EPAM Systems Inc【EPAM】株式ニュース

EPAM Reports Results for First Quarter 2026May 7, 2026 6:00 AM
PR Newswire (US) First quarter revenues of $1.400 billion, up 7.6% year-over-yearGAAP income from operations was 8.3% of revenues and non-GAAP income from operations was 14.3% of revenues for the first quarter First quarter GAAP diluted EPS of $1.52, an increase of $0.24, or 18.8%, and non-GAAP diluted EPS of $2.86, an increase of $0.45, or 18.7%, on a year-over-year basisContinued to return capital to shareholders, spending $324 million on stock repurchases in the first quarter, which includes the $300 million accelerated share repurchase agreementFor the full year, EPAM now expects the year-over-year revenue growth rate to be in the range of 4.0% to 6.5% and now expects the year-over-year revenue growth rate on an organic constant currency basis to be in the range of 2.5% to 5.0%.For the full year, EPAM now expects its GAAP diluted EPS to be in the range of $8.29 to $8.59, and non-GAAP diluted EPS to now be in the range of $12.98 to $13.28NEWTOWN, Pa., May 7, 2026 /PRNewswire/ -- EPAM Systems, Inc. (NYSE: EPAM), a leading digital and AI transformation company, today announced results for its first quarter ended March 31, 2026. "We are pleased to report a strong first quarter and solid start of the year amidst a rapidly evolving macroeconomic landscape. Our Q1 performance reflects steady execution and continued momentum across our AI-native and AI foundational readiness initiatives," said Balazs Fejes, CEO & President, EPAM. "We are on a multi-year transformation journey, continuing to position ourselves to fully benefit and capitalize on AI growth opportunities as well as accelerate our own AI client zero transformation."First Quarter 2026 HighlightsRevenues increased to $1.400 billion, a year-over-year increase of $98.4 million, or 7.6%. On an organic constant currency basis, revenues were up 3.7% compared to the first quarter of 2025;GAAP income from operations was $116.8 million, an increase of $17.4 million, or 17.6%, compared to $99.3 million in the first quarter of 2025;Non-GAAP income from operations was $200.7 million, an increase of $25.0 million, or 14.2%, compared to $175.8 million in the first quarter of 2025;Diluted earnings per share ("EPS") on a GAAP basis was $1.52, an increase of $0.24, or 18.8%, compared to $1.28 in the first quarter of 2025; andNon-GAAP diluted EPS was $2.86, an increase of $0.45, or 18.7%, compared to $2.41 in the first quarter of 2025.Cash Flow and Other MetricsCash used in operating activities was $36.4 million for the first three months of 2026, compared to cash provided by operating activities of $24.2 million for the first three months of 2025;Cash, cash equivalents and restricted cash totaled $1.043 billion as of March 31, 2026, a decrease of $258.8 million, or 19.9%, from $1.301 billion as of December 31, 2025;The Company spent $324 million on share repurchases during the first quarter of 2026 under its share repurchase program, which included $300 million for the previously announced accelerated share repurchase ("ASR"). The Company received 1.8 million shares during the first quarter with another 0.5 million shares received in April upon settlement of the ASR;Total headcount was approximately 62,750 as of March 31, 2026. Included in this number were approximately 56,500 delivery professionals, a decrease of 0.2% from December 31, 2025.2026 Outlook - Full Year and Second QuarterFull YearEPAM expects the following for the full year:The Company now expects the year-over-year revenue growth rate to be in the range of 4.0% to 6.5% for 2026 and now expects the year-over-year revenue growth rate on an organic constant currency basis to be in the range of 2.5% to 5.0%;For the full year, EPAM continues to expect GAAP income from operations to be in the range of 10% to 11% of revenues and non-GAAP income from operations to be in the range of 15% to 16% of revenues;The Company now expects its GAAP effective tax rate to be approximately 27% and continues to expect its non-GAAP effective tax rate to be approximately 24%; andEPAM now expects GAAP diluted EPS to be in the range of $8.29 to $8.59 and non-GAAP diluted EPS to be in the range of $12.98 to $13.28. The Company now expects weighted average diluted shares outstanding for the year to be 52.7 million.Second QuarterEPAM expects the following for the second quarter:The Company expects revenues will be in the range of $1.400 billion to $1.415 billion for the second quarter, reflecting year-over-year growth of 4.0% at the midpoint of the range. The Company expects the year-over-year revenue growth rate on an organic constant currency basis to be 2.7% at the midpoint of the range;For the second quarter, EPAM expects GAAP income from operations to be in the range of 9% to 10% of revenues and non-GAAP income from operations to be in the range of 15% to 16% of revenues;The Company expects its GAAP effective tax rate to be approximately 27% and its non-GAAP effective tax rate to be approximately 24%; andEPAM expects GAAP diluted EPS will be in the range of $1.79 to $1.87 for the quarter, and non-GAAP diluted EPS will be in the range of $3.10 to $3.18 for the quarter. The Company expects weighted average diluted shares outstanding for the quarter to be 52.4 million.Conference Call InformationEPAM will host a conference call to discuss the results on Thursday, May 7, 2026, 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 SystemsEPAM (NYSE:EPAM) is a global leader in AI transformation engineering and integrated consulting, serving Forbes Global 2000 companies and ambitious startups. With over thirty years of expertise in custom software, product and platform engineering, EPAM empowers organizations to become AI-Native enterprises, driving measurable value from innovation and digital investments. Recognized by industry benchmarks and leading analysts as a leader in AI, EPAM delivers globally while engaging locally, making the future real for clients, partners, and employees.We are proud to be recognized by Forbes, Glassdoor, Newsweek, Time Magazine, Great Place to Work and kununu as a Most Loved Workplace around the world.Learn more at www.epam.com and follow us on LinkedIn.Non-GAAP Financial MeasuresEPAM 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, employee separation costs incurred in connection with restructuring programs, 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 StatementsThis 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. EPAM SYSTEMS, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF INCOME(Unaudited)(In thousands, except per share data)
Three Months EndedMarch 31,
2026
2025Revenues$  1,400,061
$  1,301,692Operating expenses:

