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What changed in EPAM Systems's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of EPAM Systems's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+357 added−358 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-28)

Top changes in EPAM Systems's 2025 10-K

357 paragraphs added · 358 removed · 304 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThat is why we strive to provide pay and benefits that demonstrate the value of our employees to us, including a competitive salary, flexible work-life balance, paid time off, health coverage, ongoing training programs, relocation options, and recognition opportunities for open-source software contributions. 6 Table of Contents Our career development programs create detailed and progressive training plans for our employees and help them choose from internal and external training options, mentoring programs, and hands-on opportunities to experience emerging technology areas.
Biggest changeThat is why we aim to provide pay and benefits to demonstrate that we value our employees, which include a competitive salary, flexible work-life balance, paid time off, health coverage, ongoing training programs, relocation options, and recognition opportunities.
Our services directly impact strategy and facilitate the creation of breakthrough products and compelling brand and employee experiences, helping our clients outpace competitors. Software and Hi-Tech — We offer complex software product development services to address the constant need for innovation and agility among software and technology companies.
Our services directly impact strategy and facilitate the creation of breakthrough products and compelling brand and employee experiences, helping our clients outpace competitors. Software & Hi-Tech — We offer complex software product development services to address the constant need for innovation and agility among software and technology companies.
Our services span the complete software development lifecycle for software product development, including our comprehensive development methodologies, testing, performance tuning, deployment, maintenance and support. Business Information and Media — We help our business information and media clients build products and solutions for modern platforms including web media streaming, mobile information delivery, print to digital transformations and information discovery and search.
Our services span the complete software development lifecycle for software product development, including our comprehensive development methodologies, testing, performance tuning, deployment, maintenance and support. Business Information & Media — We help our business information and media clients build products and solutions for modern platforms including web media streaming, mobile information delivery, print to digital transformations and information discovery and search.
Life Sciences and Healthcare — We partner with global pharmaceutical, medical and scientific technology, biotechnology companies and retail pharmacies to deliver sophisticated scientific informatics and innovative enterprise technology solutions. Our Life Sciences experts utilize their extensive technology skill set to provide deep scientific and mathematical knowledge to broad-based initiatives.
Life Sciences & Healthcare — We partner with global pharmaceutical, medical and scientific technology, biotechnology companies and retail pharmacies to deliver sophisticated scientific informatics and innovative enterprise technology solutions. Our Life Sciences experts utilize their extensive technology skill set to provide deep scientific and mathematical knowledge to broad-based initiatives.
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 innovations and digital investments. We leverage AI and GenAI to deliver transformative solutions that accelerate our clients' digital innovation and enhance their competitive edge.
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 innovations and digital investments. We leverage AI to deliver transformative solutions that accelerate our clients' digital innovation and enhance their competitive edge.
From migrating data platforms to the cloud to implementing data governance practices across the enterprise, we help our clients unlock data-reliant outcomes for their business, ushering them into the future. Our integrated teams of business and technology experts assess our clients’ data ecosystems, build roadmaps and deliver data solutions to the market.
From modernizing and migrating data platforms to the cloud to implementing data governance practices across the enterprise, we help our clients unlock data-reliant outcomes for their business, ushering them into the future. Our integrated teams of business and technology experts assess our clients’ data ecosystems, build roadmaps and deliver data solutions to the market.
Data, Analytics and Artificial Intelligence With deep expertise in data and analytics, business intelligence and cloud platform development, we navigate the complexities of building and scaling new data capabilities necessary for the evolving environment.
Data, Analytics and Artificial Intelligence With deep expertise in data and analytics, business intelligence and platform development, we navigate the complexities of building and scaling new data capabilities necessary for the evolving environment.
We assist our clients in creating a roadmap to set and refine their IT and business goals while identifying new and emerging cloud opportunities. Cloud technology endows adaptive enterprises with agility and flexibility, paving the way for new business models, cutting-edge products, and the acceleration of dynamic experiences for a faster time-to-market.
We assist our clients in creating a roadmap to set and refine their IT and business goals while identifying new and emerging opportunities leveraging cloud technologies. Cloud technology endows adaptive enterprises with agility and flexibility, paving the way for new business models, cutting-edge products, and the acceleration of dynamic experiences for a faster time-to-market.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II of this Annual Report on Form 10-K for additional information related to revenues. See Note 19 “Segment Information” in the notes to our consolidated financial statements in this Annual Report on Form 10-K for information related to our reportable segments.
See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II of this Annual Report on Form 10-K for additional information related to revenues. See Note 19 “Segment Information” in the notes to our consolidated financial statements in this Annual Report on Form 10-K for information related to our reportable segments.
We believe that retaining skilled talent requires substantially more than meeting basic employment and labor rights, and that employees who are fairly compensated, feel supported in their career development, and are engaged with their employer are more likely to remain with that employer.
We believe that retaining skilled talent requires substantially more than meeting basic employment and labor rights, and that employees who are fairly compensated and feel supported and engaged in their career development are more likely to remain with EPAM.
Recruitment, Training and Utilization: As an innovation-driven business in a competitive industry, our success depends on hiring the most talented employees, training and developing that talent, and deploying them to satisfy client demand.
Recruitment, Training and Utilization: As an innovation-driven business in a competitive industry, our success depends on hiring the most talented employees and training, developing, and deploying them to satisfy client demand.
For these clients we develop tools such as plant management platforms, energy saving applications, inventory management mechanisms, and connected vehicle platforms. Additionally, we undertake various industry-specific aspects of intelligent automation and operational efficiency. Clients We maintain a geographically diverse client base in multiple industries.
For these clients we develop tools such as plant management platforms, energy saving applications, inventory management mechanisms, and connected vehicle platforms. Additionally, we undertake various industry-specific aspects of intelligent automation and operational efficiency. 4 Table of Contents Clients We maintain a geographically diverse client base in multiple industries.
For the years ended December 31, 2024, 2023 and 2022, the utilization rates of our delivery professionals were approximately 76.7%, 74.3%, and 75.8%, respectively. EPAM invests significant resources in training and developing our employees through our learning and development programs.
For the years ended December 31, 2025, 2024 and 2023, the utilization rates of our delivery professionals were approximately 76.8%, 76.7%, and 74.3%, respectively. EPAM invests significant resources in training and developing our employees through our learning and development programs.
We use our experience, custom tools and specialized knowledge to integrate our clients’ chosen strategy and create custom solutions in order to architect the right solutions with built-in quality and security gates and accomplish the best outcome from the digital modernization efforts. 2 Table of Contents Cloud Cloud technology has become the default platform for nearly every digital use.
We use our experience, custom tools and specialized knowledge to integrate our clients’ chosen strategy and create custom solutions to architect the right outcomes with built-in quality and security gates, and to accomplish the best results from digital modernization efforts. 2 Table of Contents Cloud Cloud technology has become the default platform for nearly every digital use.
We focus on retaining and engaging top talent by hiring people with the skill sets our clients need and who also share our values so we can build long-term employee satisfaction, which is supported by our voluntary attrition rate of 8.9%, 8.6%, and 13.8% in 2024, 2023 and 2022, respectively.
We focus on retaining and engaging top talent by hiring people with the skill sets our clients need and who also share our values so we can build long-term employee satisfaction, which is supported by our voluntary attrition rate of 8.5%, 8.9%, and 8.6% in 2025, 2024 and 2023, respectively.
Our experts have a solid understanding of infrastructure and are skilled at advancing the pace of change. Additionally, we assist our clients with developing and executing optimal cloud technology migration strategies and provide customized cloud solutions.
Our experts have a solid understanding of infrastructure and are skilled at advancing the pace of change. Additionally, we assist our clients with developing and executing optimal cloud technology migration and modernization strategies as well as provide customized cloud solutions.
Therefore, it is critical to our success that we are able to identify, attract, hire and retain delivery professionals who are highly skilled in information technology to execute our services, as well as individuals with appropriate skills to fill our executive, finance, legal, human resources and other key management positions.
It is critical to our success to identify, attract, hire and retain delivery professionals who are highly skilled in information technology to execute our services, as well as individuals with appropriate skills to fill our executive, finance, legal, human resources and other key management positions.
Our global delivery centers throughout the world, including in Ukraine, have sufficient resources, including infrastructure and capital, to support ongoing operations. Human Capital Our employees are a key factor in our ability to grow our revenues and serve our clients.
Our global delivery centers throughout the world, including in Ukraine, have sufficient resources, including infrastructure and capital, to support ongoing operations. 5 Table of Contents Human Capital Our employees are a key factor in our ability to grow our revenues and serve our clients.
As of December 31, 2024, we had approximately 55,100 delivery personnel consisting mainly of our core information technology professionals as well as consultants, designers, architects, engineers and trainers. We serve our clients through on-site, off-site and offshore locations across the world and use strategically located delivery centers to offer a strong, diversified and cost-effective delivery platform.
As of December 31, 2025, we had approximately 56,600 delivery personnel consisting mainly of our core information technology professionals as well as consultants, designers, architects, engineers and trainers. We serve our clients through on-site, off-site and offshore locations across the world and use strategically located delivery centers to offer a strong, diversified and cost-effective delivery platform.
Our largest learning and development investment has been directed towards developing our engineering talent, including targeted training programs, innovation labs, and significant internal production projects. Our employees consumed 2.4 million learning hours in 2024.
Our largest learning and development investment has been directed towards developing our engineering talent, including targeted training programs, innovation labs, and significant internal production projects. Our employees consumed 2.6 million learning hours in 2025.
The following table shows revenues from the top five and ten clients in the respective year as a percentage of revenues for that year: % of Revenues for Year Ended December 31, 2024 2023 2022 Top five clients 15.8 % 16.6 % 16.4 % Top ten clients 23.4 % 23.6 % 23.8 % As we remain committed to diversifying our client base and adding more clients to our client mix, we expect revenue concentration from our top clients to decrease over the long-term. 4 Table of Contents See “Item 7.
The following table shows revenues from the top five and ten clients in the respective year as a percentage of revenues for that year: % of Revenues for Year Ended December 31, 2025 2024 2023 Top five clients 13.7 % 15.8 % 16.6 % Top ten clients 21.6 % 23.4 % 23.6 % As we remain committed to diversifying our client base and adding more clients to our client mix, we expect revenue concentration from our top clients to decrease over the long-term.
We are proud to be among the top 15 companies in Information Technology Services in the Fortune 1000 and to be recognized as a leader in the IDC MarketScapes for Worldwide Experience Build Services, Worldwide Experience Design Services and Worldwide Software Engineering Services.
We are proud to be among the top 15 companies in Information Technology Services in the Fortune 1000 and to be included as a leader in the IDC MarketScapes for Worldwide Experience Build Services and Worldwide Experience Design Services.
We actively monitor how we utilize our delivery professionals and specialists to balance the needs of our clients with the availability, location, and skill sets of our employees and their need for diverse and challenging work. We manage utilization through strategic hiring and efficient staffing of projects for our clients.
We actively monitor how we utilize our delivery professionals and specialists to balance the needs of our clients with the availability, location, and skill sets of our employees and their need for interesting and challenging work. We manage utilization through strategic hiring, our internal technology platforms, and efficient staffing of client projects.
Our employees have demonstrated their satisfaction with our approach by giving their highest percentage of positive responses in our 2024 employee survey when asked if they can easily get support from their colleagues (93%), if they get management support (92%), if they feel that EPAM provides a supportive environment for all employees, regardless of gender, race, background, religion, or other personal traits (89%), and if they feel comfortable being themselves while working for EPAM (89%).
Our employees have demonstrated their satisfaction with our approach by giving their highest percentage of positive responses in our 2025 employee survey when asked if they can easily get support from their colleagues (94%), if they get management support (93%), if they feel that EPAM provides a supportive environment for all employees, regardless of gender, race, background, religion, or other personal traits (90%), if they are inspired to do their best when working for EPAM (90%) and if they feel comfortable being themselves while working for EPAM (89%).
We are particularly focused on identifying and cultivating the next generation of exceptional leaders, emphasizing technical expertise, while enhancing succession pipelines and improving diversity in our key positions. We have dedicated full-time employees who oversee all aspects of our human capital management process including talent acquisition teams to locate and attract qualified and experienced professionals around the world.
We are particularly focused on identifying and cultivating the next generation of exceptional leaders, emphasizing technical expertise, enhancing succession pipelines, and finding the best people to fill our key positions. We have dedicated full-time employees who oversee all aspects of our human capital management process including talent acquisition teams that locate and attract qualified and experienced professionals around the world.
Our focus on delivering quality service is reflected in established relationships with many of our clients, with 65.4% and 34.6% of our revenues in 2024 coming from clients that had used our services for at least five and ten years, respectively. We aim to grow our client portfolios organically and through strategic acquisitions.
Our focus on delivering quality service is reflected in established relationships with many of our clients, with 64.4% and 35.7% of our revenues in 2025 coming from clients that had used our services for at least five and ten years, respectively. We aim to grow our client portfolios organically and through strategic acquisitions.
Our employees are a critical asset, necessary for our continued success and, therefore, we are continuously exploring new geographies, markets, and sources to locate talented personnel and present them with competitive compensation programs and educational opportunities.
Our employees are a critical asset and are necessary for our continued success, so we continuously explore new geographies, markets, and sources to locate talented personnel and present them with competitive compensation, educational programs, and opportunities for career advancement.
As of the end of 2024, we offered the EPAM E-Kids program in 25 countries. Employee Engagement and Retention: As a participant in the United Nations Global Compact, we are committed to respecting our employees' fundamental human rights at work.
As of the end of 2025, we offered the EPAM E-Kids ® program in 17 countries. 6 Table of Contents Employee Engagement and Retention: As a participant in the United Nations Global Compact, we are committed to respecting our employees’ fundamental human rights at work.
In addition to hiring efforts, the acquisitions of businesses that we complete further diversify our employee base and delivery locations. Our other large delivery locations are Poland, Mexico and Belarus with approximately 5,000, 3,525, and 3,350 delivery professionals, respectively, as of December 31, 2024.
