EPAM - Earnings call transcript Q4 2021

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Operator

0:02 Good day and thank you for standing by. Welcome to the EPAM Systems Fourth Quarter and Full Year 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers presentation, there will be a question-and-answer session [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions]. like David the Relations. Straube, now your over would today, speaker Head I to conference hand to X:XX of Investor go ahead. Please

David Straube

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

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

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

Arkadiy Dobkin

joining David. X:XX for thank you today. everyone, and you, Good day, Thank us

I anniversary year other turning XXXX. Stock initial positioning our like York of time last before X:XX thoughts thoughts. to like the the provide a outlook, quarter, of couple overall doing on But a Just spend XX-year detailed even to we to for Before on performance last that, XXXX I public share and results would Exchange. New week, offering to share reflecting our our ’XX on on our some and update Jason fourth would some celebrated

grown our later, to and we team Ten a has global company. tenfold, than different EPAM across are years X footprint expanding our and of much team employees, podium, notable week journey, in very palm a which customers small as to we in important is changing Exchange and fast-growing, Stock still years startup. unfortunately, very a last XX a our of than XX,XXX across countries we also who participated more very all understandable shareholders continents more deliberated that in quality IPO, consulting professionals later, What feel constantly on minimal strong Europe Since first like about in New and in a recognized restriction. milestone our our provided digital [indiscernible] York X:XX Exactly of indeed. Western this The we up bit with prior increased we unknown just by in a very earnings few that our priority go then, across During X,XXX countries narrow the and We reflected call. startup XX% guided why in much was because of a annual first back with shared an revenue presence United company QX about $XXX was revenue. States which recall people million is our call, a from all around a X:XX XXXX And special. that EPAM with X Europe. years extremely So is and should at X:XX ago, Eastern to So would in world personally engineering that. centers XX our on thank at we due our XX%. guidance learning of development were we XXXX XX%, achieving and our to XXXX. this revenue the become and XX% growing quarterly and I is And year headcount moment, grew people leader first X:XX just this services. call

plan fourth share revenues by at to XX% we XX% our today, of and and XXXX. by annual our still grew in quarter, that head As least grow XX% XX% increased in can organically, count we

which XXXX, a over on efforts days. the special previous of Non-GAAP that a in setting greater ago, billion almost our we plans. portfolio. a mention faster revenues, growth, again, formal XXXX. X:XX was first increase earnings strong per in generated X go fiscal while I free we cash share be generated our included So post result X:XX call $X.X year transformational flow. history in I a we not of like And did months were we short, our for back X-year today To into $X.XX, across XXXX, year-over-year also all the $XXX shared side, during of were dimensions will but XX% us. a our During XXXX we are we more mission reflecting our than bit AP for than running XX% to million actually details would then

platform for analytics. [indiscernible] better possible as cloud year and as a of XXXX, and we in existing also, of was through and priorities members the across absorbed from building finding X:XX very and XXXX was high was the the and in area training clients basis. we and partners to to across attract would when innovation key clients the development a still product which our we're employee accelerate tech refined very data demonstrating and company it and new center mature fast. distributed XXXX and these X gather Travel today the continued clients. as potential and demand Additionally, outpace percent a talent organization. our experience well transformation. also the the X:XX especially smaller X:XX the of sure, of point practices, emerging it and if have In And high doubled of an spaces significant providing to rehiring once our and have previous capabilities business moved help cybersecurity, very and with can domains. was to and delivery our X forefront a Life down and So and consulting was in which previous much during and IPO, meet year digital we year slowed investing area expanding with continue marketing view. allows us We'll we performance M&A subsegments. X:XX rebound years. doubled employees, verticals our our extra quoting. majority grow not productivity return and both team has also our XXXX the fuel tech third sectors year We team demand approach our again and recognition a professional was from point we time since focus most It year all we focus services Telecommunications global social XX data our been very XXXX some from row as to in each was other through amount the fast designers, XXXX, EPAM which consumer, retain of related and our global well capabilities, in market row X:XX plus of of our upon same occasional is to as and and delivery in together added a pool at to year percentage in we to to wide is of of the new clients organic, results from X:XX the suitable keep strong remote and global best approximately and deeper a record extraordinary platforms, connections modernization expertise our when year work, where cloud Well, engagement efforts the rate our platform design financial For to in discretionary aggressively driven employees levels talent. very collaboration several in people all a both our on offerings automotive, also level view, of For our ability regular not noticeable X.Xx more churn were information in technologies verticals. Financial saw growth of white to This customers fastest-growing for credits. attrition for all embrace In in client of been a our of of high To as to demand consulting and the cut community the engagement. which year point record communicate part value second growth XX,XXX strong our and media testify digital consultants post-pandemic the as meet digital limited X:XX new-generation business in XXXX. a of on In engagement healthcare environment. our opportunities an in we opportunities manageable to in more year through practices across turn X:XX within Services, services than people through to current Insurance, understanding architects dispatch in talent and modern X:XX of previously agenda. deep of and Science person engineers, a our help during and last our challenging to current relatively and innovation, view. QX. us drove proposition,

Consulting to XX Newsweek, those one included them market; for Ford number a largest zone. as LinkedIn. IT being was also along integrated agencies most only Fastest-growing and demonstrate of the but one Work X Learning Mortgage list I advanced the ranked a XX Deloitte, Best companies, continuum the a recognized on Continuum E&Y, was Some McKinsey loved time named named Global achieved consecutive of IMB, as on of EPAM by and also Excentis, world, previously, and consulting Talent services as EPAM together beyond but was Great PWC; awarded company top not would top Also top anymore experience strategy largest Place the we to of the consultancies. employee-centric XXXX a by by engineers engineering on Companies third workplaces key as List list work shared the XX:XX the and consulting progress our for we list by SA Fortune in recognized Forrester the practices, in of Culture in the with moving our customer of XXX and of fastest-growing included year top the XX by a into top

included a Just in in top And Sustainable last lastly, week list. index was accepted Barron's XXX Most Companies December. XXX in was S&P

