EPAM Systems (EPAM) 2 Nov 232023 Q3 Earnings call transcript

Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to EPAM's Third Quarter 2023 Earnings Conference Call. [Operator Instructions]. I'd now like to turn the conference over to David Straube, Head of Investor Relations. Please go ahead.

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

in would me have Investors President; Arkadiy and you not, Chief is remind and on If Financial Peterson, Officer. I copy Dobkin, CEO section. to today's on epam.com With Jason call like are available the as company's are made contain forward-looking may release listening those subject risks filings. today's to on that the some of call described and SEC and uncertainties These earnings the statements in comments statements.

now results Additionally, to and Ark. to are references quarterly been that the all turn have in of I'll reconciled available the reported earnings the measures that GAAP call section non-GAAP in located website. With Investors comparable over measures materials our to our are said,

and good everyone. morning, you, Thank David,

stated ago our do that our deploy services and Before what recap back the and expectations the certain like more get is results for I year into build differentiated optimization environment [indiscernible]. We on full quarter, outlook under business our for I cost would to the to third months services focused will versus in demand during our QX last regards market. transformation come call. was We believe of current while X

new You'll our core continue of expect the of the be AI strong said still digitization term, business capabilities. dynamic same platform to and accelerated working moving to At we into driven even underpinned engineering, data our more generative ML into from we be AI analytics XXXX. and by product as exactly the this core part traditionally we second negative to models expect the of reinvent demand IT to that with and ways transformation. And

and will from begins Here which to first of that experience already for better and These applied are return throughout the waters is and market the outlook to preparation rest focusing for the challenging action business premise. changes strong past positioning into of into part 'XX are in on items, plans our be our XXXX. [indiscernible] normalize. We very was of us us transformational the pragmatic we when That stated demand.

part [indiscernible] delivery standards efforts. operationally The on while improvement quality about closely to and stabilize propagate our ecosystem, critical was our further our gross our engineering [indiscernible] and optimize globalize second allocations efforts focusing margin

We also throughout expect it of XXXX. I year, throughout continue the remainder to and go this

global build remains So with let's that about while capabilities the key lower address application continue X reminder, Demand. believe specific through ramp-downs the investments. for historic topics environment, platform our than levels client work of new to key the for talk the to that and We portfolios. demand and demand quarters in impact

both our results renewed we consolidation client business, Our of the verticals, and is of point portfolio, energy also putting initiatives healthcare in and in addressing new Particularly engagement and interest. expanded logos while and cost retail models, possible are existing to [indiscernible]. What and to QX in important priorities stabilization long-term efforts today's our signs we including wallet of and business our and programs relationships. in to address sign in our seeing mix environment, of are takeouts in our protecting share in science highlight current all insurance life

motions and to and to well are returning sometimes While these in there. Also, we continues balance be and pump and business. go-to-market clients factors win to partnerships are to metrics, an today focus new are on short-term quality seeing that demand-led it and leading investments positioned global required cost signs quickly likely lower sales the increased profitability growing between

key new to into teams extending new are models and and organizations logos enterprises on focused client quarters, of large last in we from IT portfolio offerings and a engagement our the brands, in [indiscernible] our across our new of engaging at and expand more key are Over and field players verticals to often, practice clients developing exciting our horizontals, structure to global include both [indiscernible]. And specialized with mid-market broader start-ups business more and the new functions.

revenue improving despite the we it's our macroeconomic numbers care, with AI agreement AWS. This result week, announced too intelligence global examples them modernization, can these help to simplify powered opportunities. next to result And level wins. Last fast signs strategic enterprise starting partnerships, to and health clients engage during and Azure to accelerate results we we artificial QX. service. Current of advanced to back ways hope learning data of those global advanced business say growing in trend showing the the adapt enable application still this net environment transformations of momentum to aim of to and conditions, complex strengthening see taken and our intelligence, new the into standing Google becoming come shared cloud-native cloud to financial value new shape are nature, modernize, gaming. Furthermore, demand significant integrator architecture artificial relatively and our load up expertise machine accelerate previous. OpenAI data industries propositions, comparable analytics of quarters. Still, and remains with conversations of platform will our take Microsoft client in create and for our efforts contraction by partnership we to an where managed processes certain a third AI-enabled is when energy accelerate of increasing new EPAM with builds, clients enterprise this growth will and quarter insurance, to with in likely have while of partner key us expanded key Earlier we we which science, the notably life system enhanced And the customer the in recently One as go-to-market collaboration such us is own clients our new collaborations solutions growth, few to globally on show production number help trends reflecting our driving greater a development and in is quarter, to a services, quarters see status The partnership transform volatile Europe, track takes Cloud with help of business. and early their leverage IP to and

