EPAM Systems, Inc. is a leading digital transformation services and product engineering company that provides digital platform engineering and software development services to clients across six continents. The company focuses on building long-term partnerships with clients in various industries by delivering innovative and scalable software solutions, integrated strategy, experience, and technology consulting, along with a continually evolving mix of advanced capabilities **[0001352010-24-000008_epam-20231231.htm:100]** **[0001352010-24-000044_epam-20240930.htm:6]** **[0001352010-24-000027_epam-20240630.htm:5]** **[0001352010-24-000018_epam-20240331.htm:5]**. EPAM derives its revenues primarily from time-and-materials and fixed-price contracts, with the majority coming from time-and-material contracts billed using hourly, daily, or monthly rates **[0001352010-24-000008_epam-20231231.htm:106]** **[0001352010-24-000008_epam-20231231.htm:130]**. The company's service offerings have evolved to provide more customized and integrated solutions, combining software engineering with customer experience design, business consulting, and technology innovation services **[0001352010-24-000008_epam-20231231.htm:60]**.

1. **Professional Services** - Delivers customized and integrated solutions that combine software engineering with customer experience design, business consulting, and technology innovation services.
2. **Licensing and Other Revenues** - Generates income from licensing agreements and other miscellaneous sources, contributing a small portion to the overall revenue.

f24bd88cece0bf60aafc153f8ac6f8c645371a02da7512d76f09935b22af3aec

35d070dc7608b49cb8d0d5fc43b982bd976b2d7392fc3586378c16fc6f2910f7

| Metric (USD Millions) | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|-----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| North America         | N/A     | 709.957  **[0001352010-23-000027_epam-20230331.htm:25]** **[0001352010-23-000027_epam-20230331.htm:36]**  | 680.1  **[0001352010-23-000044_epam-20230630.htm:29]**  | 684.8  **[0001352010-23-000051_epam-20230930.htm:30]**  | 690.216  **[0001352010-24-000008_epam-20231231.htm:143]** **[0001352010-23-000051_epam-20230930.htm:30]**  | 704.7  **[0001352010-24-000018_epam-20240331.htm:24]** **[0001352010-24-000018_epam-20240331.htm:34]**  | 698.6  **[0001352010-24-000027_epam-20240630.htm:28]** **[0001352010-24-000027_epam-20240630.htm:41]**  | 704.6  **[0001352010-24-000044_epam-20240930.htm:30]** **[0001352010-24-000044_epam-20240930.htm:42]**  |
| Europe                | N/A     | 493.147  **[0001352010-23-000027_epam-20230331.htm:25]** **[0001352010-23-000027_epam-20230331.htm:36]**  | 483.4  **[0001352010-23-000044_epam-20230630.htm:29]**  | 465.8  **[0001352010-23-000051_epam-20230930.htm:30]**  | 467.041  **[0001352010-24-000008_epam-20231231.htm:143]** **[0001352010-23-000051_epam-20230930.htm:30]**  | 460.7  **[0001352010-24-000018_epam-20240331.htm:24]** **[0001352010-24-000018_epam-20240331.htm:34]**  | 448.0  **[0001352010-24-000027_epam-20240630.htm:28]** **[0001352010-24-000027_epam-20240630.htm:41]**  | 462.9  **[0001352010-24-000044_epam-20240930.htm:30]** **[0001352010-24-000044_epam-20240930.htm:42]**  |
| Russia                | N/A     | 7.837  **[0001352010-23-000027_epam-20230331.htm:25]** **[0001352010-23-000027_epam-20230331.htm:36]**  | 6.7  **[0001352010-23-000044_epam-20230630.htm:29]**  | 1.5  **[0001352010-23-000051_epam-20230930.htm:30]**  | 0.0  **[0001352010-24-000008_epam-20231231.htm:143]** **[0001352010-23-000051_epam-20230930.htm:30]**  | 0.0  **[0001352010-24-000018_epam-20240331.htm:24]** **[0001352010-24-000018_epam-20240331.htm:34]**  | 0.0  **[0001352010-24-000027_epam-20240630.htm:28]** **[0001352010-24-000027_epam-20240630.htm:41]**  | 0.0  **[0001352010-24-000044_epam-20240930.htm:30]** **[0001352010-24-000044_epam-20240930.htm:42]**  |
| Total Revenue         | N/A     | 1,210.941  **[0001352010-23-000027_epam-20230331.htm:25]** **[0001352010-23-000027_epam-20230331.htm:36]**  | 1,170.2  **[0001352010-23-000044_epam-20230630.htm:29]**  | 1,152.1  **[0001352010-23-000051_epam-20230930.htm:30]**  | 1,157.257  **[0001352010-24-000008_epam-20231231.htm:143]** **[0001352010-23-000051_epam-20230930.htm:30]**  | 1,165.5  **[0001352010-24-000018_epam-20240331.htm:24]** **[0001352010-24-000018_epam-20240331.htm:34]**  | 1,146.6  **[0001352010-24-000027_epam-20240630.htm:28]** **[0001352010-24-000027_epam-20240630.htm:41]**  | 1,167.5  **[0001352010-24-000044_epam-20240930.htm:30]** **[0001352010-24-000044_epam-20240930.htm:42]**  |

25dc981e8479c9e87f37322b70c09a325af40e3f81f12ff469165b8d3aeacacd

615eb27c643d2e6688f6df1cb840759a936b691ec2f0371c1dd4698af522b4f9

1. Your guidance indicates that operating margins in 2025 will be slightly below 16% even after factoring in the recurring Polish R&D incentives; can you explain the underlying factors causing this margin pressure and how you plan to address them?  **[EPAM_3406494_12]** **[EPAM_3406494_21]** 

2. While you expect to return to organic revenue growth in 2025, you mentioned uncertainty about whether it will be "meaningful"; what challenges are limiting stronger growth, and what strategies are in place to accelerate it?  **[EPAM_3406494_23]** **[EPAM_3406494_5]** 

3. With the acquisition of Nedis being significant for your expansion, how will you ensure its successful integration without impacting your core operations, and what are the anticipated effects on your revenue and profitability?  **[EPAM_3406494_4]** **[EPAM_3406494_7]** 

4. You noted ongoing wage inflation and a lack of improvement in the pricing environment; how are these trends impacting your competitiveness, and what measures are you taking to manage costs while sustaining profitability?  **[EPAM_3406494_12]** **[EPAM_3406494_10]** 

