EPAM Systems, Inc. (EPAM) Q4 2022 Earnings Call Transcript

EPAM Systems, Inc. (NYSE:EPAM) Q4 2022 Earnings Conference Call February 16, 2023 8:00 AM ET

Company Participants

David Straube - Head of Investor Relations

Arkadiy Dobkin - Chairman, President and Chief Executive Officer

Jason Peterson - Chief Financial Officer, Senior Vice President & Treasurer

Conference Call Participants

Ramsey El-Assal - Barclays

Bryan Bergin - Cowen

Maggie Nolan - William Blair

James Faucette - Morgan Stanley

Surinder Thind - Jefferies

David Grossman - Stifel

Jason Kupferberg - Bank of America

Operator

Good time and convey you for opinionated by. Welcome to EPAM Systems Fourth Quarter and Full Year 2022 Earnings Conference Call. At this time, each participants are successful a listen-only mode. After nan speakers' presentation, location will beryllium a question-and-answer session. [Operator Instructions] Please beryllium advised that today’s convention is being recorded.

I would now for illustration to manus nan convention complete to your speaker today, David Straube, Head of Investor Relations. Please spell ahead, sir.

David Straube

Thank you, operator, and bully morning, everyone. By now you should person received your transcript of nan net merchandise for nan company's 4th fourth and afloat twelvemonth 2022 results. If you person not, a transcript is disposable connected epam.com successful nan Investors section.

With maine connected today's telephone are Arkadiy Dobkin, CEO and President; and Jason Peterson, Chief Financial Officer.

I'd for illustration to punctual those listening that immoderate of our comments made connected today's telephone whitethorn incorporate forward-looking statements. These statements are taxable to risks and uncertainties arsenic described successful nan company's net merchandise and SEC filings. Additionally, each references to reported results that are non-GAAP measures person been reconciled to nan comparable GAAP measurement and are disposable successful our quarterly net materials located successful nan Investors conception of our website.

With that said, I'll now move nan telephone complete to Ark.

Arkadiy Dobkin

Thank you, David. Good morning, everyone. Thank you for joining america this morning. 12 months agone connected February 17, we were looking towards -- to 2022 pinch optimism. [indiscernible] has been added to S&P 500 and we expect it to turn almost 40% and make complete $5 cardinal successful revenues successful this year.

Even pinch immoderate falling volumes, nan Russian penetration struck nan world 1 week later and put america connected a very different spot aliases priorities. The caller reality redefines nan meaning of occurrence for us. And we are very grateful to nan tens of thousands of EPAMers and our customers astir nan world who mobilized support for group successful our business during nan past year.

Our occurrence successful 2022 was defined by caller criteria and priorities, galore of which we person shared it pinch you successful our regular calls and updates during 2022. Priority 1 was to do everything imaginable for nan information of our group successful Ukraine. Next, our world mobility ngo was instantly repurposed and scaled to support complete 10,000 EPAMers. We chose to enactment [indiscernible] countries and galore pinch their families.

In addition, our business continuity strategy was adapted to see an exit of our business from Russia. And passim nan year, our customer attraction was further elevated to guarantee that moreover pinch situation that was thing but normal, our clients continued to carnivore nan consistent, high-quality of transportation and level of work that they would expect nether normal business conditions.

2022 was successful each measurement nan astir disruptive twelvemonth for EPAM I remember, and I person a erstwhile history to retrieve each of them. You mightiness inquire why we are considering 2022 a comparative success. As a consequence of our 2022 efforts, successful 2023 we person a world transportation footprint successful urbanization that makes EPAM 1 of nan astir geo-diversified IT services companies successful nan world, and nan 1 that now operates successful much than 50 countries. When we began 2022, astir 60% of our transportation was successful conscionable 3 largest locations [indiscernible] together. And today, only 30% of our talent is there.

While we expect that will autumn person to 20%, 25% attraction by nan extremity of this twelvemonth pinch accelerated maturation outside. We besides didn't suffer immoderate important clients during nan past 12 months contempt actively moving a world transportation location rebalancing program. And successful real-time, we were continuously processing caller capabilities crossed our awesome markets. We were besides prudent pinch our transportation retired of Ukraine. We tin consistently show productivity and quality, very overmuch successful statement pinch erstwhile expectations. And finally, that our caller locations are very overmuch successful statement pinch EPAM productivity and value engineering standards term.

Why past we usage a comparative qualifier to nan stated occurrence up to date? Simply, nan warfare wrong Ukraine is not over. And we judge that it will beryllium our regular reality for immoderate clip to come. Having accomplished what was highly difficult transformation, and while uncovering our [indiscernible] overmuch stronger, much tin and effective institution than we person been before. And pinch a beardown instauration to build upon to nan web of our journey, we do recognize that it's very overmuch an ongoing process which demands our moreover higher-level preparedness for caller and unexpected challenges. Additionally, arsenic I've mentioned during our past net call, immoderate of our partners and customers person been messaging their anticipation for world slowdown successful request and started taking resultant actions to amended align their businesses to nan caller environment.

While we besides expected [indiscernible] slowdown, our reality happened to beryllium much analyzable than nan emblematic slowdown indicated by others. When we shared our Q3 results successful November, we were not yet seen a elaborate image of what EPAM circumstantial request situation would go successful 2023. Today, what we are experiencing is somewhat much than be aware related to macroeconomic conditions. The emerging position is circumstantial to both, nan wide world marketplace conditions and besides reflects nan customer anticipation arsenic portion of our mitigation and diversification plans, and their corresponding decision-making process during nan past year.

First, we now understand that immoderate of our clients didn't expect that we would mitigate nan past 12 months arsenic good arsenic we did. So astatine immoderate point, they take to mitigate their consequence associated pinch our business successful beforehand and to see replacement for them caller activity streams. We judge that while they are now comfortable pinch our diversified transportation footprint and committed to proceed moving pinch us, a number of decisions made two, 3 quarters earlier became visible for america conscionable now.

Second, owed to contiguous redistribution of our talent to caller locations, our wide costs building and costs to our customers of our [indiscernible] were disrupted to immoderate level. During nan [indiscernible] environment, nan changes were accommodated was comparative eased. But successful existent slow environment, nan caller location and value and operation coming a greater challenge, astatine slightest while we were fixing nan imbalance.

Third, location are respective cardinal verticals, specified arsenic package and hi-tech, for example, which were disproportionately impacted pinch nan existent slowdown. And location are besides respective ample clients, which were impacted by their ain circumstantial circumstances during nan past respective months, who had to hold antecedently committed initiatives.

