Lilya Chernova – IR Arkadiy Dobkin – CEO and President Anthony Conte – CFO.

Moshe Katri – Cowen and Company Steve Milunovich – UBS David Grossman – Stifel Nicolaus Ashwin Shirvaikar – Citigroup Mayank Tandon – Needham & Company Alex Bateman – Mona Christy.

Greetings and welcome to the EPAM Systems Third Quarter 2014 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. It is now my pleasure to introduce your host, Lilya Chernova.

Thank you. You may begin..

Thank you and good morning, everyone. By now you should have received your copy of the earnings release for the company’s third quarter 2014 results. If you have not a copy is available on our website at epam.com. The speakers on today’s call are Arkadiy Dobkin, CEO and President; and Anthony Conte, Chief Financial Officer.

Before we begin I would like to remind you that some of the comments made on today’s call and some of the responses to your questions may contain forward-looking statements. These statements are subject to the risks and uncertainties as described in the company’s earnings release and other filings with the SEC. Arkadiy..

Thank you, Lilya, and thanks to everyone on the call for your time today. Over the past quarters, we have accelerated on EPAM aggressive strategy to help customers run digital [ph].

In fact, we were focusing very strongly on how we’re to address the growing clients’ needs triggered by new digitally destructive business model they have to implement to stay competitive. To achieve that, we’ll continue to invest in critical for our digital skills and technology capabilities as well as very specific industries per se [ph].

This has been made possible by unique combination of investments we made and continue making both organically and inorganically since our IPO in 2012. In the third quarter, the momentum continued.

EPAM had a very possible third quarter result as we delivered it through and creating of 182.8 million doors or 7.5% growth year over year and 10% growth over our Q2 results. Partially, it attributes to our three previous acquisition which we are further integrating into EPAM during the last month when they turn in their first full quarter with EPAM.

While on acquisitions, I would mention that just last week, we closed another important deal for us that formed this strong service design capabilities called Great Fridays. We’ll talk more about it later today.

At the same time, you already might believe that our growth is a very organic nature, which we carefully complemented additional specific skills and capabilities by adding very selectively to our strong core, skills and software product engineers.

In result, our overall growth during the last couple of years were driven by growing customer demand and now increasingly have the set of skills, capabilities, experiences and our overall abilities to engage and deliver complete software solution. And we do believe our customers recognize this unique value which have been much more now.

So before I turn things over to Anthony to go over further details on our Q3 financial performance, I would like to reiterate the statements I made by [ph] number of recognitions we received in Q3.

I think they will provide a good sort of independent confirmation which further support our overall strategy and also help to demonstrate the progress ratio in moving forward to the direction. So first of all, our product engineer capability.

As referred during our previous call, we do believe that our accreditation software product engineering gives us many advantages into the market, when software product development skill become important not only for traditional software industry but for many other industries are forced to rely in software to implement varied new business model.

As we said before, there’s a plan to maintain very strong core skill set in software engineering to support and develop our focus, knowledge and skill to understand new emerging technologies better and to know firsthand what is happening in the enterprise software market.

It’s important for us not only because it’s sizable customer market segment for us. It’s a key differential expertise critically important for our new clients in this new software-driven segment.

So we do leverage today over 20 years of engineer hands on experience to develop an awaited software available [ph] brand and enable our clients and digitally discuss between us [ph] to continue to stay ahead of the competition.

So in addition to the recent product [indiscernible] or product development services where EPAM was first in leadership position, it was very good to see that EPAM was recognizing this quarter as one of the leaders in two software project development vertical – Enterprise Software and Consumer Software by Zinnov.

Zinnov is a managing consultant firm focusing on primarily on further development market research and publish this global R&D service provider [indiscernible]. Now on our commerce capability. We utilize our engineering skill set at its own penetration point. But to bring real value to our new clients, we need to do much more.

So today, EPAM more and more in the position of leading net generation customer engagement serving the customer on any device in any channel, it’s multi-vendor, omni-channel, eCommerce platforms.

Today’s platforms include leading enterprise software such as SAP, fabris [ph], Oracle, ATG, [indiscernible] and extend to open source fourth quarter [ph] and to completely custom development efforts as well. Very often, growth are combined with our growing capabilities in big data analytics and cloud.