5. As you continue to diversify your global delivery hubs, particularly in higher-cost regions like Central Europe, how are you balancing talent acquisition with the impact on your cost structure and margins?  **[EPAM_3406494_12]** **[EPAM_3406494_1]** 

88c4394dd2b28d609b5533d0c850c8c36930f8ed83aea46a7cac16d3c4db9c66

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]

20def8a225c447e0b3f8e967a6594e8a87a63503afd5099e8acb98a009fdec63

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: Q4 2024 and FY 2024

#### Guidance:
**Full Year 2024 (FY 2024):**
- **Revenue**: $4.685 billion to $4.695 billion
- **GAAP Income from Operations**: 11% to 11.5%
- **Non-GAAP Income from Operations**: 16% to 16.5%
- **GAAP Effective Tax Rate**: 23%
- **Non-GAAP Effective Tax Rate**: 24%
- **GAAP Diluted EPS**: $7.78 to $7.86
- **Non-GAAP Diluted EPS**: $10.73 to $10.81
- **Weighted Average Share Count**: 57.9 million

**Q4 2024:**
- **Revenue**: $1.205 billion to $1.215 billion
- **GAAP Income from Operations**: 10.5% to 11.5%
- **Non-GAAP Income from Operations**: 16% to 17%
- **GAAP Effective Tax Rate**: 26%
- **Non-GAAP Effective Tax Rate**: 24%
- **GAAP Diluted EPS**: $1.73 to $1.81
- **Non-GAAP Diluted EPS**: $2.70 to $2.78
- **Weighted Average Share Count**: 57.2 million
- **Stock-based Compensation Expense**: $44 million
- **Amortization of Intangibles**: $9 million
- **Impact of Foreign Exchange**: $1 million loss
- **Tax Effective Non-GAAP Adjustments**: $14 million
- **Tax Shortfall Related to Stock-based Compensation**: $1 million
- **Severance Driven by Cost Optimization Program**: $9 million
- **Interest and Other Income**: $6 million  **[EPAM_3406494_7]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: Q3 2024 and FY 2024

#### Guidance:
**Full Year 2024 (FY 2024):**
- **Revenue**: $4.590 to $4.625 billion
- **GAAP Income from Operations**: 10.5% to 11%
- **Non-GAAP Income from Operations**: 15.5% to 16%
- **GAAP Effective Tax Rate**: 21%
- **Non-GAAP Effective Tax Rate**: 24%
- **GAAP Diluted EPS**: $7.18 to $7.38
- **Non-GAAP Diluted EPS**: $10.20 to $10.40
- **Weighted Average Share Count**: 57.9 million

**Q3 2024:**
- **Revenue**: $1.145 billion to $1.155 billion
- **GAAP Income from Operations**: 10% to 11%
- **Non-GAAP Income from Operations**: 16% to 17%
- **GAAP Effective Tax Rate**: 24%
- **Non-GAAP Effective Tax Rate**: 24%
- **GAAP Diluted EPS**: $1.75 to $1.83
- **Non-GAAP Diluted EPS**: $2.65 to $2.73
- **Weighted Average Share Count**: 57.4 million  **[EPAM_3397426_6]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: Q2 2024 and FY 2024

#### Guidance:
**Full Year 2024 (FY 2024):**
- **Revenue**: $4.575 billion to $4.675 billion
- **GAAP Income from Operations**: 10% to 10.5%
- **Non-GAAP Income from Operations**: 15% to 15.5%
- **GAAP Effective Tax Rate**: 20%
- **Non-GAAP Effective Tax Rate**: 24%
- **GAAP Diluted EPS**: $7.34 to $7.64
- **Non-GAAP Diluted EPS**: $10 to $10.30
- **Weighted Average Share Count**: 58.7 million

**Q2 2024:**
- **Revenue**: $1.135 billion to $1.145 billion
- **GAAP Income from Operations**: 9% to 10%
- **Non-GAAP Income from Operations**: 13.5% to 14.5%
- **GAAP Effective Tax Rate**: 25%
- **Non-GAAP Effective Tax Rate**: 24%
- **GAAP Diluted EPS**: $1.52 to $1.60
- **Non-GAAP Diluted EPS**: $2.21 to $2.29
- **Weighted Average Share Count**: 58.8 million
- **Stock-Based Compensation Expense**: $38 million for Q2, $46 million for Q3, $47 million for Q4
- **Amortization of Intangibles**: $6 million for each of the remaining quarters
- **Impact of Foreign Exchange**: $1 million loss for each of the remaining quarters
- **Tax Effective Non-GAAP Adjustments**: $10 million for Q2, $11 million for each of the remaining quarters
- **Excess Tax Benefits**: $1 million for Q2, $1.7 million for each of the remaining quarters
- **Interest and Other Income**: $15 million for Q2, $20 million for Q3, $15 million for Q4  **[EPAM_3387832_6]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: Q1 2024 and FY 2024

#### Guidance:
**Full Year 2024 (FY 2024):**
- **Revenue Growth**: 1% to 4%
- **GAAP Income from Operations**: 9.5% to 10.5%
- **Non-GAAP Income from Operations**: 14.5% to 15.5%
- **GAAP Effective Tax Rate**: 21%
- **Non-GAAP Effective Tax Rate**: 24%
- **GAAP Diluted EPS**: $7.20 to $7.60
- **Non-GAAP Diluted EPS**: $10 to $10.40
- **Weighted Average Share Count**: 59.3 million

**Q1 2024:**
- **Revenues**: $1.155 billion to $1.165 billion
- **GAAP Income from Operations**: 9% to 10%
- **Non-GAAP Income from Operations**: 13.5% to 14.5%
- **GAAP Effective Tax Rate**: 11%
- **Non-GAAP Effective Tax Rate**: 24%
- **GAAP Diluted EPS**: $1.79 to $1.87
- **Non-GAAP Diluted EPS**: $2.26 to $2.34
- **Weighted Average Share Count**: 59.1 million
- **Stock-based Compensation Expense**: $198 million for the year
- **Amortization of Intangibles**: $26 million for the year
- **Interest and Other Income**: $66 million for the full year  **[EPAM_3373491_8]** **[EPAM_3373491_9]** .