Today, we we first about time the billion future. mark billion the Just last for know XXXX. $X are that already actually, in in the the guiding sometimes XX:XX probably company in the timing to May, billion to we $XX several close talked quarters $X ago

much set $XX more we it do billion feels we company. client believe So to our we and as on as and overall near-term feel especially mission followed on-site to do. to with very diversifying why today, for the And, key I like at global about point. XX:XX; challenging advancing following positioned delivery continue That We our and Microphone topic on is like our we you know are would well the a this very sights Jason. was that I growing us. share sure before and news XXXX Russia markets year, progress fast I question. growing much confident to capabilities. am to so Ukraine actually I

and due remember some and across and of key continued times. level to not uncertainties our despite this XXXX of published the disruption that We new win XX:XX XXXX and global quarter XXXX and geopolitical for pleased funding. XXXX years and region. delivered operate remember on our to results all well our markets That is the maturity we difficult the we should exactly very share social -- our are and during of over first performance First, overall as also why conflict well. performance in We fast-growing talent ability demonstrate with then do the standing is

since those and then. the We with past, a have in lot also we well dealt learned

So in key quality degradation was capabilities. those XX:XX situation, as our XXXX, portfolio implementing any geographic we delivery. continued So and industry of our timing consulting the and gain do efforts to over actively and well Both focus without improve we years That XXXX. within something in since navigate of M&A-based as to started to diversification it our significantly are much which engineering our overall

to XXXX in regional we insight are well applying address the send time. as global our as G&A ahead deep future very our clients, our that So to for making our and and ending never prepared one shareholders and broad today, spirit possible leveraging importantly, and to more keeping our and the reach our while by by in to our our support. strong like local addition and same as communities the I at priority engineering entrepreneurial safe continuing believe continue we employees everyone their With would customers key understanding for XX:XX global challenges employees time

Jason. me over call let turn the to Now

Jason Peterson

good extremely demand geographies. services strong levels industry of for and the of range continued Ark, you, a across verticals day to reflecting EPAM delivered Thank all. XX:XX quarter full company's fourth In high the results, and

higher and programs. base. higher compared levels the the the top XXXX in was and clients level grew our of a businesses on performance to the the EPAM our last accelerated the data The growth transitioning Moving our in of GAAP telecommunications. result the industries physical America's margin are our statement, year-over-year, grew and from currency. revenues, quarter industry from quarterly EPAM’s diversification services company's first XX The currency. XXX offsider and continues acquisitions. most standing XX:XX quarter. basis revenue customer’s in trends, notable revenues our and strong merging name During across revenues in the and the the Gross operations Non-GAAP QX XX:XX reflect XX:XX and report clients below our strong the In income need to our XX been very healthcare media to Software basis recent automotive, consistent of management in XX% with very the Human constant EMEA consulting top by X% or largest currency continue XX% Cloud. XX.X% XX.X% was information new grew of our experiences. driving exchange top for to negative methodology Moving by representing and quarter reported led represents the is top Travel very QX margin constant of our growth partially and to of compensation engagements terms, banking, and life year-over-year Growth better quarter, of transform X% XX.X% was CEE in digital XX.X% ongoing across contribution the a in XXX is for year-over-year, only. was verticals the both sciences gross These quarter, revenues constant growth any the delivered XX.X% and notably reflected helping billion, XX.X%, a and them creation geographic inorganic increase year-over-year, QX, $X,XXX from XX.X% revenues, innovation grew and XX.X% renamed quarter down retail to clients. or driven levels XX:XX for significant chain finally expansion. grew XX.X% is in to the resulting and grew quarter APAC to strong. verticals. our from grew the million, impacted of consumer currency. in Long Performance quarter digital QX The revenue Larger and growth we and in acquisitions. spread foreign last XX% and the our XX% applications during partially XX, the of and in revenues which drive for growth quarter XX.X% unchanged. quarter geographic excess of terms, revenues regions our clients of greater industry grew while have XX:XX by year-over-year payments, higher same result growth, in of of XX.X% verticals growth coming of harnessing finally, emerging $X our used XX% grew driven in energy performance consumer a recent modernize across tech in Centered was of Turning customer QX are margin improve manufacturing XX.X% delivered XX.X% year-over-year, high driving and now XX.X% milestone revenues. to in our include the geographic QX representing clients in products generated compared supply variable region constant of XX:XX points. while the experiences representing growth. our changes business the And QX year. funding quarter XX.X%, of year. QX to accelerated currency gross growth to reflecting XX% XX.X% asset constant EPAM while of outside & XX.X% a revenues, remains grew XX.X%, delivered Financial insurance. XX:XX impact journey. and

and to income GAAP XX.X% Given million the of financial company's quarter quarter, income last year, SG&A $XXX XX.X% XX.X% of XX.X% the year. last or of beginning the of $XXX came non-GAAP from XX.X% XX:XX the of versus revenue outperformance year. same SG&A revenue of the targets in compared revenue to million at XX.X% QX revenues XX:XX year. to of established period or compared XXXX last last $XXX was of in the of million, revenue year. from in at XX% or operations operations in in to XX.X% $XXX fiscal GAAP was was compared million in or revenue QX compared Non-GAAP of QX in

tax came than at to Our compensation. guide stock-based related in expected Due to level a GAAP effective the rate versus QX our of excess for tax to XX%. higher quarter XX% benefits

on Diluted effective which tax non-GAAP per a GAAP $X.XX. benefits share excess tax was was basis XX.X%. rate, Our excludes earnings

