By Nate Wolf

Shares of EPAM Systems plummeted Thursday after the software-design company reported better-than-expected quarterly earnings but issued tepid guidance for 2026.

EPAM reported adjusted earnings of $3.26 a share for the fourth quarter, surpassing analysts' consensus call for $3.16, according to FactSet. Revenue totaled $1.41 billion, up 13% from last year and ahead of the $1.39 billion Wall Street estimated.

The company expects revenue growth of 4.5% to 7.5% in 2026, down from 15.4% in 2025 and lower at the midpoint than the 6.7% growth analysts had forecast. While EPAM's adjusted earnings outlook was above expectations, it guided for non-adjusted earnings per share of $7.95 to $8.25 in 2026. Wall Street was looking for earnings of $8.62 a share.

EPAM stock dropped 20% on Thursday. The broader selloff in software stocks has weighed on the shares, which were already down 18% this year as of Wednesday's close.

Like other software players, EPAM is working to integrate artificial intelligence into its offerings, positioning itself as a partner for clients' AI initiatives. But the heightened scrutiny on software stocks has meant any weakness in earnings or guidance can cause a pullback.

"Our 2025 performance reflects our steady execution and meaningful progress in driving business transformation and AI foundational readiness for our clients," CEO Balazs Fejes said in a statement. "By continuing to invest in AI innovation, talent development and strategic partnerships, we are driving our own transformation."

Write to Nate Wolf at nate.wolf@barrons.com

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February 19, 2026 10:02 ET (15:02 GMT)

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