7abc3970983efc0117a0d21c763ec281a96dd1475f4d8d902b4c0c78db684254

4a78f20de93da90612a7289e1675e00fa80739c2b9e70714c3794c09cde0ef0c

65c91aa6c174f5703efe305e67850f138012b85f81eee063c7ce1ec84270580e

e22dc2fc2f0cad8c5df78232a5d2bc96b4137d9e157882be3641cbdba10cf143

| Name            | Position                                                      | Start Date | Short Bio                                                                                                                                                                                                                                                                                                                                 |
|-----------------|---------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Arkadiy Dobkin  | Chairman of the Board of Directors, President, and CEO        | 1993       | Arkadiy Dobkin co-founded EPAM Systems, Inc. in **1993** and has served as Chairman and CEO since **2002**. He has extensive experience as an IT professional and executive in the IT services industry, providing valuable insights into operational, strategic, and management issues, as well as general industry trends  **[0001193125-24-097726_d636293ddef14a.htm:22]** **[0001193125-24-097726_d636293ddef14a.htm:10]** .          |
| Balazs Fejes    | President of Europe and APAC Markets                          | 2004       | Balazs Fejes joined EPAM in **2004** as part of the acquisition of Fathom Technology. He leads market activities across Europe and APAC and co-leads global business operations. He also oversees the strategy of EPAM's Banking and Financial Services Industry business unit  **[0001193125-24-097726_d636293ddef14a.htm:22]** **[0001193125-23-110465_d383614ddef14a.htm:18]** .                                                      |
| Viktar Dvorkin  | Senior Vice President, Head of Global Delivery                | 1997       | Viktar Dvorkin joined EPAM in **1997**. He is responsible for the strategy and operation of the company's Delivery Organization, Solution Practices, and Competency Centers. He also oversees EPAM's Advanced Technology programs, including EngX and Delivery Excellence  **[0001193125-24-097726_d636293ddef14a.htm:22]** **[0001193125-23-110465_d383614ddef14a.htm:18]** .                                                             |
| Jason Peterson  | Senior Vice President, Chief Financial Officer, and Treasurer | 2017       | Jason Peterson joined EPAM in **2017**. He leads EPAM's Global Finance, Corporate Development, and Procurement organizations. He has over 25 years of finance experience, having previously worked at Cognizant Technology Solutions and other companies  **[0001193125-24-097726_d636293ddef14a.htm:23]** **[0001193125-23-110465_d383614ddef14a.htm:19]** .                                                                             |
| Edward Rockwell | Senior Vice President, General Counsel, and Corporate Secretary| October 2018 | Edward Rockwell joined EPAM in **October 2018**. He oversees the legal activities of the organization and provides strategic counsel and legal guidance to senior leadership and EPAM’s Board of Directors  **[0001193125-24-097726_d636293ddef14a.htm:23]** **[0001193125-23-110465_d383614ddef14a.htm:19]** .                                                                                                                          |
| Elaina Shekhter | Senior Vice President, Chief Marketing and Strategy Officer   | 2001       | Elaina Shekhter has been with EPAM since **2001**. She has served in various roles, including Global Head of Business Development and Global Head of the Travel and Consumer Business Unit. She integrates functions that influence EPAM's strategy, positioning, and messaging  **[0001193125-24-097726_d636293ddef14a.htm:23]** **[0001193125-23-110465_d383614ddef14a.htm:19]** .                                                      |
| Boris Shnayder  | Senior Vice President, Co-Head of Global Business             | July 2015  | Boris Shnayder joined EPAM in **July 2015**. He focuses primarily on operations in the Americas and oversees a portfolio of business in the region, including service programs and client acquisition  **[0001193125-24-097726_d636293ddef14a.htm:24]** **[0001193125-23-110465_d383614ddef14a.htm:19]** .                                                                                                                              |
| Larry Solomon   | Senior Vice President, Chief People Officer                   | October 2016 | Larry Solomon joined EPAM in **October 2016**. He is responsible for overseeing all aspects of talent management, talent acquisition, workforce planning and management, as well as other human resource-related functions globally  **[0001193125-24-097726_d636293ddef14a.htm:24]** **[0001193125-23-110465_d383614ddef14a.htm:20]** .                                                                                                 |
| Sergey Yezhkov  | Senior Vice President, Co-Head of Global Business             | 2006       | Sergey Yezhkov joined EPAM in **2006** as part of the acquisition of Vested Development Inc. (VDI). He focuses on a North American book of business and oversees the strategy and operation of EPAM's Life Science & Healthcare portfolio  **[0001193125-24-097726_d636293ddef14a.htm:24]** **[0001193125-23-110465_d383614ddef14a.htm:20]** .                                                                                           |
| Gary Abrahams   | Vice President, Corporate Controller, and Chief Accounting Officer | June 2016  | Gary Abrahams joined EPAM in **June 2016** after initially serving as an independent contractor starting in **March 2016**. He was appointed as Chief Accounting Officer in **April 2017**. He has over 25 years of experience in global corporate financial management and public accounting  **[0001193125-24-097726_d636293ddef14a.htm:25]** **[0001193125-23-110465_d383614ddef14a.htm:20]** .                                        |

f90b17f0772f9fc5c00cc15211e61fb37b0e78572f891d8b3edea0a5c16e31a8

| Program Details          | Program 1          | Program 2          |
|--------------------------|--------------------|--------------------|
| Approval Date            | N/A                | **August 1, 2024**  **[0001352010-24-000044_epam-20240930.htm:26]** **[0001352010-24-000044_epam-20240930.htm:59]**  |
| End Date/Duration        | **Exhausted by June 30, 2024**  **[0001352010-24-000044_epam-20240930.htm:26]**  | **24 months**  **[0001352010-24-000044_epam-20240930.htm:26]** **[0001352010-24-000044_epam-20240930.htm:59]**  |
| Total additional amount  | **$500.0 million**  **[0001352010-24-000044_epam-20240930.htm:26]**  | **$500.0 million**  **[0001352010-24-000044_epam-20240930.htm:26]** **[0001352010-24-000044_epam-20240930.htm:59]**  |
| Remaining authorization  | **$0**  **[0001352010-24-000044_epam-20240930.htm:26]**          | **$450.0 million**  **[0001352010-24-000044_epam-20240930.htm:26]** **[0001352010-24-000044_epam-20240930.htm:59]**  |
| Details                  | Fully utilized     | Discretionary repurchase  **[0001352010-24-000044_epam-20240930.htm:26]** **[0001352010-24-000027_epam-20240630.htm:30]**  |

