EPAM Systems' Q2 2025: Navigating Contradictions in AI Revenue Growth and Client Demand

AI-related revenue growth, client demand and organic growth expectations, revenue growth expectations, AI investment and skills upskilling, and pricing and bench optimization are the key contradictions discussed in EPAM Systems' latest 2025Q2 earnings call.



Revenue Growth and AI Integration:
- EPAM generated revenue of $1.353 billion for Q2 2025, surpassing the upper end of their Q2 revenue outlook, with an organic constant currency growth rate of 5.3% year-over-year.
- The growth was driven by clients turning to EPAM for trusted quality coupled with accelerating momentum across its AI native offerings.

Vertical and Regional Performance:
- All six industry verticals showed encouraging momentum, with Financial Services leading the way by delivering 34.4% year-over-year growth, and Emerging Verticals showing 28.7% growth.
- Regionally, Americas grew 15.9% and EMEA 21.7%, reflecting strong year-over-year growth across all three regions.
- This was attributed to stable demand in North America and Europe, along with strong growth in emerging sectors like energy and oil and gas.

AI and AI-Native Capabilities:
- EPAM's AI native revenue grew double digits sequentially, driven by strong double-digit growth in the previous quarter.
- The company's efforts to expand its AI capabilities and integrate external tools have led to significant momentum in becoming an AI-native transformation company.

Operational Metrics and Strategic Focus:
- The company ended Q2 with over 55,800 consultants, reflecting an organic growth rate of 6.7%.
- Significant focus was placed on improving utilization from 77.5% in the previous quarter to 78.1%, indicating discipline in optimizing bench and maintaining strong delivery capabilities.

Leadership Transition and Strategic Direction:
- After 52 years at EPAM and 21 years as CEO, Arkadiy Dobkin will transition to the role of Executive Chairman by September 1, 2025.
- The transition is supported by a strong underlying business position and continued strategic investments in AI capabilities to capture future growth.