Cost of revenues (exclusive of depreciation and amortization)1,012,052
952,008Selling, general and administrative expenses239,702
218,917Depreciation and amortization expense31,539
31,437Income from operations116,768
99,330Interest and other income, net1,582
5,814Foreign exchange gain (loss)2,298
(10,727)Income before provision for income taxes120,648
94,417Provision for income taxes38,127
20,935Net income$      82,521
$      73,482

Net income per share:

Basic$         1.53
$         1.29Diluted$         1.52
$         1.28Shares used in calculation of net income per share:

Basic53,793
56,780Diluted54,183
57,262 EPAM SYSTEMS, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited)(In thousands, except par value)
As of March 31,2026
As of December 31,2025Assets

Current assets

Cash and cash equivalents$  1,036,959
$  1,296,077Trade receivables and contract assets, net of allowance of $5,060 and $6,350,
respectively1,174,660
1,108,201Prepaid and other current assets145,806
129,610Total current assets2,357,425
2,533,888Property and equipment, net202,826
202,387Operating lease right-of-use assets, net118,431
114,875Intangible assets, net385,728
406,586Goodwill1,204,577
1,210,564Deferred tax assets283,027
295,115Other noncurrent assets151,437
138,721Total assets$  4,703,451
$  4,902,136

Liabilities

Current liabilities

Accounts payable$      40,113
$      55,329Accrued compensation and benefits expenses567,656
608,232Accrued expenses and other current liabilities224,171
250,688Income taxes payable, current15,639
25,520Operating lease liabilities, current36,750
37,173Total current liabilities884,329
976,942Long-term debt165,000
25,034Operating lease liabilities, noncurrent86,193
81,497Deferred tax liabilities, noncurrent73,795
76,969Other noncurrent liabilities62,422
63,886Total liabilities1,271,739
1,224,328Commitments and contingencies

Equity

Stockholders' equity

Common stock, $0.001 par value; 160,000 shares authorized; 52,757 shares issued
and outstanding at March 31, 2026, and 54,274 shares issued and outstanding at
December 31, 202553
54Additional paid-in capital1,360,302
1,390,423Retained earnings2,084,540
2,268,204Accumulated other comprehensive income (loss)(13,765)
18,545Total EPAM Systems, Inc. stockholders' equity3,431,130
3,677,226Noncontrolling interest in consolidated subsidiaries582
582Total equity3,431,712
3,677,808Total liabilities and equity$  4,703,451
$  4,902,136EPAM 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 EndedMarch 31, 2026Revenue growth as reported7.6 %Inorganic revenue0.0 %Foreign exchange rates(3.9) %Revenue growth on an organic constant currency basis3.7 %
Reconciliation of various income statement amounts from GAAP to non-GAAP for the three months ended March 31, 2026 and 2025:
Three Months EndedMarch 31, 2026
GAAP
Adjustments
Non-GAAPCost of revenues (exclusive of depreciation and amortization)(1)$ 1,012,052
$   (23,410)
$  988,642Selling, general and administrative expenses(2)$  239,702
$   (42,840)
$  196,862Income from operations(3)$  116,768
$    83,968
$  200,736Operating margin8.3 %
6.0 %
14.3 %Net income(4)$    82,521
$    72,704
$  155,225Diluted earnings per share$       1.52