And finally, our attraction connected bringing successful nett caller logos during nan past 12 months was de-prioritized arsenic we focused connected retaining our existing customers and repositioning our world transportation arsenic our cardinal priorities. So because of those EPAM-specific factors, we judge we are now seeing a little gross maturation outlook astatine nan opening of 2023 than we historically would expect astatine this time.

Our existent position for nan twelvemonth now shows comparatively debased maturation during nan first half of nan year, pinch acceleration successful maturation successful nan 2nd half of 2023, perchance approaching nan high-teens successful Q4, and pinch opportunity to travel backmost to our pre-pandemic 20%-plus integrated maturation floor plan correct aft that.

At this point, we are investing successful our customer and partner relationships and moving crossed our world portfolio to build connected our beardown [indiscernible] differentiators pinch nan value-added services successful consulting customer information and customer experience. These are semipermanent programs which we've had underway for respective years. And our existent positioning arsenic a top-tier partner to our clients, and further credibility we built during nan past 12 months should thief america to create uplift successful request going into nan 2nd half of 2023.

Today, we proceed to stabilize our transportation world level and create talent crossed caller geographies. A important portion of those continuous efforts will let america to restoring nan balanced costs building crossed each awesome transportation centers. At nan aforesaid time, while we are afloat committed to continuing our investments successful our strategical differentiators, we are watching very cautiously nan equilibrium of those investments to our existent and instantly visible demand.

Given nan uncertainty of looking astatine our business was from a agelong and shorter-term constituent of view. We are dense utilizing our integer platforms, which person been instrumental successful guiding our decisions truthful acold and allowing america to show our business connected a regular ground and making real-time calibrations erstwhile basal to guarantee that we protect our champion talent arsenic a cardinal privilege while still driving towards our historical maturation and profitability levels.

On nan wide slowdown issue, we do judge that successful today's exertion limited world, nan existent effect of slow request connected nan IT services world market, astir apt should beryllium constricted conscionable to respective quarters. The pull-back will promote caller players to participate nan marketplace pinch caller exertion led business solutions and push enterprises to respond pinch caller investments successful bid to protect their competitory positions. This successful move should accelerate maturation for EPAM, arsenic our proposition is focusing precisely connected [indiscernible] to bring caller strategy and implementation simultaneously successful astir [indiscernible] and businesslike ways.

So our extremity coming is to hole EPAM precisely for nan clip and to beryllium capable to respond accelerated for nan adjacent maturation and capacity challenges. That is why nan scheme to attraction our attraction successful nan adjacent quarters to further stabilize our world operations and to continuously put into caller talent, caller capabilities, caller [indiscernible] and caller markets, and to support our beardown engineering DNA, but this clip arsenic a overmuch much globally diversified institution than ever successful nan past.

Looking astatine our results for 2022, we generated complete $4.800 cardinal successful revenues, reflecting a greater than 28% year-over-year growth. Non-GAAP net per stock were $10.90, a 20% summation complete fiscal 2021. And we besides generated $382 cardinal of free rate flow. And 1 much clip we did each that during nan twelvemonth erstwhile we had almost 60% of our talent successful regions straight aliases indirectly impacted by warfare and erstwhile we were supporting galore thousands of EPAMers and their families owed to nan continuous relocation process.

In 2023, we are committed to accelerating our ngo of becoming a existent world orchestrator for our customers, and we are moving each time to enactment focused connected our customer needs and demands, moreover while we proceed rolling our geographic description s, our capabilities successful our commercialized offering of a larger much diversified and much tin EPAM.

It is simply a spot unusual to talk coming again 12 months later astir crossing $5 cardinal gross people successful 2023, arsenic we did backmost successful February 2022. The warfare took a twelvemonth of our life, twelvemonth of our growth. But we each cognize excessively good that it's conscionable thing successful comparison to what group successful Ukraine must spell done coming and what is happening connected nan crushed successful Turkey arsenic we speak correct now. So that is why pinch each that, what didn't alteration astatine each is our assurance that pinch what we build and continuously building, we would beryllium capable to navigate nan challenges and travel backmost to our 20% positive integrated maturation complaint successful nan adjacent respective quarters and to our $10 cardinal aspiration successful nan adjacent respective years.

With that said, fto maine move nan telephone complete to Jason, who will talk astir our Q4 and full-year 2022 results and our business outlook for 2023.

Jason Peterson

Thank you, Ark, and bully morning, everyone. Before covering our Q4 results, I wanted to punctual everyone that successful summation to our customary non-GAAP adjustments, expenditures related to EPAM's humanitarian committedness to Ukraine, nan exit of our Russian operations and costs associated pinch accelerated nan worker relocations had been excluded from non-GAAP financial results. We person included further disclosures circumstantial to these and different related items successful our Q4 net release.

In nan 4th quarter, EPAM delivered coagulated results. The institution generated revenues of $1.23 billion, a year-over-year summation of 11.2% connected a reported ground and 14.4% successful changeless rate terms, reflecting a antagonistic overseas speech effect of 320 ground points. Additionally, nan simplification successful Russian customer revenues resulting from our determination to exit nan Russian marketplace had a 440 ground constituent antagonistic effect connected gross growth. Excluding Russia revenues, reported year-over-year gross maturation would person been 15.6% and changeless rate maturation would person been almost 19%.

Beginning pinch our manufacture verticals, recreation and user grew 16%, driven by beardown maturation successful recreation and hospitality pinch immoderate moderation successful unit and user goods, arsenic customers exhibited incremental be aware successful nan past fewer months of 2022. The ongoing exit of nan Russian marketplace besides impacted nan maturation successful this vertical. Absent nan impact, maturation would person been 19% aliases 25.4% successful changeless currency.

Financial services grew 2.4% pinch very beardown maturation coming from plus guidance and insurance. Excluding our Russia customer revenues, maturation would person been 17.8% and 20.8% successful changeless currency. Software and Hi-Tech grew 10.3% successful nan quarter. Growth successful nan 4th reflected a simplification successful gross from a customer that was antecedently successful our apical 20, successful summation to slower generalized maturation successful customer revenues crossed nan vertical.

Life sciences and healthcare grew 11.5%. Growth successful nan 4th was partially impacted by nan unexpected ramp-down of a ample translator programme astatine a customer that was antecedently EPAM's apical 10. We presently expect further ramp-downs successful this customer spending successful Q1 of 2023. Business Information and Media delivered 10.9% maturation successful nan quarter. And finally, our emerging verticals delivered beardown maturation of 20.8%, driven by clients successful manufacturing and automotive, arsenic good arsenic energy.

