|
x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
223536104
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
Title of each class
|
|
Name of each exchange on which registered
|
Common Stock, par value $0.001 per share
|
|
New York Stock Exchange
|
Large accelerated filer
|
|
x
|
|
Accelerated filer
|
|
¨
|
Non-accelerated filer
|
|
¨
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
|
¨
|
|
|
|
|
Emerging growth company
|
|
¨
|
|
|
Page
|
•
|
recruiting, training and retaining sufficiently skilled professionals and management personnel;
|
•
|
adhering to and further improving our high-quality process execution standards and maintaining high levels of customer satisfaction;
|
•
|
managing a larger number of customers in a greater number of industries and locations;
|
•
|
maintaining effective oversight of personnel and delivery centers;
|
•
|
coordinating effectively across geographies and business units to execute our strategic plan; and
|
•
|
developing and improving our internal administrative, operational and financial infrastructure.
|
•
|
foreign exchange fluctuations;
|
•
|
application and imposition of protective legislation and regulations relating to import or export, including tariffs, quotas and other trade protection measures;
|
•
|
difficulties in enforcing intellectual property and/or contractual rights;
|
•
|
complying with a wide variety of foreign laws;
|
•
|
potentially adverse tax consequences;
|
•
|
competition from companies with more experience in a particular country or with international operations; and
|
•
|
overall foreign policy and variability of foreign economic conditions.
|
•
|
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 related spending;
|
•
|
change in outsourcing strategy resulting in moving more work to the customer’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 on-site, off-site and offshore staffing;
|
•
|
maintaining productivity levels and implementing necessary process improvements; and
|
•
|
controlling costs.
|
•
|
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 customers’ 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;
|
•
|
we may find it difficult or costly to update our software and services to keep pace with evolving industry standards, methodologies, regulatory and other developments in the industries where our customers operate; and
|
•
|
we may find it difficult to maintain a high level of quality in implementing new technologies and methodologies.
|
2018
|
|
|
|
|
||||
Quarter Ended
|
|
High
|
|
Low
|
||||
December 31
|
|
$
|
139.31
|
|
|
$
|
104.77
|
|
September 30
|
|
$
|
144.19
|
|
|
$
|
115.95
|
|
June 30
|
|
$
|
131.75
|
|
|
$
|
110.20
|
|
March 31
|
|
$
|
125.88
|
|
|
$
|
102.03
|
|
2017
|
|
|
|
|
||||
Quarter Ended
|
|
High
|
|
Low
|
||||
December 31
|
|
$
|
109.07
|
|
|
$
|
86.53
|
|
September 30
|
|
$
|
88.18
|
|
|
$
|
77.96
|
|
June 30
|
|
$
|
86.98
|
|
|
$
|
73.49
|
|
March 31
|
|
$
|
76.16
|
|
|
$
|
63.32
|
|
Company/Index
|
|
Base period
12/31/2013 |
|
12/31/2014
|
|
12/31/2015
|
|
12/31/2016
|
|
12/31/2017
|
|
12/31/2018
|
||||||||||||
EPAM Systems, Inc.
|
|
$
|
100.00
|
|
|
$
|
136.66
|
|
|
$
|
225.01
|
|
|
$
|
184.06
|
|
|
$
|
307.47
|
|
|
$
|
332.03
|
|
Peer Group Index
|
|
$
|
100.00
|
|
|
$
|
107.81
|
|
|
$
|
133.69
|
|
|
$
|
125.16
|
|
|
$
|
169.91
|
|
|
$
|
146.00
|
|
S&P 500 Index
|
|
$
|
100.00
|
|
|
$
|
113.69
|
|
|
$
|
115.26
|
|
|
$
|
129.04
|
|
|
$
|
157.21
|
|
|
$
|
150.33
|
|
|
|
(1)
|
Graph assumes $100 invested on December 31, 2013, in our common stock, the S&P 500 Index, and the Peer Group.
|
(2)
|
Cumulative total return assumes reinvestment of dividends.
|
(3)
|
The Peer Group includes Cognizant Technology Solutions Corp. (NASDAQ:CTSH), ExlService Holdings, Inc (NASDAQ:EXLS), Globant (NASDAQ:GLOB), Infosys Ltd (NYSE:INFY), Luxoft Holding, Inc (NASDAQ:LXFT), Virtusa Corporation (NASDAQ:VRTU), and Wipro Limited (NYSE:WIT).
