# EPAM Systems, Inc. (EPAM) Informational only - not investment advice. CIK: 0001352010 SIC: 7371 Services-Computer Programming Services SIC breadcrumb: [Services](/division/I/) > [Business Services](/major-group/73/) > [SIC 7371 Services-Computer Programming Services](/industry/7371/) Latest 10-K filed: 2026-02-26 SEC page: https://www.sec.gov/edgar/browse/?CIK=1352010 Filing source: https://www.sec.gov/Archives/edgar/data/1352010/000135201026000015/epam-20251231.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 5457056000 | USD | 2025 | 2026-02-26 | | Net income | 377678000 | USD | 2025 | 2026-02-26 | | Assets | 4902136000 | USD | 2025 | 2026-02-26 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-26. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001352010.json. Derived margins are computed from the extracted annual SEC facts. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | 1,160,132,000 | 1,450,448,000 | 1,842,912,000 | 2,293,798,000 | 2,659,478,000 | 3,758,144,000 | 4,824,698,000 | 4,690,540,000 | 4,727,940,000 | 5,457,056,000 | | Net income | 99,266,000 | 72,760,000 | 240,256,000 | 261,057,000 | 327,160,000 | 481,652,000 | 419,416,000 | 417,083,000 | 454,533,000 | 377,678,000 | | Operating income | 133,696,000 | 172,946,000 | 245,764,000 | 302,850,000 | 379,324,000 | 542,316,000 | 572,966,000 | 501,239,000 | 544,584,000 | 520,003,000 | | Diluted EPS | 1.87 | 1.32 | 4.24 | 4.53 | 5.60 | 8.15 | 7.09 | 7.06 | 7.84 | 6.72 | | Assets | 925,811,000 | 1,250,256,000 | 1,611,802,000 | 2,244,208,000 | 2,721,332,000 | 3,523,227,000 | 4,009,151,000 | 4,352,365,000 | 4,750,473,000 | 4,902,136,000 | | Liabilities | 144,399,000 | 275,309,000 | 349,206,000 | 648,063,000 | 738,314,000 | 1,027,390,000 | 1,006,141,000 | 880,895,000 | 1,119,322,000 | 1,224,328,000 | | Stockholders' equity | 781,412,000 | 974,947,000 | 1,262,596,000 | 1,596,145,000 | 1,983,018,000 | 2,487,117,000 | 3,001,532,000 | 3,470,891,000 | 3,629,211,000 | 3,677,226,000 | | Cash and cash equivalents | 362,025,000 | 582,585,000 | 770,560,000 | 936,552,000 | 1,322,143,000 | 1,446,625,000 | 1,681,344,000 | 2,036,235,000 | 1,286,267,000 | 1,296,077,000 | | Net margin | 8.56% | 5.02% | 13.04% | 11.38% | 12.30% | 12.82% | 8.69% | 8.89% | 9.61% | 6.92% | | Operating margin | 11.52% | 11.92% | 13.34% | 13.20% | 14.26% | 14.43% | 11.88% | 10.69% | 11.52% | 9.53% | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001352010.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q2 | 2022-06-30 | | | 0.32 | reported discrete quarter | | 2022-Q3 | 2022-09-30 | | | 2.63 | reported discrete quarter | | 2023-Q2 | 2023-03-31 | | 102,292,000 | | reported discrete quarter | | 2023-Q1 | 2023-03-31 | | | 1.73 | reported discrete quarter | | 2023-Q2 | 2023-06-30 | 1,170,206,000 | | 2.03 | reported discrete quarter | | 2023-Q3 | 2023-06-30 | | 120,033,000 | | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 1,152,136,000 | | 1.65 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | 1,157,257,000 | 97,554,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | 1,165,465,000 | 116,243,000 | 1.97 | reported discrete quarter | | 2024-Q2 | 2024-03-31 | | 116,243,000 | | reported discrete quarter | | 2024-Q3 | 2024-06-30 | | 98,645,000 | | reported discrete quarter | | 2024-Q2 | 2024-06-30 | 1,146,597,000 | | 1.70 | reported discrete quarter | | 2024-Q3 | 2024-09-30 | 1,167,527,000 | | 2.37 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | 1,248,351,000 | 103,299,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 1,301,692,000 | 73,482,000 | 1.28 | reported discrete quarter | | 2025-Q2 | 2025-03-31 | | 73,482,000 | | reported discrete quarter | | 2025-Q3 | 2025-06-30 | | 88,026,000 | | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 1,353,443,000 | | 1.56 | reported discrete quarter | | 2025-Q3 | 2025-09-30 | 1,394,373,000 | | 1.91 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | 1,407,548,000 | 109,354,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 1,400,061,000 | 82,521,000 | 1.52 | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1352010/000135201026000029/epam-20260331.htm Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high Filing date: 2026-05-07 Report date: 2026-03-31 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion and analysis of our financial condition and results of operations together with our Annual Report on Form 10-K for the year ended December 31, 2025 and the unaudited condensed consolidated financial statements and the related notes included elsewhere in this quarterly report. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from management’s expectations. Factors that could cause such differences are discussed in the sections entitled “Forward-Looking Statements” in this item and in “Part I. Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025. We assume no obligation to update any of these forward-looking statements. In this quarterly report, “EPAM,” “EPAM Systems, Inc.,” the “Company,” “we,” “us” and “our” refer to EPAM Systems, Inc. and its consolidated subsidiaries. “EPAM®” is a trademark of EPAM Systems, Inc. All other trademarks and service marks used herein are the property of their respective owners. Executive Summary We have used our software engineering expertise to become a leading global provider of digital engineering, cloud and AI-enabled transformation services, as well as a leading business and experience consulting partner for global enterprises and ambitious startups. We address our clients’ transformation challenges by fusing EPAM Continuum’s integrated strategy, experience and technology consulting with our 30+ years of engineering execution to speed our clients’ time to market and drive greater value from their digital investments. We leverage AI to deliver transformative solutions that accelerate our clients' digital innovation and enhance their competitive edge. Through platforms like EPAM AI/RUN™ and initiatives like DIALX Lab™, we integrate advanced AI technologies into tailored business strategies, driving significant industry impact and fostering continuous innovation. Through increased specialization in focused verticals and a continued emphasis on strategic partnerships, we are able to deliver technology transformation from start to finish, leveraging agile methodologies, proven client collaboration frameworks, engineering excellence tools, hybrid teams and our award-winning proprietary global delivery platform. Our clients depend on us to solve their complex technical challenges and rely on our expertise in core engineering, advanced technologies, digital design and intelligent enterprise development. We combine our software engineering heritage with strategic business and innovation consulting, design thinking, and physical-digital capabilities to deliver end-to-end digital transformation services for our clients. We focus on building long-term partnerships with our clients in a market that is constantly challenged by the pressures of digitization through our innovative strategy and scalable software solutions, integrated advisory, business consulting and experience design, and a continually evolving mix of advanced capabilities. Our global delivery model and centralized support functions, combined with the benefits of scale from the shared use of fixed-cost resources, enhance our productivity levels and enable us to better manage the efficiency of our global operations. As a result, we have created a delivery base whereby our applications, tools, methodologies and infrastructure allow us to seamlessly deliver services and solutions from our global delivery centers to our clients across the world. Our teams of consultants, designers, architects, engineers and trainers have the capabilities and skill sets to deliver business results. Business Update Regarding the War in Ukraine Russia’s attack on Ukraine has had, and could continue to have, a material adverse effect on our operations. As of March 31, 2026, Ukraine continues to be a significant delivery location with a large number of delivery professionals operating from safe locations at levels of productivity consistent with those achieved prior to the attack. We have maintained our $100 million humanitarian aid commitment to our people in Ukraine, and as of March 31, 2026, we have $7.1 million remaining to be expensed under this humanitarian commitment. Our Board of Directors and its committees continue their oversight of our strategic, geopolitical, and cybersecurity risks and the risks related to our