EPAM’s shares dropped 11.3% as investors reacted negatively to noticeable deceleration and weakness in the North American business, as well as pressure from margin headwinds and cautious outlook commentary.
- Revenue grew 4.5% year-over-year on a reported basis, with organic constant currency growth of 3.4%, but growth was uneven across verticals and regions.
- Four of six verticals recorded growth, led by Financial Services and Life Sciences & Healthcare; however, Software & Hi-Tech and Business Information & Media declined, with the latter impacted by project completions.
- Americas region showed significantly lower growth compared to strong double-digit expansion in EMEA.
- Management highlighted ongoing “growth gaps” in key parts of the North American business, signaling execution challenges despite strategic investments.
- EPAM is investing heavily in AI-related capabilities and commercial transformation, but these forward-looking efforts have yet to offset near-term deceleration and cautious client budget sentiments amid geopolitical uncertainty.
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