EPAM - Earnings call transcript Q4 2017

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Operator

Greetings, and welcome to EPAM Systems Fourth Quarter Fiscal 2017 Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I’d now like to turn the conference over to your host, David Straube, Senior Director of Investor Relations. Sir. ahead, go Please

David Straube

and your everyone. release copy quarter Company’s operator, should for now, have fourth results. XXXX received of fiscal good you, By morning, you the Thank the earnings

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

are made forward-looking to and Before you that Company’s statements comments I’d statements. the contain may like the remind to uncertainties on begin, SEC and call we of today’s in risk as subject These some filings. described release earnings

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

Arkadiy Dobkin

everyone. organic good with strong joining Thank year-over-year XX% of morning, We David, revenue constant on a annual Thanks you, in fiscal position terms. currency finished growth XX% for or reflecting XXXX million and us. $X,XXX

was Our our both of across majority the verticals. industry based revenue broad geographically and growth

we generated Additionally, of cash earnings strong million. $X.XX, share $XXX free flow XX.X% of delivered a growth of non-GAAP and per

we year pillars finishing continue to strong three In addition to across on of the EPAM the fiscal evolve business. footing, major our

capabilities unique engineering and core our and customers. services our our by Combination key people, and Our markets driving digital our powered of those differentiation, is strength. business

prepared to with our tomorrow’s of and and changes well. our XXXX, centers highly solving talent teams, attracted delivering build challenges; In activity competitive and current people, we over be market of start the business as hybrid today’s fast-changing Let’s clients EPAM, engagement in to solutions better and end technology individuals locations. in employees delivery that environment, development. hiring multi-disciplinary X,XXX welcomed is from the complexity across skilled most for and capable key We associated new to help stay which

ecosystem in programs, as employee investments tools practices. training our well as people productivity ongoing advanced engagement and educational function, in delivery engineering making are We efficient and

flexibility the near established geographic the to year XX% than conferences XXX The almost advantage largest regional innovative over All numerous over addition In from with scenarios. spanning our enrolled result, to continents a year-over-year raise we specialized educational ran net as all engineering our hackathons well XX XX new as plan professionals, X,XXX in well number [indiscernible] during to future. new geographic students this XXXX, in from serve X,XXX meet-ups, EPAM, deliveries over our initiative the diversity our To both the QX. our events talent in software began across In as of to four program that university and professionals initiative EPAM and XX,XXX to clients also And in delivery countries continue access bar allows we ago. of Latin [ph] marketplace. a continuously various since start production over locations. We were across EPAM years more ended Central [events] last maintain and the program, we and group develop enrichment footprint Eastern expand that professional in gives communities and quarter increase the gatherings, we a as of APAC footprint further to increase locations America. Europe, talent, in to

XX,XXX employees. at Our total more headcount than ended

experience our offerings in adding service units business our in success growth. to focus and leadership more organic we to broadly talent XXXX, in goes our invest on fiscal more line current the most growth and rate. is maintaining and bring without important of continuing factors demand it one Capabilities team, industry-leading support and our saying, continue of future to in in industry offerings; our our across scale expanding talent ahead So, ability

[ph] In our interest. in demand improve for areas core and and for providers services has in new some addition, engineering partnership we to against continue product that emerging deliver. solutions and and digital as high for. to clients our cases advanced deployment we Last a recognized continuous engineering traditionally to our capabilities to EPAM cloud such That demand year, testing, deliver technology more industry-leading [ph] to delivery, and us with to stronger quality bring [the critical capabilities of continuous climbing] strategic capabilities strong demand pushed to and and relationship as us platform of digital well increasing number strengthened business in expect [up a been invest works] deliver level even

in color that group included I’d contributions to in the placing leading us a was software by some most global as large surrounded of on companies where open one global Top the tech InfoWorld the software note list brands week XX, bring to was to of into Worth XX world. by services the contributors. source on were like number the last of share Just EPAM representative list open here, EPAM of leading respectful we in source technology only that by the firms and

recognition becomes contribution as response one awards that, new in EPAM time recognition the intelligence of XXXX. increasing we and for blockchain Looking reflection to and another in to receive more and our demand banking wealth market wide management wealth of are specifically to similar full voted Smart were private management use for of compete would accessible digital and Wealth to we example engineering registered UBS great bringing react spectrum initiative This capabilities clients. our from look technology technology offering disruptive disruptions service than benefit Working our of significant shared time, to story. We the our award. us. innovation with value client, to EPAM client our industry with at around Last in which expanded clients, our Liberty thinking for our financial ahead, very and app a like application Global. their implementation; and their is and both growing general diverse today. of Smart recognitions you customers, testament going Wealth a of type of This strongly designing spend app clients audience innovative our we delivering story intelligent both opportunities Combined opportunities to continues fast. UBS, is a of we are specific we into management services, quickly to XX closely and of to created banking market as area, are consulting, offerings. EPAM operations. part collaborate top that December, are across significant in best broad to in in innovation. highlight artificial In business which There solutions helping delivery ability very much relationship innovation expertise A our as differentiating differently The and automation as is IT is deliver in services the solution and in promise of our with are to to emerging of on the services, wealth well to it to a positioning