geographic locations and expansion. Our Board has received updates from management during both regular and special meetings, while also providing oversight of the risks associated with Russia’s invasion of Ukraine and other strategic areas of importance related to the war. 26 Table of contents We continue to monitor and respond to the difficult conditions in Ukraine while maintaining a focus on our clients and long-term growth. We execute on our business continuity plans and our global delivery centers have sufficient resources, including infrastructure and capital, to support ongoing operations while continuing to focus on the safety and security of our employees and their families in Ukraine as well as in the broader region. The implementation and execution of our business continuity plans, our humanitarian commitment to our people in Ukraine, and other costs related to the war resulted in materially increased expenses. Some of these expenses continued during this year and we expect some of these expenses will continue to occur in subsequent quarters for some time in the future. The information contained in this section is accurate as of the date hereof but may become outdated due to changing circumstances beyond our control or present awareness. For additional information on the various risks posed by the attack against Ukraine and the impact in the region as well as other risks to our business, please read “Part I. Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 and “Part II. Item 1A. Risk Factors” in this quarterly report. Year-to-Date 2026 Developments and Trends For the first three months of 2026, our revenues were $1.400 billion, an increase of 7.6% from $1.302 billion reported for the same period of 2025. Revenues have been positively impacted by improving demand for our services and foreign exchange fluctuations. Income from operations as a percentage of revenues increased to 8.3% for the three months ended March 31, 2026 as compared to 7.6% for the three months ended March 31, 2025, largely driven by a decrease in cost of revenues (exclusive of depreciation and amortization) as a percentage of revenues. Diluted earnings per share increased to $1.52 for the three months ended March 31, 2026 from $1.28 for the three months ended March 31, 2025, principally resulting from an increase in income from operations as well as reduced common shares outstanding resulting from share repurchases, including repurchases made under the Accelerated Share Repurchase Agreement (“ASR”) in connection with the 2025 Repurchase Program. See Note 10 “Stockholders’ Equity” of our condensed consolidated financial statements in “Part I. Item 1. Financial Statements (Unaudited)” for information regarding the ASR. Critical Accounting Policies The discussion and analysis of our financial position and results of operations is based on our unaudited condensed consolidated financial statements which have been prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements in accordance with U.S. GAAP requires us to make estimates and judgments that may affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On a recurring basis, we evaluate our estimates and judgments, including those related to revenue recognition and related allowances, impairments of long-lived assets including intangible assets, goodwill and right-of-use assets, income taxes including the valuation allowance for deferred tax assets, and stock-based compensation. Actual results may differ materially from these estimates under different assumptions and conditions. In addition, our reported financial condition and results of operations could vary due to a change in the application of a particular accounting standard. During the three months ended March 31, 2026, there have been no material changes to our critical accounting policies as reported in our Annual Report on Form 10-K for the year ended December 31, 2025. 27 Table of contents Results of Operations The following table presents a summary of our consolidated results of operations for the periods indicated. This information should be read together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this quarterly report. The operating results in any period are not necessarily indicative of the results that may be expected for any future period. Three Months Ended March 31, 2026 2025 (in thousands, except percentages and per share data) Revenues $ 1,400,061  100.0  % $ 1,301,692  100.0  % Operating expenses: Cost of revenues (exclusive of depreciation and amortization)(1) 1,012,052  72.3  % 952,008  73.1  %  Selling, general and administrative expenses(2) 239,702  17.1  % 218,917  16.8  % Depreciation and amortization expense 31,539  2.3  % 31,437  2.5  % Income from operations 116,768  8.3  % 99,330  7.6  % Interest and other income, net 1,582  0.1  % 5,814  0.5  % Foreign exchange gain (loss) 2,298  0.2  % (10,727) (0.8) % Income before provision for income taxes 120,648  8.6  % 94,417  7.3  % Provision for income taxes 38,127  2.7  % 20,935  1.7  % Net income $ 82,521  5.9  % $ 73,482  5.6  % Effective tax rate 31.6  % 22.2  % Diluted earnings per share $ 1.52  $ 1.28  (1)Includes $22,853 and $23,923 of stock-based compensation expense for the three months ended March 31, 2026 and 2025, respectively. (2)Includes $27,066 and $24,533 of stock-based compensation expense for the three months ended March 31, 2026 and 2025, respectively. 28 Table of contents Consolidated Results Review Revenues During the three months ended March 31, 2026, our total revenues increased by 7.6% to $1.400 billion compared to the corresponding period in 2025. During the three months ended March 31, 2026 as compared to the same period last year, revenues have been positively impacted by improving demand for our services and fluctuations in foreign currency exchange rates which contributed 3.9% to revenue growth. Revenues by client location for the three months ended March 31, 2026 and 2025 were as follows: Three Months Ended March 31, 2026 2025 (in thousands, except percentages) Americas(1) $ 799,469  57.1  % $ 780,285  59.9  % EMEA(2) 576,012  41.1  % 497,115  38.2  % APAC(3) 24,580  1.8  % 24,292  1.9  % Revenues $ 1,400,061  100.0  % $ 1,301,692  100.0  % (1)Americas includes revenues from clients in North, Central and South America. (2)EMEA includes revenues from clients in Europe and the Middle East. (3)APAC includes revenues from clients in East Asia, Southeast Asia and Australia. During the three months ended March 31, 2026, the United States continued to be our largest client location. During the three months ended March 31, 2026, revenues in the United States increased 3.4% to $711.8 million from $688.5 million in the first quarter of 2025, largely due to increased spending at certain large accounts in the region. During the three months ended March 31, 2026, the top three revenue contributing countries by client location in EMEA were the United Kingdom, Switzerland, and the Netherlands, generating $158.5 millio [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion and analysis of our financial condition and results of operations together with our audited consolidated financial statements and the related notes included elsewhere in this annual report. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from management’s expectations. Factors that could cause such differences are discussed in the sections entitled “Forward-Looking Statements” and “Part I. Item 1A. Risk Factors.” We assume no obligation to update any of these forward-looking statements. Executive Summary We have used our software engineering expertise to become a leading global provider of digital engineering, cloud and AI-enabled transformation services, as well as a leading business and experience consulting partner for global enterprises and ambitious startups. We address our clients’ transformation challenges by fusing EPAM Continuum’s integrated strategy, experience and technology consulting with our 30+ years of engineering execution to speed our clients’ time to market and drive greater value from their digital investments. We leverage AI to deliver transformative solutions that accelerate our clients' digital innovation and enhance their competitive edge. Through platforms like EPAM AI/RUN™ and initiatives like DIALX Lab™, we integrate advanced AI technologies into tailored business strategies, driving significant industry impact and fostering continuous innovation. Through increased specialization in focused verticals and a continued emphasis on strategic partnerships, we are able to deliver technology transformation from start to finish, leveraging agile methodologies, proven client collaboration frameworks, engineering excellence tools, hybrid teams and our award-winning proprietary global delivery platform. 