EPAM (NYSE: EPAM) 2025 earnings, cash flow and 2026 guidance

Rhea-AI Filing Summary

EPAM Systems reported solid growth for 2025 while shifting its business mix. Full-year revenue reached $5.457 billion, up 15.4%, with GAAP operating margin at 9.5% and non-GAAP operating margin at 15.2%. GAAP diluted EPS fell to $6.72 (down 14.3%), while non-GAAP diluted EPS rose to $11.50 (up 5.9%).

In the fourth quarter, revenue grew 12.8% to $1.408 billion, and GAAP diluted EPS increased to $1.98, with non-GAAP diluted EPS of $3.26. Cash from operations was $654.9 million for 2025, and the company repurchased 3.54 million shares for $660.6 million, ending the year with $1.301 billion in cash and restricted cash.

For 2026, EPAM guides to revenue growth of 4.5%–7.5%, GAAP operating margin of 10%–11%, and GAAP EPS of $7.95–$8.25, with non-GAAP EPS of $12.60–$12.90. Management highlights growing AI-native revenues and continued investment in AI, talent, and partnerships.

Insights

Equity research analyst

EPAM shows healthy 2025 growth, strong cash generation, and measured 2026 guidance, with GAAP margins still rebuilding.

EPAM delivered full-year 2025 revenue of $5.457 billion, up 15.4%, while non-GAAP operating income grew to $831.5 million. GAAP profitability softened, with income from operations down 4.5% and GAAP EPS declining 14.3% to $6.72, reflecting higher costs and adjustments from restructuring and geopolitical factors.

Cash generation was strong: operating cash flow reached $654.9 million in 2025, and the company ended the year with $1.301 billion in cash and restricted cash. EPAM returned capital aggressively, repurchasing 3.54 million shares for $660.6 million, leaving $776.5 million authorized for future buybacks.

Guidance for 2026 points to slower but still positive top-line growth, with revenue expected to rise 4.5%–7.5% and non-GAAP operating margin targeted at 15%–16%. The outlook for GAAP EPS of $7.95–$8.25 and non-GAAP EPS of $12.60–$12.90 suggests improvement versus 2025, assuming execution on cost optimization and continued demand for AI-native transformation services.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported):  February 19, 2026

EPAM SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware			1-35418			22-3536104
(State or other jurisdiction of incorporation)			(Commission File Number)			(IRS Employer Identification No.)
41 University Drive			Suite 202			18940
Newtown			Pennsylvania
(Address of principal executive offices)						(Zip Code)

267-759-9000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

			☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
			☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
			☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
			☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class			Trading Symbol			Name of Each Exchange on which Registered
Common Stock, par value $0.001 per share			EPAM			New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

On February 19, 2026, EPAM Systems, Inc. (the “Company” or “EPAM”) issued a press release discussing its results of operations for the fourth quarter and the year ended December 31, 2025. A copy of the press release is attached as Exhibit 99.1 to this report and is incorporated by reference into this Item 2.02.

The information in this report, including Exhibit 99.1 attached hereto, is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise be subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, except as expressly stated by specific reference in such a filing. 

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

99.1  Press release dated February 19, 2026, announcing results of operations of EPAM Systems, Inc. for the fourth quarter and the year ended December 31, 2025

101 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.

104 The cover page from this Current Report on Form 8-K, formatted as Inline XBRL.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: February 19, 2026

			By:			/s/ Jason Peterson
			Name:			Jason Peterson
			Title:			Senior Vice President, Chief Financial Officer and Treasurer

Exhibit 99.1

EPAM Reports Results for Fourth Quarter and Full Year 2025

Fourth Quarter 2025

•Revenues of $1.408 billion, up 12.8% year-over-year

•GAAP Income from Operations was 10.6% of revenues and Non-GAAP Income from Operations was 16.3% of revenues

•GAAP Diluted EPS of $1.98, an increase of 10.0%, and Non-GAAP Diluted EPS of $3.26, an increase of 14.8% on a year-over-year basis

Full Year 2025

•Revenues of $5.457 billion, up 15.4% year-over-year

•GAAP Income from Operations was 9.5% of revenues and Non-GAAP Income from Operations was 15.2% of revenues

•GAAP Diluted EPS of $6.72, a decrease of 14.3%, and Non-GAAP Diluted EPS of $11.50, an increase of 5.9% on a year-over-year basis

Newtown, PA, USA, February 19, 2026 — EPAM Systems, Inc. (NYSE: EPAM), a leading digital and AI transformation company, today announced results for its fourth quarter and full year ended December 31, 2025.