across we key globalization are of specific infrastructures. current while and of of our after growth outlook based global allocation And growth capabilities. delivery effort for and to efforts. rightsizing location office regarding is of and seen us stabilization delivery on areas stabilization future opportunities. Part optimization and India locations pyramids cost down future Eastern and and the Lat demand seniority Western regions the capabilities, multiple and Am are are Europe Central, Now Central Asia massive we've

efforts in America. Europe relevant locations several Some also and are in identical North Western

strategic And topic on we While multiple delivery us speak. EPAM which already optimizing results upskilling expect as additional new of engineering locations and key initiatives are we AI way first enabled efforts XXXX. continuous harmonization platforms. Those talent some the and our to This mentioned additional with locations, we continue and to productivity materialize to our across have by brings own of reinvest all we're times. to expand in seeing G&A past investments. efforts the to in in use global in benefits the

with consulting a related broad to technology in our include and AI strategic of expansion with expertise. Development solutions, agency of of across investing focus go-to-market cost-effective use capabilities, priorities continuously use responsible on and differentiated cloud propositions range are data of vertical as which ML business AI cases. We such now

today. The from cloud well for long terms and fundamental strong of in position of also impact transformations, data security persist of skills services the requirements modernization will AI by pent-up management and engineering and of just real core specific industry also still Our applications reliability and integrated benefit adaptive with models as should platforms even EPAM foundational new complexity from AI of the encapsulating and the elements profile for platforms. Gen composite demand impact trust, of AI, ML platforms to currently become in medium and technological closely future with more current in shortage and not cloud and concrete term both classes by available but which as

of IP to real our -- our and clients AI open-source focus, work AI our bench this initiatives. We our in number number as extensions we with own of on into with by data previous real-life centers have a and part have using ability tools growing see One to orchestration the that of EPAM our we our is work productize our integrated key use labs propositions Dial, a variety learnings of today, mentioned to through excellence cases of problems, we sources. our addressed them specific industries offered call. this a share created of platform are make and based And with which specific of and

broad a development a of investments adapt framework to rollout of One in to and AI is more significant EPAM related play our and it. responsible internal training AI

AI our efforts cloud to prerequisites in continues of related interest provides necessary in as facing of help into in a to say are us. the capabilities EPAM also believe to with and evolve demand the are for build complete the I confident [indiscernible] value understood and level that data of adoption the XXXX a we to readiness and front our level focus. To would to beyond. Till overview environment. talent clients proper of in are exciting demand applications becomes services, success. promised and drive and evolving areas still like for bring. Conversations key good in engineering it will and Today, state the modernization current indicate our of clients of our has and fundamental to summarize, are I that opportunities with that AI of capabilities data necessary generally momentum we general that

trained to capabilities manner. think much war for this year while Middle footprint. This demand working and manage the continues third of well across the us Ukraine balancing well. invest East into extends for require the challenge new being are delivery would them the adapt disruptions as and more as future a in we feel appropriate to We all as in I diverse supply point, in the the escalations to well company continuously at skills

would for for QX an Jason remainder XXXX. the share pass with business numbers So like update I and to to details to of outlook that, our for for more and

reduced an spending ongoing by well project revenues of In new impact XXX resulting basis Thank impacted related you, XX our approximate basis from clients year-over-year or in third market, across in the morning, the everyone. customer Russian reported quarter, currency and good basis foreign a reduction billion, of a of client exchange constant EPAM had in growth. Revenue revenue a the impact on to starts. The exit to program cost of negative year-over-year a reflecting quarter on as continued X% and point X.X% Ark, revenue terms, points. as our number over be from decrease favorable $X.XX generated

X.X% consumer The we by financial consumer decreased year-over-year based health a & late revenues asset Excluding our hospitality. Life negatively mentioned X.X% number was of life quarter X.X%, by care particularly decreased positive growth On data primarily declined space. Difficulty] our revenue a by was the previous XX% and year-over-year a partially sequential by a constant partially & in year-over-year currency return which was impacted have sciences in XXXX, sciences the driven we year-over-year Russia offset in a uncertainty reported quarter. mortgage management. large X.X%, of banking, and positive to Revenue in expect a services on by goods, next across end in transformational predominantly a ramp declines earnings clients rate X.X%, declines in the media to in call. reduction impacted quarter. Business basis, travel program in in verticals respectively. Beginning for their solid decreased by large with would markets, and in offset industry due basis, care in health growth & growth [Technical X.X%. declined down the spend by on growth during information growth to have