578be80299c4fc99101fb7df5bffba18dac4519f03a40783934697435b4bc1bf

805c4cfd0a60ca0901af00a43d4448a7482861d8b6115cface8d7b096cd7e5df

**Quarterly guidance for Q4 2024:**
- **Revenue**: $1.205 to $1.215 billion  **[EPAM_3406494_7]**  (raised from $1.145 to $1.155 billion  **[EPAM_3397426_6]** )  
- **GAAP Income from Operations**: 10.5% to 11.5%  **[EPAM_3406494_7]**  (raised from 10% to 11%  **[EPAM_3397426_6]** )  
- **Non-GAAP Income from Operations**: 16% to 17%  **[EPAM_3406494_7]**  (no change from prior guidance  **[EPAM_3397426_6]** )  
- **GAAP Effective Tax Rate**: 26%  **[EPAM_3406494_7]**  (raised from 24%  **[EPAM_3397426_6]** )  
- **Non-GAAP Effective Tax Rate**: 24%  **[EPAM_3406494_7]**  (no change from prior guidance  **[EPAM_3397426_6]** )  
- **GAAP Diluted EPS**: $1.73 to $1.81  **[EPAM_3406494_7]**  (lowered from $1.75 to $1.83  **[EPAM_3397426_6]** )  
- **Non-GAAP Diluted EPS**: $2.70 to $2.78  **[EPAM_3406494_7]**  (raised from $2.65 to $2.73  **[EPAM_3397426_6]** )  
- **Weighted Average Share Count**: 57.2 million  **[EPAM_3406494_7]**  (lowered from 57.4 million  **[EPAM_3397426_6]** )  
- **Stock-based Compensation Expense**: $44 million  **[EPAM_3406494_7]**  (no prior guidance)  
- **Amortization of Intangibles**: $9 million  **[EPAM_3406494_7]**  (no prior guidance)  
- **Impact of Foreign Exchange**: $1 million loss  **[EPAM_3406494_7]**  (no prior guidance)  
- **Tax Effective Non-GAAP Adjustments**: $14 million  **[EPAM_3406494_7]**  (no prior guidance)  
- **Tax Shortfall Related to Stock-based Compensation**: $1 million  **[EPAM_3406494_7]**  (no prior guidance)  
- **Severance Driven by Cost Optimization Program**: $9 million  **[EPAM_3406494_7]**  (no prior guidance)  
- **Interest and Other Income**: $6 million  **[EPAM_3406494_7]**  (no prior guidance)

**Annual guidance for FY 2024:**
- **Revenue**: $4.685 to $4.695 billion  **[EPAM_3406494_7]**  (raised from $4.590 to $4.625 billion  **[EPAM_3397426_6]** )  
- **GAAP Income from Operations**: 11% to 11.5%  **[EPAM_3406494_7]**  (raised from 10.5% to 11%  **[EPAM_3397426_6]** )  
- **Non-GAAP Income from Operations**: 16% to 16.5%  **[EPAM_3406494_7]**  (raised from 15.5% to 16%  **[EPAM_3397426_6]** )  
- **GAAP Effective Tax Rate**: 23%  **[EPAM_3406494_7]**  (raised from 21%  **[EPAM_3397426_6]** )  
- **Non-GAAP Effective Tax Rate**: 24%  **[EPAM_3406494_7]**  (no change from prior guidance  **[EPAM_3397426_6]** )  
- **GAAP Diluted EPS**: $7.78 to $7.86  **[EPAM_3406494_7]**  (raised from $7.18 to $7.38  **[EPAM_3397426_6]** )  
- **Non-GAAP Diluted EPS**: $10.73 to $10.81  **[EPAM_3406494_7]**  (raised from $10.20 to $10.40  **[EPAM_3397426_6]** )  
- **Weighted Average Share Count**: 57.9 million  **[EPAM_3406494_7]**  (no change from prior guidance  **[EPAM_3397426_6]** )  

05ed3980ead355d03ca19a64d6ab16dd486d599c8241c8330053972ca54ebc1a

| Name                   | Start Date | End Date | Reason for Change |
|------------------------|------------|----------|-------------------|
| Deloitte & Touche LLP  | 2006  **[0001352010-24-000008_epam-20231231.htm:93]**    | Present  | Current auditor   |

e5c5c8a4cc0374cd3d9a9cd9eac17589826a6b8b75d51d5ba8233ec5c11427a8

1ae11a436a64affd0a7b7f71fcb38fbd5b6563d4ad5244b219a0b73bdd0d67f5

- Total Revenue: $1,167.5 million (+1% YoY)  **[0001352010-23-000051_epam-20230930.htm:2]** **[0001352010-23-000051_epam-20230930.htm:38]** **[0001352010-24-000044_epam-20240930.htm:2]**   
- Operating Income (EBIT): $177 million (**+55% YoY**)  **[0001352010-23-000051_epam-20230930.htm:2]** **[0001352010-23-000051_epam-20230930.htm:38]** **[0001352010-24-000044_epam-20240930.htm:2]**   
- Net Income: $136 million (**+40% YoY**)  **[0001352010-23-000051_epam-20230930.htm:2]** **[0001352010-23-000051_epam-20230930.htm:38]** **[0001352010-24-000044_epam-20240930.htm:2]**   
- Diluted EPS: $2.37 (**+45% YoY**)  **[0001352010-23-000051_epam-20230930.htm:2]** **[0001352010-23-000051_epam-20230930.htm:38]** **[0001352010-24-000044_epam-20240930.htm:2]**   

- Business Information & Media: $167.39 million (−9% YoY)  **[0001352010-23-000051_epam-20230930.htm:20]** **[0001352010-24-000044_epam-20240930.htm:20]** **[0001352010-24-000044_epam-20240930.htm:21]**   
- Life Sciences & Healthcare: $142.33 million (+15% YoY)  **[0001352010-23-000051_epam-20230930.htm:20]** **[0001352010-24-000044_epam-20240930.htm:20]** **[0001352010-24-000044_epam-20240930.htm:21]**   
- Emerging Verticals: $173.97 million (+9% YoY)  **[0001352010-23-000051_epam-20230930.htm:20]** **[0001352010-24-000044_epam-20240930.htm:20]** **[0001352010-24-000044_epam-20240930.htm:21]**   

- United Kingdom: $126 million (−10% YoY)  **[0001352010-23-000051_epam-20230930.htm:32]** **[0001352010-24-000044_epam-20240930.htm:37]**   
- Switzerland: $104.3 million (+14% YoY)  **[0001352010-23-000051_epam-20230930.htm:32]** **[0001352010-24-000044_epam-20240930.htm:37]**   
- Netherlands: $45.8 million (**−22% YoY**)  **[0001352010-23-000051_epam-20230930.htm:32]** **[0001352010-24-000044_epam-20240930.htm:31]**   
- Other Locations: $149 million (+7% YoY)  **[0001352010-23-000051_epam-20230930.htm:32]** **[0001352010-24-000044_epam-20240930.htm:31]**   