“We are pleased to deliver a strong fourth quarter and full year 2025, notably scaling and accelerating our AI-native revenues. Our 2025 performance reflects our steady execution and meaningful progress in driving business transformation and AI foundational readiness for our clients” said Balazs Fejes, CEO & President, EPAM. “By continuing to invest in AI innovation, talent development and strategic partnerships, we are driving our own transformation, building on top of our core engineering DNA and strengthening our strategic positioning to win in the AI-Native Build era.”

Fourth Quarter 2025 Highlights

•Revenues increased to $1.408 billion, a year-over-year increase of $159.2 million, or 12.8%. On an organic constant currency basis, revenues grew 5.6% compared to the fourth quarter of 2024;

•GAAP income from operations was $149.3 million, an increase of $12.7 million, or 9.3%, compared to $136.5 million in the fourth quarter of 2024;

•Non-GAAP income from operations was $230.0 million, an increase of $21.8 million, or 10.5%, compared to $208.2 million in the fourth quarter of 2024;

•Diluted earnings per share (“EPS”) on a GAAP basis was $1.98, an increase of $0.18, or 10.0%, compared to $1.80 in the fourth quarter of 2024;

•Non-GAAP diluted EPS was $3.26, an increase of $0.42, or 14.8%, compared to $2.84 in the fourth quarter of 2024;

Full Year 2025 Highlights

•Revenues increased to $5.457 billion, a year-over-year increase of $729.1 million, or 15.4%. On an organic constant currency basis, revenues grew 4.9% year-over-year;

•GAAP income from operations was $520.0 million, a decrease of $24.6 million, or 4.5%, compared to $544.6 million in 2024;

•Non-GAAP income from operations was $831.5 million, an increase of $52.3 million, or 6.7%, compared to $779.2 million in 2024;

•Diluted EPS on a GAAP basis was $6.72, a decrease of $1.12, or 14.3%, compared to $7.84 in 2024; and

•Non-GAAP diluted EPS was $11.50, an increase of $0.64, or 5.9%, compared to $10.86 in 2024.

Cash Flow and Other Metrics

•Cash provided by operating activities was $282.9 million in the fourth quarter of 2025, an increase from $130.3 million in the fourth quarter of 2024; and was $654.9 million in 2025, an increase from $559.2 million in 2024;

•The Company repurchased 1.16 million shares of its common stock for $223.5 million during the fourth quarter of 2025 under its share repurchase program. During the year ended December 31, 2025, the Company repurchased 3.54 million shares of its common stock for $660.6 million under its share repurchase programs. As of December 31, 2025, the Company had $776.5 million remaining under its share repurchase authorization;

•Cash, cash equivalents and restricted cash totaled $1.301 billion as of December 31, 2025, an increase of $11.0 million, or 0.9%, from $1.290 billion as of December 31, 2024; and

•Total headcount was approximately 62,850 as of December 31, 2025. Included in this number were approximately 56,600 delivery professionals, an increase of 2.7% from December 31, 2024.

2026 Outlook - Full Year and First Quarter

Full Year

EPAM expects the following for the full year:

•The Company expects the year-over-year revenue growth rate to be in the range of 4.5% to 7.5% for 2026. The Company expects the year-over-year revenue growth rate on an organic constant currency basis to be in the range of 3% to 6%;

•For the full year, EPAM expects GAAP income from operations to be in the range of 10% to 11% of revenues and non-GAAP income from operations to be in the range of 15% to 16% of revenues;

•The Company expects its GAAP effective tax rate to be approximately 26% and its non-GAAP effective tax rate to be approximately 24%; and

•EPAM expects GAAP diluted EPS will be in the range of $7.95 to $8.25 for the year, and non-GAAP diluted EPS will be in the range of $12.60 to $12.90 for the year. The Company expects weighted average diluted shares outstanding for the year of 54.4 million.