client Turning highlights. to markets and

including and are mentioned as to spanning and partner European software for A product in digital we customer examples automation engineering industrial hardware of share; clients. currently multinational ecosystem. of strategic a we with working and services as existing well number As aspect corporation offerings, to drive few specialized digitize are business their solution, new that experience top and transformation to programs core already, continuing

our initiatives. of We needs are and factory and allows the the of that changes highly this clients to best-in-class quickly business. led through team center creation understand for initiatives approach skills quick reliable digital execution adaptable digital our supporting provides the approaches response a technology and respond excellence This gives on to of access EPAM the quick to

digital we just Global product over started which Another example other provide countries. Health Services care services and with Company to is XX people health initiative enterprise related in transformation

priorities part range [digitization] Most become of helping and these Top service are than legacy we data outcomes. XXXX. design started ramification our engagement [ph] accounts improve and modernization in XX but them expect consumer a scenarios engagements across just aspects ago, to we We applying to of of them analytics, less a are XX-XX key months where principles of

Let’s XX% quarter responding development the our vertical high end payment the demand across driven experience customer take was offering, coming the product including digital data projects based digitalization as as and with broad vertical inside at from largest and fourth transformation quarter. the for well even a grew with geographies effort to which finished in consumer client program. by optimization, year-over-year, our the performance major personalization, XX% look and quarter growth our Financial services, and

the Media development clients from growth grew with life for year growth of Sciences quarter and over in technology entertainment grew by companies and and the services year combination and broadcasters. information quarter year-over-year transformation. X% and driven services over Life Software and startup Hi-Tech a Healthcare XX% and and focus year. last on project for software digital coming XX% publish digital only engagement same posted

progressing outside global XX%, know new customer top more in year it by anniversary last strong run our To EPAM Growth over digital client across top now to And driven are few existing tribe starts influenced was Science and the by to year several all my significant quarter confident In capabilities, our XXth emerging at our hundred time, annual we’re a growth truly diversity XX% quarter last portion last mainstream than X XX% by also among great with the verticals and couple XX automotive client we for better, was significant revenue, At of our really a celebrate some also part fewer lastly, trajectory segment XX%. and energy our accounts XXXX. about customers. clients. the the was primarily infatuate. understand same impacted obviously within while years the triggered we Life and or are of and top growth down the One Healthcare clients accounts growth our throughout for the Their While it EPAM. and but our be practically grow most you still very smaller to sales by million just these note, base, it’s important will opportunity another us that changes is fiscal over large opportunities of and engagements. in and would by year opportunity which XX regards represent planned to to is healthcare growth growth return by of is conclusion that concentration this clients. delivery engagements what

XX% We proud with worldwide. XXXX base annual across solutions to on client be XX,XXX-strong countries able top-notch XX each rely enter our to feel deliver growth. are capable And to we into organic fortunate to very

constantly to relevant cooperation program team create as in programs including conversation responsibility very to each social class globally tomorrow. to our are countries now contribute is my Pfizer EPAM, and across We represent is with happy today initiative The communities ET improving XX talent commitment developing such program. thus engineering extended and our countries with in very program those our and strong for to

Let for turn update. over me it a detailed Jason financial to

Jason Peterson

representing key you, share for few from million a revenues a CIS Ark highlights. in perspective, represents a on we reported QX and region our strong North and constant Thank organic XX.X% year over our our QX good flow revenues. generated non-GAAP terms, significant cash to And with reflecting over $XXX.X of move profitability, close representing of in of continued In quarter, in QX some XX.X% and or constant sequentially XXXX year. of free in America rate XX.X% or start our XX.X% XX.X% cash growth representing performance currency. finally, assets constant XX.X% grew our our XX.X% QX XX.X% this was earnings growth over revenue delivered QX. growth flow. geographic constant Europe or year are Talk XX.X% and per year-over-year There largest now currency QX, everyone. year rate financial in grew APAC highlights year revenues year grew through or top currency. I’ll morning, revenues about From XX.X% currency line guidance XX.X% X.X% X.X% fiscal X.X%.

