• EPAM is a digital transformation services and product engineering company established 1993 and currently headquartered in Newtown, Pennsylvania, United States.
  • The company provides digital platform engineering and software development services to customers located around the world. It delivers business and technology transformation from start to finish.
  • EPAM classifies the industries it serves as 'industry verticals'. There are six of these verticals - travel & consumer, financial services, business information & media, software & hi-tech, life sciences & healthcare, and emerging verticals.
  • During the three months ended March 31, 2023, our total revenues grew to $1.211 billion or 3.4% compared to the corresponding period in 2022. Income from operations during the first quarter of 2023 is $120.37 million which was $129.24 million a year earlier. Net income of the company for the periods are $102.29 million and $89.72 million, respectively. Diluted income per share of the company is $1.73 and $1.52 for the quarters, respectively.
  • Total revenue reported by EPAM in the year 2022 is $4,824.70 million as compared to $3,758.14 million a year earlier, a 28.4% increase year-on-year. Income from operations grew 5.7% year-on-year to $572.97 million in 2022 from $542.32 million in 2021. Net income in 2022 is $419.42 million and $481.65 million a year earlier, a decrease of 12.9%.

Brief Company Overview

epam logoEPAM Systems, Inc. (NYSE:EPAM) is a digital transformation services and product engineering company established 1993 with its roots in Belarus. The company started its operations in both Belarus and the USA in the year of its founding. Since then it has grown rapidly through acquisitions and geographic expansion. EPAM's industry expertise includes financial services, travel and consumer, software and hi-tech, business information and media, life sciences and healthcare, as well as several other industries. The company provides digital platform engineering and software development services to customers located around the world, primarily in North America, Europe, and Asia. The company delivers business and technology transformation from start to finish. EPAM plans to expand its operational areas beyond their traditional services into business consulting, design and physical product development and areas such as artificial intelligence, robotics and virtual reality.

The company uses this term 'vertical' to identify the industries it serves. There are six verticals including one called 'Emerging Verticals' where the company assigns various industries in which it is increasing its presence. The other fives are travel & consumer, financial services, business information & media, software & hi-tech, life sciences & healthcare. As on December 31, 2022, EPAM had approximately 59,300 employees, of which 52,850 were delivery professionals. Co-founder of the company Arkadiy Dobkin still serves as the chairman, CEO & president of the company.

epam cover photo

The company has three reportable segments: North America, Europe, and Russia.

As of May, 2023, 52-week price range of the company stock is $462.99 to $224.65. Trailing P/E ratio of the company is 34.20 times, price to sales ratio is 2.97 times, profit margin is 8.88%, operating margin (ttm) is 12.96%, return on assets (ttm) is 10.40%, return on equity (ttm) is 15.20%, total debt to equity ratio (mrq) is 5.98 times, and current ratio is 4.15 times. Total outstanding shares of the company as on April 28, 2023 is 57,905,539.

Recent Developments

  • On account of the war in Ukraine, EPAM on April 7, 2022 announced the beginning of its phased exit from Russia. The company also discontinued services to certain customers. On September 7, 2022, the company executed an agreement to sell substantially all its operations to a third party. Russia was EPAM's third largest delivery location by the number of delivery professionals.
  • EPAM launches vehicle-to-cloud (V2C) platform "AosEdge" on January 5, 2023. The platform allows seamless delivery and updates of software for connected cars.

Recent Financing Activities

  • On February 13, 2023, the Board of Directors of the company authorized a repurchase program for up to $500 million of the Company's outstanding common stock.

Financial Performance Highlights

Q1 2023 Highlights

During the three months ended March 31, 2023, our total revenues grew to $1.211 billion or 3.4% compared to the corresponding period in 2022. Revenues of the company have been negatively impacted by its decision to exit operations in Russia. The principal components of EPAM's cost of revenues (exclusive of depreciation and amortization) are salaries, bonuses, fringe benefits, stock-based compensation, project-related travel costs and fees for subcontractors who are assigned to customer projects. During the three months ended March 31, 2023, cost of revenues was $855.9 million representing an increase of 9.6% from $780.8 million. Of the total revenue of $1,210.94 million, the segments North America, Europe, and Russia has generated $709.96, $493.15, and $7.84 million in revenues, respectively. Income from operations during the first quarter of 2023 is $120.37 million which was $129.24 million a year earlier. Net income of the company for the periods are $102.29 million and $89.72 million, respectively. Diluted income per share of the company is $1.73 and $1.52 for the quarters, respectively.

Net cash provided by operating activities during the three months ended March 31, 2023 was $87.3 million, an increase of $139.2 million compared to $51.8 million used in operating activities in the corresponding period of 2022. Net cash used in investing activities during the three months ended March 31, 2023 was $17.7 million compared to $34.6 million used in investing activities during the same period in 2022. Net cash used in financing activities was $15.3 million in the first three months of 2023 compared to $9.6 million net cash used in financing activities in the same period of 2022.

