EPAM’s Q4 Beats with $105M AI Revenue but Shares Slide 18.4%
EPAM Systems delivered Q4 EPS of $3.26 on $1.4B sales, driven by $105M in pure AI-native revenue and double-digit growth in financial services and energy. Despite projecting 2026 AI-native revenues above $600M and 20% EPS growth, GAAP profits fell 14% YoY, triggering an 18.4% stock sell-off.
1. Q4 Earnings Highlights
In Q4 2025, EPAM reported EPS of $3.26 on $1.4 billion in revenues, surpassing expectations. The company attributed results to double-digit revenue growth in financial services, energy and telecommunications verticals.
2. AI-Native Revenue Growth
EPAM generated $105 million in pure AI-native revenue, excluding foundational data and cloud work. It noted 60% to 70% of AI proof-of-concepts transitioned into production-grade enterprise programs, supported by partnerships with Microsoft, AWS and Google Cloud.
3. Guidance and Projections
Management projects 2026 AI-native revenues to exceed $600 million and forecasts 20% EPS growth. Organic constant-currency revenue is expected to grow 3% to 6%, factoring in a 1% headwind from a major client contraction in Mexico.
4. Profitability and Stock Reaction
GAAP profits declined 14% year-over-year, driven by increased variable compensation and a $25 million cost optimization program. The stock fell 18.4% as investors reacted to modest margin pressures and extended procurement cycles in larger AI deployments.