EPAM Reports Results for Third Quarter 2025 and Raises Full Year Revenue and EPS Outlook

Third quarter revenues of $1.394 billion, up 19.4% year-over-year GAAP income from operations was 10.4% of revenues and non-GAAP income from operations was 16.0% of revenues for the third quarter Third quarter GAAP diluted EPS of $1.91, a decrease of $0.46, and non-GAAP diluted EPS of $3.08, a decrease of $0.04 on a year-over-year basis Continued to return capital to shareholders, repurchasing $82.1 million of stock in the third quarter and established a new share repurchase plan for up to $1 billion in additional repurchases as previously announced EPAM raises its full year expected revenue growth rate for 2025 to now be in the range of 14.8% to 15.2%, reflecting a year-over-year growth rate of 15.0% at the midpoint of the range For the full year, EPAM increases expected GAAP diluted EPS to now be in the range of $6.75 to $6.83, and non-GAAP diluted EPS to be in the range of $11.36 to $11.44 , /PRNewswire/ -- EPAM Systems, Inc. (NYSE: EPAM), a leading digital transformation services and product engineering company, today announced results for the third quarter ended September 30, 2025. EPAM Reports Results for Third Quarter 2025 and Raises Full Year Revenue and EPS Outlook "We are pleased to deliver another quarter of improving year-over-year organic constant currency revenue growth, driven by our deep engineering expertise and focus on helping clients build out their AI foundation and transform themselves into AI-Native organizations," said Balazs Fejes, CEO and President at EPAM. "By investing in AI and AI-Native innovation, talent, and partnerships we are accelerating our own transformation, building on top of our core engineering heritage and strengthening our strategic positioning to lead in the future world of AI-Native enterprises." Third Quarter 2025 Highlights Revenues increased to $1.394 billion, a year-over-year increase of $226.8 million, or 19.4%. On an organic constant currency basis, revenues were up 7.1% compared to the third quarter of 2024; GAAP income from operations was $144.9 million, a decrease of $32.0 million, or 18.1%, compared to $177.0 million in the third quarter of 2024; Non-GAAP income from operations was $222.8 million, a decrease of $0.1 million, compared to $222.9 million in the third quarter of 2024; Diluted earnings per share ("EPS") on a GAAP basis was $1.91, a decrease of $0.46, or 19.4%, compared to $2.37 in the third quarter of 2024; and Non-GAAP diluted EPS was $3.08, a decrease of $0.04, or 1.3%, compared to $3.12 in the third quarter of 2024. Cash Flow and Other Metrics Cash provided by operating activities was $372.0 million for the first nine months of 2025, compared to cash provided by operating activities of $428.9 million for the first nine months of 2024; Cash, cash equivalents and restricted cash totaled $1.244 billion as of September 30, 2025, a decrease of $46.9 million, or 3.6%, from $1.290 billion as of December 31, 2024; The Company repurchased 493,000 shares of its common stock for $82.1 million during the third quarter of 2025 under its share repurchase program. As of September 30, 2025, the Company exhausted the $500 million available for purchases of the Company's common stock under the previously authorized share repurchase program; On October 16, 2025, as previously announced, the Board of Directors approved a new share repurchase program with authorization to purchase up to $1.0 billion of EPAM common stock; and Total headcount was approximately 62,350 as of September 30, 2025. Included in this number were approximately 56,100 delivery professionals, an increase of 0.5% from June 30, 2025. 2025 Outlook - Full Year and Fourth Quarter Full Year EPAM expects the following for the full year: Based on the strength of organic constant currency revenue growth and updates to our foreign exchange rate assumptions, the Company raises its expected revenues to be in the range of $5.430 billion to $5.445 billion, reflecting a year-over-year growth rate of 15.0% at the midpoint of the range, an increase from the prior outlook of 14.0% at the midpoint of the range. Additionally, the Company now expects the year-over-year revenue growth rate on an organic constant currency basis to be 4.6% at the midpoint of the range, an increase from the prior outlook of 4.0% at the midpoint of the range; For the full year, EPAM now expects GAAP income from operations to be in the range of 9.4% to 9.7% of revenues and non-GAAP income from operations to be in the range of 15.0% to 15.3% of revenues; The Company now expects its GAAP effective tax rate to be approximately 25.0% and continues to expect its non-GAAP effective tax rate to be approximately 24.0%; and EPAM now expects GAAP diluted EPS to be in the range of $6.75 to $6.83 and non-GAAP diluted EPS to be in the range of $11.36 to $11.44. The Company now expects weighted average diluted shares outstanding for the year to be 56.2 million. Fourth Quarter EPAM expects the following for the fourth quarter: The Company expects revenues will be in the range of $1.380 billion to $1.395 billion for the fourth quarter, reflecting year-over-year growth of 11.1% at the midpoint of the range. The Company expects the year-over-year revenue growth rate on an organic constant currency basis to be 4.4% at the midpoint of the range; For the fourth quarter, EPAM expects GAAP income from operations to be in the range of 10.0% to 11.0% of revenues and non-GAAP income from operations to be in the range of 15.5% to 16.5% of revenues; The Company expects its GAAP effective tax rate to be approximately 24.0% and its non-GAAP effective tax rate to be approximately 23.0%; and EPAM expects GAAP diluted EPS will be in the range of $2.00 to $2.08 for the quarter, and non-GAAP diluted EPS will be in the range of $3.10 to $3.18 for the quarter. The Company expects weighted average diluted shares outstanding for the quarter to be 55.1 million. Conference Call Information EPAM will host a conference call to discuss the results on Thursday, November 6, 2025, at 8:00 a.m. ET. The conference call will be available live on the EPAM website at https://investors.epam.com. Please visit the website at least 15 minutes prior to the call to register for the event. For those who cannot access the live webcast, a replay will be available in the Investor Relations section of the website. About EPAM Systems Since 1993, EPAM Systems, Inc. (NYSE: EPAM) has used its software engineering expertise to become a leading global provider of digital engineering, cloud and AI-enabled transformation services, and a leading business and experience consulting partner for global enterprises and ambitious startups. We address our clients' transformation challenges by focusing EPAM Continuum's integrated strategy, experience and technology consulting with our 30+ years of engineering execution to speed our clients' time to market and drive greater value from their innovations and digital investments.We leverage AI and GenAI to deliver transformative solutions that accelerate our clients' digital innovation and enhance their competitive edge. Through platforms like EPAM AI/RUN™ and initiatives like DIALX Lab, we integrate advanced AI technologies into tailored business strategies, driving significant industry impact and fostering continuous innovation.We deliver globally but engage locally with our expert teams of consultants, architects, designers and engineers, making the future real for our clients, our partners, and our people around the world. We believe the right solutions are the ones that improve people's lives and fuel competitive advantage for our clients across diverse industries. Our thinking comes to life in the experiences, products and platforms we design and bring to market.Added to the S&P 500 and the Forbes Global 2000 in 2021 and recognized by Glassdoor and Newsweek as Most Loved Workplace, our multidisciplinary teams serve customers across six continents. We are proud to be among the top 15 companies in Information Technology Services in the Fortune 1000 and to be recognized as a leader in the IDC MarketScapes for Worldwide Experience Build Services, Worldwide Experience Design Services and Worldwide Software Engineering Services.Learn more at www.epam.com and follow us on LinkedIn. Non-GAAP Financial Measures EPAM supplements results reported in accordance with United States generally accepted accounting principles, referred to as GAAP, with non-GAAP financial measures. Management believes these measures help illustrate underlying trends in EPAM's business and uses the measures to establish budgets and operational goals, communicate internally and externally, for managing EPAM's business and evaluating its performance. Management also believes these measures help investors compare EPAM's operating performance with its results in prior periods. 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 expenses, acquisition-related costs including amortization of acquired intangible assets, impairment of assets, expenses associated with EPAM's humanitarian commitment to its professionals in Ukraine, costs associated with the geographic repositioning of EPAM employees based outside of Ukraine impacted by the war and geopolitical instability in the region, employee separation costs incurred in connection with restructuring programs including the Company's exit from Russia, certain other one-time charges and benefits, changes in fair value of contingent consideration, foreign exchange gains and losses, excess tax benefits and tax shortfalls related to stock-based compensation, and the related effect on income taxes of the pre-tax adjustments. Management also compares revenues on an "organic constant currency basis," which is a non-GAAP financial measure. This measure excludes the effect of acquisitions by removing revenues from an acquired company in the twelve months after completing an acquisition and foreign currency exchange rate fluctuations by translating current period revenues into U.S. dollars at the weighted average exchange rates of the prior period of comparison. Because EPAM's reported non-GAAP financial measures are not calculated in accordance with GAAP, these measures are not comparable to GAAP and may not be comparable to similarly described non-GAAP measures reported by other companies within EPAM'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 the information in EPAM's consolidated financial statements, which are prepared in accordance with GAAP. Forward-Looking Statements This press release includes estimates and statements which may constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the accuracy of which are necessarily subject to risks, uncertainties, and assumptions as to future events that may not prove to be accurate. Our estimates and forward-looking statements are mainly based on our current expectations and estimates of future events and trends, which affect or may affect our business and operations. These statements may include words such as "may," "will," "should," "believe," "expect," "anticipate," "intend," "plan," "estimate" or similar expressions. Those future events and trends may relate to, among other things, developments relating to the war in Ukraine and escalation of the war in the surrounding region, political and civil unrest or military action in the geographies where we conduct business and operate, difficult conditions in global capital markets, foreign exchange markets, global trade and the broader economy, the adoption and implementation of artificial intelligence technologies by EPAM and its clients, and the effect that these events may have on client demand and our revenues, operations, access to capital, and profitability. Other factors that could cause actual results to differ materially from those expressed or implied include general economic conditions, the risk factors discussed in the Company's most recent Annual Report on Form 10-K and the factors discussed in the Company's Quarterly Reports on Form 10-Q, particularly under the headings "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" and other filings with the Securities and Exchange Commission. Although we believe that these estimates and forward-looking statements are based upon reasonable assumptions, they are subject to several risks and uncertainties and are made based on information currently available to us. 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 securities law.Category: Investor EPAM SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In thousands, except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Revenues $ 1,394,373 $ 1,167,527 $ 4,049,508 $ 3,479,589 Operating expenses: Cost of revenues (exclusive of depreciation and amortization) 983,169 763,992 2,899,189 2,409,183 Selling, general and administrative expenses 234,948 206,820 685,546 599,331 Depreciation and amortization expense 31,313 19,736 94,024 63,003 Income from operations 144,943 176,979 370,749 408,072 Interest and other income, net 2,302 13,347 11,635 40,425 Foreign exchange loss (3,627) (710) (20,581) (1,416) Income before provision for income taxes 143,618 189,616 361,803 447,081 Provision for income taxes 36,802 53,270 93,479 95,847 Net income $ 106,816 $ 136,346 $ 268,324 $ 351,234 Net income per share: Basic $ 1.92 $ 2.40 $ 4.77 $ 6.11 Diluted $ 1.91 $ 2.37 $ 4.75 $ 6.04 Shares used in calculation of net income per share: Basic 55,557 56,910 56,214 57,445 Diluted 55,817 57,425 56,534 58,166 EPAM SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except par value) As of September 30, 2025 As of December 31, 2024 Assets Current assets Cash and cash equivalents $ 1,239,136 $ 1,286,267 Trade receivables and contract assets, net of allowance of $4,481 and $5,612, respectively 1,130,496 1,002,175 Prepaid and other current assets 154,408 137,806 Total current assets 2,524,040 2,426,248 Property and equipment, net 198,821 207,667 Operating lease right-of-use assets, net 123,439 128,244 Intangible assets, net 419,806 436,418 Goodwill 1,208,912 1,181,575 Deferred tax assets 235,318 269,799 Other noncurrent assets 132,964 100,522 Total assets $ 4,843,300 $ 4,750,473 Liabilities Current liabilities Accounts payable $ 42,981 $ 44,702 Accrued compensation and benefits expenses 543,738 484,952 Accrued expenses and other current liabilities 188,591 201,356 Income taxes payable, current 19,492 50,395 Operating lease liabilities, current 40,460 39,634 Total current liabilities 835,262 821,039 Long-term debt 25,036 25,194 Operating lease liabilities, noncurrent 89,721 98,426 