$       2.86
Three Months EndedMarch 31, 2025
GAAP
Adjustments
Non-GAAPCost of revenues (exclusive of depreciation and amortization)(1)$  952,008
$   (24,541)
$  927,467Selling, general and administrative expenses(2)$  218,917
$   (34,223)
$  184,694Income from operations(3)$    99,330
$    76,420
$  175,750Operating margin7.6 %
5.9 %
13.5 %Net income(4)$    73,482
$    64,533
$  138,015Diluted earnings per share$       1.28

$       2.41
Items (1) through (4) above are detailed in the table below with the specific cross-reference noted in the appropriate item.
Three Months EndedMarch 31,
2026
2025Stock-based compensation expenses$      22,853
$      23,923Humanitarian support in Ukraine(a)557
618Total adjustments to GAAP cost of revenues(1)23,410
24,541Stock-based compensation expenses27,066
24,533Cost Optimization charges(b)13,396
5,311Other acquisition-related expenses6
570Humanitarian support in Ukraine(a)2,409
3,732One-time charges (benefits)(37)
77Total adjustments to GAAP selling, general and administrative expenses(2)42,840
34,223Amortization of acquired intangible assets17,718
17,656Total adjustments to GAAP income from operations(3)83,968
76,420Foreign exchange loss (gain)(2,298)
10,727Gain on financial instrument—
(350)Change in fair value of contingent consideration included in Interest and other income, net985
(1,737)Provision for income taxes:

Tax effect on non-GAAP adjustments(19,131)
(19,910)Tax shortfall (excess tax benefit) related to stock-based compensation9,849
(543)Net discrete benefit from tax planning(c)(669)
(74)Total adjustments to GAAP net income(4)$      72,704
$      64,533
(a)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.

(b)Cost Optimization charges include employee separation costs incurred in connection with the programs initiated in the 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 attributable to targeted restructuring efforts and not expected to recur once the respective Cost Optimization program is completed.

(c)Net discrete 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 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 SUBSIDIARIESReconciliations 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:
Second Quarter 2026
Full Year 2026
(at midpoint of range)

Revenue growth4.0 %
4.0% to 6.5%Foreign exchange rates impact (1.3) %
(1.5) %Inorganic revenue growth— %
— %Revenue growth on an organic constant currency basis2.7 %
2.5% to 5.0%
Reconciliation of expected GAAP to non-GAAP income from operations as a percentage of revenues is presented in the table below:
Second Quarter 2026
Full Year 2026GAAP income from operations as a percentage of revenues 9.0% to 10.0%
10.0% to 11.0%Stock-based compensation expenses3.6 %
3.2 %Included in cost of revenues (exclusive of depreciation and amortization)1.6 %
1.4 %Included in selling, general and administrative expenses2.0 %
1.8 %Humanitarian support in Ukraine(a)0.2 %
0.2 %Cost Optimization charges(b)1.0 %
0.4 %Amortization of acquired intangible assets1.2 %
1.2 %Non-GAAP income from operations as a percentage of revenues(d)15.0% to 16.0%
15.0% to 16.0%
(d)EPAM has not included the impact of potential future one-time charges including asset impairments, unusual gains and losses, expenses incurred in connection with future cost optimization actions, 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:
Second Quarter 2026
Full Year 2026GAAP effective tax rate (approximately)27.0 %
27.0 %Tax effect on non-GAAP adjustments(1.9) %
(1.0) %Tax shortfall related to stock-based compensation(1.1) %
(2.1) %Net discrete benefit from tax planning(c)— %
0.1 %Non-GAAP effective tax rate (approximately)24.0 %
24.0 %
Reconciliation of expected GAAP to non-GAAP diluted earnings per share is presented in the table below:
Second Quarter 2026
Full Year 2026GAAP diluted earnings per share $1.79 to $1.87
$8.29 to $8.59Stock-based compensation expenses0.95
3.55Included in cost of revenues (exclusive of depreciation and amortization)0.43
1.62Included in selling, general and administrative expenses0.52
1.93Humanitarian support in Ukraine(a)0.05
0.21Cost Optimization charges(b)0.25
0.51Amortization of acquired intangible assets0.33
1.31Change in fair value of contingent consideration—
0.02Foreign exchange loss0.06
0.13Provision for income taxes:

