EPAM Systems, Inc.

Previous wording

Russia’s attack on Ukraine has had, and could continue to have, a material adverse effect on our operations. As of June 30, 2026, Ukraine continues to be a significant delivery location with a large number of delivery professionals operating from safe locations at levels of productivity consistent with those achieved prior to the attack. We have maintained our $100 million humanitarian aid commitment to our people in Ukraine, and as of June 30, 2026, we have $4.6 million remaining to be expensed under this humanitarian commitment.

Current wording

Russia’s attack on Ukraine has had, and could continue to have, a material adverse effect on our operations. As of September 30, 2026, Ukraine continues to be a significant delivery location with delivery professionals generally operating at levels of productivity consistent with those achieved prior to the attack. We have maintained our $100.0 million humanitarian aid commitment to our people in Ukraine, and as of September 30, 2026, we have $2.1 million remaining to be expensed under this humanitarian commitment.

Previous wording

For the first six months of 2026, our revenues were $2.815 billion, an increase of 6.0% from $2.655 billion reported for the same period of 2025. Revenues have been positively impacted by improving demand for our services and foreign exchange fluctuations. Income from operations as a percentage of revenues increased to 9.6% for the six months ended June 30, 2026 as compared to 8.5% for the six months ended June 30, 2025, largely driven by a decrease in cost of revenues (exclusive of depreciation and amortization) as a percentage of revenues. Diluted earnings per share increased to $3.49 for the six months ended June 30, 2026 from $2.84 for the six months ended June 30, 2025, principally resulting from an increase in income from operations as well as reduced common shares outstanding resulting from share repurchases, including repurchases made under the Accelerated Share Repurchase Agreement (“ASR”) in connection with the 2025 Repurchase Program. See Note 10 “Stockholders’ Equity” of our condensed consolidated financial statements in “Part I. Item 1. Financial Statements (Unaudited)” for information regarding the ASR.

Current wording

For the first nine months of 2026, our revenues were $4.241 billion, an increase of 4.7% from $4.050 billion reported for the same period of 2025. Revenues have been positively impacted by improving demand for our services and foreign exchange fluctuations. Income from operations as a percentage of revenues increased to 10.5% for the nine months ended September 30, 2026 as compared to 9.2% for the nine months ended September 30, 2025, largely driven by a decrease in cost of revenues (exclusive of depreciation and amortization) as a percentage of revenues. Diluted earnings per share increased to $6.00 for the nine months ended September 30, 2026 from $4.75 for the nine months ended September 30, 2025, mainly driven by an increase in income from operations as well as reduced common shares outstanding resulting from share repurchases, including repurchases made under the Accelerated Share Repurchase Agreement (“March 2026 ASR”) in connection with the 2025 Repurchase Program. See Note 10 “Stockholders’ Equity” of our condensed consolidated financial statements in “Part I. Item 1. Financial Statements (Unaudited)” for information regarding the March 2026 ASR.

Previous wording

During the three and six months ended June 30, 2026, there have been no material changes to our critical accounting policies as reported in our Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

During the three and nine months ended September 30, 2026, there have been no material changes to our critical accounting policies as reported in our Annual Report on Form 10-K for the year ended December 31, 2025.

Previous wording

(1)Includes $22,833 and $18,161 of stock-based compensation expense for the three months ended June 30, 2026 and 2025, respectively, and $45,686 and $42,084 of stock-based compensation expense for the six months ended June 30, 2026 and 2025, respectively.

Current wording

(1)Includes $21,054 and $21,149 of stock-based compensation expense for the three months ended September 30, 2026 and 2025, respectively, and $66,740 and $63,233 of stock-based compensation expense for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

(2)Includes $23,568 and $20,397 of stock-based compensation expense for the three months ended June 30, 2026 and 2025, respectively, and $50,634 and $44,930 of stock-based compensation expense for the six months ended June 30, 2026 and 2025, respectively.

Current wording

(2)Includes $21,424 and $23,455 of stock-based compensation expense for the three months ended September 30, 2026 and 2025, respectively, and $72,058 and $68,385 of stock-based compensation expense for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

During the six months ended June 30, 2026, our total revenues increased by 6.0% to $2.815 billion compared to the corresponding period in 2025. During the six months ended June 30, 2026 as compared to the same period last year, revenues have been positively impacted by improving demand for our services and fluctuations in foreign currency exchange rates which contributed 2.5% to revenue growth.