compared in to revenue the to gross Non-GAAP for to margin to same to QX XX.X% same SG&A quarter last last income last now revenue year. of XX.X% year. XX.X% XX.X% in the year. XX.X% percent year in for XX.X% and was XX% GAAP GAAP SG&A compared statement, of margin the came in XX.X% period the of compared at last our quarter was quarter QX non-GAAP compared for gross was Moving

XX% XX.X from of level million of a continued in revenue in year. operations current or operations XX.X% Our global investment Non-GAAP QX XX.X in million extension or in income of revenue of reflects XX.X compared to the or our XX.X% was sustainable XX.X% term quarter growth compared the to capabilities our with footprint XX.X focus from quarter of revenue acquisition, of supporting SG&A and GAAP in year. or million QX last revenue income our expansion on of long strategy. last of with talent million

a form change basis XXX.X%, excludes GAAP from reflect legislation. recently was Our reform our GAAP tax in the mix and came of earnings impact was which XX.X rates quarter the includes certain effective implementation GAAP tax Legislation. tax passed the tax planning per Tax charge, $X.XX which effective Reform resulting and initiatives. the rate includes of XX.X% negative which at impact Both for rate Non-GAAP the million in of Non-GAAP tax a tax geographic income of onetime share Diluted legislation. on the

$X.XX the the by XX.X% increase and $X.XX, other which approximately compared shares they Non-GAAP a EPS, a onetime foreign legislation landed impact reform in percent XX% the to for losses end and to adjustments XX.X slightly We change levels. medium that historical GAAP of quarter the to tax which period we’d our to fiscal diluted the same of ‘XX. lower to offset traditional we will and outstanding. reflecting excludes the range, Utilization to charge In stock in expect XX.X% were manage was over hire of trend XX.X% was do the than to like term. year was million But our rate, XX% the within end We continue demand over top included QX, XX% Excluding this towards last business. the XX% same range tax compensation EPS GAAP year expense. more higher legislation related quarter. last top of higher a utilization XX% over

year. and compared the was cash cash in cash flow $XX.X balance same Free our in operations million sheet, last from at $XX.X $XX.X for Turning million flow to compared in came same quarter in QX quarter of was year. a DSO last XX quarter same income. resulting adjusted year, million to to the the compared Total days $XX.X net in XXX% conversion XX last million days

We DSO quite XXs. total pleased be performance the continue our low to in with

year see financial year which a metrics. $X.XX Now fiscal year of the market. the income increased XX.X% organic fiscal for how relevance of the we let XX% for offerings our year. of over represented across constant over revenue from at growth Underscoring represents XXXX, currency operations number XX.X%. of GAAP Revenues in billion XX.X% year finished and closed growth the me or the an

tax results EPS transitional and fiscal million provisional deferred for over tax million from charge a year’s diluted In there million million provisional adjusted XX.X was earnings other tax Cash legislation excludes net XXX.X per from over XX.X increase were legislation, of GAAP of XX.X% to the a effective Our $XXX.X the GAAP includes tax represented impact which down were $X.XX cash this non-GAAP conversion. flow resulting non-GAAP which compared tax one approximately The adjustments at prior reform XXX.X and income at legislation. was to effective the in recently on was XX% free and other shares this assets. Reform reform adjustments passed basis share $X.XX impact from write XXXX. includes fiscal outstanding. XX.X% XXXX rate year million XX.X%. in operations Diluted a million and was operations reform GAAP item which included Tax the income in onetime came excluding our onetime charge to million legislation with fiscal revenue. tax million tax XX.X increased XX or the in of for XX.X% ‘XX. rate came And XX.X% a due reflecting of XXX.X Non-GAAP year impact the EPS

Turning growth after now starting XXXX estimated at currency X% with to guidance reported currency in revenue XX% be least tailwinds. or fiscal XX% will at constant least factoring in

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

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

at for per year. we non-GAAP the full EPS $X.XX diluted EPS at for expect year earnings least the full be share, be will will $X.XX least GAAP For and

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

fiscal XX% will first for quarter at or reflecting the of at least ‘XX, a of at QX year For million currency estimated reported growth rate XXX be least constant in X% revenues least factoring XX% currency tailwinds. after

of operations reflects non-GAAP For be and quarter, from income normal QX. the XX.X% in income to range XX% the be seasonality to to XX% first we which from we expect the to in range the expect of XX.X% in GAAP operations

