Epam Systems 2025 Q2 Earnings Misses Targets as Net Income Declines 10.8%

Epam Systems (EPAM) reported its fiscal 2025 Q2 earnings on Aug 07th, 2025. The company missed expectations with a decline in earnings despite a strong revenue increase. It also raised its 2025 outlook for AI-driven growth.

Revenue
Epam Systems reported total revenue of $1.35 billion for Q2 2025, representing an 18.0% increase from $1.15 billion in the same period the previous year. The performance highlights a sustained upward trend in top-line growth, driven by expanded client demand and continued momentum in key service offerings.

Earnings/Net Income
The company’s net income fell to $88.03 million in Q2 2025, a 10.8% decrease from $98.64 million in Q2 2024. Earnings per share (EPS) also declined to $1.56 from $1.71, a drop of 8.8%. Despite these declines, the company remains profitable for the 16th consecutive year, indicating resilience amid macroeconomic headwinds.

Price Action
The stock experienced a 4.38% decline during the latest trading day, with a marginal 0.02% gain over the past week. However, the stock has fallen sharply by 13.95% month-to-date, reflecting broader market concerns and investor skepticism following the earnings release.

Post Earnings Price Action Review
A historical strategy of buying EPAM shares after a revenue growth quarter and holding for 30 days has shown poor performance, returning -52.69% over the past three years. This underperformed the benchmark by 104.38%, with a compound annual growth rate (CAGR) of -22.37%. The strategy recorded a maximum drawdown of 0.00%, indicating no recovery from the initial loss during the holding period.

CEO Commentary
The CEO highlighted “strong performance” in Q2, crediting growth in digital product engineering and platform services. The company is investing in new capabilities and talent to support long-term goals while navigating macroeconomic pressures and market volatility. Leadership remains optimistic about future opportunities, particularly in emerging markets and technology-driven sectors.

Guidance
Epam Systems provided forward-looking guidance for the next fiscal period, expecting continued revenue growth and operational efficiency improvements. Specific numerical targets were not included in the 8-K filing, but Q2 results showed an EPS of $1.56, revenue of $1.35 billion, and net income of $88.03 million. The company is focused on execution and client retention to maintain this trajectory.

Additional News
EPAM Systems raised its 2025 guidance on AI-driven growth, now projecting annual revenue growth between 13% and 15%, with adjusted earnings per share (EPS) expected to range from $10.96 to $11.12. The updated outlook reflects growing confidence in the company’s ability to leverage artificial intelligence and digital transformation to drive long-term value. This marks a notable shift from earlier expectations and underscores the strategic importance of innovation in the firm’s business model.