     Tax effect on non-GAAP adjustments(0.36)
(1.27)     Tax shortfall related to stock-based compensation0.03
0.24     Net discrete benefit from tax planning(c)—
(0.01)Non-GAAP diluted earnings per share(d)$3.10 to $3.18
$12.98 to $13.28 View original content to download multimedia:https://www.prnewswire.com/news-releases/epam-reports-results-for-first-quarter-2026-302764876.htmlSOURCE EPAM Systems, Inc. Original: EPAM Reports Results for First Quarter 2026

EPAM Reports Results for Fourth Quarter and Full Year 2025February 19, 2026 6:00 AM
PR Newswire (US)

Fourth Quarter 2025Revenues of $1.408 billion, up 12.8% year-over-yearGAAP Income from Operations was 10.6% of revenues and Non-GAAP Income from Operations was 16.3% of revenuesGAAP Diluted EPS of $1.98, an increase of 10.0%, and Non-GAAP Diluted EPS of $3.26, an increase of 14.8% on a year-over-year basisFull Year 2025Revenues of $5.457 billion, up 15.4% year-over-yearGAAP Income from Operations was 9.5% of revenues and Non-GAAP Income from Operations was 15.2% of revenuesGAAP Diluted EPS of $6.72, a decrease of 14.3%, and Non-GAAP Diluted EPS of $11.50, an increase of 5.9% on a year-over-year basisNEWTOWN, Pa., Feb. 19, 2026 /PRNewswire/ -- EPAM Systems, Inc. (NYSE: EPAM), a leading digital and AI transformation company, today announced results for its fourth quarter and full year ended December 31, 2025.