the operations higher of cash in million, flow the QX free level cash in to XXX% compared $XXX cash income, in $XXX $XXX approximately same reflecting XXXX. balance in XX.X% our DSO and cash Our which diluted Turning our XXXX and growth of flow XX cash the $XX.X a $XXX In a equivalents, of quarter last is $XXX ended million from billion used acquisition of conversion XX:XX efforts of XX% quarter non-GAAP and days QX, was adjusted the At was with during year. net reflects EPS approximately sheet. over XX to in days cash million, and cash Free million year. strong flow free end XXXX. the collections. quarter last there for was $X.X outstanding. flow diluted of same increase We million same Cash XX, shares $X.XX, negative million compared quarter flow QX to XXXX. same in quarter of in to The were a QX, level quarter the compares and the in produced

more we ahead, year will over of year operational engineers, XXXX. the up quarter, trend few to A metrics and Moving Looking with increase in trainers DSO on expect XX,XXX for we architects. QX XX.X%. consultants, XX:XX ended a designers, than

more for In of we XX.X% had to Our total XX:XX headcount our of for additions when a for results approximately year on XX.X% QX the in and QX quarter was $X,XXX and number record employees. to XX,XXX Utilization a year to compared producing in last XX.X% than XX.X%, growth Turning net XXXX, QX, compared XX.X% X,XXX was XXXX. XXXX. new additions were currency million revenues for constant basis the reported EPAM.

During from acquisitions contributed million, of year-over-year growth. revenues. fiscal our income operations and XX% increase XXXX X% our XX.X% represented $XXX GAAP approximately was of to an

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

$XXX adjusted XX% our million XXXX. progress from flow average of basis other compensation, an XXXX the And provide customers was at conversion. Diluted set million, long XX:XX fiscal for standing on certain was million effective XX:XX weighted our I'd responsibility a items area beginning and the excludes the free compared like flow on exceeded XX%. few was our a people Before reflecting Our for in income XX.X% $X.XX, and finally, GAAP share $X.XX. $XX.X metrics to our operate. increase our EPS, EPAM In Non-GAAP $XXX which stock-based And our highlights to outstanding. rate was to of we serve corporate approximately cash and which move to was ESG. in shares non-GAAP commitment costs outlook, related each a which a guided We're operations I tax on has results, XXXX. one-time diluted acquisition pleased per earnings cash XXXX, to over communities adjustments $XXX net of with the very year. reflecting million the

to to As communities. and act by supporting environment operating local our and we to continue principles recognize expand, our responsibility protecting global we according our ethically, the

hours guidance. emissions. also long-term developing to to specific change, to fight the constant fuel sustainable and have XX:XX today We're a turn in on than and to with and be will continued in focus in of our we’ve organization skills sites the factoring events, in solutions creating will Our time impact. growth basis, future. sustainability and day, sustainability innovating on concepts negative associations conference. STEM Starting XX working global Over social and their to EPAMers Now catalyst courses, X% expansion on XX% a be effects and conducting the significantly full-year XX:XX through media scratch coolest reported climate at the across digital our While donated continued the growth projects, and outlook, our at commitments are year we least innovation exchange and after environmental the platforms challenge will last initiatives British new support XX% EPAM let's revenue Pi foreign focused related be communities. to ourselves partner more XX,XXX including approximate supporting Foundation's reduce currency interactive of a Raspberry events least terms XX:XX and carbon supporting digital

acquisitions inorganic in revenue X% to last the we from expect approximately contribution closed XX months. We be

in expect income GAAP of rate the XX.X% the We in XX:XX approximately of to operations be income from We and range expect effective range be operations GAAP to our XX%. XX.X%. XX.X% from be to to non-GAAP to XX.X% tax

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

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

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

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

acquisitions expect operations range our we operations non-GAAP in from of of GAAP expect closed be income in approximately of come the quarter, to be first to months. XX.X% the to XX by X% XX.X%. the from over last revenues Lastly, income contributed XX:XX from For growth range and XX.X% to XX.X% to we the

share, We our GAAP to expect we X% rate, quarter, expect to to excludes our tax effective GAAP diluted excess the EPS XX%. $X.XX be to the be earnings tax EPS to range non-GAAP approximately quarter. benefits and of non-GAAP stock-based diluted range approximately to XX:XX and For effective be be rate the of the $X.XX in compensation tax which related to in $X.XX $X.XX for for per

weighted expected XXXX. in a XX year, the around $XX each demand that a markets million the in quarter. XXXX of is evenly key Stock-based the expenses with approximately across remaining QX, assumptions year in million be expected of non-GAAP support finally see And each full XX:XX share and tax a for is XX be in in Finally, for Amortization QX, loss shares expect of we quarter. to in million exchange to million excess few across we XX:XX adjustments spread million to million outstanding. to we Tax and $XXX intangibles $XX quarter. million million QX, $XX foreign serve. million our business, approximately and is million to the be be approximately each across diluted quarters. expect We million million for spread evenly be year environment to $X the $X remaining QX, $XX then QX, around in strong each million, compensation X Impact $XX $XX.X XX:XX count a in Our in remaining expected for the QX, $XX measurements non-GAAP and year, benefits but reflects GAAP average XX approximately outlook expected $X million with million in quarter. effective

equip EPAM In across future growth. processes, for people, will which ongoing addition platforms to investments our position and and expected

past, As the and business we've operations. adjust environment reflect our in through done our quarter the outlook we will in each changes to demand in

operator, questions. call for open Okay, let's the

Operator

from Our XX:XX question Thank Ramsey Barclays. comes you Instructions] with first [Operator El-Assal

is line Your open.

Ramsey El-Assal

for in model give so easier maybe taking I situation on in color whether conflict anniversary. the work, your plans thanks continuity your of much has a about ask sort and Ukraine, we've us there a to call. and Hi, wanted whether that my potential pandemic to you XX:XX the congratulations could in made bit remote workloads And little more it shifting the escalated contemplate, the post little event also on around?

