Financial Performance - First quarter revenues reached $1.302 billion, representing an 11.7% year-over-year increase[5] - GAAP diluted EPS for the first quarter was $1.28, a decrease of 35.0% compared to $1.97 in the first quarter of 2024[6] - Non-GAAP diluted EPS was $2.41, a decrease of 2.0% from $2.46 in the first quarter of 2024[6] - Revenue growth reported for the three months ended March 31, 2025, was 11.7%, with organic constant currency growth at 1.4%[21] - Net income for the three months ended March 31, 2025, was $73,482, compared to $116,243 for the same period in 2024[21] - Diluted earnings per share for the three months ended March 31, 2025, was $1.28 on a GAAP basis, and $2.41 on a non-GAAP basis[21] Future Guidance - The company raised its expected year-over-year revenue growth rate for 2025 to a range of 11.5% to 14.5%[7] - For the second quarter, EPAM expects revenues between $1.325 billion and $1.340 billion, reflecting a year-over-year growth of 16.2% at the midpoint[7] - The company expects revenue growth of 16.2% for the second quarter of 2025, with full-year growth guidance between 11.5% and 14.5%[28] - GAAP diluted EPS for the second quarter of 2025 is expected to be between $1.67 and $1.75, with non-GAAP diluted earnings per share projected between $2.56 and $2.64[30] - Non-GAAP income from operations as a percentage of revenues is projected to be between 14.0% and 15.0% for the second quarter of 2025[28] Operational Metrics - Cash provided by operating activities was $24.2 million for the first quarter, down from $129.9 million in the same period last year[6] - Total headcount as of March 31, 2025, was approximately 61,700, with a 0.9% increase in delivery professionals from December 31, 2024[6] - The company repurchased 796 thousand shares for $160.0 million during the first quarter of 2025[6] - GAAP income from operations was 7.6% of revenues, while non-GAAP income from operations was 13.5% of revenues for the first quarter[5] Balance Sheet - Total assets as of March 31, 2025, were $4,723,612, a decrease from $4,750,473 as of December 31, 2024[20] - The company reported a total of $1,235,475 in additional paid-in capital as of March 31, 2025, an increase from $1,190,222 as of December 31, 2024[20] - Total liabilities decreased to $1,080,396 as of March 31, 2025, from $1,119,322 as of December 31, 2024[20] Compensation and Expenses - Stock-based compensation expenses for the three months ended March 31, 2025, were $23,923, up from $22,357 in the same period in 2024[22]

Wall Street analysts forecast that Epam (EPAM) will report quarterly earnings of $2.27 per share in its upcoming release, pointing to a year-over-year decline of 7.7%. It is anticipated that revenues will amount to $1.28 billion, exhibiting an increase of 10.1% compared to the year-ago quarter.The consensus EPS estimate for the quarter has undergone a downward revision of 5.6% in the past 30 days, bringing it to its present level. This represents how the covering analysts, as a whole, have reassessed their ...

The market expects Epam (EPAM) to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended March 2025. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The earnings report, which is expected to be released on May 8, 2025, might help the stock move higher if these key numbers are better than ...

The expanded collaboration, first established in 2023, will see EPAM work with AWS to harness its advanced generative AI services, including Amazon Bedrock, to allow customers to develop specialized AI agents and GenAI solutions to solve engineering and industry-specific issues, including modernizations. The agreement will also help EPAM to continue developing and refining AI-powered modernization, including automating workflows and tools through AI agents that help organizations seamlessly transition their ...

Core Insights - The report by EPAM Systems highlights the current state of AI adoption in enterprises, revealing a significant gap between perceived and actual AI implementation success [3][4] - Companies are entering a new phase of AI deployment, focusing on high-value use cases and aligning technology with business objectives to drive real value [4][9] AI Adoption Status - Nearly half (49%) of surveyed companies consider themselves "advanced" in AI implementation, but only 26% of these have successfully delivered AI use cases to market [3] - 30% of technology-advanced companies have implemented AI at scale, indicating a struggle for many organizations to transition from experimentation to enterprise-wide deployment [7] Investment Trends - Companies plan to increase AI spending by 14% year-over-year in 2025, reflecting a commitment to AI-driven growth [7] - Disruptors expect 53% of their profits in 2025 to be attributed to AI investments, showcasing a tangible financial impact [7] Key Challenges - A lack of alignment between business and technical teams is identified as a major barrier to AI adoption, with 31% of executives citing outdated technology as a challenge [14] - Security remains a priority, with 35% of businesses indicating that inadequate security programs hinder modernization efforts [14] Governance and Talent - While 75% of advanced companies claim to have clear AI strategies, only 4% of disruptors have developed comprehensive governance frameworks, with effective governance expected to take at least 18 months to implement [14] - 43% of surveyed companies plan to hire AI-related roles in 2025, with machine learning engineers and AI researchers being the most sought-after positions [7]

