# EPAM Systems, Inc. (EPAM)

Informational only - not investment advice.

CIK: 0001352010
SIC: 7371 Services-Computer Programming Services
SIC breadcrumb: [Services](/division/I/) > [Business Services](/major-group/73/) > [SIC 7371 Services-Computer Programming Services](/industry/7371/)
Latest 10-K filed: 2026-02-26
SEC page: https://www.sec.gov/edgar/browse/?CIK=1352010
Filing source: https://www.sec.gov/Archives/edgar/data/1352010/000135201026000015/epam-20251231.htm

## At a glance

FY2025 · period end 2025-12-31 · filed 2026-02-26 · accession 0001352010-26-000015 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001352010.json

| Metric | Value | FY | Provenance |
| --- | ---: | ---: | --- |
| Revenue | 5,457,056,000 USD | 2025 | verified |
| Net income | 377,678,000 USD | 2025 | verified |
| Assets | 4,902,136,000 USD | 2025 | verified |
| Free cash flow | 612,691,000 USD | 2025 | computed |
| Net margin | 6.92% | 2025 | computed |
| Operating margin | 9.53% | 2025 | computed |
| Revenue YoY | +15.42% | 2025 | computed |
| ROE | 10.27% | 2025 | computed |

Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Operating margin = operating income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity.

No market price, no rating, no forecast on this site. Not investment advice.

### Peer percentile fingerprint

| Ratio | EPAM | Peer median | Percentile | N |
| --- | ---: | ---: | ---: | ---: |
| Revenue growth | 15.4% | 6.7% | 86 | 8 |
| FCF margin | 11.2% | 12.3% | 29 | 8 |
| ROA | 7.7% | 7.7% | 43 | 8 |
| Current ratio | 2.59 | 2.08 | 71 | 8 |

Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC industry 7371 Services-Computer Programming Services, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking.

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 5457056000 | USD | 2025 | 2026-02-26 |
| Net income | 377678000 | USD | 2025 | 2026-02-26 |
| Assets | 4902136000 | USD | 2025 | 2026-02-26 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-26. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001352010.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue | 1,160,132,000 | 1,450,448,000 | 1,842,912,000 | 2,293,798,000 | 2,659,478,000 | 3,758,144,000 | 4,824,698,000 | 4,690,540,000 | 4,727,940,000 | 5,457,056,000 |
| Net income | 99,266,000 | 72,760,000 | 240,256,000 | 261,057,000 | 327,160,000 | 481,652,000 | 419,416,000 | 417,083,000 | 454,533,000 | 377,678,000 |
| Operating income | 133,696,000 | 172,946,000 | 245,764,000 | 302,850,000 | 379,324,000 | 542,316,000 | 572,966,000 | 501,239,000 | 544,584,000 | 520,003,000 |
| Diluted EPS | 1.87 | 1.32 | 4.24 | 4.53 | 5.60 | 8.15 | 7.09 | 7.06 | 7.84 | 6.72 |
| Operating cash flow | 167,217,000 | 192,820,000 | 292,218,000 | 287,453,000 | 544,407,000 | 572,327,000 | 464,104,000 | 562,634,000 | 559,168,000 | 654,934,000 |
| Capital expenditures | 29,317,000 | 29,806,000 | 37,574,000 | 99,308,000 | 68,793,000 | 111,501,000 | 81,629,000 | 28,415,000 | 32,146,000 | 42,243,000 |
| Share buybacks |  |  |  |  |  | 0.00 | 0.00 | 164,924,000 | 398,028,000 | 662,159,000 |
| Assets | 925,811,000 | 1,250,256,000 | 1,611,802,000 | 2,244,208,000 | 2,721,332,000 | 3,523,227,000 | 4,009,151,000 | 4,352,365,000 | 4,750,473,000 | 4,902,136,000 |
| Liabilities | 144,399,000 | 275,309,000 | 349,206,000 | 648,063,000 | 738,314,000 | 1,027,390,000 | 1,006,141,000 | 880,895,000 | 1,119,322,000 | 1,224,328,000 |
| Stockholders' equity | 781,412,000 | 974,947,000 | 1,262,596,000 | 1,596,145,000 | 1,983,018,000 | 2,487,117,000 | 3,001,532,000 | 3,470,891,000 | 3,629,211,000 | 3,677,226,000 |
| Cash and cash equivalents | 362,025,000 | 582,585,000 | 770,560,000 | 936,552,000 | 1,322,143,000 | 1,446,625,000 | 1,681,344,000 | 2,036,235,000 | 1,286,267,000 | 1,296,077,000 |
| Free cash flow | 137,900,000 | 163,014,000 | 254,644,000 | 188,145,000 | 475,614,000 | 460,826,000 | 382,475,000 | 534,219,000 | 527,022,000 | 612,691,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin | 8.56% | 5.02% | 13.04% | 11.38% | 12.30% | 12.82% | 8.69% | 8.89% | 9.61% | 6.92% |
| Operating margin | 11.52% | 11.92% | 13.34% | 13.20% | 14.26% | 14.43% | 11.88% | 10.69% | 11.52% | 9.53% |
| Return on equity | 12.70% | 7.46% | 19.03% | 16.36% | 16.50% | 19.37% | 13.97% | 12.02% | 12.52% | 10.27% |
| Return on assets | 10.72% | 5.82% | 14.91% | 11.63% | 12.02% | 13.67% | 10.46% | 9.58% | 9.57% | 7.70% |
| Liabilities / equity | 0.18 | 0.28 | 0.28 | 0.41 | 0.37 | 0.41 | 0.34 | 0.25 | 0.31 | 0.33 |
| Current ratio | 5.56 | 5.31 | 4.56 | 3.81 | 4.11 | 2.97 | 3.69 | 4.79 | 2.96 | 2.59 |

