Average number of production professionals (percentage)

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5d2fe6784cd313fbccea73074aae9eb0264fd7fe4a649c5e967973701abfdf74

22f7a70ba0431179d582944086a264cb00382fe9442e8d28d4721320e64d100e

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The documents indicate that despite the high impairment charges in Q3 2024, **no specific reasons** are provided for the increase. Typically, such charges can be associated with **asset write-downs**, **goodwill impairments**, or other **one-time adjustments**, but the documents do not offer an explicit explanation for the Q3 2024 figures.   

Why were impairment charges so high in Q3 2024?

The documents do not provide specific reasons for the surge in proceeds from short-term investments in Q3 2024. They only note that the balance sheet shows short-term investments decreased from **$60,739 thousand** as of December 31, 2023, to **$22,316 thousand** as of September 30, 2024.  **[0001352010-24-000041_exhibit99_q3x2024.htm:6]** 

What drove the surge in proceeds from short-term investments in Q3 2024?

In Q3 2024, the net cash used in investing activities turned positive primarily because **proceeds from matured investments increased significantly** (from **$10.9 million** to **$41.5 million**), which helped to offset the larger cash outflows from **acquisitions of businesses** (rising from **$14.0 million** to **$57.1 million**), along with a small decline in **capital expenditures** (from **$18.4 million** to **$16.4 million**), resulting in a net positive effect overall.  **[0001352010-24-000044_epam-20240930.htm:48]** 

Why did net cash used in investing activities turn positive in Q3 2024?

The low operating cash flow in Q2 2024 was primarily influenced by several factors. One key factor was a **larger increase in days sales outstanding (DSO)**, which negatively impacted the cash flow. Additionally, **cash used for humanitarian efforts for Ukraine** and the **geographic repositioning of EPAM’s workforce** further contributed to the lower operating cash flow. Although lower payments for variable compensation partially offset these declines, the negative effects from increased DSO and the significant outflows for humanitarian and repositioning activities played a prominent role in the subdued operating cash flow performance.  **[0001352010-24-000027_epam-20240630.htm:47]** 

What factors contributed to the low operating cash flow in Q2 2024?

The large negative net change in cash in Q2 2024 was primarily driven by **substantial increases in cash used in both financing and investing activities**. Specifically, EPAM saw a significant **increase in net cash used in financing activities** due to extensive share repurchases (approximately **1.16 million shares for $214 million**), coupled with a rise in cash used for investing activities—mainly attributable to **$56.7 million used for acquisitions of businesses, net of cash acquired**. These outflows, combined with a **lower incremental contribution from operating activities** and a **negative impact from exchange rate changes** (a decline of **$(26,447) thousand** versus a positive impact in the previous period), collectively led to the large negative net change in cash for the quarter.  **[0001352010-24-000024_exhibit99_q2x2024.htm:0]** **[EPAM_3397426_5]** **[0001352010-24-000027_epam-20240630.htm:47]** **[0001352010-24-000027_epam-20240630.htm:4]** 

What led to the large negative net change in cash in Q2 2024?

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The documents do not provide a definitive reason for the sharp drop in short-term investments in Q3 2024. However, they note that EPAM’s investing activities during this period involved significant expenditures on acquisitions of businesses, capital expenditures on computer hardware, software, office equipment, office buildings, and new businesses, which could indicate that funds were redirected from short-term investments to finance these other investing needs.  **[0001352010-24-000041_exhibit99_q3x2024.htm:6]** **[0001352010-24-000044_epam-20240930.htm:48]** 

Why did Short-term investments drop so sharply in Q3 2024?

EPAM’s lower Cash and cash equivalents in Q2 2024 resulted primarily from **substantial share repurchases**—about **$214 million** spent to repurchase roughly **1.16 million shares**—which significantly reduced their cash reserves. This was compounded by **net cash used in financing activities** (totaling **$338.2 million** over the first six months) and **net cash used in investing activities** (including expenditures for capital investments and acquisitions), as well as a **negative effect from exchange rate changes** amounting to **$26.4 million**. Together, these factors led to an overall drop of approximately **$251.5 million** in cash and cash equivalents.  **[EPAM_3397426_5]** **[0001352010-24-000027_epam-20240630.htm:47]** 

Why was Cash and cash equivalents lower in Q2 2024?

The marked increase in Total assets in Q3 2024 was primarily driven by several factors: **a significant increase in goodwill** (rising from **$562,459 thousand** to **$621,903 thousand**, largely due to the acquisition of NEORIS), **an increase in other noncurrent assets** (up by **$38,618 thousand**), **a rise in trade receivables and contract assets** (up by **$38,045 thousand**), and **an increase in prepaid and other current assets** (up by **$15,714 thousand**). These increases were partially offset by a decrease in short-term investments, but the overall effect was a substantial growth in total assets.  **[0001352010-24-000041_exhibit99_q3x2024.htm:6]** **[0001352010-24-000041_exhibit99_q3x2024.htm:1]** 

What drove the marked increase in Total assets in Q3 2024?

The decline in **Total liabilities** in **Q2 2024** was primarily driven by a **significant reduction** of **accrued compensation and benefits expenses** by **$45,077 thousand**. This decrease was complemented by additional reductions in **Other Noncurrent Liabilities** (down by **$6,819 thousand**) and **Operating Lease Liabilities (Noncurrent)** (down by **$5,607 thousand**).  **[0001352010-24-000024_exhibit99_q2x2024.htm:5]** **[0001352010-24-000027_epam-20240630.htm:1]** 

What factors contributed to the decline in Total liabilities in Q2 2024?

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Adjustments for Non-Cash Items [USD, Thousands]

Stock-Based Compensation [USD, Thousands]

Changes in Working Capital [USD, Thousands]

Capital Expenditures (CapEx) [USD, Thousands]

Proceeds from Debt [USD, Thousands]

Repayments of Debt [USD, Thousands]

Share Repurchases [USD, Thousands]

Dividend Payments [USD, Thousands]

Net Change in Cash [USD, Thousands]

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Epam Systems Inc (EPAM)

Financials