EPAM Systems (EPAM) 7 Nov 242024 Q3 Earnings call transcript

Thank you for standing by my name is Bella, and I will be your conference operator today. At this time, I would like to welcome everyone to the EPAM Third Quarter 2024 Earnings Conference Call. [Operator Instructions] I would now like to turn over the call to Mike Rowshandel, Head of Investor Relations. Please go ahead.

Good morning, everyone and thank you for joining us today.

mentioned, Rowshandel, just Relations. of operator the I'm Head Mike Investor As now, your company's for results. received should third of XXXX By have release copy you the earnings quarter the

in copy call today's Arkadiy Financial Dobkin, and available a Officer. me President; are not, and Peterson, have section. With you on If epam.com Jason the CEO Investors on is Chief

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

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

large Our our results forecast and of reflecting since been things Friday better strong the continued than across significant Nedis most week, which last history. busy execution, ], on clients. our third us. does of we the expected, [ value came and portfolio in Nedis X signing a of X closed strategic is global we've acquisition our From relevance differentiations quarter in Further, is perspective, for addition core announced its acquisitions

world general propositions. sort joint and Europe. across and three, one, gives believe with service two, creates ] our which net delivery while brings Number will highly and of a Latin strengthening Latin accelerate platform entry near number with regarded in us and point and an America speaking our into growth significant Number clients' parts it [ to portfolio. in clients we our Nedis in Spanish value attractive new id and new Portuguese markets American new of And region, logos follow be opportunities unified local the

it key more across talking be about share some today, a highlights let our first, later me business. will bit We but

which demonstrate growth level to was client and globally a ability willingness year-over-year execute saw we our believe share performance we both broad of That level revenue client we QX, geographies, our The by and more improvements market results. We our in of hope all what outlook. across trust budget and to much capabilities with diversified engagement QX delivered During overall sequentially. stable driven be triggered and increased a more in a now their continuously are to in high client quality. increase verticals better-than-expected

returned software call life emerging health which biotech, verticals both out growth this and quarter. and includes and science to care, services financial markets Key sequential and to notably

are we In within stabilization addition, retail seeing travel. and media further signs consumer goods, business of and information and

existing continue own to Our encouraged mix comparison and our clients end demand see dynamics in Today, sentiment we portfolio positive in to navigate clients both first ago. acquired markets. new are XX with in days more a still their

engineering Secondly, unique we general transformation go-to as and a data product partner our platform for in our were expanding offering advanced and pleased with our capabilities. optimization while reputation continuously ability programs services and to cloud technology-led and maintain

return of well levels sectors about market our about as target our we summarize, To certain broader to over remain growth portfolio to quarters. coming optimistic and the of higher

returns in capabilities and in increased are share invest referencing to global in So capture continuing market we strategically demand full.

we optimization. the their However, close transformational critical efforts, the investment most market [indiscernible] staying a With address with up to appetite, speak. most they about our think we are to variety clients focus adapting ourselves very prioritize world of while needs, delayed continue of likely broaden conditions around end continued own and currently, assess a as still their navigating decision-making we do meet some and to that, caution see and all cost on

their diversified company industry support both building strategy service our delivery organically As perspective. to advanced realization us this past, for the through world. from most models ] global the And further executing and reference and based in a is that, acquisitions, transformative enabling on are times in [ investing on we global global and on clients our our many becoming stated talent new around new business is capabilities talent the We into by we key us, strategy markets. believe successfully focused

. currently, major hubs on As X result, delivery a focus we global in [indiscernible]

remain their In to and most to helping Europe, continue differentiated clients address technological challenges. complex in we business our highly

and strong Our core intact. engineering DNA remains very

which better-than-expected than largest quality hub you European Union existing to QX As continue countries, our and this Ukraine deliver around zone. European in logos our clients from across results, we dozen well more a the new can with high our mainly operates as delivery see as including with

will for addition in recent derivative not the signing for Europe strengthen services further footprint clients, just our financial especially of but to our future user With resourcing, those. limited with

more We in when later it will be ready about to in the details talk we QX. close transaction

of which focus differentiating based division demand service growth and In other for more to pleased of very level our product has India, on services majority we players. are engineering compared with

building off year, similar from X,XXX investment we as we back as added India, future the growth Latin In are and expect the professionals country. India XX,XXX process we the XXXX in to XXXX see well. are over following And robust for investing Today, Our people XXXX. America, now. dating early to in paying by the reach just this