On our a verticals declines our Americas, region, currency. XX.X%. The top perspective, of slower mentioned declined in was Revenue revenues, by improvement year-over-year in in QX or X.X%, a from of and XX.X% basis, exit representing delivered reduction revenues X.X% was year-over-year an And revenue across in currency. previous vertical. And in representing energy, during XX.X% finally, in APAC outside than calls decreased by our XX% of impacted representing declined a our year-over-year or our relatively year-over-year generally now in growth our finally, customers the driven from its year-over-year Americas currency negatively primarily X% contracted by XX.X% QX automotive. XX.X% clients constant geographic growth XXXX. of X.X%. quarters EPAM's EMEA, our XX% rate XX constant impacted the growth customers operations. in Hi-Tech XX grew the QX vertical. In clients X.X% X.X% solid former quarter revenues. From our of and sequential and terms was X% constant or X.X% a work in contracted revenues growth down and the from year-over-year represents in currency. CEE in impacted clients earnings revenues, the services emerging of within top declined range quarter less constant QX, revenue we our flat, in manufacturing while was and Russian declined from of Software X.X% XX ramp top by of the largest Revenue revenues the our financial in previous

Moving down the income statement.

for offset GAAP came XX.X% for revenue in partially XX.X% variable the of and the in the XX.X% of the compensation lower to at of pressure quarter was to income $XXX $X.X take XX.X% in demand. the of $XX.X the was remaining of same QX compared was structure pricing XX.X% our X.X% is to in Non-GAAP GAAP of income utilization, QX margin last last we in compared revenue the on our in XX.X% year. a or XXXX last was year. $XXX compared margin holdings results SG&A margin or of Non-GAAP better company's year. Gross last last QX same revenue from XX.X% QX severance and $XXX to the reduce revenue in align the quarter Included last of SG&A compared Our to gross sale in was lower Russia loss level XX.X% million cost million in quarter quarter in in XX.X% as impact by QX period million to of reflects million year. XXXX year. GAAP negative to for QX compared gross expense. or Non-GAAP million quarter operations with to the of in revenue $XXX in operations GAAP of or steps year. of a XX.X% from compared revenue in XX% million of quarter

rate which in to GAAP tax on of basis the XX.X%, to related lower-than-expected charge Diluted came quarter was the tax includes tax effective and onetime GAAP Our tax compensation. disposal stock-based rate at Russia connected for holdings $X.XX. a a earnings excess was in XX.X%. Non-GAAP share benefits per

QX, the approximately decrease outstanding. EPS were quarter shares diluted XX.X same reflecting million non-GAAP a $X.XX, Our was diluted $X.XX compared to XXXX. In in there

last DSO $XXX the XXXX. Turning XXX,XXX the an quarter DSO clients $XXX QX falling XX same was in to with cash million $XXX QX were on quarter flow XXXX in sheet. share. and Share year. $XXX third our the days same flow million. quarter At quarter cash $XX.X some balance million days XX QX, was the a cash combined Cash and from of of in flow end reflects day for and to days operations of for compared approval XX for last was in million free flow and price of million weekend. Free compared quarter time year. The same for the the last repurchases compares to to increase the $XXX.XX are approximately shares in uptick per at average the review of in taking payments, an the of

$X.X of We cash we remaining. $XXX As billion ended the million quarter equivalents. approximately XX, of had September share and cash with repurchase authority approximately in

attrition of metrics. XX% QX designers, we production on the with has combined of We exit and a XXXX. from QX and continue levels our to involuntary ended demand. headcount the than balance Including voluntary as to XX,XXX This supply operational hiring of more lower both compared and Moving trainers architects. engineers, to few result consultants, declined is impact with Russia,

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

Now outlook. to business let's turn our

encouraged and are of customer by We demand these the our from efforts generation efforts. resulting results new revenues

enough not XX and spending generated being from our project customer clients. the reduced from of is new impact downs the However, ramp revenues offset level still existing top to

also but a our are American an planned in we several We degree ramp-downs stability at North impact European to our emerging are portfolio, customers. beginning expecting see of demand of from

there are signs, remains somewhat uncertain. demand encouraging Although

on QX, revenue addition relocate QX number environment. also holidays. QX. were of has despite stabilizing seasonality a headwinds to expecting also are usually countries In December had the the to revenue, we large foreign with the exchange that decline celebrate QX impact, employees demand negative comparison in a the we've In These factors sequential unfavorable in producing

delivery efficiently production. Ukrainian continues on organization to Our and focused remain uninterrupted teams operate our maintaining highly

with to XXXX. at consistent will throughout Our levels levels continue guidance we assumes deliver previous from that productivity Ukraine

efforts. During on by effort with costs demand our allow optimization and part this demand investment to cost clearly previous the is quarter, program focus programs. take than our cost efforts our think necessary intentional initiating operating to structure demand more near-term and initiatives, reduce it a We our X%. the environment, to supply third balancing across we This for people to is elevated aligning generation designed strategic X.X% action further in

I $X.X program. QX, further recognize in which program. a to optimization million $X.X million costs expect cost As result in of the to had earlier, cost this $XX QX, related expenses In million as we severance-related a we in mentioned of optimization

utilization limited decline headcount slightly in QX to to quarter. due will higher which managed expect in attrition, hiring continue will the We and drive

the year-over-year an basis, Moving $X.XXX revenue decline of by year expect Russia, to to decline X%. revenue from also a currency constant to expect approximately we billion, of to impact organic range exit billion X%. our $X.XXX now On of the be full the outlook. in reflecting We excluding

