EPAM Systems Reports 19.4% Revenue Growth in Q3 2025, Net Income Declines

EPAM Systems, Inc. reported a significant increase in financial performance for the third quarter of 2025, with revenues reaching $1.394 billion, a 19.4% increase from $1.168 billion in the same period last year. For the nine months ending September 30, 2025, total revenues were $4.050 billion, up 16.4% from $3.480 billion in 2024. However, net income for the third quarter decreased to $106.8 million, or $1.91 per diluted share, compared to $136.3 million, or $2.37 per diluted share, in the prior year. The decline in profitability was attributed to increased operating expenses and lower government incentives related to R&D activities in Poland.

The company experienced notable changes in its operational metrics, with a rise in costs associated with revenues, which increased to 70.5% of total revenues in Q3 2025, compared to 65.4% in Q3 2024. This increase was primarily driven by acquisitions made in 2024, including NEORIS and First Derivative, as well as higher variable compensation expenses. Selling, general, and administrative expenses also rose to $234.9 million, reflecting a 13.6% increase year-over-year, largely due to the same acquisitions and increased variable compensation.

In terms of strategic developments, EPAM completed one acquisition in 2025, expanding its AI-enabled business operations capabilities. The company also maintained a humanitarian commitment of $100 million to support employees affected by the ongoing conflict in Ukraine, with $12.5 million remaining to be expensed as of September 30, 2025. The company’s employee headcount remained stable, with a focus on optimizing operations through cost reduction programs initiated in previous quarters.

Geographically, EPAM's revenues were bolstered by strong performance in the Americas and Europe, with the Americas segment generating $799.9 million in Q3 2025, a 13.5% increase from the previous year. The Europe segment saw a more substantial growth of 28.4%, reaching $594.5 million, driven by acquisitions and favorable foreign exchange rates. The company reported that approximately 39.9% of its consolidated revenues were denominated in currencies other than the U.S. dollar, exposing it to foreign exchange risks, which it manages through a hedging program.

Looking ahead, EPAM Systems remains cautiously optimistic about its growth trajectory, despite the challenges posed by geopolitical tensions and market conditions. The company plans to continue leveraging its global delivery model and strategic partnerships to enhance its service offerings and maintain competitive advantages in the digital transformation space.