Annual Performance Highlights

Total revenue reported by EPAM in the year 2022 is $4,824.70 million as compared to $3,758.14 million a year earlier, a 28.4% increase year-on-year. Income from operations grew 5.7% year-on-year to $572.97 million in 2022 from $542.32 million in 2021. However, operating margin during the years are 11.9% and 14.4%, respectively. Net income in 2022 is $419.42 million and $481.65 million a year earlier, a decrease of 12.9%. The company has incurred a big loss in currency translation in 2022 owing to especially stronger Russian ruble against USD, which impacted the company's intercompany payables denominated in Russian rubles and the value of U.S. dollar denominated assets held by Russian subsidiaries. A loss of $75.73 million is accounted for during 2022 which was a loss of $7.20 million a year earlier. Diluted earnings per share (EPS) for 2022 is $7.09 which was $8.15 in 2021. Total diluted share outstanding at the end of the years were 59.17 million and 59.06 million, respectively.

Among six reported industry verticals, travel & consumer vertical represents 22.7% of total revenue of 2022, followed by 21.3% from financial services vertical, 16.8% from business information & media vertical, 16.4% from software & hi-tech vertical, 12.3% from emerging verticals, and 10.5% from life sciences & healthcare vertical. The company classifies its service offerings into two categories - professional services, and licensing and other revenues. The categories represents 99.5% and 0.5% of total revenues, respectively, in 2022 which was same a year earlier.

The company has three reportable business segments - North America, Europe, and Russia. During the year 2022, the company has reported $2,898.55 million revenue from North America segment, which was $2,242.25 million a year earlier. Total operating profit from the segment is $589.41 million which was $462.80 million a year earlier, an increase of 27.4% year-on-year. Revenues from our North America segment represented 60.1% of total segment revenues.

During 2022, Europe segment revenues were $1,853.1 million, reflecting an increase of $502.6 million, or 37.2%, from last year. Acquisitions contributed $166.3 million to Europe segment revenues during 2022. Revenues from our Europe segment represent 38.4% and 35.9% of total segment revenues during 2022 and 2021, respectively. During 2022, this segment’s operating profits decreased $10.5 million, or 4.5% as compared to last year, to $223.3 million. Europe’s operating profit represented 12.0% of Europe segment revenues as compared to 17.3% in 2021.

During 2022, revenues from our Russia segment decreased $92.3 million relative to 2021 and represent 1.5% of total segment revenues during 2022 compared with 4.4% in 2021. The decrease in revenues was primarily attributable to decreased operations in Russia as the company proceeds with the phased exit from Russia while discontinuing services to customers there. Operating loss of the Russia segment was $13.5 million in 2022 compared to operating profit of $32.5 million in 2021 primarily due to the discontinuance of services to certain customers in there.

Cash, cash equivalents and restricted cash of the company at the end of 2022 stand at $1,683.64 million, as compared to $1,449.35 million a year earlier. Net cash provided by operating activities during the year ended December 31, 2022 decreased $108.2 million, or 18.9%, to $464.1 million, as compared to 2021. Net cash used in investing activities during the years are $182.9 million and $368.9 million, respectively. During the year ended December 31, 2022, net cash used in financing activities was $2.0 million, compared to $59.6 million net cash used in financing activities in 2021.

Business Overview

EPAM uses the shared fixed-cost resources globally to cost-effectively deliver their services and solutions. The company use their delivery personnel located strategically across the globe to deliver their services. As of December 31, 2022, the company had approximately 52,850 delivery personnel consisting mainly of EPAM's core information technology professionals as well as designers, consultants, product experts and scientists. Customers of the company are mostly recurring. For example, about 54.7% and 26.4% of the revenue of 2022 is from the customers who are using the company's services for more than five and ten years, respectively.

EPAM's key service offerings and solutions include several practice areas like engineering, operations, optimization, consulting and design.

epam business interior office


This practice area allows the company to build and scale next-generation software solutions. EPAM develops enterprise technologies to improve business processes, and to offer smarter analytics. The results of offerings include greater operational excellence through requirements analysis and platform selection, deep and complex customization, cross-platform migration, implementation and integration. Complete infrastructure management services with its full life-cycle coverage are included into the solutions provided by the company. This includes application, database, network, server, storage and systems operations management, as well as monitoring, incident notification and resolution.

The company has deep expertise and the ability to offer a comprehensive set of software product development services including product research, customer experience design and prototyping, program management, component design and integration, full lifecycle software testing, product deployment and end-user customization, performance tuning, product support and maintenance, managed services, as well as porting and cross-platform migration. EPAM focuses on software products covering a wide range of business applications as well as product development for multiple mobile platforms and embedded software product services.