Deferred tax liabilities, noncurrent 96,956 92,362 Other noncurrent liabilities 69,482 82,301 Total liabilities 1,116,457 1,119,322 Commitments and contingencies Equity Stockholders' equity Common stock, $0.001 par value; 160,000 shares authorized; 55,214 shares issued and outstanding at September 30, 2025, and 56,869 shares issued and outstanding at December 31, 2024 55 57 Additional paid-in capital 1,329,512 1,190,222 Retained earnings 2,384,297 2,555,796 Accumulated other comprehensive income/(loss) 12,397 (116,864) Total EPAM Systems, Inc. stockholders' equity 3,726,261 3,629,211 Noncontrolling interest in consolidated subsidiaries 582 1,940 Total equity 3,726,843 3,631,151 Total liabilities and equity $ 4,843,300 $ 4,750,473 EPAM SYSTEMS, INC. AND SUBSIDIARIES Reconciliations of Non-GAAP Financial Measures to Comparable GAAP Financial Measures (Unaudited) (In thousands, except percentages and per share amounts) Reconciliation of year-over-year revenue growth as reported on a GAAP basis to revenue growth on an organic constant currency basis is presented in the table below: Three Months Ended September 30, 2025 Nine Months Ended September 30, 2025 Revenue growth as reported 19.4 % 16.4 % Inorganic revenue growth (10.5) % (10.8) % Foreign exchange rates impact (1.8) % (1.0) % Revenue growth on an organic constant currency basis 7.1 % 4.6 % Reconciliation of various income statement amounts from GAAP to non-GAAP for the three and nine months ended September 30, 2025 and 2024: Three Months Ended September 30, 2025 Nine Months Ended September 30, 2025 GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP Cost of revenues (exclusive of depreciation and amortization)(1) $ 983,169 $ (21,732) $ 961,437 $ 2,899,189 $ (64,505) $ 2,834,684 Selling, general and administrative expenses(2) $ 234,948 $ (37,924) $ 197,024 $ 685,546 $ (112,496) $ 573,050 Income from operations(3) $ 144,943 $ 77,876 $ 222,819 $ 370,749 $ 230,713 $ 601,462 Operating margin 10.4 % 5.6 % 16.0 % 9.2 % 5.7 % 14.9 % Net income(4) $ 106,816 $ 64,978 $ 171,794 $ 268,324 $ 198,276 $ 466,600 Diluted earnings per share $ 1.91 $ 3.08 $ 4.75 $ 8.25 Three Months Ended September 30, 2024 Nine Months Ended September 30, 2024 GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP Cost of revenues (exclusive of depreciation and amortization)(1) $ 763,992 $ 2,739 $ 766,731 $ 2,409,183 $ (37,781) $ 2,371,402 Selling, general and administrative expenses(2) $ 206,820 $ (42,979) $ 163,841 $ 599,331 $ (107,692) $ 491,639 Income from operations(3) $ 176,979 $ 45,947 $ 222,926 $ 408,072 $ 162,950 $ 571,022 Operating margin 15.2 % 3.9 % 19.1 % 11.7 % 4.7 % 16.4 % Net income(4) $ 136,346 $ 42,740 $ 179,086 $ 351,234 $ 115,364 $ 466,598 Diluted earnings per share $ 2.37 $ 3.12 $ 6.04 $ 8.02 Items (1) through (4) above are detailed in the table below with the specific cross-reference noted in the appropriate item. Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Stock-based compensation expenses $ 21,149 $ 19,576 $ 63,233 $ 58,870 Poland R&D incentives(a) — (22,917) (505) (22,917) Humanitarian support in Ukraine(b) 583 602 1,777 1,828 Total adjustments to GAAP cost of revenues(1) 21,732 (2,739) 64,505 37,781 Stock-based compensation expenses 23,455 22,548 68,385 63,729 Cost Optimization charges(c) 11,028 9,903 32,614 26,433 Other acquisition-related expenses 64 7,098 926 8,777 Humanitarian support in Ukraine(b) 3,375 2,955 10,389 7,694 Geographic repositioning(d) — 28 — 853 One-time charges, net 2 447 182 206 Total adjustments to GAAP selling, general and administrative expenses(2) 37,924 42,979 112,496 107,692 Amortization of acquired intangible assets 18,220 5,707 53,712 17,477 Total adjustments to GAAP income from operations(3) 77,876 45,947 230,713 162,950 Foreign exchange loss 3,627 710 20,581 1,416 Gain on financial instrument (350) — (700) — One-time benefit included in Interest and other income, net — (1,812) — (1,812) Change in fair value of contingent consideration included in Interest and other income, net 1,556 1,492 (413) 4,027 Provision for income taxes: Tax effect on non-GAAP adjustments (17,254) (3,855) (55,455) (28,882) Tax shortfall/(excess tax benefits) related to stock-based compensation 188 258 751 (20,505) Net discrete (benefit)/charge from tax planning(e) (665) — 2,799 (1,830) Total adjustments to GAAP net income(4) $ 64,978 $ 42,740 $ 198,276 $ 115,364 (a) We have excluded from non-GAAP results the portion of the benefit from Poland R&D incentives related to qualifying activities performed in 2023 as it represents a nonrecurring one-time benefit. (b) Humanitarian support in Ukraine includes expenses related to EPAM's $100 million humanitarian commitment in response to Russia's invasion of Ukraine to support EPAM professionals and their families in and displaced from Ukraine. These expenses are incremental to those expenses incurred prior