EPAM Systems: Rating Upgrade Due to Accelerating Growth

EPAM Systems reported Q2 results, showing strong organic growth acceleration across verticals and geographies. Despite an uncertain macroeconomic backdrop, the company's investments in digital transformation and innovation have paid off. EPAM's growth recovery is expected to continue, making it a promising investment opportunity.

EPAM Systems (NYSE:EPAM) reported robust Q2 2025 results, showcasing strong organic growth across verticals and geographies. Despite an uncertain macroeconomic backdrop, the digital engineering services company's investments in digital transformation and innovation have paid off, making it a promising investment opportunity.

Key Highlights:
- Revenue: EPAM reported $1.35 billion in revenue, a 18% year-over-year (YoY) increase, beating Wall Street's estimates of $1.33 billion [1].
- Adjusted EPS: The company's adjusted earnings per share (EPS) of $2.77 surpassed analysts' consensus estimates by 6% [1].
- Revenue Guidance: EPAM raised its full-year 2025 revenue growth guidance to 13-15% and increased its Q3 2025 revenue expectations to $1.365-$1.380 billion, indicating a 17.6% YoY growth rate [3].

EPAM's growth was driven by strong organic constant currency revenue growth and favorable foreign exchange rate assumptions. The company's AI-native services and cloud modernization initiatives have been key drivers of this growth, with top clients advancing from small-scale pilots to larger enterprise-wide initiatives [1].

Management attributed the quarter's performance to increased adoption of its AI-enabled platforms, a focus on quality execution, and successful integration of recent acquisitions. The company's operating momentum is strong, with a steady stream of new client wins and expanded engagements in complex AI-driven programs [2].

Looking ahead, EPAM expects continued momentum, with AI-led transformation, talent development, and operational improvements shaping its outlook for the next quarter and beyond. The company's ability to deliver end-to-end, AI-optimized solutions is expected to create new opportunities across industry verticals [2].

EPAM's current market capitalization stands at $8.45 billion, trading at $152.25, in line with pre-earnings levels of $151.46. The stock has shown resilience, rebounding from the April 2025 "Liberation Day" tariffs and proving that knee-jerk reactions often create the best buying opportunities [1].

References:
[1] https://finance.yahoo.com/news/epam-q2-deep-dive-ai-072410606.html
[2] https://finance.yahoo.com/news/william-blair-retains-buy-rating-040530056.html
[3] https://www.ainvest.com/news/epam-systems-raises-full-year-revenue-outlook-q2-2025-earnings-2508/