Financial Data and Key Metrics Changes - In Q4 2024, EPAM generated revenues of $1.25 billion, a year-over-year increase of 7.9% on a reported basis, including revenues from recent acquisitions [37] - Organic revenues grew 1% compared to Q4 2023, marking a return to year-over-year organic revenue growth for the first time since Q1 2023 [37][38] - GAAP gross margin for Q4 was 30.4%, down from 31.1% in Q4 of the previous year, while non-GAAP gross margin was 32.2%, compared to 33% in the same period last year [44] - GAAP income from operations was $137 million, or 10.9% of revenue, compared to $122 million, or 10.6% of revenue in Q4 of last year [46] - Non-GAAP diluted EPS was $2.84, reflecting an increase of 3.3% compared to the same quarter in 2023 [47] Business Line Data and Key Metrics Changes - Financial services delivered strong growth of 15.9% year-over-year, with 4.3% organic and 11.6% inorganic growth [39] - Life sciences and healthcare increased 8.6% year-over-year, reflecting 5.7% organic and 2.9% inorganic growth [39] - Emerging verticals delivered very strong growth of 24.8%, with 3% organic and 21.8% inorganic growth [41] - The travel and consumer vertical declined by 3% year-over-year, reflecting a negative 5.7% organic and a positive 2.7% inorganic growth [40] Market Data and Key Metrics Changes - The Americas, representing 60% of Q4 revenues, increased 11.4% year-over-year, reflecting 2.7% organic and 8.7% inorganic growth [42] - EMEA, representing 38% of Q4 revenues, increased 3.1% year-over-year, reflecting negative 1.4% organic and positive 4.5% inorganic growth [42] - APAC increased 4.3% year-over-year and represents 2% of revenues [43] Company Strategy and Development Direction - The company is focused on becoming the most globally geo-balanced talent company for AI native digital business services, with recent acquisitions aimed at expanding global client relationships and penetrating new markets [9] - EPAM is investing in GenAI and AI-driven client engagement, with 75% of top country clients engaged in GenAI initiatives [23] - The company anticipates that 2025 will be a transformative year, driven by increased client demand for advanced AI native and agentic software and data engineering services [32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about 2025 being a better year than 2024, despite caution regarding growth market sensitivity and macroeconomic risks [11][16] - There is a belief that the demand for AI-related services will increase, with clients transitioning to more engineering-led programs [15] - Management acknowledged ongoing cost sensitivity among clients, which remains a critical decision factor [16] Other Important Information - The company ended Q4 with approximately $1.3 billion in cash and cash equivalents, lower than the previous year due to recent acquisitions [48] - Total headcount reached 61,200 employees, with a growth of 16.3% compared to Q4 of 2023 [49] - The company expects flat year-over-year organic revenue growth in Q1 2025, followed by continued improvement throughout the year [56] Q&A Session Summary Question: Can you elaborate on the expectations embedded in the revenue guidance? - Management indicated a cautious approach to revenue expectations for NEORIS and FD, with a zero to 4% revenue growth for organic and a 1% to 5% growth when considering foreign exchange headwinds [70][71] Question: What are the implications of investments in Agentic AI and IP? - Management highlighted the importance of investing in GenAI and retaining top talent, which has led to increased compensation costs and pressure on margins [74][76] Question: How did client spending behavior progress through Q4? - Management noted a good number of new clients entering the pipeline, with some quickly reaching significant revenue levels, while also seeing the return of previous clients [90][91] Question: What is the outlook for revenue growth and profitability? - Management expects improved profitability in the second half of 2025, aiming to return to typical profit levels of 16% or better [97]

分组1 - Epam reported quarterly earnings of $2.84 per share, exceeding the Zacks Consensus Estimate of $2.75 per share, and showing an increase from $2.75 per share a year ago, representing an earnings surprise of 3.27% [1] - The company achieved revenues of $1.25 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 2.92%, and up from $1.16 billion year-over-year [2] - Epam has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] 分组2 - The stock has gained approximately 10.4% since the beginning of the year, outperforming the S&P 500's gain of 4.5% [3] - The current consensus EPS estimate for the upcoming quarter is $2.57 on revenues of $1.27 billion, and for the current fiscal year, it is $11.29 on revenues of $5.26 billion [7] - The Computers - IT Services industry, to which Epam belongs, is currently ranked in the top 29% of over 250 Zacks industries, indicating a favorable outlook [8]

