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- **Revenue Growth Accelerates**: Q4 2025 revenue up 12.8% YoY, with AI-native services scaling to $600 million in 2026.
- **Profitability Improvements**: Non-GAAP EPS of $3.26 (+14.8%), gross margin at 31.7%, and free cash flow of $268 million.
- **Strategic Partnerships**: Microsoft, AWS, and Google Cloud collaborations drive AI-native innovation and client wins.
- **Geographic Expansion**: Europe (+21.8% YoY), APAC (+19.1%), and financial services (+19.8%) lead growth.
- **2026 Outlook**: 3-6% organic growth, with AI-native services and fixed-price contract adoption boosting margins.

**【CEO Summary Section】**
- EPAM delivered Q4 2025 revenue of $1.4 billion, up 12.8% YoY (5.6% organic constant currency), driven by AI-native and AI foundational services growth.
- AI-native revenue reached $105 million in Q4, with expectations to scale to $600 million in 2026, supported by partnerships like Microsoft, AWS, and Google Cloud.
- Client momentum in financial services (+19.8%), software & hi-tech (+18.1%), and emerging verticals (+19.1%) highlights strategic execution.
- CEO emphasizes AI-native transformation, with 56,000+ consultants, engineers, and architects driving utilization improvements in 2026.

**【CFO Financial Commentary】**
- GAAP EPS of $1.98 and Non-GAAP EPS of $3.26, up 14.8% YoY, with free cash flow of $268 million.
- Gross margin improved to 31.7% (Non-GAAP), with operating expenses controlled at 17.3% of revenue.
- 2026 guidance: Organic constant currency growth of 3-6%, with AI-native services driving profitability in Europe, India, and APAC.
- Share buybacks of $224 million in Q4, reflecting confidence in long-term growth.

**【Q&A Key Highlights】**
- **NEORIS Client Impact**: Q1 2026 revenue decline of ~100bps YoY, but stable from Q2 onwards, with 2026 organic growth of 3-6%.
- **AI-Native Momentum**: $600 million+ AI-native revenue in 2026, supported by fixed-price contracts and utilization improvements.
- **Geographic Strength**: Europe (+21.8% YoY), APAC (+19.1%), and Americas (+7.6%) reflect balanced regional growth.
- **Cost Optimization**: 2026 productivity gains in India and Europe, offsetting juniors' lower utilization in Q4 2025.
- **Pipeline Visibility**: Larger AI transformation programs in financial services, energy, and life sciences drive Q2+ 2026 revenue acceleration.

EPAM Systems, Inc. (EPAM) Q4 2025 Earnings Call Transcript

- **Revenue Momentum**: Q3 organic growth 7.1% YoY, with AI-native revenue up double digits sequentially. Full-year 2025 organic growth raised to 4.6% midpoint.
- **AI Leadership**: AI/RUN Transform strategy drives 60-70% of AI projects expanding into large programs. Agentic QA reduces testing costs by 30%.
- **Financial Strength**: Record Q3 free cash flow ($286M) and $1B share buyback program. Q4 non-GAAP EPS guidance $3.10-$3.18.
- **Client Demand**: 5/6 verticals growing YoY, with Financial Services (+32.7%) and Software & Hi-Tech (+19.1%) leading. Clients redirecting work from failed partners.
- **Future Outlook**: 2026 growth expected higher than 2025, driven by AI foundational build-outs and improved account margins (15%+).

**【CEO Summary】**
- **Revenue Growth**: Q3 organic constant currency revenue grew 7.1% YoY, driven by AI-native services and foundational modernization. 5 out of 6 verticals showed year-over-year growth, with Financial Services (+32.7%), Software & Hi-Tech (+19.1%), and Consumer Goods (+9.9%) leading.
- **AI Strategy**: AI-native revenue grew sequentially for the 3rd quarter, with clients expanding proof-of-concepts into large-scale programs. EPAM's AI/RUN Transform strategy focuses on AI innovation, engineering transformation, and industry-specific solutions. Agentic QA, a new offering, reduces manual testing costs by 30% and covers 90% of manual checks.
- **Client Engagement**: 60-70% of AI projects expand into larger programs, with clients redirecting work from partners who failed to deliver. EPAM's engineering expertise and reliability are key competitive advantages.
- **Internal Transformation**: 90% of employees completed AI literacy training, and internal AI-driven efficiencies (e.g., EPAM AI/RUN Transform) are being scaled.

