Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
EPAM Systems grew FY2025 revenue 15.4% to $5.46B but saw net income fall 16.9% to $378M as rising costs and elevated SG&A compressed margins, while the company returned $662M to shareholders via buybacks.
Revenue
$5.46B
+15.42% YoY
EPS (Diluted)
$6.72
-14.29% YoY
Operating Income
$520M
-4.51% YoY
Source: SEC XBRL
EPAM Systems (EPAM) reported FY2025 revenue of $5.46B, up 15.4% year over year. Operating margin was 9.5%, down 2.0 points from 11.5% a year earlier. Operating cash flow was $654.93M, up 17.1% year over year.
Last 4 quarters: 3 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026 | 3.38 | 3.21 | Beat +5.4% |
| Mar 2026 | 2.86 | 2.81 | Beat +1.8% |
| Dec 2025This filing | 3.26 | 3.22 | Beat +1.2% |
| Sep 2025 | 3.08 | 3.09 | Miss -0.2% |
Reported EPS of $3.26 versus the $3.22 analyst consensus — a +1.2% beat for Dec 2025.
Compiled by AI from this SEC filing
EPAM delivered revenue of $5.46B in FY2025, up 15.4% year-over-year from $4.73B, demonstrating continued demand for its IT services and engineering solutions. However, cost of revenue grew faster at 18.5% YoY to $3.88B, indicating that revenue growth came at the expense of gross profitability.
Source: 10-K Income Statement
Operating income fell 4.5% to $520M and net income dropped 16.9% to $378M despite top-line growth, reflecting the dual pressure of rising delivery costs and SG&A expenses that grew 13.8% to $929M. Operating margin contracted approximately 2 percentage points to 9.5%.
Source: 10-K Income Statement
Operating cash flow improved 17.1% to $655M, outpacing net income growth and suggesting strong working capital management and non-cash add-backs. This healthy cash generation supported an aggressive capital return program.
Source: 10-K Cash Flow Statement
EPAM repurchased $662M worth of shares in FY2025, a 66.4% increase from $398M in the prior year, reflecting management's confidence in intrinsic value and commitment to returning capital. Financing cash outflows surged 66.8% to $651M as a result.
Source: 10-K Cash Flow Statement
The company ended FY2025 with $1.30B in cash and equivalents, long-term debt of only $25M, and a debt-to-equity ratio of 0.33, indicating a conservatively financed balance sheet with ample liquidity. The current ratio of 2.59 further underscores near-term financial stability.
Source: 10-K Balance Sheet
Compiled by AI from this SEC filing · 2 high, 2 medium, 1 low
EPAM has historically relied heavily on engineering talent in Eastern Europe, particularly Ukraine and neighboring countries. Ongoing geopolitical instability in the region could disrupt delivery operations, increase talent relocation costs, and compress margins further. The 18.5% rise in cost of revenue in FY2025 may partly reflect these elevated operational costs.
Source: 10-K Income Statement & Balance Sheet
Cost of revenue grew 18.5% YoY, outpacing revenue growth of 15.4%, causing gross margin deterioration. If this trend continues, EPAM's ability to sustain profitability while scaling could be challenged, particularly in a competitive talent market. Operating margin already contracted ~2 percentage points to 9.5% in FY2025.
Source: 10-K Income Statement
SG&A expenses rose 13.8% to $929M in FY2025, consuming a significant portion of incremental revenue. Sustained investment in sales, marketing, and administrative functions without commensurate revenue acceleration could further erode net margins, which already declined to 6.9% from a higher prior-year level.
Source: 10-K Income Statement
Basic EPS fell 14.8% to $6.76 and diluted EPS dropped 14.3% to $6.72, even as revenue grew 15.4%. This disconnect signals that profitability per share is under pressure, which could disappoint earnings-focused investors and affect market sentiment.
Source: 10-K Income Statement
Current liabilities increased 19.0% to $977M in FY2025, growing faster than current assets which rose only 4.4% to $2.53B. While the current ratio remains healthy at 2.59, the accelerating pace of short-term obligations warrants monitoring, especially if operating cash flows were to moderate.
Source: 10-K Balance Sheet
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 5.46 $B | 4.73 $B | +15.42% |
Cost of Revenue $B | 3.88 $B | 3.28 $B | +18.49% |
Operating Income $M | 520.00 $M | 544.58 $M | -4.51% |
Net Income $M | 377.68 $M | 454.53 $M | -16.91% |
EPS (Basic) $ | 6.76 $ | 7.93 $ | -14.75% |
EPS (Diluted) $ | 6.72 $ | 7.84 $ | -14.29% |
SG&A Expense $M | 928.71 $M | 816.30 $M | +13.77% |
Answers draw on this SEC filing and the data on this page
EPAM Systems reported a 4.5% revenue increase and margin expansion in Q2 FY2026, driven by improving demand and cost optimization, though operating cash flow fell negative amid working capital pressures.
EPAM Systems delivered solid Q1 FY2026 revenue growth of 7.6% YoY to $1.40B with operating income surging 17.6%, though operating cash flow turned sharply negative and share buybacks more than doubled, reflecting significant capital allocation shifts.