EPAM Systems, Inc. (EPAM): A Bull Case Theory

Core Thesis - EPAM Systems, Inc. is experiencing a strong recovery in demand, with significant organic growth and positive market reactions following its Q3 2025 performance [2][5] Financial Performance - EPAM's Q3 2025 revenue reached $1.39 billion, representing a 19.4% year-over-year increase, with organic growth of 7.1% in constant currency, up from 5.3% in Q2 [2][3] - Non-GAAP gross margin was 31% and adjusted operating margin was 16%, reflecting temporary factors affecting margins, but adjusted operating margin improved sequentially [4] - Adjusted EPS was $3.08, slightly down year-over-year but above expectations, indicating strong underlying earnings power [4] Market Position and Strategy - The company is benefiting from a broad-based rebound in client spending, particularly in Financial Services and Emerging Verticals, aided by recent acquisitions [3] - Management raised full-year 2025 guidance across revenue, organic growth, margins, and EPS, indicating confidence in sustained growth [5] - EPAM is successfully scaling AI projects and generating record operating and free cash flow, supporting a new $1 billion buyback program [5] Future Outlook - The positive momentum positions EPAM for a meaningful rerating as demand normalizes, with optimism for accelerating growth into 2026 [5]