EPAM cuts annual revenue forecast on weak software services demand

Aug 6 (Reuters) - EPAM Systems ‌on Thursday ​cut ​its annual revenue forecast, indicating a slowing demand for its software services and sending its shares ‌down 11% in premarket trading.

The company provides a ⁠wide range of IT services including consulting, cloud and AI transformation ‌and software engineering.

Here are some ‌details:

• EPAM saw mixed demand across its businesses, with weakness in the vertical serving software and technology clients ​partly offset by continued strength in financial services.

• Software and IT services providers are grappling with investor ⁠fears that advanced AI tools by companies such as OpenAI and Anthropic could ​automate some software development tasks and weigh on demand.

• Revenue from financial services clients rose 11.5% ​year over year, while software and ‌hi-tech revenue fell 1.3% and business information and media revenue declined 2.1%.

• The company now ⁠expects revenue growth of 3.2% to 4.2% for 2026, compared with its prior forecast of 4.0% to 6.5%.

• EPAM forecast ⁠annual adjusted profit in the range of $13.08 to $13.24 per share, compared with ​its prior view of $12.98 to $13.28.

• The company expects third-quarter revenue in the range of $1.410 billion to $1.425 billion, below estimates of $1.45 billion, according ‌to data compiled by LSEG.

• Revenue rose 4.5% to $1.42 billion for the quarter ended June ‌30, compared with analysts' average estimate of $1.41 billion.

• Adjusted ⁠profit came in at $3.38 ‌per share for the ​second quarter, compared with estimates of $3.14 per share.

(Reporting by Prathik Jayaprakash in Bengaluru; Editing by Vijay ‌Kishore)

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