EPAM Systems’ Earnings Call Highlights Growth and AI Focus

Epam Systems ((EPAM)) has held its Q3 earnings call. Read on for the main highlights of the call.

EPAM Systems’ recent earnings call conveyed a generally positive sentiment, underscored by robust revenue growth and significant strides in AI initiatives. The company showcased its strategic advancements through new product launches and earned notable recognitions. However, challenges such as decreased gross margins, seasonal impacts, and issues with the NEORIS acquisition were also acknowledged. Despite these hurdles, EPAM’s outlook remains optimistic, bolstered by its strategic initiatives and strong market positioning.

Strong Year-over-Year Revenue Growth

EPAM Systems reported impressive revenue figures for Q3 2025, with a total of $1.394 billion. This marks a year-over-year increase of 19.4% on a reported basis and 7.1% in organic constant currency growth, surpassing market expectations. This growth reflects the company’s effective strategies and market adaptability.

Expansion in AI Initiatives

The company’s AI-native revenues have shown consistent growth, achieving double-digit sequential growth for the third consecutive quarter. EPAM launched the EPAM AI/RUN Transform, enhancing its AI service offerings and cementing its position as a leader in AI-native services.

Recognition and Awards

EPAM’s leadership and workplace culture have been recognized with the company being ranked #7 on Glassdoor’s 2025 best-led companies list and acknowledged by Forbes as one of the world’s best employers. These accolades highlight EPAM’s commitment to excellence and its strong corporate governance.

New Share Repurchase Program

In a move that signals confidence in its business strength, EPAM announced a new $1 billion share repurchase program. This initiative underscores the company’s commitment to returning value to its shareholders.

Strong Cash Flow Generation

Q3 2025 marked a milestone for EPAM with the highest level of quarterly cash flow from operations in its history, amounting to $295 million compared to $242 million in Q3 2024. This strong cash flow generation reflects the company’s operational efficiency and financial health.

Decreased Gross Margin

EPAM reported a decrease in its GAAP gross margin for Q3 2025, which fell to 29.5% from 34.6% in Q3 2024. This decline was attributed to higher variable compensation and lower profitability from recent acquisitions.

Impact of Seasonality on Q4 Outlook

The company’s Q4 2025 outlook is anticipated to be negatively impacted by seasonal factors, including more holidays and potential furloughs, which could affect revenue growth.

Challenges with NEORIS

EPAM faced challenges with its NEORIS acquisition due to political and economic instability in Mexico. This situation negatively impacted a major customer and contributed to a modestly negative impact on organic constant currency growth.

Forward-Looking Guidance

EPAM’s forward-looking guidance reflects a strong growth trajectory, with full-year revenue expected to reach between $5.430 billion and $5.445 billion. This optimism is driven by AI-led demand and strategic client engagements. The company’s strategic focus on AI is evident, with over 90% of its workforce completing AI literacy education, and significant advancements in AI-native services.

In conclusion, EPAM Systems’ earnings call painted a picture of a company that is thriving amidst challenges. With strong revenue growth, strategic advancements in AI, and a commitment to shareholder value, EPAM is well-positioned for sustained success. Despite some hurdles, the overall sentiment remains positive, with a focus on leveraging strategic initiatives to drive future growth.