"We are pleased to deliver a strong fourth quarter and full year 2025, notably scaling and accelerating our AI-native revenues. Our 2025 performance reflects our steady execution and meaningful progress in driving business transformation and AI foundational readiness for our clients," said Balazs Fejes, CEO & President, EPAM. "By continuing to invest in AI innovation, talent development and strategic partnerships, we are driving our own transformation, building on top of our core engineering DNA and strengthening our strategic positioning to win in the AI-Native Build era."Fourth Quarter 2025 HighlightsRevenues increased to $1.408 billion, a year-over-year increase of $159.2 million, or 12.8%. On an organic constant currency basis, revenues grew 5.6% compared to the fourth quarter of 2024;GAAP income from operations was $149.3 million, an increase of $12.7 million, or 9.3%, compared to $136.5 million in the fourth quarter of 2024;Non-GAAP income from operations was $230.0 million, an increase of $21.8 million, or 10.5%, compared to $208.2 million in the fourth quarter of 2024;Diluted earnings per share ("EPS") on a GAAP basis was $1.98, an increase of $0.18, or 10.0%, compared to $1.80 in the fourth quarter of 2024;Non-GAAP diluted EPS was $3.26, an increase of $0.42, or 14.8%, compared to $2.84 in the fourth quarter of 2024;Full Year 2025 HighlightsRevenues increased to $5.457 billion, a year-over-year increase of $729.1 million, or 15.4%. On an organic constant currency basis, revenues grew 4.9% year-over-year;GAAP income from operations was $520.0 million, a decrease of $24.6 million, or 4.5%, compared to $544.6 million in 2024;Non-GAAP income from operations was $831.5 million, an increase of $52.3 million, or 6.7%, compared to $779.2 million in 2024;Diluted EPS on a GAAP basis was $6.72, a decrease of $1.12, or 14.3%, compared to $7.84 in 2024; andNon-GAAP diluted EPS was $11.50, an increase of $0.64, or 5.9%, compared to $10.86 in 2024.Cash Flow and Other MetricsCash provided by operating activities was $282.9 million in the fourth quarter of 2025, an increase from $130.3 million in the fourth quarter of 2024; and was $654.9 million in 2025, an increase from $559.2 million in 2024;The Company repurchased 1.16 million shares of its common stock for $223.5 million during the fourth quarter of 2025 under its share repurchase program. During the year ended December 31, 2025, the Company repurchased 3.54 million shares of its common stock for $660.6 million under its share repurchase programs. As of December 31, 2025, the Company had $776.5 million remaining under its share repurchase authorization;Cash, cash equivalents and restricted cash totaled $1.301 billion as of December 31, 2025, an increase of $11.0 million, or 0.9%, from $1.290 billion as of December 31, 2024; andTotal headcount was approximately 62,850 as of December 31, 2025. Included in this number were approximately 56,600 delivery professionals, an increase of 2.7% from December 31, 2024.2026 Outlook - Full Year and First QuarterFull YearEPAM expects the following for the full year:The Company expects the year-over-year revenue growth rate to be in the range of 4.5% to 7.5% for 2026. The Company expects the year-over-year revenue growth rate on an organic constant currency basis to be in the range of 3% to 6%;For the full year, EPAM expects GAAP income from operations to be in the range of 10% to 11% of revenues and non-GAAP income from operations to be in the range of 15% to 16% of revenues;The Company expects its GAAP effective tax rate to be approximately 26% and its non-GAAP effective tax rate to be approximately 24%; andEPAM expects GAAP diluted EPS will be in the range of $7.95 to $8.25 for the year, and non-GAAP diluted EPS will be in the range of $12.60 to $12.90 for the year. The Company expects weighted average diluted shares outstanding for the year of 54.4 million.First QuarterEPAM expects the following for the first quarter:The Company expects revenues will be in the range of $1.385 billion to $1.400 billion for the first quarter reflecting a year-over-year increase of 7.0% at the midpoint of the range. The Company expects year-over-year revenue growth on an organic constant currency basis to be approximately 2.9% at the midpoint of the range;For the first quarter, EPAM expects GAAP income from operations to be in the range of 7.0% to 8.0% of revenues and non-GAAP income from operations to be in the range of 13.5% to 14.5% of revenues;The Company expects its GAAP effective tax rate to be approximately 30% and its non-GAAP effective tax rate to be approximately 24%; andEPAM expects GAAP diluted EPS will be in the range of $1.32 to $1.40 for the quarter, and non-GAAP diluted EPS will be in the range of $2.70 to $2.78 for the quarter. The Company expects weighted average diluted shares outstanding for the quarter of 54.7 million.Conference Call InformationEPAM will host a conference call to discuss results on Thursday, February 19, 2026 at 8:00 a.m. EST. 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 EPAM (NYSE:EPAM) is a global leader in AI transformation engineering and integrated consulting, serving Forbes Global 2000 companies and ambitious startups. With over thirty years of expertise in custom software, product and platform engineering, EPAM empowers organizations to become AI-Native enterprises, driving measurable value from innovation and digital investments. Recognized by industry benchmarks and leading analysts as a leader in AI, EPAM delivers globally while engaging locally, making the future real for clients, partners, and employees.We are proud to be recognized by Forbes, Glassdoor, Newsweek, Time Magazine, Great Place to Work and kununu as a Most Loved Workplace around the world.Learn more at www.epam.com and follow us on LinkedIn.Non-GAAP Financial MeasuresEPAM 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 StatementsThis 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.EPAM SYSTEMS, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME(Unaudited)(In thousands, except per share data)

Three Months Ended
December 31,
Year EndedDecember 31,
2025
2024
2025
2024Revenues$ 1,407,548
$ 1,248,351
$ 5,457,056
$ 4,727,940Operating expenses:

Cost of revenues (exclusive of depreciation and
amortization)984,346
868,314
3,883,535
3,277,497Selling, general and administrative expenses243,161
216,969
928,707
816,300Depreciation and amortization expense30,787
26,556
124,811
89,559Income from operations149,254
136,512
520,003
544,584Interest and other income (loss), net(89)
6,451
11,546
46,876Foreign exchange loss(5,344)
(5,632)
(25,925)
(7,048)Income before provision for income taxes143,821
137,331
505,624
584,412Provision for income taxes34,467
34,032
127,946
129,879Net income$     109,354
$     103,299
$     377,678
$     454,533

Net income per share:

Basic$           1.99
$           1.82
$           6.76
$           7.93Diluted$           1.98
$           1.80
$           6.72
$           7.84Shares used in calculation of net income per share:

Basic54,942
56,818
55,893
57,288Diluted55,341
57,435
56,233
57,983 EPAM SYSTEMS, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Unaudited)(In thousands, except par value)