Current wording

During the three months ended September 30, 2026, our total revenues increased by 2.3% to $1.426 billion compared to the corresponding period in 2025. During the three months ended September 30, 2026 as compared to the same period last year, revenues have been positively impacted by improving demand for our services, partially offset by fluctuations in foreign currency exchange rates which decreased revenues by 0.2%.

Previous wording

During the three months ended June 30, 2026, our total revenues increased by 4.5% to $1.415 billion compared to the corresponding period in 2025. During the three months ended June 30, 2026 as compared to the same period last year, revenues have been positively impacted by improving demand for our services and fluctuations in foreign currency exchange rates which contributed 1.1% to revenue growth.

Current wording

During the nine months ended September 30, 2026, our total revenues increased by 4.7% to $4.241 billion compared to the corresponding period in 2025. During the nine months ended September 30, 2026 as compared to the same period last year, revenues have been positively impacted by improving demand for our services and fluctuations in foreign currency exchange rates which contributed 1.6% to revenue growth.

Previous wording

Revenues by client location for the three and six months ended June 30, 2026 and 2025 were as follows:

Current wording

Revenues by client location for the three and nine months ended September 30, 2026 and 2025 were as follows:

Previous wording

During the three and six months ended June 30, 2026, the United States continued to be our largest client location. During the three months ended June 30, 2026, revenues in the United States increased 0.7% to $715.0 million from $710.0 million in the second quarter of 2025. During the six months ended June 30, 2026, revenues in the United States increased 2.0% to $1.427 billion as compared to $1.398 billion in the same period of the prior year, largely due to increased spending at certain large accounts.

Current wording

During the three and nine months ended September 30, 2026, the United States continued to be our largest client location. During the three months ended September 30, 2026, revenues in the United States decreased 0.2% to $714.4 million from $716.2 million in the third quarter of 2025. During the nine months ended September 30, 2026, revenues in the United States increased 1.3% to $2.141 billion as compared to $2.115 billion in the same period of the prior year, largely due to revenue growth in the Financial Services industry vertical.

Previous wording

During the three months ended June 30, 2026, the top three revenue contributing countries by client location in EMEA were the United Kingdom, Switzerland, and the Netherlands, generating $159.6 million, $112.3 million and $63.2 million in revenues, respectively, compared to $149.6 million, $110.1 million, and $57.1 million, respectively, in the corresponding period last year. During the six months ended June 30, 2026, the United Kingdom, Switzerland and the Netherlands performed as EMEA’s top revenue generating locations and contributed $318.1 million, $226.5 million, and $126.4 million, respectively compared to $294.2 million, $214.9 million, and $104.0 million, respectively, in the corresponding period last year. Revenues in the EMEA region were positively impacted by increased spending at certain large accounts and changes in foreign currency exchange rates during the three and six months ended June 30, 2026 as compared to the same period in the previous year.

Current wording

During the three months ended September 30, 2026, the top three revenue contributing countries by client location in EMEA were the United Kingdom, Switzerland, and the Netherlands, generating $153.8 million, $118.6 million and $65.1 million in revenues, respectively, compared to $153.4 million, $113.3 million, and $60.7 million, respectively, in the corresponding period last year. During the nine months ended September 30, 2026, the United Kingdom, Switzerland and the Netherlands performed as EMEA’s top revenue generating locations and contributed $472.0 million, $345.1 million, and $191.5 million, respectively compared to $447.5 million, $328.2 million, and $164.7 million, respectively, in the corresponding period last year. Revenues in the EMEA region were positively impacted by increased spending at certain large accounts during the three and nine months ended September 30, 2026 as compared to the same periods in the previous year.

Previous wording

During the three months ended June 30, 2026, revenues from clients in the APAC region decreased by $0.1 million or 0.3%, and increased by $0.2 million or 0.4% during the six months ended June 30, 2026, compared to the corresponding periods of 2025.

Current wording

During the three months ended September 30, 2026, revenues from clients in the APAC region decreased by $1.2 million or 4.0%, and decreased by $1.0 million or 1.2% during the nine months ended September 30, 2026, compared to the corresponding periods of 2025.

Previous wording

During the three months ended June 30, 2026, cost of revenues (exclusive of depreciation and amortization) was $985.2 million representing an increase of 2.2% from $964.0 million in the corresponding period of 2025. The increase primarily resulted from a 1.6% increase in the average number of production professionals in the second quarter of 2026 compared to the second quarter of 2025, foreign exchange fluctuations, and increased stock-based compensation expense. Expressed as a percentage of revenues, cost of revenues (exclusive of depreciation and amortization) was 69.6% and 71.2% in the second quarter of 2026 and 2025, respectively. This year-over-year decrease is primarily due to a decrease in compensation expense as a percentage of revenues, partially offset by the negative impact from foreign currency fluctuations.

