EPAM Systems Inc. Reports Strong Growth in 2025 Annual Report Amidst Geopolitical Challenges
EPAM Systems Inc. has released its 2025 annual report, showcasing robust growth and resilience in a challenging global environment. As a leading provider of digital engineering, cloud services, and AI transformation solutions, EPAM has reaffirmed its commitment to innovation and client success despite the ongoing geopolitical tensions stemming from the conflict in Ukraine.
1. Executive Summary
In 2025, EPAM reported total revenues of $5.457 billion, marking a significant 15.4% increase compared to the previous year. This growth was fueled by strategic acquisitions and a diversified service offering, allowing the company to enhance its client engagements across various sectors. The integration of AI technologies into business strategies remains a focal point, with platforms such as EPAM AI/RUN™ driving industry impact.
2. Business Update Regarding the War in Ukraine
The war in Ukraine continues to affect EPAM's operations, yet the company has managed to sustain productivity levels among its Ukrainian workforce. EPAM's commitment to its employees is evident, with $100 million allocated for humanitarian aid, of which approximately $10.1 million remains to be expensed. The Board of Directors is actively involved in overseeing the strategic and operational implications of this conflict, ensuring business continuity while prioritizing employee safety.
3. Financial Performance Overview
Revenue Breakdown
EPAM's revenue streams are diversified across geographies and service offerings. The following highlights provide insight into the company's financial performance in 2025:
- Total Revenues: $5.457 billion
- Revenue Growth: 15.4% year-over-year
- Top Revenue Segment: Financial Services, contributing 24.1% of total revenues.
Revenues by Geography
In 2025, EPAM's revenues by geography reveal strong performance in various regions, with the Americas leading the charge:
- United States: $2.83 billion (5.76% growth)
- EMEA: $2.147 billion (19.7% growth)
- APAC: $0.109 billion (8.8% growth)
Revenues by Segment
The company operates through two primary segments: Europe and the Americas. The financial results indicate the following:
- Americas Segment: $3.16 billion (10.46% growth)
- Europe Segment: $2.29 billion (23.06% growth)
Income Statement Highlights
The income statement for 2025 shows a solid operating profit of $520 million, with net income reported at $377.6 million. A comparison with the previous year highlights the following:
- Net Income: $377.6 million (down from $454.5 million in 2024)
- Operating Expenses: $1.05 billion, with selling, general, and administrative expenses accounting for $928.7 million.
| Feb 2025 | Feb 2026 | |
|---|---|---|
Net Income | 454.5M | 377.6M |
Profit | 454.5M | 377.6M |
Net Income Continuing | 454.5M | 377.6M |
Income Tax Expense | 129.8M | 127.9M |
Pretax Income | 584.4M | 505.6M |
Non-operating Income | 39.82M | -14.37M |
Operating Income | 544.5M | 520.0M |
Revenue | 4.72B | 5.45B |
Costs and Expenses | 4.18B | 4.93B |
Cost of Revenue | 3.27B | 3.88B |
Operating Expenses | 905.8M | 1.05B |
Depreciation, Depletion & Amortization | 89.55M | 124.8M |
Selling, General & Administrative | 816.3M | 928.7M |
4. Cost Structure and Operating Expenses
Cost of Revenues
The cost of revenues increased by 18.5% to $3.884 billion, attributed to higher compensation costs and the integration of recent acquisitions. The average number of production professionals grew by 9%, contributing to the rise in compensation.
Selling, General, and Administrative Expenses
SG&A expenses rose to $928.7 million, which is a 13.8% increase compared to 2024. However, these expenses accounted for a slightly lower percentage of total revenues at 17.0%.
5. Balance Sheet Analysis
EPAM's balance sheet reflects a healthy financial position with total assets reaching $4.90 billion, up from $4.75 billion in 2024. Key components include:
- Current Assets: $2.53 billion
- Total Liabilities: $1.22 billion
- Total Equity: $3.67 billion
| Feb 2025 | Feb 2026 | |
|---|---|---|
Total Assets | 4.75B | 4.90B |
Total Current Assets | 2.42B | 2.53B |
Cash and Equivalents | 1.28B | 1.29B |
Short-term Investments | 1.69M | 0 |
Prepaid Expenses | 136.1M | 129.6M |
Other Current Assets | 1.00B | 1.10B |
Total Non-current Assets | 2.32B | 2.36B |
Intangible Assets | 1.61B | 1.61B |
Non-current Deferred Tax Assets | 269.7M | 295.1M |
Net PP&E | 207.6M | 202.3M |
Lease Assets | 128.2M | 114.8M |
Other Non-current Assets | 100.5M | 138.7M |
Total Liabilities and Equity | 4.75B | 4.90B |
Total Liabilities | 1.11B | 1.22B |
Total Current Liabilities | 821.0M | 976.9M |
Accounts Payable and Accrued Liabilities | 781.4M | 939.7M |
Current Debt | 39.63M | 37.17M |
Total Non-current Liabilities | 298.2M | 247.3M |
Long-term Debt | 25.19M | 25.03M |
Non-current Deferred Tax Liabilities | 92.36M | 76.96M |
Other Non-current Liabilities | 180.7M | 145.3M |
Total Equity and Non-controlling Interests | 3.63B | 3.67B |
Total Equity | 3.62B | 3.67B |
Non-controlling Interests | 1.94M | 582K |
6. Cash Flow Statement Highlights
The cash flow statement for 2025 indicates a net change in cash of $10.98 million, with significant cash flows from operating activities amounting to $654.9 million. However, financing activities recorded a net outflow of $651.2 million, primarily due to a share repurchase program.
| Feb 2025 | Feb 2026 | |
|---|---|---|
Net Change in Cash | -752.7M | 10.98M |
Effect of Exchange Rate Changes | -36.49M | 56.29M |
Net Cash from Operating Activities | 559.1M | 654.9M |
Operating Profit | 454.5M | 377.6M |
Adjustment to Operating Profit | 104.6M | 277.2M |
Net Cash from Investing Activities | -884.9M | -49.04M |
Business & Interest in Affiliates | 915.4M | 1.40M |
Investments | -60.28M | 2.05M |
Productive Assets | 32.14M | 42.24M |
Other Investing Activities | 2.31M | -3.34M |
Net Cash from Financing Activities | -390.4M | -651.2M |
Debt | -1.85M | -2.54M |
Equity Issuance/Repurchase | -344.2M | -607.5M |
Other Financing Activities | -44.25M | -41.07M |
7. Future Outlook and Strategic Initiatives
EPAM anticipates that its current cash reserves and operational cash flow will be adequate to meet its capital and operational needs for the foreseeable future. However, the company remains vigilant regarding potential geopolitical disruptions that could impact liquidity.
As part of its strategic initiatives, EPAM aims to further enhance its AI capabilities through partnerships and innovative solutions tailored to client needs. The company has received accolades for its excellence in IT services, including being ranked among the top IT vendors in Europe.
8. Conclusion
EPAM Systems Inc. has demonstrated resilience and growth in 2025, leveraging its expertise in digital transformation and AI integration. Despite external challenges, the company remains focused on delivering value to its clients while prioritizing employee welfare and strategic partnerships for future growth.
