Connect with us

Technology

EPAM Reports Results for Fourth Quarter and Full Year 2024

Published

2 years ago

on

Fourth Quarter 2024

Revenues of $1.248 billion, up 7.9% year-over-yearGAAP Income from Operations was 10.9% of revenues and Non-GAAP Income from Operations was 16.7% of revenuesGAAP Diluted EPS of $1.80, an increase of 8.4%, and Non-GAAP Diluted EPS of $2.84, an increase of 3.3% on a year-over-year basis

Full Year 2024

Revenues of $4.728 billion, up 0.8% year-over-yearGAAP Income from Operations was 11.5% of revenues and Non-GAAP Income from Operations was 16.5% of revenuesGAAP Diluted EPS of $7.84, an increase of 11.0%, and Non-GAAP Diluted EPS of $10.86, an increase of 2.5% on a year-over-year basis

NEWTOWN, Pa., Feb. 20, 2025 /PRNewswire/ — EPAM Systems, Inc. (NYSE: EPAM), a leading digital transformation services and product engineering company, today announced results for its fourth quarter and full year ended December 31, 2024.

“After navigating a dynamic year, we are pleased to report a strong fourth quarter. We continued to build sequential momentum, and saw a return to year-over-year organic growth, while we simultaneously accelerated our global strategy with the acquisitions of NEORIS and First Derivative,” said Arkadiy Dobkin, CEO & President, EPAM. “As we look ahead, we believe 2025 will be a year of transition, as clients balance their cost focus with the need to accelerate their transformational and GenAI journeys. We see a strong need to continue to invest in our talent, advanced technological and consulting capabilities, and the integration of recent acquisitions to best position ourselves to capture market share once demand returns to more normalized levels.”

Fourth Quarter 2024 Highlights

Revenues increased to $1.248 billion, a year-over-year increase of $91.1 million, or 7.9%. On an organic constant currency basis, revenues grew 1.0% compared to the fourth quarter of 2023;GAAP income from operations was $136.5 million, an increase of $14.0 million, or 11.4%, compared to $122.5 million in the fourth quarter of 2023;Non-GAAP income from operations was $208.2 million, an increase of $7.8 million, or 3.9%, compared to $200.4 million in the fourth quarter of 2023;Diluted earnings per share (“EPS”) on a GAAP basis was $1.80, an increase of $0.14, or 8.4%, compared to $1.66 in the fourth quarter of 2023;Non-GAAP diluted EPS was $2.84, an increase of $0.09, or 3.3%, compared to $2.75 in the fourth quarter of 2023;Completed the acquisition of NEORIS creating a competitive offering for clients across Latin America and in Spanish- and Portuguese-speaking countries, while broadening EPAM’s global and nearshore delivery capabilities across Latin America and Europe; andCompleted the acquisition of First Derivative strengthening EPAM’s financial services consulting and delivery capabilities in North America, Europe and APAC and expanding our client portfolio in financial services.

Full Year 2024 Highlights

Revenues increased to $4.728 billion, a year-over-year increase of $37.4 million, or 0.8%. On an organic constant currency basis, revenues declined 1.7% year-over-year;We recorded a benefit of $68.8 million for research & development government incentives in Poland. Specifically, $23.5 million of the benefit related to activities performed during 2023 and $45.3 million of the benefit related to activities performed during the full year of 2024. This benefit was included as a reduction to our Cost of revenues.  The impact of this benefit on net income was partially offset as the incentives drove a higher effective tax rate for both GAAP and non-GAAP results. We expect the incentive will be recurring with benefits recognized continuing in the future;GAAP income from operations was $544.6 million, an increase of $43.3 million, or 8.6%, compared to $501.2 million in 2023. GAAP income from operations benefited from the recognition of $68.8 million of incentives related to research and development activities performed in Poland and was negatively impacted by $31.3 million of costs incurred in connection with the Company’s Cost Optimization Programs;Non-GAAP income from operations was $779.2 million, an increase of $14.1 million, or 1.8%, compared to $765.1 million in 2023. Non-GAAP income from operations benefited from the recognition of $45.3 million of incentives related to research and development activities performed in Poland in 2024;Diluted EPS on a GAAP basis was $7.84, an increase of $0.78, or 11.0%, compared to $7.06 in 2023. EPS on a GAAP basis was positively impacted by the recognition of the Polish incentives, which increased income from operations. However, this benefit was partially offset by an increase to the effective tax rate; andNon-GAAP diluted EPS was $10.86, an increase of $0.27, or 2.5%, compared to $10.59 in 2023. EPS on a non-GAAP basis was positively impacted by the recognition of the Polish incentives for activities performed during the full year of 2024, which increased income from operations. However, this benefit was partially offset by an increase to the effective tax rate.

Cash Flow and Other Metrics

Cash provided by operating activities was $130.3 million in the fourth quarter of 2024, a decrease from $171.4 million in the fourth quarter of 2023; and was $559.2 million in 2024, a decrease from $562.6 million in 2023;The Company repurchased 53 thousand shares of its common stock for $13.0 million during the fourth quarter of 2024 under its share repurchase program. During the year ended December 31, 2024, the Company repurchased 1,854 thousand shares of its common stock for $398.0 million under its share repurchase programs. As of December 31, 2024, the Company had $437.0 million remaining under its share repurchase authorization;Cash, cash equivalents and restricted cash totaled $1.290 billion as of December 31, 2024, a decrease of $752.7 million, or 36.8%, from $2.043 billion as of December 31, 2023 largely the result of payments for the acquisitions of NEORIS and First Derivative; andTotal headcount was approximately 61,200 as of December 31, 2024. Included in this number were approximately 55,100 delivery professionals, an increase of 16.3% from December 31, 2023. 