on the As with scale milestone capabilities expertise. X, depth really knowledge, mentioned our up will of and completed significant acquisition a Nedis. This acquisition company leadership, local our global we November and already, for represents

our Mexico, in Portugal. the market and countries with doubled delivery and other also notably relationship therefore Argentina in X,XXX demonstrate the clearly Nedis, among in [ Brazil portfolio but in and immediately region. strong client approximately Spain LatAm, we Now footprint Really our differentiation Colombia, expanding to people, ] presence

addition SAP. in system Latin as cloud Today, well is strong In Nedis and automation AI to data SAP America, development Nedis market developed recognized strong implementation, migration has application regional very and practice. a in leader

effective and current practice proposition. platforms our to further enhancing globally enterprise core practitioners thousand over brings our It value

verticals addition to across manufacturing the key telco X,XXX our capabilities new we're In who in in Today, and in practices. bring hub continuously relatively many and nearly all Central a our of the previous strong Western X. people building delivery technology globally. major global representing we have are region also Asia, Finally, they local

We healthy more talent along energetic with young mix senior new strong have of population, a a very future for junior growth. and opportunities hungry

and many, AI of parenteral Now generate X and We target for organization do highly to advanced also our internally about our represents X-dimensional. other that a talent for mitigated approach important deliver is differentiator In mind talked advanced a we top let's internal back turn own using remains mentioned to of to focused transformation It's quarter, our how AI. category and is we a this what our trainings, skill-based Last us is transformation and tools methodologies related and processes. ourselves. office camps in and and for boot Gen which efforts. productivity efficiency everything key upscaling

closely X And in them. of Dimension to AI Gen type of place preparation os about X programs other around platforms are EPAM interconnected. very we is methodologies, us client and digital be solid EliteA. opportunities client and helping data currently, AI/Run transformation AI-enabled partner EPAM to those and centered and encompasses dimensions life X must continue major such for partners, Gen closed EPAM DIAL, our across ecosystem is also as And enable Gen transformation success. is all all network, make dimension Solutions, which finally, All cloud when AI-driven progress

However, value. for client on and generating of X pragmatic to we and real our like efforts combination focus driving would bit illustrate today, to engagements dimension a how X are

arrangement strong very spectrum seen has our across with EPAM XXXX, clients full the Throughout AI most Gen initiatives. of of

AI services our in consulting all business capabilities AI core often our and specialized helping our consulting redesign to enabling holistic external customer to all to service implementation major accelerators. platforms across engineering, business cover optimization, programs programs also and including an internal such approach by verticals. assistance experienced operations and JenAii of interactive services, For our our including Such include with bring

When we the our engaged will we and on XX% with type them you of from we expected Gen at picture. inconsistent look directly of XXX those initiatives. size top about and AI see look different If maturity perspective, across clients, are

Gen early-stage ability our map X are outcomes. road This So are clear based where on to and get year, AI this of or what X and AI engagement AI starting saw help we readiness journey broadly. X top focus year, transformations doubling and bottom clients where compared start the enable quickly see is their on a our last we Stage line outcomes defined Stage we projects are with of projects requirements. Stage midsized and far to more by demonstrating characterized horizontally to call to driven a to more defined we vertical

scale. our combines with multiyear capabilities dollar construct and to AI multimillion and These new engagements are data Gen factory programs

comprehensive life organization. manage has year within this work or complete we solutions enterprise-level large-scale ecosystems might and where includes cycle, client which transformative establishing models most are our product entire factories AI integrated of services. Our separation involved AI Those the

During these have been terms XXXX. much be grow millions of of engaged we sizable in which believe a this range, of faster year, dollars in programs few will already we and could are in which

share Now a let me client few examples.

started on governance, AI data from few [indiscernible] in old, time for program life with health company. a was story ready transformation Let's of that and and manufacturing almost fished AI covering nutrition This an the cases. responsible cycle use XX,XXX-person of as client in start on jointly operating foundation full days our with business ], organization products. regarding which from team to of platform ] before data a Record just stage strategy Barcelona, [ transformation XXX our model multiyear really variety large story, main a transformation being construction real the for a this the the [ is setting stage the presented years framework, We data global where and

based world built ago of that major story allowed developed mentioned continue we into about months strong StatGPT In X financial XXXX, progress future. with EPAM and DIAL language. users It Monetary briefly in back EPAM using our Quanthub collaboration XP. is Another Fund different. version the to the talk It was economic platform the making we first and on that is International data