Current wording

During the three months ended September 30, 2026, cost of revenues (exclusive of depreciation and amortization) was $980.5 million representing a decrease of 0.3% from $983.2 million in the corresponding period of 2025. The decrease primarily resulted from a decrease in compensation and benefits expense in the third quarter of 2026 compared to the third quarter of 2025, partially offset by foreign currency fluctuations. Expressed as a percentage of revenues, cost of revenues (exclusive of depreciation and amortization) was 68.7% and 70.5% in the third quarter of 2026 and 2025, respectively. This year-over-year decrease is primarily due to a decrease in variable compensation expense as a percentage of revenues and higher account-level profitability, partially offset by the negative impact from changes in foreign currency exchange rates.

Previous wording

During the six months ended June 30, 2026, cost of revenues (exclusive of depreciation and amortization) was $1.997 billion representing an increase of 4.2% from $1.916 billion in the corresponding period of 2025. The increase primarily resulted from a 2.1% increase in the average number of production professionals in the first six months of 2026 compared to the first six months of 2025, foreign exchange fluctuations, and increased stock-based compensation expense. Expressed as a percentage of revenues, cost of revenues (exclusive of depreciation and amortization) was 71.0% and 72.2% for the six months ended June 30, 2026 and 2025, respectively. The year-over-year decrease is primarily due to a decrease in compensation expense as a percentage of revenues, partially offset by the negative impact from foreign currency fluctuations.

Current wording

During the nine months ended September 30, 2026, cost of revenues (exclusive of depreciation and amortization) was $2.978 billion representing an increase of 2.7% from $2.899 billion in the corresponding period of 2025. The increase primarily resulted from a 2.5% increase in the average number of production professionals in the first nine months of 2026 compared to the first nine months of 2025, foreign currency fluctuations, and increased stock-based compensation expense, partially offset by lower variable compensation expense. Expressed as a percentage of revenues, cost of revenues (exclusive of depreciation and amortization) was 70.2% and 71.6% for the nine months ended September 30, 2026 and 2025, respectively. The year-over-year decrease is primarily due to a decrease in variable compensation expense as a percentage of revenues and higher account-level profitability, partially offset by the negative impact from changes in foreign currency exchange rates.

Previous wording

During the three months ended June 30, 2026, selling, general and administrative expenses were $245.2 million representing a 5.9% increase as compared to $231.7 million in the corresponding period of 2025. The increase was mainly driven by increased personnel-related costs including stock-based compensation expense and foreign exchange fluctuations. Expressed as a percentage of revenues, selling, general and administrative expenses increased by 0.2% to 17.3% for the three months ended June 30, 2026 as compared to the same period from the prior year. The year-over-year increase is primarily due to higher stock-based compensation expense as a percentage of revenues.

Current wording

During the three months ended September 30, 2026, selling, general and administrative expenses were $237.4 million representing a 1.0% increase as compared to $234.9 million in the corresponding period of 2025. Expressed as a percentage of revenues, selling, general and administrative expenses decreased by 0.1% to 16.7% for the three months ended September 30, 2026 as compared to the same period from the prior year.

Previous wording

During the six months ended June 30, 2026, selling, general and administrative expenses were $484.9 million representing a 7.6% increase as compared to $450.6 million in the corresponding period of 2025. The increase in selling, general and administrative expenses was mainly driven by increased personnel-related costs including stock-based compensation expense, and foreign exchange fluctuations. Expressed as a percentage of revenues, selling, general and administrative expenses increased by 0.2% to 17.1% for the six months ended June 30, 2026 as compared to the same period from the prior year. The year-over-year increase is primarily due to higher severance expenses incurred in the current year as part of the 2025 Cost Optimization Program.

Current wording

During the nine months ended September 30, 2026, selling, general and administrative expenses were $722.3 million representing a 5.4% increase as compared to $685.5 million in the corresponding period of 2025. The increase in selling, general and administrative expenses was mainly driven by increased personnel-related costs, including stock-based compensation expense, and foreign exchange fluctuations. Expressed as a percentage of revenues, selling, general and administrative expenses increased by 0.1% to 17.0% for the nine months ended September 30, 2026 as compared to the same period from the prior year.