In addition to hiring efforts, the acquisitions of businesses that we complete further diversify our employee base and delivery locations. Our other large delivery locations are Poland, Belarus and Mexico with approximately 5,050, 3,400 and 2,950 delivery professionals, respectively, as of December 31, 2025.
To attract, retain and motivate our employees, we offer a dynamic work environment, a culture that values the individual, ongoing skills development initiatives, attractive career advancement with continuous rotation and promotion opportunities while providing an environment and culture that rewards entrepreneurial initiative and performance.
To attract, retain and motivate our employees, we offer a work environment that values the individual, ongoing skills development, career advancement with continuous rotation and promotion opportunities, and rewards for entrepreneurial initiative and performance.
We believe that innovation comes from the unique perspectives, knowledge, and experiences of our global employees, so we strive to create a culture to support that uniqueness by creating employee groups that recognize and share the varied perspectives of our personnel so employees of all backgrounds, interests, and identities can grow and thrive professionally.
We believe that innovation comes from the different perspectives, knowledge, and experiences of our global employees, so we strive for a supportive culture by creating employee groups that recognize and share perspectives so employees of all backgrounds, interests, and identities can grow and thrive professionally.
Our engineering expertise allows us to build enterprise technologies that improve business processes, offer smarter analytics and result in greater operational excellence through requirements analysis and platform selection, complex customization, cross-platform migration, implementation and integration.
Engineering Our engineering foundation underpins how we architect, build and scale next-generation software solutions and agile delivery teams. Our engineering expertise allows us to build enterprise technologies that improve business processes, offer smarter analytics and result in greater operational excellence through requirements analysis and platform selection, complex customization, cross-platform migration, implementation and integration.
Our health and safety programs are designed to comply with the regulations in the multiple cities and countries where we operate but also provide working conditions that are compatible with the necessities of our delivery and administrative operations, whether our employees choose to work remotely or in EPAM’s or our clients’ offices.
Our health and safety programs are designed to comply with the regulations in the multiple cities and countries where we operate while meeting the needs of our delivery and administrative functions, whether our employees choose to work remotely or in EPAM’s or our clients’ offices.
Our suppliers are generally bound by our supplier code of conduct, which imposes an obligation to protect our and our clients’ intangible assets, including confidential information, personal information, and intellectual property, and to protect the security of those assets. 8 Table of Contents Regulations Due to the industry and geographic diversity of our operations and services, our operations are subject to a variety of rules and regulations.
Our suppliers are generally bound by our supplier code of conduct, which imposes an obligation to protect our and our clients’ intangible assets, including confidential information, personal information, and intellectual property, and to protect the security of those assets.
Women currently represent approximately 44% of the independent directors on our Board and we have developed programs to identify, retain, mentor, and supply a pipeline of qualified candidates from all backgrounds at every level of our Company.
Increasing the breadth of viewpoints and experiences in executive and key operational leadership roles is an organizational priority that starts at the top. Women currently represent approximately 44% of the independent directors on our Board and we have developed programs to identify, retain, mentor, and supply a pipeline of qualified candidates from all backgrounds at every level of our Company.
With our end-to-end AI capabilities, we uncover opportunities for AI, advise and then build solutions that unlock new business models, enhance productivity, automate operations, and deliver deeper customer and supply chain insights. Customer Experience Design We enable our clients to better leverage technology more effectively, addressing the simultaneous pressures of driving value for their consumers and offering more engaging experiences.
With our end-to-end AI capabilities, we uncover opportunities for AI, advise and then build solutions that unlock new business models, enhance productivity, automate operations, and deliver deeper customer and supply chain insights. Customer Experience We help our clients harness technology and human-centered design to create experiences that drive measurable value.
Our financial services domain experts have been recognized with industry awards for engineering and deploying unique applications and business solutions that facilitate growth, competitiveness, regulatory compliance and client interaction while driving cost efficiency and digital transformation. 3 Table of Contents Consumer Goods, Retail & Travel — In this vertical, our capabilities span a range of platforms, applications and solutions that consumer goods manufacturers, global, regional and local retailers, online retail brands and marketplaces, distributors and supply chain organizations as well as leading airlines, travel agencies and global hotel brands use to enhance their clients’ experience and efficiently manage their operations.
Consumer Goods, Retail & Travel — In this vertical, our capabilities span a range of platforms, applications and solutions that consumer goods manufacturers, global, regional and local retailers, online retail brands and marketplaces, distributors and supply chain organizations as well as leading airlines, travel agencies and global hotel brands use to enhance their clients’ experience and efficiently manage their operations.
During 2024, India became our largest delivery location, measured by the number of delivery professionals, and as of December 31, 2024, we had 10,072 delivery professionals in this location. We focused on growing India as a key delivery location and added 3,006 delivery professionals since December 31, 2023.
In 2025, India remained our largest delivery location, measured by the number of delivery professionals, and as of December 31, 2025, we had approximately 12,200 delivery professionals in this location. We continued to focus on growing India as a key delivery location and added approximately 2,150 delivery professionals since December 31, 2024.
We believe that our focus on complex and innovative software product development solutions, our technical employee base, and our development and continuous improvement in process methodologies, applications and tools position us well to compete effectively in the future. 7 Table of Contents Quality Management and Information Security We are continuously investing in systems, applications, tools and infrastructure to manage all aspects of our global delivery process in order to manage quality and information security risks, while providing control and visibility across all project lifecycle stages both internally and to our clients.
Quality Management and Information Security We are continuously investing in systems, applications, tools and infrastructure to manage all aspects of our global delivery process in order to manage quality and information security risks, while providing control and visibility across all project lifecycle stages both internally and to our clients.
We believe that the principal competitive factors in our business include technical expertise and industry knowledge, end-to-end solution offerings, a reputation for and a track record of high-quality and on-time delivery of work, effective employee recruiting, training and retention, responsiveness to clients’ business needs, ability to scale, financial stability and price.
We believe that the principal competitive factors in our business include technical expertise and industry knowledge, end-to-end solution offerings, a reputation for and a track record of high-quality and on-time delivery of work, effective employee recruiting, training and retention, responsiveness to clients’ business needs, ability to scale, financial stability and price. 7 Table of Contents We face competition from various technology services providers such as Accenture, Atos, Capgemini, Cognizant Technology Solutions, Deloitte Digital, DXC Technology, Endava, Genpact, GlobalLogic, Globant, Grid Dynamics, HCL Technologies, Infosys, Tata Consultancy Services, and Wipro, among others.
Our service offerings continuously evolve to provide more customized and integrated solutions to our clients. We combine software engineering with customer experience design, business consulting, strategy, and technology innovation services in areas such as cloud platforms, cybersecurity and artificial intelligence. Engineering Our engineering foundation underpins how we architect, build and scale next-generation software solutions and agile delivery teams.
Our service offerings continuously evolve to provide more customized and integrated solutions to our clients. We combine software engineering with customer experience design, business consulting, strategy, and technology innovation services in areas such as cloud platforms, cybersecurity and artificial intelligence. Our strategy is increasingly focused on providing end-to-end AI-native transformations, which require deep expertise across all of our service lines.
In 2023, the employee experience we create was recognized with awards from a number of different organizations in North America, Europe, and Asia, and we were also named on Newsweek’s list of Top 100 Most Loved Workplaces for the fourth consecutive year and recognized by Glassdoor as a Best Workplace for three consecutive years.
Our focus on our employees’ experience is recognized inside and outside of EPAM. In 2025, the employee experience we create was recognized with awards from a number of different organizations in the Americas, Europe, and Asia, and we were also named to the Forbes World’s Best Employers list and recognized by Glassdoor as a Best Workplace for four consecutive years.
As of December 31, 2024, 2023 and 2022, we had approximately 61,200, 53,150, and 59,300 employees, respectively, of which approximately 55,100, 47,350, and 52,850 were delivery professionals, respectively. 5 Table of Contents Health, Safety, and Wellness: We invest in programs designed to improve the physical, mental, and social well-being of our employees so we can offer a safe, welcoming, and productive workplace that supports and enhances the work-life balance and wellness of our employees.
Health, Safety, and Wellness: We invest in programs designed to improve the physical, mental, and social well-being of our employees so we can offer a safe, welcoming, and productive workplace that supports and enhances the work-life balance and wellness of our employees.
Several foreign and U.S. federal and state agencies regulate various aspects of our business. See “Item 1A.
Regulations Due to the industry and geographic diversity of our operations and services, our operations are subject to a variety of rules and regulations. Several foreign and U.S. federal and state agencies regulate various aspects of our business. See “Item 1A.
Our digital learning platform provides our employees with a recommendation engine that suggests courses and materials based on employee role, level, location and skills.
We deliver training and development opportunities and content through our unique learning ecosystem and through dedicated learning events, using proprietary platforms that are available to all of our employees. Our digital learning platform provides our employees with a recommendation engine that suggests courses and materials based on employee role, level, location and skills.
We drive AI and GenAI strategy, delivery and enablement from a business perspective to ensure meaningful, sustained outcomes. Our hybrid, networked teams of consultants, designers, architects, engineers and trainers have developed numerous proprietary data accelerators, repeatable AI frameworks and methodologies that can be implemented quickly and at scale.
Our hybrid, networked teams of consultants, designers, architects, engineers and trainers have developed numerous proprietary data accelerators, repeatable AI frameworks and methodologies that can be implemented quickly and at scale. Our strategy also involves engaging clients on the critical prerequisite work required to enable AI applications, including modernizing cloud infrastructure.
We rely on a combination of intellectual property laws, trade secrets, cybersecurity, and confidentiality obligations to protect our intellectual property.
We have invested, and will continue to invest, in research and development to enhance our knowledge, create solutions for our clients, and continuously advance our information security. We rely on a combination of intellectual property laws, trade secrets, cybersecurity, and confidentiality obligations to protect our intellectual property.
Ukraine continues to be a significant delivery location for us and we had 8,764 delivery professionals there as of December 31, 2024, compared with 9,113 delivery professionals as of December 31, 2023.
Ukraine continues to be a significant delivery location for us and we had approximately 8,750 delivery professionals there as of December 31, 2025, compared with 8,764 delivery professionals as of December 31, 2024. Since the Russian forces' attack on Ukraine and its people began on February 24, 2022, our teams remain highly focused on maintaining uninterrupted production.
We have been recognized by many top global independent research agencies, such as Forrester, Gartner, IDC and Everest and by publications such as Newsweek, Forbes and Fortune.
We maintain a marketing team, which coordinates corporate-level branding efforts such as participation in and the hosting of industry conferences and events as well as sponsorship of programming competitions. We have been recognized by many top global independent research agencies, such as Forrester, Gartner, IDC and Everest and by publications such as Newsweek, TIME Magazine, Forbes and Fortune.
Industry Expertise Strong industry-specific knowledge, backed by extensive experience merging technology with our clients’ business processes, enables us to deliver tailored solutions to various industry verticals. Our clients operate in five main industry verticals as well as a number of emerging verticals where we are increasing our presence.
Our clients operate in five main industry verticals as well as a number of emerging verticals where we are increasing our presence.
This requires pervasive security that matches the rapid pace of agile development, ensures regulatory compliance, training, and aligns with business objectives. We help our clients achieve their security objectives through our security by design approach, architect security controls into systems and processes, and our agile security platform, AI-driven tools that allow for rapid threat responses and attack simulations.
Cybersecurity We guide our clients through achieving operational resilience against evolving cybersecurity threats. This requires pervasive security that matches the rapid pace of agile development, ensures regulatory compliance, training, and aligns with business objectives.
In addition to effective client management, our sales model also utilizes an integrated sales and marketing approach that leverages a dedicated sales team to identify and acquire new accounts. We maintain a marketing team, which coordinates corporate-level branding efforts such as participation in and the hosting of industry conferences and events as well as sponsorship of programming competitions.
In addition to effective client management, our sales model also utilizes an integrated sales and marketing approach that leverages a dedicated sales team to identify and acquire new accounts. Our sales and marketing efforts are increasingly AI-enabled, leveraging internal data platforms to create a comprehensive view of our clients which enables more personal and tailored conversations.
Our electronic library platform makes books and publications available to all of our employees and we celebrate learning achievements through our recognition portal, where we promote our employees’ learning accomplishments and employees can recognize each other for their teamwork, initiative, and unique, valuable skills.
We celebrate our employees’ learning accomplishments and employees can recognize each other for their teamwork, initiative, and unique, skills through our recognition portal. Culture: Our talented personnel include people with varied backgrounds and characteristics to drive innovation and new approaches to delivering services to our clients.
By understanding our impact on local, regional and global communities, we strive to create positive change and opportunities in areas where it is needed most. We believe responsible stewardship of the environment is critical, and we take this responsibility seriously.
By understanding our impact on local, regional and global communities, we strive to create positive change and opportunities in areas where it is needed most. From an environmental perspective, we are committed to reducing greenhouse gas emissions across our operations and have established Science Based Targets initiative (“SBTi”) targets to guide our progress.
We approach enterprise security holistically, extending our services across proactive defense and actionable intelligence to engineer an effective security model. Our specialties within the cybersecurity domain include managed detection and response, digital risk management, cybersecurity advisory, cloud and data security, zero trust design and implementation and cyber intelligence and managed incident response services.
Our specialties within the cybersecurity domain include managed detection and response, digital risk management, cybersecurity advisory, cloud and data security, zero trust design and implementation, and cyber intelligence and managed incident response services. 3 Table of Contents Industry Expertise Strong industry-specific knowledge, backed by extensive experience merging technology with our clients’ business processes, enables us to deliver tailored solutions to various industry verticals.
We assist these clients with challenges stemming from new regulations, compliance requirements, client-based needs and risk management.
We assist these clients with challenges stemming from new regulations, compliance requirements, client-based needs and risk management. Our financial services domain experts have been recognized with industry awards for engineering and deploying unique applications and business solutions that facilitate growth, competitiveness, regulatory compliance and client interaction while driving cost efficiency and digital transformation.
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We apply innovative design ideas for clients looking to improve user experiences and drive greater customer engagement. We assist them in digitally transforming into adaptive, product-centric organizations that reinvent experiences in real time. Additionally, we specialize in physical experience where we conceive, develop physical products and design spaces for a digital world.
