|
x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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223536104
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, par value $0.001 per share
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New York Stock Exchange
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Large accelerated filer
|
|
x
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Accelerated filer
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¨
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|
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|||
Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Page
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Year Ended December 31,
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|||||||||||||||||||
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2015
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2014
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2013
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|||||||||||||||
Financial Services
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$
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248,526
|
|
|
27.2
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%
|
|
$
|
215,425
|
|
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29.5
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%
|
|
$
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156,340
|
|
|
28.2
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%
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Travel and Consumer
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215,303
|
|
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23.6
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|
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157,756
|
|
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21.6
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|
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117,248
|
|
|
21.1
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|||
Software & Hi-Tech
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192,989
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|
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21.1
|
|
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157,944
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21.6
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|
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134,970
|
|
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24.3
|
|
|||
Media & Entertainment
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120,616
|
|
|
13.2
|
|
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91,726
|
|
|
12.6
|
|
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75,677
|
|
|
13.6
|
|
|||
Life Sciences and Healthcare
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73,327
|
|
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8.0
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|
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42,428
|
|
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5.8
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|
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14,079
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|
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2.5
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|||
Emerging Verticals
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53,856
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|
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5.9
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|
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56,338
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7.7
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|
|
49,177
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|
|
8.9
|
|
|||
Reimbursable expenses and other revenues
|
9,511
|
|
|
1.0
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|
|
8,410
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|
|
1.2
|
|
|
7,626
|
|
|
1.4
|
|
|||
Revenues
|
$
|
914,128
|
|
|
100.0
|
%
|
|
$
|
730,027
|
|
|
100.0
|
%
|
|
$
|
555,117
|
|
|
100.0
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%
|
|
% of Revenues for Year Ended December 31,
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|||||||
Client location
|
2015
|
|
2014
|
|
2013
|
|||
North America
|
53.1
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%
|
|
50.4
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%
|
|
50.8
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%
|
Europe
|
38.6
|
|
|
39.0
|
|
|
36.1
|
|
CIS
|
4.7
|
|
|
7.6
|
|
|
11.7
|
|
APAC
|
2.6
|
|
|
1.8
|
|
|
—
|
|
Reimbursable expenses and other revenues
|
1.0
|
|
|
1.2
|
|
|
1.4
|
|
Revenues
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Year Ended December 31,
|
||||
Revenues Greater Than or Equal To
|
2015
|
|
2014
|
|
2013
|
$0.1 million
|
365
|
|
306
|
|
263
|
$0.5 million
|
211
|
|
181
|
|
147
|
$1 million
|
136
|
|
116
|
|
95
|
$5 million
|
33
|
|
24
|
|
22
|
$10 million
|
14
|
|
12
|
|
12
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$20 million
|
7
|
|
6
|
|
4
|
•
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objective valuation of the performed process, work products and services against the client’s process descriptions, standards and procedures;
|
•
|
identification, documentation and timely resolution of noncompliance issues;
|
•
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feedback to the client’s project staff and managers on the results of quality assurance activities;
|
•
|
monitoring and improvement of the software development process to ensure adopted standards and procedures are implemented and flaws are detected and resolved in a timely manner; and
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•
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execution of planned and systematic problem prevention activities.
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•
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multi-site, multi-project capabilities;
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•
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activity-based software development lifecycle, which fully tracks the software development activities through the project documentation;
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•
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project, role-based access control, which can be available to us, clients and third parties;
|
•
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fully configurable workflow engine with built-in notification and messaging;
|
•
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extensive reporting capabilities and tracking of key performance indicators; and
|
•
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integration with Microsoft Project and Outlook.
|
•
|
India-based technology outsourcing IT services providers, such as Cognizant Technology Solutions (NASDAQ:CTSH), GlobalLogic, HCL Technologies, Infosys Technologies (NASDAQ:INFY), Mindtree, Symphony Technology Group, Tata Consultancy Services and Wipro (NASDAQ:WIT);
|
•
|
Local CEE technology outsourcing IT services providers such as Luxoft Holding, Inc. (NYSE:LXFT);
|
•
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Large global consulting and outsourcing firms, such as Accenture, Atos Origin, Capgemini, CSC and IBM;
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•
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China-based technology outsourcing IT services providers such as Camelot Information Services, and Pactera; and
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•
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In-house IT departments of our clients and potential clients.
|
•
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recruiting, training and retaining sufficiently skilled IT professionals and management personnel;
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•
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adhering to and further improving our high-quality and process execution standards and maintaining high levels of client satisfaction;
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•
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managing a larger number of clients in a greater number of industries and locations;
|
•
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maintaining effective oversight of personnel and delivery centers;
|
•
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coordinating effectively across geographies and business units to execute our strategic plan; and
|
•
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developing and improving our internal administrative infrastructure, particularly our financial, operational, communications and other internal systems.
|
•
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financial difficulties;
|
•
|
corporate restructuring, or mergers and acquisitions activity;
|
•
|
change in strategic priorities, resulting in elimination of the impetus for the project or a reduced level of technology spending;
|
•
|
change in outsourcing strategy resulting in moving more work to the client’s in-house technology departments or to our competitors; and
|
•
|
replacement of existing software with packaged software supported by licensors.
|
•
|
maintaining high-quality control and process execution standards;
|
•
|
maintaining planned resource utilization rates on a consistent basis and using an efficient mix of onsite and offshore staffing;
|
•
|
maintaining productivity levels and implementing necessary process improvements; and
|
•
|
controlling costs.
|
•
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we may find it difficult or costly to update our services, applications, tools and software and to develop new services quickly enough to meet our clients’ needs;
|
•
|
we may find it difficult or costly to make some features of our software work effectively and securely over the Internet or with new or changed operating systems;
|
•
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we may find it difficult or costly to update our software and services to keep pace with business, evolving industry standards, methodologies, regulatory and other developments in the industries where our clients operate; and
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•
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we may find it difficult to maintain a high level of quality in implementing new technologies and methodologies.
|
•
|
investors’ perception of, and demand for, securities of IT services companies;
|
•
|
conditions of the United States and other capital markets in which we may seek to raise funds;
|
•
|
our future results of operations and financial condition;
|
•
|
government regulation of foreign investment in the CIS and CEE and other countries in which we operate or in which we plan to expand; and
|
•
|
economic, political and other conditions both globally and in emerging markets.
|
Location
|
|
Square Meters
Leased
|
|
Square Meters
Owned
|
|
Total Square
Meters
|
|||
Delivery Centers and Client Management Locations:
|
|
|
|
|
|
|
|||
Belarus
|
|
37,287
|
|
|
21,669
|
|
|
58,956
|
|
Ukraine
|
|
32,452
|
|
|
—
|
|
|
32,452
|
|
Russia
|
|
20,399
|
|
|
—
|
|
|
20,399
|
|
Hungary
|
|
16,560
|
|
|
—
|
|
|
16,560
|
|
India
|
|
11,529
|
|
|
—
|
|
|
11,529
|
|
United States
|
|
6,868
|
|
|
—
|
|
|
6,868
|
|
China
|
|
5,889
|
|
|
—
|
|
|
5,889
|
|
Poland
|
|
4,990
|
|
|
—
|
|
|
4,990
|
|
Kazakhstan
|
|
2,735
|
|
|
—
|
|
|
2,735
|
|
Mexico
|
|
2,007
|
|
|
—
|
|
|
2,007
|
|
Bulgaria
|
|
1,850
|
|
|
—
|
|
|
1,850
|
|
Czech Republic
|
|
1,757
|
|
|
—
|
|
|
1,757
|
|
United Kingdom
|
|
1,090
|
|
|
—
|
|
|
1,090
|
|
Canada
|
|
810
|
|
|
—
|
|
|
810
|
|
Armenia
|
|
408
|
|
|
—
|
|
|
408
|
|
Sweden
|
|
322
|
|
|
—
|
|
|
322
|
|
Switzerland
|
|
112
|
|
|
—
|
|
|
112
|
|
Germany
|
|
28
|
|
|
—
|
|
|
28
|
|
Total
|
|
147,093
|
|
|
21,669
|
|
|
168,762
|
|
Executive Office:
|
|
|
|
|
|
|
|||
Newtown, PA, United States
|
|
1,050
|
|
|
—
|
|
|
1,050
|
|
2015
|
|
|
|
|
||||
Quarter Ended
|
|
High
|
|
Low
|
||||
December 31
|
|
$
|
84.41
|
|
|
$
|
67.29
|
|
September 30
|
|
$
|
76.69
|
|
|
$
|
63.37
|
|
June 30
|
|
$
|
74.49
|
|
|
$
|
57.58
|
|
March 31
|
|
$
|
63.50
|
|
|
$
|
45.27
|
|
2014
|
|
|
|
|
||||
Quarter Ended
|
|
High
|
|
Low
|
||||
December 31
|
|
$
|
52.89
|
|
|
$
|
40.42
|
|
September 30
|
|
$
|
44.36
|
|
|
$
|
36.81
|
|
June 30
|
|
$
|
45.99
|
|
|
$
|
29.44
|
|
March 31
|
|
$
|
46.70
|
|
|
$
|
31.34
|
|
|
|
Company / Index
|
||||||||||
Base Period
|
|
EPAM Systems,
Inc.
|
|
S&P 500
Index
|
|
Peer Group
Index
|
||||||
12/31/2015
|
|
$
|
561.57
|
|
|
$
|
151.41
|
|
|
$
|
140.47
|
|
9/30/2015
|
|
$
|
532.29
|
|
|
$
|
142.23
|
|
|
$
|
151.74
|
|
6/30/2015
|
|
$
|
508.79
|
|
|
$
|
152.83
|
|
|
$
|
139.89
|
|
3/31/2015
|
|
$
|
437.79
|
|
|
$
|
153.18
|
|
|
$
|
148.89
|
|
12/31/2014
|
|
$
|
341.07
|
|
|
$
|
152.52
|
|
|
$
|
127.74
|
|
9/30/2014
|
|
$
|
312.79
|
|
|
$
|
146.10
|
|
|
$
|
120.55
|
|
6/30/2014
|
|
$
|
312.50
|
|
|
$
|
145.21
|
|
|
$
|
118.41
|
|
3/31/2014
|
|
$
|
235.00
|
|
|
$
|
138.70
|
|
|
$
|
124.76
|
|
12/31/2013
|
|
$
|
249.57
|
|
|
$
|
136.92
|
|
|
$
|
124.18
|
|
9/30/2013
|
|
$
|
246.43
|
|
|
$
|
124.56
|
|
|
$
|
103.03
|
|
6/30/2013
|
|
$
|
194.14
|
|
|
$
|
118.99
|
|
|
$
|
80.39
|
|
3/31/2013
|
|
$
|
165.93
|
|
|
$
|
116.24
|
|
|
$
|
99.89
|
|
12/31/2012
|
|
$
|
129.29
|
|
|
$
|
105.65
|
|
|
$
|
85.86
|
|
9/30/2012
|
|
$
|
135.29
|
|
|
$
|
106.72
|
|
|
$
|
89.48
|
|
6/30/2012
|
|
$
|
121.36
|
|
|
$
|
100.90
|
|
|
$
|
83.91
|
|
3/31/2012
|
|
$
|
146.57
|
|
|
$
|
104.33
|
|
|
$
|
102.94
|
|
2/8/2012
|
|
$
|
100
|
|
|
$
|
100
|
|
|
$
|
100
|
|
|
|
(1)
|
Graph assumes $100 invested on February 8, 2012, in our common stock, the S&P 500 Index, and the Peer Group Index (capitalization weighted).
|
(2)
|
Cumulative total return assumes reinvestment of dividends.
|
(3)
|
We have constructed a Peer Group Index of other information technology consulting firms consisting of Virtusa Corporation (NASDAQ:VRTU), Cognizant Technology Solutions Corp. (NASDAQ:CTSH), Infosys Ltd ADR (NYSE:INFY), Syntel, Inc. (NASDAQ:SYNT) and Wipro Ltd. (ADR) (NYSE:WIT).