- Net Change in Cash: $249 million (**+663% YoY**)  **[0001352010-23-000051_epam-20230930.htm:5]** **[0001352010-24-000044_epam-20240930.htm:5]**   

20587a60f81490827ba25c4a27b47626d0687a538f68d360f868de1668b3db8e

- **EPAM is successfully expanding in India, potentially becoming its largest delivery location with approximately 20% of total headcount, focusing on high-quality, differentiated services.**  **[EPAM_3387832_15]**
- **EPAM is seeing clients return and increasing wallet share with top clients, indicating strong client confidence and stability in its core business.**  **[EPAM_3387832_18]** **[EPAM_3387832_16]**
- **EPAM plans to continue strategic acquisitions and share buybacks, demonstrating confidence in future growth and value creation.**  **[EPAM_3387832_28]**

fa919d3c0ca1abf7e6272c319b76229aad07dc635f9cbb8175fcd9289b7bb62c

| Year | Amount Due (Millions) | Debt Type                | Interest Rate (%) | % of Total Debt                     |
|------|-----------------------|--------------------------|-------------------|--------------------------------------|
| 2024 | 25.0                 | Revolving Credit Facility | 5.9              | 100% = (25.0 / 25.0) * 100 **[0001352010-24-000044_epam-20240930.htm:17]** **[0001352010-24-000044_epam-20240930.htm:1]** |

2479c25fbc0c74c5b21e9cc6760d1ab451de20a789fc6f949312288a013b87dc

d969812153157f477554f9b202acc1325f500cf47172a098af392884f9790a00

Average number of production professionals (percentage)

ff3b2c65de3de2b0719bca8d1064f6cca92d323757ddb14ae1cb2a2bb5823cda

- **Clients who had reduced spending with EPAM are returning**, driven by improved execution across locations like India and Latin America, and successful delivery from Ukraine, indicating regained client confidence.  **[EPAM_3373491_21]**
- **Demand is stabilizing with strong traction in life sciences and energy sectors**, and EPAM expects **sequential growth in several industry verticals** in Q1 2024, suggesting a broader demand improvement.  **[EPAM_3373491_12]**
- **EPAM is shifting towards more consulting-led, fixed-fee engagements**, which provides opportunities to improve margins and protect future pricing flexibility, positioning the company well for profitability.  **[EPAM_3373491_18]**

e2abb7e177a9546a41389acf81c6c01c188fbc2eca23a59c7da17a0faef19094

1. **Flat Revenue Outlook**  
   **Q:** Will revenues remain flat through year-end?  
   **A:** Management expects **revenues to remain flat** from the second quarter through the end of the year. They anticipate a modest improvement in Q3 due to seasonal factors, but potential declines in Q4 because of higher vacation levels and possible furloughs. They are not projecting any upside in their outlook and note that **no improvement in demand** is anticipated.  **[EPAM_3397426_12]** 

2. **Margin Improvement Efforts**  
   **Q:** What's driving the improvement in margin outlook?  
   **A:** The company is focusing on **cost optimization** after resetting revenue growth expectations. They've become more efficient in corporate functions and SG&A and are working on utilization. Actions are already underway and are showing benefits, with **profitability improving in Q2**.  **[EPAM_3397426_9]** 

3. **Impact of India Headcount Shift**  
   **Q:** How is the India expansion affecting the business?  
   **A:** India is projected to account for just over **20% of headcount** by year-end, slightly higher than previously expected. This has led to modest pressure on average bill rates, impacting revenue outlook for the second half. The shift is not changing the type of work but is influencing the average bill rate due to the **lower pricing** in India.  **[EPAM_3397426_16]** 

4. **Demand in Top Accounts**  
   **Q:** How is demand progressing in top accounts?  
   **A:** Despite declines in the top five clients, the situation is stabilizing. The decline is a continuation of previous trends, particularly with a European business information and media client. Overall, demand from top clients is described as **"pretty stable."**  **[EPAM_3397426_10]** 

5. **GenAI Work Progression**  
   **Q:** What's the status of GenAI-related projects?  
   **A:** GenAI-related work is progressing, but it's challenging to quantify. The company has dozens of projects in the **low millions of dollars** range, but GenAI still represents a **very small portion of revenue**. Companies realize that to benefit from GenAI, significant investments in data modernization are required, which can be a showstopper for progression.  **[EPAM_3397426_11]** 

6. **Shift to Fixed-Price Contracts**  
   **Q:** Why is there a shift to fixed-price contracts?  
   **A:** The percentage of fixed-price contracts is increasing, reflecting efforts to address clients' needs more proactively. Clients are seeking commitments on delivering programs for a **fixed amount of money** or monthly fee. This shift allows for more flexibility and potential improvements in profitability compared to time-and-materials contracts.  **[EPAM_3397426_18]** 

7. **Guidance and Pipeline Confidence**  
   **Q:** How are you ensuring you achieve your outlook?  
   **A:** The company is being prudent with its guidance, not expecting improvement in demand. The full-year outlook considers potential reductions in demand due to clients' cost-cutting efforts. Management feels confident given the downside risks and notes that any upside would come from lighter furloughs or **budget openness**.  **[EPAM_3397426_17]** 

8. **Utilization Rates On-site vs. Offshore**  
   **Q:** How are utilization rates affecting growth?  
   **A:** Offshore utilization is healthy, while on-site utilization is **lower than traditional levels**, posing a challenge. There's increased demand for offshore, particularly in India, which may be contributing to revenue growth constraints for the remainder of the year. Efforts are underway to address on-site utilization through demand generation and other actions.  **[EPAM_3397426_8]** 

9. **Hiring Plans Amid Utilization Concerns**  
   **Q:** Will you continue hiring despite utilization levels?  
   **A:** The company plans to continue hiring, including in offshore locations like India and Latin America. While they are working on AI productivity improvements, hiring remains necessary to meet demand and adjust the workforce pyramid, introducing more juniors to improve profitability and competitiveness.  **[EPAM_3397426_13]** 

10. **M&A Strategy Remains Active**  
    **Q:** Is larger-scale M&A still on the table?  
    **A:** Larger-scale M&A is still under consideration. The company continues to explore opportunities of different sizes. The share buyback is not a determining factor; they are open to adjusting if significant M&A opportunities arise, maintaining a bias towards acquisitions.  **[EPAM_3397426_19]** 