From a geographic perspective, nan Americas, our largest region, representing 59% of our Q4 revenues, grew 14.7% year-over-year aliases 15.6% successful changeless currency. EMEA, representing 37% of our Q4 revenues, grew 18% year-over-year, aliases 25.7% successful changeless currency. The accelerated maturation successful nan 4th is partially nan consequence of caller acquisitions. CEE, representing 1% of our Q4 revenues, contracted 71.8% year-over-year, aliases 72.6% successful changeless currency. Revenue successful nan 4th was impacted by our determination to exit nan Russian marketplace and nan resulting ramp-down of services to Russian customers. And finally, APAC was level year-over-year, but really grew 3.8% successful changeless rate position and now represents 2% of our revenues. In Q4, revenues from our apical 20 clients grew 8% year-over-year, while revenues from clients extracurricular our apical 20 grew 13%.

Moving down nan income statement. Our GAAP gross separator for nan 4th was 32.4% compared to 34.3% successful Q4 of past year. Non-GAAP gross separator for nan 4th was 34.1% compared to 35.9% for nan aforesaid 4th past year. Gross separator successful Q4 2022 reflects nan antagonistic effect of little utilization and nan affirmative effect of a much normalized adaptable compensation disbursal compared to Q4 2021. Gross separator successful nan 4th was besides negatively impacted by nan timing quality associated pinch EPAM's ongoing efforts to align measure rates based connected worker relocations, astir of which person been accomplished successful 2022.

GAAP SG&A was 16.6% of revenues compared to 17.2% successful Q4 of past year. And non-GAAP SG&A came successful astatine 14.8% of gross compared to 15.6% successful nan aforesaid play past year. The SG&A results for Q4 reflected efficiencies made chiefly successful our accommodation footprint and little adaptable compensation compared to Q4 2021.

GAAP income from operations was $170 cardinal aliases 13.8% of gross successful nan quarter, compared to $166 cardinal aliases 15% of gross successful Q4 of past year. Non-GAAP income from operations was $220 cardinal aliases 17.8% of gross successful nan 4th compared to $206 cardinal aliases 18.6% of gross successful Q4 of past year.

Our GAAP effective taxation complaint for nan 4th came successful astatine 22.9% versus our Q4 guideline of 21%, owed chiefly to little excess taxation benefits related to stock-based compensation, arsenic good arsenic nan effect of nan alteration successful definite taxation regulations. Our non-GAAP effective taxation rate, which excludes excess taxation benefits and includes nan effect of nan alteration successful definite taxation regulations was 23.5%. Diluted net per stock connected a GAAP ground was $2.61. Our non-GAAP diluted EPS was $2.93, reflecting a $0.17 summation and a 6.2% maturation complete nan aforesaid 4th successful 2021. In Q4, location were astir 59.3 cardinal diluted shares outstanding.

Turning to our rate travel and equilibrium sheet. Cash travel from operations for Q4 was $186 cardinal compared to $285 cardinal successful nan aforesaid 4th of 2021. Free rate travel was $165 cardinal compared to free rate travel of $228 cardinal successful nan aforesaid 4th past year. We ended nan 4th pinch astir $1.7 cardinal successful rate and rate equivalents. At nan extremity of Q4, DSO was 70 days and compares to 69 days successful Q3, 2022, and 62 days successful nan aforesaid 4th past year. Looking ahead, we expect DSO will stay dependable successful 2023.

Moving connected to a fewer operational metrics for nan quarter. We ended Q4 pinch much than 52,850 consultants, designers, engineers, trainers and architects. Production headcount maturation was comparatively level compared to Q4 2021. Our full headcount for nan 4th was much than 59,250 employees. Utilization was 73.6% compared to 76.8% successful Q4 of past twelvemonth and 73.5% successful Q3 of 2022.

Turning to our afloat twelvemonth results for 2022. Revenues for nan twelvemonth were $4,825 million, producing 28.4% reported maturation and 32.4% connected a constant-currency ground erstwhile compared to 2021. During 2022, our acquisitions contributed astir 5% to our growth. Excluding Russia revenues, reported year-over-year gross maturation would person been astir 32.1%, and changeless rate maturation would person been astir 36.3%.

GAAP income from operations was $573 million, an summation of 5.7% year-over-year and represented 11.9% of revenue. Our non-GAAP income from operations was $818 million, an summation of 20.6% complete nan anterior twelvemonth and represented 17% of revenue. Our GAAP effective taxation complaint for nan twelvemonth was 17.3%, our non-GAAP effective taxation complaint was 23.4%.

Diluted net per stock connected a GAAP ground was $7.09. Non-GAAP diluted EPS, which excludes adjustments for stock-based compensation, acquisition-related costs and different definite one-time items was $10.90, reflecting a 20.4% summation complete fiscal 2021. In 2022, location were astir 59.2 cardinal weighted mean diluted shares outstanding.

And finally, rate travel from operations was $464 cardinal compared to $572 cardinal for 2021. And free rate travel was $382 million, reflecting a 59.3% adjusted nett income conversion. Cash travel successful 2022 reflected expenses associated pinch our ongoing humanitarian efforts successful supporting our Ukrainian labor and definite rate impacts related to nan exit of our Russian operations. We're very pleased pinch our 2020 results fixed nan important magnitude of disruption successful translator which we navigated passim nan year.

Now let's move to guidance. For 2023, we will resume providing a afloat twelvemonth outlook, successful summation to guidance for nan adjacent quarter. To date, our operations successful Ukraine person not been materially impacted and our teams stay highly focused connected maintaining uninterrupted production. Our guidance assumes that we will proceed to beryllium capable to present from our Ukraine transportation centers, productivity levels astatine aliases somewhat little than those achieved successful 2022.

As we mentioned during our Q3 net call, we began to spot signs of moderation successful demand, including delays successful decision-making and further scrutiny connected programme budgets early successful Q4. At that time, this was isolated to a fewer customers successful nan unit and user equipment industries. Since past we've seen further grounds of slower decision-making and be aware astir spending, including immoderate programme ramp-downs. For astir clients, be aware astir budgets has only resulted successful a slowdown successful growth. But for immoderate clients, we knowledgeable existent reductions successful walk successful Q4, mixed pinch continued cautious spending entering Q1. For 2 customers that were successful our apical 20 successful 2022, we've seen ramp-downs successful programs, which will negatively effect Q1 revenues. We expect neither of these customers to beryllium successful our apical 20 successful Q1, but we already spot 1 of those customers erstwhile again requesting incremental task teams.

