stockrowWhat it does
EPAM Systems helps organizations design, build and run software and other digital services. Its work combines software engineering with business consulting, customer-experience design, cloud technology, cybersecurity and artificial intelligence. Clients include global enterprises and startups that need help changing their technology or the way they serve customers.
An engagement can start with advice on a business problem and continue through selecting technology, building and testing software, integrating it with existing systems, and maintaining it after launch. EPAM also helps clients move applications and data to cloud platforms, modernize older systems and prepare their data and infrastructure for AI applications. Its teams include consultants, designers, architects, engineers and trainers.
The company serves clients in financial services; consumer goods, retail and travel; software and high tech; business information and media; and life sciences and healthcare. It also works in industries such as energy, telecommunications, automotive and manufacturing, as well as for government entities. Its Empathy Lab agency combines marketing, design, data and engineering services.
EPAM uses its own tools and platforms, including EPAM AI/RUN, alongside technologies selected by its clients. Clients usually own the intellectual property in the software, products and solutions EPAM develops for them; EPAM may license relevant pre-existing technology to them for use with those solutions.
The business traces its origins to a predecessor company. EPAM is headquartered in Newtown, Pennsylvania, and Balazs Fejes is president and chief executive officer.
How it makes money
EPAM earns revenue by providing engineering, consulting and other technology services under client contracts. Its business is managed through Americas and Europe segments, with client relationships generally assigned according to geographic location and management responsibility. A client can be assigned to a team in another region when the relationship is managed there.
The majority of revenue comes from time-and-materials contracts. Under these arrangements, EPAM bills for work performed using hourly, daily or monthly rates. It recognizes the related revenue based on its right to invoice for services performed. This model connects revenue to the amount of client work delivered, rather than to the sale of a standardized product.
EPAM also has fixed-price contracts. These include application development projects and maintenance and support arrangements. Maintenance and support can continue for extended periods, with revenue generally recognized over the expected service period. For fixed-price development, EPAM measures progress using methods tied to work completed or outputs delivered. Contract consideration can include variable elements such as discounts, service credits, concessions or incentives.
Revenue is generally recognized over time as EPAM satisfies its contractual obligations. Some software licenses have stand-alone functionality and are recognized when control transfers; licenses without stand-alone functionality are recognized over time. Client relationships can lead to repeat business: account managers work with existing clients to identify additional opportunities, and the company also seeks new accounts through dedicated sales teams.
AI-native work includes services centered on AI; EPAM distinguishes it from revenue for work that is assisted by AI.
Customers and how it sells
EPAM serves organizations across several industries rather than relying on one type of customer. Financial-services clients include banks, insurers, payment companies and investment firms. Other customers include retailers and travel companies, software and technology businesses, media and information providers, pharmaceutical companies and healthcare organizations.
Client relationships can last for years. EPAM’s client service professionals and account managers maintain direct relationships and pursue additional work with existing customers. Its sales teams also seek new accounts, while inbound requests and referrals bring further opportunities.
EPAM manages its business through Americas and Europe segments. The Americas is its largest region. Its quarterly regional descriptions also include EMEA and APAC, which are not the same as the annual segment labels.
EPAM delivers work at client sites and from off-site and offshore locations. India was its largest delivery location at the end of the fiscal year. Ukraine remained a significant delivery location. EPAM also had delivery teams in Poland, Belarus and Mexico.
Suppliers and costs
EPAM’s delivery model depends on skilled employees rather than manufacturing products. At the end of the fiscal year, it had approximately 62,850 employees, including delivery professionals. It recruits and trains technical staff and uses teams in different locations to serve clients. Delivery costs and direct selling costs are included in segment operating profit, along with an allocation of some shared-services expenses.
EPAM monitors utilization: the proportion of delivery professionals’ capacity deployed on client work. Hiring, staffing and employee location are part of how it manages that rate. Wage, equity compensation and other compensation increases can raise costs, while unassigned employees following project delays or cancellations can compress margins.
The company uses shared fixed-cost resources, centralized support functions and its own delivery tools across its operations. It also invests in training, security, sales and AI capabilities. Some corporate expenses, stock-based compensation, acquisition-related costs and amortization of acquired intangible assets are not allocated to individual segments.
EPAM reported improved pricing and better fixed-fee profitability, though fixed-fee work remained below the company average. It expects a lower benefit from Poland’s research and development incentive program in the following year.
- Revenue$5.5B
- Cost of revenue−$3.9B
- Selling, general and administrative−$928.7M
- Other operating costs−$124.8M
- Operating income$520.0M
Competitive position
EPAM competes for technology services work against global providers, specialized consulting firms, boutique digital companies and outsourcing businesses. Named competitors include Accenture, Capgemini, Cognizant Technology Solutions, Genpact, Endava, Globant, Infosys, Tata Consultancy Services and Wipro. It also faces smaller local companies and providers operating from lower-cost labor markets.
