Digital engineering services company EPAM Systems (NYSE: EPAM) reported revenue ahead of Wall Street’s expectations in Q4 CY2025, with sales up 12.8% year on year to $1.41 billion. The company expects next quarter’s revenue to be around $1.39 billion, close to analysts’ estimates. Its non-GAAP profit of $3.26 per share was 3.2% above analysts’ consensus estimates.

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"We are pleased to deliver a strong fourth quarter and full year 2025, notably scaling and accelerating our AI-native revenues. Our 2025 performance reflects our steady execution and meaningful progress in driving business transformation and AI foundational readiness for our clients," said Balazs Fejes, CEO & President, EPAM.

Company Overview

Founded in 1993 during the early days of offshore software development, EPAM Systems (NYSE: EPAM) provides digital engineering, cloud, and AI transformation services to help global enterprises and startups modernize their technology systems and create digital products.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years.

With $5.46 billion in revenue over the past 12 months, EPAM is one of the larger companies in the business services industry and benefits from a well-known brand that influences purchasing decisions.

As you can see below, EPAM’s sales grew at an incredible 15.5% compounded annual growth rate over the last five years. This is an encouraging starting point for our analysis because it shows EPAM’s demand was higher than many business services companies.

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. EPAM’s annualized revenue growth of 7.9% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

We can dig further into the company’s sales dynamics by analyzing its constant currency revenue, which excludes currency movements that are outside their control and not indicative of demand. Over the last two years, its constant currency sales averaged 2.1% year-on-year growth. Because this number is lower than its normal revenue growth, we can see that foreign exchange rates have boosted EPAM’s performance.

This quarter, EPAM reported year-on-year revenue growth of 12.8%, and its $1.41 billion of revenue exceeded Wall Street’s estimates by 1.1%. Company management is currently guiding for a 7% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 6.6% over the next 12 months, similar to its two-year rate. Still, this projection is above average for the sector and implies the market sees some success for its newer products and services.

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Operating Margin

EPAM has done a decent job managing its cost base over the last five years. The company has produced an average operating margin of 11.4%, higher than the broader business services sector.

Analyzing the trend in its profitability, EPAM’s operating margin decreased by 4.9 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

In Q4, EPAM generated an operating margin profit margin of 10.6%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

EPAM’s EPS grew at a remarkable 12.7% compounded annual growth rate over the last five years. However, this performance was lower than its 15.5% annualized revenue growth, telling us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes.

Diving into the nuances of EPAM’s earnings can give us a better understanding of its performance. As we mentioned earlier, EPAM’s operating margin was flat this quarter but declined by 4.9 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For EPAM, its two-year annual EPS growth of 4.3% was lower than its five-year trend. This wasn’t great, but at least the company was successful in other measures of financial health.

In Q4, EPAM reported adjusted EPS of $3.26, up from $2.84 in the same quarter last year. This print beat analysts’ estimates by 3.2%. Over the next 12 months, Wall Street expects EPAM’s full-year EPS of $11.52 to grow 9.2%.

Key Takeaways from EPAM’s Q4 Results

It was encouraging to see EPAM beat analysts’ full-year EPS guidance expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. Overall, this print had some key positives. Investors were likely hoping for more, and shares traded down 3.3% to $162.13 immediately after reporting.

Should you buy the stock or not? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).