EPAM retired about 5% of its shares for $500 million while sales are guided flat
EPAM paid UBS $500 million up front and retired about 5% of its share count in a day. The per-share growth on show now comes from shrinking the share count rather than selling more, and part of it is bought with borrowed money.
Richard Tangtwo-minute read
EPAM Systems−0.80% — EPAM Systems, down 0.80 percent today paid UBS AG's London branch $500 million on November 9 and had 2,550,695 of its own shares back by the next day, according to the Form 8-K filed on November 10 1. The delivery is about 5% of the shares EPAM expects to average this year, retired at roughly $157 each, above the $155 average analyst target 23. The meaning is blunt: with sales guided flat, per-share growth is now manufactured in the share count, and part of the purchase is borrowed 14.
The share count does the work revenue no longer does
Third-quarter revenue rose 2.3% to $1.426 billion while non-GAAP earnings per share rose 14% 4. The difference is the buyback and margin, not demand. Fourth-quarter revenue is guided between minus 0.2% and plus 0.9%, and the diluted share count for that quarter drops to 49.9 million against a 52.0 million full-year average 4. Revenue growth has now decelerated for four straight quarters 5.
EPAM's revenue growth has fallen every quarter for a year, to 2.3%
Growth peaked at 19.4% in Q3 2025 and faded to 2.3% just as the buyback arrived
Data
| Revenue growth, year over year | |
|---|---|
| Q4 '23 | -6% |
| Q1 '24 | -3.8% |
| Q2 '24 | -2% |
| Q3 '24 | 1.3% |
| Q4 '24 | 7.9% |
| Q1 '25 | 11.7% |
| Q2 '25 | 18% |
| Q3 '25 | 19.4% |
| Q4 '25 | 12.8% |
| Q1 '26 | 7.6% |
| Q2 '26 | 4.5% |
| Q3 '26 | 2.3% |
The funding is the link that can break
The purchase uses cash on hand plus borrowings under the existing credit facility, with final settlement in the first quarter of 2027 at UBS's option 1. That lands at a company whose cash pile fell 25.5% this year to $969.9 million, and whose nine-month operating cash flow dropped to $250 million from $372 million 4. Behind this trade sit a $1.8 billion authorization running through 2029 and a pledge to return at least half of free cash flow annually, obligations carried by a business earning less cash than last year 4.
EPAM's cash has fallen by more than half in two years, to $965 million
Data
| Cash and equivalents | |
|---|---|
| Q4 '23 | $2.04B |
| Q1 '24 | $1.98B |
| Q2 '24 | $1.79B |
| Q3 '24 | $2.04B |
| Q4 '24 | $1.29B |
| Q1 '25 | $1.17B |
| Q2 '25 | $1.04B |
| Q3 '25 | $1.24B |
| Q4 '25 | $1.3B |
| Q1 '26 | $1.04B |
| Q2 '26 | $0.79B |
| Q3 '26 | $0.97B |
The bet underneath: AI-native growth against a shrinking core
AI-native work brought in more than $185 million in the quarter, about 13% of revenue and growing at a double-digit sequential rate, and the 2026 target was lifted to at least $650 million 6. The rest of the business shrank about 6%, by Earnings Whispers' arithmetic 2, and management has ruled out double-digit growth for 2027 6. Wedbush raised its target to $160 from $99 and still rates the stock Neutral 3; the shares fell 6.2% the day after the beat 7 and by November 11 had recovered above the price EPAM just paid 6.
The chain is short: enterprises paying for AI integration, a line compounding fast from a small base, and a suddenly smaller share count. Holders of the remaining shares do well while the first link outgrows the erosion behind it. If it does not, the rest of the authorization is debt-funded support for a flat business, and the reward will go to whoever makes AI-native delivery scale, not to the repurchase.
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