Previous wording

During the three and six months ended June 30, 2026, depreciation and amortization expense was $32.1 million and $63.6 million, respectively, as compared to $31.3 million and $62.7 million, respectively, in the corresponding periods last year. The composition of depreciable and amortizable assets has not changed significantly since the beginning of the prior year.

Current wording

During the three and nine months ended September 30, 2026, depreciation and amortization expense was $32.6 million and $96.3 million, respectively, as compared to $31.3 million and $94.0 million, respectively, in the corresponding periods last year. The composition of depreciable and amortizable assets has not changed significantly since the beginning of the prior year.

Previous wording

Interest and other income (loss), net includes interest earned on cash and cash equivalents and short-term investments, gains and losses from certain financial instruments, interest expense related to our borrowings, and changes in the fair value of contingent consideration. Interest and other income (loss), net was a loss of $1.8 million and $0.2 million during the three and six months ended June 30, 2026, respectively, compared to income of $3.5 million and $9.3 million during the three and six months ended June 30, 2025, respectively. The decrease in Interest and other income (loss), net during the three months ended June 30, 2026 as compared to the three months ended June 30, 2025 was largely driven by a $1.7 million difference in the change in fair value of contingent consideration, a $1.2 million increase in interest expense, mainly related to our line of credit, and a $0.9 million decrease in interest income from our cash, cash equivalents and short-term investments. The decrease in Interest and other income (loss), net during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025 was largely driven by a $4.4 million difference in the change in fair value of contingent consideration, a $1.8 million decrease in interest income from our cash, cash equivalents and short-term investments, and a $1.3 million increase in interest expense, mainly related to our line of credit.

Current wording

Interest and other income (loss), net includes interest earned on cash and cash equivalents and short-term investments, gains and losses from certain financial instruments, interest expense related to our borrowings, and changes in the fair value of contingent consideration. Interest and other income (loss), net was a loss of $0.9 million and $1.1 million during the three and nine months ended September 30, 2026, respectively, compared to income of $2.3 million and $11.6 million during the three and nine months ended September 30, 2025, respectively. The decrease in Interest and other income (loss), net during the three months ended September 30, 2026 as compared to the three months ended September 30, 2025 was largely driven by $1.4 million of impairments of investments in equity securities, a $1.2 million decrease in interest income from our cash, cash equivalents and short-term investments and a $0.4 million difference in the change in fair value of contingent consideration. The decrease in Interest and other income (loss), net during the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025 was largely driven by a $4.0 million difference in the change in fair value of contingent consideration, a $2.9 million decrease in interest income from our cash, cash equivalents and short-term investments, $1.8 million of impairments on investments, and a $1.2 million increase in interest expense, mainly related to our line of credit.

Previous wording

During the three and six months ended June 30, 2026, foreign exchange loss was $9.9 million and $7.6 million, respectively, compared to a loss of $6.2 million and $17.0 million, respectively, reported in the corresponding periods last year. Exchange rate movements impact the reported value of our assets and liabilities denominated in currencies other than the U.S. dollar or where the currency of such items is different than the functional currency of the entity where these items were recorded.

Current wording

During the three and nine months ended September 30, 2026, foreign exchange gain (loss) was a gain of $1.3 million and a loss of $6.2 million, respectively, compared to a loss of $3.6 million and a loss of $20.6 million, respectively, reported in the corresponding periods last year. Exchange rate movements impact the reported value of our assets and liabilities denominated in currencies other than the U.S. dollar or where the currency of such items is different than the functional currency of the entity where these items were recorded.

Previous wording

Our effective tax rate was 26.7% and 29.0% for the three and six months ended June 30, 2026, respectively, and 28.9% and 26.0% for the three and six months ended June 30, 2025, respectively. We recorded a tax shortfall upon vesting or exercise of stock awards of $1.7 million and $11.6 million during the three and six months ended June 30, 2026, respectively, as compared to a tax shortfall upon vesting or exercise of stock awards of $1.1 million and $0.6 million during the three and six months ended June 30, 2025, respectively.

Current wording

Our effective tax rate was 26.1% and 27.8% for the three and nine months ended September 30, 2026, respectively, and 25.6% and 25.8% for the three and nine months ended September 30, 2025, respectively. We recorded tax shortfalls upon vesting or exercise of stock awards of $0.5 million and $12.1 million during the three and nine months ended September 30, 2026, respectively, as compared to tax shortfalls of $0.2 million and $0.8 million during the three and nine months ended September 30, 2025, respectively.