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

our few the EPS expect impact benefits that be we the think GAAP As discreet non-GAAP structure, share, EPS per at will diluted quarter $X.XX we QX will onetime at our least tax a review tax Earnings for least be $X.XX that we will quarter. could for rate. and be tax

million around expect XX.X count the few fully finally, to our expense XX.X quarter. XX year, in in to spread intangibles QX million remaining around with be expected million a compensation which and quarter. Amortization each key outstanding. each to million Stock diluted GAAP across And million shares XX.X evenly weighted approximately assumptions of for be XX measurements. average We X.X a share support and will is million non-GAAP

remaining Foreign around is exchange in quarter. approximately X.X with for loss for million expected and million quarter. each with in X.X loss $X.X effective year QX adjustments in to Tax XX approximately is million million expected X.X and each a be to million X.X produce QX non-GAAP year the loss remaining million the in

million X.X with XX.X the around expect approximately excess full benefits QX. in Lastly, million of for we tax year

will through go remain core they of services underpinned confident open call diverse strategy reflects digital outlook as varying of growth strong opportunities and services, set we serve for the advanced their by up the industries that engineering future. XXXX cycles. the which continued that natural With our We produce positions heritage EPAM Our with combining let’s business for well questions. technology for demand

Operator

Thank [Operator you. Instruction]

Please with from Our question of Peller comes Barclays. proceed first Darrin question. the line your with

Darrin Peller

All right, Nice guys. thanks job.

with Just competitors discussions, as client reform well of year positive mean from Ark end want in the from mean yours as obviously macro backdrop of as to seen hearing any certain inflection we’re it I you weren’t I in in overall there tax clearly, start some well sentiment I the of not? some mean or or, have much are [indiscernible] maybe environment. look, spent areas the I market. wanted terms of areas there know terms just in that accelerated last certain may to have if off

Arkadiy Dobkin

know right in like X [indiscernible] what line maybe changes. that better. evaluate XX seen us, to seems But very you we’ve you environments difficult think similar having So, kind we’re in we’ll now or it to from I of had before able for months before. it’s micro still It with be now

Darrin Peller

go Okay. on then more into And just financials. let me specifics

free have and business guys to pretty steady reinvest Just one I you margin that. the your mean and plans with maintain in question historically on cash. is margins been

Just room discretionary profile - guess curious investment how your though it’s given you giving to much would high I you margin. [indiscernible] there the level consider guess again, I change are growth wanted on the just assuming levels,

years level the on be keeping margin question clients well, curious just margin would from you couple if able your for getting flat [indiscernible]? again, the If needed if down We’re growing thoughts switch strategic on ever to? would right on you it you’re the turn slow now. next because this roughly of to planning high you’re so growth Just

Jason Peterson

in XX% and Certainly, than to to we market growth. strong growth continue annual continue revenue greater the expect deliver see to

that between - exist Certainly, conditions as delivering XXXX XX% obviously But in XX% at so, look business. invest to operate continue the XX% XXXX, the right is the expect deliver those can change. profitability to XXXX, we in if time and over you visit we’re XX% it where this And in in IFO. for I think guide to long we as range. adjusted in And rates growth ever the in now,

Darrin Peller

quarter the versus then embedded on back just right, I was in to outlook? assumptions guys. organic queue. will one quickly that inorganic the last All in Okay. And Thanks fourth turn

Arkadiy Dobkin

Yeah.

it now. right So, all organic was

Jason Peterson

And the guidance organic. is that also we have XXXX for

anything So, [indiscernible]. if the in would it future were announce we to

Darrin Peller

guys. Thanks Excellent.

Operator

ask [Operator comes of question. your Instruction] the The Jefferies. line next El-Assal with Please Ramsey question from

Ramsey El-Assal

sort briefly. or sort I a had continuous is and costs? in they of you How competitive use give will development this, which these reduce marketplace? the advantage you Did how you internal DevOps benefit about of question DevOps mentioned a do your methodologies development you of

Arkadiy Dobkin

So us of of products one of definitely and pretty components our to about And the talked to and professional is build [indiscernible] software quality we experience which ourselves. regularly productivity impacting delivering engineering differentiate kind predictability solutions. allow this of

complexity the differentiation of new it’s of a And of target. component deliverables. solutions, on very important it’s pure final of this being So, quality a of digital with kind growing

Operator

the Please Thank you. question Citigroup. next The from ahead go with your line of Ashwin is Shirvaikar with question.

Ashwin Shirvaikar

kind ended growth, accelerate are year help. about But there is hiring in at utilization, Hey know of guys, good mentioned that gave quarter your talk is you question in there, you headcount, XX% you there. to XXX headcount growth, component plan from XX% obviously higher there. that? could or expectations, that pricing a on you basis some your My Jason headcount you going you FX so points the

Jason Peterson

Thanks. Yeah.