**【CFO Financial Commentary】**
- **Revenue**: Q3 revenue $1.394B (+19.4% YoY), exceeding guidance. Organic constant currency growth 7.1% YoY. Full-year 2025 organic growth now 4.6% midpoint vs. 4% prior.
- **Profitability**: Non-GAAP EPS $3.08 vs. $3.12 YoY, with Q4 guidance of $3.10-$3.18. Gross margin 31% (vs. 34.3% YoY), impacted by variable compensation and recent acquisitions.
- **Cash Flow**: Q3 free cash flow $286M (record high), with $1B+ cash on hand. $82M share buybacks in Q3 under new $1B program.
- **Headcount**: 56,100 consultants (+17.5% YoY), with net additions of 300 delivery professionals. Utilization 76.5% (flat YoY).
- **Q4 Outlook**: Revenue $1.38B-$1.395B (+11.1% YoY), with organic growth 4.4% at midpoint. Non-GAAP income from operations 15.5-16.5%.

**【Q&A Highlights】**
- **AI BPO Growth**: Early momentum in Agentic BPO, with clients testing AI-driven process automation. Differentiated from RPA by requiring advanced engineering and industry-specific playbooks.
- **2026 Growth**: Expect organic growth higher than 2025's 4.6% midpoint, driven by AI foundational build-outs and pipeline strength.
- **Profitability Focus**: Improved account margins (15%+ in Q4) from selective deal pricing and cost optimization. 2025 GAAP tax rate 25.6%, non-GAAP 24.1%.
- **Headcount Strategy**: Continued hiring to meet demand, with focus on rebalancing delivery pyramid to reduce costs and improve efficiency.
- **AI Project Scale**: Average AI projects evolve from POCs to medium/large-scale engagements, with some top clients investing in multi-million dollar AI programs.

EPAM Systems, Inc. (EPAM) Q3 2025 Earnings Call Transcript

- **Revenue Growth**: Q2 revenue up 18% YoY, with 5.3% organic growth, driven by financial services (34.4% YoY) and AI-native services.
- **Financial Strength**: Non-GAAP EPS of $2.77, up 12.6% YoY, with improved profitability in Q3 guidance.
- **AI Momentum**: 80%+ employees upskilled in AI, clients returning to EPAM for scalable AI solutions post-DIY attempts.
- **Balanced Growth**: Utilization at 78.1%, with focus on reducing bench and adding headcount for 2025 organic growth of 3%–5%.

**【CEO Summary Section】**
- Q2 revenue reached $1.353 billion, up 18% year-over-year, with 5.3% organic constant currency growth, marking the third consecutive quarter of positive organic growth.
- All 6 verticals showed year-over-year growth, driven by financial services (34.4% YoY), software & hi-tech (21.2% YoY), and emerging verticals (28.7% YoY).
- Geographically, Americas (15.9% YoY), EMEA (21.7% YoY), and APAC (13% YoY) all contributed to growth.
- Strategic focus on AI-native services, quality execution, and global delivery hubs underpinning growth.

**【CFO Financial Commentary】**
- GAAP net income: $126 million (9.3% of revenue); Non-GAAP income: $203 million (15% of revenue).
- Non-GAAP EPS: $2.77, up 12.6% YoY.
- Gross margin: 30.1% (down 0.7% YoY) due to variable compensation and recent acquisitions.
- Q3 2025 revenue guidance: $1.365–$1.380 billion (17.6% YoY midpoint).
- Full year 2025 organic constant currency growth: 3%–5%, with FX contributing 0.9% to reported growth.

**【Q&A Highlights】**
- **Workforce Management**: Utilization improved to 78.1%, with focus on reducing bench and adding headcount for growth.
- **Client Demand**: Clients prioritizing AI adoption, cloud migration, and data modernization, driving demand for EPAM's AI-native and transformation services.
- **AI Adoption**: 80%+ of employees upskilled in AI, with clients returning to EPAM for scalable, maintainable solutions after initial DIY attempts.
- **Delivery Hubs**: Balanced growth across India, EMEA, and Latin America, with no single region dominating demand.