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on representatives sets went and more process, StatGPT than was sponsored by data international which national from AI institutions conducted month, SDMX the now statistical large X XXX of as Just session DC and available a XXXX publicly the over statistical included it the Measuring presented and from national be Economy. in will statistical evaluation agencies organization. in result, this and called IMR In forum Implication

As an access for data platform alternative simplification globally. users community SDMX

are conclude, stronger-than-expected pleased with To we our results. QX

Our differentiation evident. core remains

value, our deliver quality for to continue clients. excellence We and

our We executing market at time. successfully strategy the our global growth and main and while capabilities are same expending

Finally, be we and continues market EPAM share. continuously rapidly believe strongly most We and rebound to advanced and positioned the demand capture generic in ourselves engineering in upskilling capabilities. to well

Let outlook. me and results turn who now details over QX will Jason, to provide call the additional on our

Thank X.X% In a and $X.XXX terms, on impact everyone. third the reflecting constant year-over-year of a morning, basis increase positive currency EPAM in XX of you, basis reported revenue billion a or points. quarter, X.X% exchange generated Ark, good foreign of

and would have Russia, currency of revenue in respectively. increased exit X.X%, impact Year-over-year from our the for Excluding X.X% constant by reported

addition to growth, contribute and growth. solid saw revenue positively operating In reported of performance to profitability. the with growth, verticals X also Along to industry out revenue this also EPAM delivered X the company returning year-over-year

improve Polish further Additionally, profitability to the government company incentive benefit from in quarter. recognized the the a program company's

GAAP the and non-GAAP This has incentives incentives Poland. During for conducted by XXX purposes. the for qualifying million pertains gross benefit $XX.X cost benefit activities and improving amount third research out from of expects revenues, quarter, resulting company and been of basis for XXXX million margin adjusted to this IFO activities to the points. of in reduced conducted benefit the company $XX development recognized receive government in

in non-GAAP margin adjusted gross derived points. in year-to-date benefit by improved IFO The activities basis Poland, remaining from $XX.X million R&D XXXX approximately and XXX

other a further the expect receive incentive approximately in XXXX will of and to recurring future years. We and QX fiscal $X million as that benefits in be estimate as benefit well XXXX the company

rate during reflected While to expense reporting the and impacted to is incentive operating XX, X XXXX, for the as and respect ] purposes, the a by was [ tax X negatively R&D the September of incentive. ended GAAP accounting benefit receipt effective with poll the the months

increase the the to the rate in R&D of net contributed IFO, QX impact on EPS. Therefore, positive the incentive Polish GAAP of GAAP effective $X.XX tax

$X.XX. For non-GAAP was EPS, contribution the

sequential sciences, The pharmaceuticals & XX.X%. demand growth and as year-over-year, Growth vertical well clients driven this delivered Financial very Services to year-over-year in strength fintech sector. also as driven improvement by in of in X.X% increased across from healthcare continued growth was solid by an the in vertical performance. Moving life our banking quarter quarter. the sciences delivered and Life med tech. clients strong insurance

decreased retail largely X.X% and offset due to on growth year-over-year declines travel. consumer in partially and travel Consumer basis, goods, retail, by a solid in products

and to the impacts up quarter grew QX declined year-over-year. down X.X% was media Software hi-tech ramp information compared and substantially XXXX. in Business XX Revenue of X% clients.

our and our From Americas, solid on region, X.X% sequential finally, year-over-year of quarter, a a basis in growth currency revenues, terms. slight the growth. X.X% largest by verticals in manufacturing. delivered driven energy the reported revenue grew vertical returned constant QX X.X%, geographic XX% positive the emerging in However, and perspective, of And representing our clients year-over-year

EMEA and currency. our X.X% in representing QX XX% revenues X.X% contracted of year-over-year constant

the signs revenues. However, ongoing top year-over-year, terms represents to showed our revenues and of our our of QX, growth X.X%. X.X% clients year-over-year from constant In region finally, from in APAC increased X.X% in top quarter. XX now increased the X.X% clients currency sequential or And XX returning X% outside revenues while grew stabilization

statement. income the down Moving

gross gross quarter from GAAP the margin last margin compared GAAP XX.X% XX.X% Our for year. Polish Both Non-GAAP and margin XX.X% the quarter for benefited XX.X% the was same to non-GAAP R&D was year. in quarter incentive. the to of compared last QX for gross

ongoing compared For QX in been XX% at in compared the a in was SG&A benefit of has GAAP activities margin, QX cost XXXX non-GAAP XXXX efficiency quarter same revenue our excluded. the managing our in the base revenue focus increased with result XX.X% of improvement last gross to our of in on of XX.X% associated Non-GAAP SG&A to came SG&A XX.X% is period in and last spend. year. year.

