Sector: Information Technology | Focus: IT Consulting & Other Services
HQ: Newtown, Pennsylvania
Financial Risks
EPAM faces risks from the war in Ukraine, including potential asset damage, employee relocation costs, client contract alterations, and disruptions to service delivery. Concentration of credit risk exists in Ukraine and Belarus, with potential deposit losses due to banking instability or sanctions. Interest rate fluctuations and foreign exchange rate volatility also pose risks. Inflation in various operating countries could increase costs. Future acquisitions and investments may require additional funding, potentially diluting existing shareholder value or increasing debt obligations.
Financial Upside
EPAM's revenues increased slightly in the first nine months of 2024, despite a decline at one client. Operating profit margin improved to 11.7% from 10.7% in the prior year. Government incentives, particularly in Poland, contributed to this improvement. Acquisitions, including the pending acquisition of First Derivative, and the acquisition of Neoris, are expected to expand EPAM's capabilities and geographic reach. The company has a large cash balance and available borrowing capacity, providing financial flexibility.
