EPAM Systems (EPAM) 16 Feb 232022 Q4 Earnings call transcript

Good day and thank you for standing by. Welcome to EPAM Systems Fourth Quarter and Full Year 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded.

to Straube, conference Head like speaker to now David today, of would hand over the your I Investor Relations. sir. ahead, go Please

Thank of morning, have good and full the you, now results. quarter operator, should XXXX you company's everyone. fourth received earnings the By copy year release for your and

a is on epam.com you the Investors If copy have in not, available section.

Officer. Arkadiy and Jason With President; me and on Dobkin, today's CEO call Chief Financial are Peterson,

call may like uncertainties remind today's comments listening made are some statements that as the company's and our forward-looking to earnings SEC of contain subject release I'd those in risks These statements. and on to filings. described

Additionally, comparable materials the Investors all measures the GAAP non-GAAP measure are section of and located in our in results references earnings to website. are that quarterly to have been reconciled available reported our

said, that With over call now the I'll to Ark. turn

Thank [indiscernible] morning, and we February joining Thank expect optimism. with generate towards everyone. this this David. grow billion revenues looking year. S&P to over it on in were you you, ago to XX in XX% XX, and almost XXX morning. has added for we been XXXX months to $X Good us --

our the Even priorities. redefines us the volumes, some customers invasion one of for success place the Russian meaning put the with us. later during week our The who thousands the and around And on people struck different falling business very and reality a world or we are EPAMers world new in very support grateful of to the past of tens mobilized year. for

and the in of have in possible we new to in Priority priorities, XXXX of and our updates shared Ukraine. safety which for one XXXX. with success everything defined was it people by you do during our criteria Our was regular calls many

families. support EPAMers. many their over Next, repurposed our chose scaled [indiscernible] stay and mobility immediately We with XX,XXX countries to mission to and was global

anything our level business the Russia. In strategy an And exit to addition, and our include year, continued expect normal was conditions. of even customer clients further high-quality with consistent, would ensure normal, elevated the that continuity they service business to to focus that of our from that our but was business under delivery bear of was throughout adapted environment

every have way remember, previous remember for all history was year them. EPAM in I most and the disruptive a XXXX of I to

considering You might we relative ask why a are success. XXXX

we XXXX, geo-diversified As our that now a And locations delivery one a we operates the footprint the When began talent XXXX our EPAM just XXXX urbanization countries. companies of and in delivery makes our in that most roughly was XX% XX% efforts, three in largest today, global there. result in IT of more world, in one of is have services XX than together. only of [indiscernible] the

of by end this While XX% closer with that to growth XX%, fall expect concentration the outside. we year accelerated will

very also lose capabilities with We were delivery any real-time, line locations standards with line consistently out expectations. term. finally, and productivity quality, new previous We our of global the location XX new our rebalancing demonstrate much in engineering We clients developing our delivery actively significant quality much a productivity we And also EPAM And can and last were are didn't Ukraine. that continuously during very running markets. months prudent with program. major in across in despite

challenges. that daily journey, preparedness while transformation, build our our more we network was ongoing is much to [indiscernible] we qualifier and strong Simply, believe it's and date? it then higher-level up an and be will our reality not process Why company for time some difficult of come. we Having the that a success than And a effective And realize war to demands the extremely which unexpected we finding upon relative our over. even use much stated accomplished have do stronger, Ukraine very capable the before. with to been to to for foundation what new within

last earnings demand for environment. during and to align resultant of actions businesses expectation started mentioned taking our partners in messaging I've as call, to Additionally, and some our better been slowdown customers the their global have new their

we While as is a decision-making experiencing by the environment process yet were emerging slowdown, to would mitigation reflects happened last of and macroeconomic expectation When plans, during the in in the picture are more specific XXXX. The to demand global what client our year. slightly [indiscernible] caution detailed part and specific Today, what expected conditions. related shared and we also both, we typical complex more the November, slowdown our to we also than view is be our results indicated diversification reality EPAM of conditions than not overall others. become QX corresponding market seen their

the now First, that some didn't clients expect mitigate XX past we we as did. we understand of months our that as would well

situation our of committed two, consider So just and are delivery working now. with work We point, risk quarters to decisions for that continue their diversified choose new mitigate became a to them for comfortable in at before believe while three some they us, they and alternative footprint now associated streams. our advance made with with us to visible number

customers locations, our cost overall to disrupted Second, talent due our of to to were new cost and redistribution immediate our of our level. [indiscernible] some to structure

slow fixing were changes current mix we environment, were the in relative [indiscernible] greater location and least while the a at accommodated But challenge, the the new environment, price was present eased. imbalance. During and

were previously large are committed specific own had initiatives. such months, hi-tech, which to delay as clients, current also the Third, who disproportionately several the which verticals, were example, there during last for several their circumstances And impacted by with key software are several impacted and slowdown. there

net new priorities. during our delivery as retaining as repositioning logos our de-prioritized and attention our XX last focused bringing customers key in finally, was existing on our And months the on we global

than factors, lower expect we So XXXX time. at because are of at EPAM-specific outlook would a believe historically beginning we of those this growth seeing we now revenue the