So in confirmation of last month, EPAM has been included in the list of the top 10 largest software service providers in [indiscernible] September 2015. Corner service providers market overview large scale partners can accelerate corners for key customers [indiscernible].

The report reviews over 110 responses from representatives at both [indiscernible] and specialty corner service providers company and the details the eCommerce platform, geographies and industry vertical as the largest provider support.

Another interesting illustration of the same point is EPAM’s win of Liberty Global Best Product and Service Quality Award. The [indiscernible] award and the seventh annual Technology Summit and won dozens of events. In addition, EPAM was shortlisted in the top 3 for the Best Innovator category.

I would mention that Liberty Global is the largest cable company in the world today. The winners of the Liberty Global Technology Award were selected by the input from [indiscernible] senior executive across the entire company.

This recognition, the technologies relationship [ph] with EPAM [indiscernible] of development and innovation across Liberty Global [indiscernible].

And in result, Liberty Global was able to source and refine ideas in response to real business challenges by taking in the collective creativity of EPAM employees and encourage them to submit ideas in a way together with Liberty Global. In our opinion, this win continues to validate our standards for the [indiscernible] to EPAM clients.

Now on big data and analytic capabilities. During this quarter, EPAM was included in the shortlist of companies considered for the implementation of Consolidated Audit Trail or CAT, a system for the Securities and Exchange Commission can be development in the response on circ rule 613 adopted in July 2012.

The CAT is one of the biggest undertakings in the history of Securities [indiscernible]. It can go record in 25 [indiscernible] transaction data in the next five years. And it’s second only to national security agencies data [indiscernible]. Over 3,000 organizations [indiscernible] the transaction data.

The [indiscernible] process more than 50 billion [indiscernible] resulting in approximately 10 terabytes of data per day and the number is expected to grow 25% a year.

EPAM [indiscernible] that were selected from the list of 31 initial recognition including all major companies in the field including IBM, Google, Computer Science Corporation and others. The decision of each company to get the contract will come next year.

But we consider it as a success and confirmation of our expertise in big data and the capital market allowing us to come up with a very competent portfolio [ph]. EPAM was shortlisted among six top vendors together with FINRA, SunGard, Computer Science Corporation and HP.

And it put us in the late category of vendors able to help find an answer to what is one of the today’s biggest challenges in the financial services industry [ph]. Now on digital strategy capabilities and the recent announcement of Great Fridays acquisition.

Customer experience has become a great focus for EPAM as we work to differentiate our offering in the marketplaces. In 2012, we acquired Empathy Lab, the digital strategy and experience design [indiscernible] to add and enhance capabilities to EPAM [indiscernible] development skill set.

And we know now it makes a very important impact on EPAM overall capabilities. Last week, EPAM acquired Great Fridays, a product and services design corp. Headquartered in Manchester, Ukraine with studios in London and San Francisco and New York, Great Fridays is focused on bridging the gap between business and design.

So with design-focused [indiscernible] Great Fridays help companies such as Sonos, Pearson, MasterCard and Vodafone create not only beautiful products and services, but also smart new business practices that deliver lasting commercial value and business transformation.

Great Fridays’ success brings [indiscernible] in business and design combined with Empathy Lab around digital strategy and experience design and then supports EPAM’s [indiscernible] for the development and [indiscernible] capabilities should allow us to create an end to end solution for those customers looking to build their [indiscernible] digital customer experiences.

And we are very excited to have Great Fridays’ capabilities to the EPAM family and see the common result. To conclude, I would report to our most recent recognition coming from [indiscernible]. Each year [indiscernible] strong, consistent growth in a feature on America’s Best Small Companies or public companies under $1 billion in revenue.

Thirty-sixth annual [indiscernible] to home building to retail. [Indiscernible] on equities, sales growth and earnings growth over the last 12 months as well as past last year. They also partner it in stock markets or common [indiscernible] of each company tier group during the past year.

So this year, [indiscernible] number three overall and number one for technology companies on America’s Best Small Companies list. And underscoring EPAM ability to continue to grow and change. This recognition provides kind of integral mark to our overall direction especially taken into account with regards on the list for the second [indiscernible].

Last year, EPAM was number six and two accordingly. Now, over to Anthony for more details on Q3 financial performance..

