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EPAM Systems Reports Strong Financial Performance for Q4 and Full Year 2024

Overview of Results
On February 20, 2025, EPAM Systems, Inc. (NYSE: EPAM), a prominent player in digital transformation and product engineering, released its financial outcomes for the fourth quarter and the entire year of 2024. The results indicate a robust performance, with Q4 revenues reported at $1.248 billion, a 7.9% increase compared to the previous year. The full-year revenue reached $4.728 billion, marking a modest 0.8% growth.

Fourth Quarter Highlights

• - Quarterly Revenue: EPAM's revenue stood at $1.248 billion, representing an increase of $91.1 million over Q4 2023. In terms of organic constant currency, revenues grew by 1.0%.
• - Income from Operations: The GAAP income from operations was recorded at $136.5 million, which is an 11.4% rise year-over-year. Non-GAAP figures showed an operational income of $208.2 million, reflecting a nearly 3.9% increase.
• - Earnings Per Share (EPS): The diluted GAAP EPS was $1.80, up 8.4%, while the Non-GAAP diluted EPS reached $2.84, marking a 3.3% improvement.

EPAM's CEO Arkadiy Dobkin expressed satisfaction with the quarter's results, emphasizing the company's successful navigations through a challenging year. The acquisitions of NEORIS and First Derivative were highlighted as key strategies to bolster their offerings across Latin America and enhance financial service capabilities.

Full Year Insights
For the entirety of 2024, EPAM's revenues amounted to $4.728 billion, representing a small increment of $37.4 million or 0.8% year-over-year. Notably, the company benefitted from a $68.8 million government incentive program for research and development in Poland, albeit with an impact on tax rates that balanced out some gains.

• - Income from Operations for the Year: The GAAP income from operations was $544.6 million, representing an increase of 8.6% compared to 2023. The Non-GAAP income from operations was $779.2 million, showing a slight increase of 1.8%.
• - EPS Growth: For the full year, the diluted GAAP EPS rose to $7.84 (an 11.0% increase), while the Non-GAAP diluted EPS was $10.86, exhibiting a 2.5% growth.

Financial Metrics and Cash Flow
Despite these successes, cash flow saw a reduction, with operating activities generating $130.3 million in Q4, down from $171.4 million a year earlier. Additionally, the company repurchased shares worth $13.0 million in Q4, totaling $398.0 million for the year, with $437.0 million remaining under its repurchase authorization.

As of December 31, 2024, EPAM's cash, cash equivalents, and restricted cash totaled $1.290 billion, down by 36.8% compared to previous figures largely due to acquisition expenditures.

Looking Ahead to 2025
EPAM maintains an optimistic outlook for 2025, projecting revenue growth in the range of 10.0% to 14.0%. Anticipated operational margins are set at 9.0% to 10.0% for GAAP incomes, while non-GAAP operational income is expected to be between 14.5% to 15.5% of revenues. The first quarter outlook includes revenues projected between $1.275 billion and $1.290 billion, aiming for a year-over-year rise of 10.0% at the midpoint.

Conclusion
EPAM Systems continues to adapt and grow, leveraging strategic acquisitions and focusing on talent and technology investments. As the market looks for stability, EPAM appears well-positioned to capture opportunities in the evolving digital landscape.