## As-reported value updates

2 tracked differences above grepcent's stated thresholds were found between the earliest XBRL-filed value and the value currently on file for the same fiscal period.

Ledger: /company/EPAM/revisions/


## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-08-06. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001352010.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q3 | 2022-09-30 |  |  | 2.63 | reported discrete quarter |
| 2023-Q1 | 2023-03-31 |  |  | 1.73 | reported discrete quarter |
| 2023-Q2 | 2023-06-30 |  |  | 2.03 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 1,152,136,000 | 97,204,000 | 1.65 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 1,157,257,000 | 97,554,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-31 | 1,165,465,000 | 116,243,000 | 1.97 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 1,146,597,000 | 98,645,000 | 1.70 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 1,167,527,000 | 136,346,000 | 2.37 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 1,248,351,000 | 103,299,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 | 1,301,692,000 | 73,482,000 | 1.28 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 1,353,443,000 | 88,026,000 | 1.56 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 1,394,373,000 | 106,816,000 | 1.91 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 1,407,548,000 | 109,354,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 | 1,400,061,000 | 82,521,000 | 1.52 | reported discrete quarter |
| 2026-Q2 | 2026-06-30 | 1,414,767,000 | 102,979,000 | 1.97 | reported discrete quarter |

## Filed narrative (10-K & 10-Q)

## Business

Verbatim Item 1 Business section from EPAM's latest 10-K: [/company/EPAM/business/](/company/EPAM/business/).

## Risk Factors

Verbatim Item 1A Risk Factors from EPAM's latest 10-K: [/company/EPAM/risk-factors/](/company/EPAM/risk-factors/).

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1352010/000135201026000046/epam-20260630.htm

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Published MD&A gate trimmed front/tail over-capture.
Confidence: high
Filing date: 2026-08-06
Report date: 2026-06-30

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our Annual Report on Form 10-K for the year ended December 31, 2025 and the unaudited condensed consolidated financial statements and the related notes included elsewhere in this quarterly report. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from management’s expectations. Factors that could cause such differences are discussed in the sections entitled “Forward-Looking Statements” in this item and in “Part I. Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025. We assume no obligation to update any of these forward-looking statements.

In this quarterly report, “EPAM,” “EPAM Systems, Inc.,” the “Company,” “we,” “us” and “our” refer to EPAM Systems, Inc. and its consolidated subsidiaries.

“EPAM®” is a trademark of EPAM Systems, Inc. All other trademarks and service marks used herein are the property of their respective owners.

Executive Summary

We have used our software engineering expertise to become a leading global provider of digital engineering, cloud and AI-enabled transformation services, as well as a leading business and experience consulting partner for global enterprises and ambitious startups. We address our clients’ transformation challenges by fusing EPAM Continuum’s integrated strategy, experience and technology consulting with our 30+ years of engineering execution to speed our clients’ time to market and drive greater value from their digital investments.

