EPAM Systems, Inc.EPAM
EPAM Systems, Inc. Segments Disclosure
SEGMENT INFORMATION
The Company determines its business segments and reports segment information in accordance with how the Company’s chief operating decision maker (“CODM”) organizes the segments to evaluate performance, allocate resources and make business decisions. The Company’s CODM is the chief executive officer. The Company manages its business primarily based on the managerial responsibility for its client base and market. As managerial responsibility for a particular client relationship generally correlates with the client’s geographic location, there is a high degree of similarity between client locations and the geographic boundaries of the Company’s reportable segments. In some cases, managerial responsibility for a particular client is assigned to a management team in another region and is usually based on the strength of the relationship between client executives and particular members of EPAM’s senior management team. In such cases, the client’s activity would be reported through the management team’s reportable segment.
Starting in 2025, the Company renamed its North America segment to Americas. The new name reflects the evolving geographic footprint and growth of operations within the segment, particularly in Latin America. This constitutes a naming change only and no changes were made to amounts previously reported.
Segment results are based on the segment’s revenues and operating profit, where segment operating profit is defined as segment income from operations before unallocated costs. Expenses included in segment operating profit consist principally of direct selling and delivery costs as well as an allocation of certain shared services expenses. Intersegment transactions are excluded from the segment’s revenues and operating profit on the basis that they are neither included in the measure of a segment’s profit and loss results, nor considered by the CODM during the review of segment results. Certain corporate expenses are not allocated to specific segments as these expenses are not controllable at the segment level. Such expenses include certain types of professional fees, certain taxes included in operating expenses, compensation to non-employee directors and certain other general and administrative expenses, including compensation of specific groups of non-production employees. In addition, the Company does not allocate amortization of intangible assets acquired through business combinations, goodwill and other asset impairment charges, stock-based compensation expenses, acquisition-related costs and certain other one-time charges and benefits. These unallocated amounts are combined with total segment operating profit to arrive at consolidated income from operations as reported below in the reconciliation of segment operating profit to consolidated income before provision for income taxes. Additionally, management has determined that it is not practical to allocate identifiable assets by segment since such assets are used interchangeably among the segments.
The Company’s CODM considers the operating results of each segment on a quarterly basis and uses segment operating profit predominantly to assess the performance of each segment by comparing the results of each segment with one another and to historical performance. When combined with certain other financial information, this enables the CODM to make decisions about the reporting structure, allocation of operating and capital resources, and compensation of certain employees.
On July 26, 2023, the Company completed the sale of its remaining holdings in Russia to a third-party. As a result of this sale, the Company no longer has operations associated with this segment. See Note 2 “Impact of the Invasion of Ukraine” for more information.
Segment revenues from external clients and segment operating profit, as well as a reconciliation of segment operating profit to consolidated income before provision for income taxes is presented below:
| For the Year Ended December 31, 2025 | ||||||||||||||||||||
| Americas | Europe | Total | ||||||||||||||||||
| Segment revenues | $ | 3,166,116 | $ | 2,290,940 | $ | 5,457,056 | ||||||||||||||
| Less: | ||||||||||||||||||||
| Cost of revenues (exclusive of depreciation and amortization) | 2,189,329 | 1,625,058 | 3,814,387 | |||||||||||||||||
| Selling, general and administrative expenses | 418,715 | 315,442 | 734,157 | |||||||||||||||||
| Depreciation and amortization expense | 35,957 | 17,487 | 53,444 | |||||||||||||||||
| Segment operating profit: | $ | 522,115 | $ | 332,953 | $ | 855,068 | ||||||||||||||
| Unallocated costs: | ||||||||||||||||||||
| Stock-based compensation expense | (176,764) | |||||||||||||||||||
| Amortization of purchased intangibles | (71,367) | |||||||||||||||||||
| Other acquisition-related expenses | (1,345) | |||||||||||||||||||
| Other unallocated costs | (85,589) | |||||||||||||||||||
| Income from operations | 520,003 | |||||||||||||||||||
| Interest and other income, net | 11,546 | |||||||||||||||||||