Thank you, Ark, and good morning everyone. I’m going to spend a few minutes taking you through the third quarter results then I’ll talk more about our fourth quarter and full year outlook. As usual, the whole details of our results can be found in our press release and the quarterly fact sheet located on the investor section of our website.

As detailed in our press release, the third quarter revenues grew 37.5% over last year and 10.3% sequentially to $192.8 million above the top end of our guidance. North America remains our largest segment representing 50.7% of our revenue, up 35.8% year-over-year and 13% sequentially.

Europe was up 42% year-over-year and 5.5% sequentially now representing 37.5% of revenue. CIS was up 1% year-over-year and 2.7% sequentially representing only 7.9% of revenue. Looking at service lines, we’ve experienced no significant change in our revenue mix.

Software development and application testing services continue to our largest service offering, representing approximately 69% and 20% of revenue respectively. Our top 20 accounts came in at 55.3% of revenue, growing 31.8%. While all our other clients below top 20 grew 46.6% year-over-year.

Each of our verticals grew year-over-year and sequentially led by Travel and Consumer and the other vertical.

Travel and Consumer increased 52.1% from prior year and 18% sequentially representing 22.2% of our Q3 revenues, the large sequential growth was related to completion of some key milestone for several large accounts and the quick ramp up for a new opportunity that started in Q2.

The other vertical grew 61% year-over-year and 15% sequentially primarily due to the GGA [ph] acquisition and represent 13% of Q3 revenues. GAAP income from operations increased 7.9% year-over-year to represent 11.3% of revenue.

Included in our operating results in a GAAP basis are stock-based compensation expenses, amortization of purchased intangibles, acquisition-related costs and certain other onetime items that we excluded from our non-GAAP measures. Full details on these can be found in our press release.

Stock-based compensation expense increased around 26% sequentially in Q3 as a result of the first full quarter of expense for stock granted as part of the acquisitions in the first half of the year. After these adjustments, our non-GAAP income from operation increased 33.2% over prior year to $31.8 million representing 15.5% of revenue.

GAAP net income increased 15.8% year-over-year and non-GAAP net income grew 43% year-over-year. Net income for the quarter was boosted by a lower than normal tax rate of approximately 15%. This was due to a onetime reversal of reserve for an uncertain tax position set up in 2010.

Our 2010 tax returns filed timely in September 2011 included the uncertain tax position form that properly explains the position issue to the IRS. The IRS statute of limitation is now expired. And the 2010 tax return in total has expired from statute.

For the quarter, we generated $0.50 of non-GAAP EPS, also above the top end of our guidance, and $0.38 GAAP EPS based on approximately 49.8 million diluted shares outstanding. The overperformance in EPS is due to several factors. Almost $3 million of revenue overperformance contributed about $0.03 to the bottom line.

The tax reserve reversal was worth approximately another $0.02. On a GAAP basis, we also had about a $0.04 overperformance due to an error in our estimate related to stock compensation expense from the acquisitions. We completed the quarter with 11,509 IT professionals, an increase of approximately 26% compared to Q3 of 2013 and 4% sequentially.

Approximately 9% of this growth is from acquisitions, bringing organic headcount growth to about 17%. Utilization for the quarter was at 73.8%, about 3% lower than Q2, primarily due to the heavy vacation months of July and August, combined with some ramp up in hiring in some new locations like Poland. Now, turning to our balance sheet.

We finished the quarter with approximately $191 million of cash, up $16 million from June 30th and $22 million from December 31st. During the third quarter, operating activities generated approximately $16.2 million of cash. Unbilled revenues were at $71 million as of September 30th, an increase of about $3 million compared to Q2.

This sequential increase is normal as our fixed-price projects grow throughout the year and then expire in the fourth quarter. As a percentage of revenue, however, this is still much lower than Q3 of 2013. Accounts receivables were at $114 million at the end of Q3 and DSO ended the quarter at approximately 54 days. Turning to our guidance.

For the full year 2014 based on current conditions and including the impact of all acquisitions, EPAM expects revenue growth to be $728 million to $730 million. Non-GAAP net income growth for 2014 is expected to be in the range of 33% to 35% year-over-year with an effective tax rate of 19%.

The full year weighted average share count is expected to be just under 50 million diluted shares outstanding. For the fourth quarter of 2014, EPAM expects revenues between $200 million and $202 million, representing a growth rate of 27% to 28% over fourth quarter 2013 revenue.