|
|
Year Ended December 31
,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
|
(in
thousands, except per share data)
|
||||||||||||||||||
Consolidated Income Statement Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
914,128
|
|
|
$
|
730,027
|
|
|
$
|
555,117
|
|
|
$
|
433,799
|
|
|
$
|
334,528
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of revenues (exclusive of depreciation and amortization)
|
566,913
|
|
|
456,530
|
|
|
347,650
|
|
|
270,361
|
|
|
205,336
|
|
|||||
Selling, general and administrative expenses
|
222,759
|
|
|
163,666
|
|
|
116,497
|
|
|
85,868
|
|
|
64,930
|
|
|||||
Depreciation and amortization expense
|
17,395
|
|
|
17,483
|
|
|
15,120
|
|
|
10,882
|
|
|
7,538
|
|
|||||
Goodwill impairment loss
|
—
|
|
|
2,241
|
|
|
—
|
|
|
—
|
|
|
1,697
|
|
|||||
Other operating expenses/(income), net
|
1,094
|
|
|
3,924
|
|
|
(643
|
)
|
|
682
|
|
|
19
|
|
|||||
Income from operations
|
105,967
|
|
|
86,183
|
|
|
76,493
|
|
|
66,006
|
|
|
55,008
|
|
|||||
Interest and other income, net
|
4,731
|
|
|
4,769
|
|
|
3,077
|
|
|
1,941
|
|
|
1,422
|
|
|||||
Change in fair value of contingent consideration
|
—
|
|
|
(1,924
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Foreign exchange loss
|
(4,628
|
)
|
|
(2,075
|
)
|
|
(2,800
|
)
|
|
(2,084
|
)
|
|
(3,638
|
)
|
|||||
Income before provision for income taxes
|
106,070
|
|
|
86,953
|
|
|
76,770
|
|
|
65,863
|
|
|
52,792
|
|
|||||
Provision for income taxes
|
21,614
|
|
|
17,312
|
|
|
14,776
|
|
|
11,379
|
|
|
8,439
|
|
|||||
Net income
|
$
|
84,456
|
|
|
$
|
69,641
|
|
|
$
|
61,994
|
|
|
$
|
54,484
|
|
|
$
|
44,353
|
|
Net income per share of common stock
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
$
|
1.73
|
|
|
$
|
1.48
|
|
|
$
|
1.35
|
|
|
$
|
1.27
|
|
|
$
|
0.69
|
|
Diluted
|
$
|
1.62
|
|
|
$
|
1.40
|
|
|
$
|
1.28
|
|
|
$
|
1.17
|
|
|
$
|
0.63
|
|
Shares used in calculation of net income per share of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
48,721
|
|
|
47,189
|
|
|
45,754
|
|
|
40,190
|
|
|
17,094
|
|
|||||
Diluted
|
51,986
|
|
|
49,734
|
|
|
48,358
|
|
|
43,821
|
|
|
20,473
|
|
|
|
(1)
|
In connection with the completion of our initial public offering, we effected an 8-for-1 common stock split as of January 19, 2012. All historical common stock and per share information has been changed to reflect the common stock split.
|
|
|
As of December 31
,
|
||||||||||||||||||
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
|
|
(in
thousands)
|
||||||||||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
199,449
|
|
|
$
|
220,534
|
|
|
$
|
169,207
|
|
|
$
|
118,112
|
|
|
$
|
88,796
|
|
Time deposits
|
|
30,181
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Accounts receivable, net
|
|
174,617
|
|
|
124,483
|
|
|
95,431
|
|
|
78,906
|
|
|
59,472
|
|
|||||
Unbilled revenues
|
|
95,808
|
|
|
55,851
|
|
|
43,108
|
|
|
33,414
|
|
|
24,475
|
|
|||||
Property and equipment, net
|
|
60,499
|
|
|
55,134
|
|
|
53,315
|
|
|
53,135
|
|
|
35,482
|
|
|||||
Total assets
|
|
778,536
|
|
|
594,026
|
|
|
432,877
|
|
|
350,814
|
|
|
235,613
|
|
|||||
Accrued expenses and other liabilities
|
|
60,384
|
|
|
32,203
|
|
|
20,175
|
|
|
19,814
|
|
|
24,782
|
|
|||||
Deferred revenue
|
|
3,047
|
|
|
3,220
|
|
|
5,076
|
|
|
7,632
|
|
|
6,949
|
|
|||||
Total liabilities
|
|
165,313
|
|
|
129,976
|
|
|
56,776
|
|
|
64,534
|
|
|
54,614
|
|
|||||
Total stockholders’ equity
|
|
613,223
|
|
|
464,050
|
|
|
376,101
|
|
|
286,280
|
|
|
95,059
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
|
(in millions, except percentages)
|
|||||||||||||||||||
Revenues
|
$
|
914.1
|
|
|
100.0
|
%
|
|
$
|
730.0
|
|
|
100.0
|
%
|
|
$
|
555.1
|
|
|
100.0
|
%
|
Income from operations
|
106.0
|
|
|
11.6
|
|
|
86.2
|
|
|
11.8
|
|
|
76.5
|
|
|
13.8
|
|
|||
Net income
|
84.5
|
|
|
9.2
|
|
|
69.6
|
|
|
9.5
|
|
|
62.0
|
|
|
11.2
|
|
•
|
The European segment continued its strong performance, generating revenue growth of
$101.2 million
during the
year ended
December 31, 2015
, or
33.8%
over
2014
;
|
•
|
Revenue increased in all our key verticals in
2015
as compared to
2014
, specifically within the Software and Hi-Tech and Travel and Consumer verticals, which grew
$35.0 million
and
$57.5 million
respectively.
|
•
|
Income from operations grew
23.0%
during the
year ended
December 31, 2015
, over
2014
, while income from operations as a percentage of revenues decreased by
0.2%
. The slight decrease was due to a combination of factors, including an increase of
$21.2 million
in stock-based compensation expense driven by increases in headcount and acquisitions.
|
•
|
Net income increased by
21.3%
during
2015
compared with
2014
. Expressed as a percentage of revenues, net income remained consistent despite the adverse effect of a higher effective tax rate and significant foreign exchange rate changes in
2015
as compared to
2014
.
|
•
|
Our organic growth was complemented by two strategic acquisitions completed during
2015
, which expanded our highly skilled employee base, geographic footprint and service capabilities. Through acquisitions, we added capabilities in digital design as well as a delivery center in India.
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
|
(in thousands, except percentages)
|
|||||||||||||||||||
Revenues
|
$
|
914,128
|
|
|
100.0
|
%
|
|
$
|
730,027
|
|
|
100.0
|
%
|
|
$
|
555,117
|
|
|
100.0
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of revenues (exclusive of depreciation and amortization)
(1)
|
566,913
|
|
|
62.0
|
|
|
456,530
|
|
|
62.5
|
|
|
347,650
|
|
|
62.6
|
|
|||
Selling, general and administrative expenses
(2)
|
222,759
|
|
|
24.4
|
|
|
163,666
|
|
|
22.4
|
|
|
116,497
|
|
|
21.0
|
|
|||
Depreciation and amortization expense
|
17,395
|
|
|
1.9
|
|
|
17,483
|
|
|
2.4
|
|
|
15,120
|
|
|
2.7
|
|
|||
Goodwill impairment loss
|
—
|
|
|
—
|
|
|
2,241
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|||
Other operating expenses, net
|
1,094
|
|
|
0.1
|
|
|
3,924
|
|
|
0.6
|
|
|
(643
|
)
|
|
(0.1
|
)
|
|||
Income from operations
|
105,967
|
|
|
11.6
|
|
|
86,183
|
|
|
11.8
|
|
|
76,493
|
|
|
13.8
|
|
|||
Interest and other income, net
|
4,731
|
|
|
0.5
|
|
|
4,769
|
|
|
0.7
|
|
|
3,077
|
|
|
0.5
|
|
|||
Change in fair value of contingent consideration
|
—
|
|
|
—
|
|
|
(1,924
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|||
Foreign exchange loss
|
(4,628
|
)
|
|
(0.5
|
)
|
|
(2,075
|
)
|
|
(0.3
|
)
|
|
(2,800
|
)
|
|
(0.5
|
)
|
|||
Income before provision for income taxes
|
106,070
|
|
|
11.6
|
|
|
86,953
|
|
|
11.9
|
|
|
76,770
|
|
|
13.8
|
|
|||
Provision for income taxes
|
21,614
|
|
|
2.4
|
|
|
17,312
|
|
|
2.4
|
|
|
14,776
|
|
|
2.6
|
|
|||
Net income
|
$
|
84,456
|
|
|
9.2
|
%
|
|
$
|
69,641
|
|
|
9.5
|
%
|
|
$
|
61,994
|
|
|
11.2
|
%
|
|
|
(1)
|
Included
$13,695
,
$8,648
and
$4,823
of stock-based compensation expense for the years ended
December 31, 2015
,
2014
and
2013
, respectively;
|
(2)
|
Included
$32,138
,
$15,972
and
$8,327
of stock-based compensation expense for the years ended
December 31, 2015
,
2014
and
2013
, respectively.
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
Software development
|
$
|
644,732
|
|
|
70.6
|
%
|
|
$
|
504,590
|
|
|
69.1
|
%
|
|
$
|
374,426
|
|
|
67.4
|
%
|
Application testing services
|
174,259
|
|
|
19.1
|
|
|
140,363
|
|
|
19.2
|
|
|
109,222
|
|
|
19.7
|
|
|||
Application maintenance and support
|
70,551
|
|
|
7.7
|
|
|
58,840
|
|
|
8.1
|
|
|
45,971
|
|
|
8.3
|
|
|||
Infrastructure services
|
11,311
|
|
|
1.2
|
|
|
14,198
|
|
|
1.9
|
|
|
14,433
|
|
|
2.6
|
|
|||
Licensing
|
3,764
|
|
|
0.4
|
|
|
3,626
|
|
|
0.5
|
|
|
3,439
|
|
|
0.6
|
|
|||
Reimbursable expenses and other revenues
|
9,511
|
|
|
1.0
|
|
|
8,410
|
|
|
1.2
|
|
|
7,626
|
|
|
1.4
|
|
|||
Revenues
|
$
|
914,128
|
|
|
100.0
|
%
|
|
$
|
730,027
|
|
|
100.0
|
%
|
|
$
|
555,117
|
|
|
100.0
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
Financial Services
|
$
|
248,526
|
|
|
27.2
|
%
|
|
$
|
215,425
|
|
|
29.5
|
%
|
|
$
|
156,340
|
|
|
28.2
|
%
|
Travel and Consumer
|
215,303
|
|
|
23.6
|
|
|
157,756
|
|
|
21.6
|
|
|
117,248
|
|
|
21.1
|
|
|||
Software & Hi-Tech
|
192,989
|
|
|
21.1
|
|
|
157,944
|
|
|
21.6
|
|
|
134,970
|
|
|
24.3
|
|
|||
Media & Entertainment
|
120,616
|
|
|
13.2
|
|
|
91,726
|
|
|
12.6
|
|
|
75,677
|
|
|
13.6
|
|
|||
Life Sciences and Healthcare
|
73,327
|
|
|
8.0
|
|
|
42,428
|
|
|
5.8
|
|
|
14,079
|
|
|
2.5
|
|
|||
Emerging Verticals
|
53,856
|
|
|
5.9
|
|
|
56,338
|
|
|
7.7
|
|
|
49,177
|
|
|
8.9
|
|
|||
Reimbursable expenses and other revenues
|
9,511
|
|
|
1.0
|
|
|
8,410
|
|
|
1.2
|
|
|
7,626
|
|
|
1.4
|
|
|||
Revenues
|
$
|
914,128
|
|
|
100.0
|
%
|
|
$
|
730,027
|
|
|
100.0
|
%
|
|
$
|
555,117
|
|
|
100.0
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
North America
|
$
|
485,075
|
|
|
53.1
|
%
|
|
$
|
367,498
|
|
|
50.4
|
%
|
|
$
|
281,738
|
|
|
50.8
|
%
|
Europe
|
352,489
|
|
|
38.6
|
|
|
284,853
|
|
|
39.0
|
|
|
200,137
|
|
|
36.1
|
|
|||
United Kingdom
|
164,301
|
|
|
18.0
|
|
|
141,366
|
|
|
19.4
|
|
|
108,892
|
|
|
19.6
|
|
|||
Switzerland
|
111,353
|
|
|
12.2
|
|
|
87,111
|
|
|
11.9
|
|
|
51,941
|
|
|
9.4
|
|
|||
Other
|
76,835
|
|
|
8.4
|
|
|
56,376
|
|
|
7.7
|
|
|
39,304
|
|
|
7.1
|
|
|||
CIS
|
43,043
|
|
|
4.7
|
|
|
55,807
|
|
|
7.6
|
|
|
65,616
|
|
|
11.7
|
|
|||
Russia
|
36,506
|
|
|
4.0
|
|
|
48,945
|
|
|
6.7
|
|
|
53,328
|
|
|
9.6
|
|
|||
Other
|
6,537
|
|
|
0.7
|
|
|
6,862
|
|
|
0.9
|
|
|
12,288
|
|
|
2.1
|
|
|||
APAC
|
24,010
|
|
|
2.6
|
|
|
13,459
|
|
|
1.8
|
|
|
—
|
|
|
—
|
|
|||
Reimbursable expenses and other revenues