was from in revenue in of million or million million operations income X.X% QX last GAAP of of income revenue operations $XXX XX.X% compared $XXX quarter to or Non-GAAP from $XXX the year. was last income $XXX in R&D of of include compared in XX.X% or QX revenue XX% year. of the benefit non-GAAP the GAAP operations Polish incentive. revenue quarter a million from Both from to positive or and

been excluded. benefit the the XXXX income non-GAAP For from activities operations, from has

tax XX.X% Our came the rate for our rate GAAP and XX.X%. effective was quarter tax at in non-GAAP effective

on had mentioned adverse an on non-GAAP $X.XX. the GAAP impact earlier, rate. GAAP basis Diluted As R&D and incentive tax both Polish effective a earnings per was share

was a EPS EPS QX Both GAAP diluted non-GAAP and non-GAAP Our by positively last reflecting the to R&D compared $X.XX impacted year of year-over-year. were incentive. Polish increase in $X.XX $X.XX

diluted associated the excluded. EPS, been there has In QX, shares outstanding. diluted non-GAAP approximately benefit For XXXX with XX.X million were activities

end cash QX equivalents end per days free was compared to year, QX, the XX flow free $XXX cash at flow level third of average $XXX quarter and in $XXX.XX from flow same our in same At Share for million and to and flow our last sheet. QX million share. for as the cash quarter quarter were price the representing XX to compares million $XX DSO in to year. cash XXX,XXX was XX in of quarter highest flow Cash were for XXXX. $XXX billion history. million, XXXX quarter. the our the million cash approximately of and shares of $XXX days an Free of Turning balance same $X repurchases Cash was operations days of last for the compared of the

consultants, QX than of XXXX. architects, X.X% designers, metrics. We on QX a and engineers to Moving with operational to compared more XX,XXX decline ended few a

to additions with for returned X we the net XXX quarters time sequential first in of However, employees. growth

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

Now in the let's to In North we growth continue business QX, expect outlook. turn revenue in year-over-year to region. our demand drive to America

stability our see to geography. beginning are demand we degree emerging Additionally, of a European in

QX flat year-over-year, from result, acquisition. be we to expect revenue the now Nedis a XXXX contribution approximately As excluding the

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

mentioned QX earlier, further to R&D in Polish incentives. government benefit expect As related we

will returning QX quarters finally and We expect headcount of anticipate growth to decline. our continue after production year-over-year grow X in headcount to

of is expected full Moving $X.XXX to year be range foreign billion exchange effectively to the positive of $X.XXX our year-over-year. to approximately of outlook. flat now is a to Revenue in growth on billion, impact The have expected X.X%. impact

in of months December. organic the million of improvement Nedis reflects our Our both the and for fiscal half in contribution revenues November year second a plus from guidance $XX

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

from be XX% of range to XX.X%. the income non-GAAP in now And operations to

to We expect tax be tax continue rate our be rate non-GAAP effective now GAAP XX%. will effective XX%, to our

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

our outlook. to XXXX QX Moving

Nedis expect expect full our in a the of year increase We our currency On to of for range to of X.X% year-over-year million November year-over-year. increase $X.XXX reflects December. outlook, QX to a $X.XXX producing Similar X.X%. be billion revenue $XX revenue a the guidance to QX we basis, constant months contribution billion, from and

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

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

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

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

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

a related driven to We around $X stock-based tax optimization compensation by is program million. cost to $X be million. expect our expected of shortfall Severance

income. assumption of to a more of level GAAP are healthy outside We of X significant maintain a interest our non-GAAP cash and Finally, generating items. level

QX Derivative on X we However, in Based to reduction and expecting we resulting to approximately $X [ interest ]. cash and be of the in from First income decline expect Nedis income other both acquisitions to now due are acquisitions, the these million QX. for interest

While this cycle more run to we a continue environment. will through normalized we the an work our positioning to stabilizing EPAM efficiently, demand company of on way demand, capitalize

Lastly, my our focus their continued and dedication serving clients on and thanks employees for for driving to results our all EPAM.