to the crisis, clearly separable from normal operations, and not expected to recur once the crisis has subsided and operations return to normal. (c) Cost Optimization charges include severance, facilities and contract termination charges incurred in connection with the programs initiated in the third quarter of 2023, second quarter of 2024, and second quarter of 2025. Consistent with the Company's historical non-GAAP policy, costs incurred in connection with formal restructuring initiatives have been excluded from non-GAAP results as these are one-time and unusual in nature. (d) Geographic repositioning includes expenses associated with the relocation to other countries of employees based outside of Ukraine impacted by the war and geopolitical instability in the region, and includes the cost of accommodations, travel and food. These expenses are incremental to those expenses incurred prior to the crisis, clearly separable from normal operations, and not expected to recur once the crisis has subsided and operations return to normal. (e) One-time charge or benefit related to the implementation of tax planning to disregard certain foreign subsidiaries as separate entities for U.S. income tax purposes. Consistent with the Company's historical non-GAAP policy, the charge or benefit related to the implementation of tax planning has been excluded from non-GAAP results as it is one-time and unusual in nature. EPAM SYSTEMS, INC. AND SUBSIDIARIES Reconciliations of Guidance Non-GAAP Financial Measures to Comparable GAAP Financial Measures (Unaudited) The below guidance constitutes forward-looking statements within the meaning of the federal securities laws and is based on a number of assumptions that are subject to change and many of which are outside the control of the Company. Actual results may differ materially from the Company's expectations depending on factors discussed in the Company's filings with the Securities and Exchange Commission. Reconciliation of expected year-over-year revenue growth on a GAAP basis to expected revenue growth on an organic constant currency basis is presented in the table below: Fourth Quarter 2025 Full Year 2025 Revenue growth (at midpoint of range) 11.1 % 15.0 % Foreign exchange rates impact (2.4) % (1.3) % Inorganic revenue growth (4.3) % (9.1) % Revenue growth on an organic constant currency basis (at midpoint of range) 4.4 % 4.6 % Reconciliation of expected GAAP to non-GAAP income from operations as a percentage of revenues is presented in the table below: Fourth Quarter 2025 Full Year 2025 GAAP income from operations as a percentage of revenues 10.0% to 11.0% 9.4% to 9.7% Stock-based compensation expenses 3.2 % 3.2 % Included in cost of revenues (exclusive of depreciation and amortization) 1.5 % 1.5 % Included in selling, general and administrative expenses 1.7 % 1.7 % Humanitarian support in Ukraine(b) 0.3 % 0.3 % Cost Optimization charges(c) 0.7 % 0.8 % One-time charges and Other acquisition-related expenses(f) — % — % Amortization of acquired intangible assets 1.3 % 1.3 % Non-GAAP income from operations as a percentage of revenues 15.5% to 16.5% 15.0% to 15.3% (f) EPAM has not included the impact of potential future One-time charges including asset impairments, unusual gains and losses, and Other acquisition-related expenses because the Company is unable to predict these amounts with reasonable certainty. Reconciliation of expected GAAP to non-GAAP effective tax rate is presented in the table below: Fourth Quarter 2025 Full Year 2025 GAAP effective tax rate (approximately) 24.0 % 25.0 % Tax shortfall related to stock-based compensation (0.7) % (0.3) % Net discrete charge from tax planning(e) — % (0.1) % Tax effect on non-GAAP adjustments (0.3) % (0.6) % Non-GAAP effective tax rate (approximately) 23.0 % 24.0 % Reconciliation of expected GAAP to non-GAAP diluted earnings per share is presented in the table below: Fourth Quarter 2025 Full Year 2025 GAAP diluted earnings per share $2.00 to $2.08 $6.75 to $6.83 Stock-based compensation expenses 0.80 3.13 Included in cost of revenues (exclusive of depreciation and amortization) 0.38 1.50 Included in selling, general and administrative expenses 0.42 1.63 Poland R&D incentives(a) — (0.01) Humanitarian support in Ukraine(b) 0.05 0.27 Cost Optimization charges(c) 0.19 0.76 Amortization of acquired intangible assets 0.32 1.27 Change in fair value of contingent consideration — (0.01) Foreign exchange loss 0.02 0.39 Provision for income taxes: Tax effect on non-GAAP adjustments (0.29) (1.28) Tax shortfall related to stock-based compensation 0.01 0.03 Net discrete charge from tax planning(e) — 0.06 Non-GAAP diluted earnings per share $3.10 to $3.18 $11.36 to $11.44 SOURCE EPAM Systems, Inc.

EPAM Reports Results for Third Quarter 2025 and Raises Full Year Revenue and EPS Outlook

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