|
Period
|
|
Total Number of
Shares Purchased |
|
Average Price
Paid Per Share |
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Dollar Amount of Shares That May Yet Be Purchased Under the Program |
|||||
March 1, 2018 to March 31, 2018
|
|
61,950
|
|
|
$
|
112.78
|
|
|
—
|
|
|
—
|
|
April 1, 2018 to April 30, 2018
|
|
1,760
|
|
|
$
|
114.03
|
|
|
—
|
|
|
—
|
|
May 1, 2018 to May 31, 2018
|
|
50
|
|
|
$
|
129.72
|
|
|
—
|
|
|
—
|
|
June 1, 2018 to June 30, 2018
|
|
132
|
|
|
$
|
124.50
|
|
|
—
|
|
|
—
|
|
July 1, 2018 to July 30, 2018
|
|
2,579
|
|
|
$
|
129.82
|
|
|
—
|
|
|
—
|
|
August 1, 2018 to August 31, 2018
|
|
104
|
|
|
$
|
140.54
|
|
|
—
|
|
|
—
|
|
October 1, 2018 to October 30, 2018
|
|
439
|
|
|
$
|
122.17
|
|
|
—
|
|
|
—
|
|
November 1, 2018 to November 30, 2018
|
|
421
|
|
|
$
|
125.32
|
|
|
—
|
|
|
—
|
|
December 1, 2018 to December 30, 2018
|
|
3,899
|
|
|
$
|
119.25
|
|
|
—
|
|
|
—
|
|
Total
|
|
71,334
|
|
|
$
|
113.99
|
|
|
—
|
|
|
—
|
|
|
Year Ended December 31
,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
(in
thousands, except per share data)
|
||||||||||||||||||
Consolidated Statements of Income Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
1,842,912
|
|
|
$
|
1,450,448
|
|
|
$
|
1,160,132
|
|
|
$
|
914,128
|
|
|
$
|
730,027
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cost of revenues (exclusive of depreciation and amortization)
|
1,186,921
|
|
|
921,352
|
|
|
737,186
|
|
|
566,913
|
|
|
456,530
|
|
|||||
Selling, general and administrative expenses
|
373,587
|
|
|
327,588
|
|
|
265,863
|
|
|
223,853
|
|
|
167,590
|
|
|||||
Depreciation and amortization expense
|
36,640
|
|
|
28,562
|
|
|
23,387
|
|
|
17,395
|
|
|
17,483
|
|
|||||
Goodwill impairment loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,241
|
|
|||||
Income from operations
|
245,764
|
|
|
172,946
|
|
|
133,696
|
|
|
105,967
|
|
|
86,183
|
|
|||||
Interest and other income, net
|
3,522
|
|
|
4,601
|
|
|
4,848
|
|
|
4,731
|
|
|
2,845
|
|
|||||
Foreign exchange gain/(loss)
|
487
|
|
|
(3,242
|
)
|
|
(12,078
|
)
|
|
(4,628
|
)
|
|
(2,075
|
)
|
|||||
Income before provision for income taxes
|
249,773
|
|
|
174,305
|
|
|
126,466
|
|
|
106,070
|
|
|
86,953
|
|
|||||
Provision for income taxes
|
9,517
|
|
|
101,545
|
|
|
27,200
|
|
|
21,614
|
|
|
17,312
|
|
|||||
Net income
|
$
|
240,256
|
|
|
$
|
72,760
|
|
|
$
|
99,266
|
|
|
$
|
84,456
|
|
|
$
|
69,641
|
|
Net income per share of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
$
|
4.48
|
|
|
$
|
1.40
|
|
|
$
|
1.97
|
|
|
$
|
1.73
|
|
|
$
|
1.48
|
|
Diluted
|
$
|
4.24
|
|
|
$
|
1.32
|
|
|
$
|
1.87
|
|
|
$
|
1.62
|
|
|
$
|
1.40
|
|
Shares used in calculation of net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
53,623
|
|
|
52,077
|
|
|
50,309
|
|
|
48,721
|
|
|
47,189
|
|
|||||
Diluted
|
56,673
|
|
|
54,984
|
|
|
53,215
|
|
|
51,986
|
|
|
49,734
|
|
|
|
As of December 31
,
|
||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
|
(in
thousands)
|
||||||||||||||||||
Consolidated Balance Sheets Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
770,560
|
|
|
$
|
582,585
|
|
|
$
|
362,025
|
|
|
$
|
199,449
|
|
|
$
|
220,534
|
|
Accounts receivable, net