2025 Outlook – Full Year and First Quarter

Full Year

EPAM expects the following for the full year:

The Company expects the year-over-year revenue growth rate to be in the range of 10.0% to 14.0% for 2025. The Company expects the year-over-year revenue growth rate on an organic constant currency basis to be in the range of 1.0% to 5.0%;For the full year, EPAM expects GAAP income from operations to be in the range of 9.0% to 10.0% of revenues and non-GAAP income from operations to be in the range of 14.5% to 15.5% of revenues;The Company expects its GAAP effective tax rate and its non-GAAP effective tax rate to both be approximately 24.0%; andEPAM expects GAAP diluted EPS will be in the range of $6.78 to $7.08 for the year, and non-GAAP diluted EPS will be in the range of $10.45 to $10.75 for the year. The Company expects weighted average diluted shares outstanding for the year of 58.1 million.

First Quarter

EPAM expects the following for the first quarter:

The Company expects revenues will be in the range of $1.275 billion to $1.290 billion for the first quarter reflecting a year-over-year increase of 10.0% at the midpoint of the range. The Company expects year-over-year revenue growth on an organic constant currency basis to be approximately flat at the midpoint of the range;For the first quarter, EPAM expects GAAP income from operations to be in the range of 6.5% to 7.5% of revenues and non-GAAP income from operations to be in the range of 12.5% to 13.5% of revenues;The Company expects its GAAP effective tax rate to be approximately 19% and its non-GAAP effective tax rate to be approximately 24%; andEPAM expects GAAP diluted EPS will be in the range of $1.27 to $1.37 for the quarter, and non-GAAP diluted EPS will be in the range of $2.22 to $2.32 for the quarter. The Company expects weighted average diluted shares outstanding for the quarter of 57.7 million.

Conference Call Information

EPAM will host a conference call to discuss results on Thursday, February 20, 2025 at 8:00 a.m. EST. The conference call will be available live on the EPAM website at https://investors.epam.com. Please visit the website at least 15 minutes prior to the call to register for the event. For those who cannot access the live webcast, a replay will be available in the Investor Relations section of the website.

About EPAM Systems

Since 1993, EPAM Systems, Inc. (NYSE: EPAM) has used its software engineering expertise to become a leading global provider of digital engineering, cloud and AI-enabled transformation services, and a leading business and experience consulting partner for global enterprises and ambitious startups. We address our clients’ transformation challenges by focusing EPAM Continuum’s integrated strategy, experience and technology consulting with our 30+ years of engineering execution to speed our clients’ time to market and drive greater value from their innovations and digital investments.

We leverage AI and GenAI to deliver transformative solutions that accelerate our clients’ digital innovation and enhance their competitive edge. Through platforms like EPAM AI/RUN™ and initiatives like DIALX Lab, we integrate advanced AI technologies into tailored business strategies, driving significant industry impact and fostering continuous innovation.

We deliver globally but engage locally with our expert teams of consultants, architects, designers and engineers, making the future real for our clients, our partners, and our people around the world. We believe the right solutions are the ones that improve people’s lives and fuel competitive advantage for our clients across diverse industries. Our thinking comes to life in the experiences, products and platforms we design and bring to market.

Added to the S&P 500 and the Forbes Global 2000 in 2021 and recognized by Glassdoor and Newsweek as Most Loved Workplace, our multidisciplinary teams serve customers across six continents. We are proud to be among the top 15 companies in Information Technology Services in the Fortune 1000 and to be recognized as a leader in the IDC MarketScapes for Worldwide Experience Build Services, Worldwide Experience Design Services and Worldwide Software Engineering Services.

Learn more at www.epam.com follow us on LinkedIn.

Non-GAAP Financial Measures

EPAM supplements results reported in accordance with United States generally accepted accounting principles, referred to as GAAP, with non-GAAP financial measures. Management believes these measures help illustrate underlying trends in EPAM’s business and uses the measures to establish budgets and operational goals, communicate internally and externally, for managing EPAM’s business and evaluating its performance. Management also believes these measures help investors compare EPAM’s operating performance with its results in prior periods. EPAM anticipates that it will continue to report both GAAP and certain non-GAAP financial measures in its financial results, including non-GAAP results that exclude stock-based compensation expenses, acquisition-related costs including amortization of acquired intangible assets, impairment of assets, expenses associated with EPAM’s humanitarian commitment to its professionals in Ukraine, unbilled business continuity resources resulting from Russia’s invasion of Ukraine, costs associated with the geographic repositioning of EPAM employees based outside of Ukraine impacted by the war and geopolitical instability in the region, employee separation costs incurred in connection with restructuring programs including the Company’s exit from Russia, certain other one-time charges and benefits, changes in fair value of contingent consideration, foreign exchange gains and losses, excess tax benefits related to stock-based compensation, and the related effect on income taxes of the pre-tax adjustments. Management also compares revenues on an “organic constant currency basis,” which is a non-GAAP financial measure. This measure excludes the effect of acquisitions by removing revenues from an acquired company in the twelve months after completing an acquisition, the decision to exit from Russia by removing revenues from clients located in Russia in both the current period and prior period of comparison, and foreign currency exchange rate fluctuations by translating current period revenues into U.S. dollars at the weighted average exchange rates of the prior period of comparison. Because EPAM’s reported non-GAAP financial measures are not calculated in accordance with GAAP, these measures are not comparable to GAAP and may not be comparable to similarly described non-GAAP measures reported by other companies within EPAM’s industry. Consequently, EPAM’s non-GAAP financial measures should not be evaluated in isolation or supplant comparable GAAP measures, but rather, should be considered together with the information in EPAM’s consolidated financial statements, which are prepared in accordance with GAAP.

Forward-Looking Statements

This press release includes estimates and statements which may constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the accuracy of which are necessarily subject to risks, uncertainties, and assumptions as to future events that may not prove to be accurate. Our estimates and forward-looking statements are mainly based on our current expectations and estimates of future events and trends, which affect or may affect our business and operations. These statements may include words such as “may,” “will,” “should,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate” or similar expressions. Those future events and trends may relate to, among other things, developments relating to the war in Ukraine and escalation of the war in the surrounding region, political and civil unrest or military action in the geographies where we conduct business and operate, difficult conditions in global capital markets, foreign exchange markets and the broader economy, and the effect that these events may have on customer demand and our revenues, operations, access to capital, and profitability. Other factors that could cause actual results to differ materially from those expressed or implied include general economic conditions, the risk factors discussed in the Company’s most recent Annual Report on Form 10-K and the factors discussed in the Company’s Quarterly Reports on Form 10-Q, particularly under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” and other filings with the Securities and Exchange Commission. Although we believe that these estimates and forward-looking statements are based upon reasonable assumptions, they are subject to several risks and uncertainties and are made based on information currently available to us. EPAM undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities law.

