EPAM Systems Inc.: 10-K Risk Factor Changes

Rapidly evolving digital technology innovations, such as AI, machine learning, hyperautomation, low-code/no-code application development, system observability, and predictive insights are creating new forms of competition to our services. These innovations may reduce the need for our services and the services of our clients that develop software and software-as-a-service for their end users. AI, large language model, and machine learning technologies enable clients and potential clients to develop, customize, and maintain software solutions internally and could reduce reliance on third-party service providers such as EPAM and our clients that are software product vendors. Industry-specific plug-ins and agentic features of existing AI software can perform tasks that may replace the need for specialized software to perform common business processes, such as financial analysis, due diligence, and software coding. Our current and prospective clients have and may continue to use AI-powered tools to create or modify software applications themselves, or elect to replace traditional software with agentic AI, rather than purchasing our services or licensing software from our clients. Increased competition, or the perception of increased competition, from new and non-traditional market participants like AI-based task-specific tools, has negatively impacted the price of our stock. If a significant number of our existing or future clients employ AI-driven tools as a replacement for our services or the software we build, our revenues, anticipated growth and prospects, our financial condition, and our results of operations could be materially adversely affected.