open the let's questions. Operator, for call

with first Cowen. [Operator comes Instructions] of TD the Bergin question Your Bryan line from

here over It's clients budget discussions the you about 'XX in behavior that good are to you're the recent with most and can months. you early noted X think areas leading that optimistic just the hear Are that recovery broad on these that client as last about particular improvement in you any there color share weeks, discussions?

we certainly sort think We're more where recognize and improvement continue they've to early too comment see a but I on what are company. make services. improvement the see life clearly, continue it again, like for I seeing it's and stability that, in the spending start in improvement think expect a those do and QX, Probably investments care, we does feel domain need obviously of probably XXXX. reached results as relative to success budget necessarily and to don't we're degree our point that's there's up we just to bit exit partner we and with reiterate of fiscal we beginning improvement our a see to shows that we And with something seeing again. would incrementally I little hi-tech have for on investment in still then to clients But feel those know sciences clients, conversations year. health constructive. good It in obviously, there. they financial got that

then incentive to benefit follow-up, R&D just here. And on expected the Poland this a is continue. Understanding

margin us rate [indiscernible] else all this will just Just can refreshing then a tax about on equal, help give on you as we of sense the how effective well Headwind 'XX the think as and gross forward? much

is it talked for which million of number kind entire I of gross how impacts million was that the $XX So all benefit and year-to-date that I the we think the about QX, a $X margin. QX, that guess, about

think be Poland, the sorry, if gross And is quick looked and adjusted post at you X still margin and adjusted QX XX.X% about we'd for a that XX.X%. at be the if quite so would you I benefit, of out IFO then takeaways on the tax strong just at

between to let's have inflation As the a, we and we challenge hasn't for of gotten worse XXXX. to very look we improvement level some benefit we've ahead, there do disconnect it, got call still of have inflation increases we wage wage continue I price kind modest do but price a a pricing may expect where in but think think similar be that got and environment opportunity next mean we've we year,

to I profitability. that's still pressurize XXXX think kind So of going

I've what last been earnings with of calls. consistent about over couple talking the Somewhat

from Keane the Next line with Bryan Deutsche Bank. comes question of

It's guys to talk what of are European little helping and region and going here. bit a you're just good hiring the that the outlook what progress seeing head, is revenue perhaps. you kind seeing any XQ in see. the and be Can you revenue on the Congrats that into there might per with about pickup

generally, as mix about, positive and Yes, indicator. leading in is in talked headcount said you're also we the QX that asking we've is we've that in see QX, a to expect talked again just increases which about headcount in increases about

we're a we're to point globally. think see now broadly more also beginning where at We hiring

India America, other Europe or Eastern in geographies Latin but not Western in Asia. So and also in just

beginning of you're to I think something kind So that broaden. to see is beginning

organically. guidance the at looking just then And

at The than fourth little came the third guide a quarter midpoint. better quarter the bit

like I the quarter. in decline being just so. of mean, basically midpoint, fourth or X.X% maybe down Third a flat slightly quarter

third thinking tougher about things in saw conservatism outs quarter minuses from plus some fourth the go improvement is think fourth going we and just in the call about quarter, into third? to or quarter the Just there we to comps or the as any terms versus of

seasonality got impact between QX you've and Yes, a QX. significant

So have you you've impact. holidays then for also and classic just got low more more got you've vacation,

that's of in what's clearly stronger thing So in seen modest growth you kind out, sort stand-alone as would our though, in have that where results of expected. sequential QX X think is guidance I -- The decline. business but are a we we a improved call I a see QX versus than originally our results

you if about to If about did XX.X. guide Nedis be out the updated the the guidance we think Nedis, XX.XX X.XX. we to So adjust talked that would pre we XX.XX

So time, we QX. to we're expected with when better-than-expected a this the we call. stronger At QX expecting stand-alone than saw again, we the business, had also QX see clearly, earnings did