Previous wording

The following table summarizes revenues from external clients and operating profit, before unallocated expenses, for the Americas segment for the three and six months ended June 30, 2026, and 2025:

Current wording

The following table summarizes revenues from external clients and operating profit, before unallocated expenses, for the Americas segment for the three and nine months ended September 30, 2026, and 2025:

Previous wording

During the three months ended June 30, 2026, revenues for the Americas segment increased $4.9 million, or 0.6%, compared to the same period last year and segment operating profit increased $19.6 million, or 15.1%, compared to the same period last year. During the three months ended June 30, 2026, revenues from our Americas segment were 56.0% of total revenues, a decrease from 58.2% reported in the corresponding period of 2025. As a percentage of Americas segment revenues, the Americas segment’s operating profit increased to 18.8% during the second quarter of 2026 from 16.4% in the second quarter of 2025. This increase is primarily attributable to improved profitability as a result of our cost optimization initiatives, partially offset by the impact of changes in foreign currency exchange rates.

Current wording

During the three months ended September 30, 2026, revenues for the Americas segment decreased $3.1 million, or 0.4%, compared to the same period last year and segment operating profit increased $14.9 million, or 10.9%, compared to the same period last year. During the three months ended September 30, 2026, revenues from our Americas segment were 55.9% of total revenues, a decrease from 57.4% reported in the corresponding period of 2025. As a percentage of Americas segment revenues, the Americas segment’s operating profit increased to 19.0% during the third quarter of 2026 from 17.0% in the third quarter of 2025. This increase is primarily attributable to improved profitability as a result of lower variable compensation expense in 2026 as compared to 2025 and higher account-level profitability.

Previous wording

During the six months ended June 30, 2026, revenues for the Americas segment increased $23.1 million, or 1.5%, compared to the same period last year and segment operating profit increased $36.6 million, or 15.0%, compared to the same period last year. During the six months ended June 30, 2026, revenues from our Americas segment were 56.4% of total revenues, a decrease from 58.9% reported in the corresponding period of 2025. As a percentage of Americas segment revenues, the Americas segment’s operating profit increased to 17.7% during the six months ended June 30, 2026 from 15.6% in the six months ended June 30, 2025. This increase is primarily attributable to improved profitability as a result of our cost optimization initiatives, partially offset by the impact of changes in foreign currency exchange rates.

Current wording

During the nine months ended September 30, 2026, revenues for the Americas segment increased $20.0 million, or 0.8%, compared to the same period last year and segment operating profit increased $51.5 million, or 13.5%, compared to the same period last year. During the nine months ended September 30, 2026, revenues from our Americas segment were 56.2% of total revenues, a decrease from 58.4% reported in the corresponding period of 2025. As a percentage of Americas segment revenues, the Americas segment’s operating profit increased to 18.1% during the nine months ended September 30, 2026 from 16.1% in the nine months ended September 30, 2025. This increase is primarily attributable to improved profitability as a result of our prior cost optimization initiatives, lower variable compensation expense, and higher account-level profitability, partially offset by the impact of changes in foreign currency exchange rates.

Previous wording

During the three and six months ended June 30, 2026, Financial Services was the largest industry vertical in the Americas segment and grew 15.3% and 13.0%, respectively, compared to the corresponding periods of 2025, primarily due to increased spend at a large wealth management client and growth in insurance, asset management, and payment processing clients. Software & Hi-Tech declined 10.8% and 6.6% during the three and six months ended June 30, 2026, respectively, which was a result of lower spend from our technology clients. Life Sciences & Healthcare declined 1.3% and 1.0% during the three and six months ended June 30, 2026, respectively. Consumer Goods, Retail & Travel grew 1.0% and 3.7% during the three and six months ended June 30, 2026, respectively, primarily due to growth from our consumer goods and distribution clients. Business Information & Media declined 2.4% and 0.1% during the three and six months ended June 30, 2026, respectively, primarily due to lower demand from information services clients. Emerging Verticals grew 0.8% during the three months ended June 30, 2026 and declined 1.2% during the six months ended June 30, 2026, respectively, with growth coming from clients in the energy sector and lower revenues experienced from clients in industrial materials, telecommunications, and real estate in both periods.