half low opportunity XX%-plus with first with to the in now Our that. of right in year, acceleration current profile XXXX, come the high-teens back shows in of during approaching second growth the our the organic after to pre-pandemic potentially growth and the QX, half relatively view growth for year

this are in global programs At partner on and our to across customer with long-term additional our us the of XXXX. customer the data strong the going experience. as had second for should build built several to relationships into investing to top-tier years. our in during differentiators services a positioning underway and [indiscernible] last we demand consulting clients, XX our And help point, portfolio half and our These months uplift partner and credibility create working are client we which we've value-added in current

very we us investments across stabilize demand. centers. continuing A cost continuous differentiators, platform our watching significant restoring At new Today, while the our we part committed and fully all same are will our allow in our continue the across global of time, structure strategic to immediately major those to those balanced to we the efforts to delivery investments balance delivery develop of talent carefully are visible and current geographies.

our long view. Given the at was point shorter-term and uncertainty of looking from a of business

a growth allowing our necessary and our that been while digital we platforms, monitor heavy key priority business when decisions calibrations levels. protect daily ensure our utilizing on basis to far in guiding talent still instrumental us driving making historic have and profitability as our to towards are best so and our real-time which a We

players in market, with exactly believe investments new several in issue, world, bring slow pull-back This respond led enterprises dependent On strategy encourage in the of in should new global The will limited IT [indiscernible] new to for competitive [indiscernible] business the as with we solutions technology focusing the real is do demand and to protect general technology EPAM, push proposition their implementation likely should impact order slowdown our on simultaneously market accelerate that ways. and quarters. to to new to be today's on efficient and the most services most just growth turn positions. enter

and our the to today and next That fast further able operations to respond for So diversified next the plan as to time a than growth our company talent, to globally but why past. stabilize this capabilities, DNA, and and invest engineering EPAM [indiscernible] global into maintain to in the the strong is new capability new focus prepare more much and our is quarters time for to be to new challenges. ever attention markets, in continuously new goal exactly our the

to also XXXX, for results Non-GAAP generated earnings supporting the one the or many families fiscal more of EPAMers relocation indirectly And had our billion over regions and during in process. million flow. when free their due and a we $XXX when greater thousands $XX.XX, talent generated cash XXXX. at over increase we reflecting revenues, by war impacted did of of we year-over-year XX% we year that almost were a were XX% directly Looking in And $X.XXX per XX% growth. time our we continuous than share all

to mission in of stay on and geographic our commercial continue committed of EPAM. day are world a our rolling are we our accelerating to more XXXX, becoming and for our needs while customers, we our every diversified customer orchestrator demands, a our focused capable working we even and expansions, In capabilities true larger offering more

crossing and what today of in people $X of that happening talk XXXX. XXXX, is The must in our on later speak know in our about ground mark back Turkey what took too through year it's a comparison growth. months as XX we Ukraine in well But as go to life, we did strange year again now. today billion right bit all we a war revenue is nothing It to February in the just

is organic and with be in the building, navigate and and why our the plus to $XX is that to with back next billion growth our in our to aspiration come we what So next years. that, that what build all challenges change rate several didn't XX% able the confidence at all we quarters would several continuously

the call who let Jason, and to turn for outlook talk and business over With results our that QX full-year said, our me XXXX. XXXX about will

morning, good Thank and you, Ark, everyone.

adjustments, our covering relocations the results, associated to with customary operations everyone commitment costs humanitarian in our had financial Before related Ukraine, that I our to to to non-GAAP the non-GAAP been results. expenditures employee of and Russian excluded EPAM's QX remind accelerated addition from exit wanted

included additional disclosures have other We earnings and our release. these QX related items specific to in

constant solid and terms, revenues negative generated foreign fourth $X.XX company XXX in The a XX.X% impact currency reported reflecting quarter, increase basis a points. of on basis a XX.X% EPAM the delivered year-over-year exchange results. of of In billion,

to the Russian the basis impact XXX negative Russian our revenues customer in from a had growth. point on revenue Additionally, exit reduction resulting market decision

reported revenues, year-over-year have have XX.X% almost XX%. Russia Excluding revenue would and growth been been constant currency would growth

in travel with customers as goods, some exhibited and Beginning with in our growth impact, consumer the and industry by caution The and few months XXXX. verticals, incremental the moderation been XX.X% have constant or driven Russian grew ongoing would the consumer market impacted strong retail XX%, vertical. XX% travel of hospitality Absent growth in of in this the last exit also currency. growth in

very growth Financial services X.X% management and insurance. coming with from asset grew strong

Russia our growth have in XX.X% revenues, customer Excluding and been currency. would constant XX.X%

grew customer that Software reduction to in the growth XX.X% quarter the reflected was Hi-Tech generalized in top previously quarter. in a revenues and vertical. slower XX, Growth addition a from across in our the revenue customer in in

by partially Life was by Business Information driven transformation QX at healthcare clients previously quarter emerging EPAM's customer delivered automotive, that the sciences of as this finally, growth and a manufacturing program large of customer as delivered further XX.X% unexpected We and ramp-downs grew growth XX. a the top strong Media currently XXXX. the energy. ramp-down anticipate our in in of in was XX.X%. in Growth in impacted verticals And XX.X%, quarter. spending well and

our in From terms year-over-year, currency but representing the XX% currency. resulting to QX, services our And representing of a XX%. our Revenue ramp-down clients the In revenues, or growth finally, recent now quarter XX.X% constant constant grew revenues acquisitions. currency. Russian region, in our contracted year-over-year, was the constant X% from X% revenues impacted year-over-year, XX.X% of exit grew XX% QX our our from XX result in decision currency. clients of actually grew representing Americas, market geographic year-over-year grew QX in of largest our grew X% XX.X% the revenues. in while by to our EMEA, revenues, in accelerated outside QX and The constant X.X% and top Russian represents was of top XX is XX.X% partially or the CEE, flat or revenues, APAC XX% quarter the XX.X% customers. perspective, year-over-year, of