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

on any amount that out, secondarily, we other year-to-year? R&D change the incentives I'm look Poland. the And from for follow think opportunity And to understand, that model in suppose, or into will does amount then here that words, incentives on like the just I from an quarter-to-quarter other is trying to to up should from jurisdictions? is other wanted I there I flow

okay? at some that to obviously, we'll incentives be, level to year this pricing earlier And continue advantage Bryan similar say, expensive a is have a benefit somewhat we a, in said improvement but Central an kind begun environment, a time, we And I the there the of next to particularly more have the And look continues not wage are the at we'll say, in moved think we've that. inflation. opportunities, I let's Poland, great taken Europe I that have evaluate as we with environment. do worsening of. that's same there question. offer year, same geographies of time, and not to we at think do price into take what just would No, in

for profitability our XX% thinking been kind about to have a in of in XXXX. about talking below while somewhat I So range XX%

with think year just again, at encourage XX% the again, below So the our about somewhat to still be time, see way, inflation. because modest in business wage and think and improvement of people I environment incentive, some I I exposed would to XX% same think even is price to a next that that we'll what still degree you'll Polish

mentioned M&A, for continuing strategically to follow-up quick in A capabilities. invest me. you On

been of You have activity obviously of the we looking assets level quarters Should expect active ahead what of similar are lately. pretty guys you a in sort types and for?

with said the change much. ]. assess will specific I the or that think approach on capabilities specific happens components. leaders would small function but be before, think that our play same in opinion in didn't very last be We'll we to But our quarter. acquisition don't you future, the we level [ Polish And size more of It impact. just we related acquisitions focusing general, during in for purposes what also I as [indiscernible] [indiscernible] would be in it expect with it's line of right

Lee comes with question from Guggenheim next Your the of Jonathan Securities. line

up. delivery a talked Europe back Eastern Tremendous demand of to improvement in you've expecting in here. in you demand picks back any that and Central to as your customer conversations Have evidence just meaningful see Historically, the reversion yet? about seen

We begun to see some Europe. in demand recovery Eastern for

Yes.

Jason all locations. as think, to carry mentioned are we I starting already, across

Latin During the and it and much we for India. see we to was of now trust clients, XXXX majority [ only what Central kind not it's capacity was more now, some probably the America 'XX, to us previous ] is Eastern because they absolutely focus champion right for also in increase stabilize the teams diversified becoming the -- and Right India Europe quarters, second.

Again, seeing works. how infusion large, want don't to the as So to we're see we but now. right it trend which that's pay a mentioned we'll we before,

makeup accounts. any geographies you from follow-up. It's of the in see any pursued that seeing work there been Are a of you're those to that cohort? seeing to again, across And have And accounts? type delivery good your top or improvement changes shifts other the

transformational to more much saw started positive from seeing than in more And activation we consistently quarters much we're to programs when general of programs. ago. go not just necessarily offer faster Yes, changes realization to we've but seen stabilization several

situation positive the now plan we we given our a faster are next again So last better quarters. as during many movement [indiscernible] it changes we factors anyone are it suddenly but there is on all it's couple much to again, to external ] opinion would that when while, if side. we it's than expect from or positive need [ to too like of Even accelerate one. which plus to Projections much again, understand foresee quickly, There even start

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

about you any bit you've a related Could you talk profitability exclude either improvements Poland underlying or this benefit? sequentially year-over-year quarter, when the seen little

obviously I working and we've improve been had positive impact. utilization, that's mean a to

obviously, also a improvement seen, revenue. of percentage in SG&A as You've the

positives. So much we X not that the continue we to a pricing throughout early a think have have just but year, we year. And as improvement those I the haven't are is fiscal promotion impact the been changing, seen we've talking price campaign about, in

introduce more again, talked comparisons, about staff And still so broadly as as shows to little year-over-year more pyramid still you to beginning as we to on when opportunity juniors are globally. an a have we that do But beginning well and bit up. work Ark

trajectory spend plans of margin a and synergies, maybe you your these could acquisitions profiles the commentary then your around driving there? for and And acquisitions, on plans integrating these particular, time in some the little for

we clear acquisition let first on opportunities. really ], later then any is expect specific pursuing that that today's yet. integration a of the of we've right closed where that direction we sort me some Nedis, the opportunities with would in an we're which quite now we're guidance. to but And have from clients working close Nedis already quarter. QX. not provided standpoint, a expect don't in focus the From contribution million in as any Nedis do $XX and First jointly not Data say for newer of actively existing revenue needs meet of contribution have [ of combined EPAM and So number kind engagements some has it we that been We with

focus think first the somewhat the the to up question, that again, acquisitions lower expect than book From of that the EPAM profitability will about of so And very have is profitability combination and revenue EPAM on, we growth stand-alone. both things do really just that's say that is and I we Nedis. exciting X these would of pick

said And to [ about probably Rivet sort XX% so of the talked First in I've would XXXX a likely low And we've in historically sort XX%. Nedis contribute ] both more teens. be to of whereas little bit that we below and would

this we'll below slightly sort this modestly but wage when in adjusted impact is inflation on negative in of And so a XX%, of impact of sort really guide again, I have most the IFO disconnect. pricing, floor