First Quarter

EPAM expects the following for the first quarter:

•The Company expects revenues will be in the range of $1.385 billion to $1.400 billion for the first quarter reflecting a year-over-year increase of 7.0% at the midpoint of the range. The Company expects year-over-year revenue growth on an organic constant currency basis to be approximately 2.9% at the midpoint of the range;

•For the first quarter, EPAM expects GAAP income from operations to be in the range of 7.0% to 8.0% of revenues and non-GAAP income from operations to be in the range of 13.5% to 14.5% of revenues;

•The Company expects its GAAP effective tax rate to be approximately 30% and its non-GAAP effective tax rate to be approximately 24%; and

•EPAM expects GAAP diluted EPS will be in the range of $1.32 to $1.40 for the quarter, and non-GAAP diluted EPS will be in the range of $2.70 to $2.78 for the quarter. The Company expects weighted average diluted shares outstanding for the quarter of 54.7 million.

Conference Call Information

EPAM will host a conference call to discuss results on Thursday, February 19, 2026 at 8:00 a.m. EST. The conference call will be available live on the EPAM website at https://investors.epam.com. Please visit the website at least 15 minutes prior to the call to register for the event. For those who cannot access the live webcast, a replay will be available in the Investor Relations section of the website.

About EPAM Systems

EPAM (NYSE:EPAM) is a global leader in AI transformation engineering and integrated consulting, serving Forbes Global 2000 companies and ambitious startups. With over thirty years of expertise in custom software, product and platform engineering, EPAM empowers organizations to become AI-Native enterprises, driving measurable value from innovation and digital investments. Recognized by industry benchmarks and leading analysts as a leader in AI, EPAM delivers globally while engaging locally, making the future real for clients, partners, and employees.

We are proud to be recognized by Forbes, Glassdoor, Newsweek, Time Magazine, Great Place to Work and kununu as a Most Loved Workplace around the world.

Learn more at www.epam.com and follow us on LinkedIn.

Non-GAAP Financial Measures

EPAM supplements results reported in accordance with United States generally accepted accounting principles, referred to as GAAP, with non-GAAP financial measures. Management believes these measures help illustrate underlying trends in EPAM’s business and uses the measures to establish budgets and operational goals, communicate internally and externally, for managing EPAM’s business and evaluating its performance. Management also believes these measures help investors compare EPAM’s operating performance with its results in prior periods. EPAM anticipates that it will continue to report both GAAP and certain non-GAAP financial measures in its financial results, including non-GAAP results that exclude stock-based compensation expenses, acquisition-related costs including amortization of acquired intangible assets, impairment of assets, expenses associated with EPAM's humanitarian commitment to its professionals in Ukraine, costs associated with the geographic repositioning of EPAM employees based outside of Ukraine impacted by the war and geopolitical instability in the region, employee separation costs incurred in connection with restructuring programs including the Company's exit from Russia, certain other one-time charges and benefits, changes in fair value of contingent consideration, foreign exchange gains and losses, excess tax benefits and tax shortfalls related to stock-based compensation, and the related effect on income taxes of the pre-tax adjustments. Management also compares revenues on an “organic constant currency basis,” which is a non-GAAP financial measure. This measure excludes the effect of acquisitions by removing revenues from an acquired company in the twelve months after completing an acquisition and foreign currency exchange rate fluctuations by translating current period revenues into U.S. dollars at the weighted average exchange rates of the prior period of comparison. Because EPAM’s reported non-GAAP financial measures are not calculated in accordance with GAAP, these measures are not comparable to GAAP and may not be comparable to similarly described non-GAAP measures reported by other companies within EPAM’s industry. Consequently, EPAM’s non-GAAP financial measures should not be evaluated in isolation or supplant comparable GAAP measures, but rather, should be considered together with the information in EPAM’s consolidated financial statements, which are prepared in accordance with GAAP.