Arkadiy Dobkin

Hello, is continue is there impact at XX:XX Arkadiy environment, in that day-to-day work number normal think point. to one any on we this I operation not this

of So we Ukraine border talked part lens was XXXX. it there, from activities and about it the our the there. a operations And active in actually, military questionable XXXX, was experience started and on with was very active

we any in pretty a it's can big EPAM this what nobody people. now, addition [indiscernible]. you're have time, right of all the reading What impact to bring on didn't During from number that it

XX,XXX We people the have almost production country. in

any or is training anybody anybody who [indiscernible] So is for have who drills. or type drafted we of it military request

The point years second of practically your on special And preparations that tension -- any project completely of X of question So region, XX:XX top lot bring. we local the probably about work. and in kind also any almost activities, since this, we which independent that's a so. can for infrastructure color, remote of like project additional from we did infrastructure, COVID

that means on Lacao, it it. does of depending practically it or engagement from any doesn't So our attributes building

for And X have will XXX between we so or on participated BCP now lot testing should add of little X, in be active more bit will activities. of I number a is total pilots for not or and it of right currently XX past think to questions, I that. weeks platform in [indiscernible]. relocations. any There are a people, -- Probably the the some we from living X,

it's that, completely normal. again, So other than

Ramsey El-Assal

was fiscal I Okay. cadence should I from this guidance wanted and it's midpoint wondering, a through the know guide. at appreciate XX:XX little ask you And the just XX – the and you And maybe I to drivers also about points margin mentioned about people It's the ops. down ’XX investing more model I basis ’XX. bit the that. color we and on margin can give fiscal and year?

Jason Peterson

XX:XX Yes.

So respond also maybe specifically. year, what I'll talk do about is I'll QX to full I'll and the

somewhat if of we this more see really not education demand. I significantly were but than elevated that provide we maybe at higher But our wage from Those and traditional pricing substantially color continue processes, easiest as continue But centers ongoing of of to XXXX. maybe people strong as see obviously We've understand world. inflation, on growing different And mature XXXX the so we fully that's wage offset sort elevated a to our pricing the of is seeing are is than to also extremely kind also of talked diversification into business does inflation. the same the not probably time, XXXX, that to We, are at go the grow rapid just business better the sort impact geographies. environment. in is with the globally a around time rate investment optimized about probably less at ongoing we somewhat what

little think to that a is activities normalization impact. same related time, travel one negatives related that got of ongoing here see bit of XX:XX I more So the the to At you've in-person. you'll

to than XXX go SG&A that QX. about every and it for and not we XXXX. points And impact higher between or at somewhat to QX probably the the is that between somewhat QX wage and think at guided operate particularly inflation XXXX you XXX what and midpoint expected basis midpoint to totally to off But going XX.X%, see little we'll to We've the somewhat basis has the back XX.X% sort XX.X% higher year. of see or right be a and XX% the fact XX:XX come between now, QX. ongoing basis little talked you'll in margin a gross I and variable the declined compensation come believe history points I guide. compensating so I And the profitability between of where on I clearer would full look QX SG&A between points bit elevated and of year sometimes that expect them pricing, off you However, the want little by We've a bit a time. over bit

the that an lot And days. we QX. have And so capacity in it's more in is of the is billing holidays somewhat we are lower Christmas, which a people Orthodox those a of January, not of again, region. December. There lot which uniqueness just occurs in celebrating the we operate, lot have where or in first billing awful

[indiscernible] that kicked in, you've February month so in is of availability lower any in then January workdays And second and fiscal company. a usually a got the short for year. half of

impact, on impact you in fiscal kick the in would those have that, year Social higher company year an when of QX. second at caps employer particularly to usually a resets of half payments, much the social security XX:XX this and got Social business. the Security profitability highly has and then not beginning that Security thing and again, So oriented any get a EPAM. The you've other time materials But just

things on have those of both negative a pretty and particularly margin. gross impact So

so we modeling I say when again, we the than And be would that midpoint, can full okay, the that today, the somewhat year, for midpoint. do higher

QX, for XX.X% XXXX. I I at midpoint look However, modeling slightly to of at say would is XX.X% the below the for midpoint that the we're or of QX I say would when fiscal doing

Ramsey El-Assal

you. thank Super helpful, XX:XX

Operator

XX:XX Thank you.

comes next Bergin Cowen. from with Bryan Our question

open. is line Your

Bryan Bergin

Hi, Thank XX:XX morning. good you.

for mix an based overall work up be of them thinking follow where and there's we new on And about you increased selectivity exit those Can you to wanted client whether countries will on of the just the two then talk about of see delivered or and by conversations collectively, this First from? your Ukraine. any nature year? are amount, plans, by Ukraine declined a just global would as Belarus you but year-over-year, mix expansion headcount as how that preference

Arkadiy Dobkin

Okay. XX:XX

start what's Belarus category so seven. we would majority preparing difficult those to to them. over ago. There was figures. active to again, very Russia and alternative very it this continue So small XX:XX and as [indiscernible] general, are specific And work in happen, it ago, delivery similar is and are our I action and see, a years clients think situation, you be There options which very, define today somewhere know, today, BCP back. else. -- worried was which and the an risk prefer which X% of the are of what as And between because happening. To X is see. is which some probably some minority. was clients of X if some X similar around more to capacity probably very who versus some years have in and kind There like years clients many and for in situation especially this very And very are triggers the more conversation wait a wait usual,

Bryan Bergin

big we pace what utilization that XXXX Okay, XX:XX he over your goes, here quarter addition outlook? anticipating kind another think far as again, additions, the you're just of just and and levels comfort of this sequentially, as estimate XXXX about the and talked organically addition workforce [Indiscernible] – then, within in resource I