EPAM works to turn the operations of their clients into intelligent enterprise hubs. Proprietary platforms, integrated engineering and smart automation of EPAM give its customers the transformation. To bring competitive advantage to the customers, EPAM's multi-delivery teams and global delivery framework come together to deliver well-rounded technology solutions.


Process optimization through real transformation by using process automation and cognitive techniques is another work area of the company. A dedicated group of testing and quality assurance professionals perform software application testing, test management, automation and consulting services focused on helping customers improve their existing software testing and quality assurance practices. The company employs industry-recognized and proprietary defect tracking tools and frameworks to deliver a comprehensive range of testing services that identify threats and close loopholes to protect their customers’ business systems from information loss.


With its extensive experience and skills in development and maintenance of software and platforms, the company also offers consulting services to help address its clients' challenges.


EPAM applies design thinking to digital and service strategy, user experience and the product lifecycle with a focus on innovative design ideas and product development. The digital and service design practice provides strategy, design, creative and program management services for customers looking to improve the user experience.

The customers of the company operate in five main industry verticals. The company also works on entering new industry verticals which it calls the 'Emerging Verticals'.

  • Financial services
  • Travel and consumer
  • Software and Hi-tech
  • Business information and media
  • Life sciences and healthcare

Services of the company is largely defined by its industry knowledge and expertise.

Financial Services: EPAM worked with global investment banks, commercial and retail lending institutions, credit card and payment solution companies, trading platforms, exchanges and brokerages, capital markets, wealth and investment management institutions, insurers and various other providers of financial services and financial technology. EPAM assists these companies with challenges stemming from new regulations, compliance requirements, customer-based needs and risk management.

Travel and Consumer: Platforms, applications, and solutions of EPAM help the company in these industries to enhance their customers' experience, control operating expenses and efficiently manage their business. Expertise of EPAM is used by many global leading airlines, hotel brands and online travel agencies in order to create high-quality tools for becoming more adaptive and addressing market challenges. The company delivers a wide range of services to these customers from complex system modernization, brand strategy and space design, digital marketing, payments and loyalty programs to inventory and order management, leading edge innovations in multi-channel sales and distribution.

epam illustration

Software and Hi-Tech: With the extensive experience that EPAM has, it has developed proprietary internal processes, methodologies and information technology infrastructure for the software and hi-tech companies. To maintain the companies' innovation and agility, some of the world's leading software and hi-tech brands partnered with EPAM to build technology consulting, core engineering and full-scale integration capabilities. The services of EPAM span the complete software development lifecycle for software product development using their comprehensive development methodologies, testing, performance tuning, deployment, maintenance and support.

Business Information and Media: EPAM helps the customers in this industry build products and solutions for all modern platforms including web media streaming, mobile information delivery, print to digital transformations and information discovery and search. The solutions help customers develop new revenue sources, accelerate content management, delivery and monetization and reach broader audiences. The customer types include entertainment media, news and sports broadcasting companies, financial data and legal information providers, content distributors, educational materials publishers, game developers and advertising networks.

Life Sciences and Healthcare: In the Life Sciences category, EPAM  partners with global pharmaceutical, medical and scientific technology, biotechnology companies and retail pharmacies to deliver sophisticated scientific informatics and innovative enterprise technology solutions. The life sciences solutions of the company enable the customers speed research and accelerate time-to-market while improving collaboration, knowledge management and operational excellence. The professionals deliver an end-to-end experience that includes strategy, architecture, development and managed services to customers ranging from the traditional healthcare providers to innovative startups.

Revenue Model

The service offerings of EPAM are mostly software solutions, automation, business transformation, and consulting. The service types of the company include engineering, operations, optimization, consulting, and design. The Company derives revenues from a variety of service arrangements, which have been evolving to provide more customized and integrated solutions to customers by combining software engineering with customer experience design, business consulting and technology innovation services. Fees for these contracts may be in the form of time-and-materials or fixed-price arrangements. The Company generates the majority of its 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 customer. The Company applies a practical expedient and revenues related to time-and-material contracts are recognized based on the right to invoice for services performed.

Fixed-price contracts include maintenance and support arrangements which may exceed one year in duration. Maintenance and support arrangements generally relate to the provision of ongoing services and revenues for such contracts are recognized ratably over the expected service period. Fixed-price contracts also include application development arrangements, where progress towards satisfaction of the performance obligation is measured using input or output methods and input methods are used only when there is a direct correlation between hours incurred and the end product delivered.

Revenues from licenses which have significant stand-alone functionality are recognized at a point in time when control of the license is transferred to the customer. Revenues from licenses which do not have stand-alone functionality are recognized over time.

