Operating cash flow turned negative at -$2.4M in Q2 2026 due to a -$182.7M working capital swing, while buybacks totaled $409M in H1 2026 against negative FCF, though trailing FCF remains positive at $496M.
EPAM Systems, Inc. (EPAM) cash flow statement — 17-year operating, investing & financing cash flows
| 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 | 538.79M | 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 % | -216.08% | 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 | 401.67M | 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 | 156.79M | 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 | 186.07M | 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 | -48.57M | -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 | 192.24M | 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 | -349.4M | -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 | -124.99M | -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 | -24.91M | -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 | -57.68M | -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 | -56.15M | -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 | 1% | 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 | -393K | -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 | -9.68M | -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 | -722.98M | -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) | -1.64M | -2.55M | -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) | -680.27M | -607.58M | -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 | -714.58M | -662.16M | -398.03M | -164.92M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -7.32M | -540K |
| Other Financing | -41.07M | -41.07M | 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 | -252.19M | 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 | 482.64M | 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 % | 8.59% | 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 % | 17.79% | 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 | 9.23 | 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) | 1.20x | 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 |
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.
In 2025, EPAM Systems, Inc. (EPAM) spent $662.2M on share repurchases. This shows the company's commitment to returning capital to its equity investors.
Key Metrics
Top Statement Risk
Working capital swings and AI margin pressure
Metrics are mathematically derived from official filings.
Cash Conversion Turns Negative on Receivables
In Q2 2026, EPAM's operating cash flow turned negative at -$2.4M despite $103M net income, driven by a -$182.7M working capital swing, per reported quarterly data.
The OCF/NI ratio of -0.02 in Q2 2026 starkly contrasts with the 2.59 in Q4 2025, indicating that earnings are not being converted to cash in the near term. The negative working capital change, likely from receivables buildup, suggests that reported profitability may be outpacing cash collections, warranting close monitoring of collection cycles.
FCF Volatility Masks Underlying Recovery
Free cash flow swung from -$54.2M in Q1 2026 to -$17.6M in Q2 2026, yet trailing twelve-month FCF remains positive at $496M, based on reported figures.
The FCF margin of -1.2% in Q2 2026 is a sharp deviation from the 19-20% levels seen in late 2025, but this appears to be a timing issue rather than a structural decline. The sequential improvement from Q1 suggests that cash generation is stabilizing, though the negative FCF in two consecutive quarters highlights the impact of working capital swings on near-term cash flows.
Working Capital Swings Drive Cash Flow Distortion
Working capital changes consumed $182.7M in Q2 2026 and $229.6M in Q1 2026, reversing a $254.1M source in Q3 2025, per SEC filings.
The extreme volatility in working capital—ranging from a $254M source to a $230M use—suggests that EPAM's cash flow is heavily influenced by the timing of receivables and payables, possibly due to large project milestones. This pattern may indicate that the company is experiencing rapid revenue growth with delayed collections, which could pressure liquidity if not managed carefully.
Capital Intensity Remains Low and Stable
Capital expenditures averaged just 0.9% of revenue over the past year, with Q2 2026 CapEx of $15.2M, indicating a asset-light model, as reported in financial statements.
EPAM's capital intensity is minimal, consistent with its services-based business, and CapEx is likely focused on office infrastructure and technology. The low CapEx/Revenue ratio of 1.1% suggests that the company does not require significant fixed asset investment to grow, which should support FCF generation once working capital normalizes.
Aggressive Buybacks Despite Negative FCF
EPAM repurchased $85M of shares in Q2 2026 and $324M in Q1 2026, totaling $409M in H1, while FCF was negative, per quarterly cash flow statements.
The company is deploying significant cash into buybacks even as operating cash flow turns negative, which may indicate confidence in future cash generation or a desire to offset SBC dilution. However, funding buybacks with debt or cash reserves during a period of negative FCF could strain liquidity if the working capital drag persists.
Cumulative Earnings Outpace Cash Generation
Over the last ten quarters, cumulative net income of $1.02B exceeds cumulative operating cash flow of $1.18B, but the gap narrows to $160M, per reported data.
The cumulative OCF/NI ratio of 1.16 indicates that, over time, EPAM has converted earnings into cash effectively, but the recent quarters show a divergence. The negative working capital changes in 2026 suggest that the company may be recognizing revenue ahead of cash collections, which could signal a need to scrutinize the quality of receivables.
What Could Invalidate the Base Case
The negative operating cash flow in Q1 and Q2 2026, despite positive net income, may indicate that the earnings beat is not translating into cash, per reported figures.
If the working capital drag persists, the company may need to slow buybacks or tap into cash reserves, which could signal underlying liquidity pressure. Additionally, the low gross margin of 26.55% and the shift to lower-cost geographies may not fully offset the impact of AI-driven automation on billable hours, potentially leading to a structural decline in cash generation.