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

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

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

$X.XX earnings and $X.XX full We average the full in expect shares year. diluted For EPS share, share year, at in diluted will the $XX.XX outstanding. the be for now weighted per to we now for of non-GAAP expect will fully $XX.XX diluted range the be XX.X GAAP now the range to of EPS count million

Moving XXXX outlook. QX to our

$X.XX X%. revenue On a decline the range of the to constant We year-over-year from organic expect the an basis, excluding currency also in billion, to of impact we $X.XX by exit of expect approximately X%. decline billion be revenue to Russia, producing

For the income the from non-GAAP the be XX%. to of XX% be range and fourth to income of quarter, to in we XX% expect GAAP operations to operations XX% range in

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

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

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

in a is expense fourth support expected the expected be GAAP Finally, that is effective key impact The non-GAAP of to Stock-based assumptions few be be to million. foreign to expected Tax measurements approximately around of $XX.X expected exchange million. million. to $X.X quarter. adjustments non-GAAP to minimal. $XX our Amortization is is compensation approximately intangibles be

tax excess expect and million, optimization We we $X.X approximately expect in recognize related to our $XX around expenses cost million to be benefits to program.

to our GAAP Russia's these Please invasion earnings to resulting detailed from non-GAAP we quarters addition reconciliation guidance. the consistent prior release with GAAP to see to non-GAAP expect of for have our QX Ukraine. adjustments in ongoing XXXX, QX adjustments customary non-GAAP of in and In a

now of quarter. and fourth more $XX assumption healthy income interest expecting to items. position, level are non-GAAP cash the be in a generating of significant With outside million one GAAP other we are our our income interest and Finally, to

February. outlook Looking during XXXX, call earnings to scheduled fourth we our our for provide intend quarter business beyond XXXX

initial like to some our this However, to thoughts. I at commentary help would time provide frame

the mentioned, the believe into environment we persist of uneven, first demand Ark half this and XXXX. As will remains least at

which, on have we'll been into prioritize degree We some some pursuits pleased demand we're include of revenue continue the and in XXXX, with making progress discounting. to growth generation,

which more Additionally, to in to well annual as QX. variable costs in typically occurs cycle, increases expect due incremental XXXX, salary compensation we from as incur normalized our compensation

align the to improve XXXX our pressure the Although ability structure, still we limited margins. continue wage expect combined on pressure program cost better cost optimization will pricing to with client to put

demand a for in let's profitability levels the remain challenging a in for XXXX our EPAM, While in the been sector of to up confident environment. Operator, IT year call historical and revenue more ability open has questions. drive growth we normalized

line [Operator question Our come first will Bryan the of TD Cowen. from Bergin Instructions] with

here I large guess start And industries? tech stabilization in Is load, you I you a consistent heard again. anything how that dig toward client And bit Can that XQ more there? across on demand let's mentioned the trends prevalent XXXX coming highlighted just you early the back budget cohort? that think, production levels. discussions? client is it across I informs

Okay.

to that that Because mean. we're declining we It of else. of what what are coming clarify find production different to means. what's saw production. trend we some a of parameters, new our the much everything who which We're share work, and us. with opportunities from of the our about actually revenue, happening and stabilize a to trying general, number what we FX us coming comparable back end is clients are of way lot of in to back the discounts to it QX. That's me point is to businesses, business getting are influenced race means it's It's see some to not doing seeing we trend, days load Let But growing there work some in to with even view, number with people we're the with the revenue doing. from how but

we as where we have no we there is and demand of. is as of line this realization what more mentioned, conversation from mentioned time clear We've morning, opportunities. well. But this programs, So seen about more as environment exactly,

on work, clients it So like getting do but some to seems it's bigger. still difficult to pressure say,

with right to difficult say, especially and starting now. well we So see to geopolitically soon moving be as realized everything as

is discuss conversations, no So to clear strategy. more tangible, pretty more but there opportunities

cost the follow-up plan. on my then optimization And Understood. Okay.

on talk near And how about that the So here you in savings diversification investments Jason, for achieving frame efficiency you're what's term global growth? balancing can future time target? versus the

Yes.

to the over in we somewhat of talked So to will cost our residual is achieve X.X% about or the a that in program be taken place to I prepared of effectively the by us as structure. the with some say giving the take X% remarks, invest of designed XXXX. Most end $XXX year. be to actions would And early XXXX idea $XXX-plus actions then would further savings the there allow in would of in us million million

