02


Provision for income taxes:




Tax effect on non-GAAP adjustments

(0.08)



(0.29)


Excess tax benefits related to stock-based compensation

(0.12)



(0.39)


Non-GAAP diluted earnings per share (at least)

$

1.16



$

5.06


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