|
9,511
|
|
|
1.0
|
|
|
8,410
|
|
|
1.2
|
|
|
7,626
|
|
|
1.4
|
|
|||
Revenues
|
$
|
914,128
|
|
|
100.0
|
%
|
|
$
|
730,027
|
|
|
100.0
|
%
|
|
$
|
555,117
|
|
|
100.0
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
Time-and-material
|
$
|
784,153
|
|
|
85.8
|
%
|
|
$
|
618,725
|
|
|
84.7
|
%
|
|
$
|
456,938
|
|
|
82.3
|
%
|
Fixed-price
|
116,700
|
|
|
12.8
|
|
|
99,266
|
|
|
13.6
|
|
|
87,114
|
|
|
15.7
|
|
|||
Licensing
|
3,764
|
|
|
0.4
|
|
|
3,626
|
|
|
0.5
|
|
|
3,439
|
|
|
0.6
|
|
|||
Reimbursable expenses and other revenues
|
9,511
|
|
|
1.0
|
|
|
8,410
|
|
|
1.2
|
|
|
7,626
|
|
|
1.4
|
|
|||
Revenues
|
$
|
914,128
|
|
|
100.0
|
%
|
|
$
|
730,027
|
|
|
100.0
|
%
|
|
$
|
555,117
|
|
|
100.0
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
Top client
|
$
|
129,818
|
|
|
14.2
|
%
|
|
$
|
97,639
|
|
|
13.4
|
%
|
|
$
|
53,136
|
|
|
9.6
|
%
|
Top five clients
|
298,063
|
|
|
32.6
|
|
|
239,396
|
|
|
32.8
|
|
|
169,987
|
|
|
30.6
|
|
|||
Top ten clients
|
400,250
|
|
|
43.8
|
|
|
320,126
|
|
|
43.9
|
|
|
234,955
|
|
|
42.3
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(in thousands)
|
||||||||||
Total segment revenues:
|
|
|
|
|
|
||||||
North America
|
$
|
471,603
|
|
|
$
|
374,509
|
|
|
$
|
284,636
|
|
Europe
|
400,460
|
|
|
299,279
|
|
|
204,150
|
|
|||
Russia
|
37,992
|
|
|
50,663
|
|
|
55,764
|
|
|||
Other
|
4,911
|
|
|
5,552
|
|
|
10,493
|
|
|||
Total segment revenues
|
$
|
914,966
|
|
|
$
|
730,003
|
|
|
$
|
555,043
|
|
Segment operating profit:
|
|
|
|
|
|
|
|
||||
North America
|
$
|
112,312
|
|
|
$
|
90,616
|
|
|
$
|
66,814
|
|
Europe
|
68,717
|
|
|
50,189
|
|
|
34,573
|
|
|||
Russia
|
5,198
|
|
|
7,034
|
|
|
7,077
|
|
|||
Other
|
(94
|
)
|
|
(3,220
|
)
|
|
844
|
|
|||
Total segment operating profit
|
$
|
186,133
|
|
|
$
|
144,619
|
|
|
$
|
109,308
|
|
|
Year Ended
December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(in thousands)
|
||||||||||
Consolidated Statements of Cash Flow Data:
|
|
|
|
|
|
||||||
Net cash provided by operating activities
|
$
|
76,393
|
|
|
$
|
104,874
|
|
|
$
|
58,225
|
|
Net cash used in investing activities
|
(125,494
|
)
|
|
(52,929
|
)
|
|
(21,820
|
)
|
|||
Net cash provided by financing activities
|
33,764
|
|
|
10,347
|
|
|
15,501
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(5,748
|
)
|
|
(10,965
|
)
|
|
(811
|
)
|
|||
Net increase/(decrease) in cash and cash equivalents
|
$
|
(21,085
|
)
|
|
$
|
51,327
|
|
|
$
|
51,095
|
|
Cash and cash equivalents, beginning of period
|
220,534
|
|
|
169,207
|
|
|
118,112
|
|
|||
Cash and cash equivalents, end of period
|
$
|
199,449
|
|
|
$
|
220,534
|
|
|
$
|
169,207
|
|
|
Total
|
|
Less than 1
Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than 5
Years
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Operating lease obligations
|
$
|
49,616
|
|
|
$
|
17,606
|
|
|
$
|
23,400
|
|
|
$
|
5,946
|
|
|
$
|
2,664
|
|
Long-term debt obligation
|
$
|
65,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
65,000
|
|
|
$
|
—
|
|
|
$
|
114,616
|
|
|
$
|
17,606
|
|
|
$
|
23,400
|
|
|
$
|
70,946
|
|
|
$
|
2,664
|
|
Plan Category
|
|
Number of securities
to be issued upon
exercise of outstanding options, warrants
and rights
|
|
Weighted average
exercise price of
outstanding options,
warrants and rights
|
|
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))
|
||||||||||
Equity compensation plans approved by security holders:
(1)
|
|
|
|
|
|
|
|
|
|
7,211,440
|
|
|
(4)
|
|||
Stock options
|
|
7,450,914
|
|
|
(2)
|
|
$
|
34.07
|
|
|
(3)
|
|
|
|
|
|
Restricted stock unit awards
|
|
163,272
|
|
|
|
|
$
|
—
|
|
|
(5)
|
|
—
|
|
|
(5)
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
—
|
|
|
|
Total
|
|
7,614,186
|
|
|
|
|
$
|
34.07
|
|
|
|
|
7,211,440
|
|
|
|
|
|
(1)
|
This table includes the following stockholder approved plans: the 2015 Plan, 2012 Plan, the 2006 Plan and the 2012 Directors Plan.
|
(2)
|
Represents the number of underlying shares of common stock associated with outstanding options under our stockholder approved plans and is comprised of 134,025 shares underlying options granted under our 2015 Plan; 6,277,028 shares underlying options granted under our 2012 Plan; and 1,039,861 shares underlying options granted under our 2006 Plan.
|
(3)
|
Represents the weighted-average exercise price of stock options outstanding under the 2015 Plan, the 2012 Plan and the 2006 Plan.
|
(4)
|
Represents the number of shares available for future issuances under our stockholder approved equity compensation plans and is comprised of 7,450,914 shares available for future issuance under the 2015 Plan and 554,070 shares available for future issuances under the 2012 Directors Plan.
|
(5)
|
Not applicable.
|
|
Page
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated Balance Sheets as of December 31, 2015 and 2014
|
F-4
|
Consolidated Statements of Income and Comprehensive Income for Years Ended December 31, 2015, 2014 and 2013
|
F-5
|
Consolidated Statements of Changes in Redeemable Preferred Stock and Stockholders’ Equity for Years Ended December 31, 2015, 2014 and 2013
|
F-6
|
Consolidated Statements of Cash Flows for Years Ended December 31, 2015, 2014 and 2013
|
F-8
|
Notes to Consolidated Financial Statements for Years Ended December 31, 2015, 2014 and 2013
|
F-10
|
Exhibit
Number
|
|
Description
|
|
|
|
3.1
|
|
Certificate of incorporation (incorporated herein by reference to Exhibit 3.1 to the Company’s Form 10-K for the fiscal year ended December 31, 2011, SEC File No. 001-35418, filed March 30, 2012 (the “2011 Form 10-K”))
|
3.2
|
|
Bylaws (incorporated herein by reference to Exhibit 3.2 to the 2011 Form 10-K)
|
4.1
|
|
Form of Common Stock Certificate (incorporated herein by reference to Exhibit 4.1 to Amendment No. 6 to Form S-1, SEC File No. 333-174827, filed January 23, 2012 (“Amendment No. 6”))
|
4.2
|
|
Amended and Restated Registration Rights Agreement dated February 19, 2008 (incorporated herein by reference to Exhibit 4.2 to Form S-1, SEC File No. 333-174827, filed June 10, 2011 (the “Registration Statement”))
|
4.3
|
|
Registration Rights Agreement dated April 26, 2010 (incorporated herein by reference to Exhibit 4.3 to the Registration Statement)
|
10.1†
|
|
EPAM Systems, Inc. Amended and Restated 2006 Stock Option Plan (incorporated herein by reference to Exhibit 10.6 to Amendment No. 6)
|
10.2†
|
|
Form of EPAM Systems, Inc. 2006 Stock Option Plan Award Agreement (under the EPAM Systems, Inc. Amended and Restated 2006 Stock Option Plan) (incorporated herein by reference to Exhibit 10.7 to Amendment No. 6)
|
10.3†
|
|
EPAM Systems, Inc. 2012 Long-Term Incentive Plan (incorporated herein by reference to Exhibit 10.12 to Amendment No. 6)
|
10.4†
|
|
Form of Senior Management Non-Qualified Stock Option Award Agreement (under the EPAM Systems, Inc. 2012 Long-Term Incentive Plan) (incorporated herein by reference to Exhibit 10.13 to Amendment No. 6)
|
10.5†
|
|
Restricted Stock Award Agreement by and between Karl Robb and EPAM Systems, Inc. dated January 16, 2012 (incorporated herein by reference to Exhibit 10.14 to Amendment No. 6)
|
10.6†
|
|
Form of Chief Executive Officer Restricted Stock Unit Award Agreement (under the EPAM Systems, Inc. 2012 Long-Term Incentive Plan) (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, SEC File No. 001-35418, filed May 7, 2014 (the “Q1 2014 Form 10-Q”)
|
10.7†
|
|
Form of Senior Management Restricted Stock Unit Award Agreement (under the EPAM Systems, Inc. 2012 Long-Term Incentive Plan) (incorporated by reference to Exhibit 10.2 to the Q1 2014 Form 10-Q)
|
10.8†
|
|
Form of Chief Executive Officer Non-Qualified Stock Option Award Agreement (under the EPAM Systems, Inc. 2012 Long-Term Incentive Plan) (incorporated by reference to Exhibit 10.3 to the Q1 2014 Form 10-Q)
|
10.9†
|
|
Form of Chief Executive Officer Restricted Stock Unit Award Agreement (under the EPAM Systems, Inc. 2012 Long-Term Incentive Plan) (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, SEC File No. 001-35418, filed May 7, 2015 (the “Q1 2015 Form 10-Q”)
|
10.10†
|
|
Form of Senior Management Restricted Stock Unit Award Agreement (under the EPAM Systems, Inc. 2012 Long-Term Incentive Plan) (incorporated by reference to Exhibit 10.2 to the Q1 2015 Form 10-Q)
|
10.11†
|
|
EPAM Systems, Inc. 2015 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, SEC File No. 001-35418, filed June 15, 2015)
|
10.12†*
|
|
Form of Chief Executive Officer Non-Qualified Stock Option Award Agreement (under the EPAM Systems, Inc. 2015 Long-Term Incentive Plan)
|
10.13†*
|
|
Form of Chief Executive Officer Restricted Stock Unit Award Agreement (under the EPAM Systems, Inc. 2015 Long-Term Incentive Plan)
|
10.14†*
|
|
Form of Senior Management Non-Qualified Stock Option Award Agreement (under the EPAM Systems, Inc. 2015 Long-Term Incentive Plan)
|
10.15†*
|
|
Form of Senior Management Restricted Stock Unit Award Agreement (under the EPAM Systems, Inc. 2015 Long-Term Incentive Plan)
|
10.16†
|
|
Amended and Restated EPAM Systems, Inc. Non-Employee Directors Compensation Plan (incorporated herein by reference to Exhibit 10.3 to the Q1 2015 Form 10-Q)
|
10.17†
|
|
Form of Non-Employee Director Restricted Stock Award Agreement (under the EPAM Systems, Inc. 2012 Non-Employee Directors Compensation Plan) (incorporated herein by reference to Exhibit 10.16 to Amendment No. 6)
|
10.18†
|
|
Amended and Restated Non-Employee Director Compensation Policy (incorporated herein by reference to Exhibit 10.4 to the Q1 2015 Form 10-Q)
|
|
EPAM SYSTEMS, INC.