|
|
$
|
297,685
|
|
|
$
|
265,639
|
|
|
$
|
199,982
|
|
|
$
|
174,617
|
|
|
$
|
124,483
|
|
Unbilled revenues
|
|
$
|
104,652
|
|
|
$
|
86,500
|
|
|
$
|
63,325
|
|
|
$
|
95,808
|
|
|
$
|
55,851
|
|
Property and equipment, net
|
|
$
|
102,646
|
|
|
$
|
86,419
|
|
|
$
|
73,616
|
|
|
$
|
60,499
|
|
|
$
|
55,134
|
|
Total assets
|
|
$
|
1,611,802
|
|
|
$
|
1,250,256
|
|
|
$
|
925,811
|
|
|
$
|
778,536
|
|
|
$
|
594,026
|
|
Long-term debt
|
|
$
|
25,031
|
|
|
$
|
25,033
|
|
|
$
|
25,048
|
|
|
$
|
35,000
|
|
|
$
|
—
|
|
Total liabilities
|
|
$
|
349,206
|
|
|
$
|
275,309
|
|
|
$
|
144,399
|
|
|
$
|
165,313
|
|
|
$
|
129,976
|
|
Total stockholders’ equity
|
|
$
|
1,262,596
|
|
|
$
|
974,947
|
|
|
$
|
781,412
|
|
|
$
|
613,223
|
|
|
$
|
464,050
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
|
|
% of revenues
|
|
|
|
% of revenues
|
|
|
|
% of revenues
|
|||||||||
|
(in millions, except percentages and per share data)
|
|||||||||||||||||||
Revenues
|
$1,842.9
|
|
100.0
|
%
|
|
$1,450.4
|
|
100.0
|
%
|
|
$
|
1,160.1
|
|
|
100.0
|
%
|
||||
Income from operations
|
$
|
245.8
|
|
|
13.3
|
%
|
|
$
|
172.9
|
|
|
11.9
|
%
|
|
$
|
133.7
|
|
|
11.5
|
%
|
Net income
|
$
|
240.3
|
|
|
13.0
|
%
|
|
$
|
72.8
|
|
|
5.0
|
%
|
|
$
|
99.3
|
|
|
8.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Effective tax rate
|
3.8
|
%
|
|
|
|
58.3
|
%
|
|
|
|
21.5
|
%
|
|
|
||||||
Diluted earnings per share
|
$
|
4.24
|
|
|
|
|
$
|
1.32
|
|
|
|
|
$
|
1.87
|
|
|
|
•
|
We recorded revenues of
$1.8 billion
, or a
27.1%
increase from
$1.5 billion
in the previous year, positively impacted by
$2.0 million
or
0.2%
due to changes in certain foreign currency exchange rates as compared to the corresponding period in the previous year.
|
•
|
Income from operations grew
42.1%
to
$245.8 million
from
$172.9 million
in
2017
. Expressed as a percentage of revenues, income from operations was
13.3%
compared to
11.9%
last year. The increase as a percentage of revenues was primarily driven by an improvement in selling, general and administrative expenses as a percentage of revenues partially offset by an increase in cost of revenues as a percentage of revenues as compared to the same period last year.
|
•
|
Our effective tax rate was
3.8%
compared to
58.3%
last year. The provision for income taxes for 2018 was favorably impacted by the recognition of
$26.0 million
of net deferred tax assets resulting from the implementation of changes to our tax structure in response to U.S. tax reform. In 2017, our effective tax rate had increased principally due to the provisional
$74.6 million
charge related to U.S. Tax Reform.
|
•
|
Net income increased
230.2%
to
$240.3 million
compared to
$72.8 million
in
2017
. Expressed as a percentage of revenues, net income increased
8.0%
compared to last year, which was largely driven by the improved effective tax rate as well as the improvement in income from operations as a percentage of revenues.
|
•
|
Diluted earnings per share increased
221.2%
to
$4.24
for the year ended
December 31, 2018
from
$1.32
in
2017
.
|
•
|
Cash provided by operations increased
$99.4 million
, or
51.5%
, to
$292.2 million
during
2018
as compared to last year.
