EPAM Systems (EPAM) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue reached $1.353 billion, up 18% year-over-year, marking the third consecutive quarter of positive organic growth and exceeding expectations, with broad-based gains across all verticals and regions.

• AI-native services and platforms are driving incremental demand, with significant investments in talent, delivery hubs, and proprietary AI platforms.

• CEO transition plan is on track, with Balazs Fejes set to become CEO by September 1, 2025, as Arkadiy Dobkin moves to Executive Chairman.

• Revenues for the first six months of 2025 reached $2.655 billion, up 14.8% year-over-year, driven by improved demand, 2024 acquisitions, and favorable foreign exchange rates.

• Diluted EPS for the six months ended June 30, 2025, was $2.84, down from $3.67 in the prior year, reflecting lower operating income and reduced tax benefits from equity awards.

Financial highlights

• Q2 2025 revenue was $1.353 billion, up 18% year-over-year; organic constant currency growth was 5.3%.

• GAAP gross margin was 28.8% (down from 29.3% last year); non-GAAP gross margin was 30.1% (down from 30.8%).

• GAAP income from operations was $126.5 million (9.3% of revenue); non-GAAP income from operations was $202.9 million (15% of revenue).

• GAAP diluted EPS was $1.56 (down $0.14 year-over-year); non-GAAP diluted EPS was $2.77 (up $0.32 year-over-year).

• Free cash flow was $43 million, with cash and equivalents just over $1 billion at quarter end.

Outlook and guidance

• Full-year 2025 revenue growth expected at 13%-15%, with inorganic contribution of ~9%.

• Organic constant currency revenue growth now expected at 3%-5% for the year.

• Q3 2025 revenue guidance: $1.365-$1.380 billion, 17.6% year-over-year growth at midpoint; organic constant currency growth of 6.2%.

• Full-year GAAP income from operations expected at 9%-10%; non-GAAP at 14.5%-15.5%.

• Full-year GAAP diluted EPS expected at $6.48-$6.64; non-GAAP diluted EPS at $10.96-$11.12.