NEWTOWN, Pa., Aug. 7, 2025 — Buoyed by a strong demand for its software services as enterprises, EPAM Systems raised its annual revenue and profit forecasts on Thursday as it continues to invest heavily in Artificial Intelligence technologies.

Stocks of the company, which provides a wide range of IT services including consulting, cloud and AI transformation and software engineering, rose more than five percent in premarket trading after it also topped estimates for second-quarter results.

Even as economic tensions prevail globally, companies continue spending on software services to roll out more AI offerings and integrate AI within their operations, driving demand at EPAM.

A strong demand was noted by EPAM from clients in industries such as financial services, software, healthcare and consumer goods in the quarter, posting revenue increases across major industry verticals, as well as across geographies.

“As our clients prioritize their AI-readiness and preparatory actions, they are increasingly turning to us to build out their data and AI foundation,” said Chief Revenue Officer Balazs Fejes, who is taking over as CEO from September.

“We’re pleased with another strong quarter of sequential organic growth, our third in a row, marking a return to greater consistency in our performance,” said Arkadiy Dobkin, CEO and President at EPAM. “This reaffirms our long-standing view that deep engineering and technology expertise is critical, especially in AI-led solutions and the complex modernization efforts required for AI adoption in the future. It also reflects the distinct structure of our client portfolio, with no material exposure to traditional legacy outsourcing services.”

What Lies Behind EPAM’s Positive Outlook?

Newtown, Pennsylvania-based EPAM now expects annual revenue growth at between 13 percent and 15 percent, up from its previous forecast of 11.5 percent to 14.5 percent. Analysts on average were expecting 2025 revenue to increase 13.4 percent, according to data compiled by LSEG.

EPAM projected adjusted earnings per share in the range of $10.96 to $11.12 for the year, compared with its prior forecast of $10.70 to $10.95. Analysts were estimating $10.85 per share.

The company's third-quarter revenue forecast of $1.37 billion to $1.38 billion also came in above estimates. Adjusted profit is expected to be in the range of $2.98 to $3.06 per share, also ahead of market expectations.

For the second quarter ended June 30, EPAM's revenue jumped 18% to $1.35 billion, beating estimates of $1.33 billion. Excluding one-off items, per-share profit was $2.77, above estimates of $2.61.

Financial Result Highlights That You Should Know

Key Earnings: Revenues increased to $1.353 billion, a year-over-year increase of $206.8 million, or 18.0 percent. On an organic constant currency basis, revenues were up 5.3 percent compared to the second quarter of 2024;

GAAP income from operations was $126.5 million, an increase of $5.9 million, or 4.9 percent, compared to $120.6 million in the second quarter of 2024;

Non-GAAP income from operations was $202.9 million, an increase of $28.4 million, or 16.3 percent, compared to $174.5 million in the second quarter of 2024; and

Diluted earnings per share (EPS) on a GAAP basis was $1.56, a decrease of $0.14, or 8.2 percent, compared to $1.70 in the second quarter of 2024; and non-GAAP diluted EPS was $2.77, an increase of $0.32, or 13.1 percent, compared to $2.45 in the second quarter of 2024.

Cash Flow and Other Metrics: Cash provided by operating activities was $77.4 million for the first six months of 2025, compared to cash provided by operating activities of $186.9 million for the first six months of 2024;

Cash, cash equivalents and restricted cash totalled $1.046 billion as of June 30, 2025, a decrease of $243.9 million, or 18.9 percent, from $1.290 billion as of December 31, 2024;

The company repurchased 1.087 million shares of its common stock for $194.9 million during the second quarter of 2025 under its share repurchase program. As of June 30, 2025, the Company had $82.1 million remaining under its share repurchase authorization; and

Total headcount was approximately 62,050 as of June 30, 2025. Included in this number were approximately 55,800 delivery professionals, an increase of 0.3 percent from March 31, 2025.

2025 Outlook – Full Year and Third Quarter

Full Year Outlook: For the full year, EPAM has envisaged certain achievements.  Based on the strength of organic constant currency revenue growth and updates to our foreign exchange rate assumptions, the Company raises its expected year-over-year revenue growth rate to now be in the range of 13.0 percent to 15.0 percent for 2025. Additionally, the Company now expects the year-over-year revenue growth rate on an organic constant currency basis to be in the range of 3.0 percent to 5.0 percent.

For the full year, EPAM continues to expect GAAP income from operations to be in the range of 9.0 percent to 10.0 percent of revenues and non-GAAP income from operations to be in the range of 14.5 percent to 15.5 percent of revenues;

The company now expects its GAAP effective tax rate to be approximately 26.0 percent and continues to expect its non-GAAP effective tax rate to be approximately 24.0 percent.  Besides, EPAM now expects GAAP diluted EPS to be in the range of $6.48 to $6.64 and non-GAAP diluted EPS to be in the range of $10.96 to $11.12. The Company now expects weighted average diluted shares outstanding for the year to be 56.4 million.

 

Inputs from Saqib Malik

Editing by David Ryder