EPAM Reports Results for Third Quarter 2025 and Raises Full Year Revenue and EPS Outlook
NEWTOWN, Pa., Nov. 6, 2025 /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.
"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
Cash Flow and Other Metrics
2025 Outlook - Full Year and Fourth Quarter
Full Year
EPAM expects the following for the full year:
Fourth Quarter
EPAM expects the following for the fourth quarter:
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.