EPAM Systems, Inc.EPAM

EPAM Systems, Inc. Earnings Per Share Disclosure

10-KFiled Feb 26, 20262 min read
EARNINGS PER SHARE
Basic earnings per share is computed by dividing net income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include outstanding stock options, unvested equity-settled RSUs and the stock to be issued under the Company’s ESPP. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method.
The following table sets forth the computation of basic and diluted earnings per share of common stock as follows:
 For the Years Ended December 31,
 202520242023
Numerator for basic and diluted earnings per share:
Net income$377,678 $454,533 $417,083 
Numerator for basic and diluted earnings per share$377,678 $454,533 $417,083 
Denominator:  
Weighted average common shares for basic earnings per share55,893 57,288 57,829 
Net effect of dilutive equity awards and stock issuable under the ESPP
340 695 1,256 
Weighted average common shares for diluted earnings per share56,233 57,983 59,085 
Net Income per share:  
Basic$6.76 $7.93 $7.21 
Diluted$6.72 $7.84 $7.06 
The number of shares underlying equity-based awards that were excluded from the calculation of diluted earnings per share as their effect would be anti-dilutive was 1,106 thousand, 896 thousand and 415 thousand for the years ended December 31, 2025, 2024 and 2023, respectively.

Historical Timeline

Fiscal YearFiled
2025Feb 26, 2026Showing above
2024Feb 28, 2025
2023Feb 22, 2024
2022Feb 24, 2023
2021Feb 25, 2022
2020Feb 25, 2021
2019Mar 2, 2020
2018Feb 26, 2019
2017Feb 27, 2018
2016Mar 1, 2017
2015Feb 23, 2016

About Earnings Per Share Disclosures

The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.

Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.

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