And AI, it's a in that's us so demand normalized in allow in it year. will effectively generation of campaign programs, variable capabilities, things programs, also to like next partnership sort then more consulting. And generative further fund salary compensation

end achieve And truly again, QX, savings of are QX the QX. to are payouts certain savings achieved of that either Truly, severance expect and that lease talk to there'll still some in be a of taken incremental be costs related in this us and much the as in I costs so allow probably amount the to we by actions XXXX. and facilities, year, about we other different costs incremental countries enter exits, again,

line next Wedbush Katri of will come from with Your question Moshe Securities. the

pre, have can bit that. your And a here. selling to be differ talk a using of profitability I able the Eastern Maybe about of some ability as guess, of kind new top that you one successes focus can guess, liberty to engagements. does hostilities in talk you those, in compared your what and Maybe how Europe. terms you want to of that, I about bit on your to about pitch those I of to generate India centers efforts

India capabilities, So new as from I have the because mentioned a us fastest even is think location for years. is as multiple for probably uplift there relatively X growing fast. is which investment well last growing it's still to times, we the it the India the investment if we

we So digital in practices. as type engagement of data significant practice the from same purposely we to and cloud have globally built practices

and question locations stability difficult have. any which in this the -- from we one in pressure is environment general everywhere because So a

definitely think to accumulating we're back. seeing opportunity So market -- And I uplift of the we but coming a experience. demand lot are

very have Now we sizable there. programs

that we understand comparable hire also investments, additional we people we which -- through hire with quality there. and them So do can

this everything pretty mentioned several we think about optimistic I and with times. happened, So we're that's as

think proportionately part I of bigger deliveries. will much EPAM this become

the And in profitability. I Yes. follow on just

characteristics So as of to some is operated than we'll today with heavier about traditionally we with inflation. about that to continue continue talk talked pressures we and last amount kind in some and had pricing the again, the on of wage we pyramid ongoing call, here have then

And XXXX. But when sort typical we of at hard handful to the for is through more so demand, India, than we with Europe possible say levels time in it's profitability or maybe geography run to did of certainly that consistent enter the we most at and look ability as of sort Eastern some next think of of profitability what more I'd possible, likely. quarters and return we given particularly

So we're again, of the working on and still Ark pricing right heavier a delivery imbalances as said, through, it's now, just some pyramid.

do where Europe, Understood. America that mix down just to by want are we And to mix can where context, India, and -- sort And in the road? remind you get Latin headcount us Eastern do then of your today? we what then

Yes.

XX% XXs. than low India Europe less currently... clearly is in we're towards kind Eastern So of heading and

all We and are we [indiscernible]. about this. in different of XX%, pretty Belarus, Central and around are right significantly is it's present India Hungary and because And Ukraine XX% Eastern becoming Poland between Europe, okay? or like Europe

Second largest Yes. delivery location.

Right largest now, Ukraine. it's second after the

the question of Citigroup. Ashwin next from comes Your Shirvaikar with line

now? me hear you Can

Yes.

Okay.

kind unchanged with XQ, what back your sciences. And wondering, I drive question growth growth bit I look obviously to and that I have you of by a commentary relatively by at XQ stabilization. with sense going life at with the look rates on results, idiosyncratic trying positivity I'm either basis, -- is -- of or decel little sequential compare very everything the the of versus what kind thing almost the guess when the of is I'm -- does either terms because more in I is geography So vertical or when the and were they I a rate on in

comment in in useful. How So have September course we little with can more of are in environmental quarter, would are evolved on bit terms be what be you than over of where areas. things different was evolving going conversations more the of clients the color radically A how July? the stabilization seems That to October?

Okay.

I think still client actually big right it's because have terms, apples programs and amount which doing of difficult even [indiscernible] from to decline now numbers all are There I and decisions last of best clients. declining the are the lot. is done it's That's is work getting see comparison stabilizing, new -- some we in the but year. got which apples if definitely our to with during latest you why to continue -- in general we

side, is opportunities we even fixed starting to for local positivity to after and period, to this clients us. back conversation other there some the come but or [indiscernible] see started programs, back On us new some that programs coming lot beginning. A why a decisions of this when was very

they some clients ahead while will seriously do Some have unfortunately, means of they them are very the they large them of as it. deadline clients delays and started And are there to start of consider making need decisions. have to sizable that to so specific

we a be a calls. apart happens, conversation making never going work positivity But was of better from this more are well. business And we of usually not quality program us, growing. because where for and -- level still is That's normal but that complex, more to enter historically was new where can small level. do very conversation and a So different the day is which as it there wasn't X. they're [indiscernible] lot it in, then It's it

of we for the now a So lot future. have right seats

we definitely see main point getting production is but as load is So as that more the stable. --

Yes.