Forward-Looking Statements

This press release includes estimates and statements which may constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the accuracy of which are necessarily subject to risks, uncertainties, and assumptions as to future events that may not prove to be accurate. Our estimates and forward-looking statements are mainly based on our current expectations and estimates of future events and trends, which affect or may affect our business and operations. These statements may include words such as "may," "will," "should," "believe," "expect," "anticipate," "intend," "plan," "estimate" or similar expressions. Those future events and trends may relate to, among other things, developments relating to the war in Ukraine and escalation of the war in the surrounding region, political and civil unrest or military action in the geographies where we conduct business and operate, difficult conditions in global capital markets, foreign exchange markets, global trade and the broader economy, the adoption and implementation of artificial intelligence technologies by EPAM and its clients, and the effect that these events may have on client demand and our revenues, operations, access to capital, and profitability. Other factors that could cause actual results to differ materially from those expressed or implied include general economic conditions, the risk factors discussed in the Company's most recent Annual Report on Form 10-K and the factors discussed in the Company's Quarterly Reports on Form 10-Q, particularly under the headings "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" and other filings with the Securities and Exchange Commission. Although we believe that these estimates and forward-looking statements are based upon reasonable assumptions, they are subject to several risks and uncertainties and are made based on information currently available to us. EPAM undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities law.

Contact:

EPAM Systems, Inc.

Mike Rowshandel, Head of Investor Relations

Phone: +1-267-759-9000 x393336

Email: mike_rowshandel@epam.com

EPAM SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share data)

			Three Months Ended December 31,												Year Ended December 31,
			2025						2024						2025						2024
Revenues			$	1,407,548					$	1,248,351					$	5,457,056					$	4,727,940
Operating expenses:
Cost of revenues (exclusive of depreciation and amortization)			984,346						868,314						3,883,535						3,277,497
Selling, general and administrative expenses			243,161						216,969						928,707						816,300
Depreciation and amortization expense			30,787						26,556						124,811						89,559
Income from operations			149,254						136,512						520,003						544,584
Interest and other income (loss), net			(89)						6,451						11,546						46,876
Foreign exchange loss			(5,344)						(5,632)						(25,925)						(7,048)
Income before provision for income taxes			143,821						137,331						505,624						584,412
Provision for income taxes			34,467						34,032						127,946						129,879
Net income			$	109,354					$	103,299					$	377,678					$	454,533
Net income per share:
Basic			$	1.99					$	1.82					$	6.76					$	7.93
Diluted			$	1.98					$	1.80					$	6.72					$	7.84
Shares used in calculation of net income per share:
Basic			54,942						56,818						55,893						57,288
Diluted			55,341						57,435						56,233						57,983

EPAM SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except par value)

			As of   December 31,   2025						As of   December 31,   2024
Assets
Current assets
Cash and cash equivalents			$	1,296,077					$	1,286,267
Trade receivables and contract assets, net of allowance of $6,350 and $5,612, respectively			1,108,201						1,002,175
Prepaid and other current assets			129,610						137,806
Total current assets			2,533,888						2,426,248
Property and equipment, net			202,387						207,667
Operating lease right-of-use assets, net			114,875						128,244
Intangible assets, net			406,586						436,418
Goodwill			1,210,564						1,181,575
Deferred tax assets			295,115						269,799
Other noncurrent assets			138,721						100,522
Total assets			$	4,902,136					$	4,750,473
Liabilities
Current liabilities
Accounts payable			$	55,329					$	44,702
Accrued compensation and benefits expenses			608,232						484,952
Accrued expenses and other current liabilities			250,688						201,356
Income taxes payable, current			25,520						50,395
Operating lease liabilities, current			37,173						39,634
Total current liabilities			976,942						821,039
Long-term debt			25,034						25,194
Operating lease liabilities, noncurrent			81,497						98,426
Deferred tax liabilities, noncurrent			76,969						92,362
Other noncurrent liabilities			63,886						82,301
Total liabilities			1,224,328						1,119,322
Commitments and contingencies
Equity
Stockholders’ equity
Common stock, $0.001 par value; 160,000 authorized; 54,274 shares issued and outstanding at December 31, 2025, and 56,869 shares issued and outstanding at December 31, 2024			54						57
Additional paid-in capital			1,390,423						1,190,222
Retained earnings			2,268,204						2,555,796
Accumulated other comprehensive income (loss)			18,545						(116,864)
Total EPAM Systems, Inc. stockholders’ equity			3,677,226						3,629,211
Noncontrolling interest in consolidated subsidiaries			582						1,940
Total equity			3,677,808						3,631,151
Total liabilities and equity			$	4,902,136					$	4,750,473