QX strong So, talked talked that high sort is you utilization that pretty hiring demand. and see this over and XX.X% What for think slightly about time. coming running of a we to are down so and level we I utilization demand for at we we know continue that, clearly about have are point

reflect hiring So fact be we support to the revenue additional our would do yeah intend growth. some that doing to that

to upticks demand. opportunity utilization it One give you slightly support in of running is of the benefits a lower does level more

upside margins impact the utilization slightly some demand. what that of does part gross so, for available on the the customer unexpected that, additional generally, that you got for drove some have sourcing lower QX. is and to guidance And But

Ashwin Shirvaikar

is -- of pricing [indiscernible] I the of level guess? the is level But demand

Jason Peterson

as top have opportunities increases subset because we in scarcity part I a talked a standpoint resources we our the customers. - in So, we past demand get that of marketplace. the of pricing we’ve across do got the in from pricing And annual of in and a think significant

there terms you opportunities like know Programs of if levels of [indiscernible] into university pricing resources from of standpoint program margin management kind sort from talking supportive improvement. So, like are Ark some about and additional talked the gross company - a more about brings also are broadly. of gross a you standpoint that helps and pyramid margin of in

Operator

next Maggie from Our with William Blair. Nolan the of proceed Please question line with your question.

Maggie Nolan

Hi guys.

Just question, building ebbs flows? can across talk a employees ability move or on as you previous to engagements about that geographies your and little bit demand

Arkadiy Dobkin

talent. it’s So, optimization where the regular I think kind and process finding best can that teams of the opportunities a we utilize with of

So, definitely environment. to movement when it’s of some projects but is rotation necessary, [indiscernible] there some minor pretty geographies rotation and there the our is in a or

basically, composition optimize in So rotations again we of project and internal team our that’s part model.

Moving from basis. to exceptional one it’s another, geography on more people

Maggie Nolan

the Thanks. Congrats results. on

Arkadiy Dobkin

you. Thank

Operator

Research. the from Pivotal of Miscioscia with Please you question line Lou proceed next is question. with Our

Louis Miscioscia

you. Thank

possible. you for for up is is if I press not consensus Just fast just around $X.XX. a that’s that. And given explanation that of revenue? release guidance conservative first think your a why Would growing EPS clarification an or I below follow the EPS being in guidance just as you’ve is say maybe as have XXXX Obviously then

Jason Peterson

SG&A. declining utilization in as we some efficiency what see think consistent. to - slightly, time think greater we’ll at think guiding reasonably that I remaining the What And will same what leverage. we’ve that about profitability we we SG&A is see is you to refer we’re talked is

able increments while So, with deliver demand. we’re the rapidly growing to opportunity to XX% comfortable to support XX% the and IFO, adjusted being in giving business ourselves

Louis Miscioscia

a question, IT when a maybe levels ago they lot you, you the to than follow actually look tighten few bigger that that service into get utilization at and the companies you had around more level same other XXs. start switch ones are to then the just had things basically, at Okay, and of utilization, up utilization years

exactly to it that? sure do not to any So, operationally but, is there have. And chance others how rethink

if wondering Thank should just be higher So the goal there? you.

Arkadiy Dobkin

of we size, It’s have because for for at now. think have least of our for provide and they larger portfolio right our very not services that’s but to I because type of we size difficult our provide into. environment we the and which vendors only especially goal the optimal opinion of compare services these the

Jason Peterson

But sort of making that you’ve overtime support something it’s always of there’s balance certain and demand do available course got upticks then to kind - in having revisit this not of that resources And we over-hiring. between not

a there’s fine balance there. So,

Louis Miscioscia

you. Thank

Operator

Our line from the next question. Wedbush with Please with Securities. question is proceed Moshe Khatri your of

Moshe Khatri

the question Is that going from sustainable? lot. other XXXX? And coming in Thanks. a results. the year lot model embedded that’s a of bit the was Congrats related for Thanks to about up that then strong specific Couple CIS Good of region? Maybe whereas is questions, for and the be morning. to on of strength expectations wage sequentially that’s sources inflation can year. that, you talk a the

Jason Peterson

Sure.

kind CIS several just the things. I On of front,

growth So, ‘XX had of by while appreciation sort just obviously we of and between a got and increases revenue QX movable QX strong ‘XX, exchange. foreign in

in for that that we business. revenue still in at a go our but some not of ‘XX revenue the countries nice QX an recognition, financial time same forward to to piece continues there two sort ‘XX expect had basis, QX timing of saw I would we other thing the actually extremely so is that and between good sort uptick in see The part clients, be who growth had CIS and on of revenue what due was recognition timing high-level of of revenue services growth was in we

Arkadiy Dobkin

so oil it’s as of a up a because stronger And years ago economy still is prices complement, looking layer reflection went facts with more when which business well. in of kind couple you’re basically it at went comparison up