I that is would add think what companies. these you collect I

the very much focusing on case. quality of and engineering quality capabilities most are We of in

deeper focusing very diligence now of the we very integration So due right time company the you perspective, because under because from to capabilities, carefully win compressed. to also characters these pressure, understand deeper is do when deals,

we capacity equal couple But realizing broad where this synergies opinions core company and understand know collect the is time, [ there's on we year ] we have risk be next because we next can our of in financial today after it. as how business, the definitely their of well all same you the again, and clients. traditional more working it's be market, It's areas placed improve So capabilities right -- we'll on X the kind plus because some all something bring parameters the like years. to at not, it's the to can X

the comes next of of Thind Your from line question Jefferies. Surinder

you as footprint the on diversified a about footprint. global maybe versus concentrated in having can perspective delivery more a comment Anything a be more maybe there we should from you more aware of past? Jason, structural margins think

in about I of this, this Western change I are, versus levels. throughout believed the if more X change Asia India think a or understand a people radical think, is don't I versus I question about significant produces similar talked We've ] a margin profitability than or profiles so have think and Eastern think, shift a that the geography is into Europe or [ businesses another

to has on of without from increasing increases both seniority this ] has to it us really again, able kind has been pass substrates appropriate then been us still wage I And the environment in [ that those do being clients. impactful think pyramid what of has, just sort globally.

the talking that change And environment, so what in I clearly, in with ability lag demand a And of the it would see in future with revenue. the environment. demand Ark we do terms the improvement think in a an then you pricing. and But were might thing about to also improve improvement eventually a first is see you yesterday, is that that, comes

opportunity Or terms the there in pyramid, general versus seniority terms of reshaping is on we can this the go-forward in then way point a the the perhaps employees? of that And pyramid think at the about in basis? should that you the of quantify a how just

And will doing we demand a is change we [ pyramid know be need someone we accelerated and there's definitely steadily, think the might on and else, how answer I models locations to think exactly market. We and market months senior simple that And much have But basis. like gross a demand encouraging it how because whatever different it months But now. the for to even on can that benefit going I of about we from we will XX recruitment wood the it our development. we address think we're how it next perspective. understand to like a ] depend in lean, be improvement from will have never we it. educational XX look kind start need how will wish

better, So able in whether would start it comfortable and necessary, term specifically near component. we will the scaling hiring to that be be

be it demand It is takes then somewhat environment takes benefit. and some to needs time show a Both time. dial better, to the that

than time. definitely senior right traditional in our we had of an is part But opportunity more [ because now ]

benefit. So opportunity we have to

line Grossman comes from Question the Stifel. David with of

you've And demand overall a about talked the I quite bit know environment.

And becoming the sorry could delivery the new seeing clients if much to platform? I improvement with of comfortable but as missed opposed perhaps repeat macro is factors demand-related more you're you diversified just nuance the how here, just

Gen mantra all in for were impossible I they work AI we like to in were [ time, do in and of it need answer now great to what introduction benefits from benefits because some implied talking say whereas And then total direct. can huge almost about new that at the the we question technology that to enterprise a understand in level, future. That's believable the ] and then same geopolitics to explain

And some easy ready clients go. to so several really not starting to quarters to pay to quantify, much see change in ago. more general it's invest how infrastructure, started and We attention this. to data versus But a and cloud

things budget. different of maybe And maybe markets, a hi-tech, are some in are the it there improvement in in kind the there's moving a of mean bit I feels lot that needle. services financial of some little is like

vendors. we to multiple of the other we One the the they've seeing, beginning channel internal with we over beginning things vendors. examples because are that with the clients David, had are of as growing talked are being years accounts had challenges on grow logos some on own us other that based experience new But clients checks, Turn do quality exhausted to with that we our again have of return about still method. to they've somewhat to and or are again we've margin. It's is other see quality

clients least us. to total come starting Yes. basis, those bid scaling see which clients who of back level One relatively recently wasn't clients to annually, for back the months. millions in growth. decrease I didn't XX, with us XX lot, during to last come working really the And up to started started of more we we at visible with kind tens and to of start which often to visibly revenue clients a XX in then and point to

Poland want quite you But 'XX? in XX% start this slightly level to and to the equivalent you've below and would to then next to clear, talked again a year add to be you sorry just roughly million know $XX benefit be us and the Poland, about margins I from which ask bit XX% question. the Jason, do got

we're So below do at is glad as you opportunity use about I'm clarify this that the from I to benefits would And to you XX% something XXXX. prefer continue we that to having very see same expect slightly time, Poland. explicit think

next year. would So XX%, you of Poland that inclusive correct? slightly from get $XX Is below million the that

That is correct.