11. **DSO Increase and Working Capital**  
    **Q:** Why did Days Sales Outstanding increase?  
    **A:** The increase in DSO to **76 days** was due to the last days of the quarter falling on a weekend, with significant cash coming in afterward. The shift towards more fixed-fee contracts is also impacting DSO due to changes in invoicing. Management expects DSO to stabilize around **74 days** in the second half of the year.  **[EPAM_3397426_24]** 

12. **Life Sciences Growth**  
    **Q:** What's driving growth in Life Sciences?  
    **A:** The Life Sciences & Healthcare segment is experiencing positive growth, with a high concentration of data programs that are in demand. The combination of industry expertise, consultancy, and data program capabilities benefits the company, fulfilling previous expectations in this area.  **[EPAM_3397426_25]** 

13. **Global Delivery Footprint Expansion**  
    **Q:** What's the plan for your global delivery footprint?  
    **A:** The company aims to be more diversified and become the **most balanced global company**. The exact proportion of delivery locations will depend on market recovery and demand for modernization and technical debt projects. As the market improves, demand is expected to return to all regions.  **[EPAM_3397426_20]** 

14. **Talent Acquisition in India**  
    **Q:** How do you attract talent in India?  
    **A:** EPAM differentiates itself as an **engineering-focused company**, competing with software tech firms rather than traditional services companies. This image helps attract talent seeking high-end engineering roles. Being newer in India allows them to approach talent acquisition differently, and they are **growing strongly** in the region.  **[EPAM_3397426_21]** 

15. **Headwind from India on Revenue**  
    **Q:** How does India impact revenue growth?  
    **A:** The headwind from the shift to India is estimated at about **2%** on revenue this year, slightly higher than previously guided. For next year, the headwind might be greater than **2%**, due to higher billable headcount in India and lower billable on-site, leading to a modestly lower average bill rate.  **[EPAM_3397426_22]** 

16. **Lost Clients Impact**  
    **Q:** What's the impact of lost clients?  
    **A:** One client exiting due to M&A will be fully offset by year-end, impacting revenue by over **$10 million per quarter**. Another client is gradually reducing demand, partially due to concerns about the Ukrainian footprint and internal shifts. This decline is expected to continue for the next couple of quarters.  **[EPAM_3397426_23]** 

db4f5564acd24ba52584a7fff9c9bad9c189ae09bafddd4aefa3e9e029076f7b

- **EPAM's cost optimization efforts are leading to improved profitability**, with positive impacts already seen in Q2 results.  **[EPAM_3397426_9]**
- **Offshore utilization is healthy**, with increasing demand for EPAM's services from India, contributing to revenue growth for the remainder of the year.  **[EPAM_3397426_8]**
- **Client demand is stabilizing**, particularly among top clients, indicating a more stable environment moving forward.  **[EPAM_3397426_10]**

f80e0d46479712b19555f954d786d705a5e3af360f0b6bd6023cc6c2d15cc03a

1. **Growth Outlook & Revenue Guidance**  
   **Q:** What's causing the change in growth outlook—broad slowdown or client-specific issues?  
   **A:** EPAM is experiencing delays and reduced scopes in many programs, indicating a **broad-based slowdown** rather than client-specific issues.  **[EPAM_3387832_7]**  Client decision-making is **slow**, budgets are being **partially released**, and some programs are being **descoped**, leading to more realistic guidance.  **[EPAM_3387832_7]**  There's also an incremental **weakness in Europe**.  **[EPAM_3387832_11]** 

2. **Impact of Shift to India Delivery on Revenue**  
   **Q:** How much does the shift to India affect this year's revenue growth?  
   **A:** The mix shift towards India is producing a revenue growth headwind of approximately **$100 million year-over-year** due to **lower billing rates**, despite solid profitability in India.  **[EPAM_3387832_8]**  This shift is impacting the revenue growth rate measured in dollars.  **[EPAM_3387832_7]** 

3. **Margin Outlook**  
   **Q:** Can you provide additional color on margins and their expected cadence?  
   **A:** EPAM expects Q2 gross margins around **30%**, with first-half margins at **32%**, second half at **32–33%**, resulting in a full-year margin of **31–32%**.  **[EPAM_3387832_19]**  Margins will improve in the second half due to cost focus and more billable days.  **[EPAM_3387832_19]** 

4. **Demand Environment and Client Delays**  
   **Q:** Are project delays widespread, and which verticals are affected?  
   **A:** Delays and slowness in client decisions are **broad-based**, not limited to specific verticals.  **[EPAM_3387832_11]**  Some sectors like **healthcare, life sciences, and energy** are performing better.  **[EPAM_3387832_11]**  Clients have budgets but are **slow to activate them**, particularly in Europe.  **[EPAM_3387832_11]** 

5. **Confidence in Sequential Growth**  
   **Q:** What gives you confidence in sequential growth in Q3 and flat Q4?  
   **A:** Sequential growth in Q3 is expected due to **seasonality** and more **billable days**, rather than improved demand.  **[EPAM_3387832_9]**  The Q2 to Q3 growth will be driven substantially by **more available bill days** in Q3.  **[EPAM_3387832_9]** 

6. **Pricing Environment and Discounting**  
   **Q:** Have you seen changes in the pricing environment, and are you offering discounts?  
   **A:** The pricing environment remains **challenging** with no improvement.  **[EPAM_3387832_21]**  There's market pressure towards **lower bill rates**, especially with the shift to India, making it difficult to achieve rate increases.  **[EPAM_3387832_21]** 

7. **Headcount and Investment Plans**  
   **Q:** Are you adjusting growth investments and headcount plans due to the demand environment?  
   **A:** EPAM will continue to invest in **India** and **Latin America**.  **[EPAM_3387832_22]**  They may reduce in-market resources where there is **excess bench**.  **[EPAM_3387832_22]**  They aim to meet demand as it returns while managing costs.  **[EPAM_3387832_22]** 

8. **Clients Taking Longer to Pay (DSO Increase)**  
   **Q:** What's happening with Days Sales Outstanding (DSO), and is there a concern about collections?  
   **A:** Clients are taking more time to review and make payments, with DSO likely to remain above **70 days** for the remainder of the year.  **[EPAM_3387832_23]**  EPAM has **no concerns** about revenue recognition or potential write-offs.  **[EPAM_3387832_23]** 