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Our focus has sharpened on providing the foundational data engineering, decisioning and platform modernization services that are critical for large-scale AI-readiness and AI adoption. We drive AI strategy, delivery and enablement from a business perspective to ensure meaningful, sustained outcomes.
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Within our clients’ organizations, we reshape processes for the workforce through engaging, enabling and empowering experiences. Moreover, we help set up marketing teams and brands to remain relevant in the future. Cybersecurity We guide our clients through achieving operational resilience against evolving cybersecurity threats.
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We bring together strategy, design, and engineering to help organizations transform into adaptive, product-centric businesses that can reinvent experiences in real time. Our teams design seamless digital and physical interactions, reimagining products, services, and spaces for a connected world. Inside our clients’ organizations, we reshape processes and employee journeys to engage, enable, and empower the workforce.
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Since the Russian forces' attack on Ukraine and its people began on February 24, 2022, our operations in Ukraine have not been significantly impacted, and our teams remain highly focused on maintaining uninterrupted production.
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From vision to execution, we deliver customer and employee experiences that accelerate growth and strengthen loyalty. Marketing Through our agency brand, Empathy Lab, our marketing domain experts work with multidisciplinary teams to help CMOs navigate the accelerating shifts reshaping marketing, commerce, and customer experience.
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We deliver training and development opportunities and content through our unique learning ecosystem that promotes learning in the daily workflow to improve retention and productivity, and through dedicated learning events. We deliver learning and development content through proprietary platforms that are available to all of our employees.
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We unite creativity, data, design, engineering, and applied AI to build orchestrated, customer-centered growth systems for the AI era, transforming fragmented marketing capabilities into adaptive, always-on ecosystems. From next-generation content production and agentic commerce to generative loyalty and intelligent products, we partner with brands to reimagine how marketing drives growth - end to end, from strategy through execution.
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Culture: EPAM provides our clients with the skills of our talented personnel, which includes people with varied backgrounds and characteristics, to drive innovation and varied approaches to delivering our services.
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We help our clients achieve their security objectives by applying a security-by-design approach, integrating security controls into systems and processes, and leveraging our agile security platform while using AI-driven tools that allow for rapid threat responses and attack simulations. We approach enterprise security holistically, extending our services across proactive defense and actionable intelligence to engineer an effective security model.
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Increasing the breadth of viewpoints and experiences in executive and key operational leadership roles is an organizational priority that starts at the top of our organization.
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As of December 31, 2025, 2024 and 2023, we had approximately 62,850, 61,200, and 53,150 employees, respectively, of which approximately 56,600, 55,100, and 47,350 were delivery professionals, respectively.
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Our focus on our employees’ experience is recognized inside and outside of EPAM.
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Our career development programs create detailed and progressive training plans for our employees and help them choose from internal and external training options, mentoring programs, and hands-on opportunities to experience emerging technology areas.
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We face competition from various technology services providers such as Accenture, Atos, Capgemini, Cognizant Technology Solutions, Deloitte Digital, DXC Technology, Endava, Genpact, GlobalLogic, Globant, Grid Dynamics, HCL Technologies, Infosys, Tata Consultancy Services, and Wipro, among others. Additionally, we compete with numerous smaller local companies in the various geographic markets in which we operate.
Added
Additionally, we compete with numerous smaller local companies in the various geographic markets in which we operate. We believe that our focus on complex and innovative software product development solutions, our technical employee base, and our development and continuous improvement in process methodologies, applications and tools position us well to compete effectively in the future.
Removed
We continually strive to improve our environmental performance through implementation of sustainable development and environmental practices including recycling and upcycling electronics and computers, designing and releasing a carbon footprint calculator to our employees and the general public, and building new offices according to the conservation standards of the Leadership in Energy and Environmental Design rating system.
Added
Our ability to deliver end-to-end AI-native solutions is a key differentiator as companies move from AI experimentation to production.
Removed
EPAM was a Frost & Sullivan Enlightened Sustainable Growth Leader for the past three consecutive years. Intellectual Property Protecting our intellectual property rights is important to our business. We have invested, and will continue to invest, in research and development to enhance our knowledge, create solutions for our clients, and continuously advance our information security.
Added
Our efforts include monitoring and managing our emissions to ensure alignment with our reduction targets and implementing energy-efficient workplace practices. We also support the responsible use of electronic equipment by donating devices to those in need.
Added
To further advance our environmental objectives, we utilize an application to track and report our emissions, enabling greater transparency and accountability in our sustainability journey. 8 Table of Contents Intellectual Property Protecting our intellectual property rights is important to our business.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe important markets for both our clients and our delivery operations are increasingly interdependent and uncertainty about the outcome of changing economic and geopolitical conditions in those markets has caused, and could continue to cause our clients to reduce or defer their spending on new initiatives and technologies, resulting in clients reducing, delaying or eliminating spending on our services which negatively affects our business.
Biggest changeUncertainty about changing economic and geopolitical conditions in those markets has caused, and could continue to cause, our clients to reduce or defer their spending on new initiatives, technologies, and on our services, which negatively affects our business. 9 Table of Contents Civil, military, political, energy, and macroeconomic uncertainty exists and may increase in many of the global regions where we operate and where we derive our revenues.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Provision for Income Taxes.” Risks Related to Regulation and Legislation Existing policy and substantial changes to fiscal, political, regulatory and other federal policies may adversely affect our business and financial results. Changes in general economic or political conditions in the U. S. could adversely affect our business.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Provision for Income Taxes.” Risks Related to Regulation and Legislation Existing policy and substantial changes to fiscal, political, regulatory and other federal policies may adversely affect our business and financial results. General economic or political conditions in the U.S. could adversely affect our business.
There are a number of factors relating to our clients that are outside of our control, which might lead them to terminate or not renew a contract or project with us, or be unable to pay us, including: • financial difficulties, including client insolvency or bankruptcy or increased global inflationary pressures and elevated interest rates; • corporate restructuring, mergers, and acquisitions; • our inability to complete our contractual commitments and invoice and collect our contracted revenues; • change in strategic priorities or economic conditions that eliminate the impetus for the project or reduce technology-related spending; • change in outsourcing strategy resulting in moving more work to the client’s in-house technology departments or to our competitors; and • replacement of existing software with packaged software supported by licensors.
There are a number of factors relating to our clients that are outside of our control and which might lead them to terminate or not renew a contract or project with us, or be unable to pay us, including: • financial difficulties, including client insolvency or bankruptcy or increased global inflationary pressures and elevated interest rates; • corporate restructuring, mergers, and acquisitions; • our inability to complete our contractual commitments and invoice and collect our contracted revenues; • change in strategic priorities or economic conditions that eliminate the impetus for the project or reduce technology-related spending; • change in outsourcing strategy resulting in moving more work to the client’s in-house technology departments or to our competitors; and • replacement of existing software with packaged software supported by licensors.
The loss of any of our major clients, a significant decrease in the volume of work they outsource to us or price they are willing or able to pay us, if not replaced by new service engagements and revenues, could materially adversely affect our revenues and results of operations.
The loss of any of our major clients, a significant decrease in the volume of work they outsource to us or the price they are willing or able to pay us, if not replaced by new service engagements and revenues, could materially adversely affect our revenues and results of operations.
If our sales cycle unexpectedly lengthens for one or more large projects, it could negatively affect the timing of our revenues and our revenue growth. In certain cases, we may begin work and incur costs prior to executing a contract, which may cause fluctuations in recognizing revenues between periods or jeopardize our ability to collect payment from clients.
If our sales cycle unexpectedly lengthens for one or more large projects, it could negatively affect the timing of our revenues and our revenue growth. In certain cases, we begin work and incur costs prior to executing a contract, which may cause fluctuations in recognizing revenues between periods or jeopardize our ability to collect payment from clients.
Any such errors could result in disruptions to the proper functioning of the software we build, cause disruptions in our clients’ business, and allow unauthorized access to our or our clients’ proprietary information, resulting in claims for damages against us, litigation, and reputational harm that could materially adversely affect our business. General Risk Factors Our stock price is volatile.
Any such errors result in disruptions to the proper functioning of the software we build, cause disruptions in our clients’ business, and allow unauthorized access to our or our clients’ proprietary information, resulting in claims for damages against us, litigation, and reputational harm that could materially adversely affect our business. General Risk Factors Our stock price is volatile.
Any violations of these or other laws and regulations by our employees, independent contractors, subcontractors and agents, including third parties with which we associate or companies we acquire, could expose us to administrative, civil or criminal penalties, fines or business restrictions, which could have a material adverse effect on our results of operations and financial condition and would adversely affect our reputation and the market for shares of our common stock and may require certain of our investors to disclose their investment in us under certain state laws.
Any violations of these or other laws and regulations by our employees, independent contractors, subcontractors and agents, including third parties with which we associate or companies we acquire, could expose us to administrative, civil or criminal penalties, and fines or business restrictions, each of which could have a material adverse effect on our results of operations and financial condition and would adversely affect our reputation and the market for shares of our common stock and may require certain of our investors to disclose their investment in us under certain state laws.
Our business activities may be materially disrupted in the event of a partial or complete failure of any of these technologies or systems, which could be due to software malfunction, cybersecurity attacks, conversion errors due to system upgrades, damage from fire, earthquake, power loss, military action, telecommunications failure, unauthorized entry, government shutdowns, demands placed on internet infrastructure by users, increased bandwidth requirements or other events beyond our control.
Our business activities may be materially disrupted in the event of a partial or complete failure of any of these technologies or systems, which could be due to software malfunction, cybersecurity attacks, conversion errors due to system upgrades, damage from fire, earthquake, power loss, military action, telecommunications failure, unauthorized entry, government shutdowns, demands placed on internet or electrical infrastructure by users, increased bandwidth requirements or other events beyond our control.
War, terrorism, riot, civil insurrection or social unrest; man-made and natural disasters, the severity and frequency of which have increased due to climate change, including famine, flood, fire, earthquake, pandemics and other regional or global health crises, and storms, may cause clients to delay their decisions on spending for the services we provide and give rise to sudden significant changes in regional and global economic conditions and cycles.
War, terrorism, riot, civil insurrection or social unrest; man-made and natural disasters, the severity and frequency of which have increased due to climate change, including famine, flood, fire, earthquake, pandemics, storms, and regional or global health crises, may cause clients to delay their decisions on spending for the services we provide and give rise to sudden significant changes in regional and global economic conditions and cycles.
A majority of our revenues are generated in North America and Western Europe. However, most of our personnel and delivery centers are located outside of those geographies, including emerging markets. This exposes us to foreign exchange risks relating to revenues, compensation, purchases, capital expenditures, receivables and other balance-sheet items.
A majority of our revenues are generated in North America and Western Europe. However, most of our personnel and delivery centers are located outside of those geographies, including in many emerging markets. This exposes us to foreign exchange risks relating to revenues, compensation, purchases, capital expenditures, receivables and other balance-sheet items.
Risks Related to Our Operations Increases in wages, equity compensation, and other compensation expenses could limit our competitive advantage, increase our costs, and result in dilution to our stockholders. Wages for technology professionals in the emerging markets where we have significant operations and delivery centers are lower than comparable wages in more developed countries.
Risks Related to Our Operations Increases in wages, equity compensation, and other compensation expenses could limit our competitive advantage, increase our costs, and result in dilution to our stockholders. Wages for technology professionals in the emerging markets where we have significant operations and delivery centers are typically lower than comparable wages in more developed countries.
In addition, there are significant expenses associated with issuing stock-based compensation, and changes to our equity compensation practices and programs can affect our ability to attract and retain talent. Our operations in emerging markets subject us to greater economic, financial, and banking risks than we would face in more developed markets.
In addition, there are significant expenses associated with issuing equity under our stock-based compensation programs, and changes to our equity compensation practices and programs can affect our ability to attract and retain talent. Our operations in emerging markets subject us to greater economic, financial, and banking risks than we would face in more developed markets.
Clients may prefer service providers that have more locations, more personnel, more experience in a particular country or market, or that are based in countries that are more cost-competitive or have the perception of being more stable than some of the emerging markets in which we operate.
Clients may prefer service providers that have more locations, more personnel, more experience in a particular country, market, or technology, or that are based in countries that are more cost-competitive or have the perception of being more stable than some of the emerging markets in which we operate.
Despite our multiple security measures, any breach of our facilities, network, or information security defenses compromises the information stored in those locations and allows the accessed information to be held for ransom, publicly disclosed, misappropriated, lost or stolen.
Despite our multiple security measures, any breach of our facilities, network, or information security defenses compromises the information stored in those locations and allows the accessed information to be held for ransom, publicly disclosed, misappropriated, corrupted, lost or stolen.
Our clients have asked, and may come to expect, that we use generative AI along with human delivery personnel to develop software for them at comparatively lower costs than software developed solely by our human delivery personnel.
Our clients have asked, and may come to expect, that we use AI along with human delivery personnel to develop software for them at comparatively lower costs than software developed solely by our human delivery personnel.
In Belarus, we are a member of High-Technologies Park which provides for a full exemption from Belarus income and value added taxes until 2049 and reduced tax amounts on obligatory social contributions and other taxes.
In Belarus, we are a member of High-Technologies Park which provides a full exemption from Belarus income and value added taxes until 2049 and reduced tax amounts on obligatory social contributions and other taxes.
Developing solutions for our clients is extremely complex and is expected to become increasingly complex and expensive in the future due to the introduction of new platforms, operating systems, technologies and methodologies.
Developing solutions for our clients is extremely complex and is expected to become increasingly complex and expensive in the future due to the introduction of AI, new platforms, operating systems, technologies and methodologies.
U.S. policy with respect to a variety of issues, including AI, international trade agreements, conducting business offshore, inflation mitigation, interest rates, climate change, import and export regulations, tariffs and customs duties, foreign relations, immigration laws and travel restrictions, antitrust controls and enforcement, and corporate governance laws, could have a positive or negative impact on our business.