If there is an uncertainty about the receipt of payment for the services, revenue recognition is deferred until the uncertainty is sufficiently resolved. The Company applies a practical expedient and does not assess the existence of a significant financing component if the period between transfer of the service to a customer and when the customer pays for that service is one year or less.

The Company reports gross reimbursable “out-of-pocket” expenses incurred as both revenues and cost of revenues in the consolidated statements of income and comprehensive income.

Company History1

Arkadiy Dobkin and Leo Lozner started EPAM in 1993. The company opened in two locations - New Jersey, USA and Minsk, Belarus. The global software engineering services company had only 3 people working for it during 1993. Dabiwa Ltd. was its first new customer, although the first major client was Bally of Switzerland - one of the leading global fashion and apparel brands. Headcounts in EPAM has increased from 6 in 1994 to 15 in 1995. The company has received some other clients including Halliburton, Parametric Technology Corporation. During 1996-1997, the company has received the order from Colgate-Palmolive to develop a Salesforce Automation solution and deploy it across multiple countries in Europe and Latin America. By 1999, the company had a workforce of 126 people and expanded its operation into product development space by receiving an order from SAP AG from Russia. By 2001, the company has entered eCommerce era developing CRM and eCommerce solutions.

During the dot com bubble burst in 2001, EPAM was recognized for the first time as a 'trendsetter' in software engineering outsourcing services by leading industry analysts, and was ranked publicly as a fast-growing company. This year also marks their very first end-to-end digital engagement for the travel destination portal Employee count of the company increased to 536 by 2003. The company has acquired LintecProject in 2003 and Fathom Technology in 2004. Geographies added to the company portfolio are Hungary, UK, and Ukraine. Fathom Technology is a software development services company based in Budapest, Hungary. Through the addition of Fathom, EPAM makes a strategic shift away from a pure North American market focus to one that is more balanced and includes a growing EU client base.

EPAM acquired VDI in 2006, Spline Software in 2007 and entered the German market. The company secured equity investment from Siguler Guff & Company, received a new customer - The Coca-Cola Company. During the time of recession in 2008, the company has acquired B2Bits Corp and PlusMicro in 2008, Rodmon Systems in 2009. Headcount at the company during 2009 is 4,431 and the company expanded to Kazakhstan and Sweden through its acquisitions.

During the period 2012-2013, the company entered into Poland, Switzerland, Canada, and Hong Kong SAR through acquisition of Thoughtcorp, and Empathy Lab. EPAM is the first company with Belarusian engineering roots to go public on the New York Stock Exchange on February 8, 2012.

Positioned for the first time as a leader in Product Development Services by Forrester during 2014-2015, EPAM spans 17 countries, including a new location in China, and employs 13,000+ experts in a variety of domains and solution practices. With the acquisition of Alliance Global Services, EPAM enters the Indian market in 2015. More markets added include Singapore, China, Australia, Armenia, Netherlands, and Bulgaria. Total number of employees in the workforce of the company is 25,900+ by 2017 and the company kept expanding to more geographic locations.

The company celebrated its 25th anniversary in 2018. It has acquired Continuum, and TH_NK during the year to expand to Japan and Spain. In 2019, EPAM is listed as Fortune’s 100 Fastest-Growing Companies, for a second time, and recognized with the Best in Biz Award for Corporate Social Responsibility Program of the Year. The workforce now is 36,700+ in 2019 and the company expands to Uzbekistan, France, Vietnam, and Israel.

EPAM grew its global API practice and salesforce capabilities with the acquisition of Ricston, expanded its advanced data and analytics capabilities with the acquisition of Deltix, and joined the newly formed MACH Alliance as a founding member to help drive next-generation digital architectures and experiences. EPAM ranked as the top IT services company on Fortune’s 100 Fastest-Growing Companies list, jumping 50 positions to #21, and was broadly recognized as a rising leader in integrated consulting capabilities in 2020.

In 2021, EPAM diversified its global capabilities, talent footprint and solutions portfolio—making several strategic acquisitions, including PolSource, White-Hat Ltd., Just-BI, CORE SE, S4N, Emakina Group and Optiva Media. EPAM became a member of the S&P 500 and a Forbes Global 2000 company, and for the third consecutive year, EPAM ranked the Top IT services company on Fortune’s 100 Fastest-Growing Companies list.

In 2022, the company is operating in more than 50+ companies around the globe and has 59,250+ employees. During the year, Vivify Ideas and Enginiety joined the family of EPAM. EPAM prioritized the safety and well-being of its employees and their families in Ukraine. The Company supported EPAMers and the Ukrainian people via humanitarian relief, IT volunteering, educational programs and community initiatives in partnership with local NGOs.

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Created by Md. Touhidul Islam on 2023/05/23 09:06
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