28 Table of Contents Our clients depend on us to solve their complex technical challenges and rely on our expertise in core engineering, advanced technologies, digital design and intelligent enterprise development. We combine our software engineering heritage with strategic business and innovation consulting, design thinking, and physical-digital capabilities to deliver end-to-end digital transformation services for our clients. We focus on building long-term partnerships with our clients in a market that is constantly challenged by the pressures of digitization through our innovative strategy and scalable software solutions, integrated advisory, business consulting and experience design, and a continually evolving mix of advanced capabilities. Our global delivery model and centralized support functions, combined with the benefits of scale from the shared use of fixed-cost resources, enhance our productivity levels and enable us to better manage the efficiency of our global operations. As a result, we have created a delivery base whereby our applications, tools, methodologies and infrastructure allow us to seamlessly deliver services and solutions from our global delivery centers to our clients across the world. Our teams of consultants, designers, architects, engineers and trainers have the capabilities and skill sets to deliver business results. Business Update Regarding the War in Ukraine Russia’s attack on Ukraine has had, and could continue to have a material adverse effect on our operations. As of December 31, 2025, Ukraine continues to be a significant delivery location with a large number of delivery professionals operating from safe locations at levels of productivity consistent with those achieved prior to the attack. We have maintained our $100 million humanitarian aid commitment to our people in Ukraine, and as of December 31, 2025, we have $10.1 million remaining to be expensed under this humanitarian commitment. Our Board of Directors and its committees continue their oversight of our strategic, geopolitical, and cybersecurity risks and the risks related to our geographic locations and expansion. Our Board has received updates from management during both regular and special meetings, while also providing oversight of the risks associated with Russia’s invasion of Ukraine and other strategic areas of importance related to the war. We continue to monitor and respond to the difficult conditions in Ukraine while maintaining a focus on our clients and long-term growth. We execute on our business continuity plans and our global delivery centers have sufficient resources, including infrastructure and capital, to support ongoing operations while continuing to focus on the safety and security of our employees and their families in Ukraine as well as in the broader region. The implementation and execution of our business continuity plans, our humanitarian commitment to our people in Ukraine, and other costs related to the war resulted in materially increased expenses. Some of these expenses continued during this year and we expect some of these expenses will continue to occur in subsequent quarters for some time in the future. The information contained in this section is accurate as of the date hereof but may become outdated due to changing circumstances beyond our control or present awareness. For additional information on the various risks posed by the attack against Ukraine and the impact in the region as well as other risks to our business, please read “Part I. Item 1A. Risk Factors” included in this Annual Report on Form 10-K. Critical Accounting Policies We prepare our consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”), which require us to make judgments, estimates and assumptions that affect: (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities at the end of each reporting period and (iii) the reported amounts of revenues and expenses during each reporting period. We evaluate these estimates and assumptions based on historical experience, knowledge and assessment of current business and other conditions, and expectations regarding the future based on available information and reasonable assumptions, which together form a basis for making judgments about matters not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. Some of our accounting policies require higher degrees of judgment than others in their application. When reviewing our audited consolidated financial statements, you should consider (i) our selection of critical accounting policies, (ii) the judgment and other uncertainties affecting the application of such policies and (iii) the sensitivity of reported results to changes in conditions and assumptions. We consider the policies discussed below to be critical to an understanding of our consolidated financial statements as their application places significant demands on the judgment of our management. 29 Table of Contents An accounting policy is considered critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the consolidated financial statements. We believe that the following critical accounting policies are the most sensitive and require more significant estimates and assumptions used in the preparation of our consolidated financial statements. You should read the following descriptions of critical accounting policies, judgments and estimates in conjunction with our audited consolidated financial statements and other disclosures included elsewhere in this annual report. Additional information on our policies is in Note 1 “Organization and Summary of Significant Accounting Policies” in the notes to our consolidated financial statements in this Annual Report on Form 10-K. Revenues — We recognize revenues when control of goods or services is passed to a client in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Such control is generally transferred over time based on satisfaction of obligations stipulated by the contract. Consideration expected to be received may consist of both fixed and variable components and is allocated to each separately identifiable performance obligation based on the performance obligation’s relative standalone selling price. Variable consideration usually takes the form of volume-based discounts, service level credits, price concessions or incentives. Determining the estimated amount of such variable consideration involves assumptions and judgment that can have an impact on the amount of revenues reported. We derive revenues from a variety of service arrangements, which have been evolving to provide more customized and integrated solutions to clients by combining software engineering with customer experience design, business consulting, strategy, and technology innovation services in areas such as cloud platforms, cybersecurity and artificial intelligence. Fees for these contracts may be in the form of time-and-materials or fixed-price arrangements. We generate the majority of our revenues under time-and-materials contracts, which are billed using hourly, daily or monthly rates to determine the amounts to be charged directly to the client. We apply a practical expedient and revenues related to time-and-materials contracts are recognized based on the right to invoice for services performed. Fixed-price contracts include maintenance and support arrangements, which may exceed one year in duration. Maintenance and support arrangements generally relate to the provision of ongoing services and revenues for such contracts are recognized ratably over the expected service period. Fixed-price contracts also include application development arrangements, where progress towards satisfaction of the performance obligation is measured using input or output methods and input methods are used only when there is a direct correlation between hours incurred and the end product delivered. Assumptions, risks and uncertainties inherent in the estimates used to measure progress could affect the amount of revenues, receivables and deferred revenues at each reporting period. Revenues from licenses which have significant stand-alone functionality are recognized at a point in time when control of the license is transferred to the client. Revenues from licenses which do not have stand-alone