At this time, we are expecting a little level of gross successful Q1, producing a slower commencement to our 2023 fiscal year. Consistent pinch erstwhile cycles, wherever we managed done a impermanent softening successful demand, we will proceed to thoughtfully calibrate our disbursal levels, while focusing connected nan preservation of our talent successful mentation for expected stronger 2023 second-half demand.

In nan first half of 2023, we expect headcount will proceed to diminution arsenic a consequence of simplification successful hiring, mixed pinch normal levels of attrition. We are readying connected returning maturation and accumulation successful headcount successful nan 2nd half of 2023. We expect utilization successful nan mid-70s successful nan first half of nan twelvemonth arsenic request and proviso normalize pinch utilization successful nan 2nd half of nan twelvemonth expected to return to our much accepted 77% to 79% range. As a reminder, nan exit of nan Russian marketplace and nan simplification successful Russia customer revenues produces a tougher year-over-year gross comparison, chiefly successful nan first half of 2023.

Starting pinch our afloat twelvemonth outlook. Revenue maturation will beryllium astatine slightest 9% connected some a reported and changeless rate basis. The effect of overseas speech is expected to beryllium negligible connected a full-year basis. Additionally, astatine this time, location is nary inorganic gross publication for 2023. So our guideline includes integrated gross maturation only. Excluding nan effect of nan exit of nan Russian market, reported gross maturation is expected to beryllium astir 11%. We expect first half gross maturation to beryllium successful nan azygous digits, returning to double-digit gross maturation successful nan 2nd half of nan year. In Q4 2023, we expect gross maturation successful nan precocious teens.

We expect GAAP income from operations to beryllium successful nan scope of 11.5% to 12.5% and non-GAAP income from operations to beryllium successful nan scope of 15.5% to 16.5%. We expect our GAAP effective taxation complaint to beryllium astir 21%. Our non-GAAP effective taxation rate, which excludes excess taxation benefits related to stock-based compensation will beryllium 23%.

For net per share, we expect nan GAAP-diluted EPS will beryllium successful nan scope of $8.64 to $8.84 for nan afloat twelvemonth and non-GAAP diluted EPS will beryllium successful nan scope of $11.15 to $11.35 for nan afloat year. We expect a weighted mean stock count of 59.6 cardinal afloat diluted shares outstanding.

For Q1 of 2023, we expect revenues to beryllium successful nan scope of $1.200 cardinal to $1.210 billion, producing a year-over-year maturation complaint of astir 3%. Our guidance reflects an unfavorable FX effect of 2% and nan year-over-year maturation complaint connected a changeless rate ground is expected to beryllium astir 5%. We expect negligible publication to gross maturation from acquisitions. Adjusted for nan effect of our determination to exit nan Russian market, changeless rate gross maturation would beryllium astir 8%.

For nan first quarter, we expect GAAP income from operations to beryllium successful nan scope of 9.5% to 10.5% and non-GAAP income from operations to beryllium successful nan scope of 14% to 15%. Income from operations reflects nan effect of nan resetting of societal information caps and little utilization, which we expect to amended passim nan year.

We expect our GAAP effective taxation complaint to beryllium astir 18% and our non-GAAP effective taxation rate, which excludes excess taxation benefits related to stock-based compensation to beryllium astir 23%. For net per share, we expect GAAP diluted EPS to beryllium successful nan scope of $1.66 to $1.74 for nan 4th and non-GAAP diluted EPS to beryllium successful nan scope of $2.30 to $2.38 for nan quarter. We expect a weighted mean stock count of 59.5 cardinal diluted shares outstanding.

Finally, a fewer cardinal assumptions that support our GAAP to non-GAAP measurements successful 2023. Stock based compensation expenses is expected to beryllium astir $152 cardinal pinch $35 cardinal successful Q1, $36 cardinal successful Q2 and $81 cardinal successful nan remaining quarters. Amortization of intangibles is expected to beryllium astir $22 cardinal for nan year, evenly dispersed crossed each quarter. The effect of overseas speech is expected to beryllium nominal for nan year. Tax-effective non-GAAP adjustments is expected to beryllium astir $44 cardinal for nan year, pinch $12 cardinal successful Q1, $10 cardinal successful Q2 and $11 cardinal successful each remaining quarter.

And finally, we expect excess taxation benefits to beryllium astir $23 cardinal for nan afloat twelvemonth pinch astir $8 cardinal successful Q1, $6 cardinal successful Q2 and $9 cardinal successful nan remaining quarters. Related to nan support of our Ukrainian employees, done December 31, 2022, EPAM has spent astir $45 cardinal arsenic portion of nan company's $100 cardinal humanitarian committedness to our Ukrainian labor and their families. We expect further humanitarian expenditures will beryllium made during 2023.

Lastly, our Board of Directors precocious approved a stock repurchase program, authorizing nan institution to acquisition up to $500 cardinal of nan company's communal banal complete nan adjacent 24 months. This programme will let nan institution to substantially offset dilution associated pinch nan issuance of worker equity. We expect to proceed to make coagulated free rate flows successful 2023 and moreover stronger free rate flows successful 2024. With our important rate position and our assurance successful EPAM's expertise to make beardown free rate flows, we judge nan institution tin some proceed to prosecute important strategical acquisitions while evolving our superior allocation strategy to see a stock buyback program.

Again, my acknowledgment to each nan EPAMers who made 2022 a successful twelvemonth and will thief america thrust maturation passim 2023.

Operator, let's unfastened nan telephone for questions.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] And our first mobility comes from nan statement of Ramsey El-Assal pinch Barclays. Your statement is open.

Ramsey El-Assal

Hi, acknowledgment truthful overmuch for taking my mobility this morning. I wanted to inquire astir Ark's comments connected immoderate clients preemptively making nan determination to move immoderate workloads benignant of disconnected of EPAM and that benignant of playing retired arsenic we speak. I conjecture nan mobility is, is that move already mostly complete, aliases is that thing that's benignant of ongoing into -- deeper into nan year? And past possibly you could speak to really do you -- if you tin and really you tin spell astir winning those workloads back?

Arkadiy Dobkin

I deliberation pinch nan [indiscernible] first of all, it's very difficult to measurement what's happening, but we person not taken -- opportunity that activity taken from EPAM. What we were saying, look, we are realizing correct now that immoderate activity -- early activity which we traditionally will beryllium getting from existing customer guidelines were waking astir apt to immoderate replacement vendors and decisions were made to [indiscernible]explore this respective quarters agone erstwhile clients were not judge really good we're going to navigate nan full disruption successful Eastern Europe. So again, it's very difficult to measure, but seeing nan existent request business successful Q1, that's what we presume happening. And nan reconfirmation of this is not needfully easy to get. At nan aforesaid time, we cognize that pinch mostly of nan client, arsenic we mentioned, we didn't suffer practically immoderate customer aliases didn't suffer important clients astatine all.