Contents 01 | | Who We Are | 4 | | --- | --- | --- | | 02 | The EPAM Story | 7 | | 03 | Our Positioning | 11 | | 04 | Market Trends | 13 | | 05 | How We Do It | 15 | | 06 | Artificial Intelligence | 18 | | 07 | Corporate Recognition | 28 | | 08 | Investment Highlights | 30 | EPAM Proprietary & Confidential. 3 01 Investor Presentation F E B R U A R Y 2 0 2 5 EPAM Proprietary & Confidential. Safe Harbor Statement These materials contain forward-looking statements. You should not place undue reliance on these ...

Core Insights - EPAM Systems, Inc. reported strong fourth quarter results for 2024, achieving a year-over-year organic growth and completing significant acquisitions to enhance its global strategy [1][4][5] Fourth Quarter 2024 Highlights - Revenues reached $1.248 billion, reflecting a 7.9% increase year-over-year, with an organic constant currency growth of 1.0% compared to Q4 2023 [4][5] - GAAP income from operations was $136.5 million, up 11.4% from $122.5 million in Q4 2023, while Non-GAAP income from operations increased by 3.9% to $208.2 million [4][5] - GAAP diluted EPS was $1.80, an increase of 8.4%, and Non-GAAP diluted EPS was $2.84, up 3.3% year-over-year [4][5] Full Year 2024 Highlights - Total revenues for 2024 were $4.728 billion, a slight increase of 0.8% year-over-year, with a decline of 1.7% on an organic constant currency basis [4][5] - GAAP income from operations was $544.6 million, an increase of 8.6% compared to 2023, while Non-GAAP income from operations rose by 1.8% to $779.2 million [4][5] - GAAP diluted EPS for the year was $7.84, up 11.0%, and Non-GAAP diluted EPS was $10.86, an increase of 2.5% year-over-year [4][5] Acquisitions and Strategic Developments - The company completed the acquisition of NEORIS, enhancing its offerings in Latin America, and First Derivative, which strengthens its financial services consulting capabilities [5][6] - These acquisitions are expected to broaden EPAM's global delivery capabilities and client portfolio, particularly in financial services [5][6] Cash Flow and Financial Position - Cash provided by operating activities in Q4 2024 was $130.3 million, down from $171.4 million in Q4 2023, while total cash and equivalents decreased to $1.290 billion, a 36.8% drop from $2.043 billion in the previous year [8][6] - The company repurchased 53 thousand shares for $13.0 million in Q4 2024, totaling 1,854 thousand shares repurchased for $398.0 million throughout the year [8][6] 2025 Outlook - For Q1 2025, EPAM expects revenues between $1.275 billion and $1.290 billion, indicating a year-over-year increase of approximately 10.0% at the midpoint [7][16] - The company anticipates a revenue growth rate for 2025 in the range of 10.0% to 14.0%, with organic constant currency growth expected to be between 1.0% and 5.0% [7][16]