| Foreign exchange loss | (25,925) | |||||||||||||||||||
| Income before provision for income taxes | $ | 505,624 | ||||||||||||||||||
| For the Year Ended December 31, 2024 | ||||||||||||||||||||
| Americas | Europe | Total | ||||||||||||||||||
| Segment revenues | $ | 2,866,339 | $ | 1,861,601 | $ | 4,727,940 | ||||||||||||||
| Less: | ||||||||||||||||||||
| Cost of revenues (exclusive of depreciation and amortization) | 1,915,851 | 1,290,317 | 3,206,168 | |||||||||||||||||
| Selling, general and administrative expenses | 369,055 | 267,032 | 636,087 | |||||||||||||||||
| Depreciation and amortization expense | 40,009 | 20,076 | 60,085 | |||||||||||||||||
| Segment operating profit: | $ | 541,424 | $ | 284,176 | $ | 825,600 | ||||||||||||||
| Unallocated costs: | ||||||||||||||||||||
| Stock-based compensation expense | (167,297) | |||||||||||||||||||
| Amortization of purchased intangibles | (29,475) | |||||||||||||||||||
| (15,472) | ||||||||||||||||||||
| Other unallocated costs | (68,772) | |||||||||||||||||||
| Income from operations | 544,584 | |||||||||||||||||||
| Interest and other income, net | 46,876 | |||||||||||||||||||
| Foreign exchange loss | (7,048) | |||||||||||||||||||
| Income before provision for income taxes | $ | 584,412 | ||||||||||||||||||
| For the Year Ended December 31, 2023 | ||||||||||||||||||||||||||
| Americas | Europe | Russia | Total | |||||||||||||||||||||||
| Segment revenues | $ | 2,765,022 | $ | 1,909,443 | $ | 16,075 | $ | 4,690,540 | ||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
| Cost of revenues (exclusive of depreciation and amortization) | 1,848,758 | 1,348,190 | 18,483 | 3,215,431 | ||||||||||||||||||||||
| Selling, general and administrative expenses | 361,589 | 285,722 | 2,531 | 649,842 | ||||||||||||||||||||||
| Depreciation and amortization expense | 43,645 | 25,307 | 131 | 69,083 | ||||||||||||||||||||||
| Segment operating profit (loss): | 511,030 | 250,224 | (5,070) | 756,184 | ||||||||||||||||||||||
| Unallocated costs: | ||||||||||||||||||||||||||
| Stock-based compensation expense | (147,730) | |||||||||||||||||||||||||
| Amortization of purchased intangibles | (22,717) | |||||||||||||||||||||||||
| Other acquisition-related expenses | (2,768) | |||||||||||||||||||||||||
| Loss on sale of business | (25,922) | |||||||||||||||||||||||||
| Other unallocated costs | (55,808) | |||||||||||||||||||||||||
| Income from operations | 501,239 | |||||||||||||||||||||||||
| Interest and other income, net | 51,124 | |||||||||||||||||||||||||
| Foreign exchange loss | (15,778) | |||||||||||||||||||||||||
| Income before provision for income taxes | $ | 536,585 | ||||||||||||||||||||||||
For each reportable segment, selling, general and administrative expenses include the costs of salaries, bonuses, fringe benefits, bad debt, travel, employee relocations, legal and accounting services, insurance, facilities and overhead including operating leases, advertising and other promotional activities.
There were no clients that accounted for more than 10% of total segment revenues for the years ended December 31, 2025, 2024 and 2023. See Note 13 “Revenues” for additional disclosures of the Company’s disaggregated revenues reconciled with the revenues from the Company’s reportable segments.
Geographic Area Information
Long-lived assets presented in the table below include property and equipment, net of accumulated depreciation and amortization, and management has determined that it is not practical to allocate these assets by segment since such assets are used interchangeably among the segments. Physical locations and values of the Company’s long-lived assets are presented below:
| As of December 31, 2025 | As of December 31, 2024 | As of December 31, 2023 | |||||||||||||||
| Ukraine | $ | 59,381 | $ | 58,865 | $ | 62,653 | |||||||||||
| Belarus | 44,483 | 45,900 | 49,875 | ||||||||||||||
| United States | 26,085 | 39,403 | 42,510 | ||||||||||||||
| India | 17,365 | 15,367 | 12,735 | ||||||||||||||
| Poland | 10,947 | 10,605 | 15,057 | ||||||||||||||
| Hungary | 4,495 | 4,157 | 6,683 | ||||||||||||||
| Other | 39,631 | 33,370 | 45,540 | ||||||||||||||
| Total | $ | 202,387 | $ | 207,667 | $ | 235,053 | |||||||||||
The table below presents the Company’s revenues by client location for the years ended December 31, 2025, 2024 and 2023:
| For the Years Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| United States | $ | 2,834,343 | $ | 2,680,063 | $ | 2,633,730 | ||||||||||||||
| United Kingdom | 597,317 | 523,369 | 585,172 | |||||||||||||||||
| Switzerland | 438,495 | 407,849 | 367,121 | |||||||||||||||||
| Germany | 233,429 | 206,129 | 178,492 | |||||||||||||||||
| Netherlands | 229,785 | 188,576 | 236,292 | |||||||||||||||||
| Other locations | 1,123,687 | 721,954 | 689,733 | |||||||||||||||||
| Revenues | $ | 5,457,056 | $ | 4,727,940 | $ | 4,690,540 | ||||||||||||||
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Mar 2, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Mar 1, 2017 | |
| 2015 | Feb 23, 2016 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.