|
|
|
|
|
|
By:
|
/s/ Arkadiy Dobkin
|
|
|
Name: Arkadiy Dobkin
|
|
|
Title: Chairman, Chief Executive Officer and President
(principal executive officer)
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Arkadiy Dobkin
|
|
Chairman, Chief Executive Officer and President
(principal executive officer)
|
|
February 22, 2016
|
Arkadiy Dobkin
|
||||
|
|
|
|
|
/s/ Anthony J. Conte
|
|
Senior Vice President, Chief Financial Officer and Treasurer
(principal financial officer and principal accounting officer)
|
|
February 22, 2016
|
Anthony J. Conte
|
||||
|
|
|
|
|
/s/ Karl Robb
|
|
Director
|
|
February 22, 2016
|
Karl Robb
|
||||
|
|
|||
|
|
|
|
|
/s/ Peter Kuerpick
|
|
Director
|
|
February 22, 2016
|
Peter Kuerpick
|
||||
|
|
|||
|
|
|
|
|
/s/ Richard Michael Mayoras
|
|
Director
|
|
February 22, 2016
|
Richard Michael Mayoras
|
||||
|
|
|||
|
|
|
|
|
/s/ Robert E. Segert
|
|
Director
|
|
February 22, 2016
|
Robert E. Segert
|
||||
|
|
|||
|
|
|
|
|
/s/ Ronald P. Vargo
|
|
Director
|
|
February 22, 2016
|
Ronald P. Vargo
|
||||
|
|
|
Page
|
Audited Consolidated Financial Statements
|
|
|
As of
December 31, 2015 |
|
As of
December 31, 2014 |
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
199,449
|
|
|
$
|
220,534
|
|
Time deposits
|
30,181
|
|
|
—
|
|
||
Accounts receivable, net of allowance of $1,729 and $2,181, respectively
|
174,617
|
|
|
124,483
|
|
||
Unbilled revenues
|
95,808
|
|
|
55,851
|
|
||
Prepaid and other current assets
|
14,344
|
|
|
9,289
|
|
||
Employee loans, net of allowance of $0 and $0, respectively, current
|
2,689
|
|
|
2,434
|
|
||
Deferred tax assets, current
|
11,847
|
|
|
2,496
|
|
||
Total current assets
|
528,935
|
|
|
415,087
|
|
||
Property and equipment, net
|
60,499
|
|
|
55,134
|
|
||
Restricted cash, long-term
|
238
|
|
|
156
|
|
||
Employee loans, net of allowance of $0 and $0, respectively, long-term
|
3,649
|
|
|
4,081
|
|
||
Intangible assets, net
|
46,860
|
|
|
47,689
|
|
||
Goodwill
|
115,930
|
|
|
57,417
|
|
||
Deferred tax assets, long-term
|
18,312
|
|
|
11,094
|
|
||
Other long-term assets
|
4,113
|
|
|
3,368
|
|
||
Total assets
|
$
|
778,536
|
|
|
$
|
594,026
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Accounts payable
|
$
|
2,576
|
|
|
$
|
4,641
|
|
Accrued expenses and other liabilities
|
60,384
|
|
|
32,203
|
|
||
Deferred revenue, current
|
3,047
|
|
|
3,220
|
|
||
Due to employees
|
32,067
|
|
|
24,518
|
|
||
Taxes payable
|
29,472
|
|
|
24,704
|
|
||
Contingent consideration, current (Note 2 and 16)
|
—
|
|
|
35,524
|
|
||
Deferred tax liabilities, current
|
365
|
|
|
603
|
|
||
Total current liabilities
|
127,911
|
|
|
125,413
|
|
||
Long-term debt
|
35,000
|
|
|
—
|
|
||
Deferred tax liabilities, long-term
|
2,402
|
|
|
4,563
|
|
||
Total liabilities
|
165,313
|
|
|
129,976
|
|
||
Commitments and contingencies (Note 15)
|
|
|
|
|
|
||
Stockholders’ equity
|
|
|
|
|
|
||
Common stock, $0.001 par value; 160,000,000 authorized; 50,177,044 and 48,748,298 shares issued, 50,166,537 and 48,303,811 shares outstanding at December 31, 2015 and December 31, 2014, respectively
|
49
|
|
|
48
|
|
||
Additional paid-in capital
|
303,363
|
|
|
229,501
|
|
||
Retained earnings
|
345,054
|
|
|
260,598
|
|
||
Treasury stock
|
(93
|
)
|
|
(4,043
|
)
|
||
Accumulated other comprehensive loss
|
(35,150
|
)
|
|
(22,054
|
)
|
||
Total stockholders’ equity
|
613,223
|
|
|
464,050
|
|
||
Total liabilities and stockholders’ equity
|
$
|
778,536
|
|
|
$
|
594,026
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Revenues
|
$
|
914,128
|
|
|
$
|
730,027
|
|
|
$
|
555,117
|
|
Operating expenses:
|
|
|
|
|
|
|
|||||
Cost of revenues (exclusive of depreciation and amortization)
|
566,913
|
|
|
456,530
|
|
|
347,650
|
|
|||
Selling, general and administrative expenses
|
222,759
|
|
|
163,666
|
|
|
116,497
|
|
|||
Depreciation and amortization expense
|
17,395
|
|
|
17,483
|
|
|
15,120
|
|
|||
Goodwill impairment loss
|
—
|
|
|
2,241
|
|
|
—
|
|
|||
Other operating expenses/(income), net
|
1,094
|
|
|
3,924
|
|
|
(643
|
)
|
|||
Income from operations
|
105,967
|
|
|
86,183
|
|
|
76,493
|
|
|||
Interest and other income, net
|
4,731
|
|
|
4,769
|
|
|
3,077
|
|
|||
Change in fair value of contingent consideration
|
—
|
|
|
(1,924
|
)
|
|
—
|
|
|||
Foreign exchange loss
|
(4,628
|
)
|
|
(2,075
|
)
|
|
(2,800
|
)
|
|||
Income before provision for income taxes
|
106,070
|
|
|
86,953
|
|
|
76,770
|
|
|||
Provision for income taxes
|
21,614
|
|
|
17,312
|
|
|
14,776
|
|
|||
Net income
|
$
|
84,456
|
|
|
$
|
69,641
|
|
|
$
|
61,994
|
|
Foreign currency translation adjustments
|
(13,096
|
)
|
|
(20,251
|
)
|
|
(811
|
)
|
|||
Comprehensive income
|
$
|
71,360
|
|
|
$
|
49,390
|
|
|
$
|
61,183
|
|
|
|
|
|
|
|
||||||
Net income per share:
|
|
|
|
|
|
|
|||||
Basic
|
$
|
1.73
|
|
|
$
|
1.48
|
|
|
$
|
1.35
|
|
Diluted
|
$
|
1.62
|
|
|
$
|
1.40
|
|
|
$
|
1.28
|
|
Shares used in calculation of net income per share:
|
|
|
|
|
|
|
|||||
Basic
|
48,721
|
|
|
47,189
|
|
|
45,754
|
|
|||
Diluted
|
51,986
|
|
|
49,734
|
|
|
48,358
|
|
|
|
|||||||||||||||||||||||||
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Treasury Stock
|
|
Accumulated Other Comprehensive Income
|
|
Total Stockholders’ Equity
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, December 31, 2012
|
44,442,494
|
|
|
$
|
44
|
|
|
$
|
166,962
|
|
|
$
|
128,992
|
|
|
$
|
(8,697
|
)
|
|
$
|
(1,021
|
)
|
|
$
|
286,280
|
|
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
13,150
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,150
|
|
||||||
Stock issued under the 2012 Non-Employee Directors Compensation Plan
|
14,041
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Stock issued in connection with acquisition of Empathy Lab
|
1,483
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
13
|
|
|
—
|
|
|
—
|
|
||||||
Proceeds from stock options exercises
|
2,156,898
|
|
|
2
|
|
|
9,285
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,287
|
|
||||||
Excess tax benefits
|
—
|
|
|
—
|
|
|
6,201
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,201
|
|
||||||
Currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(811
|
)
|
|
(811
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
61,994
|
|
|
—
|
|
|
—
|
|
|
61,994
|
|
||||||
Balance, December 31, 2013
|
46,614,916
|
|
|
$
|
46
|
|
|
$
|
195,585
|
|
|
$
|
190,986
|
|
|
$
|
(8,684
|
)
|
|
$
|
(1,832
|
)
|
|
$
|
376,101
|
|
Stock issued in connection with acquisition of Netsoft (Note 2)
|
2,289
|
|
|
—
|
|
|
(21
|
)
|
|
—
|
|
|
21
|
|
|
—
|
|
|
—
|
|
||||||
Stock issued in connection with acquisition of Jointech (Note 2)
|
179,104
|
|
|
—
|
|
|
1,158
|
|
|
—
|
|
|
1,630
|
|
|
—
|
|
|
2,788
|
|
||||||
Stock issued in connection with acquisition of GGA (Note 2)
|
262,277
|
|
|
—
|
|
|
(2,386
|
)
|
|
—
|
|
|
2,386
|
|
|
—
|
|
|
—
|
|
||||||
Stock issued in connection with acquisition of Great Fridays (Note 2)
|
90,864
|
|
|
—
|
|
|
(827
|
)
|
|
—
|
|
|
827
|
|
|
—
|
|
|
—
|
|
||||||
Stock issued under the 2012 Non-Employee Directors Compensation Plan (Note 14)
|
7,738
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Forfeiture of stock issued in connection with acquisition of Empathy Lab
|
(24,474
|
)
|
|
—
|
|
|
223
|
|
|
—
|
|
|
(223
|
)
|
|
—
|
|
|
—
|
|
||||||
Stock-based compensation expense (net of liability awards)
|
—
|
|
|
—
|
|
|
21,397
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,397
|
|
||||||
Proceeds from stock options exercises
|
1,171,097
|
|
|
2
|
|
|
10,596
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,598
|
|
||||||
Excess tax benefits
|
—
|
|
|
—
|
|
|
3,776
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,776
|
|
||||||
Prior periods retained earning adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(29
|
)
|
|
—
|
|
|
29
|
|
|
—
|
|
||||||
Currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,251
|
)
|
|
(20,251
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
69,641
|
|
|
—
|
|
|
—
|
|
|
69,641
|
|
||||||
Balance, December 31, 2014
|
48,303,811
|
|
|
$
|
48
|
|
|
$
|
229,501
|
|
|
$
|
260,598
|
|
|
$
|
(4,043
|
)
|
|
$
|
(22,054
|
)
|
|
$
|
464,050
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Treasury Stock
|
|
Accumulated Other Comprehensive Income
|
|
Total Stockholders’ Equity
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, December 31, 2014
|
48,303,811
|
|
|
$
|
48
|
|
|
$
|
229,501
|
|
|
$
|
260,598
|
|
|
$
|
(4,043
|
)
|
|
$
|
(22,054
|
)
|
|
$
|
464,050
|
|
Stock issued in connection with acquisition of Netsoft (Note 2)
|
25,503
|
|
|
—
|
|
|
(232
|
)
|
|
—
|
|
|
232
|
|
|
—
|
|
|
—
|
|
||||||
Forfeiture of stock issued in connection with acquisition of Netsoft
|
(1,482
|
)
|
|
—
|
|
|
13
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
||||||
Stock issued in connection with acquisition of Jointech (Note 2)
|
166,114
|
|
|
—
|
|
|
3,488
|
|
|
—
|
|
|
1,512
|
|
|
—
|
|
|
5,000
|
|
||||||
Stock issued in connection with acquisition of GGA (Note 2)
|
233,753
|
|
|
—
|
|
|
(2,127
|
)
|
|
—
|
|
|
2,127
|
|
|
—
|
|
|
—
|
|
||||||
Stock issued in connection with acquisition of Great Fridays (Note 2)
|
10,092
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
92
|
|
|
—
|
|
|
81
|
|
||||||
Stock issued under the 2012 Non-Employee Directors Compensation Plan (Note 13)
|
5,295
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Restricted stock unites vested
|
17,625
|
|
|
—
|
|
|
574
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
574
|
|
||||||
Stock-based compensation expense (net of liability awards & RSU)
|
—
|
|
|
—
|
|
|
43,120
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43,120
|
|
||||||
Proceeds from stock options exercises
|
1,405,826
|
|
|
1
|
|
|
20,674
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,675
|
|
||||||
Excess tax benefits
|
—
|
|
|
—
|
|
|
8,363
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,363
|
|
||||||
Currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,096
|
)
|
|
(13,096
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
84,456
|
|
|
—
|
|
|
—
|
|
|
84,456
|
|
||||||
Balance, December 31, 2015
|
50,166,537
|
|
|
$
|
49
|
|
|
$
|
303,363
|
|
|
$
|
345,054
|
|
|
$
|
(93
|
)
|
|
$
|
(35,150
|
)
|
|
$
|
613,223
|
|
(US Dollars in thousands)
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
84,456
|
|
|
$
|
69,641
|
|
|
$
|
61,994
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
|
17,395
|
|
|
17,483
|
|
|
15,120
|
|
|||
Bad debt expense
|
|
1,407
|
|
|
817
|
|
|
335
|
|
|||
Deferred taxes
|
|
(15,328
|
)
|
|
(3,270
|
)
|
|
41
|
|
|||
Stock-based compensation expense
|
|
45,833
|
|
|
24,620
|
|
|
13,150
|
|
|||
Impairment charges and acquisition related adjustments
|
|
(1,183
|
)
|
|
7,907
|
|
|
—
|
|
|||
Excess tax benefit on stock-based compensation plans
|
|
(8,363
|
)
|
|
(3,776
|
)
|
|
(6,201
|
)
|
|||
Other
|
|
3,883
|
|
|
735
|
|
|
1,199
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
||||
(Increase)/ decrease in operating assets:
|
|
|
|
|
|
|
|
|
||||
Accounts receivable
|
|
(47,694
|
)
|
|
(30,410
|
)
|
|
(17,302
|
)
|
|||
Unbilled revenues
|
|
(38,076
|
)
|
|
(11,134
|
)
|
|
(9,833
|
)
|
|||
Prepaid expenses and other assets
|
|
(574
|
)
|
|
565
|
|
|
587
|
|
|||
Increase/ (decrease) in operating liabilities:
|
|
|
|
|
|
|
|
|
||||
Accounts payable
|
|
(2,781
|
)
|
|
(2,603
|
)
|
|
(2,900
|
)
|
|||
Accrued expenses and other liabilities
|
|
26,563
|
|
|
11,492
|
|
|
501
|
|
|||
Deferred revenues
|
|
(869
|
)
|
|
(1,514
|
)
|
|
(2,325
|
)
|
|||
Due to employees
|
|
2,752
|
|
|
7,453
|
|
|
785
|
|
|||
Taxes payable
|
|
8,972
|
|
|
16,868
|
|
|
3,074
|
|
|||
Net cash provided by operating activities
|
|
76,393
|
|
|
104,874
|
|
|
58,225
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
||||
Purchases of property and equipment
|
|
(13,272
|
)
|
|
(11,916
|
)
|
|
(13,360
|
)
|
|||
Payment for construction of corporate facilities
|
|
(4,692
|
)
|
|
(3,924
|
)
|
|
(2,560
|
)
|
|||
Employee housing loans
|
|
(2,054
|
)
|
|
(1,740
|
)
|
|
(7,982
|
)
|
|||
Proceeds from repayments of employee housing loans
|
|
2,249
|
|
|
1,793
|
|
|
2,189
|
|
|||
Increase in restricted cash and time deposits, net
|
|
(29,944
|
)
|
|
1,430
|
|
|
429
|
|
|||
Increase in other long-term assets, net
|
|
(708
|
)
|
|
(1,479
|
)
|
|
(516
|
)
|
|||
Payments for foreign currency derivatives
|
|
(165
|
)
|
|
—
|
|
|
—
|
|
|||
Acquisition of businesses, net of cash acquired (Note 2)
|
|
(76,908
|
)
|
|
(37,093
|
)
|
|
(20
|
)
|
|||
Net cash used in investing activities
|
|
(125,494
|
)
|
|
(52,929
|
)
|
|
(21,820
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
||||
Proceeds related to stock options exercises
|
|
20,675
|
|
|
10,571
|
|
|
9,300
|
|
|||
Excess tax benefit on stock-based compensation plans
|
|
8,363
|
|
|
3,776
|
|
|
6,201
|
|
|||
Proceeds from borrowing under line of credit (Note 12)
|
|
35,000
|
|
|
—
|
|
|
—
|
|
|||
Acquisition of business, deferred consideration (Note 2)
|
|
(30,274
|
)
|
|
(4,000
|
)
|
|
—
|
|
|||
Net cash provided by financing activities
|
|
33,764
|
|
|
10,347
|
|
|
15,501
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
|
(5,748
|
)
|
|
(10,965
|
)
|
|
(811
|
)
|
|||
Net increase/ (decrease) in cash and cash equivalents
|
|
(21,085
|
)
|
|
51,327
|
|
|
51,095
|
|
|||
Cash and cash equivalents, beginning of period
|
|
220,534
|
|
|
169,207
|
|
|
118,112
|
|
|||
Cash and cash equivalents, end of period
|
|
$
|
199,449
|
|
|
$
|
220,534
|
|
|
$
|
169,207
|
|
Supplemental disclosures of cash paid:
|
|
|
|
|
|
|
||||||
Income taxes
|
|
$
|
25,071
|
|
|
$
|
11,756
|
|
|
$
|
10,207
|
|
Bank interest
|
|
$
|
124
|
|
|
$
|
7
|
|
|
$
|
26
|
|
1.