functionality are recognized over time. If there is an uncertainty about the receipt of payment for the services, revenue recognition is deferred until the uncertainty is sufficiently resolved. We apply a practical expedient and do not assess the existence of a significant financing component if the period between transfer of the service to a client and when the client pays for that service is one year or less. We report gross reimbursable “out-of-pocket” expenses incurred as both revenues and cost of revenues in the consolidated statements of income. Business Combinations — We account for business combinations using the acquisition method which requires us to estimate the fair value of identifiable assets acquired and liabilities assumed, including any contingent consideration, to properly allocate purchase price to the individual assets acquired and liabilities assumed. A substantial portion of the purchase price is typically allocated to goodwill and other intangible assets, which typically include customer relationships, software, trade names, non-competition agreements, and assembled workforce. The allocation of the purchase price utilizes significant estimates in determining the fair values of identifiable assets acquired and liabilities assumed, especially with respect to intangible assets. The significant estimates and assumptions used include the timing and amount of forecasted revenues and cash flows, anticipated growth rates, customer attrition rates, the discount rate reflecting the risk inherent in future cash flows, and the useful lives for finite-lived assets. There are different valuation models for each component, the selection of which requires considerable judgment. These determinations will affect the amount of amortization expense recognized in future periods. We base our fair value estimates on assumptions we believe are reasonable but recognize that the assumptions are inherently uncertain. 30 Table of Contents We determine the fair value of contingent consideration using either Monte Carlo simulations (which involve a simulation of future revenues and earnings during the earn-out period using management's best estimates) or probability-weighted expected return methods. Changes in financial projections, market risk assumptions, discount rates or probability assumptions related to achieving the various earn-out criteria would result in a change in the fair value of contingent consideration. Such changes, if any, are recorded within Interest and other income, net in the Company’s consolidated statements of income. If the initial accounting for the business combination has not been completed by the end of the reporting period in which the business combination occurs, provisional amounts are reported to present information about facts and circumstances that existed as of the acquisition date. Once the measurement period ends, which in no case extends beyond one year from the acquisition date, revisions to the accounting for the business combination are recorded in earnings. Recent Accounting Pronouncements See Note 1 “Organization and Summary of Significant Accounting Policies” in the notes to our consolidated financial statements in this Annual Report on Form 10-K for information regarding recent accounting pronouncements. Results of Operations For discussion of our results of operations for the year ended December 31, 2023, including a year-over-year comparison between 2024 and 2023, refer to “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024. The following table presents a summary of our consolidated results of operations for the periods indicated. This information should be read together with our consolidated financial statements and related notes included elsewhere in this Annual Report. The operating results in any period are not necessarily indicative of the results that may be expected for any future period. Year Ended December 31, 2025 2024 % of revenues % of revenues (in thousands, except percentages and per share data) Revenues $5,457,056  100.0 % $4,727,940  100.0 % Operating expenses: Cost of revenues (exclusive of depreciation and amortization)(1) 3,883,535 71.2  3,277,497  69.3  Selling, general and administrative expenses(2) 928,707  17.0  816,300  17.3  Depreciation and amortization expense 124,811  2.3  89,559  1.9  Income from operations 520,003  9.5  544,584  11.5  Interest and other income, net 11,546  0.3  46,876  1.0  Foreign exchange loss (25,925) (0.5) (7,048) (0.1) Income before provision for income taxes 505,624  9.3  584,412  12.4  Provision for income taxes 127,946  2.4  129,879  2.8  Net income $ 377,678  6.9  % $ 454,533  9.6 % Effective tax rate 25.3 % 22.2 % Diluted earnings per share $6.72  $7.84  (1) Includes $86,252 and $80,944 of stock-based compensation expense for the years ended December 31, 2025 and 2024, respectively. (2) Includes $90,512 and $86,353 of stock-based compensation expense for the years ended December 31, 2025 and 2024, respectively. 31 Table of Contents Revenues We continue to diversify our presence across multiple geographies and verticals, both organically and through strategic acquisitions. During the year ended December 31, 2025, our total revenues increased 15.4% from the previous year to $5.457 billion. Revenues from the first twelve months following each acquisition that was made in the fourth quarter of 2024, increased our revenues by 9.2% and fluctuations in foreign currency increased our revenues by 1.3% during the year ended December 31, 2025 as compared to the previous year. During the year ended December 31, 2025, we experienced a decrease in client concentration in our top client groups as a percentage of total revenues as compared to the previous year. See Note 3 “Acquisitions” in the notes to our consolidated financial statements in this Annual Report on Form 10-K for more information related to our completed acquisitions of businesses. We discuss below the breakdown of our revenues by vertical, client location, client concentration, and service offering. Revenues by Vertical We assign our clients into one of our five main vertical markets or a group of various industries where we are increasing our presence, which we label as “Emerging Verticals.” Emerging Verticals include clients in multiple industries such as energy, manufacturing and automotive, industrial materials, telecommunications and several others. The following table presents our revenues by vertical and revenues as a percentage of total revenues by vertical for the periods indicated: Year Ended December 31, 2025 2024 (in thousands, except percentages) Financial Services $ 1,316,487  24.1  % $ 1,022,617  21.6  % Consumer Goods, Retail & Travel 1,077,513  19.7  1,013,138  21.4  Software & Hi-Tech 821,819  15.1  702,367  14.9  Business Information & Media 675,667  12.4  674,597  14.3  Life Sciences & Healthcare 625,607  11.5  574,605  12.2  Emerging Verticals 939,963  17.2  740,616  15.6  Revenues $ 5,457,056  100.0  % $ 4,727,940  100.0  % We experienced revenue growth across all verticals in 2025 and Financial Services remained our largest vertical, comprising 24.1% of total revenues. See further discussion of our verticals in the section “Revenues by Business Segment” below. Revenues by Client Location Our revenues are sourced from multiple countries, which we assign into three geographic markets identified as Americas, EMEA, and APAC. We present and discuss our revenues by client location based on the location of the specific client site that we serve, irrespective of the location of the headquarters of the client or the location of the delivery center where the work is performed. Revenues by client location differ from revenues by reportable segment in our consolidated financial statements included elsewhere in this annual report. Segments are not based on the geographic location of the clients, but rather they are based on the location of the Company’s management responsible for a particular client. 