EPAM Systems (EPAM)-7 Aug 25-2025 Q2 Earnings call transcript

- **CEO Transition & AI Vision**: Arkadiy Dobkin steps back as CEO, with FB leading EPAM's shift to AI-native transformation. Q1 AI-native revenues grew strongly, with 80% of top clients engaged in AI projects.
- **Revenue Outperformance**: Q1 2025 revenue $1.3B (+11.7% YoY), exceeding flat organic growth guidance. Full-year 2025 organic growth raised to 2%-5% (vs. prior 1%-4%).
- **Margin Challenges**: Gross margin pressured by wage increases and acquisitions (26.9% GAAP vs. 28.4% Q1 2024). Focus on utilization and pricing to recover in H2.
- **Client Momentum**: 61% of top 20 clients increased spend, with new logo growth (+14.6% YoY) outpacing top 20 (+6.1%). Clients returning to EPAM for quality execution in financial services and healthcare.
- **Share Buybacks**: $160M spent in Q1, with plans to accelerate under $1.5B authorization. Diluted shares reduced to 56.5M, driving EPS upside.

**【CEO Summary Section】**
- **Leadership Transition**: Arkadiy Dobkin transitions to Executive Chairman, with Balazs Fejes (FB) set to become CEO on September 1, 2025. FB will lead the company's AI-native transformation strategy.
- **Q1 2025 Results**: Revenue grew 11.7% YoY to $1.3B, with organic growth of 1.4% (vs. flat guidance). AI-native revenues saw strong double-digit QoQ growth, driven by client demand for AI transformation programs.
- **Client Dynamics**: 80% of top 100 clients engaged in AI initiatives, with projects maturing into mid-sized programs with measurable ROI. Clients are returning to EPAM for quality execution and reliability, especially in financial services and healthcare.
- **Global Delivery Hubs**: India, Europe, and Western/Central Asia saw net organic headcount growth. Ukraine remains stable, supporting global programs with 9,000+ employees.
- **AI Innovations**: EPAM AI/Run (AWS collaboration) and DIAL platform advance AI-driven SDLC automation. Notable wins include Google Cloud's 2025 Partner of the Year for oil and gas solutions.

**【CFO Financial Commentary】**
- **Revenue**: Q1 2025 GAAP revenue $1.3B (+11.7% YoY), organic growth 1.4% (vs. flat guidance). Full-year 2025 guidance raised to 11.5%-14.5% YoY growth, with organic 2%-5% (previously 1%-4%).
- **Margins**: GAAP gross margin 26.9% (vs. 28.4% Q1 2024), pressured by wage increases and lower-margin acquisitions. Non-GAAP gross margin 28.7% (vs. 30.4%). Focus on improving utilization to 77.5% (Q1 2025 vs. 76.8% Q1 2024).
- **EPS**: Non-GAAP diluted EPS $2.41 (vs. $2.46 Q1 2024). Full-year 2025 guidance: $10.70-$10.95 (vs. prior $10.50-$10.75), driven by share buybacks.
- **Cash Flow**: Q1 free cash flow $15M (vs. $123M Q1 2024), impacted by higher bonuses and fixed-fee project milestones. DSO 75 days (vs. 70 days Q4 2024).
- **Headcount**: Total consultants/engineers 55,600 (+18.2% YoY), with 500 net additions in Q1. Utilization 77.5% (vs. 76.8% Q1 2024).

**【Q&A Key Takeaways】**
- **AI Growth**: AI-native revenues expected to grow strongly Q2-Q4, with double-digit QoQ expansion. Clients prioritizing comprehensive AI factories over isolated use cases.
- **Client Spend**: No material slowdown in Q1, with 61% of top 20 clients increasing spend. New logo activity (+14.6% YoY) outpaces top 20 growth (+6.1%).
- **Gross Margin Recovery**: Focus on pricing, utilization, and cost control to improve margins in H2 2025. FX tailwinds (+0.4% YoY) partially offset headwinds.
- **Free Cash Flow**: DSO expected to remain elevated due to fixed-fee projects. Q2-Full Year FCF likely constrained by seasonality and milestone billing.
- **Share Buybacks**: $160M spent in Q1, with plans to accelerate repurchases under $1.5B authorization. Diluted shares reduced to 56.5M (vs. 57.3M Q1 2024).

