Feb 20 (Reuters) - EPAM Systems ( EPAM ) on Thursday

forecast first-quarter and annual profit below Wall Street

expectations, as the company plans to increase investments in

its technologies and consulting capabilities.

The company, which provides a broad spectrum of IT services,

said it plans to spend on retaining talent, and accelerate

investments in advanced Gen AI platforms and tools to capture

market share.

Shares of Newtown, Pennsylvania-based company fell 10%.

"Compensation increases to retain talent for future growth

combined with the limited ability to improve client pricing in

the near term, and additional pressure from dilutive impact of

recent acquisitions will continue to put pressure on

profitability this year," company executives said on a

post-earnings call.

For the first quarter, EPAM ( EPAM ) expects adjusted profit between

$2.22 and $2.32 per share, compared with analysts' estimate of

$2.59 per share, according to data compiled by LSEG.

It expects full-year adjusted earnings per share in the

range of $10.45 to $10.75, while analysts expect $11.32.

EPAM ( EPAM ) offers services in consulting, cybersecurity, software

engineering and product development.

Worldwide IT spending is expected to reach $5.61 trillion in

2025, an increase of 9.8% from a year ago, according to research

firm Gartner. However, it adds that nominal spending versus real

IT spending will be skewed, with price hikes absorbing some or

all of budget growth.

The Newtown, Pennsylvania-based company expects to generate

revenue between $1.28 billion and $1.29 billion in the first

quarter, above analysts' estimate of $1.27 billion.

EPAM ( EPAM ) sees 2025 revenue growth rate to be in the range of 10%

to 14%, compared to analysts' expectations of 11.4%.

The company reported fourth-quarter revenue of $1.25

billion, beating estimates of $1.21 billion. It posted an

adjusted profit per share of $2.84 for the three months ended

December 31, compared to estimates of $2.75.