Transcripts

EPAM Systems, Inc.'s management answers for the business every quarter. These are the exchanges that explain it best — verbatim, from the call transcripts preserved in Sources. Each link opens the full transcript at that page in a new tab.

Q1 FY2026 Earnings Call — Q1 FY2026

The clearest read on EPAM's AI-era economics — the large-deal pipeline, token pricing, and why full-year guidance came down. · Open the full transcript →

Why the full-year growth outlook came down, and what management is—and isn't—assuming to reach the second half.

Bryan Bergin (TD Cowen); Balazs Fejes (CEO & President); Jason Peterson (CFO): On the 2026 guide and the organic growth revision, is this a handful of large engagements that are just moving slower or a broader portfolio dynamic, and what gives you the confidence on the second-half implied sequential growth, just given where the Q2 number is? Are you assuming geopolitical volatility moderates to hit that revised target? Do you have things in hand? Maybe a little detail on that. […] In our estimate, we are not assuming a significant change in the geopolitical environment. So we are guiding as we see it right now and are not assuming any major shifts. That said, as I noted in the prepared remarks, we have a number of unusually large opportunities that we're targeting. We are not yet certain how fast they will ramp or close, but our AI-native and AI/Run capabilities opened us up to a part of the market that was previously closed to us — specifically large vendor consolidation and large transformation deals. Those are included in our current guide to the extent we believe they are likely to convert.

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The shape of the new large-deal pipeline: ~10 outsized vendor-consolidation deals, risk-adjusted into the guide.

Jason Kupferberg (Wells Fargo); Balazs Fejes (CEO & President); Jason Peterson (CFO): So those large opportunities — there's vendor consolidation deals. It sounds like it's not just two or three. Can you clarify how many and what the nature of the work is that comprises those large pipeline opportunities for the second half? […] It's no longer just three or four. We're talking about close to 10 significant opportunities at this point. These opportunities are outsized relative to our historical range. Many are not time & materials: they involve different commercial models […] From a risk-adjusted standpoint, we're not assuming we will win all of those opportunities. We're capturing a small subset in our models, and that subset contributes to the expected growth in the second half.

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Can EPAM run programs this large—and what they earn: AI-native work runs above the corporate average margin.

Jonathan Lee (Guggenheim); Balazs Fejes (CEO & President): You highlighted large multiyear deals in the pipeline that are larger in scale than what EPAM has historically pursued. What gives you confidence in your ability to close and execute on those? Do you have the sales muscle, governance frameworks and delivery infrastructure to manage programs of that magnitude? How should we think about the profile of these deals regarding competitive dynamics, deal size and margin profiles relative to what you currently see? […] Great question. We were somewhat surprised at how successful our offering resonated and how quickly the pipeline built. We have the sales muscle to get into these opportunities, and our offering is differentiated because it brings AI-native capabilities that challenge the status quo. We are risk-adjusting the pipeline; we're not assuming full conversion or immediate ramp. EPAM has experience running large programs historically, though those were typically aggregates of many smaller engagements rather than single outsized deals. In terms of profitability, our current AI-native portfolio, which is over $125 million per quarter, runs at higher profitability than the EPAM average.

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Who pays for tokens today, and the state of billing rates—no broad compression, some increases won.

Bryan Keane (Citi); Balazs Fejes (CEO & President): can you talk a little about contract pricing and how those dynamics have changed over the last year or so? In particular, with the Anthropic partnership, how will you recognize revenues in that contract? Is it any different than the model you've used in recent years? […] Pricing dynamics are a moving target and token economics continues to be an area of discussion. Today, in most client relationships clients are bearing the cost of tokens. We're exploring different commercial models, including when EPAM might charge for tokens, when clients pay directly, and how to structure security and compliance concerns. Anthropic is not fundamentally different in construct — we'll develop software using the Anthropic stack and explore appropriate commercial models with clients and Anthropic. Regarding pricing, Jason and I were pleased to see rate increases in Q1; we are not seeing broad rate compression at this time and have been successful negotiating rate increases with a minority of clients.

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The AI-era cost lever: model choice, multi-sourcing and a 'trading-desk' to manage token economics.

James Faucette (Morgan Stanley); Balazs Fejes (CEO & President): On margins, especially for longer-duration projects and factoring in token costs, what levers do you need to control — model usage, sourcing, pricing — and what relationships do you need to develop? […] To control economics you need to control multiple aspects: model usage (which model is used for which task and how frequently), the right blend of models to balance capability and cost, and multi-sourcing capability so you can buy the same model service from multiple providers when appropriate. We need to build trading-desk-like capabilities to manage pricing, availability and consumption limits. If you correctly control sourcing and usage of models, you can achieve differentiation in pricing and profitability.

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Q4 & Full Year FY2025 Earnings Call — Q4 FY2025

Where the 'AI-native' revenue segment is defined and the 2026 growth-and-margin framework is laid out. · Open the full transcript →

How EPAM defines 'AI-native' revenue—and what it deliberately excludes—plus the >$600M 2026 target.

Balazs Fejes (CEO & President): As a reminder, our AI-native revenues are defined across two groupings: number one, AI-native IP products, platforms, and solutions where AI was the core of the solution versus simple work accelerated by the use of AI tools; and number two, AI-led transformation initiatives across the entire enterprise. Importantly, our definition excludes all the AI foundational services along with any AIassisted work performed by EPAM Systems, Inc. employees within the software delivery lifecycle. Looking ahead, we continue to see robust demand for our AI-native services and expect to scale these revenues in excess of $600,000,000 in 2026.