9. **Planning Assumptions and Conservatism in Guidance**  
   **Q:** How are you changing planning assumptions for pipeline and guidance?  
   **A:** EPAM is adopting a more **pragmatic and conservative** view, focusing on what they can predict over the next **90 days**, due to the unpredictable demand environment.  **[EPAM_3387832_25]** 

10. **M&A and Share Buybacks**  
    **Q:** Are you considering additional M&A or share buybacks?  
    **A:** EPAM plans to continue both **strategic acquisitions** and **share buybacks** in the coming quarters  **[EPAM_3387832_28]** , using cash to expand their market position and return value to shareholders.  **[EPAM_3387832_28]** 

81793df1f16630fd938e2d87ebb4c754b4ebab16d0e5e32b28781bf5d2447b35

- **EPAM delivered better-than-expected Q3 results and anticipates stronger Q4 results than initially expected, indicating a positive growth trajectory.**  **[EPAM_3406494_11]**
- **The acquisition of Nedis significantly expands EPAM's presence in Latin America and Europe, adding approximately $300 million in revenue and opening up new market opportunities.**  **[EPAM_3406494_24]**
- **EPAM is improving profitability by increasing utilization and reducing SG&A expenses, enhancing underlying profitability.**  **[EPAM_3406494_16]**

6f2d6c9571a23c398e648d1ba8a745a712b9ff8bd403423638257b53ed6c357c

- **EPAM is facing a challenging demand environment**, with uneven demand expected to persist at least through the first half of 2024. Seasonal factors may cause sequential revenues to be flat or even down, and growth depends on improving demand.  **[EPAM_3373491_12]**
- **The company lost clients due to geopolitical risks from the war in Ukraine**, leading to long-term impacts on client engagements. Although some clients are returning, the declines in 2023 and into 2024 are significant, with clients still under commitments to other vendors.  **[EPAM_3373491_21]**
- **EPAM is facing pricing pressures and is offering discounts to secure business**, which could impact margins and hinder future ability to raise prices. The competitive pricing environment may compress profitability.  **[EPAM_3373491_20]**

80e585c47af818fbcd9432e308815cf2d355e8d595089e81a4904e429f57cd62

- **Challenging demand environment with slow client decision-making, partial budget releases, and projects being delayed or reduced in scope, leading to lower than expected demand improvement.**  **[EPAM_3387832_7]**
- **Shift towards lower-cost delivery locations like India is causing revenue headwinds due to lower billing rates, impacting revenue growth measured in dollars.**  **[EPAM_3387832_7]**
- **Continued pricing pressures with clients favoring lower-cost geographies, making it difficult to achieve rate increases, and challenging profitability margins, especially for higher-cost in-market resources.**  **[EPAM_3387832_21]** **[EPAM_3387832_22]**

28c9b6f8d818211b2332c9c89bab32db52088b63637f03a646d264eac0d5728a

1. **Demand Inflection in Second Half 2024**  
   **Q:** What gives you confidence in demand improving in H2 2024?  
   **A:** Management observed increased client activities in Q4 and ongoing conversations, indicating that delays in decision-making are becoming harder to sustain as companies need to address growing debt. They believe these activities will materialize into projects, supporting an inflection in demand in the second half.  **[EPAM_3373491_10]** 

2. **Margin Outlook and Investments**  
   **Q:** What costs and investments are impacting margins in 2024?  
   **A:** They are returning to a more typical variable compensation structure and proceeding with salary increases in Q2 to retain talent amid low voluntary attrition. Significant investments in **AI** and demand generation programs are expected to deliver returns. They anticipate lower gross margins in the first half but expect a significant improvement in the second half, aiming to return to typical profitability by year-end.  **[EPAM_3373491_11]** **[EPAM_3373491_14]** 

3. **Headcount Changes and Geographic Mix**  
   **Q:** How do headcount reductions and geographic shifts affect growth?  
   **A:** Adjustments in headcount across geographies were made in 2023 due to contingencies related to Ukraine. While headcount declined in most regions, growth continues in **India** and **Latin America**, which is expected to pressure revenue per headcount, contributing to the **1% to 4%** growth guidance. They are prepared to ramp up hiring when necessary.  **[EPAM_3373491_13]** 

4. **Larger Clients and Industry Verticals**  
   **Q:** Are ramp downs with larger clients as expected, and what's the outlook?  
   **A:** The expected ramp down in Q1 is proceeding as planned and is reflected in the Q1 guidance. Demand is stabilizing, with strong traction in **life sciences** and **energy**. They anticipate returning to sequential growth in several industry verticals in Q1, with broader demand across customers.  **[EPAM_3373491_12]** 

5. **Ability to Scale Hiring**  
   **Q:** How quickly can you adjust staffing to meet demand increases?  
   **A:** They maintain flexibility to scale hiring within a **quarter**, keeping investments in training, especially for junior levels. They are confident in their ability to respond to demand due to ongoing investments and available talent in the market.  **[EPAM_3373491_19]** 

6. **Seasonality and Demand Outlook**  
   **Q:** How will seasonality and changing footprint affect demand and capacity?  
   **A:** **Q2** typically has fewer billable days, while **Q3** is strong with significant sequential growth. They note an improving demand environment with more client conversations and larger deal opportunities. However, seasonality may cause Q1 to Q2 to be flat or slightly down; improved demand is needed to overcome seasonal impacts.  **[EPAM_3373491_17]** 

7. **Competitive Landscape and Client Return**  
   **Q:** Are clients that reduced spending returning, and why?  
   **A:** Some clients who cut spending due to risk perceptions from the Ukraine war are returning, now comfortable with EPAM's execution and diversified delivery from locations like India and Latin America. In some cases, dissatisfaction with competitors is prompting reengagement with EPAM, positively affecting 2024.  **[EPAM_3373491_21]** 

8. **Generative AI Capabilities**  
   **Q:** What Gen AI capabilities are clients most excited about?  
   **A:** Clients are experimenting with Gen AI for customer-facing capabilities and new insights, particularly enhancing interfaces and data access. While currently in pilot phases, more sophisticated applications are expected over the next **12 months**.  **[EPAM_3373491_23]** 

43d6d62e713570e44c2d1d45e64baae7a21f16acc0aa23ff31e2708c1049107c

1. **Margin Outlook**  
   **Q:** What is the expected margin outlook, considering Poland R&D incentives?  
   **A:** EPAM expects to see benefits from the Poland R&D incentives similar to the **$38 million** received in 2024.  **[EPAM_3406494_9]** **[EPAM_3406494_12]**  However, due to wage inflation outpacing modest pricing improvements, profitability is expected to be slightly below the historical **16–17%** range in 2025, even inclusive of the Poland benefit.  **[EPAM_3406494_9]** **[EPAM_3406494_12]** **[EPAM_3406494_21]** 