We leverage AI to deliver transformative solutions that accelerate our clients' digital innovation and enhance their competitive edge. Through platforms like EPAM AI/RUN™ and initiatives like DIALX Lab™, we integrate advanced AI technologies into tailored business strategies, driving significant industry impact and fostering continuous innovation.

Through increased specialization in focused verticals and a continued emphasis on strategic partnerships, we are able to deliver technology transformation from start to finish, leveraging agile methodologies, proven client collaboration frameworks, engineering excellence tools, hybrid teams and our award-winning proprietary global delivery platform.

Our clients depend on us to solve their complex technical challenges and rely on our expertise in core engineering, advanced technologies, digital design and intelligent enterprise development. We combine our software engineering heritage with strategic business and innovation consulting, design thinking, and physical-digital capabilities to deliver end-to-end digital transformation services for our clients. We focus on building long-term partnerships with our clients in a market that is constantly challenged by the pressures of digitization through our innovative strategy and scalable software solutions, integrated advisory, business consulting and experience design, and a continually evolving mix of advanced capabilities.

Our global delivery model and centralized support functions, combined with the benefits of scale from the shared use of fixed-cost resources, enhance our productivity levels and enable us to better manage the efficiency of our global operations. As a result, we have created a delivery base whereby our applications, tools, methodologies and infrastructure allow us to seamlessly deliver services and solutions from our global delivery centers to our clients across the world. Our teams of consultants, designers, architects, engineers and trainers have the capabilities and skill sets to deliver business results.

Business Update Regarding the War in Ukraine

Russia’s attack on Ukraine has had, and could continue to have, a material adverse effect on our operations. As of June 30, 2026, Ukraine continues to be a significant delivery location with a large number of delivery professionals operating from safe locations at levels of productivity consistent with those achieved prior to the attack. We have maintained our $100 million humanitarian aid commitment to our people in Ukraine, and as of June 30, 2026, we have $4.6 million remaining to be expensed under this humanitarian commitment.

Our Board of Directors and its committees continue their oversight of our strategic, geopolitical, and cybersecurity risks and the risks related to our geographic locations and expansion. Our Board has received updates from management during both regular and special meetings, while also providing oversight of the risks associated with Russia’s invasion of Ukraine and other strategic areas of importance related to the war.

29

Table of contents

We continue to monitor and respond to the difficult conditions in Ukraine while maintaining a focus on our clients and long-term growth. We execute on our business continuity plans and our global delivery centers have sufficient resources, including infrastructure and capital, to support ongoing operations while continuing to focus on the safety and security of our employees and their families in Ukraine as well as in the broader region. The implementation and execution of our business continuity plans, our humanitarian commitment to our people in Ukraine, and other costs related to the war resulted in materially increased expenses. Some of these expenses continued during this year and we expect some of these expenses will continue to occur in subsequent quarters for some time in the future. The information contained in this section is accurate as of the date hereof but may become outdated due to changing circumstances beyond our control or present awareness.

For additional information on the various risks posed by the attack against Ukraine and the impact in the region as well as other risks to our business, please read “Part I. Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 and “Part II. Item 1A. Risk Factors” in this quarterly report.

Year-to-Date 2026 Developments and Trends

For the first six months of 2026, our revenues were $2.815 billion, an increase of 6.0% from $2.655 billion reported for the same period of 2025. Revenues have been positively impacted by improving demand for our services and foreign exchange fluctuations. Income from operations as a percentage of revenues increased to 9.6% for the six months ended June 30, 2026 as compared to 8.5% for the six months ended June 30, 2025, largely driven by a decrease in cost of revenues (exclusive of depreciation and amortization) as a percentage of revenues. Diluted earnings per share increased to $3.49 for the six months ended June 30, 2026 from $2.84 for the six months ended June 30, 2025, principally resulting from an increase in income from operations as well as reduced common shares outstanding resulting from share repurchases, including repurchases made under the Accelerated Share Repurchase Agreement (“ASR”) in connection with the 2025 Repurchase Program. See Note 10 “Stockholders’ Equity” of our condensed consolidated financial statements in “Part I. Item 1. Financial Statements (Unaudited)” for information regarding the ASR.

Critical Accounting Policies

The discussion and analysis of our financial position and results of operations is based on our unaudited condensed consolidated financial statements which have been prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements in accordance with U.S. GAAP requires us to make estimates and judgments that may affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On a recurring basis, we evaluate our estimates and judgments, including those related to revenue recognition and related allowances, impairments of long-lived assets including intangible assets, goodwill and right-of-use assets, income taxes including the valuation allowance for deferred tax assets, and stock-based compensation. Actual results may differ materially from these estimates under different assumptions and conditions. In addition, our reported financial condition and results of operations could vary due to a change in the application of a particular accounting standard.