Jason Peterson

of other Yes, And XX:XX up of bit questions on the that, provide significant our let Belarus capabilities a earlier region. follow of seen so, had that. growth productive also we've you're me traditional you one Ukraine, color that on the outside little in correct and kind of

XX% specific, Russia, And seen and by be between Belarus, other year-over-year basis XX%, a XX%. a than India XX% we've where had on Latin regions, XX%, and from high in to greater grew Ukraine, we almost particularly standpoint including growth the production So growth. America,

in it we a the labor pool that idea moved an we've broader was becoming clearly we're at need we again, from the have And from XX% same risk and to to a to XXXX Europe, accelerated see, expect production Eastern in continue Latin of in you'll like particularly to to see APAC. to America, Belarus that as result, and derive would XX%, And I it growth, we number places continue down. Russia. benefits has diversification continue time, increasingly from Europe, you as company, expect access, of to global Ukraine Belarus, we a standpoint, see gone capacity And larger, Ukraine, let's we've Central so that that we're call

know would a and be it people be From we certainly a utilization at still QX involuntary it exit level for from it get So attrition nutrition QX, we generally benefit if of then at we lower a than in would today up I same bonus, we you But as and is dip see XXXX of bit standpoint, about as a well. see of it voluntary or think something, below XX%, little a same wait utilization and standpoint, than year, we the see approach full certainly And vesting below little time XXXX. remain and stock we XX:XX XX% was expected slightly. XX% would and I as much in but don't lower nutrition are with think in attrition to the will usually so the might in attrition QX. XXXX both bit definitely as

Bryan Bergin

for Thank color. XX:XX you the

Jason Peterson

Sure. XX:XX

Operator

you. Thank XX:XX

question Our Stanley. next from comes Faucette Morgan James with

open. Your line is

James Faucette

Great, XX:XX very thank you much.

you for to continue situation regions out you etc. of those move flexibility. other think – about Ukraine, potential and etc. region kind the of seeing, ask How are you into where this needed Just if quickly were operations and delivery, disruption of can flexible there If we move or about operationally, you're kind of to how out disruption

then you're And fully increases a Jason, a Is pricing those with about moving wage Thanks. experiencing what that kind faster than can thinking you balance your wage timeframe better perspective you you mentioned of or pricing. from contingency Just keeping the separately inflation recapture on which under in your there aren't can pricing. customers? move plans. and those

Arkadiy Dobkin

of first XX:XX On first the question. the part

the engagements of or your how us, operate accounts there the have independent one there. in within But approach accounts, kind BCP there Ukraine. even it's from like on on no factors, specific or still, sensor are risk were these general engagement specific and plans, mix depending again, all, rule part we to distribution this First of some of situation infrastructure team is of because clients which

So that very the very real doing experiencing is plans it personnel of key is and period, So media including we events pragmatic feel we're detailed, we covered for very years It but it because it escalation pressure this happening this. as specific. And pretty during on Also and is very, X much multiple by were XX:XX ago definition and very, as this. so wasn't then those was prepared like similar well. very timing today,

also have of lot happen in board from And again relatively We not Ukraine. understanding line number on understanding is science, of which is Ukraine, centers necessarily could a our what reading limited across a across of our local large site. we have we're exactly in with the and development again what

that pretty to is border, people the in plans today farther still we to even have believe from the the the kind again, border from At we sales of closer which time, move So one future. necessary. if do how and will same in those, another, be to

that's So to very engagements. clients in I think a timing specific triggering and specific

Jason Peterson

of is the to XX:XX quality Yeah, and on so selective somewhat delivery is in with also the pricing terms continue on value existing superior, increases opportunities, clients, new the that where more pricing such we taking the of rate question, open deals both EPAM the we focus take. then and that

time kind price, inflation of the beginning sort XXXX. continue clearly hard be also we'll XXXX. predict sort But and year, and of of the wage there's, at see the throughout to of price not a It's at what I just price the get at improvements of what, that end what continue inflation. is beginning QX, going between to to And, the see you'll of in we XXXX, wage better it's is to think year. think the to hopefully, but by balance I

Operator

Thank XX:XX you.

Our line Jason your next question Bank with of comes Kupferberg open. America, from is

Jason Kupferberg

morning, XX:XX guys. Good

on in or you constant currency, at least same growth, sorry, posted least basis guess I or the revenue organic, XXXX, XX% XXXX. in was it guys XX% So guiding XX%, to just

may on like looks the there's even last, growth, from on a XXXX? think but pandemic, do assessed, curious surge a long competitive growth as normalized you what and, I in growth obviously, that mean, So how how revenue has mean, plus, you've would organic rate it's incredibly position been just XX% underlying seems talk demand beyond really evolved used do and that kind be kind your true like your multiyear think continuing of I just your the basis? of how persist. about it's about we strong on now thoughts to you to

Jason Peterson

compares said XX.X%ish XX:XX correct growth XX% consequence XXXX. just in would to in percent I the currency guide, kind just constant a you That absolutely be rate the serve restate growth Yeah, or so let me of XX%. to, what contribution that contribution, about organic organic,

revenue seen you've we three that for XXXX the growth rates. had as we've quarters you XX% if XXXX So, QX what of and in year-over-year guide include is enter or XXXX, also now,

acquisitions with huge have And growth the headcount even deceleration that with number. that year-over-year that related the basis, So, guide think us has growth if that's rate activity. a And see throughout revenue we a QX, think the including of year. XX% you Part in of exit expect see acquisition full QX would and I in extraordinary we excess But the growth in on plus that as think the rate, the so rate guidance year, additions don't of sort I you're growth decompose sustainable. result is we for you clearly, the organic you'll XX:XX going of XX%. rate to additional an that some been of an

growth to is us QX would rate to rate again, rate. a it's get relative of accelerated exit appropriate that time above growth the growth see think above more you at to a somewhat guide to QX you'll XX%. believe year. that But a higher than throughout XX%. a And the get that we we you is, is period, that closer growth still somewhat what back to think is exit you would see for somewhat rate sustainable And traditional we'll decelerating intentional, XXXX that a I get with I somewhat do as but historic, the So that would

Jason Kupferberg

XX:XX Right, right.

year, on no, the about sense. headcount And makes pricing all obviously, your then to think side. have some on we targets for going Okay. if growth to help you're the that revenue Yeah, the

revenue kind growth, of XXXX? in growth headcount lagging about think modestly, we should So

Jason Peterson

say, are you you Ark, XX:XX want something to sponsored?