Moshe Khatri

XXXX? So, assumptions wage inflation for

Jason Peterson

we margin, is something inflation I what clearly, to would opportunities a the students modest. something So is the There ability about we’re sort an again, one a able components. - as in Ark it’s we’re the talked pyramid feel say and that monitoring. been some regularly additional have of earlier and think that to that manage. wage opening earlier relatively university ability were And see may which it’s XXXX the bringing customer mix. One call would but it’s And bit standpoint we got where the we’re also multiple talked little about of gross price that questions. about still I pricing manage the if do in that to of we and his I in response from uptick

manage. comfortable our And to ability continue to we with feel so,

Moshe Khatri

of are we in that wage So, still XX,XXX? inflation on X% terms X% level to

Jason Peterson

any higher than that. wouldn’t I say

yeah. So

Operator

Our line Kantor of with Cowen next Please question is go Company. from question. with your Avishai & the

Avishai Kantor

and taking Hi for you my question. thank

in strength segment. mentioned wondering you the it You was coming elaborate adding if Are which that are share, client? you gaining you can where regions on is from? I new automotive

Arkadiy Dobkin

mention it’s of this because emergence as other of verticals we right our now. kind part So,

business didn’t have months So, segment we ago. much in this XX probably

growing, is and this Now Europe mostly it is a Asia. and

Jason Peterson

So, new it it’s still modest for a is revenue our stream it’s but number, us and growing.

Avishai Kantor

think you getting other market from there? Do you’re vendors share

Arkadiy Dobkin

it’s late better other relatively When Probably now. but or like to talk it vendors, understand. to in be months always you it’s share again right grow and insignificant even from taken would XX

Operator

proceed the line from with Company. The of your with & Needham question Please is question. Mayank next Tandon

Mayank Tandon

some what their key in broadly? that’s And that Thank course, and well? And condensing the verticals? obviously signals. of Ark you could in financial digital, Healthcare and on in in services Good morning we’ve mixed drivers drivers Especially banking, as services verticals also key more how of of little are spend into banking on are financial in some banks bit been The the of drill course, you healthcare. the segment but the a impacting the they’re you. you. investing Thank and hearing like legacy’s

Arkadiy Dobkin

I on workers was all a were supposed financial simple think specifically us have big of it be a because answer to in of very services is like pretty there. EGK it systems and supported lot to be which

a small. of we for component. a good of mostly financial example So, example, maintenance digital services some side of wealth our the about like year all right of new us today about for one was type weren’t now kind or when and good is this and were business. legacy all delivering component this engagement we pretty we of It was it, it talked traditional services on management And our talking so line of is systems

a us area mostly even growing it’s today. for So,

Jason Peterson

said, growth wealth maybe both our the as so, asset and market growth again Ark and we some substantial And in to existing management the in new with customers. of relative got others

kind the of and sort we much very what which So challenging a have of more maybe the limited digital traditional the would you of on business transformation call lights kind stream. keep exposure very is to

been part of revenue So is that significant stream. said our a legacy never our

Mayank Tandon

call out on fueling drivers there segment verticals? because that And we at that are could look overall healthcare spending know your you there other that levels spend you terms maybe how or should any as of in

Arkadiy Dobkin

very we there. believe big and it’s that today a that already opportunity do mentioned also I strong have we article

us volatility for still quarterly engagements than While results. couple it’s bigger smaller is like and much other couple accounts, could impact segments, actually

very on we’ve are one. lot seen us. this we business what opportunities And in So, optimistic for a of

Operator

Bank with question. line from of your the America. proceed of is with Kupferberg Our Please Jason next question

Jason Kupferberg

morning good guys. Hey

guidance going Another share ask the good broader buyback ‘XX if you’re mean, of may the now. just actually some I deltas factors? XXX some I between million the is creep. count growing think in of thoughts you this EPS big to some think and performed ongoing has looks forecasting of in I’m want looks is of XXXX. in cash what be deployment faster And for tie other or that balance a than what if almost share the using the a year. like? the to been with function comments, like stock for sheet to part And just I how as forecast that’s at share little count one It that street in question have can ‘XX any I up about just possibly soak

So, I there? latest thoughts love would your hear to Thanks.

Jason Peterson

Yeah.

which compensation may seeing shares calculation. on really does don’t our fair. an be to any an that’s in element and of XXXX appreciates I change you impact diluted Continue have is there as fully guidance that share know that some retention, use you the as stock but So our in see price our and think significant that

So allocation maybe showing couple up what kind standpoint. from of a that’s we’re

in to active active you know We’re on and our inorganic us XXXX. is and we strategy to going cash focus be you’ll to more do are see think I continue

right So, our I isn’t where strategy. coming begin revisiting plan to - now on think the allocation using change for part we’re for we the strategy. deployed. the certainly it’s capital There see that’s focused organic very could in our cash most a you are buybacks, cash year will but things I And but overtime clearly

