EPAM Systems (EPAM) Turns To Cybersecurity As Core Growth Cools

EPAM Systems has expanded its cybersecurity services by joining forces with Wiz, a cloud and AI security platform owned by Google Cloud. The partnership, announced on August 25, aims to help large organizations transform cloud risk data into actionable engineering fixes. This move comes as EPAM's core business experiences a slowdown, with second-quarter revenue growth of only 4.5%.

The collaboration combines Wiz's AI Application Protection Platform with EPAM's AI-native engineering and cloud modernization capabilities. Additionally, White Hat, an EPAM company, will provide a layer of offensive security to test the vulnerabilities found by Wiz. EPAM has already implemented Wiz's solutions across six industries, giving the partnership a head start.

EPAM's financial performance has been robust, with GAAP income from operations rising to 10.8% of revenue and non-GAAP operating margin increasing to 16.4%. EPS also saw a 26.3% year-over-year increase. However, EPAM's revenue growth guidance for the year has been lowered to 3.2% to 4.2%, and cash flow has decreased. The partnership with Wiz provides EPAM with a new growth story just as its core business decelerates, potentially offsetting the deceleration in projected third-quarter growth.