EPAM SYSTEMS, INC. AND SUBSIDIARIES

Reconciliations of Non-GAAP Financial Measures to Comparable GAAP Financial Measures

(Unaudited)

(In thousands, except percent and per share amounts)

Reconciliation of revenue growth as reported on a GAAP basis to revenue growth on an organic constant currency basis is presented in the table below:

			Three Months Ended December 31, 2025						Year Ended December 31, 2025
Revenue growth as reported			12.8		%				15.4		%
Inorganic revenue			(4.6)		%				(9.2)		%
Foreign exchange rates			(2.6)		%				(1.3)		%
Revenue growth on an organic constant currency basis			5.6		%				4.9		%

Reconciliation of various income statement amounts from GAAP to non-GAAP for the three months and years ended December 31, 2025 and 2024 is presented in the table below:

			Three Months Ended December 31, 2025																		Year Ended December 31, 2025
			GAAP						Adjustments						Non-GAAP						GAAP						Adjustments						Non-GAAP
Cost of revenues (exclusive of depreciation and amortization)(1)			$	984,346					$	(23,550)					$	960,796					$	3,883,535					$	(88,055)					$	3,795,480
Selling, general and administrative expenses(2)			$	243,161					$	(39,574)					$	203,587					$	928,707					$	(152,070)					$	776,637
Income from operations(3)			$	149,254					$	80,779					$	230,033					$	520,003					$	311,492					$	831,495
Operating margin			10.6		%				5.7		%				16.3		%				9.5		%				5.7		%				15.2		%
Net income(4)			$	109,354					$	70,855					$	180,209					$	377,678					$	269,131					$	646,809
Diluted earnings per share			$	1.98											$	3.26					$	6.72											$	11.50

			Three Months Ended December 31, 2024																		Year Ended December 31, 2024
			GAAP						Adjustments						Non-GAAP						GAAP						Adjustments						Non-GAAP
Cost of revenues (exclusive of depreciation and amortization)(1)			$	868,314					$	(22,040)					$	846,274					$	3,277,497					$	(59,821)					$	3,217,676
Selling, general and administrative expenses(2)			$	216,969					$	(37,637)					$	179,332					$	816,300					$	(145,329)					$	670,971
Income from operations(3)			$	136,512					$	71,675					$	208,187					$	544,584					$	234,625					$	779,209
Operating margin			10.9		%				5.8		%				16.7		%				11.5		%				5.0		%				16.5		%
Net income(4)			$	103,299					$	60,066					$	163,365					$	454,533					$	175,430					$	629,963
Diluted earnings per share			$	1.80											$	2.84					$	7.84											$	10.86

Items (1) through (4) above are detailed in the following table with the specific cross-reference noted in the appropriate item.