Core Insights - EPAM Systems, Inc. has been awarded the 2025 Google Cloud Industry Solutions Partner of the Year Award for Oil and Gas, recognizing its innovation and commitment to customer service [1][2][3] Company Achievements - The award highlights EPAM's development of an AI-powered geospatial data visualization and GenAI solution, which enhances clients' ability to manage large datasets [2][3] - EPAM has over 2,000 experienced Google Cloud engineers and has been a Premier level Partner for Google Cloud since 2018, indicating a strong collaboration and expertise in cloud solutions [2][3] Industry Impact - The solution developed by EPAM integrates Google's Gemini models, which can also be applied in manufacturing and supply chain contexts, showcasing versatility across industries [2] - EPAM's initiatives, such as EPAM AI/RUN™ and DIALX Lab, leverage advanced AI technologies to drive significant industry impact and foster continuous innovation [4] Client Engagement - The company emphasizes its local engagement with expert teams to deliver tailored solutions that improve clients' competitive edge across various industries [6] - EPAM's focus on enhancing efficiency and resilience for clients aligns with the growing demand for digital transformation in the energy sector [2][4]

Company Overview - EPAM Systems, Inc. is a leading global provider of digital engineering, cloud, and AI-enabled transformation services, established in 1993 [3] - The company focuses on addressing clients' transformation challenges through an integrated strategy that combines experience and technology consulting with over 30 years of engineering execution [3] Financial Results Announcement - EPAM Systems will host a conference call on May 8, 2025, at 8:00 a.m. ET to discuss its first quarter 2025 financial results, with a news release to be issued prior to the call [1] Digital Innovation and AI Integration - The company leverages AI and GenAI to deliver transformative solutions that enhance clients' digital innovation and competitive edge [4] - EPAM integrates advanced AI technologies into tailored business strategies through platforms like EPAM AI/RUN™ and initiatives such as DIALX Lab [4] Global Presence and Recognition - EPAM serves customers across six continents and has been recognized as one of the top 15 companies in Information Technology Services in the Fortune 1000 [6] - The company was added to the S&P 500 and Forbes Global 2000 in 2021 and has received accolades from Glassdoor and Newsweek as a Most Loved Workplace [6]

Company Overview - EPAM Systems has undergone a transformation since its peak in 2021, influenced by the war, persistent wage inflation, and tightening IT budgets [1] - The company is currently trading at a significant discount from its historical levels, with a price-to-earnings ratio of just 15x [1] Investment Insights - The investment thesis suggests that identifying high-quality and/or severely mispriced investment ideas is crucial for potential investors [1] - A strong investment opportunity is characterized by the ability to purchase great companies at attractive prices [1]

