EPAM Systems, Inc

EPAM Systems generated strong results in the fourth quarter. Revenues were $1.23 billion, a year-over-year rise of 11.2% in reported terms and 14.4% in constant currency terms, was on par with Wall Street expectations and the company delivered an earnings beat. The decrease in Russian customer revenues due to its decision to quit the Russian market had a negative impact on revenue growth of 440 basis points. Travel and consumer goods gained 16%, led by strong growth in travel and hospitality, with a modest slowdown in retail and consumer goods as shoppers showed additional caution in the last months of 2022. Life Sciences and Healthcare rose 11.5%, with growth in the quarter affected by the unexpected ramp-down of a big transformation program at a customer formerly ranked in EPAM’s top ten. They presently expect further reductions in customer expenditure in Q1 2023. In the quarter, Business Information & Media grew by 10.9%. Besides, their emerging verticals produced 20.8% growth, driven by manufacturing, automotive, and energy clients. EPAM further intends to increase its manufacturing workforce in the second half of 2023. In the quarter, they developed a new “AosEdge” vehicle-to-cloud platform to advance the development of connected cars. We give EPAM Systems a ‘Buy’ rating with a revised target price.