32 Table of Contents The following table sets forth revenues by client location by amount and as a percentage of our revenues for the periods indicated: Year Ended December 31, 2025 2024 (in thousands, except percentages) Americas (1) $ 3,200,924  58.7  % $ 2,834,704  60.0  % EMEA (2) 2,147,304  39.3  1,793,198  37.9  APAC (3) 108,828  2.0  100,038  2.1  Revenues $ 5,457,056  100.0  % $ 4,727,940  100.0  % (1)Americas includes revenues from clients in North, Central and South America. (2)EMEA includes revenues from clients in Western Europe and the Middle East. (3)APAC, or Asia Pacific, includes revenues from clients in East Asia, Southeast Asia and Australia. During the year ended December 31, 2025, revenues in the Americas, our largest geography, were $3.201 billion, growing $366.2 million, or 12.9%, from $2.835 billion reported for the year ended December 31, 2024. The increase during the year ended December 31, 2025 compared to 2024, was primarily due to the acquisitions of NEORIS and First Derivative in the fourth quarter of 2024 and increased demand from our existing clients across various industries. Revenues from the Americas accounted for 58.7% of total revenues in 2025, a decrease from 60.0% in the prior year. The United States continued to be our largest client location contributing revenues of $2.834 billion in 2025 compared to $2.680 billion in 2024. Revenues in our EMEA geography were $2.147 billion, an increase of $354.1 million, or 19.7%, from $1.793 billion in the previous year. The increase during the year ended December 31, 2025 compared to 2024, was primarily due to the acquisitions of NEORIS and First Derivative in the fourth quarter of 2024 and increased demand from our existing clients across various industries. Revenues from EMEA accounted for 39.3% of consolidated revenues in 2025 as compared to 37.9% in the previous year. The top three revenue contributing client location countries in EMEA were the United Kingdom, Switzerland and Germany, generating revenues of $597.3 million, $438.5 million and $233.4 million in 2025, respectively, compared to $523.4 million, $407.8 million and $206.1 million in 2024, respectively. Revenues from clients in locations in our APAC region increased 8.8% from the prior year and comprised 2.0% of total revenues in 2025. Revenues by Client Concentration We have long-standing relationships with many of our clients and we seek to grow revenues from our existing clients by continually expanding the scope and size of our engagements. Revenues derived from these clients may fluctuate as these accounts mature, upon beginning or completion of multi-year projects or due to external economic environment trends. We believe there is a significant potential for future growth as we expand our capabilities and offerings within existing clients. In addition, we remain committed to diversifying our client base and adding more clients to our client mix through organic growth and strategic acquisitions, and over the long-term, we expect revenue concentration from our top clients to decrease. The following table presents revenues contributed by our clients by amount and as a percentage of our revenues for the periods indicated: Year Ended December 31, 2025 2024 (in thousands, except percentages) Top five clients $ 746,169  13.7  % $ 748,324  15.8  % Top ten clients $ 1,180,007  21.6  % $ 1,107,647  23.4  % Top twenty clients $ 1,742,670  31.9  % $ 1,615,267  34.2  % Clients below top twenty $ 3,714,386  68.1  % $ 3,112,673  65.8  % 33 Table of Contents The following table shows the number of clients grouped by revenues recognized by the Company for each year presented: Year Ended December 31, 2025 2024 Over $20 Million 53 43 $10 - $20 Million 62 59 $5 - $10 Million 93 83 $1 - $5 Million 375 331 $0.5 - $1 Million 226 168 Revenues by Service Offering Our service arrangements have been evolving to provide more customized and integrated solutions to our clients where we combine software engineering with customer experience design, business consulting and technology innovation services in areas such as cloud platforms, cybersecurity and artificial intelligence. We are continually expanding our service capabilities, moving beyond traditional services into strategy consulting, design and physical product development. The following table shows revenues by service offering as an amount and as a percentage of our revenues for the years indicated: Year Ended December 31, 2025 2024 (in thousands, except percentages) Professional services $ 5,427,623  99.5  % $ 4,698,183  99.4  % Licensing and other revenues 29,433  0.5  29,757  0.6  Revenues $ 5,457,056  100.0  % $ 4,727,940  100.0  % See Note 13 “Revenues” in the notes to our consolidated financial statements in this Annual Report on Form 10-K for more information regarding our contract types and related revenue recognition policies. Cost of Revenues (Exclusive of Depreciation and Amortization) The principal components of our cost of revenues (exclusive of depreciation and amortization) are salaries, bonuses, fringe benefits, stock-based compensation, project-related travel costs and fees for subcontractors who are assigned to client projects. Salaries and other compensation expenses of our delivery professionals are reported as cost of revenues regardless of whether the employees are actually performing services for clients during a given period. Additionally, government incentives and assistance related to services performed by delivery professionals assigned to client projects are reported in cost of revenues. Our employees are a critical asset, necessary for our continued success and therefore we expect to continue hiring talented employees and providing them with competitive compensation programs. We manage the utilization levels of our delivery professionals through strategic hiring practices, dynamic management of staff, and efficient staffing of projects. Our staff utilization also depends on the general economy and its effect on our clients and their business decisions regarding the use of our services. During the year ended December 31, 2025, cost of revenues (exclusive of depreciation and amortization) was $3.884 billion, representing an increase of 18.5% from $3.277 billion reported last year. The increase during the year ended December 31, 2025 compared to 2024, was primarily due to the acquisitions of NEORIS and First Derivative in the fourth quarter of 2024, an increase in compensation costs, and a $13.6 million decrease in government incentives related to conducting R&D activities in Poland. During the year ended December 31, 2024 we recognized a cumulative catch-up benefit related to Poland R&D tax credits. Changes in foreign currency exchange rates also had a 0.8% unfavorable impact during the year. Additionally, the average number of production professionals grew 9.0% mainly driven by our acquisition of businesses during 2024. The growth in our production professionals increased compensation costs which were also impacted by salary increases and promotions for existing professionals, an increase in variable compensation expense, and a $5.3 million increase in stock-based compensation expense. The increases were partially offset by $11.9 million in increased benefits from our hedging program. 34 Table of Contents Expressed as a percentage of revenues, cost of revenues (exclusive of depreciation and amortization) was 71.2% and 69.3% during the years ended December 31, 2025 and 2024, respectively. The year-over-year increase is primarily due to compensation increases which we were not able to fully offset through pricing increases, the acquisitions completed in 2024, higher variable compensation expense, a $13.6 million decrease in government incentives related to conducting R&D activities in Poland and the negative impact from the appreciation of foreign currencies in certain of our delivery locations, partially offset by increased benefits from our hedging program. Selling, General and Administrative Expenses Selling, general and administrative expenses represent expenditures associated with promoting and selling our services and general and administrative functions of our business. These expenses include the costs of salaries, bonuses, fringe benefits, stock-based compensation, severance, bad debt, travel, legal and accounting services, insurance, facilities including operating leases, advertising, and other promotional activities. Additionally, selling, general and administrative expenses contain costs of relocating our employees and various one-time and unusual expenses such as impairment charges. During the year ended December 31, 2025, selling, general and administrative expenses were $928.7 million, representing an increase of 13.8% as compared to $816.3 million reported last year. The increase in selling, general and administrative expenses during 2025 compared to 2024 was primarily driven by the acquisitions of NEORIS and First Derivative completed in the fourth quarter of 2024, an increase in personnel-related costs, including a $4.2 million