|
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
|
|
Balance at
Beginning of
Period
|
|
Charged to Costs and Expenses
|
|
Deductions/
Other
|
|
Balance at End of Year
|
||||||||
Allowance for Doubtful Accounts (Billed and Unbilled):
|
|
|
|
|
|
|
|
|
||||||||
Fiscal Year 2013
|
|
$
|
2,203
|
|
|
$
|
619
|
|
|
$
|
(1,022
|
)
|
|
$
|
1,800
|
|
Fiscal Year 2014
|
|
1,800
|
|
|
1,325
|
|
|
(944
|
)
|
|
2,181
|
|
||||
Fiscal Year 2015
|
|
2,181
|
|
|
1,704
|
|
|
(2,156
|
)
|
|
1,729
|
|
2.
|
ACQUISITIONS
|
|
NavigationArts
|
|
AGS
|
Total
|
|||||||||||||||
|
As Originally Reported
|
|
At December 31, 2015
|
|
At December 31, 2015
|
|
As Originally Reported
|
|
At December 31, 2015
|
||||||||||
Cash and cash equivalents
|
$
|
1,317
|
|
|
$
|
1,317
|
|
|
$
|
1,727
|
|
|
$
|
3,044
|
|
|
$
|
3,044
|
|
Trade receivables and other current assets
|
3,920
|
|
|
3,920
|
|
|
10,600
|
|
|
14,520
|
|
|
14,520
|
|
|||||
Property and equipment and other long-term assets
|
230
|
|
|
230
|
|
|
1,665
|
|
|
1,895
|
|
|
1,895
|
|
|||||
Deferred tax asset
|
—
|
|
|
233
|
|
|
4,996
|
|
|
4,996
|
|
|
5,229
|
|
|||||
Acquired intangible assets
|
1,500
|
|
|
2,800
|
|
|
10,000
|
|
|
11,500
|
|
|
12,800
|
|
|||||
Goodwill
|
23,822
|
|
|
21,764
|
|
|
33,815
|
|
|
57,637
|
|
|
55,579
|
|
|||||
Total assets acquired
|
30,789
|
|
|
30,264
|
|
|
62,803
|
|
|
93,592
|
|
|
93,067
|
|
|||||
Accounts payable and accrued expenses
|
871
|
|
|
871
|
|
|
3,087
|
|
|
3,958
|
|
|
3,958
|
|
|||||
Deferred revenue
|
50
|
|
|
50
|
|
|
1,049
|
|
|
1,099
|
|
|
1,099
|
|
|||||
Due to employees
|
596
|
|
|
596
|
|
|
3,010
|
|
|
3,606
|
|
|
3,606
|
|
|||||
Deferred tax liability
|
525
|
|
|
—
|
|
|
3,800
|
|
|
4,325
|
|
|
3,800
|
|
|||||
Total liabilities assumed
|
2,042
|
|
|
1,517
|
|
|
10,946
|
|
|
12,988
|
|
|
12,463
|
|
|||||
Net assets acquired
|
$
|
28,747
|
|
|
$
|
28,747
|
|
|
$
|
51,857
|
|
|
$
|
80,604
|
|
|
$
|
80,604
|
|
|
NavigationArts
|
|
AGS
|
||||||||
|
Weighted Average Useful Life (in years)
|
|
Amount
|
|
Weighted Average Useful Life (in years)
|
|
Amount
|
||||
Customer relationships
|
10
|
|
$
|
2,800
|
|
|
10
|
|
$
|
10,000
|
|
Total
|
|
|
$
|
2,800
|
|
|
|
|
$
|
10,000
|
|
Name of Acquisition
|
|
Effective Date of Acquisition
|
|
Common Shares
|
|
Fair Value of Common
Shares
|
|
Cash, Net of Working Capital and Other Adjustments
|
|
Recorded Earnout
Payable
|
|
Total Recorded Purchase Price
|
|
Maximum Potential Earnout Payable
|
||||||||||||||||||||||||||
|
|
Issued
|
|
Deferred
|
|
Issued
|
|
Deferred
|
|
Paid
|
|
Deferred
|
|
Cash
|
|
Stock
|
|
|
||||||||||||||||||||||
|
|
|
|
(in shares)
|
|
(in thousands)
|
||||||||||||||||||||||||||||||||||
Netsoft
|
|
March 5, 2014
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,403
|
|
|
$
|
1,022
|
|
|
$
|
1,825
|
|
|
$
|
—
|
|
|
$
|
5,250
|
|
|
$
|
1,825
|
|
Jointech
|
|
April 30, 2014
|
|
—
|
|
|
89,552
|
|
|
—
|
|
|
2,788
|
|
|
10,000
|
|
|
4,000
|
|
|
15,000
|
|
|
5,000
|
|
|
36,788
|
|
|
20,000
|
|
||||||||
GGA
|
|
June 6, 2014
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,892
|
|
|
—
|
|
|
11,400
|
|
|
—
|
|
|
26,292
|
|
|
|
|||||||||
Great Fridays
|
|
October 31, 2014
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,777
|
|
|
—
|
|
|
1,173
|
|
|
—
|
|
|
11,950
|
|
|
1,173
|
|
||||||||
|
|
|
|
—
|
|
|
89,552
|
|
|
$
|
—
|
|
|
$
|
2,788
|
|
|
$
|
38,072
|
|
|
$
|
5,022
|
|
|
$
|
29,398
|
|
|
$
|
5,000
|
|
|
$
|
80,280
|
|
|
|
|
Netsoft
|
|
Jointech
|
|
GGA
|
|
Great Fridays
|
|
Total
|
||||||||||||||||||||||||||||||
|
At Originally Reported
|
|
Final as of March 31, 2015
|
|
As Originally Reported
|
|
Final as of June 30, 2015
|
|
As Originally Reported
|
|
Final as of June 30, 2015
|
|
As Originally Reported
|
|
Final as of December 31, 2015
|
|
As Originally Reported
|
|
Final as of December 31, 2015
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
871
|
|
|
$
|
871
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
259
|
|
|
$
|
259
|
|
|
$
|
1,130
|
|
|
$
|
1,130
|
|
Trade receivables and other current assets
|
788
|
|
|
788
|
|
|
784
|
|
|
784
|
|
|
5,157
|
|
|
5,377
|
|
|
1,825
|
|
|
1,825
|
|
|
8,554
|
|
|
8,774
|
|
||||||||||
Property and equipment and other long-term assets
|
52
|
|
|
52
|
|
|
338
|
|
|
338
|
|
|
444
|
|
|
306
|
|
|
262
|
|
|
262
|
|
|
1,096
|
|
|
958
|
|
||||||||||
Deferred tax asset
|
351
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,463
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,814
|
|
|
—
|
|
||||||||||
Acquired intangible assets
|
1,700
|
|
|
1,700
|
|
|
25,744
|
|
|
15,312
|
|
|
10,959
|
|
|
16,000
|
|
|
5,747
|
|
|
200
|
|
|
44,150
|
|
|
33,212
|
|
||||||||||
Goodwill
|
2,776
|
|
|
2,779
|
|
|
11,033
|
|
|
23,758
|
|
|
6,496
|
|
|
7,306
|
|
|
6,947
|
|
|
11,262
|
|
|
27,252
|
|
|
45,105
|
|
||||||||||
Total assets acquired
|
5,667
|
|
|
5,319
|
|
|
38,770
|
|
|
41,063
|
|
|
27,519
|
|
|
28,989
|
|
|
15,040
|
|
|
13,808
|
|
|
86,996
|
|
|
89,179
|
|
||||||||||
Accounts payable and accrued expenses
|
69
|
|
|
69
|
|
|
728
|
|
|
728
|
|
|
2,593
|
|
|
2,593
|
|
|
872
|
|
|
807
|
|
|
4,262
|
|
|
4,197
|
|
||||||||||
Deferred revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
104
|
|
|
317
|
|
|
317
|
|
|
317
|
|
|
421
|
|
||||||||||
Due to employees
|
—
|
|
|
—
|
|
|
1,254
|
|
|
1,254
|
|
|
—
|
|
|
—
|
|
|
624
|
|
|
624
|
|
|
1,878
|
|
|
1,878
|
|
||||||||||
Deferred tax liability
|
—
|
|
|
—
|
|
|
—
|
|
|
2,293
|
|
|
—
|
|
|
—
|
|
|
1,200
|
|
|
110
|
|
|
1,200
|
|
|
2,403
|
|
||||||||||
Total liabilities assumed
|
69
|
|
|
69
|
|
|
1,982
|
|
|
4,275
|
|
|
2,593
|
|
|
2,697
|
|
|
3,013
|
|
|
1,858
|
|
|
7,657
|
|
|
8,899
|
|
||||||||||
Net assets acquired
|
$
|
5,598
|
|
|
$
|
5,250
|
|
|
$
|
36,788
|
|
|
$
|
36,788
|
|
|
$
|
24,926
|
|
|
$
|
26,292
|
|
|
$
|
12,027
|
|
|
$
|
11,950
|
|
|
$
|
79,339
|
|
|
$
|
80,280
|
|
|
Netsoft
|
|
Jointech
|
|
GGA
|
|
Great Fridays
|
|||||||||||||||||||
|
Weighted Average
Useful Life (in years) |
|
Amount
|
|
Weighted Average
Useful Life (in years) |
|
Amount
|
|
Weighted Average
Useful Life (in years) |
|
Amount
|
|
Weighted Average
Useful Life (in years) |
|
Amount
|
|||||||||||
Customer relationships
|
10
|
|
|
$
|
1,700
|
|
|
10
|
|
$
|
15,000
|
|
|
10
|
|
|
$
|
16,000
|
|
|
3
|
|
|
$
|
200
|
|
Trade names
|
—
|
|
|
—
|
|
|
2
|
|
312
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
|
$
|
1,700
|
|
|
|
|
$
|
15,312
|
|
|
|
|
$
|
16,000
|
|
|
|
|
$
|
200
|
|
|
North America
|
|
Europe
|
|
Russia
|
|
Total
|
||||||||
Balance as of January 1, 2014
|
$
|
16,438
|
|
|
$
|
2,864
|
|
|
$
|
2,966
|
|
|
$
|
22,268
|
|
Acquisition of Netsoft (Note 2)
|
2,749
|
|
|
—
|
|
|
—
|
|
|
2,749
|
|
||||
Acquisition of Jointech (Note 2)
|
—
|
|
|
17,404
|
|
|
—
|
|
|
17,404
|
|
||||
Acquisition of GGA (Note 2)
|
12,115
|
|
|
—
|
|
|
—
|
|
|
12,115
|
|
||||
Acquisition of Great Fridays (Note 2)
|
—
|
|
|
6,947
|
|
|
—
|
|
|
6,947
|
|
||||
Goodwill written-off
|
—
|
|
|
—
|
|
|
(2,241
|
)
|
|
(2,241
|
)
|
||||
Net effect of foreign currency exchange rate changes
|
(224
|
)
|
|
(876
|
)
|
|
(725
|
)
|
|
(1,825
|
)
|
||||
Balance as of December 31, 2014
|
31,078
|
|
|
26,339
|
|
|
—
|
|
|
57,417
|
|
||||
Acquisition of NavigationArts (Note 2)
|
23,822
|
|
|
—
|
|
|
—
|
|
|
23,822
|
|
||||
Acquisition of AGS (Note 2)
|
33,815
|
|
|
—
|
|
|
—
|
|
|
33,815
|
|
||||
Netsoft purchase accounting adjustment (Note 2)
|
30
|
|
|
—
|
|
|
—
|
|
|
30
|
|
||||