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
(in thousands, except percentages and per share data)
|
|||||||||||||||||||
Revenues
|
$
|
1,842,912
|
|
|
100.0
|
%
|
|
$
|
1,450,448
|
|
|
100.0
|
%
|
|
$
|
1,160,132
|
|
|
100.0
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of revenues (exclusive of depreciation and amortization)
(1)
|
1,186,921
|
|
|
64.4
|
|
|
921,352
|
|
|
63.5
|
|
|
737,186
|
|
|
63.6
|
|
|||
Selling, general and administrative expenses
(2)
|
373,587
|
|
|
20.3
|
|
|
327,588
|
|
|
22.6
|
|
|
265,863
|
|
|
22.9
|
|
|||
Depreciation and amortization expense
|
36,640
|
|
|
2.0
|
|
|
28,562
|
|
|
2.0
|
|
|
23,387
|
|
|
2.0
|
|
|||
Income from operations
|
245,764
|
|
|
13.3
|
|
|
172,946
|
|
|
11.9
|
|
|
133,696
|
|
|
11.5
|
|
|||
Interest and other income, net
|
3,522
|
|
|
0.3
|
|
|
4,601
|
|
|
0.3
|
|
|
4,848
|
|
|
0.4
|
|
|||
Foreign exchange gain/(loss)
|
487
|
|
|
—
|
|
|
(3,242
|
)
|
|
(0.2
|
)
|
|
(12,078
|
)
|
|
(1.0
|
)
|
|||
Income before provision for income taxes
|
249,773
|
|
|
13.6
|
|
|
174,305
|
|
|
12.0
|
|
|
126,466
|
|
|
10.9
|
|
|||
Provision for income taxes
|
9,517
|
|
|
0.6
|
|
|
101,545
|
|
|
7.0
|
|
|
27,200
|
|
|
2.3
|
|
|||
Net income
|
$
|
240,256
|
|
|
13.0
|
%
|
|
$
|
72,760
|
|
|
5.0
|
%
|
|
$
|
99,266
|
|
|
8.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Effective tax rate
|
3.8
|
%
|
|
|
|
58.3
|
%
|
|
|
|
21.5
|
%
|
|
|
||||||
Diluted earnings per share
|
$
|
4.24
|
|
|
|
|
$
|
1.32
|
|
|
|
|
$
|
1.87
|
|
|
|
|
|
(1)
|
Included
$27,245
,
$20,868
and
$16,619
of stock-based compensation expense for the years ended
December 31, 2018
,
2017
and
2016
, respectively.
|
(2)
|
Included
$31,943
,
$31,539
and
$32,625
of stock-based compensation expense for the years ended
December 31, 2018
,
2017
and
2016
, respectively.