 

EPAM SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share data)

Three Months Ended
December 31,

Year Ended  December 31,

2024

2023

2024

2023

Revenues

$ 1,248,351

$ 1,157,257

$ 4,727,940

$ 4,690,540

Operating expenses:

Cost of revenues (exclusive of depreciation and amortization)

868,314

797,633

3,277,497

3,256,514

Selling, general and administrative expenses

216,969

213,972

816,300

815,065

Depreciation and amortization expense

26,556

23,158

89,559

91,800

Loss on sale of business

—

—

—

25,922

Income from operations

136,512

122,494

544,584

501,239

Interest and other income, net

6,451

13,962

46,876

51,124

Foreign exchange loss

(5,632)

(9,053)

(7,048)

(15,778)

Income before provision for income taxes

137,331

127,403

584,412

536,585

Provision for income taxes

34,032

29,849

129,879

119,502

Net income

$     103,299

$       97,554

$     454,533

$     417,083

Net income per share:

Basic

$           1.82

$           1.69

$           7.93

$           7.21

Diluted

$           1.80

$           1.66

$           7.84

$           7.06

Shares used in calculation of net income per share:

Basic

56,818

57,767

57,288

57,829

Diluted

57,435

58,913

57,983

59,085

 

EPAM SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except par value)

As of  

 December 31, 

 2024

As of  

 December 31, 

 2023

Assets

Current assets

Cash and cash equivalents

$    1,286,267

$    2,036,235

Trade receivables and contract assets, net of allowance of $5,612 and $11,864, respectively

1,002,175

897,032

Short-term investments

1,690

60,739

Prepaid and other current assets

136,116

97,355

Total current assets

2,426,248

3,091,361

Property and equipment, net

207,667

235,053

Operating lease right-of-use assets, net

128,244

134,898

Intangible assets, net

436,418

71,118

Goodwill

1,181,575

562,459

Deferred tax assets

269,799

197,901

Other noncurrent assets

100,522

59,575

Total assets

$   4,750,473

$   4,352,365

Liabilities

Current liabilities

Accounts payable

$         44,702

$         31,992

Accrued compensation and benefits expenses

484,952

412,747

Accrued expenses and other current liabilities

201,356

124,823

Income taxes payable, current

50,395

38,812

Operating lease liabilities, current

39,634

36,558

Total current liabilities

821,039

644,932

Long-term debt

25,194

26,126

Operating lease liabilities, noncurrent

98,426

109,261

Deferred tax liabilities, noncurrent

92,362

8,744

Other noncurrent liabilities

82,301

91,832

Total liabilities

1,119,322

880,895

Commitments and contingencies

Equity

Stockholders’ equity

Common stock, $0.001 par value; 160,000 authorized; 56,869 shares issued and outstanding at December 31, 2024, and 57,787 shares issued and outstanding at December 31, 2023

57

58

Additional paid-in capital

1,190,222

1,008,766

Retained earnings

2,555,796

2,501,107

Accumulated other comprehensive loss

(116,864)

(39,040)

Total EPAM Systems, Inc. stockholders’ equity

3,629,211

3,470,891

Noncontrolling interest in consolidated subsidiaries

1,940

579

Total equity

3,631,151

3,471,470

Total liabilities and equity

$   4,750,473

$   4,352,365

 

EPAM SYSTEMS, INC. AND SUBSIDIARIES

Reconciliations of Non-GAAP Financial Measures to Comparable GAAP Financial Measures

(Unaudited)

(In thousands, except percent and per share amounts)

Reconciliation of revenue growth as reported on a GAAP basis to revenue growth/(decline) on an organic constant currency basis is presented in the table below:

Three Months Ended
December 31, 2024

Year Ended
December 31, 2024

Revenue growth as reported

7.9 %

0.8 %

Foreign exchange rates impact

0.4 %

(0.1) %

Inorganic revenue growth

(7.3) %

(2.7) %

Impact of exit from Russia

— %

0.3 %

Revenue growth/(decline) on an organic constant currency basis

1.0 %

(1.7) %

 

Reconciliation of various income statement amounts from GAAP to non-GAAP for the three months and years ended December 31, 2024 and 2023:

Three Months Ended December 31, 2024

Year Ended December 31, 2024

GAAP

Adjustments

Non-GAAP

GAAP

Adjustments

Non-GAAP

Cost of revenues (exclusive of depreciation and amortization)(1)

$ 868,314

$ (22,040)

$ 846,274

$  3,277,497

$   (59,821)

$  3,217,676

Selling, general and administrative expenses(2)

$ 216,969

$ (37,637)

$ 179,332

$  816,300

$ (145,329)

$  670,971

Income from operations(3)

$ 136,512

$   71,675

$ 208,187

$  544,584

$  234,625

$  779,209

Operating margin

10.9 %

5.8 %

16.7 %

11.5 %

5.0 %

16.5 %

Net income(4)

$ 103,299

$   60,066

$ 163,365

$  454,533

$  175,430

$  629,963

Diluted earnings per share

$       1.80

$       2.84

$         7.84

$       10.86

 

Three Months Ended December 31, 2023

Year Ended December 31, 2023

GAAP

Adjustments

Non-GAAP

GAAP

Adjustments

Non-GAAP

Cost of revenues (exclusive of depreciation and amortization)(1)

$ 797,633

$ (22,183)

$  775,450

$  3,256,514

$   (89,464)

$  3,167,050

Selling, general and administrative expenses(2)

$ 213,972

$ (49,747)

$  164,225

$  815,065

$ (125,768)

$  689,297

Income from operations(3)

$ 122,494

$   77,939

$  200,433

$  501,239

$  263,871

$  765,110

Operating margin

10.6 %

6.7 %

17.3 %

10.7 %

5.6 %

16.3 %

Net income(4)

$   97,554

$   64,211

$  161,765

$  417,083

$  208,555

$  625,638

Diluted earnings per share

$       1.66

$       2.75

$         7.06

$       10.59

 

Items (1) through (4) above are detailed in the following table with the specific cross-reference noted in the appropriate item.

