EPAM Systems, Inc., a leading digital transformation services and product engineering company, today announced results for the first quarter ended March 31, 2025.
“We reported strong first quarter results amidst a dynamic macroeconomic landscape, which highlights our unique differentiation in supporting our clients through their transformation journeys,” said Arkadiy Dobkin, CEO and President at EPAM. “By staying anchored in engineering excellence, disciplined execution and AI-native innovation, we’ve continued to build sequential momentum and deliver year-over-year organic growth.”
First Quarter 2025 Highlights
- Revenues increased to $1.302 billion, a year-over-year increase of $136.2 million, or 11.7%. On an organic constant currency basis, revenues were up 1.4% compared to the first quarter of 2024;
- GAAP income from operations was $99.3 million, a decrease of $11.2 million, or 10.1%, compared to $110.5 million in the first quarter of 2024;
- Non-GAAP income from operations was $175.8 million, an increase of $2.2 million, or 1.2%, compared to $173.6 million in the first quarter of 2024;
- Diluted earnings per share (“EPS”) on a GAAP basis was $1.28, a decrease of $0.69, or 35.0%, compared to $1.97 in the first quarter of 2024; and
- Non-GAAP diluted EPS was $2.41, a decrease of $0.05, or 2.0%, compared to $2.46 in the first quarter of 2024.
Cash Flow and Other Metrics - Cash provided by operating activities was $24.2 million for the first three months of 2025, compared to cash provided by operating activities of $129.9 million for the first three months of 2024;
- Cash, cash equivalents and restricted cash totaled $1.179 billion as of March 31, 2025, a decrease of $111.9 million, or 8.7%, from $1.290 billion as of December 31, 2024;
- The Company repurchased 796 thousand shares of its common stock for $160.0 million during the first quarter of 2025 under its share repurchase program. As of March 31, 2025, the Company had $277.0 million remaining under its share repurchase authorization; and
- Total headcount was approximately 61,700 as of March 31, 2025. Included in this number were approximately 55,600 delivery professionals, an increase of 0.9% from December 31, 2024.
2025 Outlook – Full Year and Second Quarter
EPAM expects the following for the full year: - Based on the strength of organic constant currency revenue growth in the first half of 2025 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 11.5% to 14.5% 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 2.0% to 5.0%;
- For the full year, EPAM continues to expect GAAP income from operations to be in the range of 9.0% to 10.0% of revenues and non-GAAP income from operations to be in the range of 14.5% to 15.5% of revenues;
- The Company now expects its GAAP effective tax rate to be approximately 25.0% and continues to expect its non-GAAP effective tax rate to be approximately 24.0%; and
- EPAM now expects GAAP diluted EPS to be in the range of $6.78 to $7.03 and non-GAAP diluted EPS to be in the range of $10.70 to $10.95. The Company now expects weighted average diluted shares outstanding for the year to be 56.5 million.
Second Quarter
EPAM expects the following for the second quarter: - The Company expects revenues will be in the range of $1.325 billion to $1.340 billion for the second quarter reflecting year-over-year growth of 16.2% at the midpoint of the range. The Company expects the year-over-year revenue growth rate on an organic constant currency basis to be 3.8% at the midpoint of the range;
- For the second quarter, EPAM expects GAAP income from operations to be in the range of 9.0% to 10.0% of revenues and non-GAAP income from operations to be in the range of 14.0% to 15.0% of revenues;
- The Company expects its GAAP effective tax rate to be approximately 26.0% and its non-GAAP effective tax rate to be approximately 24.0%; and
- EPAM expects GAAP diluted EPS will be in the range of $1.67 to $1.75 for the quarter, and non-GAAP diluted EPS will be in the range of $2.56 to $2.64 for the quarter. The Company expects weighted average diluted shares outstanding for the quarter to be 56.7 million.
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