Fourth quarter of 2014 non-GAAP diluted EPS is expected to be in the range of $0.59 to $0.61 based on an estimated third quarter weighted average shares outstanding of 50 million. GAAP diluted EPS is expected to be in the range of $0.36 to $0.38. I would now like to turn the call back to the operator and open up for Q&A.

Operator?.

Thank you. We will now be conducting a question-and-answer session. (Operator instructions) Our first question comes from the line of Moshe Katri with Cowen and Company. Please proceed with your question..

Hey, thanks, good morning.

Can you talk a bit about gross and operating margin trends in the quarter, the pluses and minuses that kind of shows us what happened year-over-year in terms of comps?.

Hi, Moshe. It’s Anthony here. Any particular trend that you’re looking at in specific or just –.

So I think your margins were down year-over-year, so I wanted to kind of understand what happened there and then the same thing for operating margins, GAAP and then adjusted. Thanks..

Well, the operating margins, again, we continue to put money into the business. We’re working on a variety of investments.

The top line growth is coming in ahead of where we expected both from an organic and from an acquisition perspective, so we’ve been having to continue to spend into the business in a variety of areas to continue to shore up the infrastructure to make sure we can continue to support the growth that we’re seeing on the top line.

That’s had some impact on the operating margins and kept them pretty much flat to Q2 and a little bit down from last year. And it’s a lot of the same areas where we’ve talked in the past, bringing in some domain expertise, focusing on the sales function.

I mean we just continue to spend in those particular areas and that’s keeping the operating margins where they are. Gross margins, they are down about 0.4%.

It’s a little bit lower due to heavier vacations in the July and August cycle, so that’s going to cause a little bit of a drop in the gross margin combined with some additional wage inflation that we saw in our midyear raises. There’s really nothing more than those two components playing on the gross margin component..

Okay.

And then was there any FX contribution to the margins as well?.

A little bit. There was a small impact at the gross margin level. And at the bottom line net income level, it was a little bit over $1 million of positive impacts once you factor in the negative revenue impact offset by obviously a positive pick up on the expense side. So it’s about $1 million on the bottom line..

Okay. And then final question. I saw a spike in the contribution from a top client. I think you’re at 14%.

Can you talk a bit about that? Just remind us, are we working with various different departments within that client and what are you doing there?.

Yes, Moshe, we’re working with multiple groups, in fact, of this account in multiple geographies. It’s actually very much global accounts and coming fast not just Europe and not just to North America but to also now Asia, China, Singapore including. And again, it’s very, very diverse effort for us right now..

Understood, thank you..

Our next question comes from the line of Steve Milunovich with UBS. Please proceed with your question..

Thank you, good morning. So your fourth quarter revenue guidance obviously suggests a deceleration into the high 20s in revenue growth.

Is there anything in particular driving that? Is that conservatism or I know on the fourth quarter sometimes you have some significant swing factors?.

Yes, for the last couple of years we’ve had some revenue issue, yes. A little bit a surprise to us and usually it was coming from CIS region. With everything that was happening in this quarter, the world [ph], as you know, during this year we don’t expect any jumps in Q4.

And on top of this, as you know, the ruble and majority of our revenue coming in local currencies for us definitely getting weaker and weaker. And just on total shares revenue, if you take into account foreign exchange, it’s a big amount kind of going down. So that’s why Q4 looks as it looks.

If you take out, for example, CIS revenue, then our gross increase will be practically in line with what you saw previously as well..

Okay.

Anthony, given the ruble then hits you at the revenue line, but are you likely to see a positive to the EPS line as you did this quarter?.

Yes, there will definitely be some positive impacts on the bottom line as things swing. But we look at things in group currencies as well, so we have to really see where everybody goes in the fourth quarter and see how that falls out. But, yes, it should in theory give us a little bit of an uplift on the EPS number..

But please don’t – do remember that our cost in rubles only in Russia. So it’s not like embarking [ph] for example anything [ph] in Belarus or Ukraine. So it’s only Russia based..

And I would say that our estimate, our EPS estimate includes that potential impact. So we’ve based that into both the top line revenue numbers and the EPS numbers. We’ve already adjusted based on where we’re seeing the ruble go..

Understood.

And can you bring us up-to-date in terms of your clients’ view of the situation in Ukraine, whether that’s having any impact on your pipeline and so forth?.