Arkadiy Dobkin

ourselves in a XX:XX thought what about happened have what address that I think to we tested kind and we at the what that last XX% was Jason I plus just right wanted growth level. much we of before during lesson year to that the now, main higher

possible, this growth still XX% XX% the of [indiscernible] But to in expectation rates into see to comfortable we now But feel right grow XX%, a which wait in coming than what have asked positive. more have we Yes, we an to we saying and question, probably is that's that kind answer past. now. Would what come you to faster we able the and you we'll order in XX%, more will future. again, So normal on were which where be it the be past? to Unless of the tested.

Jason Peterson

QX, of know, XXXX. growth year rates, and QX, acquisitions XXXX QX on I very it QX QX And you half in we, had we and does one Again, very, year growth. plus, done, get see of standpoint basis, guess now, organic XXXX. last are what of in produce, of you all the a yeah, know, headcount growth the to that over particularly the XXXX addition, of second you've comparing Right to for when what right we've headcount is of growth, we're course, now, rate you the this time got and things and from quarters, about And, for XX:XX or high we of that of the organic XXXX, somewhat them that, to XXXX. two QX we've the and organic by somewhat -- had greater over XXXX kick than a planning you growth above

still growth Okay, that rate the that, we being, sustainable growth that might with that we're the be the for plus about year the more the XXXX. and a produces, talking strong full XX% rates idea time for believe

Jason Kupferberg

the thanks well, throughout year that. for Great, XX:XX

Operator

you. Thank XX:XX

with Our comes Surinder question Thind next from Jefferies.

open. is line Your

Surinder Thind

at when talk do you those have XX:XX maybe your clients? of are of clients point. at How terms A Thank about the these are you adding some at percentage EPAM this growth about ingrained adjust kind that clients demand even environment breadth are revenues a current selective selective the in seeing or how the question revenues? to becoming in which very new top of focused what point in with XX considerations you're $X a you trade-offs a of considerations million we'll think in outside and of the more out the or we acquisitions, to if clients, having of believe you. be Obviously, are guys you maybe how about on should the old get strategy that you onboard can versus larger that strong clients breadth clients we that's you the the given pace the

Jason Peterson

definitely million past, lead least share dozens and bring selective had high we new both potential, in and quarter and and fast. review growing already we serve we we clients when last watch which than in uses the which is it we XX:XX our definitely probably clients more we this per $X view, in clients So the at

very an camp, demand there's to be, probably across little the to that it's strong, lot new maybe think existing actually traditional again, around we've verticals. strong thing continues strategic as still industry bit and budgets, new – said see of bring think still little portfolio invest a awful XX:XX growth we more customers, so to customers in their bit again, continued thoughtful still work hearing unprecedented what and we're EPAM are be I and The level continuing So from but maybe more into EPAM. Ark about other and and is some that that growth to desire strategic of to clients somewhat becoming a I much more broad we're do, you selective but continues based are the in customers

Arkadiy Dobkin

XX, top XX to, becoming top XX:XX months even well. is [Indiscernible] our XX shift or as like which reason

Jason Peterson

checks partner this, that greater are hearing scale we true a of clients and ability on do projects And speaks we our clients, looking EPAM keep at scope. to when and transformation the Yeah. much internally, take I think, to as of XX:XX channel sort with differently

Surinder Thind

reverse XX:XX if more being point? turning be would at selective you're true in And then this business you're Got the that situation it. the away

Jason Peterson

say between turning certainly, a business. away I year I But disconnect half, mean, supply XX:XX a I and I XXXX. probably think mean, that, last, been the throughout demand and we're wouldn't there's or for

to pay very for well, right, rates willing for interesting for and looking grow, is in to projects are we've or somewhat also have clients some programs, clients selective, the in clients so And being think, talking obviously have sufficient who comes we're looking about that sometimes who cases we're looking it incentive, been definition, potential by that it we're price. funding to our we're for you the when I looking are

And some so clients, by self-selecting there'll and, do – self-selecting all those to things and in e-payments, some factor this. by be would which could clients who, obviously, some

Surinder Thind

it. Got XX:XX

Arkadiy Dobkin

us the because cut rephrase of because not to It the environment it it's operation really I is from of refer from can past, think configuration, only Okay. kind now and future, first and whole engineering. different actually very up for for will looking in of happening general we we hope engineering the our the in the skills let's understanding we still to continuum seems which study technology changing which criteria work size XX:XX speed as And our doing and like that's in much age some it looking end-to-end somebody the focus past, right much what's improve At looking It's transformation. the which more where that be like of time, changing. capabilities direction because the strategically some consulting has. same of we're of all, company in and portfolio the can of we're the who clients, general the for kind criteria allowing of and now, clients,

different together, there all retails. definitely, criteria and with very these -- is So selection

past, probably And will in bring some working we be clients, not the which in work today.