EPAM Systems (EPAM)-8 May 25-2025 Q1 Earnings call transcript

- **Revenue Growth**: Q4 2024 reported revenue $1.25B (+7.9% YoY), returning to organic growth. 2025 guided for 10-14% growth, driven by AI-native programs and acquisitions.
- **AI Momentum**: 75% of top clients engaged in GenAI, with $50M+ in Q4 AI-native revenue. Focus on Agentic AI factories and client examples like Canadian Tire and Baker Hughes.
- **Profitability Outlook**: 2025 Non-GAAP EPS $10.45-$10.75, with margin compression (14.5-15.5% IFO) due to talent costs and acquisition dilution. H2 margin improvement expected.
- **Geographic Expansion**: India (10,000+ employees), Latin America (3rd largest region), and Ukraine (stable but profitable) key growth drivers.

**【CEO Opening Remarks】**
- **2024 Year in Review**: Achieved stabilization and sequential momentum despite macro challenges. Acquisitions of NEORIS and First Derivative expanded global footprint (+6,000 employees) and penetrated new markets. 75% of top clients engaged in GenAI initiatives, with $50M+ in AI-native revenue in Q4.
- **Q4 Highlights**: 7.9% reported revenue growth (1% organic), returning to organic growth after Q1 2023. 5/6 verticals grew sequentially, led by financial services (+15.9%) and life sciences (+8.6%). Americas (+11.4%) and APAC (+4.3%) outperformed.
- **2025 Outlook**: 10-14% revenue growth (10% inorganic), balancing optimism with caution on macro risks. Focus on AI-native capabilities, talent retention, and integration of recent acquisitions.

**【CFO Financial Details】**
- **Q4 Financials**: GAAP EPS $1.80, Non-GAAP EPS $2.84 (up 3.3%). Free cash flow $115M. Headcount 61,200 (+16.3% YoY). Gross margin 32.2% (down 0.8% YoY due to compensation increases and lower acquisition margins). Operating expenses 14.4% of revenue (up 0.2% YoY).
- **2025 Guidance**: 10-14% revenue growth, Non-GAAP EPS $10.45-$10.75. Q1 2025 revenue $1.275B-$1.290B (10% YoY). Margins expected to improve from H1 to H2 as pricing environment normalizes.

**【Q&A Key Themes】**
- **Client Spending**: Q4 saw higher-than-expected new project starts (+10% YoY). 2025 will balance cost sensitivity with GenAI transformation spending. One large tech client returned to scale after failing with competitors.
- **Pricing & Margin Pressure**: 2025 will see lower profitability (14.5-15.5% Non-GAAP IFO vs 16.5% in 2024) due to talent retention costs, acquisition dilution, and limited pricing power. Ukraine remains profitable but subject to geopolitical risk.
- **Geographic Expansion**: India now largest delivery hub (10,000+ employees). Latin America expanded to 3rd largest region. Western Central Asia hub grew to 7,300 employees. Ukraine headcount stable YoY but saw sequential additions in Q4.
- **AI Investment**: $194M in stock-based compensation for 2025 reflects talent retention focus. GenAI IP development and AI factories driving $50M+ in revenue. Example clients: Canadian Tire (EliteA platform adoption) and Baker Hughes (AI-native energy platforms).

