Cash generation has become strained, evidenced by an operating cash flow to net income ratio of -0.44 in 2026Q1 and a $229.6 million working capital outflow.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 |
|---|
| Cash from Operations | 594.41M | 654.93M | 559.17M | 562.63M | 464.1M | 572.33M | 544.41M | 287.45M | 292.22M | 195.36M | 164.82M | 76.39M | 104.87M | 58.23M | 48.5M | 54.52M | 20.47M | 26.11M |
| Operating CF Margin % | - | 12% | 11.83% | 12% | 9.62% | 15.23% | 20.47% | 12.53% | 15.86% | 13.47% | 14.21% | 8.36% | 14.37% | 10.49% | 11.18% | 16.3% | 9.23% | 17.42% |
| Operating CF Growth % | -118.23% | 17.13% | -0.62% | 21.23% | -18.91% | 5.13% | 89.39% | -1.63% | 49.58% | 18.53% | 115.75% | -27.16% | 80.12% | 20.05% | -11.04% | 166.3% | -21.6% | - |
| Net Income | 386.72M | 377.68M | 454.53M | 417.08M | 419.42M | 481.65M | 327.16M | 261.06M | 240.26M | 72.76M | 99.27M | 84.46M | 69.64M | 61.99M | 54.48M | 44.35M | 28.31M | 13.53M |
| Depreciation & Amortization | 156.33M | 166.08M | 127.1M | 132.7M | 140.05M | 145.15M | 129.24M | 101.18M | 36.64M | 28.56M | 23.39M | 17.39M | 17.48M | 15.12M | 10.88M | 7.54M | 6.24M | 5.62M |
| Stock-Based Compensation | 178.23M | 176.76M | 167.3M | 147.73M | 99.91M | 111.66M | 75.24M | 72.04M | 59.19M | 52.41M | 49.24M | 45.83M | 24.62M | 13.15M | 6.83M | 2.87M | 2.94M | 2.41M |
| Deferred Taxes | -42.61M | -59.3M | -64.19M | -37.19M | -42.16M | -46.9M | -19.99M | -7.76M | -48M | 12.56M | -3.3M | -15.33M | -3.27M | 41K | -3.93M | 497K | -2.7M | -2.67M |
| Other Non-Cash Items | 191.54M | 184.9M | 1.74M | 27.48M | 76.72M | 15.63M | 9.05M | 6.38M | -864K | -3.96M | 2.5M | -4.26M | 5.68M | -4.67M | -2.06M | 3.2M | 537K | 3.98M |
| Working Capital Changes | -275.79M | -191.19M | -127.31M | -125.17M | -229.83M | -134.86M | 23.71M | -145.44M | 5M | 33.03M | -6.28M | -51.71M | -9.28M | -27.41M | -17.7M | -3.94M | -14.85M | 3.25M |
| Change in Receivables | -71.25M | -69.13M | 15.59M | 32.36M | -192.71M | -211.68M | 4.24M | -87.17M | -31M | -58.74M | -30.61M | -47.69M | -30.41M | -17.3M | -12.66M | -19.03M | -13.79M | -2.24M |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 87.17M | -899.46M | -688.51M | -506.74M | -363K | 25.24M | -4.89M | -5.67M | 13M | 1.38M | 522K |
| Change in Payables | -25.99M | -12.68M | -29.08M | 154K | -2.93M | -2.4M | 2.43M | -1.69M | -772K | 1.22M | 741K | -2.78M | -2.6M | -2.9M | 1.41M | 254K | -2.65M | 1.54M |
| Cash from Investing | -59.38M | -49.05M | -884.98M | -66.77M | -182.93M | -368.92M | -167.15M | -145.37M | -112.12M | -36.17M | -9.32M | -125.49M | -52.93M | -21.82M | -59.63M | -17.41M | -10.83M | -9.03M |
| Capital Expenditures | -42.47M | -42.24M | -32.15M | -28.41M | -81.63M | -111.5M | -68.79M | -99.31M | -37.57M | -29.81M | -29.32M | -17.96M | -15.84M | -15.92M | -27.08M | -17.09M | -8.37M | -1.05M |
| CapEx % of Revenue | 0.76% | 0.77% | 0.68% | 0.61% | 1.69% | 2.97% | 2.59% | 4.33% | 2.04% | 2.05% | 2.53% | 1.97% | 2.17% | 2.87% | 6.24% | 5.11% | 3.77% | 0.7% |
| Acquisitions | -7.07M | -3.43M | -912.16M | -24.82M | -10.64M | -314.96M | -18.89M | -39.32M | -74.27M | -6.84M | -5.5M | -76.91M | -37.09M | -20K | -32.95M | 0 | -412K | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | -17.45M | -3.34M | 2.31M | -9.94M | -29.03M | 79K | 1.02M | -6.74M | -699K | 473K | 25.5M | -30.46M | 4K | -5.88M | 401K | -315K | -2.05M | -7.98M |
| Cash from Financing | -693.88M | -651.2M | -390.41M | -165.77M | -2.02M | -59.56M | -765K | 20.36M | 23M | 49.75M | 10.47M | 33.76M | 10.35M | 15.5M | 38.85M | -1.56M | -8.04M | 6.46M |
| Debt Issued (Net) | 139.44M | 0 | -1.86M | -2.14M | -13.78M | 55K | -18K | -9K | -3.49M | -103K | -10.13M | 35M | 0 | 0 | 0 | 0 | -7.08M | 7M |
| Equity Issued (Net) | -566.87M | 0 | -398.03M | -164.92M | 50.66M | 26.29M | 26.41M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 32.36M | 0 | -1.07M | -540K |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | -602.62M | 0 | -398.03M | -164.92M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -7.32M | -540K |
| Other Financing | -266.45M | -651.2M | 9.48M | 1.29M | -38.9M | -85.9M | -27.16M | 20.37M | 26.5M | 49.85M | 20.6M | -1.24M | 10.35M | 15.5M | 6.48M | -1.56M | 105K | 0 |