Moving income down the statement.

to margin the Our quarter in year. the year. QX to for same was compared compared margin XX.X% in negatively by GAAP the in compared last a Gross quarter the quarter to been the most normalized variable of impact XX.X% of the which quarter gross for associated in of bill XXXX. also Non-GAAP efforts timing Gross with margin negative rates expense XX.X% compensation margin to last was utilization was XXXX gross the impact difference XX.X% QX for QX relocations, and XXXX. employee lower on have EPAM's align reflects more positive of impacted ongoing based accomplished

And our SG&A compared of XX.X% XX.X% QX facilities revenue to QX compared the at of last compensation in in year. of came reflected was non-GAAP variable last GAAP XX.X% and made lower revenues efficiencies in compared footprint to results year. The XXXX. SG&A QX primarily in for SG&A same period XX.X% to

or Non-GAAP year. to million of from revenue of million million compared to XX.X% or operations QX last of or was from in $XXX $XXX was quarter of income $XXX million quarter, in operations GAAP of the year. QX revenue XX.X% $XXX in the last XX.X% compared of revenue XX% income in or revenue

tax GAAP tax change in came for guide certain excess of as benefits XX%, primarily rate at related stock-based XX.X% regulations. the our effective compensation, in Our well as quarter to tax impact the the QX of to due versus lower

XX.X%. excess tax a of impact and was basis non-GAAP the tax includes Diluted which $X.XX. the change was tax certain on effective rate, Our share in GAAP earnings excludes per benefits regulations

$X.XX, $X.XX there a increase million Our non-GAAP shares was a approximately same over XXXX. EPS quarter In X.X% reflecting XX.X in growth diluted diluted the were QX, outstanding. and

cash compares from the million and $XXX days in balance the was million At the XXXX, year. cash the of sheet. cash same QX, Turning of last flow operations of in our $XXX $XXX compared quarter cash same flow to million ended same in quarter days cash quarter XX and in last the $XXX and year. flow to Free free approximately was to days billion We end equivalents. DSO flow QX to compared XXXX. for and was with Cash QX, $X.X XX in quarter XX million

we expect in ahead, steady DSO XXXX. will remain Looking

than to Production on more QX for quarter. operational growth engineers, with Moving XX,XXX was We a compared flat few XXXX. consultants, relatively the to architects. and designers, metrics headcount ended QX trainers

for compared last Utilization to XX.X% Our of XX,XXX XX.X% than in the more quarter total of employees. and was XX.X% in was year XXXX. headcount QX QX

million, XX.X% producing for to a constant-currency XXXX. were Turning XX.X% our Revenues results year basis to full reported XXXX. growth and for compared year the on $X,XXX when

to During our XXXX, our acquisitions contributed approximately X% growth.

approximately revenues, XX.X%. year-over-year XX.X%, growth revenue growth would Russia been reported have constant and been Excluding have would currency approximately

X.X% GAAP was income and from operations $XXX revenue. million, an of represented of year-over-year increase XX.X%

operations year from of of revenue. income non-GAAP Our over prior million, $XXX an the XX.X% XX% represented increase was and

effective rate year the non-GAAP XX.X%. GAAP for tax effective was tax XX.X%, rate was Our our

items over shares and which were a reflecting EPS, Diluted one-time million was there basis XXXX, compensation, earnings GAAP XX.X% diluted share weighted certain other excludes on for approximately adjustments XXXX. average Non-GAAP In per diluted acquisition-related costs $X.XX. was outstanding. XX.X stock-based increase $XX.XX, a fiscal

cash And net compared to conversion. $XXX efforts our throughout in very operations. Ukrainian exit pleased given which supporting disruption with transformation We're the related the certain humanitarian was operations from income expenses $XXX our was adjusted $XXX with flow XXXX significant associated free our XXXX flow a million million, our million year. navigated flow reflected amount employees in we ongoing reflecting cash XX.X% of finally, cash in And impacts of results Cash the and for to Russian XXXX.

turn to let's guidance. Now

highly outlook, teams addition quarter. Ukraine we XXXX, our a maintaining will production. been not impacted For focused on materially year remain for in the providing in uninterrupted our resume date, full and operations To next have guidance to