U.S. policy with respect to a variety of issues, including AI, international trade agreements, conducting business offshore, inflation mitigation, interest rates, climate change, import and export regulations, tariffs and customs duties, foreign relations, immigration laws, travel restrictions, antitrust controls and enforcement, financial reporting, and corporate governance laws, could have a positive or negative impact on our business.
The market for our services is highly competitive and we expect competition to persist and intensify, especially as we and our competitors develop generative AI capabilities and specialties.
The market for our services is highly competitive and we expect competition to persist and intensify, especially as we and our competitors develop AI capabilities and specialties.
Determining whether an individual is considered an independent contractor or an employee is typically fact sensitive, varies by jurisdiction, and is subject to change and interpretation.
Determining whether an individual is considered an independent contractor or an employee is typically fact sensitive, varies by jurisdiction, and is subject to interpretation.
Quantitative and Qualitative Disclosures About Market Risk.” We have cash in banks in countries such as Belarus, Ukraine, Kazakhstan, Georgia, Armenia, India, Argentina, and Uzbekistan, where the banking sector generally does not meet the banking standards of more developed markets, bank deposits made by corporate entities are not insured, and the banking system remains subject to instability, sanctions, and changes in regulations that complicate business transactions.
Quantitative and Qualitative Disclosures About Market Risk.” 13 Table of Contents We have cash in banks in countries such as Belarus, Ukraine, Kazakhstan, Georgia, Armenia, India, Argentina, and Uzbekistan, where the banking sector generally does not meet the banking standards of more developed markets, bank deposits made by corporate entities are not insured, and the banking system remains subject to instability, sanctions, and changes in regulations that complicate business transactions.
Enforcement actions taken by data protection authorities, as well as audits, investigations, or lawsuits by one or more individuals, organizations, or foreign government agencies have resulted in penalties and fines for non-compliance or claims against us seeking damages as a result of a breach of these regulations.
Enforcement actions taken by data protection authorities, as well as audits, investigations, or lawsuits by one or more individuals, organizations, or foreign government agencies have resulted in penalties and fines for non-compliance or claims seeking damages as a result of a breach of these regulations.
We have significant operations in emerging market economies in Central and Eastern Europe, Latin and South America, India, and certain other Asian countries, all of which are more vulnerable to market and economic volatility than larger and more developed markets and present risks to our business and operations.
We have significant operations in emerging market economies in Central and Eastern Europe, Latin and South America, India, Western Asia, and certain other Asian countries, all of which are more vulnerable to market and economic volatility than larger and more developed markets and present risks to our business and operations.
Our pricing is highly dependent on our internal forecasts, assumptions and predictions about our projects, the marketplace, global economic conditions (including foreign exchange volatility and inflation) and the coordination of operations and personnel in multiple locations with different skill sets and competencies.
Our pricing is highly dependent on our internal forecasts, assumptions and predictions about our clients and their projects, the marketplace, global economic conditions (including foreign exchange volatility and inflation) and the coordination of operations and personnel in multiple locations with different skill sets and competencies.
The risk of underpricing our services or underestimating the costs of performing the work is heightened in fixed-price contracts and in contracts that require our client to receive a productivity benefit as a result of the services performed under the contract.
The risk of underpricing our services or underestimating the costs of performing the work is heightened in fixed-price contracts, product licensing, and in contracts that require our client to receive a productivity benefit as a result of the services performed under the contract.
Delays in or the unavailability of visas and work permits could have a material adverse effect on our business, results of operations, financial condition and cash flows. We are subject to laws and regulations in the U. S. and other countries in which we operate, including export restrictions, economic sanctions, and anti-bribery and anti-corruption laws.
Delays in or the unavailability of visas and work permits could have a material adverse effect on our business, results of operations, financial condition and cash flows. 15 Table of Contents We are subject to laws and regulations in the U.S. and other countries in which we operate, including export restrictions, economic sanctions, and anti-bribery and anti-corruption laws.
We typically indemnify clients who purchase our products, services and solutions against potential infringement of third-party intellectual property rights, which subjects us to the risk and cost of defending the underlying infringement claims.
We typically indemnify clients who purchase our products, services and solutions against potential third-party intellectual property infringement claims, which subjects us to the risk and cost of defending the underlying infringement litigation.
Such a breach, misappropriation, or disruption, or the perception that we have been breached or are vulnerable to a breach, disrupts our operations and the services we provide to clients, and any actual, alleged, or perceived breach of network or information security that we suffer damages our reputation, causes a loss of confidence in our products and services, and requires us to expend significant resources, which may not be covered by insurance, to protect against further allegations and breaches and to rectify problems caused by these events.
Such a breach, or the perception that we have been breached or are vulnerable to a breach, disrupts our operations and the services we provide to clients, and any actual, alleged, or perceived breach of network or information security that we suffer causes damage to our reputation, a loss of confidence in our products and services, and requires us to expend significant resources, which may not be covered by insurance, to protect against further allegations and breaches and to rectify problems caused by these events.
Our success largely depends on our ability to use and develop our technology, tools, code, methodologies, products, and services without infringing the intellectual property rights, including patents, copyrights, trade secrets and trademarks, of third parties. We have been subject to intellectual property infringement claims alleging that we used third party trademarks or copyrighted materials without permission.
Our success largely depends on our ability to use and develop our technology, tools, code, methodologies, products, and services without infringing intellectual property rights - including patents, copyrights, trade secrets and trademarks - belonging to third parties. We have been subject to intellectual property infringement claims alleging that we used third-party trademarks or copyrighted materials without permission.
We have been incorporating AI, and particularly generative AI, into our products, services, and business, both due to client demand and because we expect that integrating generative AI into our services is a competitive requirement in a rapidly evolving market.
We have been incorporating AI into our products, services, and business, both due to client demand and because we expect that integrating AI into our services is a competitive requirement in a rapidly evolving market.
A substantial portion of our clients are concentrated in five industry verticals: Financial Services; Software & Hi-Tech; Business Information & Media; Consumer Goods, Retail & Travel; and Life Sciences & Healthcare.
A substantial majority of our clients are concentrated in five industry verticals: Financial Services; Software & Hi-Tech; Business Information & Media; Consumer Goods, Retail & Travel; and Life Sciences & Healthcare.
Our service model relies on maintaining active and stable utility connections, voice and data communications, online resource management, financial and operational record management, client service and data processing systems between our client sites, our delivery centers and our client management locations.
Our service model relies on maintaining active and stable utility connections, voice and data communications, online resource management, financial and operational record management, and our client service and data processing systems at client sites, our delivery centers, and our client management locations.
Rapid growth followed by decreased demand placed significant strain on our management and our administrative, operational and financial infrastructure, and created and may continue to create challenges, including: • recruiting, training and retaining sufficiently skilled professionals and management personnel while balancing headcount with client requirements; • balancing an increase in the number of experienced personnel that have correspondingly higher billing rates due to promotions against hiring, training, and deploying less experienced personnel at the lower rates sought by clients; • planning and maintaining resource utilization rates consistently and efficiently using on-site, off-site, near shore, and offshore staffing; • developing and maintaining close and effective relationships with potential and existing clients in a greater number of industries and locations; • controlling costs and minimizing cost overruns and project delays in our delivery operations and infrastructure; • effectively maintaining productivity levels and implementing process improvements across geographies and businesses during periods of uneven client demand; and • evolving our information security and our internal administrative, operational and financial infrastructure.
Rapid growth followed by decreased demand placed significant strain on our management and our administrative, operational and financial infrastructure, and created and may continue to create challenges, including: • recruiting, training and retaining sufficiently skilled professionals and management personnel while balancing headcount with client requirements; • balancing an increase in the number of experienced personnel that have correspondingly higher billing rates against hiring, training, and deploying less experienced personnel at the lower rates sought by clients; • planning and maintaining resource utilization rates consistently and efficiently using on-site, off-site, near shore, and offshore staffing across our geographic mix of resources; 11 Table of Contents • developing and maintaining close and effective relationships with potential and existing clients in a greater number of industries and locations; • controlling costs and minimizing cost overruns and project delays in our delivery operations and infrastructure; • effectively maintaining productivity levels and implementing process improvements across geographies and businesses during periods of uneven client demand; and • evolving our information security and our internal administrative, operational and financial infrastructure.
Some of our clients have experienced lay-offs, volatile stock prices, higher borrowing costs, and lower consumer spending on products and services which has resulted in reduced spending on our and other outsourced services.
Some of our clients have experienced lay-offs, volatile stock prices, higher borrowing costs, and lower consumer spending on products and services which has resulted in reduced spending on our services.
The burden of complying with additional data protection requirements results in significant additional costs and complexity and risk in our services as clients attempt to shift the risks of data privacy legislation to us.
The burden of complying with additional data protection requirements results in significant additional costs and complexity and risk in our services as clients attempt to shift the risks of data privacy laws to us.
Any significant failure to generate revenues or delays in recognizing revenues after incurring costs related to our sales or services processes could have a material adverse effect on our business. 17 Table of Contents If we are unable to adapt to rapidly changing technologies, methodologies and evolving industry standards, we may lose clients and our business could be materially adversely affected.
Any significant failure to generate revenues or delays in recognizing revenues after incurring costs related to our sales or services processes could have a material adverse effect on our business. If we are unable to adapt to rapidly changing technologies, methodologies and evolving industry standards, we may lose clients and our business could be materially adversely affected.
In addition, some countries where we operate and some banks that we use have imposed regulatory or practical restrictions on the movement of cash and the exchange of foreign currencies within their banking systems or to other banking systems, which limits our ability to distribute cash across our global operations and increases our exposure to currency fluctuations and regional banking instability.
In addition, some countries where we operate and some banks that we use have imposed regulatory or practical restrictions on the movement of cash and the exchange of foreign currencies within their banking systems or to other banking systems, which limits or could eliminate our ability to distribute cash from those countries across our global operations and increases our exposure to currency fluctuations and regional banking instability.
Our effective tax rate could be materially adversely affected by several factors, including changes in the amount of income taxed by or allocated to the various jurisdictions in which we operate and their differing statutory tax rates; changing tax laws, treaties, regulations and interpretations of such rules in one or more jurisdictions, including the global implementation of a 15% minimum tax; and the resolution of issues arising from tax audits or examinations and any related interest or penalties.
Our effective tax rate could be materially adversely affected by several factors, including changes in the amount of income taxed by or allocated to the various jurisdictions in which we operate and their differing statutory tax rates; changing tax laws, treaties, regulations and interpretations of such rules in one or more jurisdictions, including the implementation of minimum tax rules in many countries; and the resolution of issues arising from tax audits or examinations and any related interest or penalties.
We must manage the utilization levels of our professionals by effectively planning for future needs and staffing projects appropriately while accurately predicting the general economy, the geographies and locations where our personnel are needed, and our clients’ need for our services.
We must manage the utilization levels of our professionals by effectively planning for future needs and staffing projects appropriately while accurately predicting the general economy, the geographies and locations where our personnel will be needed, and our clients’ need for our services.
If our trademarks are successfully challenged, we could be forced to rebrand our services and solutions, which could result in loss of brand recognition, and could require us to devote additional resources to advertising and marketing new brands.
If our trademarks 19 Table of Contents are successfully challenged, we could be forced to rebrand our services and solutions, which could result in loss of brand recognition, and could require us to devote additional resources to advertising and marketing new brands.
These claims require us to initiate or defend litigation on behalf of our clients, regardless of the merits of these claims, and our indemnification obligations are sometimes not subject to liability limits or exclusion of consequential, indirect or punitive damages.
These claims require us to initiate or defend legal action on behalf of our clients, regardless of the merits of these claims, and our indemnification obligations are sometimes not subject to liability limits or exclusion of consequential, indirect or punitive damages.
If our pricing structures are based on inaccurate expectations and assumptions regarding the cost and complexity of performing our work, or if we are not able to maintain favorable pricing for our services, then our contracts could be unprofitable. We face a number of risks when pricing our contracts with our clients.
If our pricing structures are based on inaccurate expectations and assumptions regarding the cost and complexity of performing our work, or if we are not able to maintain favorable pricing for our services, then our contracts could be unprofitable or we may not meet our profitability projections. We face a number of risks when pricing our contracts with our clients.
We may not be able to successfully anticipate and prepare for any such changes, which could adversely affect our results of operations. Furthermore, developments in the industries we serve shift client demand to new services, solutions or technology, such as generative AI.
We may not be able to successfully anticipate and prepare for any such changes, which could adversely affect our results of operations. Furthermore, developments in the industries we serve shift client demand to new services, solutions or technology, such as AI-enabled business processes.
We have and will continue to invest in new lines of business, such as software development education, AI and generative AI, expanded consulting services, and in new geographies. As we introduce new services, enter into new markets and new client relationships, and take on increasingly large and complex projects, our business will face new risks and challenges.
We have and will continue to invest in new lines of business, such as AI, expanded consulting services, and in new geographies. As we introduce new services, enter into new markets and new client relationships, and take on increasingly large and complex projects, our business will face new risks and challenges.
With respect to geopolitical instability, we have developed business continuity plans that are designed to ensure that we have adequate processes and practices in place to protect the safety of our people and to handle foreseeable impacts on our delivery capabilities, but our crisis management procedures, business continuity plans, and disaster recovery capabilities may not be effective at preventing or mitigating the effects of prolonged, unanticipated, or multiple crises, such as civil unrest, energy instability and a pandemic in multiple geographies where we or our clients operate.
With respect to geopolitical instability, we have developed business continuity plans that are designed to ensure that we have adequate processes and practices in place to protect the safety of our people and to respond to foreseeable impacts on our delivery capabilities, but our crisis management procedures, business continuity plans, and disaster recovery capabilities may not be effective at preventing or mitigating the effects of prolonged, unanticipated, or multiple crises, such as civil unrest, energy instability and a pandemic in multiple geographies at the same time.
As we plan, develop, and implement changes to our delivery model to balance those services that can only be performed by humans against those that can be performed leveraging generative AI, we may have insufficient or excess delivery personnel than we require to meet client demand.
