Jason Peterson: Yes. Obviously, the world is a very complicated place at this time. And so I want to be careful not to make it an absolute assertion. But certainly, at this time, we are seeing more stability in customer programs and budgets. And so, particularly, as we look at North America, it does feel like we’ve achieved some degree of stability less of these unexpected sort of surprises and ramps down and we believe that we’re seeing similar as we entered Q4. As I did mention in my prepared remarks, we do have a couple of customers in Europe who’ve already notified us and we’ve been aware of it for a little while that we’ll see ramp downs there. But again, it feels right now that we’re seeing less of these sort of unexpected surprises that drove both the mess in Q2 and has resulted in sequential declines. And so absolutely, if you adjusted out the build at impact, you’d have flat revenue as you go through Q3 to Q4.
David Grossman: And maybe a similar question on the margins in terms of – it looks like your utilization went down again sequentially. And you’ve got again the wage pricing dynamic which sounds like the timing may be extending into calendar 2024. So – and then you’re factoring you’ve taken some cost-cutting actions. So when you roll up all those different elements, is it reasonable to think that you’re still targeting your historical range as we go into 2024 that’s kind of what the objective is based on the actions you’ve taken thus far in 2023?
Jason Peterson: So I think with some of the actions we’re taking and some of the stabilization in demand, I think that you’ll see better utilization in Q4 and we clearly hope to improve utilization in the first half of 2024. However, with the lower build days, you’ll still have some compressed gross margin in Q4, which is why we’ve sort of guided the way we have with the 15% to 16%. What I do think as we enter 2024 is – there is still an imbalance between customer pricing and wage inflation. And as I think you’ve noted before David, we do expect to return to a more normalized variable compensation. And so I think as we enter 2024 – and we haven’t done all the work on this yet. We don’t quite know what wage pressures are going to be next year.
And again, we’re still trying to assess what happens with some of the deals we closed here in Q4, and how that will impact future pricing as we enter 2024. But the sense is that it’s possible that we could see profitability decline somewhat as we move from 2023 to 2024. And then as I’ve been talking about over the last couple of earnings calls, we view 2024 as a transitional year where we get the opportunity to work through a few things. We expect at some point more rational sort of supply-demand and then that will give us opportunities on both pricing and with a return to more traditional profitability more likely in 2025.
David Grossman: Great. Thanks for that. Just one quick follow-up. So the kind of wage pricing dynamic, is that the biggest headwind to gross margins as we go into next year is just letting that play out.
Jason Peterson: Yes I would say that continues to be – that the wage pricing dynamic is the uncertain element, which is why it’s harder for me to sort of comment on it right now but I will be able to do the next time we talk. But yes, I would say that the ongoing imbalance between sort of customer pricing and wage.
David Grossman: Got it. Great. Thanks very much. Appreciate that.
Operator: Your next question comes from the line of Ramsey El-Assal with Barclays. Please go ahead.
Ramsey El-Assal: Thanks so much for taking my question. I wanted to ask about booking conversion trends. And if you could just comment on things like how average portfolio duration is trending or time line to convert bookings to revenue or pipeline erosion trends? I’m just kind of curious are you seeing consistency and stability when it comes to conversion? Or is it more of a moving target still kind of in this tough environment?
Arkadiy Dobkin: I think it’s still second. At the same time, if you’re talking about lens of the relationship I think that’s exactly what you said is that it’s very much stabilizing. And we don’t see the same kind of – that’s a way different like versus Q1 situation and now, okay? I think it’s much more manageable. I think much more transparency in situation.
Ramsey El-Assal: Okay. Thank you. And a quick follow-up for me. I wanted to ask about – a follow-up on a prior question about the headcount numbers globally. And in particular, I’m just curious, the absolute headcount numbers in Ukraine and Belarus, should we think about those as relatively stable at this point? Or do you have plans to further draw down? I’m thinking particularly in Belarus, especially, given kind of the way Russia kind of ended this quarter officially. I’m just curious whether we should think about the absolute numbers as the sort of watermark that’s going to be persistent or whether we could see more declines on an absolute basis in the region?
Arkadiy Dobkin: I think the answer is very simple, right? We believe that Ukraine would be more stable and Belarus less stable just based on the situation of supply-demand ratio. And in absolute numbers and relative numbers Belarus declined during the last several years much, much, much more significantly than Ukraine. And I think this trend might be there depending on geopolitics and client reactions.
Ramsey El-Assal: Okay. Thank you very much.
Operator: Your next question comes from the line of Jason Kupferberg with Bank of America. Please go ahead.
Jason Kupferberg: Good morning, guys. I just wanted to come back to some of the commentary around quarter-over-quarter growth rates. I know that’s what you guys have been watching most closely just to assess demand and you’ve talked about the stabilization here. Just looking ahead to the first quarter of 2024, do you think we get back to positive quarter-over-quarter revenue growth then? I think — the Street is looking for about 3% growth. So I just wanted to get your take on that. I mean putting any potential moves in FX on the side given some of the stabilization in parts of the business do you think we’re back in positive territory in the first quarter?
Arkadiy Dobkin: I think you should expect our assets we will tell you this exactly in three months. But again, we’ve seen positivity right now, but we’ll check in three months.
Jason Kupferberg: Right. Okay. And just a follow-up Jason on some of your margin commentary I want to make sure we’ve got the messaging right there because it sounds like most of the cost optimization is going to get reinvested. So it sounds like what you’re suggesting is in 2024 non-GAAP margins or perhaps down versus 2023 and then 2025 you’re kind of back to a “normal range” like 16% or 17%. Is that directionally the…
Jason Peterson: Yes. So we still — we haven’t worked through pricing. We haven’t — we’re bubbled through what we think is going to happen from the wage environment I think in certain markets is pressures are not as pronounced but then there’s other markets where there’s very, very high cost of living inflation. And so what I’m saying is we haven’t worked through it yet but I think it’s certainly possible that you could see us talk about 2024 with lower profitability. And that was just in response to the question around do we think that we will maintain profitability in 2024? I just want to make certain that there is an indication that we could be lower as we enter the fiscal year and again working to get ourselves back into a position where we could operate in the 16% to 17% range in 2025.