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
(in thousands, except percentages)
|
|||||||||||||||||||
Financial Services
|
$
|
423,977
|
|
|
23.0
|
%
|
|
$
|
338,899
|
|
|
23.4
|
%
|
|
$
|
295,419
|
|
|
25.5
|
%
|
Travel & Consumer
|
393,643
|
|
|
21.4
|
|
|
317,415
|
|
|
21.9
|
|
|
262,282
|
|
|
22.6
|
|
|||
Software & Hi-Tech
|
350,815
|
|
|
19.0
|
|
|
287,633
|
|
|
19.8
|
|
|
239,316
|
|
|
20.6
|
|
|||
Business Information & Media
|
324,033
|
|
|
17.6
|
|
|
256,267
|
|
|
17.7
|
|
|
176,325
|
|
|
15.2
|
|
|||
Life Sciences & Healthcare
|
171,703
|
|
|
9.3
|
|
|
120,591
|
|
|
8.3
|
|
|
105,943
|
|
|
9.1
|
|
|||
Emerging Verticals
|
178,741
|
|
|
9.7
|
|
|
129,643
|
|
|
8.9
|
|
|
80,847
|
|
|
7.0
|
|
|||
Revenues
|
$
|
1,842,912
|
|
|
100.0
|
%
|
|
$
|
1,450,448
|
|
|
100.0
|
%
|
|
$
|
1,160,132
|
|
|
100.0
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
(in thousands, except percentages)
|
|||||||||||||||||||
North America
|
$
|
1,099,167
|
|
|
59.6
|
%
|
|
$
|
840,692
|
|
|
58.0
|
%
|
|
$
|
670,581
|
|
|
57.8
|
%
|
Europe
|
612,472
|
|
|
33.2
|
|
|
511,319
|
|
|
35.2
|
|
|
417,813
|
|
|
36.0
|
|
|||
CIS
(1)
|
81,703
|
|
|
4.4
|
|
|
68,390
|
|
|
4.7
|
|
|
46,115
|
|
|
4.0
|
|
|||
APAC
(2)
|
49,570
|
|
|
2.8
|
|
|
30,047
|
|
|
2.1
|
|
|
25,623
|
|
|
2.2
|
|
|||
Revenues
|
$
|
1,842,912
|
|
|
100.0
|
%
|
|
$
|
1,450,448
|
|
|
100.0
|
%
|
|
$
|
1,160,132
|
|
|
100.0
|
%
|
|
|
(1)
|
CIS includes revenues from customers in Belarus, Kazakhstan, Russia and Ukraine.
|
(2)
|
APAC, which stands for Asia Pacific, includes revenues from customers in Southeast Asia and Australia.
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
(in thousands, except percentages)
|
|||||||||||||||||||
Top customer
|
See (1)
|
|
|
See (1)
|
|
|
See (1)
|
|
|
See (1)
|
|
|
$
|
137,599
|
|
|
11.9
|
%
|
||
Top five customers
|
$
|
410,987
|
|
|
22.3
|
%
|
|
$
|
348,219
|
|
|
24.0
|
%
|
|
$
|
329,324
|
|
|
28.4
|
%
|
Top ten customers
|
$
|
582,539
|
|
|
31.6
|
%
|
|
$
|
491,742
|
|
|
33.9
|
%
|
|
$
|
445,814
|
|
|
38.4
|
%
|
Top twenty customers
|
$
|
782,771
|
|
|
42.5
|
%
|
|
$
|
648,786
|
|
|
44.7
|
%
|
|
$
|
563,057
|
|
|
48.5
|
%
|
Customers below top twenty
|
$
|
1,060,141
|
|
|
57.5
|
%
|
|
$
|
801,662
|
|
|
55.3
|
%
|
|
$
|
597,075
|
|
|
51.5
|
%
|
|
|
(1)
|
No single customer comprises more than 10% of the Company’s revenues for the years ended
December 31, 2018
and 2017.
|
|
Year Ended December 31,
|
||||
Revenues Greater Than or Equal To
|
2018
|
|
2017
|
|
2016
|
$0.1 million
|
562
|
|
460
|
|
431
|
$0.5 million
|
375
|
|
316
|
|
266
|
$1 million
|
256
|
|
232
|
|
182
|
$5 million
|
81
|
|
63
|
|
45
|
$10 million
|
36
|
|
26
|
|
19
|
$20 million
|
14
|
|
10
|
|
7
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
(in thousands, except percentages)
|
|||||||||||||||||||
Professional services
|
1,837,148
|
|
|
99.7
|
%
|
|
1,429,781
|
|
|
98.6
|
%
|
|
1,144,470
|
|
|
98.6
|
%
|
|||
Licensing
|
4,097
|
|
|
0.2
|
|
|
3,529
|
|
|
0.2
|
|
|
3,141
|
|
|
0.3
|
|
|||
Other
|
1,667
|
|
|
0.1
|
|
|
1,147
|
|
|
0.1
|
|
|
860
|
|
|
0.1
|
|
|||
Reimbursable expenses
|
See (1)
|
|
|
See (1)
|
|
|
15,991
|
|
|
1.1
|
|
|
11,661
|
|
|
1.0
|
|
|||
Revenues
|
$
|
1,842,912
|
|
|
100.0
|
%
|
|
$
|
1,450,448
|
|
|
100.0
|
%
|
|
$
|
1,160,132
|
|
|
100.0
|
%
|
|
|
(1)
|
Following the adoption of Topic 606 on January 1, 2018, the Company includes reimbursable expenses in total contract consideration and is included in Professional services revenues. See Note
1
“Business and Summary of Significant Accounting Policies.”