As of  December 31,  2025
As of  December 31,  2024Assets

Current assets

Cash and cash equivalents$    1,296,077
$    1,286,267Trade receivables and contract assets, net of allowance of $6,350 and $5,612,
respectively1,108,201
1,002,175Prepaid and other current assets129,610
137,806Total current assets2,533,888
2,426,248Property and equipment, net202,387
207,667Operating lease right-of-use assets, net114,875
128,244Intangible assets, net406,586
436,418Goodwill1,210,564
1,181,575Deferred tax assets295,115
269,799Other noncurrent assets138,721
100,522Total assets$   4,902,136
$   4,750,473

Liabilities

Current liabilities

Accounts payable$         55,329
$         44,702Accrued compensation and benefits expenses608,232
484,952Accrued expenses and other current liabilities250,688
201,356Income taxes payable, current25,520
50,395Operating lease liabilities, current37,173
39,634Total current liabilities976,942
821,039Long-term debt25,034
25,194Operating lease liabilities, noncurrent81,497
98,426Deferred tax liabilities, noncurrent76,969
92,362Other noncurrent liabilities63,886
82,301Total liabilities1,224,328
1,119,322Commitments and contingencies

Equity

Stockholders' equity

Common stock, $0.001 par value; 160,000 authorized; 54,274 shares issued and
outstanding at December 31, 2025, and 56,869 shares issued and outstanding at
December 31, 202454
57Additional paid-in capital1,390,423
1,190,222Retained earnings2,268,204
2,555,796Accumulated other comprehensive income (loss)18,545
(116,864)Total EPAM Systems, Inc. stockholders' equity3,677,226
3,629,211Noncontrolling interest in consolidated subsidiaries582
1,940Total equity3,677,808
3,631,151Total liabilities and equity$   4,902,136
$   4,750,473 EPAM SYSTEMS, INC. AND SUBSIDIARIESReconciliations of Non-GAAP Financial Measures to Comparable GAAP Financial Measures(Unaudited)(In thousands, except percent and per share amounts)
Reconciliation of 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
December 31, 2025
Year Ended
December 31, 2025Revenue growth as reported12.8 %
15.4 %Inorganic revenue(4.6) %
(9.2) %Foreign exchange rates(2.6) %
(1.3) %Revenue growth on an organic constant currency basis5.6 %
4.9 % Reconciliation of various income statement amounts from GAAP to non-GAAP for the three months and years ended December 31, 2025 and 2024 is presented in the table below:

Three Months Ended December 31, 2025
Year Ended December 31, 2025
GAAP
Adjustments
Non-GAAP
GAAP
Adjustments
Non-GAAPCost of revenues (exclusive of
depreciation and amortization)(1)$   984,346
$ (23,550)
$ 960,796
$ 3,883,535
$ (88,055)
$ 3,795,480Selling, general and administrative
expenses(2)$   243,161
$ (39,574)
$ 203,587
$   928,707
$ (152,070)
$   776,637Income from operations(3)$   149,254
$ 80,779
$ 230,033
$   520,003
$ 311,492
$   831,495Operating margin10.6 %
5.7 %
16.3 %
9.5 %
5.7 %
15.2 %Net income(4)$   109,354
$ 70,855
$ 180,209
$   377,678
$ 269,131
$   646,809Diluted earnings per share$       1.98

$       3.26
$          6.72

$        11.50

Three Months Ended December 31, 2024
Year Ended December 31, 2024
GAAP
Adjustments
Non-GAAP
GAAP
Adjustments
Non-GAAPCost of revenues (exclusive of
depreciation and amortization)(1)$   868,314
$ (22,040)
$ 846,274
$ 3,277,497
$ (59,821)
$ 3,217,676Selling, general and administrative
expenses(2)$   216,969
$ (37,637)
$ 179,332
$   816,300
$ (145,329)
$   670,971Income from operations(3)$   136,512
$ 71,675
$ 208,187
$   544,584
$ 234,625
$   779,209Operating margin10.9 %
5.8 %
16.7 %
11.5 %
5.0 %
16.5 %Net income(4)$   103,299
$ 60,066
$ 163,365
$   454,533
$ 175,430
$   629,963Diluted earnings per share$       1.80

$       2.84
$          7.84

$        10.86
Items (1) through (4) above are detailed in the following table with the specific cross-reference noted in the appropriate item.