 

Three Months Ended 

 December 31,

Year Ended 

 December 31,

2024

2023

2024

2023

Stock-based compensation expenses

$     22,074

$     19,228

$     80,944

$     68,797

Poland R&D incentives(a)

(556)

—

(23,473)

—

Humanitarian support in Ukraine(b)

522

2,955

2,350

11,252

Unbilled business continuity resources(c)

—

—

—

9,415

Total adjustments to GAAP cost of revenues(1)

22,040

22,183

59,821

89,464

Stock-based compensation expenses

22,624

18,966

86,353

78,933

Cost Optimization charges(d)

4,837

27,936

31,270

35,052

Other acquisition-related expenses

7,031

275

15,808

2,723

Humanitarian support in Ukraine(b)

3,127

836

10,821

6,145

Geographic repositioning(e)

(4)

916

849

1,793

One-time charges

22

818

228

1,122

Total adjustments to GAAP selling, general and administrative expenses(2)

37,637

49,747

145,329

125,768

Amortization of purchased intangible assets

11,998

6,009

29,475

22,717

Loss on sale of business(f)

—

—

—

25,922

Total adjustments to GAAP income from operations(3)

71,675

77,939

234,625

263,871

Foreign exchange loss

5,632

9,053

7,048

15,778

Change in fair value of contingent consideration included in Interest and other income, net

1,673

1,000

5,700

2,818

One-time benefits/(charges) included in Interest and other income, net

(1,331)

700

(3,143)

700

Provision for income taxes:

Tax effect on non-GAAP adjustments

(15,640)

(19,755)

(44,522)

(53,815)

Excess tax benefits related to stock-based compensation

(1,943)

(4,726)

(22,448)

(19,829)

Net discrete benefit from tax planning(g)

—

—

(1,830)

(968)

Total adjustments to GAAP net income(4)

$     60,066

$     64,211

$   175,430

$   208,555

(a)

We have excluded from non-GAAP results the portion of the benefit from Poland R&D incentives related to qualifying activities performed in 2023 as it represents a nonrecurring one-time benefit.

(b)

Humanitarian support in Ukraine includes expenses related to EPAM’s $100 million humanitarian commitment in response to Russia’s invasion of Ukraine to support EPAM professionals and their families in and displaced from Ukraine. These expenses are incremental to those expenses incurred prior to the crisis, clearly separable from normal operations, and not expected to recur once the crisis has subsided and operations return to normal.

(c)

Given the uncertainty in the region introduced by Russia’s invasion of Ukraine, EPAM has assigned delivery professionals in locations outside of the region to ensure the continuity of delivery for customers who have substantial delivery exposure to Ukraine or other delivery concerns resulting from the invasion. These employees are not billed to clients and operate largely in a standby or backup capacity. These expenses are incremental to those expenses incurred prior to the crisis, clearly separable from normal operations, and not expected to recur once the crisis has subsided and operations return to normal.

(d)

Cost Optimization charges include severance, facilities and contract termination charges incurred in connection with the programs initiated in the third quarter of 2023 and second quarter of 2024. Consistent with the Company’s historical non-GAAP policy, costs incurred in connection with formal restructuring initiatives have been excluded from non-GAAP results as these are one-time and unusual in nature.

(e)

Geographic repositioning includes expenses associated with the relocation to other countries of employees based outside of Ukraine impacted by the war and geopolitical instability in the region, and includes the cost of accommodations, travel and food. These expenses are incremental to those expenses incurred prior to the crisis, clearly separable from normal operations, and not expected to recur once the crisis has subsided and operations return to normal.

(f)

On July 26, 2023, the Company completed the sale of its remaining operations in Russia and recorded a loss on sale of approximately $25.9 million during the year ended December 31, 2023, including the recognition of the accumulated currency translation loss related to this foreign entity that was previously included in Accumulated other comprehensive loss in the financial statements. The Company excluded this loss from non-GAAP results as it is one-time and unusual in nature.

(g)

One-time benefit related to the implementation of tax planning to disregard certain foreign subsidiaries as separate entities for U.S. income tax purposes. Consistent with the Company’s historical non-GAAP policy, the benefit related to the implementation of tax planning has been excluded from non-GAAP results as it is one-time and unusual in nature.

 

EPAM SYSTEMS, INC. AND SUBSIDIARIES

Reconciliations of Guidance Non-GAAP Financial Measures to Comparable GAAP Financial Measures

(Unaudited)

The below guidance constitutes forward-looking statements within the meaning of the federal securities laws and is based on a number of assumptions that are subject to change and many of which are outside the control of the Company. Actual results may differ materially from the Company’s expectations depending on factors discussed in the Company’s filings with the Securities and Exchange Commission.

