EPAM Systems (EPAM)

Digital engineering & software-development services — "the build" (custom platform engineering + AI-native transformation), not back-office IT

AI exposure 11% — derived from reported segment revenue, not asserted.

Where it sits

Software Stack → Enterprise & Business Software · figures rebased to Q2 2026, reported 2026-08-06

Digital engineering/software-dev services (the build) = B5 services side, like Accenture

Reported segments

• Americas — 56% of revenue
• Europe — 44% of revenue

EPAM ($1,414.8M Q2 2026, +4.5% YoY, +3.4% organic constant currency). The 10-Q reports TWO geographic segments: Americas 56.0% ($792.3M) = primary B5 Enterprise & Business Software; Europe 44.0% ($622.5M). By industry vertical the mix is Financial Services $366.2M, Consumer Goods/Retail/Travel $274.3M, Software & Hi-Tech $202.0M, Life Sciences & Healthcare $169.1M, Business Information & Media $166.7M and Emerging Verticals $236.5M. AI-native revenue passed $160M, over 11% of the business and a sixth consecutive quarter of double-digit sequential growth, but full-year guidance was cut to…

How the 11% is built

• Americas — 56% of revenue × 13% AI-driven (disclosed). AI-native delivery is over 11% of the business and growing double digits sequentially, against a base of conventional software engineering services
• Europe — 44% of revenue × 8% AI-driven (disclosed). Same service mix with a lower AI-native share

Investment read

Moat. Engineering brand and client-embedded delivery teams with CEE and India scale — genuine at the account level, but not a structural asset. The service itself is the thing under pressure: GenAI coding tools are compressing the billable hours EPAM sells faster than AI-transformation work replaces them, and every rival sells the same input at similar rates.

Bottleneck / pricing power. Little pricing power left to speak of. Organic constant-currency growth was cut twice to 2.0-3.0% for FY2026 with Q3 implied at ~1.7%, on sustained North American demand pressure — a volume problem no rate discipline fixes. The 16.4% non-GAAP operating margin sitting at the top of the guided band is the product of headcount and utilization management, not of terms EPAM can dictate.

Role in the AI stack. The digital-engineering services layer — the business AI is automating faster than it is expanding.

Connected companies

• Microsoft (MSFT) — EPAM supplies: systems integration/engineering partner — builds on Azure + implements AI for clients
• Salesforce (CRM) — EPAM supplies: builds/implements Salesforce solutions for clients (SI partner)
• Alphabet (GOOGL) — EPAM supplies: Google Cloud Premier SI partner - Vertex AI / GCP implementation and application modernization delivery
• Accenture (ACN) — EPAM competes with: IT services — EPAM (digital engineering/the build) vs Accenture (broad consulting)

Others in Enterprise & Business Software

• ServiceNow (NOW)
• Salesforce (CRM)
• SAP SE (SAP)
• Workday (WDAY)
• Oracle (ORCL)
• Intuit (INTU)
• Pegasystems (PEGA)
• HubSpot (HUBS)
• Twilio (TWLO)
• UiPath (PATH)
• Veeva Systems (VEEV)
• Adobe (ADBE)

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