Quite a few or a majority of the clients you actually driven by what’s happening kind of in the media and probably you see that media is pretty – look, relatively quiet if you compare this with what we saw six months or kind of nine months ago, eight months ago.

So I think people kind of working in assumption that it would be settled and that’s what we’re seeing as well. With some escalations climbing kind of up and down, situation definitely much more stable than we were seeing this – in the middle of the summer, for example, or at the beginning of spring.

So I think most of the client actually pretty accurate and pretty normal moderate comp [ph]..

And then finally, who are you competing against in new client deals? Is it Luxoft primarily or is it more the larger service companies?.

We don’t compete much with Luxoft. We maybe compete from time to time in financial sector but even there like with exception of shared accounts, we don’t see each other much. The second besides financial sectors, you know that we have a little bit different strategy and we mostly focus on kind of digital change.

And we’re competing with people like Sapient or some specific companies focusing on eCommerce and digital marketing type of applications. We also compete in big accounts with major players including IBM and Infosys and Cognizant and others as well and some special focused division [ph] for them..

Okay, thank you..

Thank you..

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

Thank you, good morning. I may have missed a couple of the quick data points, so if I could just start there.

Could you just review what the organic growth was both year-over-year and sequentially?.

Sure. How are you, David? It’s Anthony here. Q3 organic was around 27% and sequentially, we were coming in at about 6% organic..

Okay, great. And I think you did mention utilization, Anthony. I missed it.

What was it in the quarter?.

74%..

Okay.

And is that pretty much consistent with the first half?.

No, it’s down. Q3 is a heavy vacation cycle, so July and August a lot of people are out, so utilization dropped. It is consistent with where we were Q3 of last year given last December..

Right, got it. And then, I wonder if I could go back to a question that was asked a little bit earlier. It looks like the growth in your top client was pretty robust and maybe this is a manifestation of just a couple of other clients.

But when you look at the top five and the top – most of that growth came from that one client, is there some attrition in some of the top five or the top 10 that’s really masking that so that the others are actually in fact growing much faster or is that just the way the quarter rolled out where one client pretty much accounted for the vast majority of the growth?.

Well, a lot of the – I mean, when we did the acquisition of Jointech, that brought revenue from that same large client. So what you have is the first full quarter of revenue from Jointech. And so that’s why you’re seeing the pop in that one client for this particular quarter..

Okay, got it. And then in terms of – I think Arkadiy talked about how important the digital marketing and commerce segment is to you.

Can you help us size just how big that is within EPAM when you include the recent acquisition of Great Fridays?.

Great Fridays is a small, very specialized acquisition, so I don’t think it’s embarking anything [ph] in numbers. But the sizing of this, it’s very difficult calculation because it depends what you’re counting in [ph]. And commerce, it’s a broad term.

So what I can say that it’s probably very – it is a very fast growing market and if you talking about strictly eCommerce implementation of things like Hybris or ATG, then it’s tens and tens of millions.

If you’re looking at this broad and include in digital strategy part of the business and mobile extensions and analytics and actually of course it’s including like logistical piece for retail, then it will be for us in hundreds of millions already..

Okay.

And then just finally, with the recent acquisition activity and just bundling everything together, Anthony, can you give us a sense for what the stock-based comp and the amortization should look like going forward?.

Absolutely. The stock-based comps – and we haven’t finalized the purchase accounting and everything for Great Fridays, as we disclosed last week, but there are some estimate in my numbers related to that one. But I would expect Q4 stock compensation to be approximately $7.6 million.

And from an amortization of intangibles, it should be about $2.8 million is what I’m currently estimating..

Okay.

And that’s just the partial quarter, right, for Great Fridays?.

Correct. Yes, it will only be two months for the Great Fridays piece..

Okay, great..

So then I would say if you want a more kind of a full quarter view, probably be about $7.8 million on the stock comp full quarter view and add maybe another 200 [ph] to amortization of intangibles, so about $3 million..

Okay, great. Thank you..

Yes..

(Operator instructions) Our next question comes from the line of Ashwin Shirvaikar with Citi. Please proceed with your question..

Thank you. Good morning, Ark; good morning, Anthony..

Good morning..

Good morning..

So good quarter here. I guess there’s not much doubt in my mind about the demand profile you guys are seeing and our checks show the same thing. My question is more on the people side, the supply side of the equation.