Three Months Ended  December 31,
Year Ended  December 31,
2025
2024
2025
2024Stock-based compensation expenses$     23,019
$     22,074
$     86,252
$     80,944Poland R&D incentives(a)—
(556)
(505)
(23,473)Humanitarian support in Ukraine(b)531
522
2,308
2,350Total adjustments to GAAP cost of revenues(1)23,550
22,040
88,055
59,821Stock-based compensation expenses22,127
22,624
90,512
86,353Cost Optimization charges(c)15,279
4,837
47,893
31,270Other acquisition-related expenses234
7,031
1,160
15,808Humanitarian support in Ukraine(b)1,861
3,127
12,250
10,821Geographic repositioning(d)—
(4)
—
849One-time charges73
22
255
228Total adjustments to GAAP selling, general and administrative
expenses(2)39,574
37,637
152,070
145,329Amortization of purchased intangible assets17,655
11,998
71,367
29,475Total adjustments to GAAP income from operations(3)80,779
71,675
311,492
234,625Foreign exchange loss5,344
5,632
25,925
7,048Change in fair value of contingent consideration included in
Interest and other income, net3,878
1,673
3,465
5,700One-time benefits included in Interest and other income (loss),
net—
(1,331)
(700)
(3,143)Provision for income taxes:

Tax effect on non-GAAP adjustments(18,631)
(15,640)
(74,086)
(44,522)Tax shortfall (excess tax benefit) related to stock-based
compensation1,175
(1,943)
1,926
(22,448)Net discrete charge (benefit) from tax planning(e)(1,690)
—
1,109
(1,830)Total adjustments to GAAP net income(4)$     70,855
$     60,066
$   269,131
$   175,430

(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 attributable to targeted restructuring efforts and not expected to recur once the respective Cost Optimization program is completed.

(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)Net discrete 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 SUBSIDIARIESReconciliations 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 revenue growth on a GAAP basis to expected revenue growth on an organic constant currency
basis is presented in the table below:

First Quarter 2026
Full Year 2026
(at midpoint of
range)

Revenue growth 7.0 %
4.5% to 7.5%Foreign exchange rates(4.0) %
(1.5) %Inorganic revenue(0.1) %
— %Revenue growth on an organic constant currency basis 2.9 %
3.0% to 6.0%
Reconciliation of expected GAAP to non-GAAP income from operations as a percentage of revenues is presented in the
table below:

First Quarter 2026
Full Year 2026GAAP income from operations as a percentage of revenues 7.0% to 8.0%
10.0% to 11.0%Stock-based compensation expenses3.9 %
3.4 %Included in cost of revenues (exclusive of depreciation and amortization)1.9 %
1.7 %Included in selling, general and administrative expenses2.0 %
1.7 %Humanitarian support in Ukraine(b)0.2 %
0.1 %Cost Optimization charges(c)1.1 %
0.3 %Amortization of acquired intangible assets1.3 %
1.2 %Non-GAAP income from operations as a percentage of revenues(f)13.5% to 14.5%
15.0% to 16.0%

(f)EPAM has not included the impact of potential future one-time charges including asset impairments, unusual gains and losses, expenses incurred in connection with future cost optimization actions, 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:

First Quarter 2026
Full Year 2026GAAP effective tax rate (approximately)30.0 %
26.0 %Tax shortfall related to stock-based compensation(3.9) %
(0.6) %Tax effect on non-GAAP adjustments (2.1) %
(1.4) %Non-GAAP effective tax rate (approximately)24.0 %
24.0 %
Reconciliation of expected GAAP to non-GAAP diluted earnings per share is presented in the table below:

First Quarter 2026
Full Year 2026GAAP diluted earnings per share $1.32 to $1.40
$7.95 to $8.25Stock-based compensation expenses0.97
3.71Included in cost of revenues (exclusive of depreciation and amortization)0.47
1.81Included in selling, general and administrative expenses0.50
1.90Humanitarian support in Ukraine(b)0.06
0.22Cost Optimization charges(c)0.25
0.45Amortization of acquired intangible assets0.32
1.27Foreign exchange loss0.05
0.22Provision for income taxes:

     Tax effect on non-GAAP adjustments(0.35)
(1.28)Tax shortfall related to stock-based compensation0.08
0.06Non-GAAP diluted earnings per share(f)$2.70 to $2.78
$12.60 to $12.90

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Original: EPAM Reports Results for Fourth Quarter and Full Year 2025