As we plan, develop, and implement changes to our delivery model to balance those services that can only be performed by humans against those that can be performed by leveraging AI, we may have insufficient or excess delivery personnel than required by client demand.
Termination, non-renewal, or renegotiation of a client contract or delayed starts to projects cause us to experience a higher-than-expected number of unassigned employees and thus compress our margins until we are able to reallocate our headcount.
Termination, non-renewal, or renegotiation of a client contract or delayed starts to projects cause us to experience a higher-than-expected number of unassigned employees and thus compress our margins until we are able to reallocate our 16 Table of Contents headcount to paying client projects.
Our ability to counter or attenuate the negative impacts of global macroeconomic forces on our business is limited.
Our ability to counter or attenuate the negative impacts of such global forces on our business is limited.
Failure to invest in and comply with ESG initiatives and regulations could limit our access to certain markets, result in fines, or cause reputational harm, and commitment to ESG policies and programs could similarly harm our business and reputation with investors, clients, and the public.
Failure to invest in and comply with ESG initiatives and regulations could limit our access to certain markets, result in fines, or cause reputational harm, and commitment to ESG policies and programs could similarly harm our business and reputation with investors, clients, and the public and subject us to legal liability.
In some cases, breaches of confidentiality obligations, including obligations to protect personally identifiable information, may entitle the aggrieved party to equitable remedies, including injunctive relief.
In some cases, breaches of confidentiality obligations, including protecting personally identifiable information, may entitle the aggrieved party to seek equitable remedies, including injunctive relief.
Wage inflation, whether driven by competition for talent, ordinary course pay increases, or broader market forces, all increase our cost of providing services and reduce our profitability when we are not able to pass those costs on to our clients or adjust prices when justified by market demand.
Wage inflation, whether driven by competition for talent, ordinary course pay increases, prevailing wages in a specific geography, or broader market forces, all increase our cost of providing services and reduce our profitability when we are not able to pass those costs on to our clients or adjust prices when justified by market demand.
Although we maintain professional liability insurance, product liability insurance, cyber incident insurance, commercial general and property insurance, business interruption insurance, workers’ compensation coverage, and umbrella insurance for certain of our operations, our insurance coverage does not insure against all risks in our operations, or all claims we may receive.
Although we maintain professional liability insurance, product liability insurance, cyber incident insurance, commercial general and property insurance, business interruption insurance, workers’ compensation coverage, and umbrella insurance for 18 Table of Contents certain of our operations, our insurance coverage does not insure against all risks in our operations, or all claims we may face.
Further, when we become aware that third parties are infringing our trademarks, we have to divert resources and management attention to enforce our trademarks, possibly through litigation, which may not be successful and may result in substantial costs. 19 Table of Contents We may face intellectual property infringement claims that could be time-consuming and costly to defend.
Further, when we become aware that third parties are infringing our trademarks, we have to divert resources and management attention to enforce our trademarks, possibly through litigation, which may not be successful and may result in substantial costs. Intellectual property infringement claims are time-consuming and costly to defend.
If a tax authority in any jurisdiction reviews any of our tax returns and proposes an adjustment, including, but not limited to, a determination that the transfer prices and terms we have applied are not appropriate, such an adjustment could have a negative impact on our results of operations, business, and profitability.
If a tax authority in any jurisdiction reviews any of our tax returns and proposes an adjustment, including, but not limited to, a determination that the transfer prices and terms we have applied are not appropriate, such an adjustment could have a negative impact on our results of operations, business, and profitability. Item 1B. Unresolved Staff Comments None.
In any of the countries in which we operate, prolonged civil unrest, political instability or uncertainty, military activities, broad-based sanctions or counter-sanctions, should they continue for the long-term or escalate, could require us to further rebalance our geographic concentrations and could have a material adverse effect on our personnel, operations, financial results and business outlook.
If prolonged civil unrest, political instability or uncertainty, military activities, or broad-based sanctions or counter-sanctions continue for the long-term or escalate in any of the countries in which we operate, we would need to further rebalance our geographic concentrations, which could have a material adverse effect on our personnel, operations, financial results and business outlook.
Clients tend to engage multiple IT services providers instead of using an exclusive IT services provider, which reduces our revenues and places downward pressure on pricing among competing IT services providers.
Clients tend to engage multiple IT services providers instead of using an exclusive IT services provider, which limits our revenues and market share and places downward pressure on pricing among competing IT services providers.
GDPR, and GDPR each established complex legal obligations which organizations must follow with respect to the processing of personal data, including a prohibition on the transfer of personal information to third parties or to other countries, and the imposition of additional notification, security and other control measures. Recent developments in privacy regulations, including the EU-U.S.
GDPR, GDPR, and India’s Digital Personal Data Protection Act each establish complex legal obligations which organizations must follow with respect to the processing of personal data, including a prohibition on the transfer of personal information to third parties or to other countries, and the imposition of additional notification, security and other control measures. Developments in privacy regulations, including the EU-U.S.
In addition, government regulators have sought and may continue to seek to impose fines, penalties, and other civil or criminal consequences for real or suspected security breaches and perceived inadequate information security or disclosures.
In addition, government regulators have introduced new cybersecurity regulation frameworks and have sought and may continue to seek to impose fines, penalties, and other civil or criminal consequences for real or suspected security breaches and perceived inadequate information security or disclosures.
Emerging market vulnerability, and especially its impact on currency exchange volatility and banking systems, could have a material adverse effect on our business, financial condition and results of operations. 13 Table of Contents If we are unable to compete successfully against competitors, pricing pressures or loss of market share could have a material adverse effect on our business.
Emerging market vulnerability, and especially its impact on currency exchange volatility and banking systems, could have a material adverse effect on our business, financial condition and results of operations. If we are unable to compete successfully against others in our industry, pricing pressures or loss of market share could have a material adverse effect on our business.
In addition, the existence and ownership of intellectual property rights created by generative AI technologies is currently subject to judicial and legislative review, and many jurisdictions do not recognize the existence of any protectable intellectual property rights in materials created by generative AI.
The existence, ownership, and use of intellectual property rights created using AI technologies is subject to judicial and legislative review, and many jurisdictions do not recognize the existence of any protectable intellectual property rights in materials created by AI.
Generative AI technologies have changed how we identify, recruit, hire, retain, and efficiently utilize our professionals and are changing how we can charge for their services.
AI technologies have changed how we identify, recruit, hire, retain, and efficiently utilize our professionals and are changing how we perform and charge for services.
Expense related to our liability-classified restricted stock units, which are subject to mark-to-market accounting, and the calculation of the weighted average diluted shares outstanding in accordance with the treasury method are both affected by our stock price.
Expense related to our liability-classified restricted stock units, which are subject to mark-to-market accounting, and the calculation of the weighted average diluted shares outstanding in accordance with the treasury method are both affected by our stock price. Any fluctuations in the price of our stock will affect our future operating results.
Errors or defects in design, execution, or quality inspections may result in the loss of current clients, revenues, market share, or client data, a failure to attract new clients or achieve market acceptance and could divert development resources and increase support or service costs.
Errors or defects in design, execution, or quality inspections result in the loss of current clients, revenues, market share, or client data, make it difficult to attract new clients or achieve market acceptance, and divert development resources and increase support or service costs.
In particular, as of December 31, 2024, approximately 13,950 of our global delivery, administrative and support personnel were based in Ukraine and Belarus, both of which are involved in or affected by Russia’s invasion of Ukraine.
In particular, as of December 31, 2025, approximately 14,100 of our global delivery, administrative and support personnel were based in Ukraine and Belarus, both of which are involved in or affected by Russia’s invasion of Ukraine.
Before potential clients commit to use our services, we must expend substantial time and resources educating them on the value of our services and our ability to meet their requirements.
We have a long selling cycle for our services. Before potential clients commit to use our services, we must expend substantial time and resources educating them on the value of our services and our ability to meet their requirements.
These individual, group, and organized actors have a variety of methods at their disposal, including deploying malicious software, exploiting vulnerabilities in hardware, software, or infrastructure, using social engineering or deceptive techniques to obtain information or gain access to our or our clients’ or vendors’ data, exploiting remote working connectivity and security susceptibilities, and executing coordinated attacks to compromise our services, disrupt our operations, damage our reputation, or gain access to our communications, networks and data centers. 20 Table of Contents We have in the past experienced cybersecurity incidents and expect to continue to be the target of malicious attacks.
These individual, group, and organized actors have a variety of methods at their disposal, including deploying malicious software, exploiting vulnerabilities in hardware, software, or infrastructure, using social engineering or deceptive techniques to obtain information or gain access to our or our clients’ or vendors’ data, exploiting remote working connectivity and security susceptibilities, using AI to enhance, automate, and scale cyberattacks, and executing 20 Table of Contents coordinated attacks to compromise our services, disrupt our operations, damage our reputation, or gain access to our communications, networks and data centers.
Some of our projects require our personnel to obtain visas to travel and work at client sites outside of our personnel’s home countries and often in the U.S.
Some of our projects require our personnel to obtain visas to travel and work at client sites outside of our personnel’s home countries.
Our software development solutions involve a high degree of technological complexity, have unique specifications and could contain design defects or software errors that are difficult to detect or correct, including as a result of the introduction of new and emerging technologies such as AI.
Our software development solutions involve a high degree of technological complexity and have unique specifications. Design defects or software errors are difficult to detect or correct, including those resulting from new and emerging technologies, such as AI.
The U.S. administration has announced plans to levy tariffs, economic sanctions, and other restrictions on trade with the countries where we employ professionals and conduct significant operations and may also levy restrictions with little or no warning. The majority of our professionals are offshore.
The U.S. administration has levied tariffs, imposed economic sanctions, and created other restrictions on trade with the countries where we employ professionals and conduct significant operations and may also institute additional impediments to global trade with little or no warning. The majority of our professionals are offshore.
EPAM is subject to the GDPR, the substantially similar U.K. GDPR, the privacy laws of California and other U.S. states, and the privacy laws of the other countries where we operate, each of which imposes significant restrictions and requirements relating to the processing of personal data and can include significant financial penalties for non-compliance.
GDPR, the privacy laws of California and other U.S. states, India’s Digital Personal Data Protection Act, and the privacy laws of the other countries where we operate, each of which imposes significant restrictions and requirements relating to the processing of personal data and can include significant financial penalties for non-compliance.
In the event of a counterparty default, we could incur significant losses, which may harm our business and financial condition. In the event that one or more of our counterparties becomes insolvent or files for bankruptcy, our ability to eventually recover any losses suffered as a result of that counterparty’s default may be limited by the liquidity of the counterparty.
In the event that one or more of our counterparties becomes insolvent or files for bankruptcy, our ability to eventually recover any losses suffered as a result of that counterparty’s default may be limited by the liquidity of the counterparty.
If one or more of our senior executives or key employees are unable or unwilling to continue in their present positions, we may not be able to replace them easily or at all.
Our success heavily depends upon the continued services of our senior executives and other key employees. If one or more of our senior executives or key employees are unable or unwilling to continue in their present positions, we may not be able to replace them easily or at all.
Volatile, negative, and uncertain global macroeconomic and geopolitical conditions have and could continue to reduce confidence in our business and our delivery model and in the businesses and markets served by our clients.
Volatile, negative, and uncertain global macroeconomic and geopolitical conditions have and could continue to reduce confidence in our business and our delivery model and in the businesses and markets served by our clients. Markets that are important for both our clients and our delivery operations are increasingly interdependent.
We have no way to predict the progress or outcome of the war in Ukraine or its impacts in Belarus or the region because the conflict and government reactions are rapidly changing and beyond our control.
We have no way to predict the progress or outcome of the war in Ukraine, any cease fire or other end to active fighting, or their impacts in Belarus or the region because the conflict and government reactions are rapidly changing and beyond our control.
If a government authority changes the applicable laws or a court makes an adverse determination with respect to independent contractors in general or our independent contractors specifically, we could incur significant costs, including for prior periods, related to tax withholding, social security taxes or payments, workers’ compensation and unemployment contributions, and recordkeeping, or we may be required to modify our business model, any of which could materially adversely affect our business, financial condition and results of operations and increase the difficulty of attracting and retaining personnel.
If a government authority changes the applicable laws or a court makes an adverse determination with respect to independent contractors in general or our independent contractors specifically, we could incur significant costs, including for prior periods, related to tax withholding, social security taxes or payments, workers’ compensation and unemployment contributions, and recordkeeping, or we may be required to modify our business model, any of which could materially adversely affect our business, financial condition and results of operations and increase the difficulty of attracting and retaining personnel. 12 Table of Contents Our success depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely disrupted if we lose their services and our succession planning efforts are ineffective.
Obtaining the required visas and work permits can be lengthy and difficult due to political forces and economic conditions limiting the number of permitted applications and application and enforcement processes may cause delays or rejections when trying to obtain visas.
Obtaining the required visas and work permits for the U.S. has become more lengthy and difficult. Political forces and economic conditions limiting the number of permitted applications and application and enforcement processes may cause additional delays or rejections when trying to obtain visas.
Additionally, if we are unable to effectively train existing personnel to develop new skills and adequately maintain existing skills, our ability to win new work and successfully complete existing projects may be impaired.
Additionally, if we are unable to effectively train existing personnel to develop new skills, our ability to win new work and implement new technologies in client projects may be impaired.
Other parties, such as our clients’ customers, who have a private right of action, will seek damages for any information security or privacy breach on an individual or collective basis, and our clients have in the past, and may in the future, request to be indemnified against such claims.
Other parties, such as our clients’ customers, have claimed damages against our clients for information security or privacy breaches on an individual or collective basis, and our clients have in the past, and may in the future, request to be indemnified against such claims.
Furthermore, our acquired companies’ contracts with their clients sometimes lack terms and conditions that adequately protect us against the risks associated with the services we provide, and our acquired companies’ legacy business operations can expose us to potential liability. Acquisitions also divert significant management attention and financial resources from our ongoing business.
Our acquired companies’ contracts with their clients sometimes lack terms and conditions that adequately protect us against the risks associated with the services we provide, and our acquired companies’ legacy business operations and contract terms can expose us to potential liability.
