AI adoption bets drive EPAM revenue forecast above estimates

By Thomson Reuters Feb 15, 2024 | 6:47 AM

(Reuters) – EPAM Systems forecast first-quarter revenue above analysts’ expectations and beat quarterly results estimates on Thursday, helped by strong demand for its software services as more businesses invest in deploying AI-linked applications.

The Newtown, Pennsylvania-based company forecast current-quarter revenue in a range of $1.16 billion to $1.17 billion, above analysts’ average estimate of $1.15 billion, according to LSEG data.

Businesses across the board are looking to develop their own AI offerings, helping companies such as EPAM Systems that provide services such as AI product deployment.

Software firm Freshworks also beat Wall Street estimates for fourth-quarter revenue earlier this month, driven by a surge in demand for its AI-powered customer support and IT services products.

Worldwide IT spending is expected to grow 6.8% in 2024, according to research firm Gartner, with increased investments by organizations in planning how to use generative AI.

The software engineering and product development service provider expects adjusted profit from $2.26 to $2.34 per share for the first quarter compared to estimates of $2.39.

The company forecast revenue growth of 1%-4% for 2024, compared to analysts expectations of 3.6%.

EPAM reported fourth-quarter revenue of $1.16 billion, beating Street estimates of $1.14 billion. It posted adjusted profit of $2.75 per share for the three months ended Dec. 31, beating analysts’ estimates of $2.50.

(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Ravi Prakash Kumar)