Financial Performance - Revenues for Q4 2024 were $1.248 billion, representing a year-over-year increase of 7.9%[5] - GAAP diluted EPS for Q4 2024 was $1.80, an increase of 8.4% compared to $1.66 in Q4 2023[6] - Full year 2024 revenues reached $4.728 billion, up 0.8% year-over-year[9] - GAAP income from operations for the full year 2024 was $544.6 million, an increase of 8.6% from $501.2 million in 2023[9] - Net income for the three months ended December 31, 2024, was $103,299, up from $97,554 in the prior year, reflecting a growth of 7.0%[21] - Basic net income per share increased to $1.82 for the three months ended December 31, 2024, compared to $1.69 for the same period in 2023[21] - Operating income for the three months ended December 31, 2024, was $136,512, an increase from $122,494 in the same period of 2023[21] - Total adjustments to GAAP net income for the year ended December 31, 2024, amounted to $60.1 million, compared to $64.2 million in 2023, reflecting a decrease of 6.5%[25] Future Guidance - For 2025, the company expects year-over-year revenue growth of 10.0% to 14.0%[10] - GAAP diluted EPS guidance for 2025 is projected to be between $6.78 and $7.08[10] - The company expects revenue growth of 10.0% for Q1 2025 and between 10.0% to 14.0% for the full year 2025[34] - Non-GAAP income from operations as a percentage of revenues is projected to be between 12.5% to 13.5% for Q1 2025 and 14.5% to 15.5% for the full year 2025[34] - GAAP diluted earnings per share is estimated to be between $1.27 to $1.37 for Q1 2025 and $6.78 to $7.08 for the full year 2025[36] - Inorganic revenue growth is expected to decline by 11.4% in Q1 2025 and 9.9% for the full year 2025[34] Operational Highlights - Cash provided by operating activities in Q4 2024 was $130.3 million, down from $171.4 million in Q4 2023[9] - Total headcount as of December 31, 2024, was approximately 61,200, with a 16.3% increase in delivery professionals from the previous year[9] - The company recorded a benefit of $68.8 million from research & development government incentives in Poland for the full year 2024[9] - Total current assets decreased to $2,426,248 as of December 31, 2024, down from $3,091,361 as of December 31, 2023[23] - Total assets increased to $4,750,473 as of December 31, 2024, compared to $4,352,365 as of December 31, 2023[23] - Total liabilities increased to $1,119,322 as of December 31, 2024, from $880,895 as of December 31, 2023[23] - The company’s retained earnings increased to $2,555,796 as of December 31, 2024, compared to $2,501,107 as of December 31, 2023[23] Acquisitions and Strategic Moves - The company completed the acquisition of NEORIS and First Derivative, enhancing its capabilities in Latin America and financial services[6] - The company recorded a loss on the sale of its remaining operations in Russia of approximately $25.9 million during the year ended December 31, 2023[30] Expenses and Charges - Stock-based compensation expenses increased to $22.1 million for Q4 2024, up from $19.2 million in Q4 2023, representing a 9.7% increase[25] - Humanitarian support expenses related to Ukraine amounted to $3.1 million in Q4 2024, compared to $0.8 million in Q4 2023, indicating a significant increase[25] - Cost Optimization charges for the year ended December 31, 2024, were $31.3 million, down from $35.1 million in 2023, showing a reduction of 10.8%[25] - The company anticipates an effective tax rate of approximately 24% for both Q1 2025 and the full year 2025[35] Foreign Exchange Impact - The company reported a foreign exchange loss of $5,632 for the three months ended December 31, 2024, compared to a loss of $9,053 in the same period of 2023[21] - The organic constant currency revenue growth for the three months ended December 31, 2024, was 1.0%, while the inorganic revenue growth was -7.3%[24]

Core Viewpoint - Analysts forecast that Epam (EPAM) will report quarterly earnings of $2.75 per share, indicating no change from the previous year, with revenues expected to reach $1.21 billion, reflecting a 4.8% increase year-over-year [1]. Group 1: Earnings and Revenue Estimates - The consensus EPS estimate for the quarter has been revised upward by 0.5% over the last 30 days, indicating a collective reassessment by analysts [2]. - Analysts project revenues by contract type: Time-and-materials at $1.03 billion (+4.5% year-over-year) and Fixed-price at $174.25 million (+4.8% year-over-year) [5]. - Licensing and other revenues are estimated at $9.96 million, showing a significant year-over-year change of +41.5% [6]. Group 2: Market Performance and Analyst Insights - Epam shares have returned +16.8% over the past month, outperforming the Zacks S&P 500 composite, which increased by +4.9% [6]. - The importance of earnings estimate revisions is highlighted as a predictor of potential investor behavior and short-term stock performance [3]. - A deeper analysis of analysts' forecasts for key metrics can provide a more comprehensive understanding of the company's performance [4].

Group 1 - Zacks Premium offers various tools to help investors become more confident and informed, including daily updates on Zacks Rank and Industry Rank, Equity Research reports, and Premium stock screens [1][2] - The Zacks Style Scores are complementary indicators that rate stocks based on value, growth, and momentum characteristics, helping investors identify stocks likely to outperform the market in the next 30 days [2][3] Group 2 - The Value Score focuses on identifying undervalued stocks using ratios like P/E, PEG, and Price/Sales, appealing to value investors [3] - The Growth Score assesses a company's future prospects by analyzing projected and historical earnings, sales, and cash flow, targeting growth investors [4] - The Momentum Score identifies optimal times to invest based on price trends and earnings estimate changes, catering to momentum traders [5] Group 3 - The VGM Score combines the three Style Scores to identify stocks with attractive value, strong growth forecasts, and promising momentum, serving as a useful indicator alongside the Zacks Rank [6] - The Zacks Rank utilizes earnings estimate revisions to simplify portfolio building, with 1 (Strong Buy) stocks achieving an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [7][8] Group 4 - To maximize returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B, while also considering the direction of earnings estimate revisions [9][10] - EPAM Systems, Inc. is currently rated 3 (Hold) with a VGM Score of A and a Momentum Style Score of A, having seen an 11.6% increase in shares over the past four weeks [11] - Four analysts have revised EPAM's earnings estimate upwards for fiscal 2024, with the Zacks Consensus Estimate increasing by $0.04 to $10.78 per share, and an average earnings surprise of 9.9% [12]

