EPAM Systems just handed investors a blunt message about how it views its stock: the board approved a new $1 billion share-repurchase program, a two-year authorization that can be executed in the open market, through privately negotiated deals, or via 10b5-1 trading plans. The company stressed it can dial the pace up or down depending on market conditions, but the signal is unmistakable. The authorization’s size is effectively EPAM’s entire cash hoard, a wager that today’s share price undervalues the franchise.

The buyback carries a 24-month term and, as with most such plans, doesn’t obligate EPAM to purchase a specific amount. Still, management framed the move as an expression of confidence in the firm’s trajectory and “AI-native” positioning, saying it expects to keep investing even as it returns cash to shareholders. That balance—funding growth while shrinking the share count—suggests leadership believes the market is underappreciating both the durability of demand for digital engineering and EPAM’s ability to translate that demand into cash.

Crucially, the headline number lines up with the balance sheet. EPAM ended the June quarter with roughly $1.04 billion in cash and cash equivalents, along with modest short-term investments—essentially a mirror image of the new authorization’s capacity. Liquidity is buttressed by a largely undrawn revolving credit facility with $675 million of available borrowing capacity and just $25 million of outstanding debt, giving the company ample room to maneuver if it chooses to accelerate purchases into weakness.

This isn’t EPAM’s first foray into buybacks, either. The company authorized a $500 million program in 2024 and had $82.1 million left under that plan as of June 30—evidence that management has already been leaning on repurchases as a capital-allocation tool through the industry’s choppy patch. The new program effectively reloads—and then some.

The backdrop has been improving. After a period of hesitation in enterprise tech spending, EPAM has posted multiple quarters of better organic constant-currency growth, helped by client work that tilts toward data, cloud and AI-related projects. Earlier this year the company raised its full-year outlook and executed a planned leadership transition, with longtime founder Arkadiy Dobkin moving to executive chairman and Balazs Fejes taking over as CEO—continuity with a nudge toward a next phase. Those dynamics help explain why management feels emboldened to be aggressive on the equity line even as it talks up continued investment in its “AI Agenda.”

Investors should remember that authorizations are optional, not promises, and the timing will inevitably be sensitive to macro and client-budget noise. But the optics matter in capital markets: when a board gives itself room to retire stock equal to the company’s entire cash position, it’s making a valuation call. In EPAM’s case, that call is clear. Management is effectively saying the stock is too low.