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The guidance frame: budgets stable, one large Mexico client a ~1pt drag, and the standing Ukraine-delivery assumption.

Jason Peterson (CFO): Before moving to the specifics of our 2026 and Q1 outlook, I would like to provide some thoughts to help frame our guidance. We are encouraged by the underlying momentum of our business and the steady outperformance delivered throughout 2025. We step into 2026 with higher confidence in our long-term strategy and growth trajectory, supported by healthy client sentiment, a solid pipeline, and strong momentum in AI-native and AI foundational services. We see relative stability in overall client budgets, with a continued shift in spending towards build and strategic AI programs. […] The full year 2026 revenues from this client will decrease relative to 2025, and this decrease is expected to have a negative 1% impact on EPAM Systems, Inc.’s 2026 organic constant currency growth rate. In 2026, we remain committed to improving overall profitability, and specifically gross margin. Our guidance assumes that we will be able to continue to deliver from our Ukraine delivery centers at productivity levels similar to those achieved in 2025.

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Why 2026 organic guidance is below 2025's result—and the philosophy of guiding only to what's visible.

Jonathan Lee (Guggenheim); Jason Peterson (CFO): last quarter, you called out an expectation of 2026 organic growth being faster than that of 2025. With that in mind, can you help us reconcile that commentary to the 2026 outlook that, at the midpoint on organic constant currency basis, is slower than what you delivered in 2025? Is that due to Neoris’ largest client? Are there any other factors there? […] Yeah. Jonathan, thanks for the question, and it is certainly a good one. And so you are right. I think we had 4.9% organic constant currency growth in 2025. The midpoint of the range would produce 4.5%. Since the last time we talked, as I told Maggie, we did get incremental information on the Neoris largest client. As I called out in my fixed remarks, we expect the decline on a year-over-year basis will have a negative 100 basis point impact on growth. So you have got the 4.5% at the midpoint of our range. Obviously, it would be 100 basis points higher on the rest of the business. I think the other thing that we are trying to do from a guidance standpoint is to make certain that we guide to what we can see today. We are not assuming improvement in environment. Clearly, we have got some opportunities that we talked about throughout the remainder of the year. And so we are clearly going to work to drive towards better, and we will update you on our progress throughout the year.

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Q1 FY2022 Earnings Call — Q1 FY2022

How management steered through the Russia-Ukraine shock that put EPAM's entire delivery model to the test. · Open the full transcript →

The delivery-footprint math: how fast EPAM is cutting its Ukraine/Belarus/Russia concentration.

Arkadiy Dobkin (CEO & President): I would also point out that in large part, this diversification program was well underway even during the past several years. Before COVID, our allocation to the talent from Ukraine, Belarus and Russia was close to 70% of our total production capacity. By the end of 2021, it was less than 60%. And we believe, by the end of 2022, we will manage to reduce the allocation of our production staff in the region to about 30%.

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What the shock cost: Russia exit, asset impairments, humanitarian spend and accelerated relocation.

Jason Peterson (CFO): Thank you, Ark, and good morning, everyone. In the first quarter, EPAM delivered strong results despite the impact of the company's decision in March to discontinue services to customers based in Russia. In Q1, we also incurred some of the initial costs resulting from Russia's invasion of Ukraine and the acceleration of our geographic diversification strategy. Certain of these costs, including the expenditures related to EPAM's humanitarian commitment to Ukraine, charges for impairment of Russian longlived assets and costs associated with accelerated employee relocation have been excluded from non-GAAP financial results.

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Guidance philosophy under crisis: outlook withdrawn, quarter-only guidance until 2023.

Jason Peterson (CFO): Now let's turn to our business outlook. On February 28, we withdrew our business outlook due to the uncertainties related to Russia's invasion of Ukraine. For the remainder of this year, we plan to provide guidance for the next quarter only, with the expectation of resuming our full year guidance at the beginning of the 2023 year. Additionally, to help align with our thinking around significant events, let me provide a few broad assumptions which will help frame our guidance for Q2 and the remainder of 2022.

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More calls

Investor Day (AI Day) — Investor Day · 144 pages · The full multiyear AI-transformation strategy — the three strategic pillars and long-term targets that the 2026 earnings calls keep referring back to. · Open →

Q3 FY2025 Earnings Call — Q3 FY2025 · 10 pages · The first clean quarter under CEO Balazs Fejes; the AI-native scaling story that sets up Investor Day. · Open →

Q1 FY2025 Earnings Call — Q1 FY2025 · 10 pages · The leadership handover from founder Arkadiy Dobkin to Balazs Fejes. · Open →

Q4 & Full Year FY2022 Earnings Call — Q4 FY2022 · 36 pages · EPAM resumes full-year guidance for the first time since withdrawing it during the war — the post-shock reset. · Open →

Q2 FY2022 Earnings Call — Q2 FY2022 · 37 pages · The first post-invasion quarter of stabilization, with the employee-relocation program mid-flight. · Open →

Q4 & Full Year FY2021 Earnings Call — Q4 FY2021 · 40 pages · The pre-war call: a confident 37% growth guide and 10-year IPO retrospective, days before the invasion upended it. · Open →