
	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Cost of revenues (exclusive of depreciation and amortization)	$	19,576	$	18,142	$	58,870	$	49,569
Selling, general and administrative expenses	22,548		19,705		63,729		59,967
Total	$	42,124	$	37,847	$	122,599	$	109,536


	Number of Options	Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
Options outstanding at January 1, 2024	1,629	$	125.88
Options granted	81	$	296.87
Options exercised	(409)	$	43.83
Options forfeited	(9)	$	276.69
Options expired	(4)	$	373.38
Options outstanding at September 30, 2024	1,288	$	160.72	$	94,480	3.9

Options vested and exercisable as of September 30, 2024	1,046	$	128.05	$	94,480	2.8
Options expected to vest as of September 30, 2024	231	$	302.02	$	—	8.4

As of September 30, 2024, $21.6 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 2.1 years.

The table below summarizes activity related to the Company’s equity-classified and liability-classified service-based awards for the nine months ended September 30, 2024:


	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
Unvested service-based awards outstanding at January 1, 2024	1,074	$	292.45	98	$	287.36
Awards granted	535	$	289.73	34	$	298.35
Awards modified	1	$	366.27	(1)	$	114.30
Awards vested	(335)	$	287.43	(39)	$	272.94
Awards forfeited/cancelled	(77)	$	300.63	(2)	$	295.91
Unvested service-based awards outstanding at September 30, 2024	1,198	$	292.15	90	$	298.91

As of September 30, 2024, $248.9 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 2.6 years.

As of September 30, 2024, $14.8 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 2.4 years.

The liability associated with the service-based liability-classified RSUs as of September 30, 2024 and December 31, 2023, was $1.4 million and $8.7 million, respectively, and was classified as Accrued compensation and benefits expenses in the condensed consolidated balance sheets.

The table below summarizes activity related to the Company’s equity-classified performance-based restricted stock unit awards (“PSUs”) for the nine months ended September 30, 2024:


	Equity-Classified Equity-Settled Restricted Stock Units
		Number of Shares	Weighted Average Grant Date Fair Value Per Share
Unvested performance-based awards outstanding at January 1, 2024		13	$	441.87
Awards granted		38	$	327.31
Awards vested		(3)	$	560.97
Awards forfeited/cancelled		(1)	$	594.50
Unvested performance-based awards outstanding at September 30, 2024		47	$	333.56

As of September 30, 2024, $8.7 million of total remaining unrecognized stock-based compensation cost related to PSUs is expected to be recognized over the weighted-average remaining requisite service period of 1.9 years.

During the three months ended March 31, 2024, the Company granted to its named executive officers and certain other members of senior management PSUs that vest after 3 years, contingent on meeting certain financial performance targets, market conditions and continued service. The financial performance targets will be set by the Compensation Committee of the Board of Directors at the beginning of each year. For the portion of the awards subject to market conditions, fair value was determined using a Monte Carlo valuation model. The portion of the awards associated with financial performance in future years where the financial performance targets have not yet been determined are not considered granted for accounting purposes. There were 32 thousand such awards as of September 30, 2024.

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 ending April 30th and October 31st. 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, 2024, the ESPP participants purchased 85 thousand shares of common stock under the ESPP. During the nine months ended September 30, 2023, the ESPP participants purchased 77 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, 2024, the Company recognized $2.3 million and $7.5 million, respectively, of stock-based compensation expense related to the ESPP. For the three and nine months ended September 30, 2023, the Company recognized $3.1 million and $9.7 million, respectively, of stock-based compensation expense related to the ESPP. As of September 30, 2024, total unrecognized stock-based compensation cost related to the ESPP was $0.8 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, including specifying either 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, 2024, the Company has commitments to grant up to $15.6 million of equity awards with the number of awards to be determined based on future stock prices. Additionally, these awards contain performance criteria that will determine the number of future awards to be issued and there is a service-based vesting requirement after the grant date associated with these awards. As 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 the performance criteria. Related to these awards, the amount of stock-based compensation expense recorded in the condensed consolidated statements of income for the three months ended September 30, 2024 was not material.

On August 1, 2024, the Board of Directors authorized a new share repurchase program (the “2024 Repurchase Program”) for up to $500.0 million of the Company's outstanding common stock. EPAM may repurchase shares of its common stock on a discretionary basis from time to time through open market purchases, privately negotiated transactions or other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. The timing and total amount of stock repurchases will depend upon business, economic and market conditions, corporate and regulatory requirements, prevailing stock prices, and other considerations. The share repurchase program has a term of 24 months, may be suspended or discontinued at any time, and does not obligate the company to acquire any amount of common stock. Prior to the authorization of the 2024 Repurchase Program, the Company repurchased common stock under the 2023 Repurchase Program and exhausted the $500.0 million authorized under that program as of June 30, 2024.