QX. QX, that's exchange I build the say extent or to modest ahead largely looking sort certain we have when as ability available decline, clearly Ashwin the look also, about still despite And was talk foreign and we than basis, numbers look the you fact still the QX we decline saw had think the decline if a on less year-over-year QX. still in we to That and build as would decline don't I sequentially between but QX. a of a in a

And particularly we our is like adjust as about so North remarks. in if our that, for demand stabilizing, talked prepared does you America, during it feel

traditional And be us more geopolitical more positive more lot something to deliver of That well new and more also consumers outside our getting Asia quality because very complex. will and a are mention, that still and in I we experience general, Central Eastern more we're in as would locations. scales very, know while that environment like for able little, while is to looks there Europe, and stabilize Europe from Eastern strength a Western in again

really is to hear. point last That good

absorb to versus much because that over In terms clients is needed the opposed past as Ukraine, last because few that how impact move have kind quarters, decision-making? that client talk you was that. results, into when pricing, had of if break mentioned that on geo-mix and a loan because can of of you issue of transaction does of you a to that type pricing then equal we about crunching. And apples-to-apples obviously newer to volume down of the you the price And soft impact that environment. of in a imply pricing there Are to geographies war

Yes.

certainly, resources and you've And what more lower. But the are we effects QX those higher-cost to happening is that what's at I you quickly is me impact give India-based the here do, we had percentage. Ukraine we year-over-year let look begin that But have would basis, one Belarus movements facts. you from the Russia rates people seeing you see and and where think and got moved QX both can't in are So for the we in geographies. unfortunately, of of took the on a if exact into demand that

pencil. thing, that still speak the talked starting So shift is mix that you with, in about. And to provided it's somewhat concessions other then the and existing Ark then mentioned to with challenging with indicated, as also pricing some environment cases, as well, is the a sharper would and engagements has -- customers newer I

half coming impacts. got see more And probably part the see the which, profitability for that you've what in QX we show you'll I of again, is quarters. discussion in in so so of up think And bolt first around XXXX, them and

will Your with David Stifel. the line from Grossman of come next question

guess of that I a just wondering points last I'm I made up question. Just follow trying in could the to just if were couple just reconcile.

customer You've of production, the customers other last given some headwinds over of quarters larger information talking you've dynamics. about us losses, and about the a from about that good been lot several

work I'm just I that guess because you of I seasonal when think, hours So that trying back and FX flattish. kind to all said reconcile it feels of workdays Jason, you out or that

newer that coming pretty move the it Is like XXXX? experiencing things I to those by it this don't want but driving reasonable that's we kind to know in guidance, way work the as think quarters much revenues last is that those couple the sounds does about offsetting on into year. should of that you've sequential abate give like So of you in a end have headwinds. been feel headwinds declines been of

is very a at Yes. Obviously, place the complicated this time. world

absolute make I programs But customer so to more assertion. stability it we and in want budgets. And this are careful to time, be an at not seeing certainly,

And so does believe less seeing and some as we America, we entered these stability, down of ramps of particularly as it North we've we unexpected achieved degree and surprises QX. like we're that feel similar at look of sort

prepared do mention and did Europe of in we already we'll mess of been I we've it less in in while As who've little declines. feels a us of have we're that sort seeing my couple aware it customers resulted downs there. these in a ramp and unexpected notified remarks, see again, the drove sequential that QX now has both that surprises of right But for

adjusted revenue you'd flat you you to go build absolutely, QX so as have at out if the impact through QX. And

terms of a calendar down sequentially. be 'XX. your in got, into maybe which wage the margins on the you've dynamic, it utilization pricing question may looks And And again, went like similar timing again the sounds like extending

then taken and actions. cost-cutting you've some -- you're So factoring

that those of what into on historical we go taken So range far thus reasonable when all based roll to XXXX, XXXX? that's in your you kind the you've think targeting it actions elements, different you're as still is up the objective is

better the we in actions the to and with I the some utilization utilization half some So of in you'll demand, I improve first taking see QX, we're of clearly and that think in hope stabilization think of XXXX.

customer in the still lower of with guided think before, return you'll we've XXXX enter some gross we have still do to I there noted an expect build the we between margin QX, inflation. normalized compensation. you've variable we a which the And days, to more way with as is However, sort think pricing wage is XX% imbalance have David, as do I why compressed What to and XX%. is

We transitional next things. pricing closed we impact sense And few earnings the so XXXX view the QX the to XXXX that a that still I last and some we think will we couple is of been we're work again, then I've XXXX. And over what enter with are XXXX what here a happens year. we through talking the done quite pressures move to on as this see know we decline work year of enter as get as profitability haven't it's yet. possible in as opportunity as XXXX. assess be to we trying -- could about we don't all But wage how calls, from future where to And deals and that going the we somewhat

pricing a likely return rational traditional then at to more more give supply-demand more will point that us opportunities in of with expect We some and sort XXXX. and on both profitability

Great.

follow-up. Just one quick

kind as is play margins the into pricing out. that next we the to of biggest that year just letting headwind is wage go dynamic, gross So