Surinder Thind

just cited kind Or majority you the of keep of there? continue of building of kind in you that? And of acceleration where geopolitical any you kind is when or of questions or delivery Obviously, given you just that? the faster? towards large percentage going? on in do capabilities around perhaps Or ahead, you your rates of building just look risk, you global at current acceleration already in terms kind XX:XX there capabilities towards Got follow then do investing a Do a your it? pace terms earlier, out view the accelerate are of

Arkadiy Dobkin

because think why also risk, XX:XX to obvious from people. in X,XXX today to of pretty to the to also But need do happened what's kind we geopolitical people not you need acceleration. we XX last that's try of you give XX,XXX that general and only consider, – it's perspective, we during it's I years

acceleration to and XXXX, our Latin only mentioned than Europe. not back So 'XX, opened right XX-plus it's big we core India very geopolitics, America, globalization important. India America growing probably And we XX XX:XX in the Eastern this closer it both services. ago, of versus and started about to which do back. Latin then it's So practically dependent XX% general XX Jason in already locations when criteria of happened by now years faster years on percent, as before, year, have end is And will our we be and

Surinder Thind

you. Those Got my XX:XX That's are questions. it? helpful. Thank

Jason Peterson

XX:XX Yeah. Thank you.

Operator

comes from XX:XX is Our Nolan open. line Blair, your with question next William Maggie

Maggie Nolan

about in level, billion XX:XX until billion? you of kind $XX to of or consistent Thank that as as you you get dangled operationally would strategically billion, what congratulations. the you, then front and remains what this get I'm Ark, to be or company wondering $XX significantly $XX different us, company,

Arkadiy Dobkin

there. we to it steel very you. but much We inflow doing last still and the of years. to open it's trivial, do provider, them it because becoming not this front in it's talent. think how which all, all of building us well, criteria talked it it's in the only less it than this and we're sounds solution front that opportunity to believe end-to-end First over is up continuous do right, seems of XX:XX And lot we a of company, of of I about more And

sure So how sites a that grow that's to component platform, the together we from our very find talent, a people to education, need of different to to way big like efficiently. make how ecosystem digital and working

be And our come a lot Hopefully, it's it's challenge thinking answer it we're because we very view is look do how very simple bit separate to details May will a more it think is our $XX to I Investor very to while little realistic, conversation. Day. still the better in we things, the competitive is in able have So together which do to of a a market. billion this it in when

Maggie Nolan

driving that mentioned rolled would the that that in Jason, first out something XX:XX that the as Okay, it then the has across then was And one of think services, drivers behind when a and think, I it separately, you And business? your I is over thanks. us was last capabilities the have consulting to several it think changed financial consulting growth consulting, up, widespread about be wasn't you margins as would caution that matured billed years? you

Arkadiy Dobkin

only XX:XX not financial I it's about think services.

in right multiple [Indiscernible] now. it's and So sectors in time less retail selling happening

correctly number and and of category. very right a that consultant people it's So overlap, a and still we kind this in we department, to report consult it as orchestrate was across how have specific have It's not just accounting for very client. of for much girls us have whole capabilities very don't separate integrated of consultant specific separate to before. organizational Services, very effort know but different this much to and because units actually

nothing point. this from change So point view, at this of

Maggie Nolan

XX:XX Thank you.

Arkadiy Dobkin

Thank you. XX:XX

Operator

comes next Our from XX:XX Shirvaikar question Citi. Ashwin with

open. is line Your

Ashwin Shirvaikar

Congratulations Ark single XX:XX Jason, quarter on to Good the morning. when question bucket revenue at, journey. milestone. be cohort along good it. I every I looked has the my Thank and Happy and on you. guess you first know, is, grown.

million X of from If opportunity direction penetration. you put help you or front have of set XX thing. all perhaps what the the grown, million obviously So in have But serviceable clients clients question of that? on sort million of could. good it between million million, increasing of to leads current so them between of over a XX and this is which XX sort and Could XX the a you on, from you quantify market

Jason Peterson

probably are which I do kind more there's of there's significant growth, just somewhat of very days penetration anything our insurance, many for than customers, a – anecdotally areas, early across range Yes. top of XX, those XX:XX we're top but of our of in or largest customers opportunity the in accounts. still in some for -- for terms those couldn't the but of in our a think certainly established newer in still ongoing companies, kind areas EPAM, XX, significant

past, of the with I've breakout, and emerging management, then growth you company, – and very, both in talked a clients not about very it services, continuing significant the asset continues look you're it's is existing to opportunity So and the for and be us logistics for there's financial In healthcare certainly the as insurance, growth see in and opportunity in banks, there. a high sciences a new emerging, even wealth new life at our of existing kind banks, management, part asset to still verticals. significant growth as manufacturing,

the existing so there that don't customers new then continues a changed that at lot and with to a think already per And customers. significant dollars opportunity be opportunity those there's And has a new significant wallet much, are and quarter, talked more those that of about are customers. growth I million that story or

Arkadiy Dobkin

[indiscernible] years be because enough of changed before, to them redone differently and a then the because lot most ago our very, situation clients. probably think kind believe after opportunity much digital are new for already And rate or of in we from it's kind probably from in like client base. X core -- have other it we the that how concern It old and many not life of sharing huge understand of of before today XX:XX run them in should we present do total true very was we exactly existing think our around you're so -- not which seems has much. probably like it's vendors some discovered was it's started clients. I expectation existing that investment, a the And asking I And

new who have So be there part big very to client a from a as them on is existing base. very will That's we why selective top be logos. bringing of

Ashwin Shirvaikar

XX:XX Understood, understood.

margin, to does wage that the as two trend, of is offset if to long could of kind continued I question other so get How gets SG&A question, adding thing, towards and gross the added how SG&A that gross of a Then change this not margins the that sort to inflation gone and a The but function that new had break necessarily mix operating you a hell steadily down margins, for perhaps more part was, the is incrementally? a multi-year pretty It’s offset have capability, delivered? obviously, capabilities? the mid-XXs. clear