Ukraine achieved from XXXX. somewhat in levels lower delivery continue to Our able at productivity centers, those guidance to will assumes than deliver our or be that we

call, during and demand, to program spending, isolated to in retail QX began we in the further we've see moderation QX. was earnings caution early of goods Since As customers and slower signs this scrutiny including budgets time, and then we including around industries. delays of decision-making in some in few mentioned program decision-making seen our a evidence ramp-downs. additional that on At consumer

we For reductions entering growth. actual spend combined caution slowdown some cautious in resulted with experienced continued clients, in QX. But clients, in in budgets for only most around spending has a QX,

that For negatively XX will XXXX, programs, we've in were our in impact two top which in QX revenues. customers ramp-downs seen

We once in top in already be to expect customers neither but of again our requesting see XX these we project of customers those teams. QX, one incremental

we At of expected preservation managed temporary we this demand. second-half of previous XXXX time, to in a talent levels, in slower year. Consistent cycles, we demand, fiscal a through preparation with our while our in softening are thoughtfully expecting for revenue lower focusing XXXX a QX, on where calibrate the our stronger continue expense level to producing will start

first a of reduction result half of the to expect hiring, of will in combined XXXX, headcount continue levels In we decline attrition. normal with as

and on growth production We second half in XXXX. the returning of are headcount planning in

We to expect as half and to demand utilization in normalize utilization supply in XX% our range. year XX% traditional expected of the to return half more of first with mid-XXs the second in the the the year

Russian and customer year-over-year reminder, of a XXXX. tougher primarily in revenues As the market comparison, reduction in a the first exit the half Russia produces revenue the of

with at basis. reported X% on foreign Revenue growth full-year on exchange constant our basis. be a year expected both The negligible to a is will impact full be currency Starting of and outlook. least

XXXX. Additionally, is at inorganic contribution no this time, there revenue for

includes only. guide revenue organic our So growth

Excluding the be impact revenue to the growth is expected Russian exit reported of approximately XX%. the of market,

year. we high half returning growth to second expect be revenue growth the in of revenue revenue digits, the half in We in single In XXXX, the expect teens. to double-digit first growth the QX

XX.X% to operations be We and from range in income to XX.X% the of in income XX.X%. operations the be expect of range from to non-GAAP GAAP XX.X% to

XX%. tax our We approximately GAAP be rate effective expect to

compensation will which effective tax stock-based Our benefits related XX%. rate, be excess tax to excludes non-GAAP

be of GAAP-diluted the will the to and $XX.XX EPS expect per for range year. diluted $X.XX to EPS earnings will $X.XX full the for the full year in range share, For be of in $XX.XX non-GAAP the we

a fully expect XX.X diluted We count weighted of million average shares outstanding. share

For $X.XXX year-over-year growth rate QX expect $X.XXX billion the of of X%. a in of be to XXXX, to range billion, producing revenues approximately we

an X% to is on the rate a be Our basis guidance X%. approximately and constant year-over-year expected of reflects unfavorable FX impact currency growth

We our be from impact for revenue market, Russian to the constant growth growth contribution X%. of expect the revenue would acquisitions. currency decision exit to Adjusted negligible approximately

expect we in income improve be XX.X% For operations GAAP the throughout the X.X% the Income be operations security of to resetting from and we to lower from expect and operations of to reflects of which income from the to to quarter, range first range the year. social non-GAAP in impact the XX% of utilization, XX%. caps

our rate, be non-GAAP excess to XX%. related which tax approximately to benefits our effective approximately GAAP expect We be tax tax effective compensation rate and stock-based XX% to excludes

$X.XX For GAAP earnings diluted the and diluted per the share, for $X.XX we in for quarter. the to EPS range quarter be of to in the range be $X.XX $X.XX non-GAAP EPS to of expect to

of outstanding. We expect million shares diluted count a average XX.X weighted share

QX, spread adjustments for be $XX in the each quarter. is for non-GAAP key to is few The in evenly and $XX approximately Amortization a Tax-effective million assumptions $XX Stock of million year, million million across the to our approximately to year, be QX non-GAAP based in million QX, year. around intangibles each and expected $XX compensation GAAP expected to nominal foreign expected measurements to quarter. QX with be million expenses XXXX. impact with the $XX in $XX is quarters. of remaining exchange million $XX that is Finally, million remaining in in the in $XX expected be for support $XXX million

for to through million full quarters. of our part support in year in Ukrainian has employees million million excess $XX And $XXX humanitarian XX, spent the million $X approximately finally, Ukrainian company's families. the their remaining the Related of in we million December to XXXX, our million to and EPAM employees, expect and as commitment approximately benefits QX QX, around the $X with $XX tax $X be

further We expect during made expenditures humanitarian will be XXXX.

This company's a of recently stock to next to to substantially common approved associated company over will Board allow share the of the equity. the company program, program purchase million Lastly, dilution of repurchase the Directors offset $XXX authorizing with our months. XX issuance the up employee

share even our flows, to in to our cash both We believe continue we expect acquisitions free to generate and flows and buyback capital ability cash allocation XXXX continue position solid free confidence in to the cash free significant in while program. can significant flows strategy pursue stronger EPAM's company generate XXXX. cash a strategic evolving With to our strong include

EPAMers will growth made to Again, thanks my drive XXXX. all who successful throughout XXXX help and year us a the

let's for the call open Operator, questions.

our Ramsey of Instructions] question first from with [Operator you. comes the El-Assal Thank Barclays. And line

Your line is open.

