EPAM's AI-Driven Growth Strategy: A Case for Accelerated Adoption in 2026

The global shift toward AI-native enterprise transformation is accelerating, driven by the need for scalable, purposeful AI integration into core business operations. In this evolving landscape, EPAM Systems (EPAM) has emerged as a strategic leader, leveraging its AI/Run™.Transform Playbook, proprietary tools like Agentic QA, and robust financial performance to position itself at the forefront of AI-native innovation. With Q3 2025 results underscoring its momentum and a clear alignment with industry trends, EPAM presents a compelling case for accelerated adoption in 2026.

Strategic Positioning: AI/Run™.Transform as a Market Differentiator

EPAM's AI/Run™.Transform Playbook, launched in October 2025, represents a paradigm shift in enterprise AI adoption. Designed as a next-generation integrated consulting service, the framework combines AI-native delivery, strategic consulting, and operational excellence with agentic capabilities and partner ecosystems according to EPAM's press release. This approach addresses a critical industry challenge: the misalignment between technical execution and business strategy. Forrester's research indicates that successful AI adoption requires harmonizing these elements to ensure scalability, a gap EPAM's Playbook explicitly bridges.

The framework's three pillars-AI/Run.Blueprints, AI/Run.Talent, and AI/Run.Tools-offer a modular, repeatable model for enterprises. AI/Run.Blueprints provide tailored frameworks to meet clients at their current maturity level, while AI/Run.Talent builds multidisciplinary teams with agentic AI expertise. AI/Run.Tools, including platforms like Agentic QA, enable enterprises to transition from experimentation to large-scale AI adoption. By embedding AI into the software development lifecycle and standardizing workflows-as-code, EPAM accelerates time-to-value for clients, generating AI-native revenue faster than traditional methods.

This strategic alignment with industry needs is reshaping EPAM's market position. As highlighted in its collaboration with First Derivative, the company is reengineering business processes, data governance, and agentic AI adoption to drive scalable transformation. Such initiatives position EPAM not just as a service provider but as a co-creator of AI-native enterprises.

Financial Momentum: Q3 2025 Results Validate Strategic Investments

EPAM's Q3 2025 earnings report, released in November 2025, reinforces its financial strength and strategic focus on AI. Total revenue reached $1.394 billion, reflecting a 19.4% year-over-year increase on a reported basis and 7.1% organic constant currency growth. AI-native revenues achieved double-digit sequential growth for the third consecutive quarter, underscoring accelerating demand for AI-focused services.

While GAAP gross margin dipped to 29.5% (from 34.6% in Q3 2024) and non-GAAP gross margin fell to 31% (from 34.3%), the decline was attributed to strategic investments in variable compensation and lower-margin acquisitions. These trade-offs signal EPAM's prioritization of long-term growth over short-term margin preservation. The company's free cash flow, however, hit an all-time high of $286 million, exceeding seasonal expectations. This liquidity has enabled a $1 billion share repurchase program and a raised full-year revenue guidance of $5.430 billion to $5.445 billion, representing a 15% year-over-year increase at midpoint.

Talent and Tools: Building a Sustainable AI Ecosystem

EPAM's commitment to AI talent development further solidifies its competitive edge. Over 90% of employees have completed mandatory AI literacy training, while 95% of engineers have finished foundational AI education. This workforce transformation ensures the company can deliver high-value AI-native solutions at scale.

Proprietary tools like Agentic QA exemplify EPAM's innovation. The platform claims to be 10x more efficient than manual testing, reducing manual effort by 50% and testing costs by 30%. Such tools not only enhance client ROI but also differentiate EPAM in a crowded market. By embedding agentic workflows into the software development lifecycle, the company enables enterprises to build and ship AI-driven software more efficiently.

Investment Thesis: Capitalizing on AI-Native Enterprise Demand

The convergence of EPAM's strategic positioning, financial performance, and talent development creates a robust investment case. As enterprises increasingly seek partners to navigate AI-native transformation, EPAM's AI/Run™.Transform Playbook offers a scalable, repeatable model aligned with industry trends. The company's Q3 2025 results demonstrate its ability to monetize AI demand while investing in long-term growth levers.

Moreover, EPAM's focus on aligning technical and business AI strategies-validated by Forrester's research-positions it to capture market share in a sector where misalignment remains a significant barrier. With AI-native revenue growth accelerating and free cash flow enabling strategic flexibility, EPAM is well-positioned to outperform in 2026.

Conclusion

EPAM's AI-driven growth strategy is a masterclass in aligning innovation with market demand. By pioneering frameworks like AI/Run™.Transform, investing in AI talent, and delivering strong financial results, the company is not only capitalizing on the AI-native enterprise transformation wave but also shaping its trajectory. For investors seeking exposure to a leader in this high-growth space, EPAM offers a compelling opportunity to benefit from its strategic foresight and execution.