Jointech purchase accounting adjustment (Note 2)
|
—
|
|
|
6,181
|
|
|
—
|
|
|
6,181
|
|
||||
GGA purchase accounting adjustment (Note 2)
|
(4,807
|
)
|
|
—
|
|
|
—
|
|
|
(4,807
|
)
|
||||
Great Fridays purchase accounting adjustment (Note 2)
|
—
|
|
|
4,315
|
|
|
—
|
|
|
4,315
|
|
||||
NavigationArts purchase accounting adjustment (Note 2)
|
(2,058
|
)
|
|
—
|
|
|
—
|
|
|
(2,058
|
)
|
||||
Effect of net foreign currency exchange rate changes
|
(416
|
)
|
|
(2,369
|
)
|
|
—
|
|
|
(2,785
|
)
|
||||
Balance as of December 31, 2015
|
$
|
81,464
|
|
|
$
|
34,466
|
|
|
$
|
—
|
|
|
$
|
115,930
|
|
|
2015
|
||||||||||||
|
Weighted average life at acquisition (in years)
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net
carrying amount
|
||||||
Client relationships
|
10
|
|
$
|
52,974
|
|
|
$
|
(8,387
|
)
|
|
$
|
44,587
|
|
Trade name
|
5
|
|
5,853
|
|
|
(3,772
|
)
|
|
2,081
|
|
|||
Non-competition agreements
|
4
|
|
746
|
|
|
(554
|
)
|
|
192
|
|
|||
Total
|
|
|
$
|
59,573
|
|
|
$
|
(12,713
|
)
|
|
$
|
46,860
|
|
|
2014
|
||||||||||||
|
Weighted average life at acquisition (in years)
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net
carrying amount
|
||||||
Client relationships
|
10
|
|
$
|
48,482
|
|
|
$
|
(4,664
|
)
|
|
$
|
43,818
|
|
Trade name
|
5
|
|
6,372
|
|
|
(2,894
|
)
|
|
3,478
|
|
|||
Non-competition agreements
|
5
|
|
813
|
|
|
(420
|
)
|
|
393
|
|
|||
Total
|
|
|
$
|
55,667
|
|
|
$
|
(7,978
|
)
|
|
$
|
47,689
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Client relationships
|
|
$
|
3,961
|
|
|
$
|
3,843
|
|
|
$
|
1,373
|
|
Trade name
|
|
1,280
|
|
|
1,319
|
|
|
1,222
|
|
|||
Non-competition agreements
|
|
175
|
|
|
187
|
|
|
190
|
|
|||
Total
|
|
$
|
5,416
|
|
|
$
|
5,349
|
|
|
$
|
2,785
|
|
|
|
Amount
|
||
2016
|
|
$
|
6,633
|
|
2017
|
|
6,240
|
|
|
2018
|
|
5,292
|
|
|
2019
|
|
5,292
|
|
|
2020
|
|
5,292
|
|
|
Thereafter
|
|
18,111
|
|
|
Total
|
|
$
|
46,860
|
|
|
|
December 31,
2015 |
|
December 31,
2014 |
||||
Taxes receivable
|
|
$
|
7,954
|
|
|
$
|
3,966
|
|
Prepaid expenses
|
|
4,693
|
|
|
3,703
|
|
||
Other
|
|
1,697
|
|
|
1,620
|
|
||
Total
|
|
$
|
14,344
|
|
|
$
|
9,289
|
|
5.
|
EMPLOYEE LOANS AND ALLOWANCE FOR LOAN LOSSES
|
|
December 31,
2015 |
|
December 31,
2014 |
||||
Housing loans
|
$
|
5,654
|
|
|
$
|
5,848
|
|
Relocation and other loans
|
684
|
|
|
667
|
|
||
Total employee loans
|
6,338
|
|
|
6,515
|
|
||
Less:
|
|
|
|
|
|
||
Allowance for loan losses
|
—
|
|
|
—
|
|
||
Total loans, net of allowance for loan losses
|
$
|
6,338
|
|
|
$
|
6,515
|
|
6.
|
RESTRICTED CASH AND TIME DEPOSITS
|
|
December 31,
2015 |
|
December 31,
2014 |
||||
Time deposits
|
$
|
30,181
|
|
|
$
|
—
|
|
Other security deposits
|
238
|
|
|
156
|
|
||
Total
|
$
|
30,419
|
|
|
$
|
156
|
|
7.
|
PROPERTY AND EQUIPMENT — NET
|
|
|
Useful Life
(in years)
|
|
December 31,
2015 |
|
December 31,
2014 |
||||
Computer hardware
|
|
3
|
|
$
|
36,612
|
|
|
$
|
32,374
|
|
Leasehold improvements
|
|
lease term
|
|
6,801
|
|
|
6,287
|
|
||
Furniture and fixtures
|
|
7
|
|
8,990
|
|
|
7,348
|
|
||
Purchased computer software
|
|
3
|
|
4,099
|
|
|
3,606
|
|
||
Office equipment
|
|
7
|
|
8,307
|
|
|
5,043
|
|
||
Building
|
|
50
|
|
34,002
|
|
|
17,123
|
|
||
Land improvements
|
|
20
|
|
1,464
|
|
|
—
|
|
||
Construction in progress (Note 15)
|
|
n/a
|
|
—
|
|
|
17,885
|
|
||
|
|
|
|
100,275
|
|
|
89,666
|
|
||
Less accumulated depreciation and amortization
|
|
|
|
(39,776
|
)
|
|
(34,532
|
)
|
||
Total
|
|
|
|
$
|
60,499
|
|
|
$
|
55,134
|
|
8.
|
ACCRUED EXPENSES AND OTHER LIABILITIES
|
|
|
December 31,
2015 |
|
December 31,
2014 |
||||
Compensation
|
|
$
|
47,285
|
|
|
$
|
22,766
|
|
Subcontractor costs
|
|
4,360
|
|
|
2,815
|
|
||
Professional fees
|
|
2,251
|
|
|
1,162
|
|
||
Facilities costs
|
|
1,538
|
|
|
757
|
|
||
Acquisition related deferred consideration
|
|
603
|
|
|
1,022
|
|
||
Other
|
|
4,347
|
|
|
3,681
|
|
||
Total
|
|
$
|
60,384
|
|
|
$
|
32,203
|
|
9.
|
TAXES PAYABLE
|
|
|
December 31,
2015 |
|
December 31,
2014 |
||||
Corporate profit tax
|
|
$
|
15,057
|
|
|
$
|
7,982
|
|
Value added taxes
|
|
8,553
|
|
|
6,279
|
|
||
Payroll, social security, and other taxes
|
|
5,862
|
|
|
10,443
|
|
||
Total
|
|
$
|
29,472
|
|
|
$
|
24,704
|
|
10.
|
INCOME TAXES
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Income before income tax expense:
|
|
|
|
|
|
|
||||||
Domestic
|
|
$
|
(7,687
|
)
|
|
$
|
(7,229
|
)
|
|
$
|
7,001
|
|
Foreign
|
|
113,757
|
|
|
94,182
|
|
|
69,769
|
|
|||
Total
|
|
$
|
106,070
|
|
|
$
|
86,953
|
|
|
$
|
76,770
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Income tax expense (benefit) consists of:
|
|
|
|
|
|
|
||||||
Current
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
19,851
|
|
|
$
|
7,741
|
|
|
$
|
6,150
|
|
State
|
|
2,563
|
|
|
338
|
|
|
310
|
|
|||
Foreign
|
|
14,528
|
|
|
12,504
|
|
|
8,275
|
|
|||
Deferred
|
|
|
|
|
|
|
||||||
Federal
|
|
(13,361
|
)
|
|
(3,979
|
)
|
|
(668
|
)
|
|||
State
|
|
(1,891
|
)
|
|
(43
|
)
|
|
14
|
|
|||
Foreign
|
|
(76
|
)
|
|
751
|
|
|
695
|
|
|||
Total
|
|
$
|
21,614
|
|
|
$
|
17,312
|
|
|
$
|
14,776
|
|
|
|
December 31,
2015 |
|
December 31,
2014 |
||||
Deferred tax assets:
|
|
|
|
|
||||
Fixed assets
|
|
$
|
681
|
|
|
$
|
181
|
|
Intangible assets
|
|
1,428
|
|
|
3,789
|
|
||
Accrued expenses
|
|
10,729
|
|
|
1,282
|
|
||
Net operating loss carryforward
|
|
5,233
|
|
|
844
|
|
||
Deferred revenue
|
|
2,162
|
|
|
4,328
|
|
||
Stock-based compensation
|
|
12,484
|
|
|
6,994
|
|
||
Valuation allowance
|
|
—
|
|
|
(149
|
)
|
||
Restricted stock options
|
|
—
|
|
|
2
|
|
||
Other assets
|
|
14
|
|
|
30
|
|
||
Deferred tax assets
|
|
32,731
|
|
|
17,301
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Fixed assets
|
|
646
|
|
|
800
|
|
||
Intangible assets
|
|
1,598
|
|
|
—
|
|
||
Accrued revenue and expenses
|
|
511
|
|
|
635
|
|
||
Deferred inter-company gain
|
|
—
|
|
|
405
|
|
||
Stock-based compensation
|
|
1,672
|
|
|
7,013
|
|
||
Other liabilities
|
|
912
|
|
|
24
|
|
||
Deferred tax liability
|
|
5,339
|
|
|
8,877
|
|
||
Net deferred tax asset
|
|
$
|
27,392
|
|
|
$
|
8,424
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Statutory federal tax
|
|
$
|
37,125
|
|
|
$
|
29,564
|
|
|
$
|
26,102
|
|
Increase/ (decrease) in taxes resulting from:
|
|
|
|
|
|
|
||||||
State taxes, net of federal benefit
|
|
341
|
|
|
311
|
|
|
368
|
|
|||
Provision adjustment for current year uncertain tax position
|
|
—
|
|
|
(1,220
|
)
|
|
—
|
|
|||
Effect of permanent differences
|
|
7,314
|
|
|
8,589
|
|
|
2,524
|
|
|||
Stock-based compensation
|
|
7,591
|
|
|
3,782
|
|
|
1,948
|
|
|||
Rate differential between U.S. and foreign
|
|
(31,094
|
)
|
|
(24,772
|
)
|
|
(17,279
|
)
|
|||
Change in foreign tax rate
|
|
9
|
|
|
754
|
|
|
(59
|
)
|
|||
Change in valuation allowance
|
|
—
|
|
|
149
|
|
|
489
|
|
|||
Other
|
|
328
|
|
|
155
|
|
|
683
|
|
|||
Provision for income taxes
|
|
$
|
21,614
|
|
|
$
|
17,312
|
|
|
$
|
14,776
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Balance at January 1
|
|
$
|
200
|
|
|
$
|
1,271
|
|
|
$
|
1,271
|
|
Increases in tax positions in current year
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Increases in tax positions in prior year
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Decreases due to settlement
|
|
(138
|
)
|
|
(1,071
|
)
|
|
—
|
|
|||
Balance at December 31
|
|
$
|
62
|
|
|
$
|
200
|
|
|
$
|
1,271
|
|
11.
|
EMPLOYEE BENEFITS
|
12.
|
LONG-TERM DEBT
|
13.