Could you talk a little bit about your headcount growth strategy? Some of the areas you’re moving into requires slightly different kind of talent potentially, where are you finding that talent, is it challenging, things like that, could you address those types of questions?.

Yes, sure.

Yes, I know like when we were talking last year it was where some concerns about our speed incurring [ph] and we had many questions on [ph] some of this and usually our answer was that in 2012 we built a pretty significant range last Thomson Reuters kind of impact and we didn’t need to hire as many people as before, proportionate to the growth rates.

And that exactly was kind of the reason why our – had increased [ph] down a little bit in the past year. I think this year we actually – we’re up to speed. And the current company [ph] still mostly in the same regions where we did before in Eastern Europe and Hungary. We’re also starting to grow much faster and aggressively in Poland.

We just recently opened development center in Bulgaria, so we will be growing there. As you know, China now in the map and it’s still kind of in a lot of integration efforts happening and we kind of learning a lot. But it would be growth area for the next year for us at least and we’re planning for this.

So I think the picture didn’t change much from the last years. When you’re asking if it’s easy or hard, yes, it’s not easy and I also was commenting all the time that the talented people in demand all was replaced [ph] from San Francisco to New York to London and to Minsk, Belarus. So from this point of view, no, not much changes.

But we’re working as we did and that big portion part of our investments come into relationship within newer cities across all Former Soviet Union and our development centers both in Hungary and Poland and so for internal trainings as well. So I don’t think I told you something new, but that’s what it is..

Okay. No, it’s good to get the update. One question I did have as I look at some of the metrics you provided, Russia seemed to pop up in terms of headcount increase. I’m not sure that’s Russia itself or is there a lumping maybe a few countries, is it Russia and –.

No, this is mostly GGA. GGA had a couple of thousand people in Russia and you see basically in part of this..

Okay, got it, got it.

The other question that I had was with regards to – as you get deeper into digital marketing and areas like that, are you seeing maybe an increased volatility of the projects that – lower visibility of projects or do you still have the historical level of visibility into your revenues?.

I do believe in general on the level of company. We have very, very similar visibility as we did in the past. There are definitely changes because the digital driven projects, we starting sometimes relatively small on this pilot. But we trying to carefully select opportunities where we have kind of upside and repeated business.

And so far we have proved that it could bring us significant tens of millions business over the next several years. This client was started small and then expanded in different areas, different branch, different channels as well. So I think it’s working well.

But there are some projects, small ones as well which we getting in with completely organized because we would like to test ourselves and test new technologies and be able to have good friendzone [ph] experience before we applying this to big opportunities.

But it is very much in line with our history of working with sometimes small startup and independents like these small software product companies where we try to understand what’s happening in technology and kind of emerging trends. So there is not much new, it’s just a little bit different sector for us..

Got it, understood. Thank you, guys. Good quarter. And Ark, I have to say congratulations on being named to the Forbes All-Star list..

Thank you, Ashwin..

Yes, okay..

(Operator instructions) Our next question comes from the line of Mayank Tandon with Needham & Company. Please proceed with your question..

Thank you. Good morning. Anthony, I don’t know if you talked about pricing trends. If you could just touch on how much of the growth is coming from pricing, I know you had a lot of increases last year, almost double-digit. Maybe give us some perspective on that.

And also, Ark, I wanted to ask you about the sales productivity, I know you’ve invested aggressively in sales. Maybe just give us some sense of the trends there and how do you expect to position yourself for ‘15 on that front as well.

Do we expect more investments or do you feel like you’ve done as much as you can now or you want to start to see it pay off before you start to invest more aggressively on the sales front?.

Hi, Mayank. It’s Anthony. I’ll tackle the first one and let Ark jump in. As far as pricing trends, there’s really no difference at this stage of the year. I mean we’re still looking at kind of that 6%, 7%, 8% blended price increases that we’ve talked about through most of the year. Most of that pricing will happen.

As we move into the new year, we’ll get a better picture on where pricing is going for 2015 in Q1. But at this stage, we’re not seeing any change from what we see in the balance of this year..

Yes, and in regards to our kind of sales marketing field [ph] operation, so yes, we’re investing a lot and we have onboard new people.