Current wording

During the three and nine months ended September 30, 2026, Financial Services was the largest industry vertical in the Americas segment and grew 19.8% and 15.3%, respectively, compared to the corresponding periods of 2025, primarily due to increased spend at a large wealth management client and growth in insurance, asset management, and payment processing clients. Software & Hi-Tech declined 11.7% and 8.3% during the three and nine months ended September 30, 2026, respectively, which was a result of lower spend from certain technology clients. Life Sciences & Healthcare decreased 0.7% and 0.9% during the three and nine months ended September 30, 2026, respectively, compared to the corresponding periods of 2025. Consumer Goods, Retail & Travel decreased 4.0% during the three months ended September 30, 2026, primarily due to lower spend at retail and distribution clients, and increased 1.1% during the nine months ended September 30, 2026. Business Information & Media declined 5.7% and 1.9% during the three and nine months ended September 30, 2026, respectively, primarily due to lower demand from information services clients. Emerging Verticals declined 2.7% and 1.7% during the three and nine months ended September 30, 2026, respectively, primarily due to lower revenues from clients in industrial materials, telecommunications, and real estate, partially offset by growth from clients in the energy sector.

Previous wording

The following table summarizes revenues from external clients and operating profit, before unallocated expenses, for the Europe segment for the three and six months ended June 30, 2026, and 2025:

Current wording

The following table summarizes revenues from external clients and operating profit, before unallocated expenses, for the Europe segment for the three and nine months ended September 30, 2026, and 2025:

Previous wording

During the three months ended June 30, 2026, Europe’s segment revenues were $622.5 million, representing an increase of $56.5 million, or 10.0%, from the same period last year. Revenues were positively impacted by changes in foreign currency exchange rates during the second quarter of 2026 and had our Europe segment revenues been expressed in constant currency terms using the exchange rates in effect during the second quarter of 2025, we would have reported revenue growth of 8.5%. Europe’s segment revenues accounted for 44.0% and 41.8% of total segment revenues during the three months ended June 30, 2026 and 2025, respectively. During the second quarter of 2026, the segment’s operating profit increased 24.4% to $100.5 million compared to the second quarter of 2025. Expressed as a percentage of revenues, Europe’s segment operating profit increased to 16.1% compared to 14.3% in the same period of the prior year. This increase is primarily attributable to improved profitability as a result of our cost optimization initiatives.

Current wording

During the three months ended September 30, 2026, Europe’s segment revenues were $629.6 million, representing an increase of $35.1 million, or 5.9%, from the same period last year. Revenues were negatively impacted by changes in foreign currency exchange rates during the third quarter of 2026 and had our Europe segment revenues been expressed in constant currency terms using the exchange rates in effect during the third quarter of 2025, we would have reported revenue growth of 6.9%. Europe’s segment revenues accounted for 44.1% and 42.6% of total segment revenues during the three months ended September 30, 2026 and 2025, respectively. During the third quarter of 2026, the segment’s operating profit increased 25.4% to $111.4 million compared to the third quarter of 2025. Expressed as a percentage of revenues, Europe’s segment operating profit increased to 17.7% compared to 15.0% in the same period of the prior year. This increase is primarily attributable to improved profitability as a result of lower variable compensation expense in 2026 as compared to 2025 and higher account-level profitability.

Previous wording

During the six months ended June 30, 2026, Europe’s segment revenues were $1.227 billion, representing an increase of $136.6 million, or 12.5%, from the same period last year. Revenues were positively impacted by changes in foreign currency exchange rates during the six months ended June 30, 2026 and had our Europe segment revenues been expressed in constant currency terms using the exchange rates in effect during the first half of 2025, we would have reported revenue growth of 8.0%. Europe’s segment revenues accounted for 43.6% and 41.1% of total segment revenues during the six months ended June 30, 2026 and 2025, respectively. During the six months ended June 30, 2026, the segment’s operating profit increased 20.2% to $182.8 million compared to the corresponding period of 2025. Expressed as a percentage of revenues, Europe’s segment operating profit increased to 14.9% compared to 13.9% in the same period of the prior year. This increase is primarily attributable to improved profitability as a result of our cost optimization initiatives.

