EPAM Systems, Inc. reported a revenue increase of 11.7% for the first quarter of 2025, reaching $1.302 billion compared to $1.165 billion in the same period of 2024. The company's net income for the quarter was $73.5 million, down from $116.2 million year-over-year, resulting in diluted earnings per share of $1.28, a decrease from $1.97. The decline in profitability was attributed to higher operating expenses, particularly in cost of revenues, which rose to $952 million, representing 73.1% of total revenues, compared to 71.6% in the prior year.
The company experienced significant operational changes, including the completion of two major acquisitions in 2024: First Derivative Ltd and Neoris N.V., which contributed to the revenue growth. The acquisition of First Derivative, a managed services and consulting business, was valued at $300.7 million, while Neoris, a global advanced technology consultancy, was acquired for $626.3 million. These acquisitions are expected to enhance EPAM's capabilities in the financial services and technology sectors, particularly in the Americas and Europe.
In terms of operational metrics, EPAM's employee headcount remained stable, with 56.7 million shares outstanding as of April 30, 2025. The company reported a foreign exchange loss of $10.7 million, which impacted its financial results, reflecting the volatility in currency markets. Additionally, the company recognized $12.1 million in government incentives related to research and development activities in Poland, which helped offset some of the increased costs.
Looking ahead, EPAM Systems remains focused on navigating the challenges posed by the ongoing geopolitical situation in Ukraine, where it has maintained a significant operational presence. The company has committed $100 million in humanitarian aid to support its employees and their families affected by the conflict. Management expressed optimism about future growth, driven by improving demand for its services and the strategic integration of its recent acquisitions, while also acknowledging the potential risks associated with market conditions and geopolitical developments.
About EPAM Systems, Inc.
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