I it do will me But I that is would pricing but be I time the imbalance now, talk. the to next wage. wage sort it's is between comment customer that of to yes, that be say say continues pricing and of the harder ongoing sort dynamic Yes, uncertain which to would we why for element, -- the right on able

comes next Your of Ramsey the question Barclays. with from El-Assal line

environment? trends. if I'm convert duration are could just in to Or this tough to trending trends? bookings ask I how stability average of is line you a time or seeing wanted about like things comment pipeline curious, it And revenue is booking or portfolio to kind just comes you conversion? conversion of of target to consistency it when erosion moving kind and still more on

-- think I okay? it's we think now, much second. kind of manageable, still of the don't think like is much very more if I way a exactly relationship, that's think same And and it's transparency the stabilizing. I talking you time, see what about situation. the versus it's much that At different I that's situation said in you're lens same more QX

this in going more see officially. region? thinking watermark whether basis you the relatively further prior curious, wanted draw to and Okay. about curious to I question Ukraine particular, in point? on Russia numbers headcount follow-up at think the of the And the sort follow-up a ended a in declines the about we down? as think headcount particularly should a on I'm should Belarus, could I'm kind an we we just of numbers absolute for in kind -- as be just Or that's absolute quick the to me. of those this And absolute Belarus, or about I'm do ask about plans given quarter numbers especially whether have way stable globally. persistent

believe numbers in much, and less like I on think the the Belarus And several geopolitics we Ukraine be and think on and trend just numbers, the more depending more client based stable significantly that absolute relative years very much declined of Ukraine. answer is situation reactions. Belarus supply-demand last And stable might simple, be would I than this ratio. there much, during

the Kupferberg comes question America. next of Bank from with Jason of line Your

guys I demand, some quarter-over-quarter what have closely to about and to that's just rates. wanted to talked assess know come the most you've back stabilization been of the just commentary you here. watching I around growth

-- to Just get quarter-over-quarter revenue looking do ahead about Street think think you to X% for the looking positive we back is first of the 'XX, then? I growth. growth quarter

moves in that. stabilization your I putting just in any parts first get some back take I do of potential quarter? the the to on the given on you wanted in So FX side think business, in of we're the positive mean territory

again, But but X X months. will assets, you we've positivity check you think we this right seen months. tell expect in in we'll should exactly I now, our

Right.

to optimization to going make of there reinvested. right Okay. And the follow-up, commentary, just get because messaging your it like some most sure Jason, margin of we've cost is a got sounds on the want I

what or kind 'XX, suggesting and XXXX XX%. like a then non-GAAP perhaps down you're range" back So it margins to sounds the... XX% you're directionally like "normal of in is versus XXXX, that Is or

Yes.

So we pricing. haven't we worked through -- still

to are is going We in there's very there's wage -- inflation. haven't is think, as high markets certain we not pressures where think happen cost very, what bubbled pronounced, environment, from we're markets living of through then I the but other

ourselves could back certain XXXX? into just year be it we where with it's range in so I'm do profitability through And possible that again, make we that talk and, that haven't to XXXX lower see will to as just us around profitability. And saying we we worked could lower XXXX. the certainly is I you about indication that in to was we a to but fiscal yet, think in is could think want the response there an we the get I question XX% maintain what that XX% working enter in operate position

of the next Nolan Maggie from Blair. with comes question Your line William

This for Maggie. on Jessie is

first, you do compared the performing EPAM that to how take you feel think Do is you're starting market? to So share?

think that plan. term I started clients okay? in stabilized, clients, -- again share, have executing plan policy the long we return to term some they some while to make, are and there a be like think they some I to taking we existing longer will according

As that which are Europe, happen. in to there Jason was clients know mentioned going several we

and then So other the stabilized take of in I think we back. share we the started to clients on clients, side, existing some

Got it. something going And say to then else? were you --

good. That's No.

just follow-up, that caused you ramp geo? mentioned for or Have But bright you those there. sentiment from challenges a the behaviors any there that some downs changing be incremental spot. my to then downs? seen ramp in appeared client-specific And Jason, Or clients are Okay. Europe

actually Yes. QX We sequentially QX. saw Europe between declined and somewhat

are seeing relative to generally, of is about. we been got a but positive we that a America. it we've these customers And mixed, has North more talked so And then Europe little couple bit

more would call So it's call I not broad-based what it and I customer would specific.

big I think between years. this these at change comparison there meaningful environment year-to-year this we X almost are less looking becoming is at no because

comparison So really this right happened. point from [indiscernible]. now, what's actually quarter-by-quarter And the showing

line Your next Jamie with Susquehanna. from the will Friedman come of question

wondering of and compare do in I application Ark. share relevance the had that development? at the a of if is of for, the was less would technology you -- How the more today's services slightly relevant meaningful, In known longer-term all? stack, terms you of how tech I key you're question, mind application architecture? some see especially development that or evolving,

will to build future. happening. from And think development is we application even and will the function try think important was more this obviously I predict I this future view, -- point of with everything become

are is And huge on presenting it's will And debt where build of taken this what function it's capability conversation So long kind of this strong a be still environment, very but share. because morning, will that the started environment quarter optimize cloud [indiscernible]. We happen be some of world. I now, now. even a mentioned point there is easy that technical know and but to [indiscernible] from yourself believe second still from for in-time Western, and this would be there now whole or we view, priority that don't this companies, too extremely it critical that years which and this and couldn't in we build believe done not in their impacted, all multiple point would to which [indiscernible] believe couple in times. environment, the this from I we be right do

And happening with rebuilt together. will we changing have said AI opportunities infrastructure, whole it back. what's be the new I application So will as will come to be think

So think it's I us this still how for why to as to advantage. maintain -- that's probably

Faucette Your the James come of will Stanley. next from line question with Morgan

couple a quickly of ask to wanted I questions.

