The following table summarizes the components of stock-based compensation expense recognized in the Company’s condensed consolidated statements of income for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Cost of revenues (exclusive of depreciation and amortization)	$	17,474	$	12,174	$	31,782	$	34,552
Selling, general and administrative expenses	15,813		17,013		36,510		43,086
Total	$	33,287	$	29,187	$	68,292	$	77,638


	Number of Options	Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
Options outstanding at January 1, 2022	2,318	$	77.79
Options granted	132	$	277.70
Options exercised	(445)	$	43.30
Options forfeited	(10)	$	333.32
Options expired	(1)	$	396.69
Options outstanding at September 30, 2022	1,994	$	97.40	$	532,497	3.6

Options vested and exercisable as of September 30, 2022	1,694	$	66.24	$	502,221	2.8
Options expected to vest as of September 30, 2022	280	$	272.07	$	28,521	8.5

As of September 30, 2022, $26.1 million of total remaining unrecognized stock-based compensation cost related to unvested stock options, net of estimated forfeitures, is expected to be recognized over the weighted-average remaining requisite service period of 2.8 years.


	Equity-Classified Restricted Stock			Equity-Classified Equity-Settled Restricted Stock Units			Liability-Classified Cash-Settled Restricted Stock Units
	Number of Shares	Weighted Average Grant Date Fair Value Per Share		Number of Shares	Weighted Average Grant Date Fair Value Per Share		Number of Shares	Weighted Average Grant Date Fair Value Per Share
Unvested service-based awards outstanding at January 1, 2022	9	$	167.18	576	$	277.38	112	$	217.28
Awards granted	—	$	—	644	$	286.13	51	$	269.60
Awards modified	—	$	—	(3)	$	387.74	3	$	220.00
Awards vested	(9)	$	167.18	(222)	$	221.51	(54)	$	182.32
Awards forfeited/cancelled	—	$	—	(55)	$	333.41	(11)	$	261.04
Unvested service-based awards outstanding at September 30, 2022	—	$	—	940	$	292.98	101	$	258.01

As of September 30, 2022, $200.9 million of total remaining unrecognized stock-based compensation cost related to service-based equity-classified restricted stock units (“RSUs”), net of estimated forfeitures, is expected to be recognized over the weighted-average remaining requisite service period of 2.9 years.

As of September 30, 2022, $24.9 million of total remaining unrecognized stock-based compensation cost related to service-based liability-classified cash-settled RSUs, net of estimated forfeitures, is expected to be recognized over the weighted-average remaining requisite service period of 2.5 years.

The liability associated with the service-based liability-classified RSUs as of September 30, 2022 and December 31, 2021, was $8.3 million and $31.5 million, respectively, and was classified as Accrued compensation and benefits expenses in the condensed consolidated balance sheets.


	Equity-Classified Equity-Settled Restricted Stock			Equity-Classified Equity-Settled Restricted Stock Units
	Number of Shares	Weighted Average Grant Date Fair Value Per Share		Number of Shares	Weighted Average Grant Date Fair Value Per Share
Unvested performance-based awards outstanding at January 1, 2022	9	$	165.87	23	$	339.69
Awards granted	—	$	—	6	$	418.26
Awards vested	—	—		(2)	$	355.39
Awards forfeited/cancelled	—	—		(5)	$	375.77
Unvested performance-based awards outstanding at September 30, 2022	9	$	165.87	22	$	351.60

As of September 30, 2022, $0.4 million of total remaining unrecognized stock-based compensation cost related to performance-based equity-classified restricted stock is expected to be recognized over the weighted-average remaining requisite service period of 0.9 years.

As of September 30, 2022, $4.2 million of total remaining unrecognized stock-based compensation cost related to performance-based equity-classified RSUs is expected to be recognized over the weighted-average remaining requisite service period of 2.5 years.

The 2021 Employee Stock Purchase Plan ("ESPP") enables eligible employees to purchase shares of EPAM’s common stock at a discount at the end of each designated offering period, which occurs every six months in April and November. The purchase price is equal to 85% of the fair market value of a share of EPAM’s common stock on the first date of an offering or the date of purchase, whichever is lower. During the nine months ended September 30, 2022, the ESPP participants purchased 55 thousand shares of common stock under the ESPP.

The Company recognizes compensation expense related to share issuances pursuant to the ESPP on a straight-line basis over the six-month offering period. For the three and nine months ended September 30, 2022, the Company recognized $4.7 million and $10.0 million, respectively, of stock-based compensation expense related to the ESPP. As of September 30, 2022, total unrecognized stock-based compensation cost related to the ESPP was $1.6 million, which is expected to be recognized over a period of 0.1 years.

In connection with the Company’s acquisitions of businesses as discussed in Note 3 “Acquisitions,” EPAM enters into agreements that contractually commit it to granting equity awards at future dates. The agreements are unique to each acquisition and terms vary to specify the number of future awards to be issued or a monetary value that will be settled with equity awards valued at future stock prices.

As of September 30, 2022, the Company has commitments to grant up to $29.2 million of equity awards with the number of awards to be determined based on future stock prices. There is a service-based vesting requirement after the grant date associated with these awards and certain of these awards contain performance criteria that will determine the amount of future awards to be issued. These awards are considered granted for accounting purposes. In determining the expense, the Company adjusts the expected settlement based on the probability of achievement of such performance criteria. Due to changes in the probability of payout related to these awards, the Company recorded net reversals of stock-based compensation expense in the condensed consolidated statements of income of $1.0 million and $0.7 million for the three and nine months ended September 30, 2022, respectively.

As of September 30, 2022, the Company has issued 2 thousand performance-based equity-classified RSUs which are not considered granted for accounting purposes as the future vesting conditions have not yet been determined.