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands)
|
||||||||||
Segment revenues:
|
|
|
|
|
|
||||||
North America
|
$
|
1,077,094
|
|
|
$
|
796,126
|
|
|
$
|
642,216
|
|
Europe
|
693,867
|
|
|
593,167
|
|
|
474,988
|
|
|||
Russia
|
73,148
|
|
|
62,994
|
|
|
43,611
|
|
|||
Total segment revenues
|
$
|
1,844,109
|
|
|
$
|
1,452,287
|
|
|
$
|
1,160,815
|
|
Segment operating profit:
|
|
|
|
|
|
|
|
||||
North America
|
$
|
221,846
|
|
|
$
|
169,340
|
|
|
$
|
143,021
|
|
Europe
|
115,876
|
|
|
92,080
|
|
|
67,545
|
|
|||
Russia
|
11,377
|
|
|
13,906
|
|
|
7,555
|
|
|||
Total segment operating profit
|
$
|
349,099
|
|
|
$
|
275,326
|
|
|
$
|
218,121
|
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2018
|
|
2017
|
|
Dollars
|
|
Percentage
|
|||||||
Industry Vertical
|
(in thousands, except percentages)
|
|||||||||||||
Software & Hi-Tech
|
$
|
269,067
|
|
|
$
|
211,350
|
|
|
$
|
57,717
|
|
|
27.3
|
%
|
Business Information & Media
|
251,081
|
|
|
192,117
|
|
|
58,964
|
|
|
30.7
|
%
|
|||
Travel & Consumer
|
177,913
|
|
|
148,190
|
|
|
29,723
|
|
|
20.1
|
%
|
|||
Life Sciences & Healthcare
|
151,449
|
|
|
105,857
|
|
|
45,592
|
|
|
43.1
|
%
|
|||
Financial Services
|
112,528
|
|
|
65,170
|
|
|
47,358
|
|
|
72.7
|
%
|
|||
Emerging Verticals
|
115,056
|
|
|
73,442
|
|
|
41,614
|
|
|
56.7
|
%
|
|||
Revenues
|
$
|
1,077,094
|
|
|
$
|
796,126
|
|
|
$
|
280,968
|
|
|
35.3
|
%
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2018
|
|
2017
|
|
Dollars
|
|
Percentage
|
|||||||
Industry Vertical
|
(in thousands, except percentages)
|
|||||||||||||
Financial Services
|
$
|
253,089
|
|
|
$
|
233,496
|
|
|
$
|
19,593
|
|
|
8.4
|
%
|
Travel & Consumer
|
208,445
|
|
|
160,580
|
|
|
47,865
|
|
|
29.8
|
%
|
|||
Software & Hi-Tech
|
79,121
|
|
|
70,621
|
|
|
8,500
|
|
|
12.0
|
%
|
|||
Business Information & Media
|
72,898
|
|
|
64,110
|
|
|
8,788
|
|
|
13.7
|
%
|
|||
Life Sciences & Healthcare
|
20,272
|
|
|
14,726
|
|
|
5,546
|
|
|
37.7
|
%
|
|||
Emerging Verticals
|
60,042
|
|
|
49,634
|
|
|
10,408
|
|
|
21.0
|
%
|
|||
Revenues
|
$
|
693,867
|
|
|
$
|
593,167
|
|
|
$
|
100,700
|
|
|
17.0
|
%
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2018
|
|
2017
|
|
Dollars
|
|
Percentage
|
|||||||
Industry Vertical
|
(in thousands, except percentages)
|
|||||||||||||
Financial Services
|
$
|
59,337
|
|
|
$
|
41,466
|
|
|
$
|
17,871
|
|
|
43.1
|
%
|
Travel & Consumer
|
7,467
|
|
|
9,114
|
|
|
(1,647
|
)
|
|
(18.1
|
)%
|
|||
Software & Hi-Tech
|
2,627
|
|
|
5,725
|
|
|
(3,098
|
)
|
|
(54.1
|
)%
|
|||
Business Information & Media
|
54
|
|
|
69
|
|
|
(15
|
)
|
|
(21.7
|
)%
|
|||
Life Sciences & Healthcare
|
13
|
|
|
26
|
|
|
(13
|
)
|
|
(50.0
|
)%
|
|||
Emerging Verticals
|
3,650
|
|
|
6,594
|
|
|
(2,944
|
)
|
|
(44.6
|
)%
|
|||
Revenues
|
$
|
73,148
|
|
|
$
|
62,994
|
|
|
$
|
10,154
|
|
|
16.1
|
%
|
|
For the Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands)
|
||||||||||
Consolidated Statements of Cash Flow Data:
|
|
|
|
|
|
||||||
Net cash provided by operating activities
|
$
|
292,218
|
|
|
$
|
192,820
|
|
|
$
|
167,217
|