The sale of additional equity securities could result in dilution to our stockholders, and additional indebtedness would result in increased debt service costs and obligations and could impose operating and financial covenants that would further restrict our operations. Our hedging program is subject to counterparty default risk. We enter into foreign currency forward contracts with a number of counterparties.
The sale of additional equity securities could result in dilution to our stockholders, and additional indebtedness would result in increased debt service costs and obligations and could impose operating and financial covenants that would further restrict our operations. 22 Table of Contents Our hedging program is subject to counterparty default risk.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe review third-party cybersecurity controls through questionnaires, audits, and contract reviews, including adding security and privacy addenda to our contracts where applicable, and generally receive or commission system and organization controls reports, if available. We also generally require that our vendors report cybersecurity incidents to us so that we can assess the impact of an incident if it occurs.
Biggest changeIn addition to internal and external assessments of our own preparedness, we also seek to evaluate cybersecurity risks arising from our vendors and other third-party service providers. We review third-party cybersecurity controls through questionnaires and contract reviews, including adding security and privacy addenda to our contracts where applicable, and generally receive or commission system and organization controls reports, if available.
As of the year ending December 31, 2024, prior cybersecurity incidents have not, to our knowledge, had a material effect on our business, financial condition, results of operations, or cash flows but we cannot provide assurances that there will not be material cybersecurity incidents in the future that have a material adverse effect on our business, finances, operations, or reputation.
As of the year ending December 31, 2025, prior cybersecurity incidents have not, to our knowledge, had a material effect on our business, financial condition, results of operations, or cash flows but we cannot provide assurances that there will not be material cybersecurity incidents in the future that have a material adverse effect on our business, finances, operations, or reputation.
In 2024, the Board delegated cybersecurity and information technology systems oversight to the Audit Committee while simultaneously creating a subcommittee of the Audit Committee solely focused on EPAM’s cybersecurity and information security, including risk monitoring, assessment and management systems and policies.
In 2024, the Board delegated 23 Table of Contents cybersecurity and information technology systems oversight to the Audit Committee while simultaneously creating a subcommittee of the Audit Committee solely focused on EPAM’s cybersecurity and information security, including risk monitoring, assessment and management systems and policies.
For more information about the cybersecurity risks we face, see the risk factor entitled “Security breaches and other disruptions to our network security that compromise our information expose us to liability and cause our business and reputation to suffer.” in Item 1A – Risk Factors.
For more 24 Table of Contents information about the cybersecurity risks we face, see the risk factor entitled “Security breaches and other disruptions to our network security that compromise our information expose us to liability and cause our business and reputation to suffer.” in Item 1A – Risk Factors.
Item 1C. Cybersecurity Our Cybersecurity Risk Management Program We believe cybersecurity is a critical element in our business and in enabling digital transformation for our clients. EPAM and our clients and suppliers all face risks from cybersecurity threats and a cybersecurity incident impacting any or all of us could materially adversely affect our operations, performance, reputation, and results of operations.
Item 1C. Cybersecurity Our Cybersecurity Risk Management Program We believe cybersecurity is critical to our business and to our clients. EPAM, our clients, and our suppliers all face risks from cybersecurity threats and a cybersecurity incident impacting any or all of us could materially adversely affect our operations, performance, reputation, and results of operations.
Cybersecurity Risk Management The governance structure, controls, and processes of our information security programs are based on industry best practices, our own practices and frameworks, and codified cybersecurity and information technology standards, including compliance with the International Organization Standardization/International Electrotechnical Commission 27001:2002 Information Security Management Systems standard, the International Standard on Assurance Engagements 3402 standard, as well as applicable laws and regulations.
Cybersecurity Risk Management The governance structure, controls, and processes of our information security programs are based on industry best practices, our own practices and frameworks, and codified cybersecurity and information technology standards, including compliance with the International Organization Standardization/International Electrotechnical Commission 27001:2002 Information Security Management Systems standard, the National Institutes of Standards and Technology Cybersecurity Framework, the Center for Internet Security Controls, as well as applicable laws and regulations.
In addition to regular and periodic updates to the cybersecurity subcommittee, our Chief Information Security Officer and our Head of Global Operations brief the Board on our cybersecurity and information security programs and risks, both as a regular, standalone topic and as part of EPAM’s enterprise risk management program, where it remains rated as a high priority risk that has been integrated into our regular enterprise risk management assessments.
In addition to regular and periodic updates to the cybersecurity subcommittee, our Chief Information Security Officer (or the EPAM employee holding an equivalent position) briefs the Board on our cybersecurity and information security programs and risks, both as a regular, standalone topic and as part of EPAM’s enterprise risk management program, where it remains rated as a high priority risk that has been integrated into our regular enterprise risk management assessments.
The purpose of the delegation was to increase bilateral access and communication between our cybersecurity management and our Board members and to supplement and accelerate the cadence of cybersecurity updates and discussion in addition to the regular briefings provided to the entire Board.
The purpose of the delegation was to increase bilateral access and communication between our cybersecurity management and our Board members and to supplement and accelerate the cadence of cybersecurity updates and discussion in addition to the regular briefings provided to the entire Board. The Board has renewed the cybersecurity subcommittee delegation each year since its inception.
We have established processes and a committee to gather facts to make a multi-layered evaluation and determination of the impact and materiality of cybersecurity incidents and to apply information learned from each incident to protect EPAM, its personnel, and its clients from future cybersecurity risks. 24 Table of Contents In addition to internal and external assessments of our own preparedness, we also seek to evaluate cybersecurity risks arising from our vendors and other third-party service providers.
We have established processes and a committee to gather facts to make a multi-layered evaluation and determination of the impact and materiality of cybersecurity incidents and to apply information learned from each incident to protect EPAM, its personnel, and its clients from future cybersecurity risks.
For these reasons, EPAM maintains a cybersecurity risk management program designed to identify, assess, manage, mitigate, and respond to cybersecurity threats.
For these reasons, EPAM maintains a cybersecurity risk management program designed to identify, assess, manage, mitigate, and respond to cybersecurity threats. Our cybersecurity risk management program includes periodic reviews of our risks and responses and also includes company-wide risk assessments by internal and external cyber risk professionals.
Our information security programs are led by our Chief Information Security Officer and our Head of Global Operations and encompass our overall information security strategy, policy, operations, and threat detection and response management.
Our information security programs are led by our Chief Information Security Officer and encompass our overall information security strategy, policy, operations, threat detection and response management. Our Chief Information Security Officer has held information security and cybersecurity roles of increasing responsibility in multiple industries at regional and global scale for more than 25 years.
Our cybersecurity risk management program includes periodic reviews of our risks and responses as well as company-wide risk assessments by internal and external cyber risk professionals and is designed to address risks related to both EPAM’s corporate information technology network and our cybersecurity services.
Our program is designed to address risks related to both EPAM’s corporate information technology network and our cybersecurity services.
Our information security leadership has more than 50 years of combined experience in software product engineering, security, and IT services, with extensive operational, cybersecurity, and global management experience in our or other corporate information security roles and organizations. Our information security leadership is also responsible for notifying our management and members of the Board about cybersecurity threats and incidents.
Our information security leadership is also responsible for notifying our management and members of the Board about cybersecurity threats and incidents.
Added
We also generally require that our vendors and subcontractors that have access to confidential information or access to EPAM’s systems report cybersecurity incidents to us so that we can assess the impact of an incident if it occurs.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur facilities are used interchangeably among our segments. See Note 19 “Segment Information” in the notes to our consolidated financial statements in this Annual Report on Form 10-K for information regarding the geographical locations and values of our long-lived assets.
Biggest changeSee Note 19 “Segment Information” in the notes to our consolidated financial statements in this Annual Report on Form 10-K for information regarding the geographical locations and values of our long-lived assets.
See Note 2 “Impact of the Invasion of Ukraine” in the notes to our consolidated financial statements in this Annual Report on Form 10-K for more information regarding our assets in Ukraine.
Our facilities are used interchangeably among our segments. See Note 2 “Impact of the Invasion of Ukraine” in the notes to our consolidated financial statements in this Annual Report on Form 10-K for more information regarding our assets in Ukraine.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePrior to the authorization of the 2024 Repurchase Program, the Company repurchased common stock under the 2023 Repurchase Program and exhausted the $500.0 million authorized under that program as of June 30, 2024.
Biggest changeAs of September 30, 2025, the Company exhausted the $500 million available for purchases of the Company’s common stock under the previous 2024 Repurchase Program.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “EPAM.” Number of Holders As of February 10, 2025, we had approximately 16 stockholders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “EPAM.” Number of Holders As of February 10, 2026, we had approximately 16 stockholders of record of our common stock.
EPAM may repurchase shares of its common stock on a discretionary basis from time to time through open market purchases, privately negotiated transactions or other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended.
The Company may repurchase shares of its common stock on a discretionary basis from time to time through open-market purchases, privately negotiated transactions or other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” in Part III of this Annual Report on Form 10-K for our equity compensation plan information. 26 Table of Contents Performance Graph The following graph compares the cumulative total stockholder return on our common stock with the cumulative total return on the S&P 500 Information Technology Index and the S&P 500 Index for the period beginning December 31, 2019, and ending December 31, 2024.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” in Part III of this Annual Report on Form 10-K for our equity compensation plan information. 26 Table of Contents Performance Graph The following graph compares the cumulative total stockholder return on our common stock with the cumulative total return on the S&P 500 Information Technology Index and the S&P 500 Index for the period beginning December 31, 2020, and ending December 31, 2025.
All of the shares of common stock issued in connection with this issuance are restricted securities (as defined in Rule 144 of the Securities Act of 1933, as amended (the “Securities Act”)). No underwriter was involved in this issuance and no underwriting commissions were paid.
All of the shares of common stock issued in connection with each issuance are restricted securities (as defined in Rule 144 of the Securities Act of 1933, as amended (the “Securities Act”)). No underwriter was involved in either issuance and no underwriting commissions were paid.
During the three months ended December 31, 2024, the Company purchased 11 thousand shares. During 2024, the Company purchased an aggregate of 120 thousand shares. These shares were not acquired pursuant to our securities repurchase program. Item 6. Reserved.
During the three months ended December 31, 2025, the Company purchased 18 thousand shares. During 2025, the Company purchased an aggregate of 155 thousand shares. These shares were not acquired pursuant to our securities repurchase program. Item 6. Reserved.
(“S4N”), a Panamanian corporation acquired in 2021, the Company issued 13 thousand shares of common stock to the S4N sellers under the terms of the purchase agreement and following achievement of certain performance metrics set forth under the purchase agreement, as amended.
(“S4N”), a Panamanian corporation acquired in 2021, the Company issued 1,538 and 23,445 shares of common stock, respectively, to the S4N sellers under the terms of the purchase agreement and following achievement of certain performance metrics set forth under the purchase agreement, as amended.
(2) Cumulative total return assumes reinvestment of dividends. Unregistered Sales of Equity Securities On December 31, 2024, in connection with the Company’s acquisition of all of the outstanding equity of S4N Holding, Inc.
(2) Cumulative total return assumes reinvestment of dividends. Unregistered Sales of Equity Securities On March 31, 2025 and on October 17, 2025, in connection with the Company’s acquisition of all of the outstanding equity of S4N Holding, Inc.
The transaction was exempt from the registration requirements of Section 4(a)(2) of the Securities Act, since the transaction did not involve any public offering. 27 Table of Contents Purchases of Equity Securities by the Issuer and Affiliated Purchasers On August 1, 2024, the Board of Directors authorized a new share repurchase program (the “2024 Repurchase Program”) for up to $500.0 million of our outstanding common stock.
Each transaction was exempt from the registration requirements of Section 4(a)(2) of the Securities Act, since neither transaction involved any public offering. 27 Table of Contents Purchases of Equity Securities by the Issuer and Affiliated Purchasers On October 16, 2025, the Board of Directors authorized a new share repurchase program (the “2025 Repurchase Program”) for up to $1.0 billion of the Company’s outstanding common stock.
Share repurchase activity during the three months ended December 31, 2024 was as follows: Period Total Number of Shares Purchased Average Price Paid per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands, except per share amounts) October 1, 2024 to October 31, 2024 — $ — — $ 450,047 November 1, 2024 to November 30, 2024 — $ — — $ 450,047 December 1, 2024 to December 31, 2024 53 $ 241.99 53 $ 437,043 Total 53 53 (1) Average price paid per share in the period includes commission.
Share repurchase activity during the three months ended December 31, 2025 was as follows: Period Total Number of Shares Purchased Average Price Paid per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands, except per share amounts) October 1 to October 31, 2025 — $ — — $ 1,000,000 November 1 to November 30, 2025 585 $ 180.03 585 $ 894,726 December 1 to December 31, 2025 577 $ 204.80 577 $ 776,473 Total 1,162 1,162 (1) Average price paid per share in the period includes commission.
The share repurchase program has a term of 24 months, may be suspended or discontinued at any time, and does not obligate the company to acquire any amount of common stock.
The timing and total amount of stock repurchases will depend upon business, economic and market conditions, corporate and regulatory requirements, prevailing stock prices, and other considerations. The share repurchase program has a term of 24 months, may be suspended or discontinued at any time, and does not obligate the Company to acquire any amount of common stock.
COMPARISON OF CUMULATIVE TOTAL RETURN (1)(2) Among EPAM, S&P 500 IT Index and the S&P 500 Index Company/Index Base period 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 EPAM Systems, Inc. $ 100.00 $ 168.91 $ 315.07 $ 154.48 $ 140.15 $ 110.21 S&P 500 IT Index $ 100.00 $ 143.89 $ 193.58 $ 139.00 $ 219.40 $ 299.72 S&P 500 Index $ 100.00 $ 118.40 $ 152.39 $ 124.79 $ 157.59 $ 197.02 (1) Graph assumes $100 invested on December 31, 2019 in our common stock, the S&P 500 IT Index and the S&P 500 Index.