And sorry, just I if here. in X sneak could X last

see I sequentially. grew did Just people the headcount the headcount. XXX

However, were If like Did only looks in XX with reason I there that is there I read a increase big people. being that it nonproduction folks? is of right a XXX right, non-IT IT. got those such

I production. headcount thought we XXX had were that

again, we headcount but production And increase most you, So we can the in we the now go back again have increases, production expect of headcount over increase. QX. that with

America Jason of question line Kupferberg of from Next Bank Lynch. is with the Merrill

come on growth. to back year-over-year I wanted just organic

the I think were in X.X% So XXXX? it does midpoint, revenue reason QX, flat in you is better. demand growth sound at organic positive mean call like return you there it, is in QX year-over-year you're down, won't to to that but getting meaningfully any

We what's definition yes, return would But in definitely looking growth year. the question we XXXX. expect a are return of is the revenue next meaningful. to to I to growth organic guess

what the as well the there, given organic can model. just concentration, CEMEX I on Oris, growth client then And the clarify from that you just the as revenue is profile think asset of captive

thing. December. of million about So November and type month vacations is soft in the $XX holidays somewhat just and December because of and we a talked that usually

presence Nedis that also percentage in the I CEMEX manufacturing think of obviously it X, or probably months And business. they those go kind and multiply for take to and a customers got kind a significant business, a it, to other months so is materials, They've of if right? services. same space, a Nedis. X call will a significant huge a you significant on get But be [ of It financial to add customer. number. growing little have X not customer in some to is a their you let's It's customer by just ] bit it's

anything. customer or So again, it's is majority not as a if CEMEX

-- how you before fast CEMEX its own is growing fast I'm how on organically it? with sorry, bought Sorry, Nedis was

cent. can take we've and you excess but talked and of what I December. growing do million, it decide But November, said, get in grow to year. think we we'll again, right again, also growth And aggregate next now, not excited probably has combine to in about X But as address about about talked bit little to in yet, add we're get capabilities historically and not won't it's our as we a I that I but we've probably $XXX and markets business, we multiple don't only the into the as discuss of business opportunity probably that X a kind addressed. specifically a of our it by

that At for still have this question. we like time, X I more everyone inform to time would X

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

European larger which you So year, this Eastern earlier you update LatAm you region below on there? still being what productivity slightly us how employee improving with employee And Nedis talked were regions, there, India, specifically a LatAm, for Can in productivity acquisition like much about countries. new had in you? like is

centers to But to be a region we on much that So it well. quarters. what and current we of comparable more see in ] essentially comfortable is across expect talk in many assessment, areas our [ based couple would our well about like engineering as

talk is were the This market you So . from separate. best the different [indiscernible] basically productivity when about very at metric much very is

I is different we will be We markets. the this, of on be impact that we location global talk will hope but joint very need coming and we basically from our Latin able opportunity Then America we now. that's duration know, to served and hope also company increase client about this feel operating what ]. in together you [ is American As revenue on impact to which scalable America, Latin client of will North course

there by as them or are are you And XXXX, that behind about we we consider think client-specific should headwinds most any now? of

real think a those right as even the even time, like right cannot new again, visible factors about after There in we calculations what to election. QX mostly -- today, very like At We too exchange what us are like same we okay? many -- for predict want mentioned, now.

lot a ] assistant [ X when try There the bit unpredictable. sales which and predict a are is we to future. were didn't there happen optimistic So year we'll little ago which of more

still plants global and will how how the will very, the have very debt, be to would politics to market So happen, saw opinion, what fight going pressure let's our technical our what is, it's say, impact to will which shaped, we deep. starting in actually

to us say in QX our would [indiscernible] results much to very happened. we today. like we you that again Thank listening Look summary, for

And as We and we well would us, that good. is rebound which be EPAM positioned capture well. to how is also in remind to the definitely like future to shaping realistically optimistic demand QX in believe continues market

let's very So X [indiscernible] now. with from months this, say, Thank you much.

Ladies joining. call. and you today's all gentlemen, for concludes Thank that

now may You disconnect.