EPAM Systems, Inc. (EPAM) Q4 2024 Earnings Call Transcript

EPAM Systems (EPAM)-7 Nov 24-2024 Q3 Earnings call transcript

EPAM Systems (EPAM)-8 Aug 24-2024 Q2 Earnings call transcript

EPAM Systems (EPAM)-9 May 24-2024 Q1 Earnings call transcript

EPAM Systems (EPAM)-15 Feb 24-2023 Q4 Earnings call transcript

- **Stabilization in North America**: Q3 production load returned to Q1 levels, with renewed client interest in healthcare, insurance, and energy.
- **India Growth**: Becoming second-largest delivery hub, with investments in cloud, AI, and data capabilities.
- **2023 Revenue Decline**: Full-year revenue expected to fall 3%, with Q4 revenue down 8% YoY.
- **2024 Margin Pressure**: Wage inflation and limited pricing recovery expected to weigh on margins, with normalization possible in 2025.
- **AI Investments**: Strategic partnerships and responsible AI framework positioning EPAM for long-term growth, though near-term impact is limited.

**【CEO Summary Section】**
- **Demand Stabilization**: Production load in Q3 returned to Q1 levels, signaling stabilization in North America and renewed client interest in healthcare, insurance, and energy sectors. However, short-term profitability metrics remain pressured due to cost optimization efforts.
- **Global Expansion**: India is becoming the second-largest delivery hub, with investments in cloud, AI, and data capabilities. Ukraine remains stable, while Belarus faces ongoing challenges due to geopolitical tensions.
- **AI and Strategic Investments**: EPAM is advancing its responsible AI framework and partnerships with AWS, Google Cloud, and Microsoft to drive modernization and cloud-native solutions. These efforts are expected to gain momentum in 2024.

**【CFO Financial Commentary】**
- **Q3 Results**: Revenue of $1.15 billion (-6.1% YoY), with declines in financial services (-3.3%), software/Hi-Tech (-15.1%), and APAC (-20.2%). Life sciences/healthcare showed sequential growth (+8.6%).
- **Margins**: GAAP gross margin 31.1% (-150bps YoY), driven by pricing pressure and lower utilization. Non-GAAP operating margin 17% (-190bps YoY).
- **Cost Optimization**: $100+ million savings program to reduce costs by 2.5%-3%, with $15 million in Q4 expenses. Headcount expected to decline further in Q4.
- **2023 Outlook**: Full-year revenue $4.66-4.67 billion (-3% YoY). Non-GAAP EPS $10.31-10.39. Q4 revenue $1.13-1.14 billion (-8% YoY).
- **2024 Outlook**: Margins pressured by wage inflation and limited pricing recovery, with potential normalization in 2025.

**【Q&A Key Highlights】**
- **Demand Trends**: North America stabilizing, but Europe faces client ramp-downs. Conversations with clients about Gen AI-driven modernization are increasing, though revenue impact is delayed.
- **Cost Structure**: 2024 will balance cost optimization with investments in AI, partnerships, and demand generation. Variable compensation normalization and wage inflation could weigh on margins.
- **Geographic Mix**: India becoming key growth driver, with Ukraine remaining stable. Belarus expected to continue declining.
- **Financial Services**: Weakness in banking (-3.3% YoY) offset by growth in asset management. Insurance and healthcare showing resilience.
- **AI Impact**: EPAM's AI framework and partnerships are creating opportunities, but direct revenue contribution is still limited.


Actual											1.43	1.46	1.65	1.81	1.81	2.05	2.42	2.76	2.49	2.38	3.1	2.93	2.47	2.64	2.73	2.75	2.46	2.45	3.12	2.84	2.41	2.77	3.08	3.26
Forecast											1.4049	1.2008	1.4702	1.7149	1.6852	1.9368	2.2202	2.512	1.7581	1.7123	2.5258	2.6782	2.354	2.3379	2.5605	2.5143	2.3123	2.2589	2.6995	2.7546	2.2714	2.6123	3.0272	3.1543
Surprise	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	+1.79%	+21.59%	+12.23%	+5.55%	+7.41%	+5.84%	+9.00%	+9.87%	+41.63%	+38.99%	+22.73%	+9.40%	+4.93%	+12.92%	+6.62%	+9.37%	+6.39%	+8.46%	+15.58%	+3.10%	+6.10%	+6.04%	+1.74%	+3.35%

EPAM

EPAM fundamentals

EPAM Q4 2025 Earnings

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EPAM

EPAM fundamentals

EPAM Q4 2025 Earnings

Earnings Call

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EPAM Earnings Call Summary for Q4/20248:00 AM on Feb 20, 2025

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