Fourth Quarter revenues up 10.1% sequentially and 34.4% year-over-year;
Annual revenues of $334.5 Million, up 50.8% year-over-year led by strong growth out of Europe of 82.8%;
Provides guidance for 2012 revenue growth of between 23% and 25%
(BUSINESS WIRE)-- EPAM Systems, Inc. (NYSE: EPAM), a leading software engineering and IT outsourcing (ITO) provider with development centers across Central and Eastern Europe (CEE), today announced results for its fiscal fourth quarter and full year ended December 31, 2011.
Fourth Quarter Highlights
Quarterly revenues increased to a record $95.1 million, up 34.4% compared to the year-ago quarter and 10.1% sequentially
Quarterly diluted earnings per share (EPS) on a GAAP basis was $0.29, compared to $0.27 in the year-ago quarter
Quarterly, Non-GAAP diluted EPS was $0.30, compared to $0.31 in the year-ago quarter
Net headcount for IT professionals increased 30.2% to 6,968 as of December 31, 2011, from 5,350 as of December 31, 2010
Revenues for the fourth quarter of 2011 were $95.1 million, up 34.4% compared to $70.8 million in the fourth quarter of 2010.
Income from operations was $15.4 million, an increase of 20.1% compared to $12.1 million in the fourth quarter of 2010. Non-GAAP income from operations was $16.3 million, an increase of $2.0 million or 14.2%, from $14.8 million in 2010. Net income was $12.4 million, or $0.29 per diluted share, compared to $11.6 million, or $0.27 per diluted share in the fourth quarter of 2010.
Non-GAAP net income was $13.8 million, resulting in non-GAAP diluted EPS of $0.30, compared to $13.8 million, or non-GAAP diluted EPS of $0.31 in the fourth quarter of 2010. Reconciliations of non-GAAP financial measures to operating results and diluted EPS are included at the end of this release.
Full Year 2011 Highlights
Revenues increased 50.8% to a record $334.5 million from the previous year.
Diluted EPS was $0.63, compared to $0.79 in the previous year
Non-GAAP diluted EPS was $1.19, compared to $0.94 in the previous year
Net headcount for IT professionals increased 30.2% to 6,968 as of December 31, 2011
Revenue for 2011 increased to a record $334.5 million, up 50.8% from $221.8 million reported in 2010.
Income from operations for 2011 was $55.0 million, an increase of 67.8% from the previous year. Operating margin increased 166 basis points to 16.4% from 14.8% in the previous year. Non-GAAP income from operation was $60.9 million.
Net income for 2011 was $44.4 million, or $0.63 per diluted share, compared to $28.3 million, or $0.79 per diluted share for 2010. Non-GAAP net income was $53.9 million resulting in on-GAAP diluted EPS of $1.19. This compares to non-GAAP net income of $35.5 million, or non-GAAP diluted EPS of $0.94 in 2010. Reconciliations of non-GAAP financial measures to GAAP operating results and diluted EPS are included at the end of this release.
Arkadiy Dobkin, CEO and President of EPAM Systems said, “We are pleased to have completed our initial public offering in February, and are excited to share our results with you for our first quarter as a public company. I would like to thank our entire staff, business partners and everyone who helped make our IPO a success.”
“Despite the global macroeconomic uncertainty, 2011 was a very successful year for EPAM as we delivered strong growth across our targeted services areas, verticals and geographies. First, we benefited from an increased reliance on offshore outsourcing in Europe, where we remain well- positioned to capitalize on this rapidly growing trend. At the same time we have been successfully converting from a highly specialized software engineering shop that served mostly global leading ISVs, into one of the preferred vendors in key and rapidly growing vertical segments. In today’s challenging environment of yet another massive technology conversion, companies are in search for reliable partners with strong engineering heritage and proven hands-on expertise in such emerging trends as social enterprise and enterprise mobility, and cloud and big data. Clients are expecting to receive real help and guidance in delivering complex solutions and services cost-effectively by utilizing a global delivery model but with quality they expected in the past only from local specialized vendors and professional services divisions of leading software product vendors.”