increase in stock-based compensation expense, an $11.3 million increase in facilities and infrastructure expenses, and a $9.0 million increase in costs for software licenses. Personnel-related costs also increased due to impacts from salary increases and promotions for existing professionals, increases in variable compensation expense and severance, which reflects the impact from cost optimization programs. See Note 12 “Cost Optimization Programs” in the notes to our consolidated financial statements in this Annual Report on Form 10-K for more information regarding the Company’s restructuring programs. These year-over-year increases were partially offset by a $5.6 million decrease in professional fee expenses related to our business acquisition efforts as compared to the prior year. Expressed as a percentage of revenues, selling, general and administrative expenses decreased 0.3% to 17.0% for the year ended December 31, 2025, as compared to the prior year primarily driven by a decrease in personnel-related costs as a percentage of revenue, including stock-based compensation expense, facilities and infrastructure expenses and professional fee expenses related to our business acquisition efforts, partially offset by additional costs for software licenses as a percentage of revenues. Depreciation and Amortization Expense Depreciation and amortization expense includes depreciation of physical assets used in the operation of our business such as computer equipment, software, buildings we purchased, leasehold improvements as well as various office furniture and equipment. Depreciation and amortization expense also includes amortization of acquired finite-lived intangible assets. During the year ended December 31, 2025, depreciation and amortization expense was $124.8 million, representing an increase of $35.3 million from $89.6 million reported in the prior year. The increase in depreciation and amortization expense was primarily the result of increased amortization of acquired finite-lived intangible assets largely resulting from the acquisitions of NEORIS and First Derivative in the fourth quarter of 2024, partially offset by $6.3 million in lower depreciation and amortization on property and equipment. Expressed as a percentage of revenues, depreciation and amortization expense increased to 2.3% during the year ended December 31, 2025, as compared to 1.9% in 2024, primarily due to increased amortization of acquired finite-lived intangible assets largely resulting from the acquisitions of First Derivative and NEORIS in 2024. Interest and Other Income, Net Interest and other income, net includes interest earned on cash, cash equivalents and short-term investments, gains and losses from certain financial instruments, interest expense related to our borrowings, certain government grant income, and changes in the fair value of contingent consideration. Interest and other income, net decreased from $46.9 million during the year ended December 31, 2024 to $11.5 million during the year ended December 31, 2025. This decrease was largely driven by a $37.0 million decrease in interest income from our cash, cash equivalents and short-term investments, partially offset by a $2.2 million decrease in loss due to the change in fair value of contingent consideration. 35 Table of Contents Provision for Income Taxes Determining the consolidated provision for income tax expense, deferred income tax assets and liabilities and any potential related valuation allowances involves judgment. We consider factors that may contribute, favorably or unfavorably, to the overall annual effective tax rate in the current year as well as the future. These factors include statutory tax rates and tax law changes in the countries where we operate and excess tax benefits upon vesting or exercise of stock awards as well as consideration of any significant or unusual items. As a global company, we are required to calculate and provide for income taxes in each of the jurisdictions in which we operate. During 2025 and 2024, we had $361.4 million and $391.4 million, respectively, in income before provision for income taxes attributed to our foreign jurisdictions. Changes in the geographic mix or level of annual pre-tax income can also affect our overall effective income tax rate. Our provision for income taxes includes the impact of provisions established for uncertain income tax positions, as well as the related net interest and penalty expense. Tax exposures can involve complex issues and may require an extended period to resolve. Although we believe we have adequately reserved for our uncertain tax positions, we cannot provide assurance that the final tax outcome of these matters will not be different from our current estimates. We adjust these reserves after consideration of changes in facts and circumstances, such as the closing of a tax audit, statute of limitation lapse or the refinement of an estimate. To the extent that the final tax outcome of these matters differs from the amounts recorded, such differences will impact the provision for income taxes in the period in which such determination is made. The provision for income taxes was $127.9 million in 2025 and $129.9 million in 2024. The decrease was primarily driven by a decrease in pre-tax income. The effective tax rate was 25.3% in 2025 compared to 22.2% in 2024. We recorded a tax shortfall upon vesting or exercise of stock awards of $1.9 million in 2025 and an excess tax benefit of $22.4 million in 2024. On July 4, 2025, the U.S. federal government enacted tax reform legislation, commonly referred to as the One Big Beautiful Bill Act (“the Act”), which includes a broad range of tax reform provisions. The tax law changes included in the Act did not have a material impact on our effective tax rate for the year ended December 31, 2025; however, we expect an acceleration of certain deductions resulting in a $24.5 million reduction in cash tax payments associated with the 2025 tax year. See Note 16 “Income Taxes” in the notes to our consolidated financial statements in this Annual Report on Form 10-K for more information and detail regarding our provision for income taxes and effective tax rate. Foreign Exchange Loss For discussion of the impact of foreign exchange fluctuations see “Item 7A. Quantitative and Qualitative Disclosures About Market Risk — Foreign Exchange Risk.” Results by Business Segment We determine our business segments and report segment information in accordance with how the Company’s chief operating decision maker (“CODM”) organizes the segments to evaluate performance, allocate resources and make business decisions. Our CODM is the chief executive officer. We manage our business primarily based on the managerial responsibility for our client base and market. As managerial responsibility for a particular client relationship generally correlates with the client’s geographic location, there is a high degree of similarity between client locations and the geographic boundaries of our reportable segments. In some cases, managerial responsibility for a particular client is assigned to a management team in another region and is usually based on the strength of the relationship between client executives and particular members of EPAM’s senior management team. In such cases, the client’s activity would be reported through the management team’s reportable segment. Starting in 2025, we renamed our North America segment to Americas. The new name reflects the evolving geographic footprint and growth of operations within the segment, particularly in Latin America. This constitutes a naming change only and no changes were made to amounts reported. 