Market and Economic Risks - The company operates significantly in emerging markets, which exposes it to greater economic, financial, and banking risks compared to developed markets[96]. - A majority of the company's revenues are generated in North America and Western Europe, while most personnel and delivery centers are located in emerging markets, increasing foreign exchange risks[96]. - The company faces risks related to compliance with a variety of legal requirements across different jurisdictions, which could adversely affect operations and financial condition[99]. - Changes in U.S. policies regarding offshore outsourcing could impact the company's ability to deploy employees and conduct business effectively[104]. - The company’s operations may be negatively impacted by geopolitical events, natural disasters, and other disruptions, affecting client spending decisions[146]. Financial and Revenue Risks - The company does not have long-term commitments from clients, making future revenues uncertain and dependent on securing new engagements[109]. - Delays in client payments or contract terminations could lead to increased cash collection times and bad debt expenses, adversely affecting financial results[110]. - A downturn in any of the targeted industries or a slowdown in outsourcing trends could materially affect demand for the company's services and negatively impact financial results[112]. - The company’s effective tax rate may be adversely affected by changes in tax laws and regulations across multiple jurisdictions, impacting overall profitability[147]. - The company believes its current cash and cash flow are sufficient for the next twelve months, but may require additional capital for future investments or acquisitions[144]. Competitive Landscape and Market Position - The competitive landscape is intensifying, particularly with the development of generative AI capabilities, which may lead to pricing pressures and loss of market share[97]. - The company must adapt to rapidly changing technologies and industry standards to remain competitive; failure to do so could lead to loss of clients[118]. - Company revenues are highly dependent on five key industry verticals: Financial Services, Software & Hi-Tech, Business Information & Media, Consumer Goods, Retail & Travel, and Life Sciences & Healthcare[111]. Operational and Compliance Risks - The company faces risks related to pricing structures, which are influenced by internal forecasts and global economic conditions, potentially leading to unprofitable contracts[114]. - Significant resource commitments are required before realizing revenues, and delays in the sales cycle could adversely affect revenue timing and growth[116]. - The company relies on visas for personnel to work at client sites, and any changes in visa regulations could delay project timelines and affect service delivery[105]. - The corporate reputation is crucial for client engagement and retention, and any damage to reputation could adversely affect business and investor confidence[123]. Intellectual Property and Legal Risks - The company relies on a combination of intellectual property protections, but effectiveness may vary by country, exposing it to risks of unauthorized use[125]. - Intellectual property infringement claims could divert management attention and result in significant costs, impacting the company's ability to provide existing services[128]. - The existence and ownership of intellectual property rights related to generative AI technologies are under review, posing potential legal liabilities for the company[130]. - Any adverse outcomes from litigation or claims could materially affect the company's business, financial condition, and results of operations[131]. Cybersecurity and Information Security Risks - The company has experienced cybersecurity incidents and anticipates ongoing threats, with increasingly sophisticated attacks making detection and defense more challenging[134]. - The cost of information security measures and compliance with privacy regulations significantly reduces profitability, potentially leading to client loss and reputational harm[138]. - The company is subject to GDPR and other privacy laws, which impose significant restrictions and can result in substantial financial penalties for non-compliance[139]. - The company must continuously enhance its information security measures to protect sensitive data, which involves significant costs and resources[137]. - The company’s ability to monitor third-party suppliers' information security systems is limited, increasing vulnerability to potential breaches[135]. Financial Volatility and Risk Management - The company’s stock price has shown substantial volatility due to variations in financial results and external market conditions, impacting future operating results[142]. - The company faces counterparty default risk in its hedging program, which could lead to significant losses if a counterparty defaults[145].

Core Viewpoint - EPAM Systems reported strong fourth-quarter results for 2024, with earnings and revenues exceeding expectations, but provided disappointing guidance for 2025, leading to a decline in share price over the past year [1][3]. Financial Performance - EPAM's fourth-quarter non-GAAP earnings were $2.84 per share, beating the Zacks Consensus Estimate by 3.3%, and increased from $2.75 per share in the same quarter last year [1]. - The company's revenues for the fourth quarter reached $1.25 billion, surpassing the consensus mark by 3.3%, and reflecting a year-over-year growth of 7.9% [2]. - Non-GAAP gross profit increased by 5.3% year over year to $402.1 million, while the gross margin contracted by 80 basis points to 32.2% [6]. Segment Performance - Revenue growth was driven by various industry verticals, with Financial Services generating $280.9 million (up 15.9% year over year) and Emerging revenues at $211.8 million (up 24.8% year over year) [4][5]. - However, revenues from Consumer Goods, Travel, and Retail declined by 3% year over year to $250.6 million [4]. Guidance and Estimates - For Q1 2025, EPAM expects revenues between $1.275 billion and $1.29 billion, indicating a year-over-year growth of 10% at the midpoint, while the Zacks Consensus Estimate is $1.27 billion [9]. - The company anticipates non-GAAP earnings for Q1 to be between $2.22 and $2.32 per share, below the Zacks Consensus Estimate of $2.57 per share [10]. - For the full year 2025, EPAM expects revenue growth of 10.0-14.0%, with a consensus estimate of $4.69 billion, indicating minimal year-over-year growth of 0.04% [10]. Balance Sheet and Cash Flow - As of December 31, 2024, EPAM had cash and cash equivalents of $1.29 billion, down from $2.04 billion as of September 30, 2024 [7]. - The company reported cash flow from operations of $130.3 million and free cash flow of $114.5 million for the fourth quarter [7].