how of ask out much of sort or morning. so move thanks speak guess preemptively is is about workloads dynamic this off is, you go wanted you of I Hi, that could then question those I -- some and comments something that's the about sort that EPAM And on already deeper some into decision Ark's the maybe can complete, playing you clients largely speak. we back? winning to -- workloads for into can my year? as to the how taking question of making and ongoing to you if that do sort

this that have -- What that are traditionally were we're ago think work navigate the several to future I existing to base will not we realizing very disruption Eastern taken probably the from EPAM. right of work be decisions we sure were say vendors quarters how work going saying, waking [indiscernible]explore made taken client getting well but in measure were when we it's happening, all, -- were whole which from some [indiscernible] to some and difficult Europe. not look, what's we with clients alternative now first to

as any demand get. majority that's or time, At current the same significant at the happening. we know assume in is this lose client of And reconfirmation the seeing the clients necessarily to what lose client, not but with practically that didn't measure, to all. situation difficult very it's again, didn't So of we QX, mentioned, we easy we

to Ukraine able when working have we that And can even quality comparable will considering time, delivery our with been thing continuously for right is traditional, we the new there This navigate as cost world. of that we make the level working us prove our there now is and And we sure But of mentioned a from confirmation is that challenge comfort destinations of in for another that in we be understand the they the So we at changes another well. are which there actively clients or well. this. bring working is too. balance work same future as to believe that

fourth Okay, thank you. revenue And this line we and as to need sort margins share? one other might somewhat quick to follow-up any deeper the from on or to there step margins me. cadence all along Maybe is we of margin the year Jason, straight way expect of move in just quarter, color Should up the could in that you into the on cadence comment the year? you with a

see Yeah, in this what let little think me you a opportunity on actually we'll of XXXX. we kind use clearer be to

levels the the half profitability. in opportunity XXXX. this let first And the specific. of in half of me profitability. about do guidance expect the I think is, we higher I IFR year, year operate statement would At a that see lower the we XX.X% same And range. to second to XX.X% take our clearly, the be first we sort adjusted thoughtful And correct of would time, of range levels that of in were make of above anticipate so, that midpoint with And we very the to you're then

from Social with talked Security caps that and of a So, a ramp-downs that I XXXX of reset those about earlier. lower some entered we resulted utilization

the you of XX% revenue, with gross a the I anticipate lower days closer SG&A will results on stronger growth, our our the with utilization go be range bit the improved focusing you XX% to possibly improvement in half, half. than below I growth range, XX% margin, half. have margin XX% a think would in you're quite you first what we And first of in when XX% we in to -- the kind in the then that what bill to the somewhat So second that XX% revenue greater the to expect matching the probably above of then gross half stronger the to see SG&A see the second second in around stronger see see an time, At the and half. second SG&A XX%. half of would level bill going days in And probably and same the in is demand. little And year cost efficiency then

so again, in half half. XX% above the in of XX% below year So first and SG&A second the fiscal the

helpful. Very so much. Thanks

our you. comes with Cowen. Bryan Thank Bergin next And from question

Your line is now open.

ask I here. you. on Hi, thank wanted outlook to the

parts. a full-year guide. all what versus more So the as target outlook, you and this you you just level that of underlying weeks? XQ or given the trying a really last from saw, have that view the sort built in client normally And few client the you the maybe XQ understand visibility have baseline is a the year year, is and that at XXXX December different whether real-time growth to the of I'm activity of assumptions to full moving contract point in there would into the

Yeah. maybe positives clients slow like. January. challenging some XXXX comfortable as forecast. exited as around little sort get might think we're macroeconomic say we more little it's the clearly of clearly, And environment comfortable. slow gets a Clearly, all to bit But I more saw we seeing us what environment XXXX, think that shoots a of look is we're and what what potentially incremental with a call, to demand I more green of I bit And would see would a I December beginning

year other activity discussions that type at result, revenue the growth sequential and probably of between of think, the growth growth X% kind past. pre-pandemic feel in to see least the we beginning start full the of that with shows and generate with X% stronger for more view more I know clearly sort of then confident and that that this, requests clients. can with sequential QX year. And terms generated And we as a I we're seen we've throughout so you consistent guess, of usually and relatively And Bryan, in we RFPs

because say, it's Yeah, economic comparably -- as vis-a-vis as general others of well, you've our less out, also as clients EPAM, they I case got And reflection very given in [indiscernible] because the would a this trends well. the in specific [indiscernible] also assumptions more got slowdown work optionality slowdown got way a of some

as as which measure and up now, of start And in then that will to demand with consider that year. will this of pick do. would situation think So somewhere and we next then terms in situation this year the probably difficult closer for [indiscernible] this high-teens several our this, beginning be assumptions we normal and we to happen approximately we potentially should pre-pandemic be will growth quarters, end right the we mentioned go the and in the we again to

here. Okay. My margin follow-up on

just you're margin So the rank as out? trying profile three you just to you this lower from normal the degree pressures, any here, margin making new outlook. seeing to how change structural And, move decline this in wage pricing what you're year-over-year those Jason, versus are to there investments within diversification play lookout, growth based versus on outlook, just to this impacted can is which about margin global to the the and talk support just

Yeah.

