EPAM Systems Upgrades Revenue Forecast Amid Rising IT Spending

In recent times, the technology sector has witnessed a significant shift as companies increasingly invest in digital transformation and cloud modernization. This trend is driven by the need to enhance efficiency and reduce costs, particularly in a competitive business environment. One company that has notably benefited from this surge in IT spending is EPAM Systems, a prominent software provider.

On Thursday, EPAM Systems announced an optimistic revision of its annual revenue and profit forecasts. The company is banking on strong demand for its IT services as the year draws to a close. This positive outlook has resulted in a remarkable 11 percent increase in the company’s shares before the market opened. EPAM's proactive approach to adapting to market needs is evident in its recent acquisition of the consulting business of FD Technologies, based in Northern Ireland, for $300.9 million. This strategic move aims to bolster its expertise in financial services and enhance its capabilities in artificial intelligence.

EPAM now anticipates its full-year revenue to fall between $4.69 billion and $4.70 billion, a significant increase from its earlier projection of $4.59 billion to $4.63 billion. Additionally, the company expects adjusted profits to range from $10.73 to $10.81 per share, surpassing its previous estimate of $10.20 to $10.40. This upward revision reflects the company’s confidence in the ongoing recovery of the business environment.

Moreover, EPAM's peer, Cognizant Technology Solutions, has also raised its annual revenue forecast, indicating a broader trend of recovery within the IT sector. For the third quarter ending September 30, EPAM reported an adjusted profit of $3.12 per share, exceeding analysts' expectations of $2.70. The company’s quarterly revenue of $1.17 billion also surpassed Street estimates of $1.15 billion, further solidifying its position in the market.

As businesses continue to navigate the complexities of digital transformation, the demand for IT services is expected to grow. Companies like EPAM Systems are well-positioned to capitalize on this trend, providing essential services that help organizations adapt and thrive in an ever-evolving landscape. The future looks promising for EPAM and similar firms, as they play a crucial role in shaping the digital economy.