Reconciliation of expected revenue growth on a GAAP basis to expected revenue growth on an organic constant currency basis is presented in the table below:

First Quarter 2025

Full Year 2025

(at midpoint of 
range)

Revenue growth

10.0 %

10.0% to 14.0%

Foreign exchange rates impact

1.4 %

0.9 %

Inorganic revenue growth

(11.4) %

(9.9) %

Revenue growth on an organic constant currency basis

— %

1.0% to 5.0%

 

Reconciliation of expected GAAP to non-GAAP income from operations as a percentage of revenues is presented in the table below:

First Quarter 2025

Full Year 2025

GAAP income from operations as a percentage of revenues

6.5% to 7.5%

9.0% to 10.0%

Stock-based compensation expenses

3.9 %

3.7 %

Included in cost of revenues (exclusive of depreciation and amortization)

1.9 %

1.8 %

Included in selling, general and administrative expenses

2.0 %

1.9 %

Humanitarian support in Ukraine(b)

0.2 %

0.3 %

Cost Optimization charges(d)

0.5 %

0.2 %

Amortization of acquired intangible assets

1.4 %

1.3 %

Non-GAAP income from operations as a percentage of revenues(h)

12.5% to 13.5%

14.5% to 15.5%

(h) EPAM has not included the impact of potential future One-time charges including asset impairments, unusual gains and losses, expenses incurred in connection with future cost optimization actions, and Other acquisition-related expenses because the Company is unable to predict these amounts with reasonable certainty.

 

Reconciliation of expected GAAP to non-GAAP effective tax rate is presented in the table below:

First Quarter 2025

Full Year 2025

GAAP effective tax rate (approximately)

19 %

24 %

Excess tax benefits related to stock-based compensation

7.5 %

2.6 %

Tax effect on non-GAAP adjustments

(2.5) %

(2.6) %

Non-GAAP effective tax rate (approximately)

24 %

24 %

 

Reconciliation of expected GAAP to non-GAAP diluted earnings per share is presented in the table below:

First Quarter 2025

Full Year 2025

GAAP diluted earnings per share

$1.27 to $1.37

$6.78 to $7.08

Stock-based compensation expenses

0.87

3.33

Included in cost of revenues (exclusive of depreciation and amortization)

0.42

1.61

Included in selling, general and administrative expenses

0.45

1.72

Humanitarian support in Ukraine(b)

0.07

0.25

Cost Optimization charges(d)

0.10

0.12

Amortization of acquired intangible assets

0.31

1.17

Foreign exchange loss

0.02

0.07

Provision for income taxes:

     Tax effect on non-GAAP adjustments

(0.29)

(1.04)

     Excess tax benefits related to stock-based compensation

(0.13)

(0.23)

Non-GAAP diluted earnings per share(h)

$2.22 to $2.32

$10.45 to $10.75

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/epam-reports-results-for-fourth-quarter-and-full-year-2024-302381106.html

SOURCE EPAM Systems, Inc.

Related Topics:
Continue Reading

Technology

U.S. News & World Report Reveals the 2027 Best Places to Retire

Published

15 minutes ago

on

October 27, 2026

By

Affordability is a top priority for attendees as Midland, Michigan, holds No. 1 spot.

Summary

Midland, Michigan, is the No. 1 Best Place to Retire for the second year in a row.Affordability is the most considered factor when choosing a place to retire in 2027.Florida and Texas dominate the top 250 Best Places to Retire, offering a number of affordable and retiree-tax friendly locations.

WASHINGTON, Oct. 27, 2026 /PRNewswire/ — U.S. News & World Report, the global authority in rankings and consumer advice, today revealed the 2027 Best Places to Retire in the United States.

Midland, Michigan, retained the No. 1 rank for the second year in a row. Midland scored high in affordability and retiree taxes, helping it to lock in the top spot.

“Retirees are seeking a place that gives them a sense of security and comfort as they live out their golden years,” said Megan Wood, assistant managing editor, home services and real estate. “Whether that comfort prioritizes scenic nature spots, access to multi-cultural experiences, or everyday affordability, places like Midland, Michigan, offer financial safety while still providing a good quality of life.”

Homosassa Springs, Florida, came in at No. 2 due to strong scores in affordability, 55+ population growth and retiree taxes. High performance for, quality of life, retiree taxes, affordability and quality of life resulted in Weirton, West Virginia, placing No. 3 on the list.

U.S. News adjusted its scoring weights for the 2027 rankings to mirror a growing concern for affordability in America. This resulted in multiple double-digit jumps in the top 25, including Paducah, Kentucky (No. 8), ascending into the top 10 for the first time.

“It’s no secret that affordability is top of mind for Americans this year, which is why U.S. News updated its weighting criteria to better align with what retirees prioritize,” Wood said. “The 2027 rankings reflect key metrics used to highlight the places that best suit retiree needs.”

U.S. News evaluated more than 850 U.S. cities – publishing the top 250 places – based on how well they meet American retirees’ expectations against measures including quality of life, affordability, healthcare, retiree taxes, job market, and population and migration for retirees aged 55 and older.

The six measures factored into this year’s rankings were weighted based on a public survey of individuals across the U.S. who are at or approaching retirement age (45 and older) to find out what matters most to people when they’re considering where to retire. Resources include federal, state and local data provided by Applied Geographic Solutions, which includes data sourced from the FBI’s Uniform Crime Reporting program, Bureau of Labor Statistics, Bureau of Economic Analysis and U.S. News’ Best Hospitals rankings. To learn more about how the rankings are determined, read the Best Places to Retire methodology.

Best Places to Retire is part of U.S. News’ Real Estate section, which provides rankings and tools to help individuals navigate the housing market, including home value estimates to working with an agent.

2027 U.S. News Best Places to Retire – Top 10 
*See the full rankings here.

Midland, Michigan Homosassa Springs, Florida Weirton, West VirginiaThe Woodlands, TexasSpring, TexasRancho Rio, New Mexico Altoona, PennsylvaniaPaducah, KentuckyLynchburg, Virginia Palm Coast, Florida 

For more information on Best Places to Retire, explore Facebook, LinkedIn, Tik Tok, Instagram and X using #BestPlacesToRetire.

About U.S. News & World Report
U.S. News & World Report is the global leader for journalism that empowers consumers, citizens, business leaders and policy officials to make confident decisions in all aspects of their lives and communities. A multifaceted media company, U.S. News provides unbiased rankings, independent reporting and analysis, and consumer advice to millions of people on USNews.com each month. A pillar in Washington for more than 90 years, U.S. News is the trusted home for in-depth and exclusive insights on education, health, politics, the economy, insurance, personal finance, travel, automobiles, real estate, careers and consumer products and services.