first tale profitability demand. to of the a think first unexpected where it's is half I the two of lower little So the that, due definitely a lower thing is level halves, bit of

lower just [indiscernible] second we we'll have that in half. certain to demand matching make do And the appropriately first then And utilization so, cost half. said, in the you as

that all Then of last piece, -- the that couple I in the not years saw us to pronounced I basis over a year-over-year is, as power is think going I do quite pricing probably on just XXXX. be think think of other the

to harder a And time, And be going inflation. relatively same is driving world so at of wage around inflation come have the that lot price by. is bit high cost awful little the to an you

think think strong year I appropriate And be this we've so, benefited say, year going I sort a inflation. is do wage obviously of and, price where different from to let's

less price you're opportunity the year, see this still and high wage think to a I relatively on going inflation side. little

profitability. about lot and geographies, and a into talked that improve time of we will over [indiscernible] Structurally, new optimize will these sort scale that Bryan, we've

a think, the bring to to improve some to improve I staff make in in junior of hard more off bit scale. relations changes slowdown the with it's demand, little those that

as you the that generally ability enter XXXX. XXXX, as greater to you there's feel I when to year, comfortable I we move do opportunities, so and particularly throughout enter And our think on our profitability improve continue

Okay. detail. Thank you all the

Maggie Thank our you. next Blair. with question from William comes Nolan And

is open. line now Your

you were last what pipeline, a year. revive given steps much. very focus new business curious Thanks taking you're that adapting as the I'm with secondary to

are we the pipeline. What to doing revive

Okay.

for were I our is working is kind We stability but on us there this business. and mentioned about operations better focus to is opportunity global much this, of in talking giving think our us. on we consultants general, in which focus

time. is specifically We driven have today. new opportunities which market we about models, different this it on also we working by of But last a for are even this. number talked And

These [indiscernible] before. [indiscernible] for sometimes clients shorter transformational are our again. programs in programs, a will to be attention So

So But would multiple from to possible well. a really now we of think be don't new right small this to of couple as activities. minutes. I consulting-led in deals to support deals it revenue focus describe generation kind

Speakers] [Multiple Okay. And then

important think deals, are we can was So it that we've we still of and what when very, at finished than [indiscernible]. war [indiscernible] participate the the markets we to disruption that is beginning mention invited consider we even believe life clients' seen environment And and some that the in now, I of confidence good to in continue most at right started different definitely this alternatives. here not very given them where do important, large there are the

there as delay a this in time impact really were situation every visible understand, we seeing the QX But, changed. is I right as you QX think and now.

And Okay. from that was slowing. a you XXXX? rest or client emerging level see XX of And there of talk into those patterns those caution then about a customer top terms how they'd that customer any mentioned you -- to there you like perspective? can Outside where then in amongst the of geographic the two, top deliver customers base, is portfolio, top you with materializing growth a of top XX

of of ready problem don't point think different have regions. working comfortable. the clients there view, from and from really in portfolio the is the occasions are the We XXX% clients That's delivering point this the different point because today. view, of are geographies, have from well geographies now across a no there and of are clients to it regions, we majority today utilization, of very kind from balanced another is size again, I of we And work actually that with

else making as about some if very clients, that there a because trends will I you fast, some it's is everything but much time, decisions still more At in in other say clients today, else caution about talking are the everybody slower. slowdown. are There -- talking growing a then again it is with line much there same

And on no And normal of is there kind of the QX this, some QX. full in happen. will forget, a still what them delay. of year, let's is top confirmation of it And not mid

special we more next understand the account two, I of this -- think only month taking very for will about in bit or year, a EPAM. not an little

I even will in of the general, the a with us, more market. delays kind be normal the for think the of But to line in in the little action So rest one. portfolio -- decisions

you. Thank

question next James the Thank you. And comes from Faucette Morgan with line of the Stanley.

open. now line Your is

your Great. and Ark just around any should response in and those you're changes strategy maybe in bit Thank relationships, now Jason looking right relationships customers some of rebuild delivery what made I and specifically, the and wanted reengage pull the we levers client much. some you streams? expect or like. with comments to on work to you wondering dig to a pricing or to quickly I'm to can dynamics? more little of kind the And the of so pull the have

course, in obviously, I of reply, will general terms.

some and are the specifics more I two on overcome situation withstand market probably to due clear feel last challenge. think there our are make is clients another general about. the And there side, real-time actually again will a we decisions are months we here, sometimes much happening well, because to for for on specific in EPAM. ability as to the we comfortable, deals, And we our trends making There but still are are watching XX clients real-time. what's specifics specific

after the to war You and destruction challenges started, that due was could of infrastructure in in [indiscernible] imagine it when we first Ukraine has or the even kind of these couple Ukraine months of all delivered. overcome

we expecting clients have some mentioned and problems. I don't of we have people that So But because clearly they think complaints. were moved [indiscernible] thousands

us. is We probably now of this are right saying behind that

While the there. is still challenge

So with I say the when kind think, of rebuilding trust you caution put the client, let's there.

