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EPAM Systems Lifts 2025 Outlook, Names New CEO as Shares Surge 10%

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EPAM Systems raised its annual revenue and earnings forecast on Thursday and announced a major leadership transition, sending its stock up about 10% in premarket trading.

The IT services and consulting firm said founder and long-time CEO Arkadiy Dobkin will become executive chairman effective September 1, while current Chief Revenue Officer Balazs Fejes will take over as the new Chief Executive Officer.

Financial Highlights:

  • 2025 revenue growth is now projected at 11.5% to 14.5%, up from the previous 10% to 14% range.

  • Full-year adjusted EPS forecast increased to $10.70–$10.95, from $10.45–$10.75.

  • Q1 revenue: $1.30 billion vs. $1.28 billion expected (LSEG data)

  • Q1 adjusted EPS: $2.41 vs. $2.27 expected

Strategic and Market Context:

  • EPAM’s diversified IT consulting services have helped it outperform peers during a cautious tech spending environment.

  • Larger rivals such as Accenture and IBM have recently faced setbacks due to U.S. federal contract cutbacks amid Trump administration spending reductions.

  • EPAM’s recent acquisition of FD Technologies’ consulting unit is strengthening its positioning in AI-driven financial services.

Looking Ahead:

  • The company also issued a second-quarter forecast that topped Wall Street expectations for both revenue and profit.

  • The leadership transition comes at a time when EPAM is shifting deeper into AI and digital transformation services, and the company says the change is aimed at accelerating innovation and global growth.

Accenture Faces Federal Contract Slowdown Amid U.S. Spending Cuts

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Accenture reported delays and cancellations of federal contracts due to the Trump administration’s cost-cutting measures, leading to a more than 6% drop in its share price on Thursday. The administration’s Department of Government Efficiency (DOGE), led by Elon Musk, has been aggressively reducing spending and shrinking the federal workforce, impacting consulting firms like Accenture.

The U.S. General Services Administration has directed agencies to review and cancel non-essential contracts, slowing down new procurement actions and negatively affecting Accenture’s sales and revenue. The company’s federal services unit, which made up 8% of its total revenue in 2024, has been hit particularly hard by these measures.

DOGE’s aggressive policies—including rapid workforce reductions and contract cancellations—have sparked criticism, lawsuits, and uncertainty about the long-term impact on government operations. Meanwhile, President Trump is set to sign an executive order to shut down the Department of Education, a move that has already affected IBM, a key vendor for the department, causing its shares to drop 4%.

Accenture’s new bookings, a key indicator of future revenue, fell 3% to $20.9 billion in Q2. Its consulting services segment, which contributes 59% of revenue, posted $8.3 billion, missing analyst expectations of $8.54 billion. However, the company slightly raised its annual revenue growth forecast to 5%-7%, up from 4%-7%.

Britain Cancels $1.7 Billion of Computing Projects in Setback for Global AI Ambitions

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The U.K. government has canceled £1.3 billion ($1.7 billion) in computing infrastructure projects, marking a significant setback to its goal of becoming a global leader in artificial intelligence (AI). The cancellations include two major taxpayer-funded initiatives:

1. AI Research Resource: A £500 million ($640 million) project aimed at enhancing the U.K.’s compute infrastructure for AI research.
2. Exascale Computer: An £800 million ($1.02 billion) commitment to develop a next-generation exascale computer at the University of Edinburgh, capable of performing one trillion calculations per second.

These projects were intended to bolster the U.K.’s high-performance infrastructure, essential for running advanced AI models requiring substantial computational power and data. However, the newly elected Labour government has decided to redirect these funds to other fiscal priorities, citing the need for difficult spending decisions across all departments to restore economic stability and support national growth.

Fiscal Challenges and Strategic Shifts

The decision comes in the wake of a projected £22 billion ($28 billion) of unfunded commitments inherited from the previous Conservative administration. British Finance Minister Rachel Reeves recently announced a series of spending cuts to address this fiscal challenge.

Despite the cancellations, the government launched an AI Opportunities Action Plan last month to identify ways to enhance the U.K.’s computing infrastructure and support its industrial strategy with AI and other emerging technologies.

Regulatory Approach and Future Plans

Prime Minister Keir Starmer’s government plans to introduce new statutory regulations for the AI industry, diverging from the previous administration’s stance of avoiding formal legislation to prevent stifling innovation. The move signals a shift in strategy as the U.K. navigates its AI ambitions under the new government.