|
STOCK-BASED COMPENSATION
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Cost of revenues
|
|
$
|
13,695
|
|
|
$
|
8,648
|
|
|
$
|
4,823
|
|
Selling, general and administrative expenses - Acquisition related
|
|
18,690
|
|
|
8,829
|
|
|
4,417
|
|
|||
Selling, general and administrative expenses - All other
|
|
13,448
|
|
|
7,143
|
|
|
3,910
|
|
|||
Total
|
|
$
|
45,833
|
|
|
$
|
24,620
|
|
|
$
|
13,150
|
|
|
Number of
Options
|
|
Weighted Average
Exercise Price
|
|
Aggregate
Intrinsic Value
|
|||||
Options outstanding at January 1, 2013
|
6,296,709
|
|
|
$
|
7.51
|
|
|
$
|
66,682
|
|
Options granted
|
1,987,952
|
|
|
23.60
|
|
|
22,543
|
|
||
Options exercised
|
(2,156,898
|
)
|
|
4.31
|
|
|
(66,066
|
)
|
||
Options forfeited/cancelled
|
(304,227
|
)
|
|
11.50
|
|
|
(7,131
|
)
|
||
Options outstanding at December 31, 2013
|
5,823,536
|
|
|
$
|
13.99
|
|
|
$
|
122,003
|
|
Options granted
|
2,400,500
|
|
|
32.51
|
|
|
36,584
|
|
||
Options exercised
|
(1,171,097
|
)
|
|
9.05
|
|
|
(45,321
|
)
|
||
Options forfeited/cancelled
|
(214,193
|
)
|
|
25.33
|
|
|
(4,802
|
)
|
||
Options outstanding at December 31, 2014
|
6,838,746
|
|
|
$
|
20.98
|
|
|
$
|
183,073
|
|
Options granted
|
2,219,725
|
|
|
62.18
|
|
|
36,492
|
|
||
Options exercised
|
(1,405,826
|
)
|
|
14.70
|
|
|
(89,860
|
)
|
||
Options forfeited/cancelled
|
(201,731
|
)
|
|
34.48
|
|
|
(8,904
|
)
|
||
Options outstanding at December 31, 2015
|
7,450,914
|
|
|
$
|
34.07
|
|
|
$
|
331,938
|
|
|
|
|
|
|
|
|||||
Options vested and exercisable at December 31, 2015
|
2,446,226
|
|
|
$
|
15.95
|
|
|
$
|
153,305
|
|
Options expected to vest
|
4,690,899
|
|
|
$
|
42.51
|
|
|
$
|
169,388
|
|
|
Number of
Shares
|
|
Weighted Average Grant Date
Fair Value Per Share
|
|||
Unvested service-based awards outstanding at January 1, 2013
|
659,872
|
|
|
$
|
17.92
|
|
Awards granted
|
15,524
|
|
|
23.69
|
|
|
Awards vested
|
(330,468
|
)
|
|
17.33
|
|
|
Unvested service-based awards outstanding at December 31, 2013
|
344,928
|
|
|
$
|
18.74
|
|
Awards granted
|
523,220
|
|
|
40.41
|
|
|
Awards vested
|
(217,668
|
)
|
|
17.84
|
|
|
Awards forfeited/cancelled
|
(17,038
|
)
|
|
21.14
|
|
|
Unvested service-based awards outstanding at December 31, 2014
|
633,442
|
|
|
$
|
36.88
|
|
Awards granted
|
113,614
|
|
|
67.38
|
|
|
Awards vested
|
(279,129
|
)
|
|
33.66
|
|
|
Awards forfeited/cancelled
|
(11,816
|
)
|
|
34.47
|
|
|
Unvested service-based awards outstanding at December 31, 2015
|
456,111
|
|
|
$
|
46.51
|
|
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value Per Share
|
|||
Unvested performance-based awards outstanding at January 1, 2014
|
—
|
|
|
$
|
—
|
|
Awards granted
|
387,058
|
|
|
38.18
|
|
|
Awards forfeited/cancelled
|
(2,550
|
)
|
|
36.57
|
|
|
Changes in the number of awards expected to be delivered
|
(12,998
|
)
|
|
5.47
|
|
|
Unvested performance-based awards outstanding at December 31, 2014
|
371,510
|
|
|
$
|
39.34
|
|
Awards granted
|
14,000
|
|
|
70.22
|
|
|
Awards vested
|
(117,749
|
)
|
|
40.39
|
|
|
Awards forfeited/cancelled
|
(1,360
|
)
|
|
36.57
|
|
|
Changes in the number of awards expected to be delivered
|
(19,105
|
)
|
|
31.70
|
|
|
Unvested performance-based awards outstanding at December 31, 2015
|
247,296
|
|
|
$
|
41.19
|
|
14.
|
EARNINGS PER SHARE
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Numerator for common earnings per share:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
84,456
|
|
|
$
|
69,641
|
|
|
$
|
61,994
|
|
Numerator for basic and diluted earnings per share
|
|
$
|
84,456
|
|
|
$
|
69,641
|
|
|
$
|
61,994
|
|
|
|
|
|
|
|
|
||||||
Denominator for basic earnings per share:
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding
|
|
48,721
|
|
|
47,189
|
|
|
45,754
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
|
||||||
Stock options, RSUs and performance-based awards
|
|
3,265
|
|
|
2,545
|
|
|
2,604
|
|
|||
Denominator for diluted earnings per share
|
|
51,986
|
|
|
49,734
|
|
|
48,358
|
|
|||
|
|
|
|
|
|
|
||||||
Net income per share:
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
$
|
1.73
|
|
|
$
|
1.48
|
|
|
$
|
1.35
|
|
Diluted
|
|
$
|
1.62
|
|
|
$
|
1.40
|
|
|
$
|
1.28
|
|
15.
|
COMMITMENTS AND CONTINGENCIES
|
Year Ending December 31,
|
|
Operating Leases
|
||
2016
|
|
$
|
17,606
|
|
2017
|
|
13,670
|
|
|
2018
|
|
9,730
|
|
|
2019
|
|
4,657
|
|
|
2020
|
|
1,289
|
|
|
Thereafter
|
|
2,664
|
|
|
Total minimum lease payments
|
|
$
|
49,616
|
|
16.
|
FAIR VALUE MEASUREMENTS
|
|
|
As of December 2015
|
||||||||||||||
|
|
Balance
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Cash and cash equivalents
|
|
199,449
|
|
|
199,449
|
|
|
—
|
|
|
—
|
|
||||
Time deposits and restricted cash
|
|
30,419
|
|
|
—
|
|
|
30,419
|
|
|
—
|
|
||||
Employee loans
|
|
6,338
|
|
|
—
|
|
|
—
|
|
|
6,338
|
|
||||
Total assets measured at fair value
|
|
$
|
236,206
|
|
|
$
|
199,449
|
|
|
$
|
30,419
|
|
|
$
|
6,338
|
|
|
|
|
|
|
|
|
|
|
||||||||
Contingent consideration
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Performance-based equity awards
|
|
5,364
|
|
|
—
|
|
|
—
|
|
|
5,364
|
|
||||
Total liabilities measured at fair value
|
|
$
|
5,364
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,364
|
|
|
|
As of December 2014
|
||||||||||||||
|
|
Balance
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Cash and cash equivalents
|
|
220,534
|
|
|
220,534
|
|
|
—
|
|
|
—
|
|
||||
Time deposits and restricted cash
|
|
156
|
|
|
—
|
|
|
156
|
|
|
—
|
|
||||
Employee loans
|
|
6,515
|
|
|
—
|
|
|
—
|
|
|
6,515
|
|
||||
Total assets measured at fair value
|
|
$
|
227,205
|
|
|
$
|
220,534
|
|
|
$
|
156
|
|
|
$
|
6,515
|
|
|
|
|
|
|
|
|
|
|
||||||||
Contingent consideration
|
|
37,400
|
|
|
—
|
|
|
—
|
|
|
37,400
|
|
||||
Performance-based equity awards
|
|
3,223
|
|
|
—
|
|
|
—
|
|
|
3,223
|
|
||||
Total liabilities measured at fair value
|
|
$
|
40,623
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
40,623
|
|
|
|
Amount
|
||
Contractual contingent liabilities at January 1, 2014
|
|
$
|
—
|
|
Acquisition date fair value of contractual contingent liabilities — Netsoft
|
|
1,825
|
|
|
Acquisition date fair value of contractual contingent liabilities — Jointech
|
|
20,000
|
|
|
Acquisition date fair value of contractual contingent liabilities — GGA
|
|
11,400
|
|
|
Acquisition date fair value of contractual contingent liabilities — Great Fridays
|
|
1,173
|
|
|
Liability-classified stock-based awards
|
|
3,088
|
|
|
Changes in fair value of contractual contingent liabilities included in earnings
|
|
2,059
|
|
|
Changes in fair value of contractual contingent liabilities recorded against goodwill
|
|
1,366
|
|
|
Effect of net foreign currency exchange rate changes
|
|
(288
|
)
|
|
Settlements of contractual contingent liabilities
|
|
—
|
|
|
Contractual contingent liabilities at December 31, 2014
|
|
$
|
40,623
|
|
Liability-classified stock-based awards
|
|
5,148
|
|
|
Changes in fair value of contractual contingent liabilities included in earnings
|
|
4,355
|
|
|
Changes in fair value of contractual contingent liabilities recorded against goodwill
|
|
—
|
|
|
Effect of net foreign currency exchange rate changes
|
|
246
|
|
|
Settlements of contractual contingent liabilities
|
|
(45,008
|
)
|
|
Contractual contingent liabilities at December 31, 2015
|
|
$
|
5,364
|
|
17.
|
OPERATING SEGMENTS
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Total segment revenues:
|
|
|
|
|
|
|
||||||
North America
|
|
$
|
471,603
|
|
|
$
|
374,509
|
|
|
$
|
284,636
|
|
Europe
|
|
400,460
|
|
|
299,279
|
|
|
204,150
|
|
|||
Russia
|
|
37,992
|
|
|
50,663
|
|
|
55,764
|
|
|||
Other
|
|
4,911
|
|
|
5,552
|
|
|
10,493
|
|
|||
Total segment revenues
|
|
$
|
914,966
|
|
|
$
|
730,003
|
|
|
$
|
555,043
|
|
Segment operating profit:
|
|
|
|
|
|
|
||||||
North America
|
|
$
|
112,312
|
|
|
$
|
90,616
|
|
|
$
|
66,814
|
|
Europe
|
|
68,717
|
|
|
50,189
|
|
|
34,573
|
|
|||
Russia
|
|
5,198
|
|
|
7,034
|
|
|
7,077
|
|
|||
Other
|
|
(94
|
)
|
|
(3,220
|
)
|
|
844
|
|
|||
Total segment operating profit
|
|
$
|
186,133
|
|
|
$
|
144,619
|
|
|
$
|
109,308
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Total segment revenues
|
|
$
|
914,966
|
|
|
$
|
730,003
|
|
|
$
|
555,043
|
|
Unallocated (revenue)/loss
|
|
(838
|
)
|
|
24
|
|
|
74
|
|
|||
Revenues
|
|
$
|
914,128
|
|
|
$
|
730,027
|
|
|
$
|
555,117
|
|
|
|
|
|
|
|
|
||||||
Total segment operating profit:
|
|
$
|
186,133
|
|
|
$
|
144,619
|
|
|
$
|
109,308
|
|
Unallocated amounts:
|
|
|
|
|
|
|
||||||
Other (revenues)/loss
|
|
(838
|
)
|
|
24
|
|
|
74
|
|
|||
Stock-based compensation expense
|
|
(45,833
|
)
|
|
(24,620
|
)
|
|
(13,150
|
)
|
|||
Non-corporate taxes
|
|
(4,274
|
)
|
|
(6,882
|
)
|
|
(3,201
|
)
|
|||
Professional fees
|
|
(7,104
|
)
|
|
(5,312
|
)
|
|
(3,651
|
)
|
|||
Depreciation and amortization
|
|
(5,581
|
)
|
|
(7,988
|
)
|
|
(2,829
|
)
|
|||
Bank charges
|
|
(1,352
|
)
|
|
(1,049
|
)
|
|
(1,194
|
)
|
|||
One-time charges
|
|
(747
|
)
|
|
(5,983
|
)
|
|
—
|
|
|||
Provision for bad debts
|
|
—
|
|
|
—
|
|
|
(36
|
)
|
|||
Other corporate expenses
|
|
(14,437
|
)
|
|
(6,626
|
)
|
|
(8,828
|
)
|
|||
Income from operations
|
|
105,967
|
|
|
86,183
|
|
|
76,493
|
|
|||
Interest and other income, net
|
|
4,731
|
|
|
4,769
|
|
|
3,077
|
|
|||
Change in fair value of contingent consideration
|
|
—
|
|
|
(1,924
|
)
|
|
—
|
|
|||
Foreign exchange loss
|
|
(4,628
|
)
|
|
(2,075
|
)
|
|
(2,800
|
)
|
|||
Income before provision for income taxes
|
|
$
|
106,070
|
|
|
$
|
86,953
|
|
|
$
|
76,770
|
|
|
December 31,
2015 |
|
December 31,
2014 |
||||
Belarus
|
$
|
44,879
|
|
|
$
|
41,652
|
|
Ukraine
|
4,487
|
|
|
4,392
|
|
||
Hungary
|
2,485
|
|
|
2,773
|
|
||
Russia
|
2,084
|
|
|
2,196
|
|
||
United States
|
1,969
|
|
|
2,001
|
|
||
India
|
1,099
|
|
|
—
|
|
||
Poland
|
1,088
|
|
|
747
|
|
||
Other
|
2,408
|
|
|
1,373
|
|
||
Total
|
$
|
60,499
|
|
|
$
|
55,134
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
United States
|
|
$
|
427,433
|
|
|
$
|
318,304
|
|
|
$
|
247,979
|
|
United Kingdom
|
|
164,301
|
|
|
141,366
|
|
|
108,892
|
|
|||
Switzerland
|
|
111,353
|
|
|
87,111
|
|
|
51,941
|
|
|||
Canada
|
|
57,643
|
|
|
49,193
|
|
|
33,759
|
|
|||
Russia
|
|
36,506
|
|
|
48,945
|
|
|
53,328
|
|
|||
Germany
|
|
36,089
|
|
|
25,740
|
|
|
20,261
|
|
|||
Hong Kong
|
|
23,117
|
|
|
13,445
|
|
|
—
|
|
|||
Sweden
|
|
10,589
|
|
|
7,892
|
|
|
5,742
|
|
|||
Netherlands
|
|
9,989
|
|
|
8,838
|
|
|
7,719
|
|
|||
Belgium
|
|
7,916
|
|
|
4,198
|
|
|
—
|
|
|||
Ireland
|
|
5,437
|
|
|
3,667
|
|
|
291
|
|
|||
Kazakhstan
|
|
4,910
|
|
|
5,238
|
|
|
9,886
|
|
|||
Other locations
|
|
9,334
|
|
|
7,680
|
|
|
7,693
|
|
|||
Reimbursable expenses and other revenues
|
|
9,511
|
|
|
8,410
|
|
|
7,626
|
|
|||
Revenues
|
|
$
|
914,128
|
|
|
$
|
730,027
|
|
|
$
|
555,117
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Software development
|
|
$
|
644,732
|
|
|
$
|
504,590
|
|
|
$
|
374,426
|
|
Application testing services
|
|
174,259
|
|
|
140,363
|
|
|
109,222
|
|
|||
Application maintenance and support
|
|
70,551
|
|
|
58,840
|
|
|
45,971
|
|
|||
Infrastructure services
|
|
11,311
|
|
|
14,198
|
|
|
14,433
|
|
|||
Licensing
|
|
3,764
|
|
|
3,626
|
|
|
3,439
|
|
|||
Reimbursable expenses and other revenues
|
|
9,511
|
|
|
8,410
|
|
|
7,626
|
|
|||
Revenues
|
|
$
|
914,128
|
|
|
$
|
730,027
|
|
|
$
|
555,117
|
|
18.
