The word epic means ‘huge’ and you know what the word ‘fail’ already means. Put the two words together and that’s what it is – a ‘big failure’ or ‘complete disaster/failure’. You’d used this noun when something hasn’t gone the right way as expected and it’s used to exaggerate the idea of failing or doing something wrong.     

Example 1)

“The school basketball team lost the game by 30 points, can you believe it?”

“Yeah, epic fail!”

Example 2)

“Did you get your test marks back?”

“Yeah, it was an epic fail and I have to redo the classes again next semester!”

“Oh too bad, I’m sorry!”