And we’re also slowly doing exactly what we were planning to do and what we already talked about since IPO change and profile with the company and awaiting profile and kind of follow brand for this digital market and eCommerce type of profile.

So working more and able to get in the doors not only to IT people or IT budget, but now business budget and to marketing budget. This is all happening. If you’re asking [indiscernible] that now we will see very clearly [indiscernible] last month, that’s probably would be much more conservative. I think it’s kind of non-stop effort.

And we do that we’re very much in the beginning of this effort still and we still need to elevate profiling even high and we should be able to do it with good number of successes and that’s what I was trying to explain and kind of illustrate this morning actually. But no, we’re not stopping this.

It’s continuous and I think it would be continuing for a long time..

Okay. And I appreciate the color. And then I just wanted to ask you on the M&A strategy.

I know you’ve done a few acquisitions, but as you look ahead in terms of balancing areas that you want to acquire, and is it more delivery expansion, to diversify or are there other capabilities, verticals or services that you want to enter into just based on demand from your clients. Maybe just give us some perspective on that as well, please..

It’s more on the second part of what you mentioned. And you see, we don’t have the strategy kind of to build EPAM through acquisitions. We don’t have any type of robust strategy and we never had.

And if you look at our historical kind of speed of acquisitions, we did two write-off type PUR [ph], relatively small but very specific one from the point of building much stronger front operation for EPAM in Canada and another was important for us to the fourth kind of new digital strategy capability acquisition.

And then given the 2013, we didn’t do any because we didn’t find anything interesting from this point of view. And it seems like we did many of them in 2014 and yes, we did.

But again most of them, pretty small from revenue perspective, but very specific on the skill set or industry-focus or kind of like Great Fridays, expand and extend in what we’re already starting to do and what seemed really important for us. So again, that’s going to be our strategy in the future, though.

I’m not saying that is isn’t something much, much strategically good for EPAM, but that’s not a focus for us.

We’re kind of looking for opportunities to improve our muscles and different parts of our organization and to put it on voices [ph] of our software engineering skill set, we should be able to last [indiscernible] as we’re repeating all the time..

Right. Thank you. And then last question for me is on the hiring front. In terms of the hiring numbers, I think you had mid-20s growth the last couple of quarters. Obviously, that’s queued by acquisitions.

Could you give us what your organic increase in headcount was and also maybe comment on the attrition trend that you’re seeing your various markets – employee attrition..

I think actually Anthony mentioned very precisely exactly organic growth in headcount and the growth including acquisition..

Yes..

I think it was 26 and 17..

19 actually. I think I’ve misspoken my script. It’s actually 19 is organic..

Okay..

And 26 in total..

Okay.

Then on the attrition side, any changes that you’ve noticed in your various markets?.

No, it’s still in the low teens..

Great. Good job, guys. Thank you..

Thank you..

Thank you, Alex..

Our next question comes from the line of Alex Bateman [ph] with Mona Christy [ph]. Please proceed with your question..

Yes. Hi, guys. I just wanted to ask you if you’re seeing any impact from the sanctions. They’re still of course very much present in Russia. And also, given the overall and a western sentiment there, if that’s impacting your role as a U.S.-based company..

Nothing impacting us a U.S.-based company. So from the sanction point of view, there is no any direct impact. But as I mentioned, probably sanction did some impact on Russian economy and affects situation in Russia and that’s clearly making some impact. And again, negative and positive simultaneously.

And I think Anthony was kind of addressing this already. But there is no any direct impact. There is no sanctions in EPAM doing business anywhere. So zero on this. And again, just general economic impact..

Got, got it.

And I think your number of employees in Russia stood around 1,200, 1,300, I mean do you intend to decrease it longer term? I mean I guess kind of where are you now and kind of what are the plans for the next year or two as far as labor location if any?.

No, there is no specific labor relocation trends. So there is clearly very specific actions where we grow in and how fast. And Russia wasn’t growing or practically was flat from headcount point of view. But again, there is no relocation strategy. I think we would be able to bring in projects there.

And again, the increase in Russia happened this year mostly due to acquisition of GGA..

Got it. Thank you..

Mr. Dobkin, we have no further questions at this time. I would now like to turn the floor back over to you for closing comments..

Thank you and thank you everybody for joining us today. I hope we addressed your questions, and looking forward to talk again in three months. Thank you everybody..

Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day..