Core Insights - EPAM Systems, Inc. has been recognized as the Top IT Vendor in Europe for the second consecutive year by Whitelane Research, achieving 'exceptional performer' status across multiple categories [2][3] - The recognition is based on feedback from nearly 2,300 participants from top IT spending organizations in Europe, evaluating over 6,000 unique IT sourcing relationships [2][3] - EPAM's strong performance is attributed to its commitment to client satisfaction, innovation, and high-quality service delivery [3][7] Company Performance - EPAM received the highest ratings in several performance categories, including Service Delivery Quality (Ranked 1, 84%), Application Services (82%), Account Management Quality (82%), General Satisfaction (81%), Digital Transformation (79%), and Transformative Innovation (Ranked 1, 78%) [7] - The company has consistently performed well in previous IT sourcing studies across various European regions, including Germany, Switzerland, the UK, Nordics, and the Netherlands [3] Industry Context - The 2024/2025 IT Sourcing Study by Whitelane Research is one of the most representative reports on the IT sourcing market in Europe, highlighting the competitive landscape and performance of IT service providers [2][3] - EPAM's recognition reflects its ability to lead innovative change through digital transformation technologies and application services, addressing client concerns while maintaining quality and speed [3]

Core Insights - The collaboration between EPAM Systems and Baker Hughes aims to revolutionize the energy sector through advanced digital and AI solutions, marking a significant milestone in digital transformation [1][2][3] Group 1: Collaboration Details - EPAM has been named as Baker Hughes' systems integration collaborator for digital and AI implementations, combining EPAM's digital engineering capabilities with Baker Hughes' energy technology expertise [2][4] - This partnership is expected to redefine workflows, enhance operational efficiency, and deliver innovative solutions that contribute to environmental sustainability [2][4] Group 2: Strategic Goals - The collaboration supports Baker Hughes' commitment to grow its digital revenue stream by 2030 through advanced technologies and sustainable energy development [2][4] - The theme for the 2025 Baker Hughes Annual Meeting, "Progress at Scale," emphasizes the need for sustainable energy development to drive lasting change across the industry [4] Group 3: Event Highlights - EPAM's significant presence at the Baker Hughes Annual Meeting includes a keynote by CEO Arkadiy Dobkin and interactive kiosks showcasing Baker Hughes' applications powered by EPAM's AI technologies [6][4] - The event will gather over 2,000 industry leaders, policymakers, and experts to discuss actionable strategies for change in the energy sector [3][4]

Company Overview - EPAM Systems is a leading global provider of digital engineering, cloud, and AI-enabled transformation services, with expertise in software engineering since 1993 [3] - The company offers AI solutions such as EPAM DIAL, EPAM EliteA™, and EPAM AI/RUN™, focusing on AI LLM orchestration, testing, and engineering [4] - EPAM delivers globally with local engagement through teams of consultants, architects, designers, and engineers, aiming to improve lives and create competitive advantages for clients [5] - The company is recognized as a leader in IDC MarketScapes for Worldwide Experience Build Services, Worldwide Experience Design Services, and Worldwide Software Engineering Services [6] Financial and Investor Relations - EPAM Systems will host a conference call on February 20, 2025, at 8:00 a.m. ET to discuss its Q4 2024 financial results [1] - The conference call will be live-streamed on the EPAM website, with a replay available in the Investor Relations section [2] Industry Recognition - EPAM was added to the S&P 500 and the Forbes Global 2000 in 2021 and is recognized as a Top 100 Best Workplace by Glassdoor and Newsweek [6] - The company is among the top 15 in Information Technology Services in the Fortune 1000 [6]