During the three and six months ended June 30, 2026, there have been no material changes to our critical accounting policies as reported in our Annual Report on Form 10-K for the year ended December 31, 2025.

30

Table of contents

Results of Operations

The following table presents a summary of our consolidated results of operations for the periods indicated. This information should be read together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this quarterly report. The operating results in any period are not necessarily indicative of the results that may be expected for any future period.

[[GREPCENT_TABLE]]
[["","Three Months Ended June 30,","","Six Months Ended June 30,"],["","2026","","2025","","2026","","2025"],["","(in thousands, except percentages and per share data)"],["Revenues","$","1,414,767","","","100.0","%","","$","1,353,443","","","100.0","%","","$","2,814,828","","","100.0","%","","$","2,655,135","","","100.0","%"],["Operating expenses:"],["Cost of revenues (exclusive of depreciation and amortization)(1)","985,199","","","69.6","%","","964,012","","","71.2","%","","1,997,251","","","71.0","%","","1,916,020","","","72.2","%"],["Selling, general and administrative expenses(2)","245,245","","","17.3","%","","231,681","","","17.1","%","","484,947","","","17.1","%","","450,598","","","16.9","%"],["Depreciation and amortization expense","32,101","","","2.3","%","","31,274","","","2.4","%","","63,640","","","2.3","%","","62,711","","","2.4","%"],["Income from operations","152,222","","","10.8","%","","126,476","","","9.3","%","","268,990","","","9.6","%","","225,806","","","8.5","%"],["Interest and other income (loss), net","(1,821)","","","(0.2)","%","","3,519","","","0.3","%","","(239)","","","\u2014","%","","9,333","","","0.3","%"],["Foreign exchange loss","(9,850)","","","(0.7)","%","","(6,227)","","","(0.5)","%","","(7,552)","","","(0.3)","%","","(16,954)","","","(0.6)","%"],["Income before provision for income taxes","140,551","","","9.9","%","","123,768","","","9.1","%","","261,199","","","9.3","%","","218,185","","","8.2","%"],["Provision for income taxes","37,572","","","2.6","%","","35,742","","","2.6","%","","75,699","","","2.7","%","","56,677","","","2.1","%"],["Net income","$","102,979","","","7.3","%","","$","88,026","","","6.5","%","","$","185,500","","","6.6","%","","$","161,508","","","6.1","%"],["Effective tax rate","26.7","%","","","","28.9","%","","","","29.0","%","","","","26.0","%"],["Diluted earnings per share","$","1.97","","","","","$","1.56","","","","","$","3.49","","","","","$","2.84"]]
[[/GREPCENT_TABLE]]

(1)Includes $22,833 and $18,161 of stock-based compensation expense for the three months ended June 30, 2026 and 2025, respectively, and $45,686 and $42,084 of stock-based compensation expense for the six months ended June 30, 2026 and 2025, respectively.

(2)Includes $23,568 and $20,397 of stock-based compensation expense for the three months ended June 30, 2026 and 2025, respectively, and $50,634 and $44,930 of stock-based compensation expense for the six months ended June 30, 2026 and 2025, respectively.

31

Table of contents

Consolidated Results Review

Revenues

During the three months ended June 30, 2026, our total revenues increased by 4.5% to $1.415 billion compared to the corresponding period in 2025. During the three months ended June 30, 2026 as compared to the same period last year, revenues have been positively impacted by improving

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A (excerpt)

Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/1352010/000135201026000015/epam-20251231.htm
Complete FY 2025 MD&A: /company/EPAM/mda/fy2025/

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary.
Confidence: high
Filing date: 2026-02-26
Report date: 2025-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our audited consolidated financial statements and the related notes included elsewhere in this annual report. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from management’s expectations. Factors that could cause such differences are discussed in the sections entitled “Forward-Looking Statements” and “Part I. Item 1A. Risk Factors.” We assume no obligation to update any of these forward-looking statements.

Executive Summary

We have used our software engineering expertise to become a leading global provider of digital engineering, cloud and AI-enabled transformation services, as well as a leading business and experience consulting partner for global enterprises and ambitious startups. We address our clients’ transformation challenges by fusing EPAM Continuum’s integrated strategy, experience and technology consulting with our 30+ years of engineering execution to speed our clients’ time to market and drive greater value from their digital investments.