EPAM generated cash from operations of $26.3m in the fourth quarter of 2011, an increase of $7.6m generated over the fourth quarter of 2010. As of December 31, 2011 EPAM had cash and cash equivalents of $88.8 million and $30.0 million of available borrowings under a revolving line of credit, which expires on October 15, 2013. Currently, the Company has no outstanding borrowings under its revolver.
First Quarter and Full Year 2012 Outlook
EPAM is providing the following guidance:
First quarter 2012 Revenue of between $92 million and $94 million, representing a growth rate of 26% to 29% over 2011 revenue.
First quarter 2012 non-GAAP diluted EPS is expected to be in the range of $0.28 to $0.30. These non-GAAP diluted EPS estimates are based on 2012 fiscal year weighted average of 46.3 million diluted shares.
Full year 2012 Revenue expected to be between $411 million and $418 million, representing a growth rate of 23% to 25% over 2011 revenue.
On a full year basis, we expect non-GAAP net income growth to be in the range of 10% - 12% with a tax rate of approximately 17%.
Conference Call Information
EPAM will hold a conference call to discuss its fourth quarter and full year 2011 results at 8:00 a.m. Eastern this morning. A live webcast of the call may be accessed over the Internet from the Company's Investor Relations website at investors.epam.com. Participants should follow the instructions provided on the website to download and install the necessary audio applications. The conference call also is available by dialing 877-941-2068 (domestic) or 1-480-629-9712 (international) and entering passcode 4523859. Participants should ask for the EPAM Systems fourth quarter and full year conference call.
A replay of the live conference call will be available approximately one hour after the call. The replay will be available on the Company's website or by dialing 1-877-870-5176 (domestic) or 1- 858-384-5517 (international) and entering the replay passcode 4523859. The telephonic replay will be available until Tuesday, April 3, 2012.
About EPAM Systems
Established in 1993, EPAM Systems, Inc. (NYSE: EPAM) is a leading global IT services provider with delivery centers throughout Central and Eastern Europe. Headquartered in the United States, EPAM employs over 7,000 IT professionals and provides services to clients worldwide using a global delivery model through its client management and delivery operations in the United States, Belarus, Hungary, Russia, Ukraine, UK, Germany, Kazakhstan, Sweden, Switzerland and Poland.
Adjusted (Non-GAAP) Financial Measures
EPAM supplements results reported in accordance with principles generally accepted in the United States, referred to as GAAP, with non-GAAP financial measures. Management believes these measures help illustrate underlying trends in the company’s business and uses the measures to establish budgets and operational goals, communicated internally and externally, for managing the company’s business and evaluating its performance. Management also believes these measures help investors compare EPAM’s operating performance with its results in prior periods and compare EPAM and similar companies. 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 expense, write-off and recovery, amortization of purchased intangible assets, goodwill impairment, legal settlement, foreign exchange gains and losses, and M&A costs. However, because EPAM’s reported non-GAAP financial measures are not calculated according to GAAP, these measures are not comparable to GAAP and may not necessarily be comparable to similarly described non-GAAP measures reported by other companies within the company’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 its consolidated financial statements, which are prepared according to GAAP.
Forward-Looking Statements
This press release may include statements that constitute forward-looking statements within the meaning of the safe harbor provisions Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. These risks and other factors include, but are not limited to, those described under the caption “Risk Factors” in our most recent Annual Report on Form 10-K and in our other filings with the Securities and Exchange Commission. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “intend,” “potential,” “might,” “would,” “continue” or the negative of these terms or other comparable terminology. Actual results, level of activity, performance or achievements may differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, and these differences may be material and adverse. 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 law.
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Contacts
EPAM Systems, Inc.
Ilya Cantor, +1-267-759-9000 x64588
Chief Financial Officer
investor_relations@epam.com
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