View original content to download multimedia:https://www.prnewswire.com/news-releases/us-news–world-report-reveals-the-2027-best-places-to-retire-302920068.html

SOURCE U.S. News & World Report, L.P.

Continue Reading

Technology

IBM Introduces Identity and Control for AI Agents, Securing Frontier Intelligence for the Enterprise

Published

15 minutes ago

on

October 27, 2026

By

Enterprises are deploying agents faster than they can verify them. HashiCorp Vault uses Agent Identity to give each agent a governed identity Verified agents still need limits on access. Vault extends its established secrets management to AI agents, built to enforce least-privilege access and enable real-time revocation when an agent attempts an unauthorized action Enterprises can’t scale agents they can’t see, test or account for. IBM watsonx Orchestrate is designed to unify discovery, containment, and evaluation across Amazon Bedrock, Microsoft Foundry and Google Gemini 

ATLANTA, Oct. 27, 2026 /PRNewswire/ — At TechXchange 2026, IBM (NYSE: IBM) is announcing new capabilities to help developers, IT and security teams put AI agents to work across business systems with clear authority and accountability. IBM brings together agent discovery, verified identities, access controls and performance evaluation to help organizations understand who owns each agent, control what it can access, and trace its actions across existing applications and infrastructure.  

According to Gartner, by 2028 the average Fortune 500 enterprise will use over 150,000 AI agents. But only 13% of organizations believe that they have the right AI agent governance in place [1]. Persistent credentials, unclear ownership and disconnected controls make it harder to govern agents as they interact with other agents, invoke tools and act across teams, platforms and clouds. 

“The winners in enterprise AI are changing how their business runs, not simply adding more AI to it,” said Dinesh Nirmal, Senior Vice President, IBM Software. “For agents to take on real work across the systems a company depends on, it requires an AI operating model – one that connects agents to the business’s data, applications and infrastructure and runs them with the same discipline as its most critical systems. Build trust and control into that model, and agents stop being a technology and become a way of doing business.”  

Today’s announcements extend IBM’s portfolio to deliver an AI operating model of four essential systems working together: agents, data, automation and hybrid infrastructure. This starts with the trust and control every agent needs – a verified identity, only the access it needs, and one place to discover, secure and evaluate agents regardless of where they were built. 

Extending HashiCorp Vault to AI agents
HashiCorp Vault manages the secrets and credentials that applications and services use to access business systems. It provides that control through centrally managed secrets, automated rotation for supported credentials, and dynamically generated credentials that expire or can be revoked. These capabilities help reduce the time exposed credentials remain usable and limit access to the permissions configured for each role. 

HashiCorp Vault already secures non-human identities for organizations including ABN AMRO, Adobe, athenahealth, BBVA, BlackRock, Canva, Duke Energy, Expedia, London Stock Exchange, Starbucks, Swiss Federal Railways and Target, across systems that process billions of dollars in transactions [2]. HashiCorp will now extend those capabilities to AI agents, issuing secured, short-lived credentials that limit each agent to what it needs. 

Establishing agent identity and accountability
AI agents are a growing class of non-human identity, alongside applications and services. As they begin acting across business systems, enterprises need a clear record of who owns each agent and what authority it has been granted. HashiCorp is combining governed agent identity with credential controls to help organizations delegate work with defined authority and accountability. 

When used with HashiCorp Vault, Agent Identity establishes the authoritative record for each agent, such as who owns it, its lifecycle status and the authority it has been granted. Built to extend existing identity and security investments, it shares relevant identity and authorization context with Vault’s credential controls – ultimately enforcing least-privilege access and enabling real-time revocation when an agent attempts an unauthorized action. 

Controlling agent credentials and access
Identifying an agent is only the start. Enterprises also need to control the credentials it uses to reach databases, applications and cloud services – and how long those credentials remain valid. As agents invoke tools and act across business systems, their credentials become a critical security boundary. An agent with a long-lived, overprivileged credential can put systems and data at risk if it’s compromised or acts outside its intended task. Enterprises need to establish what each agent’s job is, limit the access it receives and revoke that access when circumstances change. 

These controls extend beyond initial authentication. If an agent attempts to retrieve information or perform actions outside its approved permissions, the access can be denied and session revoked in real time to prevent unauthorized activity. Vault’s short-lived credentials and least-privilege controls can further restrict what an agent accesses and the duration of those permissions.  

Additional capabilities include: 

Vault 2.2 gives agents their own secured accounts, automatically renews their credentials and incorporates post-quantum encryption for quantum-era threats. Secure Hub (public preview) gives companies centralized visibility across their Vault environments to make it easier to understand operational health, usage and security resources. 

At TechXchange, client speakers will share how they use Vault to secure enterprise applications, workloads and AI agents 

athenahealth: Automating certificate management with Vault’s PKI engine. Albert Einstein College of Medicine: Applying IBM Verify and Vault to AI agent identity, just-in-time access, dynamic secrets and auditability. Optum: Using Vault Radar to detect exposed secrets and Boundary for just-in-time, identity-based access. Seven-Eleven Japan: Centralizing and encrypting secrets with Vault Enterprise and detecting hardcoded secrets with Vault Radar. Yum! Brands: Building an identity security platform with IBM Verify, with a look ahead to machine identities and secrets management. 

“AI presents extraordinary opportunities to accelerate biomedical research and discovery, but realizing its potential requires a foundation of security, trust, and responsible governance,” said Shailesh M. Shenoy, Assistant Dean for Information Technology at Albert Einstein College of Medicine. “In my experience, technologies such as IBM Verify and HashiCorp Vault can play an important role in helping organizations establish the identity, access, and security controls needed to innovate with confidence.”  