|
QUARTERLY FINANCIAL DATA (UNAUDITED)
|
|
|
Three Months Ended
|
||||||||||||||||||
2015
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
Full Year
|
||||||||||
Revenues
|
|
$
|
200,045
|
|
|
$
|
217,781
|
|
|
$
|
236,049
|
|
|
$
|
260,253
|
|
|
$
|
914,128
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of revenues (exclusive of depreciation and amortization)
|
|
125,887
|
|
|
134,256
|
|
|
148,479
|
|
|
158,291
|
|
|
566,913
|
|
|||||
Selling, general and administrative expenses
|
|
46,938
|
|
|
55,976
|
|
|
55,431
|
|
|
64,414
|
|
|
222,759
|
|
|||||
Depreciation and amortization expense
|
|
4,200
|
|
|
3,903
|
|
|
4,393
|
|
|
4,899
|
|
|
17,395
|
|
|||||
Goodwill impairment loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other operating (income)/expenses, net
|
|
200
|
|
|
40
|
|
|
(30
|
)
|
|
884
|
|
|
1,094
|
|
|||||
Income from operations
|
|
22,820
|
|
|
23,606
|
|
|
27,776
|
|
|
31,765
|
|
|
105,967
|
|
|||||
Interest and other income, net
|
|
1,158
|
|
|
1,299
|
|
|
865
|
|
|
1,409
|
|
|
4,731
|
|
|||||
Change in fair value of contingent consideration
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Foreign exchange (loss)/income
|
|
(5,754
|
)
|
|
(465
|
)
|
|
32
|
|
|
1,559
|
|
|
(4,628
|
)
|
|||||
Income before provision for income taxes
|
|
18,224
|
|
|
24,440
|
|
|
28,673
|
|
|
34,733
|
|
|
106,070
|
|
|||||
Provision for income taxes
|
|
3,510
|
|
|
5,209
|
|
|
5,800
|
|
|
7,095
|
|
|
21,614
|
|
|||||
Net income
|
|
$
|
14,714
|
|
|
$
|
19,231
|
|
|
$
|
22,873
|
|
|
$
|
27,638
|
|
|
$
|
84,456
|
|
Comprehensive income
|
|
$
|
11,984
|
|
|
$
|
22,905
|
|
|
$
|
14,532
|
|
|
$
|
21,939
|
|
|
$
|
71,360
|
|
Basic net income per share
(1)
|
|
$
|
0.31
|
|
|
$
|
0.40
|
|
|
$
|
0.47
|
|
|
$
|
0.56
|
|
|
$
|
1.73
|
|
Diluted net income per share
(1)
|
|
$
|
0.29
|
|
|
$
|
0.37
|
|
|
$
|
0.44
|
|
|
$
|
0.52
|
|
|
$
|
1.62
|
|
(1)
|
Earnings per share amounts for each quarter may not necessarily total to the yearly earnings per share due to the weighting of shares outstanding on a quarterly and year to date basis.
|
|
|
Three Months Ended
|
||||||||||||||||||
2014
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
Full Year
|
||||||||||
Revenues
|
|
$
|
160,384
|
|
|
$
|
174,695
|
|
|
$
|
192,764
|
|
|
$
|
202,184
|
|
|
$
|
730,027
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of revenues (exclusive of depreciation and amortization)
|
|
102,454
|
|
|
110,102
|
|
|
122,509
|
|
|
121,465
|
|
|
456,530
|
|
|||||
Selling, general and administrative expenses
|
|
32,359
|
|
|
38,671
|
|
|
42,875
|
|
|
49,761
|
|
|
163,666
|
|
|||||
Depreciation and amortization expense
|
|
3,689
|
|
|
5,451
|
|
|
5,510
|
|
|
2,833
|
|
|
17,483
|
|
|||||
Goodwill impairment loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,241
|
|
|
2,241
|
|
|||||
Other operating (income)/expenses, net
|
|
25
|
|
|
1,995
|
|
|
35
|
|
|
1,869
|
|
|
3,924
|
|
|||||
Income from operations
|
|
21,857
|
|
|
18,476
|
|
|
21,835
|
|
|
24,015
|
|
|
86,183
|
|
|||||
Interest and other income, net
|
|
976
|
|
|
1,164
|
|
|
1,261
|
|
|
1,368
|
|
|
4,769
|
|
|||||
Change in fair value of contingent consideration
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,924
|
)
|
|
(1,924
|
)
|
|||||
Foreign exchange (loss)/income
|
|
(1,241
|
)
|
|
(1,239
|
)
|
|
(718
|
)
|
|
1,123
|
|
|
(2,075
|
)
|
|||||
Income before provision for income taxes
|
|
21,592
|
|
|
18,401
|
|
|
22,378
|
|
|
24,582
|
|
|
86,953
|
|
|||||
Provision for income taxes
|
|
4,228
|
|
|
3,587
|
|
|
3,338
|
|
|
6,159
|
|
|
17,312
|
|
|||||
Net income
|
|
$
|
17,364
|
|
|
$
|
14,814
|
|
|
$
|
19,040
|
|
|
$
|
18,423
|
|
|
$
|
69,641
|
|
Comprehensive income
|
|
$
|
13,787
|
|
|
$
|
17,708
|
|
|
$
|
10,780
|
|
|
$
|
7,115
|
|
|
$
|
49,390
|
|
Basic net income per share
(1)
|
|
$
|
0.37
|
|
|
$
|
0.31
|
|
|
$
|
0.40
|
|
|
$
|
0.39
|
|
|
$
|
1.48
|
|
Diluted net income per share
(1)
|
|
$
|
0.35
|
|
|
$
|
0.30
|
|
|
$
|
0.38
|
|
|
$
|
0.37
|
|
|
$
|
1.40
|
|
(1)
|
Earnings per share amounts for each quarter may not necessarily total to the yearly earnings per share due to the weighting of shares outstanding on a quarterly and year to date basis.
|
|
EPAM SYSTEMS, INC.
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
|
|
|
Participant
|
|
EPAM SYSTEMS, INC.
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
|
|
|
Participant
|
|
EPAM SYSTEMS, INC.
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
|
|
|
Participant
|
|
EPAM SYSTEMS, INC.
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
|
|
|
Participant
|
Entity
|
Type
|
Danika Limited
|
Cyprus
|
EPAM Corporate Information Systems
|
Belarus
|
EPAM Solutions (Novaya Vest Moscow), Ltd.
|
Russia
|
EPAM Solutions, LLC
|
Ukraine
|
EPAM Systems ApS
|
Denmark
|
EPAM Systems Canada, Ltd.
|
Canada
|
EPAM Systems (Cyprus) Limited
|
Cyprus
|
EPAM Systems GmbH
|
Germany
|
EPAM Systems GmbH
|
Switzerland
|
EPAM Systems, Inc.
|
Delaware Corp. USA
|
EPAM Systems Kft
|
Hungary
|
EPAM Systems, LLC
|
New Jersey LLC USA
|
EPAM Systems Ltd.
|
U.K.
|
EPAM Systems Nordic AB
|
Sweden
|
EPAM Systems OOO
|
Russia
|
EPAM Systems OOO
|
Ukraine
|
EPAM Systems PLLC
|
Belarus
|
EPAM Systems (Poland) sp. z o.o.
|
Poland
|
EPAM Systems PTE Ltd.
|
Singapore
|
EPAM Systems SARL
|
Luxembourg
|
EPAM Systems SRL
|
Moldova
|
TOO EPAM Kazakhstan
|
Kazakhstan
|
TOO Plus Micro Kazakhstan LP
|
Kazakhstan
|
Vested Development, Inc.
|
Delaware Corp. USA
|
EPAM Systems (Hong Kong) Limited
|
Hong Kong
|
EPAM Systems Netherlands B.V.
|
Netherlands
|
EPAM Systems (Australia) Pty. Ltd.
|
Australia
|
EPAM Systems Bulgaria EOOD
|
Bulgaria
|
EPAM Sistemos
|
Lithuania
|
EPAM Systems (Czech Republic) s.r.o.
|
Czech Republic
|
EPAM Systems Romania
|
Romania
|
EPAM Systems (Asia) Limited
|
Hong Kong
|
EPAM Systems (Shenzhen) Co. Ltd.
|
China
|
Jointech Software Pte. Ltd.
|
Singapore
|
EPAM Systems Armenia
|
Armenia
|
EPAM Systems (Ireland) Limited
|
Ireland
|
Great Fridays Limited
|
UK
|
Great Fridays Inc.
|
Delaware Corp USA
|
Design Advocates Limited
|
UK
|
Dekode Limited
|
UK
|
EPAM Systems (Malaysia) S.D.N.B.H.D.
|
Malaysia
|
EPAM Systems (Mexico) SrL
|
Mexico
|
EPAM Systems Austria GmbH
|
Austria
|
Navigation Arts, Inc.
|
Delaware Corp USA
|
1.
|
I have reviewed this annual report on Form 10-K of EPAM Systems, Inc.;
|
2.
|
Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: February 22, 2016
|
|
/s/ Arkadiy Dobkin
|
Arkadiy Dobkin
|
Chief Executive Officer and President (principal executive officer)
|
1.
|
I have reviewed this annual report on Form 10-K of EPAM Systems, Inc.;
|
2.
|
Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Anthony J. Conte
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Anthony J. Conte
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Senior Vice President, Chief Financial Officer and Treasurer
(principal financial officer and principal accounting officer)
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of EPAM Systems, Inc.
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/s/ Arkadiy Dobkin
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Arkadiy Dobkin
|
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Chairman, Chief Executive Officer and President
(principal executive officer)
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of EPAM Systems, Inc.
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/s/ Anthony J. Conte
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|
Anthony J. Conte
|
|
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Senior Vice President, Chief Financial Officer and Treasurer
(principal financial officer and principal accounting officer)
|
|