I'll just comment on And pricing. Yes. the

of And opportunity I as that there's less little able to so, go And for same time, make certainly we're that certain opportunities, still working win but at profitability going off certain we're make clearly, said, probably -- less price long the sort we're do the impair we're little over is going to pricing and to the on that improvement. we would term. anything environment and a don't

given buyback and and you for that. and potential quickly current how authorization, for on especially in deals? landscape you you acquisitions, are Thank capital what's are just about looking what acquisitions allocation, the the then pipeline Thanks. And for thinking

Sure.

had Ark XXXX, consistent priorities also that where the our for would to acquisition other in So comments that priorities. We were around made our be activity. similar

the acquisitions time, we continued through the At active And de-prioritized. to so due-diligence. aggressive same have be pursuit was somewhat of

Sometimes sort we've of disqualified potential opportunities.

acquisitions we also can in is consistent believe do we said share really I what prepared script pursue a with, so, my And buyback. pretty and that active

a And certainly active than in so, more we active XXXX, throughout we to be were do XXXX. lot expect

would say of same that generally I And the focus. sort

that kind them. platform So And flavor we're growth things Continental to sort more tending a a that in bit of are of consulting oriented, to probably somewhat things maybe have of see fair Europe.

look as to that to drive And opportunities in growth region for so, well. we'll clearly continue

so much. Thanks

next with Jefferies. from our And of Surinder Thind question line the you. Thank comes

line Your now is open.

morning. Good

I commentary potentially shoots. seeing think about green you prepared some in your talked

as clarification, than from are half in the near January? in of just that guess, near were clients? now they clients term bit the growth a what comfort case, So gives given maybe And are changes you that's and I in the or forecasting term you XXXX, some the if of a kind the optimistic in around in seeing more that challenges of demand of maybe demand seen back you've December the

I'll start front end one that earlier question. an because introduced in green language, who the the I shoot and to response the was of at was that,

business I units. sort do the our with of And so, David own and internally channel checks

business conversations heads. And commentary, Surinder, based number unit so a with was on that had of that we've

even little retail a return the goods, you so see, of bit with retail consumer And strength sector. also in in hopefully, will

and clients work. we So to look come back are seeing for begin

the in for beginning and is I client that even my new specifically between to ramp had QX of to said sort remarks QX ask teams. prepared who down

there's terms what of whole And then want so, thing. a larger Ark, than of RFPs of two. And anecdotes, or or you about just and kind of maybe in sort to series more and opportunities that we're one seeing talk deal

deals are the in participating mentioned, are work opportunities. with as is which There in right very are process sales active business we've development now. well. There and [indiscernible] As seen we some I our team the probably that some regions

and are to how think we confident have guidance this about I So we we about are working definitely asking the address how multiple I calculated, already, through assumptions. are but when trying you now right was

very than beginning similar Eastern year. is this market. is including And aggression last results now, right XXXX, it were and assumptions, so to really good about to And different question, I what transaction, I versus different you years in expected -- the where how situation if is lot be think time of efforts because think three a the XXXX, But in each at that there's news it different a of a the XXXX development now Europe. people was situation the feel will

be delivery entered and that quarters. pricing So within the will assume next we we structure locations across our we maturing new which

again, based in be fast time. grow country despite current new during we that bringing greatly with assumptions events. our, stronger it various pandemic demand usage technology, mentioned in good saw will it in before, maybe the growth, is invest that and traditional a were back. And [indiscernible] on year, and we coming assume slowdown because are And but status new We second the absolutely this not to the that part and of will technology, type we quo, be comeback, started of very again, coming the relatively [indiscernible] as world, the companies will what of we've of seeing

think to lead the QX in should assumptions standing right us combination shared number we and to which where with these come the I of you. our now ability we're

in as in think standpoint, year, past that follow-up we maybe lower-cost a at That's edge should what how competitive some we the global or the your It helpful. And clients Obviously, about over up. point, cost? has of and we think here, the a structural should cost gone average from the about cost footprint from seems like a has about How past of perspective? changed maybe the the talk gone deliveries you talent of delivery footprint delivery delivery that new this from be can Europe, Eastern of think had may that competitive it? your that

challenge that's we which are think which or now. -- a I working that's a right question

in aggression growth and inside Eastern Europe EU, time, in the Latin happened America. still also in countries At in over India many EU. like We of -- same fastest are headcount we that the outside of but

countries are, organic of is fast two some have which kind but this now growing which growth, countries because fast, of because new the impact. I we is So mean, allocation

we and right So portfolio a the regions requirements. in with line number now will time believe Latin do level and will these which Asia, focusing of EPAM and a Plus, in growing general of and across is organically comparable in regions. we have same with a Central our America, cost-competitive, is this Western we on talent be be at

a it's as moving that's able we well. be think manage the what exactly will simply target, quarters in I So bit next to but little

Thank you.