Managing agents across platforms
Identity tells organizations what an agent is. But they also need to see every agent they have, wherever it was built. IBM watsonx Orchestrate works across the AI ecosystem, not inside a single vendor’s platform, to give organizations one place to discover, secure and evaluate their agents. Capabilities include: 

Discover (tech preview): Organizations can’t govern agents they don’t know exist. Orchestrate connects to platforms such as Amazon Bedrock, Microsoft Foundry and Google Gemini to find agents built in third-party environments, so teams can see and manage agents instead of adding them manually. This capability also extends to models and MCP servers. Contain (tech preview): One rogue agent can disrupt others and spread mistakes across the business. Orchestrate now runs agents in isolated sandboxes so a rogue agent can’t interfere with others. Teams also now have access to a kill switch to shut down any agent. Evaluate: Agents that aren’t tested and tracked can quietly drift off course and increase costs. Teams using Orchestrate can now test the quality, accuracy and compliance of agents, models and MCP servers before deployment, then monitor them in production. Built-in cost tracking shows each agent’s model and token use, so teams can spot what’s driving spend and fix it. 

Orchestrate also works with Vault’s credential controls and Agent Identity to establish what each agent’s job is, govern its authority and enforce least-privilege credential access. Together, these controls help organizations authorize and audit agent actions and rapidly revoke trust and credentials when risk changes. 

Connecting agents to the business
Once agents are authorized to use a company’s APIs and tools, they need to know what already exists, how systems connect, what can be reused safely and what their actions could affect. IBM Integration Intelligence Hub is built to provide that knowledge through its Unified Context Engine, so agents can fix problems like stuck messages or deploy an API using what’s already in place. Skills, approval policies and audit controls keep those actions in check. Instead of rebuilding for AI, organizations can put agents to work on the systems they already depend on. 

Scaling agents with NVIDIA
Agent Identity and HashiCorp Vault integrate with NVIDIA OpenShell secure runtime software, the foundation of the NVIDIA OpenShell Architecture. Together, they pair a protected environment for agents to run in with a verified identity and short-lived credentials for every agent, so each action can be traced, limited and reviewed. 

“Businesses need enforceable control over how agents operate and what they can access,” said John Fanelli, vice president, enterprise software, NVIDIA. “Our work with IBM combines NVIDIA OpenShell’s policy-governed runtime with Agent Identity and HashiCorp Vault to help enterprises scale AI agents with secure execution, verified identities and tightly scoped access to business systems.” 

Responding to Emerging Security Threats
When new vulnerabilities are discovered, enterprises must quickly identify affected systems, determine required changes and deploy fixes without disrupting critical operations. In complex environments, this process often involves multiple teams, tools and processes. 

IBM Concert integrates observability, optimization, incident management and security across applications, infrastructure and networks. With AI-powered insights and proof of exploitability, Concert helps teams to identify high-risk vulnerabilities, assess operational impact, and coordinate responses. These capabilities also help organizations address performance, manage costs and maintain resilience in hybrid environments. 

HashiCorp Terraform provides an infrastructure context and governed workflows for change implementation. New features now generally available and in public preview, including Terraform policy, Terraform Developer Portal and Terraform remote MCP server, enable developers and AI agents to access approved configurations and implement infrastructure changes through established controls. Terraform powered by Infragraph also helps teams understand infrastructure relationships and dependencies for more informed decisions. 

Together, these capabilities enable organizations to progress from identifying vulnerabilities to implementing and verifying remediation, while optimizing the visibility and governance essential for enterprise operations. 

A comprehensive system intelligence and change orchestration layer for IBM Z 
IBM Z Atlas maps a client’s entire z/OS stack across infrastructure, middleware, and applications, and then uses that intelligence to address the manual effort of tasks like patch management, regulatory response, and sharing system knowledge across teams, from systems programmers to application developers. Atlas addresses the leading cause of unplanned z/OS outages – changes that aren’t proven to be safe – by mapping how a change impacts the z/OS stack and testing and validating it. This design (in tech preview) accelerates clients’ modernization efforts by keeping experts in control and giving practitioners, in operations or development, the same shared Z system visibility to reduce risk. 

Availability
HashiCorp Vault 2.2, Agent Identity, watsonx Orchestrate evaluate capabilities, IBM Concert, and HashiCorp Terraform policy are generally available. Secure Hub, Terraform Developer Portal, Terraform remote MCP server, and IBM Z Atlas are in public preview. IBM Integration Intelligence Hub and watsonx Orchestrate discover and contain capabilities are in tech preview. 

Statements regarding IBM’s future direction and intent are subject to change or withdrawal without notice and represent goals and objectives only. 

Learn more
IBM TechXchange is IBM’s annual conference for developers and technology practitioners and brings together nearly 6,500 attendees from 85 countries. This year, the event incorporates HashiConf to bring together the HashiCorp community with practitioners from across IBM, Red Hat and Confluent. Attendees can choose from more than 1,000 sessions and experiences, including 180 hands-on labs, 260 client-led sessions and more than 50 certification exams. Speakers include American Airlines, Bradesco, Citi, CVS Health, Deutsche Bank, DoorDash, Hertz, and US Bancorp who will share how they are making AI enterprise ready. 

Session livestream and replays will be available here: ibm.biz/txc26-livestream.  

Supporting Materials

Strengthen security for agentic AI with new Vault, Verify, Boundary, and Secure Hub capabilities  IBM Agent Identity now generally available: Building Trust for the Agentic Era  Vault Enterprise 2.2 advances identity security, PKI, and cryptoagility  Announcing the public preview of Secure Hub: govern Vault at scale  IBM watsonx Orchestrate advances AI agent management with new capabilities  IBM Integration Intelligence Hub gives AI the context to act, not just access IBM Concert platform advances the path to cross-domain agentic IT operations  Terraform advances infrastructure lifecycle management for the agentic era Introducing IBM Z Atlas: Change Intelligence for IBM Z 

[1]: Gartner Identifies Six Steps to Manage AI Agent Sprawl
[2]: HashiCorp Vault client stories  

About IBM  
IBM is a leading provider of global hybrid cloud and AI, and consulting expertise. We help clients in more than 175 countries capitalize on insights from their data, streamline business processes, reduce costs and gain the competitive edge in their industries. Thousands of governments and corporate entities in critical infrastructure areas such as financial services, telecommunications and healthcare rely on IBM’s hybrid cloud platform and Red Hat OpenShift to affect their digital transformations quickly, efficiently and securely. IBM’s breakthrough innovations in AI, quantum computing, industry-specific cloud solutions and consulting deliver open and flexible options to our clients. All of this is backed by IBM’s long-standing commitment to trust, transparency, responsibility, inclusivity and service. Visit www.ibm.com for more information. 

