Ramsey El-Assal: Fantastic. Thanks a lot.
Operator: Thank you.
Arkadiy Dobkin: In general, it’s still benefitting, but it is still, all I assume [ph], what we are talking about several specific client situations. Mostly it’s happened in…
Jason Peterson: North America.
Arkadiy Dobkin: …in North America and those situations were independent from general economic environment.
Operator: Thank you. One moment for our next question. Our next question will come from Moshe Katri of Wedbush Securities. Your line is open.
Moshe Katri: Hey. Thanks. Good morning. A couple of follow-ups here. So do you — looking at the new logos, can you confirm that you are actually getting the same bill rates as you are selling via some of the other delivery centers, including India, as you have been getting in Eastern Europe? So are we talking about comparable billability?
Jason Peterson: So what we usually talk about is an environment where potentially you can get higher bill rates with new engagements. That’s probably less likely to occur in today’s demand environment. And generally, Moshe, if you are trying to get it just kind of what happens as you deliver more out of India. India does have somewhat lower price points than some of the geographies in Eastern Europe, maybe not significantly different than a few of the geographies in Southwest, in Western Asia or Soviet Central Asia. But we get somewhat lower price points than certainly sort of Central Europe.
Moshe Katri: Okay. So would you say that the new logos that are coming on board are more dilutive to margins versus what you were accustomed to or is there any way to mitigate that?
Jason Peterson: Yeah. So if you — you can have different bill rates in different geographies and still have the same margin percent, right? You have got different cost structures, you got different cost of benefits and that type of thing. And so lower price, or higher price even, doesn’t necessarily mean lower or higher margin, again — so I would say, yes, we can kind of mitigate, and no, I don’t expect that new business is being attained in super expressive margins. We are working to kind of sharpen our pencils but be appropriate in our pricing.
Moshe Katri: All right. That makes sense. And last…
Jason Peterson: Absolutely.
Moshe Katri: Sorry. Last one here. So we visited your center in Hyderabad. And I remember, you have a significant capacity to kind of expand there. Can you talk a bit about your future plans in terms of how important India or critical India is going to be able to continue to get those new logos onboard and actually to be able to accelerate growth down the road? Thanks.
Arkadiy Dobkin: Yeah. Still, I know like we answered it a little bit in grey area. But in general, you need to understand the current market environment is not what it was and everybody knows it like 18 months ago or two years ago. The whole rate structure for everyone, not only for us, is different for new deals as well. So the other things which could change it is actually the demand turning into more normal scale and the demand for complexity for build stuff will go up, then correction will be happening in other side. So, there is nothing magical here. So the new deals coming today is very different environment if it was, again, 18 months, 24 months ago. It’s number one. Number two about India, now I don’t know when you visited.
I don’t remember when we visited Hyderabad, but right now, we have five development centers. We — Hyderabad is still — is the biggest one, but we have two others, which are growing very strongly and a few others which we started recently to growing strongly as well. So that’s definitely an important part of our future, but it’s one of the parts. It’s not like we are going to switch completely. That’s what I mentioned before. We are really looking how to build very balanced global delivery network for EPAM.
Moshe Katri: Thanks.
Operator: Thank you. And one moment for our next question. Our next question will come from Puneet Jain of JPMorgan. Your line is open.
Puneet Jain: Hi. Thanks for taking my question. I also wanted to ask about demand. Do you expect like clients to spend on CapEx investments to modernize or re-platform their core systems sometime this year, maybe in 4Q or is that type of work is something that could come through on their next year’s budget, meaning that it might not come in anytime this year?
Jason Peterson: Do you expect to see modernization and spend occurring in Q4 or more likely to see a return to budget growth in the first half of 2024?
Arkadiy Dobkin: It’s difficult to answer that. I think we answered this question already in another way a couple of times. We don’t know right now. There is not so much visibility. That’s difficult. Some of them, who knows, it’s sometimes unexpected happening in Q4 will be the quarter when clients will really start spending. But let’s see, so.