36 Table of Contents Segment results are based on the segment’s revenues and operating profit, where segment operating profit is defined as segment income from operations before unallocated costs. Expenses included in segment operating profit consist principally of direct selling and delivery costs as well as an allocation of certain shared services expenses. Intersegment transactions are excluded from the segment’s revenues and operating profit on the basis that they are neither included in the measure of a segment’s profit and loss results, nor considered by the CODM during the review of segment results. Certain corporate expenses are not allocated to specific segments as these expenses are not controllable at the segment level. Such expenses include certain types of professional fees, certain taxes included in operating expenses, compensation to non-employee directors and certain other general and administrative expenses, including compensation of specific groups of non-production employees. In addition, we do not allocate amortization of intangible assets acquired through business combinations, goodwill and other asset impairment charges, stock-based compensation expenses, acquisition-related costs and certain other one-time charges and benefits. These unallocated amounts are combined with total segment operating profit to arrive at consolidated income from operations. Our CODM considers the operating results of each segment on a quarterly basis and uses segment operating profit predominantly to assess the performance of each segment by comparing the results of each segment with one another and to historical performance. When combined with certain other financial information, this enables the CODM to make decisions about the reporting structure, allocation of operating and capital resources, and compensation of certain employees. See Note 19 “Segment Information” in the notes to our consolidated financial statements in this Annual Report on Form 10-K for more information related to our reportable segments. Americas Segment The following table summarizes revenues from external clients and operating profit, before unallocated expenses, for the Americas segment for the years ended December 31, 2025 and 2024: Year Ended December 31, 2025 2024 (in thousands) Americas segment revenues $ 3,166,116  $ 2,866,339  Less: Cost of revenues (exclusive of depreciation and amortization) 2,189,329  1,915,851  Selling, general and administrative expenses 418,715  369,055  Depreciation and amortization expense 35,957  40,009  Americas segment operating profit $ 522,115  $ 541,424  During 2025, Americas segment revenues increased $299.8 million, or 10.5%, from the previous year. Revenues from our Americas segment represented 58.0% of total segment revenues, a decrease from 60.6% reported in the corresponding period of 2024. During 2025 as compared to 2024, Americas segment operating profits decreased $19.3 million, or 3.6%, to $522.1 million. Expressed as a percentage of revenue, Americas segment operating profit decreased to 16.5% in 2025 as compared to 18.9% in 2024. This decrease is primarily attributable to the impact of lower profitability from acquisitions completed in 2024, lower government incentives related to conducting R&D activities in Poland, changes in foreign exchange rates, and an increase in variable compensation expense as a percentage of segment revenues during 2025 compared to 2024. The following table presents Americas segment revenues by industry vertical for the periods indicated: Year Ended December 31, Change 2025 2024 Dollars  Percentage  Industry Vertical (in thousands, except percentages) Financial Services $ 603,711  $ 519,986  $ 83,725  16.1  % Software & Hi-Tech 560,449  525,091  35,358  6.7  % Life Sciences & Healthcare 496,831  488,455  8,376  1.7  % Consumer Goods, Retail & Travel 479,934  450,162  29,772  6.6  % Business Information & Media 465,232  449,449  15,783  3.5  % Emerging Verticals 559,959  433,196  126,763  29.3  % Revenues $ 3,166,116  $ 2,866,339  $ 299,777  10.5  % 37 Table of Contents During the year ended December 31, 2025, Financial Services was the largest industry vertical in the Americas segment and grew 16.1% in 2025 compared to the prior year, benefiting from new revenues from clients gained through our 2024 acquisitions and increased demand from insurance and payment processing clients. Software & Hi-Tech grew 6.7% during 2025 compared to the prior year which was a result of the continued focus on engaging with our technology clients. Life Sciences & Healthcare increased 1.7% during 2025 compared to the prior year primarily due to increased demand from pharmaceutical and medical device clients. Consumer Goods, Retail & Travel increased 6.6% during 2025 compared to the prior year primarily due to growth from our retail clients. During the year ended December 31, 2025, revenues from the Business Information & Media vertical experienced an increase of 3.5% primarily due to improvement in demand from clients in the publishing and entertainment sectors, as well as growth from a new client in digital media added in the past twelve months. Emerging Verticals experienced 29.3% growth during 2025 compared to the prior year due to revenues from our fourth quarter 2024 acquisitions of NEORIS and First Derivative as well as growth from various clients in industries such as energy, telecommunications and industrial materials. Europe Segment The following table summarizes revenues from external clients and operating profit, before unallocated expenses, for the Europe segment for the years ended December 31, 2025 and 2024: Year Ended December 31, 2025 2024 (in thousands) Europe segment revenues $ 2,290,940  $ 1,861,601  Less: Cost of revenues (exclusive of depreciation and amortization) 1,625,058  1,290,317  Selling, general and administrative expenses 315,442  267,032  Depreciation and amortization expense 17,487  20,076  Europe segment operating profit $ 332,953  $ 284,176  During 2025, Europe segment revenues were $2.291 billion, reflecting an increase of $429.3 million, or 23.1%, from the previous year. Revenues were positively impacted by changes in foreign currency exchange rates during 2025. Had our Europe segment revenues been expressed in constant currency terms using the exchange rates in effect during 2024, we would have reported revenue growth of 19.7%. Revenues from our Europe segment represent 42.0% and 39.4% of total segment revenues during 2025 and 2024, respectively. During 2025, Europe segment operating profits increased $48.8 million, or 17.2% as compared to last year, to $333.0 million. Europe segment operating profit represented 14.5% of Europe segment revenues as compared to 15.3% in 2024. Europe segment operating profit as a percentage of revenues was negatively impacted by an increase in variable compensation expense and lower government incentives related to conducting R&D activities in Poland, partially offset by changes in foreign exchange rates and results of cost optimization programs during 2025 compared to 2024. The following table presents Europe segment revenues by industry vertical for the periods indicated: Year Ended December 31, Change 2025 2024 Dollars  Percentage  Industry Vertical (in thousands, except percentages) Financial Services $ 712,776  $ 502,631  $ 210,145  41.8  % Consumer Goods, Retail & Travel 597,579  562,976  34,603  6.1  % Software & Hi-Tech 261,370  177,276  84,094  47.4  % Business Information & Media 210,435  225,148  (14,713) (6.5) % Life Sciences & Healthcare 128,776  86,150  42,626  49.5  % Emerging Verticals 380,004  307,420  72,584  23.6  % Revenues $ 2,290,940  $ 1,861,601  $ 429,339  23.1  % 38 Table of Contents During the year ended December 31, 2025, Financial Services was the largest industry vertical in the Europe segment and grew 41.8% benefiting from new revenues from clients that we gained as part of our 2024 acquisitions and increased demand from commercial banking and insurance clients. Revenues in the Consumer Goods, Retail & Travel vertical experienced growth of 6.1% during the year ended December 31, 2025, as compared to 2024, primarily due to improved demand from clients in the retail and consumer goods industries. Revenue growth in Software & Hi-Tech during the year ended December 31, 2025, as compared to 2024, was largely attributable to the expansion of services provided to one of our top 10 clients as well as the addition of several new clients in the past eighteen months. Revenues in Business Information & Media decreased during 2025 primarily due to decreased demand from two clients who were historically included in our top 10 clients. Revenues in Life Sciences & Healthcare grew 49.5% during 2025 primarily due to the growth experienced from clients in the pharmaceutical sector. Revenues in Emerging Verticals grew 23.6% during 2025, with growth experienced from clients in various industries such as energy, professional services and industrial materials. Emerging Verticals also benefited from clients gained through our 2024 acquisitions. Effects of Inflation Economies in many countries where we operate have periodically experienced high rates of inflation, including during 2025. Periods of higher inflation may affect various economic sectors in those countries and increase our cost of doing business there. We do not believe that inflation