Operator

Fitzgerald. of is question. with from Forrester question your proceed Please line Cantor Joseph the with next Our

Joseph Forrester

projects you’re contracts. getting wondering size there could the of Hi. I talk was they and just given growth? bigger are large any that on you working if about the Are

Arkadiy Dobkin

is Definitely decisive growing. is engagement a

starting So, while relatively we getting of have kind engagement areas. in from a different sometimes small have we then where we still like still and approach

see it’s of now. bigger in concentration the and we from it definitely growth of rate bigger can participate rate and of clients. kind deals the level But You of of right also our

Jason Peterson

And of to continue range at customers. highly we time, the same be diverse

we’re a know said, large our of customer customers very significant very across and our be So we base diversified growth. across to as which But the you is in. engagements source Ark our diversified work we’re we with industries growing continue

Arkadiy Dobkin

them unhealthy. XX But XXXX. to be it I this or less sure will use months. do growth top think in us speed in counts so to the clients to we of than work the bring We to probably XX to is for

Joseph Forrester

Thanks. a expecting the can maybe bill services, any clients Got And tax now your of spending little us it. an more and update financial on that in just UBS? bit then you bit acceleration gone little money? you have And has through give a are

Arkadiy Dobkin

we’ll to rather what’s market. and already I happening as So, predict mentioned try watch we the

relatively small growing again another this think us a or So, one still we in segment while I this player it’s I and in think way are don’t impacting fast are significantly.

So, for which expectations and on had. what on how we with we And stable on on is line UBS successful now and right we time, program it some we we as last mentioned us there. on have account gave what are color program

Operator

with next Our Financial. proceed question is Freedman from Susquehanna the question. Please with line of your James

James Freedman

that I grow your to from and team congratulations you vertical Jamie observations. still median enter on to year And mind some about that sharing the wouldn’t use entertainment? than forward? XX, resonating did anticipate expected last ask you and the media faster you Thank and the you Susquehanna. going I cases want if Do average about Analyst what’s know its in company Day

Arkadiy Dobkin

talking as happening Global Well of on innovation how we we the diverse a things these last Liberty of programs. call, lot side during the and were new about felt in there well. business grow But how with we

be company would right for grows both this accounts time. that be in some now, in would be think true growing it don’t So this for segment. I growing it but fast probably will above

James Freedman

color Ark. bit And like on any Thanks look maybe the Life same healthcare, it you helpful? would a be might there have it Science but and decelerated then that

Arkadiy Dobkin

Difficult and answer kind still us. in to listen well, so for small as or to what of I it’s already mentioned sector

XX have but company to the we which would we through it that the or speed We least at the believe next back be account in will finished months. some of XX growing some two and programs, do go rest probably

James Freedman

Got it. Thanks for perspective. the

Operator

the with of you Please with from question. next Bespalov The Capital. question line is VTB Vladimir proceed

Vladimir Bespalov

my question. questions. for Congratulations a taking the Hello. of brief Thank couple Like on very number. you

narrowed all on use for currencies? guy you growth range XXXX, currency XX% you second is XX%. did First margin on for versus the Then margin assumptions to at a growth, versus before the guidance your the compared key substance do question the operating guidance, in constant for other what what is to year non-GAAP

does you affect this and GAAP at your bit on things reform cash just it that? this and is last or this? a Could you trade-off on between could of like all? what some the pressure like the flow me effect provide And thing, U.S. growth stability color little a educate competitive So, on tax earnings and

Jason Peterson

XXXX always the from our from or tailwind when or we partly used the foreign From feel we second and be most we’ve strong probably profitability part to and for or development in XXXX. impact of might you Sure, Euro XX% rates rather you of of what we narrow of would to exchange for that’s was kind than range early would appreciation XX%. Pound what seen part, XXXX the use foreign forecast got we a and so course Ruble early, and of trying and standpoint and exchange. rates that of future in between assumptions XXXX of spot it’s see driving what guidance did sort the the And to generally half range, the

growth. guiding it we’ll of operate in think think think happen kind where you XXXX that. think we it’s change what is I but we where we continue drive reflects to line we’re XXXX, and to just we operate of a And inside so, could reflection from this really And as not is know high not what so top just of we’ll a

looked So will doesn’t QX finally, I that’s the time the a guess year cash over you that at we of period. tax to Again, entry make obviously from need effectively we the payments in significant standpoint a - flow. reform know not impact

higher gets early then overtime years total of in three it that X% and their years. With the particularly last the

that that significant you more thing we you’ll know of money some of flow now does us to we’ll and only have sort a give and that revisiting and to the cash into flexibility Western gives is money in be I back support geographies for don’t so, various The U.S. Europe see non-U.S. strategy. impact that on us. that you sort our think of of inorganic And it sort