So they understand that we person been capable to beryllium that we tin navigate continuously moving from Ukraine and nan value of our transportation is comparable pinch traditional, moreover erstwhile moving successful our caller destinations of nan world. And we judge that correct now location is simply a level of comfortableness that clients will beryllium considering america for early activity arsenic well. And location is confirmation for this. But astatine nan aforesaid time, we mentioned costs changes arsenic well. This is different situation aliases different point which we are actively moving to make judge that we bring successful nan equilibrium location too.

Ramsey El-Assal

Okay, convey you. And 1 speedy follow-up from me. Maybe Jason, could you remark connected nan separator cadence this year? Should we expect margins to benignant of measurement up on pinch gross successful somewhat of a consecutive statement arsenic we move deeper into nan twelvemonth and each nan measurement to nan 4th quarter, aliases is location immoderate different colour connected conscionable nan cadence successful margins that you mightiness request to share?

Jason Peterson

Yeah, fto maine you really usage this opportunity to beryllium a small clearer connected benignant of what we deliberation we'll spot successful 2023. And so, I deliberation nan first connection I would make is, clearly, we were very thoughtful astir our guidance pinch a 15.5% to 16.5% adjusted IFR range. At nan aforesaid time, we do expect that we would run supra nan midpoint of that scope successful 2023. And you're correct that successful nan first half of nan year, we expect to spot little levels of profitability. And past successful nan 2nd half of nan twelvemonth higher levels of profitability. And fto maine return this opportunity to beryllium benignant of specific.

So, we entered 2023 pinch a reset of Social Security caps and a little utilization that resulted from immoderate of those ramp-downs that I talked astir earlier. So we expect to spot gross separator successful nan first half of nan twelvemonth astir apt successful nan 31% to 32% range, and rather perchance person to 31% than 32%. At nan aforesaid time, pinch nan little level of revenue, I deliberation you're going to spot SG&A spell somewhat supra 15% successful nan first half. And past what I expect successful nan 2nd half pinch stronger growth, a stronger measure days -- greater measure days successful nan 2nd half, improved utilization and we will beryllium focusing connected benignant of matching our costs to our demand. And past a small spot of SG&A ratio that results erstwhile you person nan stronger gross maturation that you would spot an betterment successful nan gross margin, astir apt astir nan 34% scope successful nan 2nd half. And past what you would spot is SG&A beneath 15% successful nan 2nd half. So again, truthful SG&A supra 15% successful nan first half of nan fiscal twelvemonth and beneath 15% successful nan 2nd half.

Ramsey El-Assal

Very helpful. Thanks truthful much.

Operator

Thank you. And our adjacent mobility comes from Bryan Bergin pinch Cowen. Your statement is now open.

Bryan Bergin

Hi, convey you. I wanted to inquire connected nan outlook here. So arsenic you built nan 1Q and nan 2023 maturation outlook, is that a baseline from 4Q and really nan December customer activity you saw, aliases is that much benignant of a real-time position of customer statement into nan past fewer weeks? I'm trying to understand nan underlying assumptions location successful that full-year guide. And possibly whether you person a different level of visibility to nan afloat twelvemonth target versus what you would usually person astatine this constituent successful nan year, conscionable fixed each nan moving parts.

Jason Peterson

Yeah. Clearly, it's a much challenging situation to benignant of forecast. And clearly, I deliberation we're each seeing immoderate positives astir nan macroeconomic situation that possibly gets america a small spot much comfortable. But arsenic we exited 2022, we intelligibly saw slow December and I would opportunity a slow January. And what I deliberation we're opening to spot is what I would call, a small spot of greenish shoots of incremental request arsenic clients perchance get much comfortable pinch what 2023 mightiness look like. And truthful pinch this, I guess, afloat twelvemonth position shows intelligibly that nan commencement of Q1 and past we're opening to spot much activity successful position of astatine slightest RFPs and different benignant of requests for discussions pinch clients. And arsenic a result, we consciousness comparatively assured that we tin make stronger gross maturation and astir apt much accordant pinch nan type of sequential maturation that we've seen successful nan past. And I think, Bryan, you cognize that usually pre-pandemic we benignant of generated betwixt 5% and 8% sequential maturation passim nan year.

Arkadiy Dobkin

Yeah, I would say, our assumptions -- because [indiscernible] you've sewage a wide economical slowdown [indiscernible] And fixed nan very circumstantial trends successful nan lawsuit of EPAM, it's besides successful immoderate measurement a reflection of this slowdown arsenic well, because clients sewage comparably little activity out, arsenic they besides sewage much optionality vis-a-vis others arsenic well. So our assumptions correct now, arsenic we mentioned that astir apt this difficult business would beryllium for respective quarters, and past request will commencement to prime up and past we will measurement this astir successful nan position which we see pre-pandemic and successful this business [indiscernible] maturation arsenic we do. And pinch this, we deliberation that again high-teens should beryllium hap person to nan extremity of nan twelvemonth and perchance we will spell to normal location successful nan opening of adjacent year.

Bryan Bergin

Okay. My follow-up connected separator here. So conscionable wrong this separator outlook, tin you talk astir nan grade to which little maturation impacted nan year-over-year diminution versus nan world investments you're making to support diversification versus conscionable normal pricing and costs pressures, conscionable arsenic you move to caller lookout, trying to rank what are those 3 successful this separator outlook. And, Jason, is location immoderate structural alteration to nan separator floor plan from here, conscionable based connected really you're seeing this play out?

Jason Peterson

Yeah. So I deliberation nan first point is that, it's a small spot of a communicative of 2 halves, wherever nan first half is decidedly little profitability owed to nan unexpected little level of demand. And so, you do conscionable person little utilization successful nan first half. And past arsenic we said, we'll make definite that [indiscernible] appropriately matching costs to request successful nan 2nd half.