Current wording

During the nine months ended September 30, 2026, Europe’s segment revenues were $1.857 billion, representing an increase of $171.7 million, or 10.2%, from the same period last year. Revenues were positively impacted by changes in foreign currency exchange rates during the nine months ended September 30, 2026 and had our Europe segment revenues been expressed in constant currency terms using the exchange rates in effect during the first nine months of 2025, we would have reported revenue growth of 7.5%. Europe’s segment revenues accounted for 43.8% and 41.6% of total segment revenues during the nine months ended September 30, 2026 and 2025, respectively. During the nine months ended September 30, 2026, the segment’s operating profit increased 22.1% to $294.3 million compared to the corresponding period of 2025. Expressed as a percentage of revenues, Europe’s segment operating profit increased to 15.8% compared to 14.3% in the same period of the prior year. This increase is primarily attributable to improved profitability as a result of lower variable compensation expense, higher account-level profitability, and savings from our prior cost optimization initiatives.

Previous wording

During the three and six months ended June 30, 2026, Financial Services was the largest industry vertical in the Europe segment and grew 8.4% and 10.2%, respectively, compared to the corresponding periods of 2025, primarily due to improved demand from clients in asset management and insurance. During the three and six months ended June 30, 2026, revenues in Consumer Goods, Retail & Travel grew 3.4% and 5.5%, respectively, primarily due to improved demand from clients in the retail and consumer goods industries. During the three and six months ended June 30, 2026, revenues in Software & Hi-Tech grew 21.5% and 31.8%, respectively, primarily due to increased demand at a large hardware client and several technology services clients. During the three and six months ended June 30, 2026, revenues in Business Information & Media declined 1.6% and 4.4%, respectively, primarily due to decreased demand from information services clients. Revenues in Life Sciences & Healthcare grew 45.1% and 40.2%, respectively, during the three and six months ended June 30, 2026, primarily due to the growth experienced from new and existing clients in the pharmaceutical sector. Revenues in Emerging Verticals grew 10.6% and 16.6%, respectively, during the three and six months ended June 30, 2026, due to the growth from various clients in the energy sector.

Current wording

During the three and nine months ended September 30, 2026, Financial Services was the largest industry vertical in the Europe segment and grew 8.7% and 9.7%, respectively, compared to the corresponding periods of 2025, primarily due to improved demand from clients in asset management and insurance. During the three months ended September 30, 2026, revenues in Consumer Goods, Retail & Travel decreased 1.2% and increased 3.2% during the nine months ended September 30, 2026. The increase during the nine months ended September 30, 2026 was primarily due to improved demand from clients in the retail and consumer goods industries. During the three and nine months ended September 30, 2026, revenues in Software & Hi-Tech grew 5.8% and 22.0%, respectively, primarily due to increased demand at a large hardware client and several technology services clients. During the three and nine months ended September 30, 2026, revenues in Business Information & Media declined 5.1% and 4.6%, respectively, primarily due to decreased demand from information services clients. Revenues in Life Sciences & Healthcare grew 48.6% and 43.3% during the three and nine months ended September 30, 2026, respectively, primarily due to the growth experienced from new and existing clients in the pharmaceutical sector. Revenues in Emerging Verticals grew 2.7% and 11.6% during the three and nine months ended September 30, 2026, respectively, due to the growth from various clients in the energy sector.

Previous wording

Our cash generated from operations has been our primary source of liquidity to fund operations, to repurchase shares and make investments to support the growth of our business. As of June 30, 2026, our principal sources of liquidity were cash and cash equivalents totaling $789.4 million, short-term investments totaling $4.8 million, and $675.0 million of available borrowings under our revolving credit facility. As of June 30, 2026, $25.0 million was outstanding under this facility and we were in compliance with all covenants contained in the facility. See Note 6 “Debt” of our condensed consolidated financial statements in “Part I. Item 1. Financial Statements (Unaudited)” for information regarding drawdowns on our revolving credit facility.

Current wording

Our cash generated from operations has been our primary source of liquidity to fund operations, to repurchase shares and make investments to support the growth of our business. As of September 30, 2026, our principal sources of liquidity were cash and cash equivalents totaling $965.2 million, short-term investments totaling $4.6 million, and $675.0 million of available borrowings under our revolving credit facility. As of September 30, 2026, $25.0 million was outstanding under this facility and we were in compliance with all covenants contained in the facility. See Note 6 “Debt” of our condensed consolidated financial statements in “Part I. Item 1. Financial Statements (Unaudited)” for information regarding drawdowns on our revolving credit facility.

Previous wording

Our largest source of cash provided by operating activities is cash generated from our professional services that we provide to our clients. Our primary uses of cash from operating activities include compensation to our employees and related costs, payments for leased facilities, various general corporate expenditures and income tax payments. The first six months of 2026 were negatively impacted by a higher level of variable compensation payments made based on 2025 performance and a larger increase in days sales outstanding compared to the first six months of 2025.