Jason Peterson

so I honest, a, have we a history you to Yeah, of the know, remember XX% when quite above sort about XX:XX profitability. five year with of company I be to kind I and, guess, struggled stay

pretty place. XXXX, possibility when to somewhat above we’re So the XX% being, let's here a still XX.X% with for guiding of like it the to feels say, XX.X% good

have declined right, margins that gross over are You time.

couple happened wage forever. been last what's kind in of the last market, which the of years Some I is really think over and – probably the can't inflation unprecedented, has of whole unprecedent

I capabilities do he see hard future, the say, point So when it the think stabilization geographies. specifically, new in would some to some at might additional some the and I of be would speculate

focus delivery Russia, if Belarus, locations, a we those a you see you potential. to sort margin grow sort might were different again, historic the also to So effectiveness see, on of gross different just optimizing Ukraine, of growth in of would profile, and continue cost somewhat but a

so a year the that facilities be we will a as I got I cost bit benefit results, still revenue. downward continue XXXX to where a and related continue to we've pressure, stay the as below XX%. fiscal be puts part low, going of do SG&A think think, because our at is I'd and cases, to we'd The the bit acquisition time, IFO it are out greater do an in I kind particularly call XX:XX teens think acquisitions on expect some other and has little think the it has come really standpoint, that I probably in same with in it that thing moderation. many I so The the beneficial. more and digits recent And in is operating cases don't single been of low a totally of from little exit But adjusted

place think somewhat to And be of XXXX, in a those company above and operate allows the XX% not I balance with rate. to so that's growth plus the things potentially XX% bad a I think

Ashwin Shirvaikar

agree with you. XX:XX Clearly, I that. Thank

Jason Peterson

XX:XX Thank you.

Operator

Grossman comes question Stifel, open. David last your from line with is Our XX:XX

David Grossman

some just have you. two asked. hoping, follow I ask really questions that of Thank XX:XX ups the to was been I quick

So was the made resource of be a the of pandemic. first outside thing resourcing accelerating a going historically any contributors and on XX, that that major the different top there that little or from have allocation had the during that now was of I growth, kind has the even that my outside is I'm accelerated standpoint, cohorts So really there pursue been to missing? guess the is now top of which decision XX, changed maybe all interpretation growth dynamic on your And things there right? to able one the actually to bit a of growth, year,

Jason Peterson

generally yes. XX:XX Yes, the to I say recent below the and some then in cases have is are other pieces Yes, that that XXX. would that top clients piece acquisitions and top the incorporated, XX below

that deep were has that's of so resources the in And I consumed also particularly obviously, a XXXX. the growth. certainly, and clients But much changed by that pandemic, handful of think, contributed throughout to

David Grossman

then geographic to work having is okay. management work, or global infrastructure, their that areas. even decide transportation hotspots, issue strategies risk they disruption people And follow and historically and the own situation, Ukraine, sophisticated of to that Right, in getting geopolitical before with XX:XX the to fairly different up just clients and put the on over to

address, So work seem infrastructure. to you seems own got home, your to with diminished, of you've the from risk getting work, have to and kind

is So, situation that, that different about of be we current the this risks through are about? the all different, they've we you what crisis, remember the so, anything been situation, grew should last any thinking in kind historically

Arkadiy Dobkin

difficult for geopolitical guys crisis we And of kind the my you're answer. to you has view, years. asking not multiple big kind went share during what, tensions even time, through definitely in pretty cannot XX David, started XX:XX and XX-plus the at question of years, same like last, our know which today or And XX another there now, for opinion. if talent operational will that the maybe X from bring but demand. so minimal, also in in much we think happened. But pretty also, -- be was the willing to for no like X in the years it which years clients example, we clients' too history countries X [indiscernible]. Even X difficult kind today, will were be it different the policies of in talent accept immediately actions practically the we where big what the this or from situation, changing the from mitigation efforts region. specific are in and and is like be direction, kind that ago, clients months. And in them I impact probably which even only will what And months would is be my we some sure very, point very of in from get the months we're like where swallow are to demand the would or maybe in difference. view, And X work operating exactly general, we risk answer of because Again, was doing, that's

Jason Peterson

minimal, would for also guidance. full XX:XX that just the any the our for guidance that's so the David, concludes would basis year be I say, that impact and And

Arkadiy Dobkin

predict but XX:XX But we again, cannot the future. -- we

So the the of of the we over we you have and pretty in lot -- cruises configuration on as regions interesting have which have know, management history, a and team, our experience years.

David Grossman

Right. XX:XX

But like mean, it there. really all it aggregate dissimilar and has sure So if sounds the so are -- hasn't you together, it client to been here. response sounds I'm that differences to what there I experienced the terribly the here response crisis you been

Arkadiy Dobkin

point, that XX:XX you Because from ago, some reactions. like, years difficult it situation probably this yes, client I more can at X tell was

think this much I time. more it's balanced

BCP, it's but pilots I very, for minimal have said, some we As very now. right

David Grossman

XX:XX Right.

Okay. Thanks much. Great. very

Operator

now to like closing back to for I'd over Dobkin Arkadiy you. the turn call Thank remarks. XX:XX

Arkadiy Dobkin

and future do as shared, them, it's we have about have through of because Thank XX sure just all, crisis, again, strong not everybody, you and probably call I We usual necessarily today we I celebrated XX:XX simultaneously. it will also of of in believe And went one Pretty hope we that the but just recently a and team. as IPO, Okay. first years and some was just challenged it. we our well.

So thank to in you and months. talk X you

Jason Peterson

XX:XX Thank you.

Operator

today’s for concludes you participating. XX:XX call. Thank conference This

now disconnect. may You

EPAM Systems (EPAM) 17 Feb 222021 Q4 Earnings call transcript