Thank you.

question line of the from David Stifel. with Our Grossman comes next

now is open. line Your

geographic looking benefit among your from clients' could Thank it Good -- demand that could guide, concerns break at XXXX lower of the the you if terms you. you're I'm in experiencing diversification you perhaps rates. and morning. wondering from down headwinds

David, terms growth And talking about in you revenue of or... are profitability or

revenue it break of those down. the if Jason, just could growth you headwind things, growth, three Yeah, each from revenue

Let me -- [Multiple between down was Speakers] question, revenue that breaking breaking what the clarify

headwind. So the revenue year-over-year growth basis, on a

issue for opportunity There of less we a think buckets, get of you than about concerns XXXX initiated And get. in then result creating economic is diversification, clients geographic what environment third, identified kind a rates I three some a process to slowing would on the earlier as is that. growth. typically basis, year-over-year was right? One demand who

I'm wondering dynamics could those year-over-year help So size basis. you on us if each of of the understand three just of the a headwind

don't now. Jason, can to would be think we if I able speak you create specifics right some... don't I know,

think to geographies, talked are we that people Asia, certain clients still our in is with complicated, attractive XXXX. of which same moved the decades we But XXXX. bit the little of We David, Yeah, with to rate some Belarus. traditional of West had ago comfortable And rate get We in from that because a Central location did would call, probably course, still I need into new we about, moved geographies in a full-year that in an kind we then, shows have what as changes longer see that the we the of comfortable region probably XXXX. in Ark benefit and second think way impact lot clients in make pure half term. up less, a rate as we'll

with And comfortable probably [indiscernible] is growing some lag say, so let's -- there. some very this just timing

talking were and were this, were about, clients well. we Yeah. it David, cost in things see I you on counted [indiscernible] existing the factor to split between don't think as is two growth clients more and very difficult what some

and there So specific trend is these a I almost distended more two, because think versus between calculation. these impossible it's calculation between

can't on of as how That's tens changed But say clients I don't of much definitely dollars counted again, it's which of mind. we million their we think all. well. couple -- So

about, ability we're -- just things working ability of expensive, very And cost-competitive sort our course, to of little clients the continue to And Eastern from are might high grow sort Ark these have I'll offer bit we've David Europe. impacted of but then, more close new comfortable deliver a geographies, got -- that clients from to in said, that clients for just with as be in And, these our geographies, are then geographies to sort comfortable think and are that been deliver as level XXXX, feel of throughout need. we geographies specific we obviously, of the I clearly generate Ark with, solutions. that, talent appropriate address to already talked

of of we questions, of new in just Thank at Got and any And it. utilization supply to previous as Fair look just in share in but I you rate you I'm about curious, churn can information that. or up question these a trends back, you maybe should the enough. terms came for geographies, think, how couple these operations. about just in you. board just new any of I'm all playing are with But and these that the as out it's model is any given new geographies dynamics of there recruiting well, start-up those there's observations if each think your locations? how that about kind over sure for wondering in template

Yeah.

to So it go will details. be a question in

as Latin mentioned, I India XXXX yes, in So, big and growth a America. was

start And well. was as in significant XXXX so It I'll a locations. growth actually those in

-- As so you in what know, it XXXX. XXXX was year. reasonably was already good proved a And

like India terms. I it XX%. was -- growing remember, same like Latin was in XX%, And America, don't the -- probably So

and in even India more XX% as it's well. in America XX%, Latin Now

status. we lot or grow our from And a in I build within So to And experience different of working. expertise, these pretty bring how regions, it's but we are comfortable. yes, and traditional, there think it's

this So bucket. one is

XXXX. this in war feel kind that in a of bring only comfortable what not it's after knew bucket, locations number It mentioned already other talent with experienced in we the started. started the started also in bring results it, where experienced And Another quality we well. previously, to And in in and we simultaneously been as we actually of locations. as EPAM -- local locations line from traditional have talent has

we think right speed, we now, of soon and working? were asking than when second was diversified, think the grow are more up. about as the have up, how now, didn't before. growth we are why it we different tools but much be many it speed what's need trend kind will how as that I will So very to are more to there, practices, XXXX part I how the be definitely That's to Group very you a as And hiring, we of speed is demanded able we before. comfortable

are late. bit think running I operator, little So, we a

have We one if we could. time question for quick more

comes Thank our the with line question Kupferberg you. Bank And Jason from America. of last of

is open. Your now line

does guys. surprised I which all the Thanks, the the a most? of like sound really There factors QX. is in you're guess, in just two-parter. impacting big XXXX, particular, the QX some the you ask I'll into revenue guide? because pretty type revenue And speak you that growth that acceleration in you you. can quick then in green you're Thank the building shoots to these and of between conservatism just feel is it incorporating guide,

Yeah.

in month obviously, January in saw clearly ramp-downs was and we the clients prepared we what script. that of about further think talked had a demand, I of specifically, slower with couple our

two it. BUs what changed, XXXX, kind actually, couple positive of is a QX specific customers. revenues we've out. was large At point, and stripped pipelines. there drive tonalities few same the the in customers entry so, And those our of probably and it just But to associated sort time, dialog cases, of with their The they were carefully some with evaluate is a

it's lower guide incorporate kind And -- so really is point, of quarters starting XX months. does obviously, four the the but

in in us exactly to relative hard it's achieve see kind full suggest of able we'll we for guidance same the December the predict year. to the guide. time, improvement beginning but you going the demand that want make we certain course, an to it So what November, gives to January that be where QX, we're to and are saw already in potential in of end does to that up confidence the that's and But revenue at

that question. answers hopefully So that

to Ark the this time, Mr. Thank closing you. Dobkin hand I'd remarks. At to like back for conference

always you call. as today's for Thank attending

As three you Thank in available And David help. to questions, know, months. you any talk you. is to