Then I deliberation nan different piece, conscionable connected a year-over-year ground is, I do deliberation that -- nan pricing powerfulness that I deliberation astir apt each of america saw complete nan past mates of years is going to beryllium not rather arsenic pronounced successful 2023. And truthful value is going to beryllium a small spot harder to travel by. And astatine nan aforesaid time, you person an atrocious batch of costs ostentation astir nan world that is driving comparatively precocious costs inflation. And so, I do deliberation this twelvemonth is going to beryllium a different twelvemonth wherever I deliberation we've benefited from evidently beardown value and, let's say, due benignant of costs inflation. I deliberation this year, you're going to spot still comparatively precocious costs ostentation and a small little opportunity connected nan value side.

Structurally, Bryan, we've talked a batch astir [indiscernible] into these caller geographies, that complete clip we will benignant of standard and optimize and that will amended profitability. I think, pinch nan slowdown successful demand, it's a small spot difficult to make immoderate of those changes to bring successful much inferior unit to amended disconnected nan relations that amended scale. And truthful I do deliberation that arsenic you move passim nan year, peculiarly arsenic you participate 2024, there's greater opportunities, and mostly I consciousness comfortable connected our expertise to proceed to amended our profitability erstwhile we participate 2024.

Bryan Bergin

Okay. Thank you each nan detail.

Operator

Thank you. And our adjacent mobility comes from Maggie Nolan pinch William Blair. Your statement is now open.

Maggie Nolan

Thanks very much. I'm funny what steps you're taking to revive nan caller business pipeline, fixed that pinch a secondary attraction arsenic you were adapting past year.

Jason Peterson

What we are doing to revive nan pipeline.

Arkadiy Dobkin

Okay. I deliberation we benignant of mentioned this, but successful general, location is overmuch amended stableness successful our world operations which is giving america opportunity to attraction connected business. We were talking astir our attraction connected consultants and this is moving for us. We person caller opportunities which is driven by this. But besides we are moving connected a number of different models, specifically for this marketplace today. And we talked astir it moreover past time. So attraction to sometimes shorter programs successful [indiscernible] before. These are transformational programs, will beryllium a [indiscernible] for our clients again. So aggregate activities. I don't deliberation it would beryllium imaginable to benignant of picture this successful a mates of minutes. But we attraction really to support caller gross procreation correct now from mini deals to consulting-led deals arsenic well.

Maggie Nolan

Okay. And past [Multiple Speakers]

Arkadiy Dobkin

So what I deliberation important to mention present that we've decidedly seen [indiscernible] bully life astatine nan markets location are ample deals, wherever we are invited and we participate successful correct now, [indiscernible]. And astir important, we do judge that nan clients' assurance that we tin proceed moreover successful this situation and fixed still not vanished warfare is very, very different than it was astatine nan opening of nan disruption erstwhile immoderate of them started to see alternatives. I deliberation this business changed. But, arsenic you understand, each clip location is simply a hold arsenic we were really seeing nan visible effect successful Q4 and Q1 correct now.

Maggie Nolan

Okay. And past you mentioned a apical 10 customer -- apical 20 customer that was slowing. Outside of those two, tin you talk astir nan remainder of nan apical customer portfolio, really you spot maturation materializing pinch that base, aliases is location a level of be aware location into 2023? And past immoderate patterns emerging amongst those apical customers successful position of wherever they'd for illustration you to present from a geographic perspective?

Arkadiy Dobkin

That's different constituent that we are really delivering now from very different geographies, and I deliberation mostly of nan clients are comfortable. And again, location is nary 100% of clients fresh to activity successful occasions pinch nan size of nan portfolio we person today. We really don't person nan problem from a geographies constituent of view, because location are clients moving from different regions, and from this constituent of view, utilization, coming it is good benignant of balanced crossed nan regions.

At nan aforesaid time, if you are talking astir different trends successful clients, past I will opportunity that it's very overmuch successful statement pinch everything other -- everybody other talking astir it today, because location is simply a be aware arsenic location is simply a slowdown. There are immoderate clients still increasing fast, but again immoderate decisions making overmuch much slower. And immoderate of them still delay. And connected apical of this, let's not forget, it is nan mid of Q1. And Q1 successful a normal year, location is nary afloat benignant of confirmation what will happen. I deliberation successful nan adjacent period aliases two, we will understand a small spot much astir -- taking an relationship of this very typical year, not only for EPAM. So I deliberation nan delays successful decisions will beryllium a small moreover one. But successful general, nan remainder of nan portfolio action for us, much successful statement pinch nan -- benignant of normal to nan market.

Maggie Nolan

Thank you.

Operator

Thank you. And nan adjacent mobility comes from nan statement of James Faucette pinch Morgan Stanley. Your statement is now open.

James Faucette

Great. Thank you truthful much. I wanted to excavation successful conscionable quickly a small spot connected immoderate of nan comments Ark you and Jason person made astir nan relationships pinch your customers and nan like. I'm wondering what levers correct now you're looking to propulsion aliases tin propulsion to reengage and possibly rebuild immoderate of nan relationships, and much specifically, nan activity streams? And should we expect immoderate changes to pricing aliases transportation strategy successful consequence to benignant of those customer dynamics?

Arkadiy Dobkin

I will reply, of course, obviously, successful wide terms. I deliberation we are watching what's happening successful real-time. And for circumstantial clients for circumstantial deals, we are really making sometimes real-time decisions arsenic well, because again location are 2 trends we are clear about. There is simply a wide business connected nan marketplace and location are immoderate specifics to EPAM. And specifics still will withstand here, but connected different side, owed to nan past 12 months we astir apt make our clients consciousness overmuch much comfortable, our expertise to flooded nan challenge. You could ideate [indiscernible] owed to nan first mates of months aft nan warfare started, aliases moreover erstwhile it was demolition successful Ukraine successful infrastructure and we benignant of flooded each of these challenges that Ukraine has delivered.

So I deliberation we mentioned that thousands of group person moved and they [indiscernible] because we don't person complaints. But clients intelligibly were expecting immoderate problems. We are saying correct now that this is astir apt down of us. While nan situation is still there. So erstwhile you opportunity rebuilding nan spot pinch nan client, I think, let's put be aware benignant of there.

Jason Peterson

Yes. And I'll conscionable remark connected nan pricing. And so, arsenic I said, nan situation is astir apt a small little -- there's small little opportunity for value improvement. And clearly, we're going to spell disconnected and make definite that we're capable to benignant of triumph opportunities, but astatine nan aforesaid time, we're still moving connected pricing and we're surely going to make definite that we don't do thing that would impair profitability complete nan agelong term.

James Faucette

Thank you for that. And past quickly conscionable connected superior allocation, really are you reasoning astir acquisitions, particularly fixed nan buyback authorization, and what are you looking for successful acquisitions and what's nan existent scenery and pipeline for imaginable deals? Thanks.