has had a material impact on our business, results of operations or financial condition to date. We continue to track the impact of inflation, particularly on wages, while attempting to minimize its effects through pricing and cost management strategies. A higher-than-normal rate of inflation in the future could adversely affect our operations and financial condition. Liquidity and Capital Resources Capital Resources Our cash generated from operations has been our primary source of liquidity to fund operations, investments to support the growth of our business and share repurchases. As of December 31, 2025, our principal sources of liquidity were cash and cash equivalents totaling $1.296 billion, short-term investments totaling $6.1 million as well as $675.0 million of available borrowings under our revolving credit facility. See Note 10 “Debt” in the notes to our consolidated financial statements in this Annual Report on Form 10-K for information regarding the terms of our revolving credit facility and information about debt. Cash Flows The following table summarizes our cash flows for the periods indicated: For the Years Ended December 31, 2025 2024 (in thousands) Consolidated Statements of Cash Flow Data: Net cash provided by operating activities $ 654,934  $ 559,168  Net cash used in investing activities (49,047) (884,980) Net cash used in financing activities (651,200) (390,407) Effect of exchange rate changes on cash, cash equivalents and restricted cash 56,298  (36,497) Net increase (decrease) in cash, cash equivalents and restricted cash $ 10,985  $ (752,716) Cash, cash equivalents and restricted cash, beginning of period 1,290,392  2,043,108  Cash, cash equivalents and restricted cash, end of period $ 1,301,377  $ 1,290,392  Operating Activities Our largest source of cash provided by operating activities is cash generated from our professional services that we provide to our clients. Our primary uses of cash from operating activities include compensation to our employees and related costs, payments for leased facilities, various general corporate expenditures and income tax payments. Since the invasion of Ukraine in 2022, our operating activities included using cash on humanitarian efforts for Ukraine. 39 Table of Contents Cash provided by operating activities in 2025 was primarily driven by the Company's cash collections from client contracts and was negatively impacted by an increase in days sales outstanding and higher payments for variable compensation as compared to 2024, attributable to a higher level of financial performance for the year ended December 31, 2024. Cash provided by operating activities in 2024 was primarily driven by the Company's cash collections from client contracts, which was partially offset by variable compensation payments, severance payments related to the Cost Optimization Program and other working capital outflows. Investing Activities Our primary uses of cash from investing activities consist of purchases of computer hardware, software and office equipment, as well as investments in office buildings and new businesses. We also use cash for short-term investments and time deposits and receive cash upon maturity of these deposits. Most of our investments are typically short-term and cash equivalent in nature but we may invest in longer term deposits if the terms are favorable. The cash used in investing activities during 2025 was primarily attributable to $42.2 million used for capital expenditures and $3.4 million used for the acquisitions of businesses, net of cash acquired compared to $32.1 million used for capital expenditures and $912.2 million used for the acquisitions of businesses, net of cash acquired during 2024. During 2024, the use of cash in investing activities was partially offset by inflows of $61.5 million from matured investments in time deposits with no such inflows during 2025 . Financing Activities Cash used in financing activities mainly consists of repurchasing shares of EPAM common stock under our share repurchase programs, payments of withholding taxes related to net share settlements of restricted stock units, repayments of debt, and settlements of the acquisition-date fair value of contingent consideration related to acquisitions of businesses. Cash provided by financing activities mainly consists of the proceeds from the purchases of shares under our ESPP and exercises of stock options issued under our long-term incentive plans as well as proceeds from debt. We typically do not rely on debt to supplement our cash flows. Net cash used in financing activities increased from 2024 to 2025 primarily due to $660.6 million of payments to repurchase our common stock during 2025 compared to $398.0 million during 2024. In addition, during 2025 we used cash for the payments of withholding taxes related to net share settlements of equity awards of $26.8 million, compared to $35.2 million paid during 2024. These cash outflows were partially offset by cash received from the exercises of stock options issued under our long-term incentive plans and proceeds from the purchases of shares under our ESPP of $54.6 million during 2025, compared to $53.7 million received during 2024. Future Capital Requirements We believe that our existing cash, cash equivalents and short-term investments, combined with our expected cash flow from operations will be sufficient to meet our projected operating and capital expenditure requirements for at least the next twelve months and that we possess the financial flexibility to execute our strategic objectives, including the ability to make acquisitions and strategic investments in the foreseeable future. However, the invasion of Ukraine, other various geopolitical events, and the related measures implemented to contain their impact, have caused and may continue to cause material disruptions in financial markets and economies. These disruptions may increase our costs of capital, decrease returns on investment, and otherwise adversely affect our business, results of operations, financial condition and liquidity. Our ability to generate cash is subject to our performance, general economic conditions, industry trends and other factors including the impact of the invasion of Ukraine, as described elsewhere in this Management’s Discussion and Analysis of Financial Condition and Results of Operations. We may require additional cash resources due to changed business conditions or other future developments, including any investments or acquisitions we may decide to pursue. To the extent that existing cash, cash equivalents, short-term investments, and operating cash flows are insufficient to fund our future activities and requirements, we may need to raise additional funds through public or private equity or debt financing. If we issue equity securities in order to raise additional funds, substantial dilution to existing stockholders may occur. If we raise cash through the issuance of additional indebtedness, we may be subject to additional contractual restrictions on our business and there is no assurance that we would be able to raise additional funds on favorable terms or at all. Our ability to expand and grow our business in accordance with current plans and to meet our long-term capital requirements will depend on many factors, including the rate at which our cash flows increase or decrease and the availability of public and private debt and equity financing. See Note 9 “Leases”, Note 10 “Debt”, Note 18 “Commitments and Contingencies” in the notes to our consolidated financial statements in this Annual Report on Form 10-K for information regarding our various contractual obligations and capital expenditure requirements. 40 Table of Contents Off-Balance Sheet Commitments and Arrangements We do not have any material obligations under guarantee contracts or other contractual arrangements other than as disclosed in Note 18 “Commitments and Contingencies” in the notes to our consolidated financial statements in this Annual Report on Form 10-K. We have not entered into any transactions with unconsolidated entities where we have financial guarantees, subordinated retained interests, derivative instruments, or other contingent arrangements that expose us to material continuing risks, contingent liabilities, or any other obligation under a variable interest in an unconsolidated entity that provides financing, liquidity, market risk, or credit risk support to us, or engages in leasing, hedging, or research and development services with us.