COMPARISON OF CUMULATIVE TOTAL RETURN (1)(2) Among EPAM, S&P 500 IT Index and the S&P 500 Index Company/Index Base period 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 EPAM Systems, Inc. $ 100.00 $ 186.54 $ 91.46 $ 82.97 $ 65.25 $ 57.17 S&P 500 IT Index $ 100.00 $ 134.53 $ 96.60 $ 152.48 $ 208.30 $ 258.38 S&P 500 Index $ 100.00 $ 128.71 $ 105.40 $ 133.10 $ 166.40 $ 196.16 (1) Graph assumes $100 invested on December 31, 2020 in our common stock, the S&P 500 IT Index and the S&P 500 Index.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeEurope segment operating profit as a percentage of revenues was positively impacted by higher utilization and government incentives related to conducting R&D activities in Poland, partially offset by an increase in variable compensation expense and negative impact from the fluctuations in foreign exchange rates during 2024 compared to 2023. 39 Table of Contents The following table presents Europe segment revenues by industry vertical for the periods indicated: Year Ended December 31, Change 2024 2023 Dollars Percentage Industry Vertical (in thousands, except percentages) Consumer Goods, Retail & Travel $ 562,976 $ 596,830 $ (33,854) (5.7) % Financial Services 502,631 472,146 30,485 6.5 % Business Information & Media 225,148 323,985 (98,837) (30.5) % Software & Hi-Tech 177,276 153,683 23,593 15.4 % Life Sciences & Healthcare 86,150 60,549 25,601 42.3 % Emerging Verticals 307,420 302,250 5,170 1.7 % Revenues $ 1,861,601 $ 1,909,443 $ (47,842) (2.5) % Consumer Goods, Retail & Travel remained the largest industry vertical in the Europe segment during the year ended December 31, 2024.
Biggest changeThe 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.
However, the invasion of Ukraine, other various geopolitical events, and the related measures 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.
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.
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, utilities, manufacturing, industrial materials, automotive, telecommunications and several others.
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.
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-material contracts, which are billed using hourly, daily or monthly rates to determine the amounts to be charged directly to the client.
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.
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 equity 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.
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.
Investing Activities Our primary uses of cash from investing activities consist of purchases of computer hardware, software and office equipment, as well as investments into office buildings and new businesses. We also use cash for short-term investments and time deposits and receive cash upon maturity of these deposits.
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.
Cash provided by operating activities in 2023 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.
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.
We are continually expanding our service capabilities, moving beyond traditional services into business consulting, design and physical product development.
We are continually expanding our service capabilities, moving beyond traditional services into strategy consulting, design and physical product development.
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 may be transferred over time or at a point in time depending on satisfaction of obligations stipulated by the contract.
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.
We apply a practical expedient and revenues related to time-and-material contracts are recognized based on the right to invoice for services performed. 30 Table of Contents Fixed-price contracts include maintenance and support arrangements, which may exceed one year in duration.
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.
During 2024, 2023 and 2022, we had $391.4 million, $325.7 million and $428.7 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.
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 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, 2024, cost of revenues (exclusive of depreciation and amortization) was $3.277 billion, representing an increase of 0.6% from $3.257 billion reported last year.
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.
As of December 31, 2024, our principal sources of liquidity were cash and cash equivalents totaling $1.286 billion, short-term investments totaling $1.7 million as well as $675.0 million of available borrowings under our revolving credit facility.
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.
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.
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.
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 $129.9 million in 2024 and $119.5 million in 2023. The increase was primarily driven by an increase in pre-tax income.
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 cash used in investing activities during 2024 was primarily attributable to $912.2 million used for the acquisitions of businesses, net of cash acquired, and $32.1 million used for capital expenditures compared to $24.8 million used for the acquisitions of businesses, net of cash acquired and $28.4 million used for capital expenditures during 2023.
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.
Net cash used in financing activities increased from 2023 to 2024 primarily due to $398.0 million of payments to repurchase our common stock during 2024 compared to $164.9 million during 2023.
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.
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, 2024, selling, general and administrative expenses were $816.3 million, representing an increase of 0.2% as compared to $815.1 million reported last year.
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 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, 2024 2023 2022 (in thousands, except percentages) Professional services $ 4,698,183 99.4 % $ 4,661,733 99.4 % $ 4,800,047 99.5 % Licensing and other revenues 29,757 0.6 % 28,807 0.6 % 24,651 0.5 % Revenues $ 4,727,940 100.0 % $ 4,690,540 100.0 % $ 4,824,698 100.0 % 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.
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.
The top three revenue contributing client location countries in EMEA were the United Kingdom, Switzerland and Germany generating revenues of $523.4 million, $407.8 million and $206.1 million in 2024, respectively, compared to $585.2 million, $367.1 million and $178.5 million in 2023, respectively.
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.
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 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.
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. 31 Table of Contents Results of Operations The following table presents a summary of our consolidated results of operations for the periods indicated.
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.
Interest and other income, net decreased from $51.1 million during the year ended December 31, 2023 to $46.9 million during the year ended December 31, 2024.
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.
Starting in 2024, revenues from the CEE region are included in the EMEA region. 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.
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.
The vast majority of our Ukraine employees are in safe locations and operating at levels of productivity consistent with those achieved prior to the attack. As of December 31, 2024, Ukraine continues to be a significant delivery location with a large number of delivery professionals.
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.
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.
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.
(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. (4) CEE includes revenues from clients in Belarus, Georgia, Kazakhstan, Russia, Ukraine and Uzbekistan.
(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.
The use of cash from investing activities was partially offset by inflows of $61.5 million from matured investments in time deposits during 2024, compared to $10.9 million during 2023.
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 .
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 $53.7 million during 2024, compared to $51.6 million received during 2023. Discussion of the comparison of the cash flows between 2023 and 2022 is included in “Part II.
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.
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 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 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.
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.
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.
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.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” of our Annual Report on Form 10-K for the year ended December 31, 2023. 41 Table of Contents 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.
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.
In addition, during 2024 we used cash for the payments of withholding taxes related to net share settlements of restricted stock units of $35.2 million, compared to $29.1 million paid during 2023.
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.
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, 2024 2023 2022 (in thousands, except percentages) Top five clients $ 748,324 15.8 % $ 780,606 16.6 % $ 793,603 16.4 % Top ten clients $ 1,107,647 23.4 % $ 1,109,033 23.6 % $ 1,149,966 23.8 % Top twenty clients $ 1,615,267 34.2 % $ 1,660,174 35.4 % $ 1,698,916 35.2 % Clients below top twenty $ 3,112,673 65.8 % $ 3,030,366 64.6 % $ 3,125,782 64.8 % 34 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, 2024 2023 2022 Over $20 Million 43 44 49 $10 - $20 Million 59 56 51 $5 - $10 Million 83 76 85 $1 - $5 Million 331 305 303 $0.5 - $1 Million 168 175 185 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.
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.
Expressed as a percentage of revenue, North America segment operating profit increased to 18.9% in 2024 as compared to 18.5% in 2023.
Expressed as a percentage of revenue, Americas segment operating profit decreased to 16.5% in 2025 as compared to 18.9% in 2024.
During the year ended December 31, 2024, depreciation and amortization expense was $89.6 million, representing a decrease of $2.2 million from $91.8 million reported in the prior year.
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.
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. Discussion of the provision for income taxes from 2023 as compared to 2022 is included in “Part II. Item 7.
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.
Personnel-related costs increased due to impacts from salary increases and promotions for existing professionals, increases in variable compensation expense and severance, which reflects the impact from the Cost Optimization Programs initiated in the second quarter of 2024 and the third quarter of 2023. See Note 12 “Cost Optimization Programs” for more information regarding the Company’s restructuring programs.
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.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2023.
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.
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 and geographic repositioning of our workforce.
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.
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. 33 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, 2024 2023 2022 (in thousands, except percentages) Americas (1) $ 2,834,704 60.0 % $ 2,742,662 58.4 % $ 2,887,204 59.9 % EMEA (2) 1,793,198 37.9 1,822,782 38.9 1,737,919 36.0 APAC (3) 100,038 2.1 102,138 2.2 120,370 2.5 CEE (4) — — 22,958 0.5 79,205 1.6 Revenues $ 4,727,940 100.0 % $ 4,690,540 100.0 % $ 4,824,698 100.0 % (1) Americas includes revenues from clients in North, Central and South America.
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) Includes $86,353, $78,933 and $52,439 of stock-based compensation expense for the years ended December 31, 2024, 2023 and 2022, respectively. 32 Table of Contents Revenues We continue to diversify our presence across multiple geographies and verticals, both organically and through strategic acquisitions.
(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.
However, revenues in this vertical declined 5.7% during the year ended December 31, 2024, as compared to 2023, primarily due to decreased demand from clients in the retail and consumer goods industries, partially offset by growth from our travel 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.
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 and technology innovation services.
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.
Cash provided by operating activities in 2024 was primarily driven by the Company's cash collections from client contracts and was positively impacted by lower payments for variable compensation as compared to 2023, attributable to a lower level of financial performance for the year ended December 31, 2023.
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.
Our Board of Directors continues its oversight of our strategic, geopolitical, and cybersecurity risks and the risks related to our geographic 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.
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.
Acquisitions contributed $28.9 million to Europe segment revenues during 2024. Revenues were positively impacted by changes in foreign currency exchange rates during 2024. Had our Europe segment revenues been expressed in constant currency terms using the exchange rates in effect during 2023, we would have reported a revenue decline of 3.0%.
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.
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.
Expenses included in segment operating profit consist principally of direct selling and delivery costs as well as an allocation of certain shared services expenses.
During the year ended December 31, 2024, revenues in the Americas, our largest geography, were $2.835 billion, growing $92.0 million, or 3.4%, from $2.743 billion reported for the year ended December 31, 2023. Revenues in this geography benefited from acquisitions which contributed $95.9 million to revenue growth in 2024.
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.
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.
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.
The year-over-year decrease is primarily due to benefits totaling $68.8 million recognized in the second half of 2024 for government incentives related to conducting R&D activities in Poland and improved utilization, largely offset by a $12.1 million increase in stock-based compensation expense, increases in compensation costs including variable compensation, reduced benefits from our hedging program and the negative impact from the appreciation of foreign currencies in certain of our delivery locations.
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.
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.
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.
Our global delivery centers have sufficient resources, including infrastructure and capital, to support ongoing operations while maintaining the safety and security of our employees and their families in Ukraine as well as in the broader region. 29 Table of Contents The implementation and execution of our business continuity plans, relocation costs, our humanitarian commitment to our people in Ukraine, and the cost of our phased exit from Russia resulted in materially increased expenses.
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.
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. 40 Table of Contents Cash Flows The following table summarizes our cash flows for the periods indicated: For the Years Ended December 31, 2024 2023 2022 (in thousands) Consolidated Statements of Cash Flow Data: Net cash provided by operating activities $ 559,168 $ 562,634 $ 464,104 Net cash used in investing activities (884,980) (66,768) (182,927) Net cash used in financing activities (390,407) (165,773) (2,021) Effect of exchange rate changes on cash, cash equivalents and restricted cash (36,497) 29,379 (44,867) Net (decrease)/increase in cash, cash equivalents and restricted cash $ (752,716) $ 359,472 $ 234,289 Cash, cash equivalents and restricted cash, beginning of period 2,043,108 1,683,636 1,449,347 Cash, cash equivalents and restricted cash, end of period $ 1,290,392 $ 2,043,108 $ 1,683,636 Operating Activities Our largest source of cash provided by operating activities is cash generated from our professional services that we provide to our clients.
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.
Consumer Goods, Retail & Travel declined 4.7% during 2024 compared to the prior year primarily due to declines from clients in the retail industry, partially offset by growth from our travel clients.
Consumer Goods, Retail & Travel increased 6.6% during 2025 compared to the prior year primarily due to growth from our retail clients.
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.
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.
Emerging Verticals experienced 26.6% growth during 2024 compared to the prior year due to growth from various clients in industries such as energy, professional services, industrial materials, telecommunications, manufacturing and automotive. Emerging Verticals also benefited from new revenues from clients in several verticals that we gained as part of our acquisitions.
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.
Revenues in Business Information & Media decreased during 2024 primarily due to decreased demand from two clients who were historically included in our top-10 clients. Revenue growth in Software & Hi-Tech during the year ended December 31, 2024, as compared to 2023, was largely attributable to the expansion of services provided to one of our top 10 clients.
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.
Year Ended December 31, 2024 2023 2022 % of revenues % of revenues % of revenues (in thousands, except percentages and per share data) Revenues $4,727,940 100.0 % $4,690,540 100.0 % $4,824,698 100.0 % Operating expenses: Cost of revenues (exclusive of depreciation and amortization) (1) 3,277,497 69.3 3,256,514 69.4 3,286,683 68.1 Selling, general and administrative expenses (2) 816,300 17.3 815,065 17.4 872,777 18.1 Depreciation and amortization expense 89,559 1.9 91,800 1.9 92,272 1.9 Loss on sale of business — — 25,922 0.6 — — Income from operations 544,584 11.5 501,239 10.7 572,966 11.9 Interest and other income, net 46,876 1.0 51,124 1.0 10,025 0.2 Foreign exchange loss (7,048) (0.1) (15,778) (0.3) (75,733) (1.6) Income before provision for income taxes 584,412 12.4 536,585 11.4 507,258 10.5 Provision for income taxes 129,879 2.8 119,502 2.5 87,842 1.8 Net income $ 454,533 9.6 % $ 417,083 8.9 % $ 419,416 8.7 % Effective tax rate 22.2 % 22.3 % 17.3 % Diluted earnings per share $7.84 $7.06 $7.09 (1) Includes $80,944, $68,797 and $47,470 of stock-based compensation expense for the years ended December 31, 2024, 2023 and 2022, respectively.
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.
Expressed as a percentage of revenues, selling, general and administrative expenses decreased 0.1% to 17.3% for the year ended December 31, 2024, as compared to the prior year primarily driven by reductions in facility exit costs, bad debt expense and facilities and infrastructure expenses as a percentage of revenues.
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.