We leverage AI to deliver transformative solutions that accelerate our clients' digital innovation and enhance their competitive edge. Through platforms like EPAM AI/RUN™ and initiatives like DIALX Lab™, we integrate advanced AI technologies into tailored business strategies, driving significant industry impact and fostering continuous innovation.

Through increased specialization in focused verticals and a continued emphasis on strategic partnerships, we are able to deliver technology transformation from start to finish, leveraging agile methodologies, proven client collaboration frameworks, engineering excellence tools, hybrid teams and our award-winning proprietary global delivery platform.

28

Table of Contents

Our clients depend on us to solve their complex technical challenges and rely on our expertise in core engineering, advanced technologies, digital design and intelligent enterprise development. We combine our software engineering heritage with strategic business and innovation consulting, design thinking, and physical-digital capabilities to deliver end-to-end digital transformation services for our clients. We focus on building long-term partnerships with our clients in a market that is constantly challenged by the pressures of digitization through our innovative strategy and scalable software solutions, integrated advisory, business consulting and experience design, and a continually evolving mix of advanced capabilities.

Our global delivery model and centralized support functions, combined with the benefits of scale from the shared use of fixed-cost resources, enhance our productivity levels and enable us to better manage the efficiency of our global operations. As a result, we have created a delivery base whereby our applications, tools, methodologies and infrastructure allow us to seamlessly deliver services and solutions from our global delivery centers to our clients across the world. Our teams of consultants, designers, architects, engineers and trainers have the capabilities and skill sets to deliver business results.

Business Update Regarding the War in Ukraine

Russia’s attack on Ukraine has had, and could continue to have a material adverse effect on our operations. As of December 31, 2025, Ukraine continues to be a significant delivery location with a large number of delivery professionals operating from safe locations at levels of productivity consistent with those achieved prior to the attack. We have maintained our $100 million humanitarian aid commitment to our people in Ukraine, and as of December 31, 2025, we have $10.1 million remaining to be expensed under this humanitarian commitment.

Our Board of Directors and its committees continue their oversight of our strategic, geopolitical, and cybersecurity risks and the risks related to our geographic locations and expansion. Our Board has received updates from management during both regular and special meetings, while also providing oversight of the risks associated with Russia’s invasion of Ukraine and other strategic areas of importance related to the war.

We continue to monitor and respond to the difficult conditions in Ukraine while maintaining a focus on our clients and long-term growth. We execute on our business continuity plans and our global delivery centers have sufficient resources, including infrastructure and capital, to support ongoing operations while continuing to focus on the safety and security of our employees and their families in Ukraine as well as in the broader region. The implementation and execution of our business continuity plans, our humanitarian commitment to our people in Ukraine, and other costs related to the war resulted in materially increased expenses. Some of these expenses continued during this year and we expect some of these expenses will continue to occur in subsequent quarters for some time in the future. The information contained in this section is accurate as of the date hereof but may become outdated due to changing circumstances beyond our control or present awareness.

For additional information on the various risks posed by the attack against Ukraine and the impact in the region as well as other risks to our business, please read “Part I. Item 1A. Risk Factors” included in this Annual Report on Form 10-K.

Critical Accounting Policies

We prepare our consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”), which require us to make judgments, estimates and assumptions that affect: (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities at the end of each reporting period and (iii) the reported amounts of revenues and expenses during each reporting period. We evaluate these estimates and assumptions based on historical experience, knowledge and assessment of current business and other conditions, and expectations regarding the future based on available information and reasonable assumptions, which together form a basis for making judgments about matters not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. Some of our accounting policies require higher degrees of judgment than others in their application. When reviewing our audited consolidated financial statements, you should consider (i) our selection of critical accounting policies, (ii) the judgment and other uncertainties affecting the application of such policies and (iii) the sensitivity of reported results to changes in conditions and assumptions. We consider the policies discussed below to be critical to an understanding of our consolidated financial statements as their application places significant demands on the judgment of our management.

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An accounting policy is considered critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the consolidated financial statements. We believe that the following critical accounting policies are the most sensitive and require more significant estimates and assumptions used in the preparation of our consolidated financial statements. You should read the following descriptions of critical accounting policies, judgments and estimates in conjunction with our audited consolidated financial statements and other disclosures included elsewhere in this annual report. Additional information on our policies is in Note 1 “Organization and Summary of Significant Accounting Policies” in the notes to our consolidated financial statements in this Annual Report on Form 10-K.

