Software provider EPAM beat quarterly results on strong AI adoption

(Reuters) - EPAM Systems beat quarterly profit and revenue estimates on Thursday, helped by strong demand for its IT services as businesses are increasingly digitizing their operations.

The positive result underscores the recovery of demand for IT services as clients are increasingly adopting cloud services and look to deploy their own AI applications, helping companies that provide product development services such as EPAM.

The company reported second-quarter revenue of $1.15 billion, beating estimates of $1.14 billion. It posted adjusted profit of $2.45 per share for the three months ended June 30, compared with analysts' estimates of $2.26 apiece, according to LSEG data.

Despite the uncertain macroeconomic conditions, global IT spending is expected to total $5.06 trillion in 2024, an increase of 8% from last year, according to the latest forecast by research firm Gartner.

EPAM provides a broad spectrum of IT services, such as consulting, cybersecurity, software engineering and product development services.

EPAM's peers, software firms Freshworks and Cognizant Technology Solutions, raised their annual revenue forecast and beat quarterly revenue estimates.

However, the company cut its full-year revenue outlook and now expects it to be between $4.59 billion and $4.63 billion, compared with the earlier expectation of $4.58 billion to $4.68 billion.

It also now sees annual adjusted profit to be in the range of $10.20 to $10.40 per share.

The company forecast current-quarter revenue in the range of $1.15 billion to $1.16 billion, in line with analysts' average estimate of $1.16 billion, according to LSEG data.

It expects third-quarter adjusted profit from $2.65 to $2.73 per share, which also came in line with estimates.

(Reporting by Priyanka.G in Bengaluru; Editing by Alan Barona)