Figurines with computers and smartphones are seen in front of EPAM logo in this illustration taken, February 19, 2024. REUTERS/Dado Ruvic/Illustration
(Reuters) -EPAM Systems raised its annual revenue and profit forecasts on Thursday, encouraged by strong demand for its software services as enterprises continue to invest heavily in artificial intelligence technologies.
Shares of the company, which provides a wide range of IT services including consulting, cloud and AI transformation and software engineering, rose more than 5% in premarket trading after it also topped estimates for second-quarter results.
Despite global economic tensions companies are still spending on software services to ramp up their AI offerings and integrate AI within their operations, driving demand at EPAM.
EPAM saw strong demand from clients in industries such as financial services, software, healthcare and consumer goods in the quarter, posting revenue increases across major industry verticals, as well as across geographies.
"As our clients prioritize their AI-readiness and preparatory actions, they are increasingly turning to us to build out their data and AI foundation," said Chief Revenue Officer Balazs Fejes, who is taking over as CEO from September.
Newtown, Pennsylvania-based EPAM now expects annual revenue growth at between 13% and 15%, up from its previous forecast of 11.5% to 14.5%. Analysts on average were expecting 2025 revenue to increase 13.4%, according to data compiled by LSEG.
EPAM projected adjusted earnings per share in the range of $10.96 to $11.12 for the year, compared with its prior forecast of $10.70 to $10.95. Analysts were estimating $10.85 per share.
The company's third-quarter revenue forecast of $1.37 billion to $1.38 billion also came in above estimates. Adjusted profit is expected to be in the range of $2.98 to $3.06 per share, also ahead of market expectations.
For the second quarter ended June 30, EPAM's revenue jumped 18% to $1.35 billion, beating estimates of $1.33 billion. Excluding one-off items, per-share profit was $2.77, above estimates of $2.61.
(Reporting by Deborah Sophia in Bengaluru; Editing by Maju Samuel)
