EPAM Systems (EPAM) Q3 2025 earnings summary

Executive summary

• Q3 2025 revenues reached $1.394 billion, up 19.4% year-over-year, driven by AI-native demand, foundational data/cloud services, and strong delivery execution.

• Five out of six verticals grew year-over-year, with notable strength in emerging verticals, financial services, and software/high-tech.

• AI initiatives are a key growth driver, with 60-70% of AI-native projects expanding from proof of concept to larger programs.

• Strategic investments in AI talent, playbooks, and proprietary IP are differentiating offerings and expanding client wallet share.

• Recognized as a leader in AI consultancy, digital engineering, and experience design by industry analysts and partners.

Financial highlights

• Q3 revenue was $1.394 billion, up 19.4% year-over-year; U.S. revenues grew 7.4% to $716.2 million.

• GAAP gross margin was 29.5% (down from 34.6% last year); non-GAAP gross margin was 31%.

• GAAP income from operations was $145 million (10.4% of revenue); non-GAAP income from operations was $222.8 million (16% of revenue).

• GAAP diluted EPS was $1.91 (down $0.46 year-over-year); non-GAAP diluted EPS was $3.08 (down $0.04 year-over-year).

• Cash flow from operations reached $295 million in Q3; nine-month operating cash flow was $372 million.

Outlook and guidance

• Full-year 2025 revenue guidance raised to $5.430–$5.445 billion (15% growth at midpoint), with inorganic contribution of 9.1%.

• Full-year GAAP diluted EPS expected at $6.75–$6.83; non-GAAP diluted EPS at $11.36–$11.44.

• Q4 revenue guidance: $1.380–$1.395 billion (11.1% year-over-year growth at midpoint), with 4.4% organic constant currency growth.

• Profitability expected to improve, with non-GAAP operating margin in the 15%-15.3% range.

• Management expects continued cost optimization actions through Q1 2026, with $14 million in additional restructuring charges anticipated.