|
Net cash used in investing activities
|
(112,123
|
)
|
|
(36,151
|
)
|
|
(9,320
|
)
|
|||
Net cash provided by financing activities
|
23,001
|
|
|
49,746
|
|
|
10,467
|
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(14,240
|
)
|
|
11,776
|
|
|
(3,387
|
)
|
|||
Net increase in cash, cash equivalents and restricted cash
|
$
|
188,856
|
|
|
$
|
218,191
|
|
|
$
|
164,977
|
|
Cash, cash equivalents and restricted cash, beginning of period
|
582,855
|
|
|
364,664
|
|
|
199,687
|
|
|||
Cash, cash equivalents and restricted cash, end of period
|
$
|
771,711
|
|
|
$
|
582,855
|
|
|
$
|
364,664
|
|
|
Total
|
|
Less than 1
Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than 5
Years
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Operating lease obligations
|
$
|
238,866
|
|
|
$
|
46,082
|
|
|
$
|
70,841
|
|
|
$
|
44,459
|
|
|
$
|
77,484
|
|
U.S. Tax Act transition tax
(1)
|
42,253
|
|
|
—
|
|
|
2,492
|
|
|
13,449
|
|
|
26,312
|
|
|||||
Long-term incentive plan payouts
(2)
|
35,148
|
|
|
12,861
|
|
|
19,916
|
|
|
2,371
|
|
|
—
|
|
|||||
Long-term debt obligations
(3)
|
29,404
|
|
|
1,309
|
|
|
2,579
|
|
|
25,516
|
|
|
—
|
|
|||||
Total contractual obligations
|
$
|
345,671
|
|
|
$
|
60,252
|
|
|
$
|
95,828
|
|
|
$
|
85,795
|
|
|
$
|
103,796
|
|
|
|
(1)
|
The U.S. Tax Act transition tax on undistributed foreign earnings is payable over eight years. See Note 7 “Income Taxes” to our consolidated financial statements.
|
(2)
|
We estimate our future obligations for long-term incentive plan payouts by assuming the closing price per share of our common stock at
December 31, 2018 remains constant into the future. This is an estimate as actual prices will vary over time.
|
(3)
|
Our future obligations related to the 2017 Credit Facility consist of principal, interest and fees for the unused balance. We assume the floating interest rate in effect at December 31, 2018 will remain constant into the future. This is an estimate, as actual rates will vary over time. In addition, for the 2017 Credit Facility, we assume that the balance outstanding and the unused balance as of December 31, 2018 remain the same through the remaining term of the agreement. The actual respective balances under our 2017 Credit Facility may fluctuate significantly in future periods depending on the business decisions of management.
|
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)
|
|
|
|
|
|
|
|
|
|
5,865,980
|
|
|
(2)
|
|||
Stock options
|
|
4,082,944
|
|
|
(3)
|
|
$
|
44.54
|
|
|
(4)
|
|
—
|
|
|
—
|
Restricted stock unit and restricted stock awards
|
|
828,288
|
|
|
(5)
|
|
$
|
—
|
|
|
—
|
|
—
|
|
|
—
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
—
|
|
|
|
Total
|
|
4,911,232
|
|
|
|
|
$
|
44.54
|
|
|
|
|
—
|
|
|
|
|
|
(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 shares available for future issuances under our stockholder approved equity compensation plans and is comprised of 5,332,128 shares available for future issuance under the 2015 Plan and 533,852 shares available for future issuances under the 2012 Directors Plan.