			Three Months Ended   December 31,												Year Ended   December 31,
			2025						2024						2025						2024
Stock-based compensation expenses			$	23,019					$	22,074					$	86,252					$	80,944
Poland R&D incentives(a)			—						(556)						(505)						(23,473)
Humanitarian support in Ukraine(b)			531						522						2,308						2,350
Total adjustments to GAAP cost of revenues(1)			23,550						22,040						88,055						59,821
Stock-based compensation expenses			22,127						22,624						90,512						86,353
Cost Optimization charges(c)			15,279						4,837						47,893						31,270
Other acquisition-related expenses			234						7,031						1,160						15,808
Humanitarian support in Ukraine(b)			1,861						3,127						12,250						10,821
Geographic repositioning(d)			—						(4)						—						849
One-time charges			73						22						255						228
Total adjustments to GAAP selling, general and administrative expenses(2)			39,574						37,637						152,070						145,329
Amortization of purchased intangible assets			17,655						11,998						71,367						29,475
Total adjustments to GAAP income from operations(3)			80,779						71,675						311,492						234,625
Foreign exchange loss			5,344						5,632						25,925						7,048
Change in fair value of contingent consideration included in Interest and other income, net			3,878						1,673						3,465						5,700
One-time benefits included in Interest and other income (loss), net			—						(1,331)						(700)						(3,143)
Provision for income taxes:
Tax effect on non-GAAP adjustments			(18,631)						(15,640)						(74,086)						(44,522)
Tax shortfall (excess tax benefit) related to stock-based compensation			1,175						(1,943)						1,926						(22,448)
Net discrete charge (benefit) from tax planning(e)			(1,690)						—						1,109						(1,830)
Total adjustments to GAAP net income(4)			$	70,855					$	60,066					$	269,131					$	175,430

(a) We have excluded from non-GAAP results the portion of the benefit from Poland R&D incentives related to qualifying activities performed in 2023 as it represents a nonrecurring one-time benefit.

(b) Humanitarian support in Ukraine includes expenses related to EPAM's $100 million humanitarian commitment in response to Russia's invasion of Ukraine to support EPAM professionals and their families in and displaced from Ukraine. These expenses are incremental to those expenses incurred prior to the crisis, clearly separable from normal operations, and not expected to recur once the crisis has subsided and operations return to normal.

(c) Cost Optimization charges include severance, facilities and contract termination charges incurred in connection with the programs initiated in the third quarter of 2023, second quarter of 2024, and second quarter of 2025. Consistent with the Company's historical non-GAAP policy, costs incurred in connection with formal restructuring initiatives have been excluded from non-GAAP results as these are attributable to targeted restructuring efforts and not expected to recur once the respective Cost Optimization program is completed.

(d) Geographic repositioning includes expenses associated with the relocation to other countries of employees based outside of Ukraine impacted by the war and geopolitical instability in the region, and includes the cost of accommodations, travel and food. These expenses are incremental to those expenses incurred prior to the crisis, clearly separable from normal operations, and not expected to recur once the crisis has subsided and operations return to normal.

(e) Net discrete charge or benefit related to the implementation of tax planning to disregard certain foreign subsidiaries as separate entities for U.S. income tax purposes. Consistent with the Company's historical non-GAAP policy, the charge or benefit related to the implementation of tax planning has been excluded from non-GAAP results as it is one-time and unusual in nature.

EPAM SYSTEMS, INC. AND SUBSIDIARIES

Reconciliations of Guidance Non-GAAP Financial Measures to Comparable GAAP Financial Measures

(Unaudited)

The below guidance constitutes forward-looking statements within the meaning of the federal securities laws and is based on a number of assumptions that are subject to change and many of which are outside the control of the Company. Actual results may differ materially from the Company’s expectations depending on factors discussed in the Company’s filings with the Securities and Exchange Commission.

Reconciliation of expected revenue growth on a GAAP basis to expected revenue growth on an organic constant currency basis is presented in the table below:

			First Quarter 2026						Full Year 2026
			(at midpoint of range)
Revenue growth			7.0		%				4.5% to 7.5%
Foreign exchange rates			(4.0)		%				(1.5)		%
Inorganic revenue			(0.1)		%				—		%
Revenue growth on an organic constant currency basis			2.9		%				3.0% to 6.0%

Reconciliation of expected GAAP to non-GAAP income from operations as a percentage of revenues is presented in the table below:

			First Quarter 2026						Full Year 2026
GAAP income from operations as a percentage of revenues			7.0% to 8.0%						10.0% to 11.0%
Stock-based compensation expenses			3.9		%				3.4		%
Included in cost of revenues (exclusive of depreciation and amortization)			1.9		%				1.7		%
Included in selling, general and administrative expenses			2.0		%				1.7		%
Humanitarian support in Ukraine(b)			0.2		%				0.1		%
Cost Optimization charges(c)			1.1		%				0.3		%
Amortization of acquired intangible assets			1.3		%				1.2		%
Non-GAAP income from operations as a percentage of revenues(f)			13.5% to 14.5%						15.0% to 16.0%

(f) EPAM has not included the impact of potential future one-time charges including asset impairments, unusual gains and losses, expenses incurred in connection with future cost optimization actions, and other acquisition-related expenses because the Company is unable to predict these amounts with reasonable certainty.