Current wording

Our largest source of cash provided by operating activities is cash generated from our professional services that we provide to our clients. Our primary uses of cash from operating activities include compensation to our employees and related costs, payments for leased facilities, various general corporate expenditures and income tax payments. The first nine months of 2026 were negatively impacted by a higher level of variable compensation payments made based on 2025 performance and a larger increase in days sales outstanding compared to the first nine months of 2025.

Previous wording

Our primary uses of cash in investing activities consist of purchases of computer hardware, software and office equipment, as well as investments into office buildings and new businesses. We also use cash for short-term investments and time deposits and receive cash upon maturity of these deposits. Most of our investments are typically short-term and cash equivalent in nature but we may invest in longer term deposits if the terms are favorable. The cash used in investing activities during the six months ended June 30, 2026 was primarily attributable to $33.1 million used for capital expenditures compared to $19.2 million used for capital expenditures in the corresponding period of 2025.

Current wording

Our primary uses of cash in investing activities consist of purchases of computer hardware, software and office equipment, as well as investments into office buildings and new businesses. We also use cash for short-term investments and time deposits and receive cash upon maturity of these deposits. Most of our investments are typically short-term and cash equivalent in nature but we may invest in longer term deposits if the terms are favorable. The cash used in investing activities during the nine months ended September 30, 2026 was primarily attributable to $47.7 million used for capital expenditures compared to $27.5 million used for capital expenditures in the corresponding period of 2025.

Previous wording

Cash used in financing activities mainly consists of repurchases of shares of EPAM common stock under our share repurchase programs, payments of withholding taxes related to net share settlements of equity awards, repayments of debt, and settlements of the acquisition-date fair value of contingent consideration related to acquisitions of businesses. Cash provided by financing activities mainly consists of the proceeds from the issuance of shares under our ESPP and exercises of stock options issued under our long-term incentive plans as well as proceeds from debt. We typically do not rely on debt to supplement our cash flows. During the first six months of 2026, our main use of cash in financing activities consisted of $409.0 million of payments to repurchase our common stock, including $300 million related to the accelerated share repurchase, compared to $356.5 million in the corresponding period of 2025.

Current wording

Cash used in financing activities mainly consists of repurchases of shares of EPAM common stock under our share repurchase programs, payments of withholding taxes related to net share settlements of equity awards, repayments of debt, and settlements of the acquisition-date fair value of contingent consideration related to acquisitions of businesses. Cash provided by financing activities mainly consists of the proceeds from the issuance of shares under our ESPP and exercises of stock options issued under our long-term incentive plans as well as proceeds from debt. During the first nine months of 2026, our main use of cash in financing activities consisted of $488.9 million of payments to repurchase our common stock, including $300 million related to the March 2026 ASR, compared to $438.6 million in the corresponding period of 2025. Cash used in financing activities was also impacted by lower proceeds related to stock option exercises compared to the first nine months of 2025.

Previous wording

The words “may,” “will,” “should,” “could,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “intend,” “potential,” “might,” “would,” “continue” or the negative of these terms or other comparable terminology and similar words are intended to identify estimates and forward-looking statements. Estimates and forward-looking statements speak only as of the date they were made and, except to the extent required by law, we undertake no obligation to update, to correct, to revise or to review any estimate and/or forward-looking statement because of new information, future events or other factors. Estimates and forward-looking statements involve risks and uncertainties and are not guarantees of future performance. As a result of the risks and uncertainties described above, the estimates and forward-looking statements discussed in this quarterly report and our Annual Report on Form 10-K for the year ended December 31, 2025 might not occur and our future results, level of activity, performance or achievements may differ materially from those expressed in these forward-looking statements due to, including, but not limited to, the factors mentioned above, and the differences may be material and adverse. Because of these uncertainties, you should not place undue reliance on these forward-looking statements.

Current wording

The words “may,” “will,” “should,” “could,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “intend,” “potential,” “might,” “would,” “continue” or the negative of these terms or other comparable terminology and similar words are intended to identify estimates and forward-looking statements. Estimates and forward-looking statements speak only as of the date they were made and, except to the extent required by law, we undertake no obligation to update, to correct, to revise or to review any estimate and/or forward-looking statement because of new information, future events or other factors. Estimates and forward-looking statements involve risks and uncertainties and are not guarantees of future performance. As a result of the risks and uncertainties described above, the estimates and forward-looking statements discussed in this quarterly report and our