EPAM Lifts 2025 Revenue and EPS Forecast as AI-Led Transformation Drives Growth

Full-Year Outlook Strengthens Amid Robust Revenue Expansion

EPAM Systems raised its full-year revenue and earnings outlook after reporting third-quarter revenues of $1.39 billion, representing a year-over-year increase of 19.4%. The company now expects 2025 revenue growth between 14.8% and 15.2%, up from previous guidance, with non-GAAP diluted EPS anticipated between $11.36 and $11.44.

Despite higher operating costs and a slight dip in GAAP and non-GAAP diluted EPS compared to last year, the results show consistent top-line momentum fueled by ongoing demand for digital engineering and AI transformation services. CEO Balazs Fejes highlighted EPAM’s continued investment in AI innovation, positioning the firm as a strategic partner for organizations building AI-native capabilities.

Revenue Growth Outpaces Expectations, Driven by Engineering and AI Initiatives

EPAM’s year-over-year revenue increase of $226.85 million for Q3 2025 (up 19.4%) significantly exceeded organic constant currency growth (7.1%), with the remainder attributed to M&A activity and currency effects. The ongoing shift towards AI and generative AI services appears to be a key driver behind the company’s improved growth trajectory, even as income from operations margin contracted.

Margins Contract as Expenses Rise, but Strategic Investment Persists

GAAP income from operations for Q3 2025 dropped to 10.4% of revenue, from 15.2% a year ago, with non-GAAP operating margin at 16.0%. These figures reflect higher cost structures associated with scaling delivery, talent acquisition, and strategic initiatives. On a per-share basis, GAAP diluted EPS fell by $0.46 year-over-year to $1.91, while non-GAAP diluted EPS slipped just $0.04 to $3.08, underlining resilience in core business operations despite investment-related headwinds.

Shareholder Returns Accelerate: $1 Billion Buyback Plan Unveiled

EPAM repurchased 493,000 shares for $82.1 million in Q3, completing its prior $500 million buyback program. The Board of Directors has authorized a new share repurchase program for up to $1 billion, reinforcing EPAM’s commitment to capital returns even as the company maintains significant cash reserves ($1.24 billion as of September 30, 2025).

Q4 and Full-Year 2025 Guidance Signals Sustained Growth Momentum

Looking to Q4 2025, EPAM projects revenues of $1.38–$1.40 billion, with GAAP operating margin in the 10–11% range and non-GAAP operating margin expected between 15.5–16.5%. Full-year GAAP diluted EPS is expected to land between $6.75–$6.83, while non-GAAP diluted EPS should come in at $11.36–$11.44. The company maintains a tax-efficient structure, forecasting a GAAP effective tax rate of 25% for the year.

Key Financials at a Glance

Strategic Focus: Engineering, AI, and Innovation Lead the Narrative

EPAM continues to emphasize engineering expertise and AI-led transformation as differentiators. Through initiatives like DIALX Lab and its EPAM AI/RUN™ platform, the company positions itself to capture digital transformation demand across a range of industries.

Bottom Line: Growth Accelerates Despite Margin Pressure

For investors and observers, EPAM’s raised outlook and sizable buyback signal confidence in its growth trajectory and commitment to shareholder value. With margins slightly compressed by higher investment, the focus on AI-native innovation could serve as a catalyst for long-term strategic gains—one worth tracking as digital and AI adoption expands globally.

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