Jason Peterson

Sure. So akin to nan comments that Ark made astir wherever our priorities were successful 2022, that would besides beryllium accordant for our acquisition activity. We had different priorities. And truthful nan fierce pursuit of acquisitions was somewhat de-prioritized. At nan aforesaid time, we person continued to beryllium progressive done due-diligence. Sometimes we've benignant of disqualified imaginable opportunities. And so, what I said successful my prepared book really is accordant with, we judge that we tin do beautiful progressive acquisitions and besides prosecute a stock buyback. And so, we do expect to beryllium progressive passim 2023, surely a batch much progressive than we were successful 2022.

And I would opportunity that mostly nan aforesaid benignant of focus. So things that are astir apt somewhat much benignant of consulting benignant of oriented, possibly things that person a level spirit to them. And we're tending to spot a adjacent spot of maturation successful Continental Europe. And so, we'll intelligibly proceed to look for opportunities to thrust maturation successful that region arsenic well.

James Faucette

Thanks truthful much.

Operator

Thank you. And our adjacent mobility comes from nan statement of Surinder Thind pinch Jefferies. Your statement is now open.

Surinder Thind

Good morning. I deliberation successful your prepared commentary you talked astir perchance seeing immoderate greenish shoots. So conscionable arsenic a clarification, are you seeing that clients are a spot much optimistic now than they were successful December and January? And I guess, if that's nan case, what benignant of gives you comfortableness astir possibly maturation successful nan backmost half of 2023, fixed immoderate of nan challenges of possibly forecasting request successful nan adjacent word aliases nan changes successful request that you've seen successful nan adjacent word from clients?

Jason Peterson

I'll commencement astatine nan beforehand extremity of that, because I was nan 1 who introduced nan greenish sprout language, and that was successful consequence to an earlier question. And so, David and I do benignant of our ain transmission checks internally pinch nan business units. And truthful that commentary, Surinder, was based connected a number of conversations that we've had pinch business portion heads. And truthful you see, moreover successful user goods, hopefully, unit will besides return pinch a small spot of spot successful nan unit sector. So we are seeing clients statesman to travel backmost and look for work.

I specifically said successful my prepared remarks that moreover nan customer who benignant of had to ramp down betwixt Q3 and Q4 is opening to inquire for caller teams. And so, there's conscionable a full bid of benignant of anecdotes, aliases much than 1 aliases two. And past possibly Ark, you want to talk astir what we're seeing successful position of larger woody opportunities and RFPs and that benignant of thing.

Arkadiy Dobkin

As I mentioned, we've seen [indiscernible] that are opportunities. There is very progressive activity pinch our business improvement and nan income squad correct now. There are immoderate deals successful astir apt immoderate regions which we are participating successful nan process arsenic well. So erstwhile you are asking astir really assured we are astir nan guidance correct now and really person we calculated, I deliberation I was trying to reside this already, but we are decidedly moving done aggregate assumptions.

And really bully is transaction, this is simply a different question, because if you deliberation astir 2020, 2021 and 2022, truthful each clip it was a very different business successful nan past 3 years wherever there's a batch of news to nan market. And results were really different than group expected astatine nan opening of nan year. But versus assumptions, I deliberation I consciousness that business -- now improvement efforts will beryllium akin to what it is correct now, including aggression successful Eastern Europe. So we presume that we will beryllium maturing our transportation and pricing building crossed caller locations which we entered wrong nan adjacent quarters.

We presume that request will turn stronger successful nan 2nd portion of nan year, based connected our, again, assumptions that what we were seeing before, possibly slowdown successful technology, usage of [indiscernible] comparatively accelerated comeback, because arsenic we've mentioned successful nan existent world, caller companies will beryllium coming and bringing caller technology, and nan accepted [indiscernible] position quo, and started to put very greatly contempt of various events. And we saw it during nan pandemic time. And again, we are perfectly a state that is not bully pinch this type of growth, but it will beryllium coming back. I deliberation nan operation of these assumptions and our expertise to travel wherever we're opinionated correct now successful Q1 should lead america to nan number which we shared pinch you.

Surinder Thind

That's helpful. And arsenic a follow-up here, tin we possibly talk astir nan transportation footprint cost? Obviously, your world deliveries changed complete nan past year, nan mean costs of transportation has gone up. How should we deliberation astir that from a structural perspective? It seems for illustration immoderate of nan competitory separator that you whitethorn beryllium had successful nan past from possibly lower-cost talent successful Eastern Europe, has that gone astatine this point, aliases really should we deliberation astir that from a competitory standpoint, nan costs of your caller transportation footprint and what clients deliberation of it?

Arkadiy Dobkin

I deliberation that's a mobility which -- aliases that's a situation which we are moving correct now. We are still successful Eastern Europe that we -- complete aggression successful galore countries wrong of EU, but besides extracurricular of EU. At nan aforesaid time, for illustration nan fastest maturation successful headcount happened successful India and Latin America. So this is 2 caller countries now which are, I mean, integrated accelerated growth, because we person benignant of immoderate countries which is increasing fast, but because of nan allocation impact. So is successful Latin America, this is simply a organically increasing and we will beryllium focusing connected these regions. Plus, we person successful our portfolio correct now crossed Central and Western Asia, a number of regions which we do judge will beryllium cost-competitive, and astatine nan aforesaid clip pinch a level of talent comparable and successful statement pinch wide EPAM requirements. So I deliberation it's a small spot moving target, but that's precisely what we simply will beryllium capable to negociate successful nan adjacent quarters arsenic well.

Surinder Thind

Thank you.

Operator

Thank you. Our adjacent mobility comes from nan statement of David Grossman pinch Stifel. Your statement is now open.

David Grossman

Thank you. Good morning. I'm wondering if you could -- looking astatine nan 2023 guide, possibly you could break it down successful position of nan headwinds that you're experiencing from geographic diversification concerns among your clients' request and little use from rates.

Jason Peterson

And David, are you talking astir successful position of gross maturation aliases profitability or...

David Grossman

Yeah, Jason, gross growth, conscionable nan gross maturation headwind from each of those 3 things, if you could break it down.

Arkadiy Dobkin

Let maine explain nan question, was that breaking down betwixt what -- breaking gross [Multiple Speakers]

David Grossman

So connected a year-over-year basis, nan gross maturation headwind. I deliberation we identified benignant of 3 buckets, right? One was immoderate clients concerns earlier successful 2022 astir geographic diversification, who initiated a process for that. There is simply a request rumor connected a year-over-year basis, arsenic consequence of slowing economical growth. And past third, nan situation is creating little opportunity to get rates than what you would typically get. So I'm conscionable wondering if you could thief america understand nan size of nan headwind of each of those 3 dynamics connected a year-over-year basis.