But that can some help us the help what First on at little know recover a of And point, Jason, implications? through look bit discounting would et through you've it you run? kind of, like? medium the sense think able that. long terms you longer-term mechanism of alluded to I cetera. you think pricing, being just in mentioned typically what Can over to us to would make

a we're give this barrier some geographies. been play. an time India appropriate, other has as you'll to India do also in with depends but wanted us, is And probably be continue efficient, it you using, We see think is delivery more demand Yes. but more as it. responsive be will people or our important that over one attractive cost I'll that just of location for more Certainly, -- probably you Ark's to conversions

next it permanent. At mix year we standpoint, what same quarters still reset. of in that delivery, time, that's a India the of from is couple to don't so And take probably may pronounced a think necessarily the a you does oftentimes more but pricing see

and tomorrow the And sort of set higher. so it's Oftentimes, to over a relationships kind go, are price of now is hard year. your is higher demand

price up to clients QX. and of going locked XXXX, up why And end not all with year. to to earlier so I've during in you're probably we'll in our all And in the probably exposed we've inflation we'll campaign the it's And be wage course, that's some roles. in adjust during not said, of enter okay, then traditional price. opportunity compensation later calls, where more I somewhat an think to And XXXX difficult environment then in that in take got

at EPAM being leading to and/or you acquiring higher, capability and historically, and of just acquisitions do of about, Then But for if about obviously. of think how Ark Jason, second is stay you we're the for environment. just appreciate to new the to cost doing now to role guess with interest technologies longer future need question a that this that about I'm and has do thinking you I importance Great. higher edge. my long do how been how kind think and any was changes capital really I term think the strategy acquisitions you adjust in Jason. have that, rate good you and at adjust development. But

opportunity with I capabilities sort further of doing help would continue that allow we've think still our to organically. strategy expand we then same that grow acquisitions with us and the to had

significant be think you'll see acquisitions probably been, as still we'll more but tuck-in. that midsized in certainly, on we sort so focus that that small a careful And have are of to I

have that's financial advantage position. our And an we I guess from

do We were had to very not relatively the market very cash have acquisitions for outside doing in small specific what to good this. was specific we very a targeted rely to continue past shape or the exactly strong because doing position we geographies it a competencies on

I think much that's not change.

line question come the with from next Jain will of Puneet JPMorgan. Your

I wanted to ask on financial services.

Some there. your some peers you of have within financial talked seeing about weak. mentioned weakness services banking And as also

you what seeing are there? are you banking? they within Or the can headwinds So client-specific? broad-based are on double-click Like,

Yes.

we large it's we work then have where clearly, number other some in X decline. specific, guess, would have also of where a we client -- seen And us, probably that revenues banks some seen client the with, there's we've reduction I and For there.

banking soft is certainly -- opportunities other So services areas practices in somewhat the banking. I services, would seeing say in were elements so it's financial other for and also including financial relatively probably broad of with insurance. asset growth. And But management

AI? work it then that clients driven hear cost programs, incremental systems And coming optimization correct. their type some deals? to like clients by more are these generative core need that modernize nice to are still the of because That's the was projects Is back. of of of maybe some Or

it's with -- well. return, for but the the where opening program new trigger think I suppliers they else. because do usually triggering it And us it's with it's a then somebody as can [indiscernible] a where program with actually that's happened. the opportunities return Usually,

So it's we when happening. have already several situations during the last several quarters

revenue in talked going lot it we investments a we see that what differentiated the be client AI, and with there on now, ourself, reaction still do are right but yet, have impact not we we Gen which definitely is the So should. of about is all the exactly there activities to we direct see

working the So that but it's starting small. to size relatively against still opportunities create tangible of

So I be the or so. we going next will think to during developing us see quarters

Mr. I'll remarks. and call over that, CEO back turn to Dobkin, President, for the closing any With

joining today. for you Yes. Thank

looking So a unpredictable which the and of -- the think statement kind still several that it's very Unfortunately, we sometimes. quarters numbers more we place make ago. still why clear situation positive with more to all and is world to to difficult continues be that's said I

in meet you to be we and Thank months able X what very let's So share much. see will then.

all That will you conclude today's joining. call. for We thank

disconnect. now may You