Operator

your question Ramnani the from Arvind next Please KeyBanc. comes of Our with line question. proceed with

Arvind Ramnani

also, the Hey organization? alliances and on what done first a you XX I and great partnerships have on on broader refreshed comment And doing management know you months congrats about different you quarter guidance. expanded your of side? all XX have team. are Can you sales question anything with you good and back to a

Arkadiy Dobkin

you us Like years wish for six carefully. over

while and have to about our in a and we question base in for So, of something in XX% we was And again loggers respect in mentioned penetrate how from changing you this XX there new management do great actually client the that sales time. And is in our today. believe we’ve opportunities long sales about this, came of always business favorite feet. target a

like there but definitely actually like we area us ago in to of know in lot times six four don’t and and I growth while something were answer, we couple improvements than are supported in this bigger a came sentences that. or were how So, years

to else say. don’t know So, I what

Jason Peterson

work high praise my one you the to from source of add the also and right a new to which perspective one as of customers bring entrants is oftentimes think grow with account move who I we us growth. and our both then I and or they that with think job is continue know another great

Arvind Ramnani

feedback your the always work of on checks done does. really happy positive. is very EPAM that I’ve I’m when kind Yeah, Clients are about

sales so like You just the client expanding are are well know this of I has kind team is certainly many was still or know years that worked that consistent? staying for of you wondering model you enthusiastic sales base. at so kind

Arkadiy Dobkin

reputation by I model. the model of quality the sales I differently, think probably is the the We me reliable. definitely Let to of good the services extended but in delivery number sales business answer driven best and function, deliver it’s think actually most people quality development in is

So, then to development be people for fair job it’s too. our my business

So, one. we’re on the number we’re capabilities is on quality, this focusing focusing

Arvind Ramnani

the XXXX. best for Great. much and very you Thank you wish

Operator

comes Miscioscia Research. with Pivotal question. your the next question Louis with from proceed Please The

Louis Miscioscia

up. is question our follow for This your

So chain were we about block a hearing robotic process automation AI. automation obviously lot

sense what new If of types in just very portion real these kicking meaningful really clients not gear revenue? you just embryonic it Or you still of really with your Thank of lot engaging could a maybe in the a there with technologies. you’re high out comment is is and of you. into seeing yet

Arkadiy Dobkin

very the this being in engagements type starting companies a over automation now to there are all show is of very seriously that up of And right becoming anything What very place. the seeing we’re lot related in on and this are market to hard.

much the beginning didn’t probably a really they are lot interesting Blockchain, but there in it’s think yeah. I and companies here. but investment, prove of return is probably hopes, lot still more completely on experimentation So, of initial a With

Louis Miscioscia

for luck new Good year. you. Thank another

Operator

Our final Stifel. with Grossman David your question. question Please this of morning proceed comes the line from with

David Grossman

you. Thank

a the how type I to higher the what’s utilization on at about And diversification the run end something we in years I know reflecting end down of in your thought even wanted should management end running India next of the supply? set is range target. think it earlier at at range of just you right the higher I heard run though to few and that’s coming about going came supply So, perhaps kind about to over that And still back I’d if going it’s high go there? your up talk of decision you’re the including to is these or and base up with subsidiaries target

Arkadiy Dobkin

optimal because running scale we’re of point this actually probably were the before than higher trying this of and to what understand company possible We Okay. what’s the improved view. from and

quality we we the So, do we and we it. work of it definitely exchange to delivery in we going But our will the that of not teams of talked would will increase increase. type can preparedness do in to to that see or of kind are be that of possible about it - result

And before workforce. so, I be our keep situation efforts on it to came than the best the higher would of

of centers like outside years Eastern the iteration have we We last also couple five didn’t delivery during mentioned ago that Europe. any years so in four,

we a now China, now. right We’re in We investing in investing center right lot a India. Mexico have in

is in a So, was years Europe right very, as diversification different. Proportion this ago by six and Central well very resources Bellerose the as of in well. far like is happening. Hungary increase five now now between is And biggest, big

happening all So, be time see this done better area. is the we continuously if would what and situation in could the

Operator

turn the remark. to management like to would for floor closing I you. back Thank

Arkadiy Dobkin

you with XXXX. pleased our complex the to our core of to are our growth be defined deliver continue ability programs. in and results The we Thank by

in to focus you. talk what’s mentioned right for we I you now. globally year would happening of that as capabilities call today’s So to three the people thank This the helping everything thank And drive else. months. you XX,XXX and Thank all quality to should for happening and on our like make our

Operator

conference. today’s concludes This

participation. You you this right may Thank for your disconnect time.

EPAM Systems (EPAM) 16 Feb 182017 Q4 Earnings call transcript