Reconciliation of expected GAAP to non-GAAP effective tax rate is presented in the table below:

			First Quarter 2026						Full Year 2026
GAAP effective tax rate (approximately)			30.0		%				26.0		%
Tax shortfall related to stock-based compensation			(3.9)		%				(0.6)		%
Tax effect on non-GAAP adjustments			(2.1)		%				(1.4)		%
Non-GAAP effective tax rate (approximately)			24.0		%				24.0		%

Reconciliation of expected GAAP to non-GAAP diluted earnings per share is presented in the table below:

			First Quarter 2026						Full Year 2026
GAAP diluted earnings per share			$1.32 to $1.40						$7.95 to $8.25
Stock-based compensation expenses			0.97						3.71
Included in cost of revenues (exclusive of depreciation and amortization)			0.47						1.81
Included in selling, general and administrative expenses			0.50						1.90
Humanitarian support in Ukraine(b)			0.06						0.22
Cost Optimization charges(c)			0.25						0.45
Amortization of acquired intangible assets			0.32						1.27
Foreign exchange loss			0.05						0.22
Provision for income taxes:
Tax effect on non-GAAP adjustments			(0.35)						(1.28)
Tax shortfall related to stock-based compensation			0.08						0.06
Non-GAAP diluted earnings per share(f)			$2.70 to $2.78						$12.60 to $12.90

FAQ

How did EPAM (EPAM) perform financially in full-year 2025?

EPAM reported strong 2025 revenue of $5.457 billion, up 15.4% year-over-year. GAAP operating margin was 9.5%, while non-GAAP operating margin reached 15.2%. GAAP diluted EPS declined to $6.72, but non-GAAP diluted EPS rose to $11.50.

What were EPAM (EPAM) results for the fourth quarter of 2025?

In Q4 2025, EPAM generated $1.408 billion in revenue, up 12.8% year-over-year. GAAP income from operations was $149.3 million, and GAAP diluted EPS was $1.98. Non-GAAP diluted EPS reached $3.26, reflecting higher adjusted profitability.

What 2026 guidance did EPAM (EPAM) provide for revenue and earnings?

For 2026, EPAM expects revenue growth of 4.5%–7.5% and non-GAAP revenue growth on an organic constant currency basis of 3%–6%. It projects GAAP diluted EPS of $7.95–$8.25 and non-GAAP diluted EPS between $12.60 and $12.90.

How much cash flow and liquidity did EPAM (EPAM) report for 2025?

EPAM generated $654.9 million of cash from operating activities in 2025, up from 2024. Cash, cash equivalents and restricted cash totaled $1.301 billion at December 31, 2025, providing significant liquidity to support operations, investments, and shareholder returns.

What share repurchase activity did EPAM (EPAM) undertake in 2025?

EPAM repurchased 3.54 million shares of its common stock in 2025 for $660.6 million. In Q4 alone, it bought back 1.16 million shares for $223.5 million. As of December 31, 2025, $776.5 million remained under its repurchase authorization.

How are EPAM (EPAM) GAAP and non-GAAP margins trending?

In 2025, EPAM’s GAAP operating margin was 9.5%, down from 2024, while non-GAAP operating margin was 15.2%, slightly below the prior year. Adjustments reflect stock-based compensation, cost optimization, humanitarian support, acquisition-related items, and amortization of acquired intangibles.

What growth outlook did EPAM (EPAM) give for Q1 2026?

For Q1 2026, EPAM expects revenue between $1.385 billion and $1.400 billion, implying about 7.0% year-over-year growth at the midpoint. It guides GAAP diluted EPS to $1.32–$1.40 and non-GAAP diluted EPS to $2.70–$2.78.

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