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

• First quarter revenues of $1.302 billion, up 11.7% year-over-year
• GAAP income from operations was 7.6% of revenues and non-GAAP income from operations was 13.5% of revenues for the first quarter
• First quarter GAAP diluted EPS of $1.28, a decrease of $0.69, and non-GAAP diluted EPS of $2.41, a decrease of $0.05 on a year-over-year basis
• Based on the strength of organic constant currency revenue growth in the first half of 2025 and updates to our foreign exchange rate assumptions, EPAM raises its expected year-over-year revenue growth rate to now be in the range of 11.5% to 14.5% for 2025

NEWTOWN, Pa., May 8, 2025 /PRNewswire/ -- EPAM Systems, Inc. (NYSE: EPAM), a leading digital transformation services and product engineering company, today announced results for the first quarter ended March 31, 2025.

"We reported strong first quarter results amidst a dynamic macroeconomic landscape, which highlights our unique differentiation in supporting our clients through their transformation journeys," said Arkadiy Dobkin, CEO and President at EPAM. "By staying anchored in engineering excellence, disciplined execution and AI-native innovation, we've continued to build sequential momentum and deliver year-over-year organic growth."

First Quarter 2025 Highlights

• Revenues increased to $1.302 billion, a year-over-year increase of $136.2 million, or 11.7%. On an organic constant currency basis, revenues were up 1.4% compared to the first quarter of 2024;
• GAAP income from operations was $99.3 million, a decrease of $11.2 million, or 10.1%, compared to $110.5 million in the first quarter of 2024;
• Non-GAAP income from operations was $175.8 million, an increase of $2.2 million, or 1.2%, compared to $173.6 million in the first quarter of 2024;
• Diluted earnings per share ("EPS") on a GAAP basis was $1.28, a decrease of $0.69, or 35.0%, compared to $1.97 in the first quarter of 2024; and
• Non-GAAP diluted EPS was $2.41, a decrease of $0.05, or 2.0%, compared to $2.46 in the first quarter of 2024.

Cash Flow and Other Metrics

• Cash provided by operating activities was $24.2 million for the first three months of 2025, compared to cash provided by operating activities of $129.9 million for the first three months of 2024;
• Cash, cash equivalents and restricted cash totaled $1.179 billion as of March 31, 2025, a decrease of $111.9 million, or 8.7%, from $1.290 billion as of December 31, 2024;
• The Company repurchased 796 thousand shares of its common stock for $160.0 million during the first quarter of 2025 under its share repurchase program. As of March 31, 2025, the Company had $277.0 million remaining under its share repurchase authorization; and
• Total headcount was approximately 61,700 as of March 31, 2025. Included in this number were approximately 55,600 delivery professionals, an increase of 0.9% from December 31, 2024.

2025 Outlook - Full Year and Second Quarter

Full Year

EPAM expects the following for the full year:

• Based on the strength of organic constant currency revenue growth in the first half of 2025 and updates to our foreign exchange rate assumptions, the Company raises its expected year-over-year revenue growth rate to now be in the range of 11.5% to 14.5% for 2025. Additionally, the Company now expects the year-over-year revenue growth rate on an organic constant currency basis to be in the range of 2.0% to 5.0%;
• For the full year, EPAM continues to expect GAAP income from operations to be in the range of 9.0% to 10.0% of revenues and non-GAAP income from operations to be in the range of 14.5% to 15.5% 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 $6.78 to $7.03 and non-GAAP diluted EPS to be in the range of $10.70 to $10.95. The Company now expects weighted average diluted shares outstanding for the year to be 56.5 million.

Second Quarter

EPAM expects the following for the second quarter:

• The Company expects revenues will be in the range of $1.325 billion to $1.340 billion for the second quarter reflecting year-over-year growth of 16.2% at the midpoint of the range. The Company expects the year-over-year revenue growth rate on an organic constant currency basis to be 3.8% at the midpoint of the range;
• For the second quarter, EPAM expects GAAP income from operations to be in the range of 9.0% to 10.0% of revenues and non-GAAP income from operations to be in the range of 14.0% to 15.0% of revenues;
• The Company expects its GAAP effective tax rate to be approximately 26.0% and its non-GAAP effective tax rate to be approximately 24.0%; and
• EPAM expects GAAP diluted EPS will be in the range of $1.67 to $1.75 for the quarter, and non-GAAP diluted EPS will be in the range of $2.56 to $2.64 for the quarter. The Company expects weighted average diluted shares outstanding for the quarter to be 56.7 million.

Conference Call Information

EPAM will host a conference call to discuss the results on Thursday, May 8, 2025, at 8:00 a.m. EDT. 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.

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SOURCE EPAM Systems, Inc.