| Net Change in Cash | -135.88M | 10.98M | -752.72M | 359.47M | 234.29M | 125.81M | 385.85M | 165.98M | 188.86M | 220.56M | 162.58M | -21.09M | 51.33M | 51.09M | 29.32M | 34.79M | 1.08M | 22.27M |
| Free Cash Flow | 543.64M | 612.69M | 527.02M | 534.22M | 382.48M | 460.83M | 475.61M | 188.15M | 254.64M | 165.56M | 135.5M | 58.43M | 89.03M | 42.3M | 21.42M | 37.43M | 12.11M | 25.06M |
| FCF Margin % | 9.79% | 11.23% | 11.15% | 11.39% | 7.93% | 12.26% | 17.88% | 8.2% | 13.82% | 11.41% | 11.68% | 6.39% | 12.2% | 7.62% | 4.94% | 11.19% | 5.46% | 16.72% |
| FCF Growth % | 29.85% | 16.26% | -1.35% | 39.67% | -17% | -3.11% | 152.79% | -26.11% | 53.81% | 22.18% | 131.91% | -34.37% | 110.46% | 97.48% | -42.76% | 209.11% | -51.69% | - |
| FCF per Share | 10.03 | 10.90 | 9.09 | 9.04 | 6.46 | 7.80 | 8.14 | 3.26 | 4.49 | 3.01 | 2.55 | 1.12 | 1.79 | 0.87 | 0.49 | 1.98 | 0.59 | 1.36 |
| FCF Conversion (FCF/Net Income) | 1.41x | 1.73x | 1.23x | 1.35x | 1.11x | 1.19x | 1.66x | 1.10x | 1.22x | 2.69x | 1.66x | 0.90x | 1.51x | 0.94x | 0.89x | 1.23x | 0.72x | 1.93x |
| Interest Paid | 0 | 0 | 3.74M | 4.7M | 1.66M | 413K | 425K | 832K | 777K | 548K | 566K | 124K | 7K | 26K | 14K | 37K | 101K | 185K |
| Taxes Paid | 0 | 0 | 196.39M | 177.43M | 113.19M | 87.32M | 54.52M | 65.31M | 40.44M | 26.67M | 37.49M | 25.07M | 11.76M | 10.21M | 13.06M | 7.01M | 5.58M | 1.23M |
Geopolitical delivery footprint disruption
As reported in recent financial statements, EPAM's operating cash flow to net income ratio plummeted to -0.44 in 2026Q1, highlighting a significant divergence between accounting profits and actual cash generation that warrants close scrutiny from investors regarding the sustainability of current earnings quality.
The sharp negative conversion in the most recent quarter suggests that reported net income is increasingly decoupled from cash inflows, likely driven by aggressive working capital absorption. This trend indicates that the firm's earnings may be masking underlying operational friction, particularly as the company navigates its complex global delivery transition.
Based on EPAM's reported figures, free cash flow margins have experienced extreme volatility, swinging from a 20.5% peak in 2025Q3 to a negative 3.9% in 2026Q1, which suggests that the company's ability to self-fund operations is currently highly sensitive to quarterly working capital fluctuations.
The erratic nature of FCF generation appears to be a byproduct of the company's ongoing geographic diversification efforts and shifting project mix. Investors should monitor whether this volatility is a temporary feature of the current restructuring or a permanent shift in the firm's cash-generating profile.
According to recent SEC filings, EPAM's working capital requirements have become a significant drag on cash flow, with a massive $229.6 million outflow in 2026Q1 alone, signaling potential inefficiencies in collections or inventory-like project costs that are currently overwhelming the firm's cash generation capabilities.
The substantial cash drain from working capital suggests that the company may be facing extended payment cycles or significant upfront costs associated with new client engagements. This trend implies that the firm's liquidity is increasingly tied up in receivables or project-related assets, limiting its financial flexibility.
Based on the provided data, EPAM has continued to prioritize share repurchases, including a $324 million outflow in 2026Q1, even as operating cash flow turned negative, which may indicate a management preference for supporting equity value over maintaining a conservative cash buffer during periods of operational transition.
The decision to aggressively buy back shares while cash flow is deteriorating suggests a high degree of confidence in long-term prospects, yet it also reduces the company's margin for error. This capital allocation strategy warrants further investigation into whether these funds might be better utilized to stabilize the delivery footprint.
Quick answers to the most common questions about buying EPAM stock.
EPAM Systems, Inc. (EPAM) generated $654.9M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
EPAM Systems, Inc. (EPAM) generated $612.7M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
EPAM Systems, Inc. (EPAM) spent $42.2M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.