Jason Peterson: Yeah, I think, that would be fair. We’ve got obviously utilization opportunities, first and foremost, but then, yeah, a quarter window would probably be appropriate.
Arkadiy Dobkin: This is all proportionally…
Surinder Thind: Thank you.
Arkadiy Dobkin: In one quarter, the demand will not jump as crazy. So, it’s still going to be spread around the quarter. We’re still not — don’t seem right now the demand will be performing kind of in 2021. It will be much more softer. And if you remember 2021 and it was very quickly become hot market, we were performing pretty well.
Surinder Thind: That’s very helpful. Thank you.
Operator: Thank you. [Operator Instructions] Our next question comes from the line of Moshe Katri of Woodburn Securities. Please go ahead.
Moshe Katri: Hey, thanks. Congrats on strong execution. Ark, when you started the call, you indicated the clients that moderated spending with EPAM last year are coming back. Can you talk a bit more about that? Is it that they went to some of your competitors are coming back, they’re changing their plans? What’s prompting that? That — yeah.
Arkadiy Dobkin: I think we were talking about it many times during the last year, but at the beginning of the year when we were much more optimistic, we didn’t realize that impact of the war raised risk profile for EPAM and uncertainty that we will be able to navigate the war. So, a lot of calls clients were doing in the middle of 2022 which kind of delaying decision with us or actually going to — starting to replace, not put a new [repeats] (ph) to us, but unfortunately, we realized impact of this only kind of at the end of the Q1 2023. And some of these actions make a pretty long-term impact. We still have clients who declining, because when decision is done and they signed with somebody else, it’s happening. So, this is very visible impact in 2023.
Plus, economy — and that’s why I would say the simultaneous impact of these two things were the most critical for us, which really put us aside from our competitors, which was only one part of this challenges. So, when economy started to slow down, then again, competition for rates, cost and everything else pick up. And this was second one. So, positive things which we also mentioned that there are some clients who are coming back to us, and some of them growing as well, but definitely this is part of 2023 and partially will be, for us, part of 2024. If you think at the same time that how we were bringing some new business to compensate this, that’s kind of a positive part of the story. Declining in 2024 definitely will be smaller than decline it was at 2023.
Jason Peterson: And, Moshe, we continue to see clients who may have experimented with other vendors, reengaging with us with both discussions and in some cases actually transferring work back to us just based on the fact that they didn’t get as much done with those other vendors.
Moshe Katri: That makes sense. And is that because they’re more comfortable with your execution from places like India or Latin America? Is that kind of…
Arkadiy Dobkin: It’s — yeah. It’s multiple factors. Some of them become much more comfortable with Ukraine because it was any impact of the quality of interruption. So, some were thinking we’ll be leaving and now staying there. So it’s also, we prove that we can deliver from different locations. India was probably one of the kind of major critical components here. And third one, I think that when you’re removing some order works to some competitors, the results were not satisfactory as they started to come back to us or waiting when their commitments with new vendors will be kind of expired, and it will be possible to come back. So, I think it’s between all these lines.
Moshe Katri: Understood. Thank you.
Operator: Thank you. Our next question comes from the line of Darrin Peller of Wolfe Research. Please go ahead.
Darrin Peller: Yeah, guys. I want to follow-up a bit on the competitive landscape for a minute. And the main question is really just sort of circling back. You said you’re seeing some customers come back to you. You also talked about adding a ton of new, I think, more than usual new customers over the past year, and you’re seeing that progressing into this year. So, putting that all into context, just there’s been a lot of discussion of competitors trying to be more aggressive, taking advantage of what happened in the war in Ukraine. What are you seeing competitively? I mean, has anything truly changed? And then, maybe dovetailing that into the potential we could see for this year, you said you added a bunch more than usual new customers you’ve been adding at a run rate.
I guess that informs your decision on what you’re seeing in terms of guidance for the second half of the year. Why not a little bit more in the first half since it was being added last year? Thanks, guys.
Arkadiy Dobkin: So, I think when we’re talking about increasing the client number, it’s true the difference with previous year that this is smaller clients, smaller — clients maybe not smaller, but smaller engagements. And overall, it still feel a lot of pressure from all, more competitiveness. And it’s all coming back to our statement that we actually adjusted our behavior during the 2023, okay, and started to use different approaches to kind of protect client base as well. But it was much more visible all the transition between first half and second half of 2023. We’re still seeing that something similar will be continuous for this and next quarter. And that exactly explain all these dynamics and competitive situation. We see that clients starting the programs, we participated in this bigger programs than they were considering in the first half of 2023.
So, we think this acceleration will be happening and second half will give us opportunity to demonstrate it. One word I just — okay. I lost the point which I was bringing. Maybe later, I’ll add.
Darrin Peller: Thank you.
Jason Peterson: If we do all right, definitely stronger new logo activity, stronger new customer revenues. Don’t forget that we do have the ramp down in Q1 from the one customer. And as Ark said, some kind of slower kind of decision making, but again generally the demand environment at least feels like it’s stabilizing and potentially improving.
Operator: Thank you. So, the final question…
Arkadiy Dobkin: Well, what I wanted to say is actually my — our usual remark. Until the full speed, what we kind of all expecting from margins and from the real growth, it’s still function of right demands. And this right demand, we consider it will start to be realized on second part, okay? At what level? So, we put it conservative right now. At least we think that it’s conservative or realistic right now. Yeah. So, what would be happening still this year, definitely less predictable than kind of before war years. We all know that it’s not about us, it’s about the whole the IT segment.
David Straube: So, we’ll do one last quick call or question, and then wrap up?
Operator: Thank you. Our final question comes from the line of Sean Kennedy of Mizuho. Please go ahead.
Sean Kennedy: Hi, everyone. Good morning, and thank you for taking my question. So, I understand it’s still very early on, GenAI, but what specific types of GenAI capabilities are your clients most excited about currently, and you expect those to change as the technology matures?
Arkadiy Dobkin: So, I think, still there are, at this point, a lot of experimentation and a lot of kind of more straightforward thinking about GenAI, as it’s available practically for the end consumers and how this can change interfaces. And again, very straightforward that everybody is thinking how to have a right access to the hybrid data between general sales, the specific ones and most of the companies experimenting in this area and created some type of copilots. And I’m talking about application of areas and just utilizing GenAI as a activity tools for individuals and [we work as subs] (ph). I’m talking about, like, client-facing capabilities, new insight. The difficulties of this is it will be changing quarter by quarter. And, I think some exciting things which we see right now would become very quickly commodity and much more sophisticated since it’ll be happening like 12 months from now.
Sean Kennedy: Got it. Thank you.
Arkadiy Dobkin: Very early, like you said.
Sean Kennedy: All right. Thanks.
Operator: Thank you. I will now turn the call back over to Arkadiy Dobkin, Chief Executive Officer and President, for concluding remarks.
Arkadiy Dobkin: Thank you very much as usual for your questions. I think we’re feeling in general this stabilization happening. At the same time, we’re feeling that a lot of unknowns ahead of us and some trends, which were driving the market and our performance in 2023, still actually critical for 2024, but, yeah, we feel much better after showing that we can stabilize the revenue, the client base, and even little but some growth versus continuous decline, which was happening in previous four quarters. Thank you very much, and talk to you in three months.
Jason Peterson: Thank you.
Operator: Thank you. This concludes today’s conference call. We thank you for participating and you may now disconnect.