2. **Organic Revenue Growth in 2025**  
   **Q:** Do you expect a return to positive organic revenue growth in 2025?  
   **A:** Yes, EPAM definitely expects a return to organic revenue growth in 2025, as demand is getting better. While the exact growth rate is not specified, they are looking to return to growth next year.  **[EPAM_3406494_23]** 

3. **Impact of Acquisitions**  
   **Q:** How will recent acquisitions affect revenue and margins?  
   **A:** The acquisition of Nedis is expected to contribute **$54 million** in Q4.  **[EPAM_3406494_17]**  Both Nedis and the upcoming **First Data** acquisition will likely have margins in the **low teens**, slightly lower than EPAM's standalone business.  **[EPAM_3406494_17]**  This may modestly impact adjusted IFO, with core synergies anticipated over the next couple of years.  **[EPAM_3406494_13]** **[EPAM_3406494_17]** 

4. **Demand Improvement in Key Sectors**  
   **Q:** Which sectors are leading the recovery and what is the demand outlook?  
   **A:** EPAM is seeing improvement in **financial services**, reflected in Q3 results and expected to continue.  **[EPAM_3406494_8]**  There is also progress in **hi-tech** and consistent growth in **life sciences and healthcare**.  **[EPAM_3406494_8]**  Client conversations feel incrementally more constructive, though it's too early to comment on **2025 budgets**.  **[EPAM_3406494_8]** 

5. **Headcount Increases and Hiring Trends**  
   **Q:** What are the trends in headcount and hiring?  
   **A:** EPAM increased production headcount by **750** in Q3 and expects further increases in Q4.  **[EPAM_3406494_22]**  Hiring is broadening globally, including in **Eastern Europe** and **Western Asia**, indicating a positive leading indicator of demand.  **[EPAM_3406494_10]** **[EPAM_3406494_14]** 

6. **Pricing vs. Wage Inflation**  
   **Q:** How is wage inflation impacting margins compared to pricing power?  
   **A:** EPAM continues to face wage inflation without significant pricing improvements.  **[EPAM_3406494_9]** **[EPAM_3406494_12]** **[EPAM_3406494_18]**  While modest price increases are expected next year, there remains a disconnect between wage inflation and price improvement, which will pressurize **2025 profitability**.  **[EPAM_3406494_9]** **[EPAM_3406494_12]** 

7. **Return of Clients Due to Quality Focus**  
   **Q:** Are clients returning to EPAM due to quality issues with other vendors?  
   **A:** Yes, EPAM is beginning to see clients return based on quality challenges they've had with other vendors. Multiple accounts are growing because clients are seeking better quality after unsatisfactory experiences elsewhere.  **[EPAM_3406494_20]** 

8. **Integration of Acquisitions**  
   **Q:** What are the plans for integrating recent acquisitions?  
   **A:** The focus is on revenue opportunities, actively pursuing engagements jointly with Nedis.  **[EPAM_3406494_17]**  Integration efforts include understanding deeper capabilities, with core synergies expected over the next couple of years.  **[EPAM_3406494_13]** **[EPAM_3406494_17]** 

9. **Shift Back to Eastern and Central Europe Delivery**  
   **Q:** Is there evidence of a shift back to delivery in Eastern and Central Europe?  
   **A:** Yes, EPAM has begun to see recovery in demand for Eastern Europe and is increasing capacity there, as clients seek more diversified teams beyond India.  **[EPAM_3406494_14]** 

10. **Profitability Improvements Excluding Poland Benefit**  
    **Q:** Are there underlying profitability improvements excluding the Poland benefit?  
    **A:** EPAM has improved utilization and reduced SG&A as a percentage of revenue, positively impacting profitability. However, the lack of significant pricing improvements continues to be a challenge.  **[EPAM_3406494_16]** 

88996fba4ead051f246765574f6a549b8d9d3adfcbc31e8af094a387b18cd98e

- **Loss of significant clients leading to revenue headwinds**: EPAM is experiencing revenue declines due to the loss of major clients. One client exit, described as "M&A like," resulted in over **$10 million revenue loss per quarter**, a "significant number," expected to fully impact by the end of the year.  **[EPAM_3397426_24]**  Another client is "slowly reducing their demand" due to "hesitation around our Ukrainian footprint" and is bringing some positions in-house, with this trend expected to continue for the next couple of quarters.  **[EPAM_3397426_24]**
- **Shift toward lower billing rates impacting revenue growth**: The mix shift to increased headcount in India is causing revenue headwinds due to lower average billing rates. The headwind from India is "about **200 basis points this year on revenue**" and may be higher in 2025.  **[EPAM_3397426_23]**  This is because of "higher in billable India and a little bit lower in billable on site," leading to a "modestly lower average bill rate for the company".  **[EPAM_3397426_23]**
- **Challenges with on-site utilization and demand environment**: On-site utilization is "lower than we would traditionally run at and it continues to be the area that I think we find ourselves somewhat challenged in".  **[EPAM_3397426_8]**  The company is seeing "more demand for offshore and incrementally more demand for India," which may contribute to revenue growth challenges for the remainder of the year.  **[EPAM_3397426_8]**

2c536c2bdb943e7d1059092b42b1f0bbb06f56968fdcc103b8bc692924dfd0b9

- EPAM expects profitability to be **somewhat below 16% to 17%** in 2025, even after including the approximate **$38 million** benefit from the Polish R&D incentive, due to ongoing **wage inflation** and lack of improvement in the **pricing environment**.  **[EPAM_3406494_12]** **[EPAM_3406494_21]**
- Management expressed uncertainty about the level of **organic revenue growth** in 2025, stating they expect a return to growth but questioning what is considered **'meaningful'**, indicating potential challenges in achieving strong growth.  **[EPAM_3406494_23]**
- There is a **lack of transparency** regarding the **organic growth profile** of the recently acquired company **Nedis**, and potential **client concentration risk** as **CEMEX** is a significant customer, possibly posing integration and revenue risks.  **[EPAM_3406494_24]**

c3f4cfd84cc5b0b80c44cdee2f10a659660c5d49a343474ca9b76415b296c8d8

Epam Systems Inc (EPAM)

Financials