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, 2024 2023 2022 (in thousands, except percentages) Financial Services $ 1,022,617 21.6 % $ 1,018,433 21.7 % $ 1,026,686 21.3 % Consumer Goods, Retail & Travel 1,013,138 21.4 1,072,950 22.9 1,092,224 22.7 Software & Hi-Tech 702,367 14.9 707,720 15.1 793,261 16.4 Business Information & Media 674,597 14.3 753,981 16.1 809,952 16.8 Life Sciences & Healthcare 574,605 12.2 489,914 10.4 507,367 10.5 Emerging Verticals 740,616 15.6 647,542 13.8 595,208 12.3 Revenues $ 4,727,940 100.0 % $ 4,690,540 100.0 % $ 4,824,698 100.0 % Financial Services became our largest vertical during 2024, comprising 21.6% of total revenues.
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.
North America Segment The following table summarizes revenues from external clients and operating profit, before unallocated expenses, for the North America segment for the years ended December 31, 2024, 2023 and 2022: Year Ended December 31, 2024 2023 2022 North America segment revenues $ 2,866,339 $ 2,765,022 $ 2,898,554 Less: Cost of revenues (exclusive of depreciation and amortization) 1,915,851 1,848,758 1,875,861 Selling, general and administrative expenses 369,055 361,589 404,276 Depreciation and amortization expense 40,009 43,645 41,516 North America segment operating profit $ 541,424 $ 511,030 $ 576,901 During 2024, North America segment revenues increased $101.3 million, or 3.7%, from the previous year.
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.
The Company recorded a loss on sale of $25.9 million during the year ended December 31, 2023, including the recognition of the accumulated currency translation loss related to this foreign entity that was previously included in Accumulated other comprehensive loss. 36 Table of Contents 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 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.
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, 2024, 2023 and 2022: Year Ended December 31, 2024 2023 2022 Europe segment revenues $ 1,861,601 $ 1,909,443 $ 1,853,056 Less: Cost of revenues (exclusive of depreciation and amortization) 1,290,317 1,348,190 1,283,398 Selling, general and administrative expenses 267,032 285,722 323,151 Depreciation and amortization expense 20,076 25,307 27,465 Europe segment operating profit $ 284,176 $ 250,224 $ 219,042 During 2024, Europe segment revenues were $1.862 billion, reflecting a decrease of $47.8 million, or 2.5%, from last year.
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.
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. 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.
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.
For additional information on the various risks posed by the attack against Ukraine and the impact in the region as well as other disruptors to our business, please read “Part I. Item 1A. Risk Factors” included in this Annual Report on Form 10-K.
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.
Revenues from our Europe segment represent 39.4% and 40.7% of total segment revenues during 2024 and 2023, respectively. During 2024, Europe segment operating profits increased $34.0 million, or 13.6% as compared to last year, to $284.2 million. Europe segment operating profit represented 15.3% of Europe segment revenues as compared to 13.1% in 2023.
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.
Revenues from our North America segment represented 60.6% of total segment revenues, an increase from 58.9% reported in the corresponding period of 2023. Acquisitions contributed $95.7 million to North America segment revenues during 2024. During 2024 as compared to 2023, North America segment operating profits increased $30.4 million, or 5.9%, to $541.4 million.
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.
The decrease in depreciation and amortization expense was primarily the result of lower depreciation on furniture, fixtures, other equipment and computer hardware, partially offset by increased amortization of software licenses and acquired finite-lived intangible assets.
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.
The impact of Russia’s invasion of Ukraine on our operations, personnel, and physical assets in Ukraine has had, and, along with any escalation of the war that includes Belarus’ territory or military, could continue to have a material adverse effect on our operations.
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.
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.
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.
Revenues from Americas accounted for 60.0% of total revenues in 2024, an increase from 58.4% in the prior year. The United States continued to be our largest client location contributing revenues of $2.680 billion in 2024 compared to $2.634 billion in 2023.
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 effective tax rate decreased slightly from 22.3% in 2023 to 22.2% in 2024 primarily due to the increase in excess tax benefits recorded upon vesting or exercise of stock-based awards, which were $22.4 million in 2024 compared to $19.8 million in 2023.
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.
These year-over-year increases were partially offset by an $8.4 million decrease in bad debt expense, a $5.6 million reduction in facility exit costs and a $3.9 million reduction in facilities and infrastructure expenses as compared to the prior year.
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.
During the year ended December 31, 2024, r evenues from the Business Information & Media vertical experienced an increase of 4.6% primarily due to improvement in demand from clients in the information services and entertainment sectors. Life Sciences & Healthcare increased 13.8% during 2024 compared to the prior year primarily due to increased demand from pharmaceutical and medical device clients.
During the year ended December 31, 2025, r evenues 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.
The increase in selling, general and administrative expenses during 2024 compared to 2023 was primarily driven by a $14.1 million increase in personnel-related costs, including a $7.4 million increase in stock-based compensation expense, a $10.3 million increase in professional fee expenses related to our business acquisition efforts and a $4.7 million increase in expenses associated with our humanitarian efforts for Ukraine.
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.
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. We have no way to predict the progress or outcome of the war in Ukraine because the conflict and government reactions change quickly and are beyond our control.
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.
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.
These determinations will affect the amount of amortization expense recognized in future periods.
Expressed as a percentage of revenues, depreciation and amortization expense remained the same at 1.9% during the year ended December 31, 2024, as compared to 2023. Discussion of depreciation and amortization expense from 2023 as compared to 2022 is included in “Part II. Item 7.
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe maintain our cash, cash equivalents and short-term investments with financial institutions. We believe that our credit policies reflect normal industry terms and business risk. We do not anticipate non-performance by the counterparties.
Biggest changeConcentration of Credit and Other Credit Risk s Financial instruments that potentially subject us to significant concentrations of credit risk consist primarily of cash, cash equivalents, short-term investments and trade receivables. We maintain our cash, cash equivalents and short-term investments with financial institutions. We believe that our credit policies reflect normal industry terms and business risk.
We regularly monitor cash held in these countries and, to the extent the cash held exceeds amounts required to support our operations in these countries, we distribute the excess funds into markets with more developed banking sectors to the extent it is possible to do so.
We regularly monitor cash held in these countries and, to the extent the cash held exceeds the amounts required to support our operations in these countries, we distribute the excess funds into markets with more developed banking sectors to the extent it is possible to do so.
Exposure to interest rate risk results primarily from variable rates related to cash and cash equivalent deposits, short-term investments, and our borrowings, mainly under our 2021 Credit Agreement, which is subject to a variety of rates depending on the currency and timing of funds borrowed.
Exposure to interest rate risk results primarily from variable rates related to cash and cash equivalent deposits, short-term investments, and our borrowings, mainly under our 2025 Credit Agreement, which is subject to a variety of rates depending on the currency and timing of funds borrowed.
We place our cash and cash equivalents with financial institutions considered stable in the region, limit the amount of credit exposure with any one financial institution and conduct ongoing evaluations of the credit worthiness of the financial institutions with which we do business.
We place our cash and cash equivalents with financial institutions considered stable, limit the amount of credit exposure with any one financial institution and conduct ongoing evaluations of the credit worthiness of the financial institutions with which we do business.
We have cash in several countries, including Ukraine and Belarus, where the banking sector remains subject to periodic instability; banking and other financial systems in these countries generally do not meet the banking standards of more developed markets; and bank deposits made by corporate entities are not insured.
We do not anticipate non-performance by the counterparties. We have cash in several countries, including Ukraine and Belarus, where the banking sector remains subject to periodic instability; banking and other financial systems in these countries generally do not meet the banking standards of more developed markets; and bank deposits made by corporate entities are not insured.
Trade receivables are generally dispersed across many clients operating in different industries; therefore, concentration of credit risk is limited and we do not believe significant credit risk existed as of December 31, 2024.
Trade receivables are generally dispersed across many clients operating in different industries and geographies; therefore, concentration of credit risk is limited and we do not believe significant credit risk existed as of December 31, 2025.
We do not believe we are exposed to material direct risks associated with changes in interest rates related to these deposits, investments and borrowings. Foreign Exchange Risk Our global operations are conducted predominantly in U.S. dollars.
We do not believe we are exposed to material direct risks associated with changes in interest rates related to these deposits, investments and borrowings. 41 Table of Contents Foreign Exchange Risk Our global operations are conducted predominantly in U.S. dollars.
Income from operations was most significantly impacted by the movements of the Polish zloty, British pound, Indian rupee and Colombian peso exchange rates during the year ended December 31, 2024 compared to 2023. Item 8. Financial Statements and Supplementary Data The information required is included in this Annual Report on Form 10-K beginning on page F-1. Item 9.
Income from operations was most significantly impacted by the movements of the Polish zloty, Indian rupee, euro, British pound, Swiss franc and Mexican peso exchange rates during the year ended December 31, 2025 compared to 2024. Item 8. Financial Statements and Supplementary Data The information required is included in this Annual Report on Form 10-K beginning on page F-1.
As of December 31, 2024, all of our foreign exchange forward contracts, were designated as hedges and there is no financial collateral (including cash collateral) required to be posted related to the foreign exchange forward contracts. As of December 31, 2024, the net unrealized loss from these hedges was $14.7 million.
As of December 31, 2025, all of our foreign exchange forward contracts, were designated as hedges and there is no financial collateral (including cash collateral) required to be posted related to the foreign exchange forward contracts. As of December 31, 2025, the net unrealized loss from these hedges was $2.6 million.
During the year ended December 31, 2024, we reported a revenue increase of 0.8% compared to the prior year. Had our consolidated revenues been expressed in constant currency terms using the exchange rates in effect during 2023, we would have reported revenue growth of 0.7%.
During the year ended December 31, 2025, we reported a revenue increase of 15.4% compared to the prior year. Had our consolidated revenues been expressed in constant currency terms using the exchange rates in effect during 2024, we would have reported revenue growth of 14.1%.
Had our consolidated results been expressed in constant currency terms using the exchange rates in effect during 2023, we would have reported an increase in income from operations of 9.7%.
Had our consolidated results been expressed in constant currency terms using the exchange rates in effect during 2024, we would have reported a decrease in income from operations of 8.8%.
We recorded a loss on sale of $25.9 million during the year ended December 31, 2023, including the recognition of the accumulated currency translation loss related to this foreign entity that was previously included in Accumulated other comprehensive loss in the consolidated financial statements. 43 Table of Contents During the year ended December 31, 2024, our foreign exchange loss was $7.0 million compared to a $15.8 million loss reported in the previous year.
We recorded a loss on sale of $25.9 million during the year ended December 31, 2023, including the recognition of the accumulated currency translation loss related to this foreign entity that was previously included in Accumulated other comprehensive income (loss) in the consolidated financial statements.
Our revenues denominated in the British pound, Swiss franc and Mexican peso experienced the most impact from the movements in foreign currencies. During the year ended December 31, 2024, we reported an increase in income from operations of 8.6% as compared to the previous year.
Our revenues denominated in euros, British pounds, Swiss francs and Mexican pesos experienced the most impact from the movements in foreign currencies. During the year ended December 31, 2025, we reported a decrease in income from operations of 4.5% as compared to the previous year.
In addition, our global operations are subject to risks related to differing economic conditions, civil unrest, political instability or uncertainty, military activities, broad-based sanctions, differing tax structures, and other regulations and restrictions. 42 Table of Contents Concentration of Credit and Other Credit Risk s Financial instruments that potentially subject us to significant concentrations of credit risk consist primarily of cash, cash equivalents, short-term investments and trade receivables.
In addition, our global operations are subject to risks related to differing economic conditions, global trade, civil unrest, political instability or uncertainty, military activities, broad-based sanctions, differing tax structures, and other changing regulations and restrictions.
Foreign exchange losses were primarily driven by the impact of fluctuations in foreign currencies on our assets and liabilities denominated in foreign currencies.
During the year ended December 31, 2025, our foreign exchange loss was $25.9 million compared to a $7.0 million loss reported in the previous year. Foreign exchange losses were primarily driven by the impact of fluctuations in foreign currencies on our assets and liabilities denominated in foreign currencies.
As a result, exchange rate fluctuations in any of these currencies relative to the U.S. dollar could negatively impact our results of operations. During the year ended December 31, 2024, approximately 34.0% of consolidated revenues and 58.6% of operating expenses were denominated in currencies other than the U.S. dollar.
During the year ended December 31, 2025, approximately 39.5% of consolidated revenues and 63.2% of operating expenses were denominated in currencies other than the U.S. dollar.
Other than U.S. dollars, we generate revenues principally in euros, British pounds, Swiss francs, Canadian dollars and Mexican pesos and incur expenditures principally in euros, Polish zlotys, Indian rupees, British pounds, Swiss francs, Mexican pesos, Hungarian forints, Colombian pesos, Canadian dollars, Armenian drams and Chinese yuan renminbi.
Other than U.S. dollars, we generate revenues principally in euros, British pounds, and Swiss francs and incur expenditures principally in euros, Polish zlotys, Indian rupees, British pounds, Mexican pesos, and Swiss francs. As a result, exchange rate fluctuations in any of these currencies relative to the U.S. dollar could negatively impact our results of operations.
The Company does not expect these new restrictions to have a material impact on our ability to meet our worldwide cash obligations during this period.
The restrictions are scheduled to remain in place until the end of 2026 and may prevent EPAM from distributing excess funds, if any, out of Belarus. We do not expect these restrictions to have a material impact on our ability to meet our worldwide cash obligations during this period.
As of December 31, 2024, we had $41.1 million of cash and cash equivalents in banks in Ukraine and $37.5 million of cash and cash equivalents in banks in Belarus.
As of December 31, 2025, we had $49.2 million of cash and cash equivalents in banks in Ukraine and $37.8 million of cash and cash equivalents in banks in Belarus. In April 2024, Belarus instituted restrictions on distributing dividends from Belarus to shareholders in certain countries, including the U.S.
Removed
In April 2024, Belarus instituted new restrictions on distributing dividends from Belarus to shareholders in certain countries, including the U.S. The restrictions are initially scheduled to remain in place until the end of 2025 and may prevent EPAM from distributing excess funds, if any, out of Belarus.
Removed
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.

Other EPAM 10-K year-over-year comparisons