Revenues — We recognize revenues when control of goods or services is passed to a client in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Such control is generally transferred over time based on satisfaction of obligations stipulated by the contract. Consideration expected to be received may consist of both fixed and variable components and is allocated to each separately identifiable performance obligation based on the performance obligation’s relative standalone selling price. Variable consideration usually takes the form of volume-based discounts, service level credits, price concessions or incentives. Determining the estimated amount of such variable consideration involves assumptions and judgment that can have an impact on the amount of revenues reported.

We derive revenues from a variety of service arrangements, which have been evolving to provide more customized and integrated solutions to clients by combining software engineering with customer experience design, business consulting, strategy, and technology innovation services in areas such as cloud platforms, cybersecurity and artificial intelligence. Fees for these contracts may be in the form of time-and-materials or fixed-price arrangements. We generate the majority of our revenues under time-and-materials contracts, which are billed using hourly, daily or monthly rates to determine the amounts to be charged directly to the client. We apply a practical expedient and revenues related to time-and-materials contracts are recognized based on the right to invoice for services performed.

Fixed-price contracts include maintenance and support arrangements, which may exceed one year in duration. Maintenance and support arrangements generally relate to the provision of ongoing services and revenues for such contracts are recognized ratably over the expected service period. Fixed-price contracts also include application development arrangements, where progress towards satisfaction of the performance obligation is measured using input or output methods and input methods are used only when there is a direct correlation between hours incurred and the end product delivered. Assumptions, risks and uncertainties inherent in the estimates used to measure progress could affect the amount of revenues, receivables and deferred revenues at each reporting period.

Revenues from licenses which have significant stand-alone functionality are recognized at a point in time when control of the license is transferred to the client. Revenues from licenses which do not have stand-alone functionality are recognized over time. If there is an uncertainty about the receipt of payment for the services, revenue recognition is deferred until the uncertainty is sufficiently resolved. We apply a practical expedient and do not assess the existence of a significant financing component if the period between transfer of the service to a client and when the client pays for that service is one year or less.

We report gross reimbursable “out-of-pocket” expenses incurred as both revenues and cost of revenues in the consolidated statements of income.

Business Combinations — We account for business combinations using the acquisition method which requires us to estimate the fair value of identifiable assets acquired and liabilities assumed, including any contingent consideration, to properly allocate purchase price to the individual assets acquired and liabilities assumed. A substantial portion of the purchase price is typically allocated to goodwill and other intangible assets, which typically include customer relationships, software, trade names, non-competition agreements, and assembled

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]

Read the full FY 2025 MD&A: /company/EPAM/mda/fy2025/
All MD&A years: /company/EPAM/mda/


## MD&A history

Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page.

- [FY 2024 MD&A](/company/EPAM/mda/fy2024/): filed 2025-02-28; accession 0001352010-25-000007 (https://www.sec.gov/Archives/edgar/data/1352010/000135201025000007/epam-20241231.htm)
- [FY 2023 MD&A](/company/EPAM/mda/fy2023/): filed 2024-02-22; accession 0001352010-24-000008 (https://www.sec.gov/Archives/edgar/data/1352010/000135201024000008/epam-20231231.htm)
- [FY 2022 MD&A](/company/EPAM/mda/fy2022/): filed 2023-02-24; accession 0001352010-23-000013 (https://www.sec.gov/Archives/edgar/data/1352010/000135201023000013/epam-20221231.htm)
- [FY 2021 MD&A](/company/EPAM/mda/fy2021/): filed 2022-02-25; accession 0001352010-22-000020 (https://www.sec.gov/Archives/edgar/data/1352010/000135201022000020/epam-20211231.htm)




## Macro cross-references

Indicators mapped to this company's SIC classification (industry 7371 Services-Computer Programming Services) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim.

- [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity

Macro-to-micro threads including this sector: [US labor market](/thread/us-labor-market/), [Growth & output](/thread/growth-output/), [Government finances](/thread/government-finances/), [Sector employment](/thread/sector-employment/).

All macro indicators: /indicators/


## For LLMs & downloads

Markdown twin: /company/EPAM.md · JSON record: /company/EPAM.json · verified financials: /company/EPAM/financials.json / /company/EPAM/financials.csv · machine TOC for the whole site: /llms.txt