The company identifies technical expertise, industry knowledge, the ability to deliver a complete solution, on-time delivery, recruiting, responsiveness, scale and price among the factors clients consider. EPAM combines consulting, design, engineering and ongoing services, and uses its global delivery centers and shared tools to serve clients across locations.
Our reading: Long client relationships provide some competitive protection because account teams can identify follow-on projects, but those relationships are not guaranteed commitments. Clients can terminate or choose not to renew contracts.
Our reading: EPAM’s engineering workforce and global delivery model provide a capability-based advantage, but their strength depends on continued recruiting, training and effective staffing. Competitors also have access to delivery talent across multiple markets.
Our reading: Proprietary tools and AI frameworks can support delivery, but they do not establish exclusive ownership of most client solutions: clients usually own the intellectual property in what EPAM builds for them. The company must also keep adapting its services as AI tools change how software is developed.
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| Accenture | Technology services and transformation | Medium |
| Capgemini | Technology services and transformation | Medium |
| Cognizant Technology Solutions | Technology services and transformation | Medium |
| Genpact | Technology services and transformation | Medium |
| Endava | Technology services and transformation | Medium |
| Globant | Technology services and transformation | Medium |
| Infosys | Technology services and transformation | Medium |
| Tata Consultancy Services | Technology services and transformation | Medium |
Growth opportunities
EPAM seeks growth by expanding work with existing clients, acquiring new accounts and making acquisitions that add industry expertise, services, clients or geographic reach. Its account managers pursue opportunities within established relationships, while dedicated sales teams target new customers. The company also invests in partnerships and sales capabilities.
A focus is AI-native transformation. EPAM provides AI strategy and implementation alongside data engineering, platform modernization and cloud infrastructure work that clients may need before deploying AI applications. It uses proprietary tools and repeatable frameworks in this work. The company expects further AI-native revenue during the year.
EPAM has won large multi-year client engagements and expects them to begin contributing revenue in the first quarter of the following year, with greater contributions in the second quarter. It is adding employees to meet anticipated demand, including work from those deals. The company also reported improving revenue from new customers in the latest quarter as its sales investments began to contribute.
In the latest quarter, financial-services and life sciences and healthcare revenues grew year-over-year. Other verticals declined, including software and high tech. In the Americas, EPAM expects its North American business to continue to underperform in the following quarter, although it has seen improvement in some areas of demand.
- $3.8BFY2021
- $4.8BFY2022
- $4.7BFY2023
- $4.7BFY2024
- $5.5BFY2025
Structural risks
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Geopolitical disruption: Instability where EPAM has substantial personnel or operations can affect its clients, service delivery and financial results. Ukraine remains a significant delivery location, and Russia’s attack has had and could continue to have a material adverse effect on operations. EPAM’s outlook assumes its Ukraine centers can continue delivering at similar productivity levels.
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AI and technology changes: AI-based tools, automation and low-code or no-code development are creating new forms of competition. EPAM could become less competitive if it cannot keep pace with AI adoption or use AI effectively in workforce planning and deployment.
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Client commitments and demand: Clients generally do not make long-term commitments and may terminate projects or decline to renew. Delays or cancellations can leave employees unassigned and compress margins until they can be moved to paying work. Changes in client priorities or spending can also reduce demand.
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People and utilization: EPAM must recruit, train and retain skilled professionals while matching headcount and skills to client requirements. Increases in compensation can raise costs, and uneven demand can make it harder to maintain productive staffing levels.
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Security and regulation: Security breaches or other network disruptions can expose EPAM to liability and harm its business and reputation. Its operations are also subject to privacy, sanctions and other rules across multiple jurisdictions; compliance requires resources, and non-compliance can lead to penalties.
Leadership
Arkadiy Dobkin Executive is chair, while Balazs Fejes is president and chief executive officer.
| Name | Role | Since | Total pay, FY2025 |
|---|---|---|---|
| Balazs Fejes | President and Chief Executive Officer | — | $5.2 million |
| Jason Peterson | Senior Vice President, Chief Financial Officer and Treasurer | — | $4.2 million |
| Arkadiy Dobkin Executive | Chair | — | $8.1 million |
| Viktar Dvorkin | Senior Vice President, Global Head of Engineering, Cloud and Enterprise Platforms | — | $2.9 million |
| Larry Solomon | Senior Vice President, Chief People Officer and Head of Operations | — | $2.9 million |
| Elaina Shekhter | Senior Vice President, Chief Strategy and Transformation Officer | — | $2.3 million |
Bottom line
Our reading
EPAM is a people-intensive technology services business built around recurring client relationships, engineering expertise and delivery teams spread across multiple countries. Its ability to expand AI work and win larger engagements sits alongside the need to replace changing client demand, keep employees productively assigned and manage geopolitical exposure. The company’s own tools support delivery, but client contracts and continued execution remain central to the business.