Arkadiy Dobkin

I don't deliberation we tin speak specifics correct now. I don't know, Jason, if you would beryllium capable to create some...

Jason Peterson

Yeah, a small spot complicated, David, because we still person astir apt immoderate use successful complaint from nan complaint changes that we did arsenic group moved geographies successful nan 2nd half of 2022. And then, of course, that shows up successful a full-year effect successful 2023. But we deliberation we'll spot less, what I would call, accepted benignant of axenic complaint successful 2023. We moved into a batch of caller geographies, arsenic Ark talked about, Central and West Asia, which we deliberation is an charismatic location longer term. We astir apt still request to make definite that our clients are comfortable pinch nan region successful nan aforesaid measurement that decades agone we had to get clients comfortable pinch Belarus. And truthful this is astir apt conscionable immoderate -- let's say, immoderate timing lag [indiscernible] very comfortable pinch increasing there.

Arkadiy Dobkin

Yeah. David, I deliberation it is very difficult to divided betwixt 2 things what you were talking about, immoderate clients were [indiscernible] were counted connected much maturation successful existing clients and we don't spot this, and nan costs facet arsenic well. So I deliberation calculation betwixt these two, almost intolerable because it's much distended and location is simply a inclination betwixt these versus circumstantial calculation. So we decidedly can't opportunity really overmuch we counted connected mates of clients which changed their mind. But I don't deliberation -- again, it's tens of cardinal of dollars arsenic well. That's all.

Jason Peterson

And past I conscionable deliberation I'll conscionable benignant of adjacent David with, these are things that, obviously, we're moving to reside passim 2023, and arsenic Ark said, already nan expertise to benignant of present from these caller geographies, we consciousness that clients are comfortable -- intelligibly comfortable pinch our expertise to make -- to present from geographies that person been impacted successful Eastern Europe. And then, arsenic Ark talked about, we proceed to benignant of turn geographies that connection our clients very cost-competitive solutions. And, of course, we've sewage nan precocious level of talent successful geographies, mightiness beryllium a small spot much expensive, but are due for circumstantial clients need.

David Grossman

Got it. Fair enough. Thank you for that. And possibly conscionable back, I think, to nan mobility came up astir proviso successful a mates of erstwhile questions, but I'm conscionable curious, arsenic you look astatine these caller geographies, tin you stock immoderate accusation successful position of trends successful utilization complaint aliases churn and really we should deliberation astir that successful each of these locations? I'm judge it's each complete nan committee fixed location are caller start-up operations. But conscionable wondering if there's immoderate observations astir immoderate of those dynamics arsenic well, pinch conscionable benignant of your recruiting exemplary successful these caller geographies and really that template is playing retired for you.

Arkadiy Dobkin

Yeah. So it will beryllium a mobility to spell successful details. So, yes, arsenic I mentioned, 2022 was a large maturation successful India and Latin America. And truthful I'll commencement really successful those locations. It was a important maturation successful 2021 arsenic well. As you know, 2021 was a reasonably bully year. And what -- truthful it was already proved successful 2021. So it was for illustration -- India was increasing for illustration -- I don't remember, 70%, 80%. And Latin America, astir apt successful nan aforesaid terms. Now it's 30%, 40% successful India and moreover much successful Latin America arsenic well. So these regions, we are beautiful comfortable. And yes, it's different from traditional, but we bring successful location a batch of acquisition aliases expertise, really to build and turn wrong our status. And I deliberation it's working. So this is 1 bucket. Another bucket, it's a number of locations wherever we person simultaneously bring successful section talent and bring successful knowledgeable talent from different locations. And we started to -- knew it, arsenic already mentioned previously, not only aft nan warfare started. It started really successful 2021. And we besides consciousness comfortable that this has been successful nan value results successful statement pinch what we knowledgeable successful benignant of accepted EPAM locations arsenic well.

So now, decidedly 2nd portion of 2022 was a very different inclination than before. That's why erstwhile you were asking astir practices, really are we hiring, what's nan speed, really nan Group is working? I deliberation we are very comfortable that we will beryllium capable to velocity it up, but we didn't request to velocity it up. And I deliberation we are overmuch much diversified, and we person galore much benignant of devices correct now, really to turn arsenic soon arsenic nan maturation will beryllium there, demanded arsenic before.

David Straube

So, operator, I deliberation we are moving a small spot late. We person clip for 1 much speedy mobility if we could.

Operator

Thank you. And our past mobility comes from nan statement of Jason Kupferberg pinch Bank of America. Your statement is now open.

Jason Kupferberg

Thanks, guys. I'll conscionable inquire a speedy two-parter. I guess, of each nan factors impacting nan gross maturation successful 2023, which really amazed you nan most? And past tin you conscionable speak to nan type of conservatism that you consciousness is successful nan gross guide, successful particular, because it does sound for illustration you're incorporating these greenish shoots into nan guide? There is immoderate beautiful large acceleration that you're building successful betwixt Q1 and Q4. Thank you.

Jason Peterson

Yeah. I deliberation what we intelligibly saw successful nan period of January was slower demand, and specifically, obviously, further ramp-downs pinch a mates of clients that we had talked astir successful our prepared script. And so, conscionable astir apt nan introduction point, Q1 2023, is benignant of what changed, and successful a mates of cases, it was circumstantial to a fewer ample customers. At nan aforesaid time, we've stripped those 2 customers out. The dialog pinch our BUs is they benignant of thrust revenues and cautiously measure their pipelines. But actually, location were immoderate affirmative tonalities associated pinch it. And truthful nan guideline really does incorporated benignant of nan little starting point, but obviously, 4 quarters is -- it's 12 months.

So it's difficult to foretell precisely wherever you are going to extremity up successful Q4, but it does already propose that we're opening to spot an betterment successful imaginable request comparative to that we saw successful November, December and January and that's benignant of what gives america nan assurance successful nan guide. But astatine nan aforesaid time, of course, we want to make definite that we'll beryllium capable to execute nan gross guidance for nan afloat year. So hopefully that answers that question.

Operator

Thank you. At this time, I'd for illustration to manus nan convention backmost to Mr. Ark Dobkin for closing remarks.

Arkadiy Dobkin

Thank you arsenic ever for attending today's call. As you know, immoderate questions, David is disposable to help. And talk to you successful 3 months. Thank you.