Media contacts:

Sarah Benchaita
IBM
sarah.benchaita@ibm.com

Kate Lehman
IBM
Kate.Lehman@ibm.com 

View original content to download multimedia:https://www.prnewswire.co.uk/news-releases/ibm-introduces-identity-and-control-for-ai-agents-securing-frontier-intelligence-for-the-enterprise-302920162.html

Continue Reading

Technology

Three Blind Spots Leave Industrial Companies Exposed to Critical Mineral Shortages

Published

15 minutes ago

on

October 27, 2026

By

Boston Consulting Group Finds Industrial Companies Underestimate Their Critical Mineral Exposure, Which Also Limits Their Access to Public CapitalDemand for Key Minerals Is Projected at 120% to 250% of Forecast Supply Through 2040An Estimated $3.5 Trillion of Products Depend on Gallium, a “Mosquito Mineral” Traded in a Market Under $350 Million a YearSome Governments Have Deployed Less Than 10% of Their Critical Minerals Funds

BOSTON, Oct. 27, 2026 /PRNewswire/ — Industrial companies are underestimating their exposure to critical mineral shortages and missing a strategic opportunity as a result, according to new analysis from Boston Consulting Group (BCG). Three blind spots in the metrics that companies rely on hide where the risk sits, including what BCG calls “mosquito minerals,” so small by traded value that they never reach a risk register.

These are among the findings of Why Critical Mineral Shortages Are a CEO Issue, a BCG report released today. BCG’s proprietary model projects demand for key inputs, including rare earths, graphite, copper and lithium, at roughly 120% to 250% of forecast supply through 2040.

“Most industrials track exposure through spend and direct supplier data, and the minerals that can stop a production line are often the ones they spend almost nothing on,” said Tycho Möncks, a BCG managing director and partner and a coauthor of the report. “The question for CEOs and boards is not whether their company is exposed. It is. The question is whether they intend to live with that exposure or turn it into an advantage.”

Small Markets Can Stall Large Industries

Companies often start their risk assessment with the bill of materials, which points them toward high-volume metals such as copper and lithium. Mosquito minerals fall outside that view. Their traded value is tiny, but the value chains that depend on them are not.

Rare earths. The rare earths used in a fighter jet are worth less than the paint that coats the plane.Gallium. The global market is worth under $350 million a year, with production of only about 900 tons, yet BCG estimates about $3.5 trillion of final products depend on it.Arsenic. The upstream market is about $50 million worldwide, yet a single producer supplies roughly 60% of the ultra-high-purity grade used in 5G and 6G infrastructure, data center optics, radar systems, and defense electronics.Byproduct supply. Gallium, germanium and arsenic are recovered as byproducts of other mining and industrial processes, so the host metal’s market sets their supply. Even a sharp price spike may not bring new production.

Exposure Hides Below Tier One Suppliers

A company that buys almost no critical minerals directly can still be acutely exposed because minerals arrive embedded in motors, magnets, power modules, lasers and sensors. They also sit in the tools and processes used to make those components, from crucibles and catalysts to dies and the capital equipment itself.

Turbine blades, engine blocks and structural aerospace components, for example, are machined with cutting tools made of tungsten carbide bonded with cobalt. A manufacturer that has never bought either metal directly can still see production stop if those tools run short, a dependency that appears on no bill of materials.

Companies also tend to map where critical minerals are mined, but for some minerals the bottleneck is processing, not production. A map of where assets sit and a map of who owns them can look very different, so a change of supplier that looks like diversification may leave a company’s exposure unchanged.

Public Capital Is Committed but Largely Unspent

The three blind spots also lead to a strategic miss. The International Energy Agency reports that public finance commitments to critical minerals in advanced economies reached around $65 billion in 2025, more than four times the 2023 level. BCG’s review of government-backed vehicles found the flagship instruments barely deployed, with some countries having spent less than 10% of their allocated capital and others nothing.

These vehicles are designed to draw in private capital, and offtake requirements are typically the main eligibility gate. BCG argues that companies without a clear view of their own exposure cannot make a credible commitment, and so cannot qualify. The funds are not free money: they carry conditions such as reporting obligations and localization requirements, and they represent only about one tenth of the capital needed through 2040. But for industrial companies, BCG says, they are a way to build a competitive advantage.

Several of the companies that have reframed their approach and tapped public capital are industrial companies and trading firms, not miners, and BCG found that in each case the CEO and executive team led the process of identifying and correcting their blind spots.

“These blind spots have a cost beyond risk. The money is there, but it comes with offtake requirements, and a company cannot make a credible commitment without knowing its own exposure,” said Karthik Valluru, a BCG managing director and senior partner who coauthored the report. “Mapping that exposure properly is where the opportunity starts.”

Download the publication here:

https://www.bcg.com/publications/2026/critical-minerals-risk-blind-spots

Media Contact: 
Bruce Wraight
wraight.bruce@bcg.com 

About Boston Consulting Group
Boston Consulting Group bridges the gap between ambition and outcomes for the world’s leading companies and organizations. We are built for this era of unprecedented change — bringing strategic clarity rooted in over 60 years of deep domain knowledge, combined with applied AI shaped by our practitioners. BCG works shoulder-to-shoulder with CEOs across industries and geographies to deliver transformative impact at scale: stronger returns, transferred capabilities, and change that sticks. For more information, visit bcg.com.

View original content to download multimedia:https://www.prnewswire.com/news-releases/three-blind-spots-leave-industrial-companies-exposed-to-critical-mineral-shortages-302920029.html

SOURCE Boston Consulting Group (BCG)

Continue Reading

Trending