|
(3)
|
Represents the number of underlying shares of common stock associated with outstanding options under our stockholder approved plans and is comprised of 658,192 shares underlying options granted under our 2015 Plan; 3,148,937 shares underlying options granted under our 2012 Plan; and 275,815 shares underlying options granted under our 2006 Plan.
|
(4)
|
Represents the weighted-average exercise price of stock options outstanding under the 2015 Plan, the 2012 Plan and the 2006 Plan.
|
(5)
|
Represents the number of underlying shares of common stock associated with outstanding restricted stock units and restricted stock awards under our stockholder approved plans and is comprised of 811,700 shares underlying restricted stock units granted under our 2015 Plan; 9,875 shares underlying restricted stock units granted under our 2012 Plan; and 6,713 shares underlying restricted stock units granted under our 2012 Directors Plan.
|
|
Page
|
Index to Consolidated Financial Statements
|
F-1
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated Balance Sheets as of December 31, 2018 and 2017
|
F-4
|
Consolidated Statements of Income and Comprehensive Income for the Years Ended December 31, 2018, 2017 and 2016
|
F-5
|
Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2018, 2017 and 2016
|
F-6
|
Consolidated Statements of Cash Flows for the Years Ended December 31, 2018, 2017 and 2016
|
F-8
|
Notes to Consolidated Financial Statements for the Years Ended December 31, 2018, 2017 and 2016
|
F-10
|
Exhibit
Number
|
|
Description
|
3.1
|
|
|
3.2
|
|
|
4.1
|
|
|
10.1†
|
|
|
10.2†
|
|
|
10.3†
|
|
|
10.4†
|
|
|
10.5†
|
|
|
10.6†
|
|
|
10.7†
|
|
|
10.8†
|
|
|
10.9†
|
|
|
10.10†
|
|
|
10.11†
|
|
|
10.12†
|
|
|
10.13†
|
|
|
10.14†
|
|
|
10.15†
|
|
|
10.16†
|
|
|
10.17†
|
|
|
10.18†
|
|
|
10.19†
|
|
|
10.20†
|
|
|
10.21†
|
|
|
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 25, 2019
|
Arkadiy Dobkin
|
||||
|
|
|
|
|
/s/ Jason Peterson
|
|
Senior Vice President, Chief Financial Officer and Treasurer
(principal financial officer)
|
|
February 25, 2019
|
Jason Peterson
|
||||
|
|
|
|
|
/s/ Gary Abrahams
|
|
Vice President, Corporate Controller, Chief Accounting Officer
(principal accounting officer)
|
|
February 25, 2019
|
Gary Abrahams
|
|
|||
|
|
|
|
|
/s/ Helen Shan
|
|
Director
|
|
February 25, 2019
|
Helen Shan
|
|
|||
|
|
|
|
|
/s/ Jill B. Smart
|
|
Director
|
|
February 25, 2019
|
Jill B. Smart
|
||||
|
|
|
|
|
/s/ Karl Robb
|
|
Director
|
|
February 25, 2019
|
Karl Robb
|
||||
|
|
|
|
|
/s/ Peter Kuerpick
|
|
Director
|
|
February 25, 2019
|
Peter Kuerpick
|
||||
|
|
|
|
|
/s/ Richard Michael Mayoras
|
|
Director
|
|
February 25, 2019
|
Richard Michael Mayoras
|
||||
|
|
|
|
|
/s/ Robert E. Segert
|
|
Director
|
|
February 25, 2019
|
Robert E. Segert
|
||||
|
|
|
|
|
/s/ Ronald P. Vargo
|
|
Director
|
|
February 25, 2019
|
Ronald P. Vargo
|
|
Page
|
Audited Consolidated Financial Statements
|
|
|
|
Financial Statement Schedule:
|
|
|
As of
December 31, 2018 |
|
As of
December 31, 2017 |
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
770,560
|
|
|
$
|
582,585
|
|
Accounts receivable, net of allowance of $1,557 and $1,186, respectively
|
297,685
|
|
|
265,639
|
|
||
Unbilled revenues
|
104,652
|
|
|
86,500
|
|
||
Prepaid and other current assets
|
26,171
|
|
|
25,309
|
|
||
Total current assets
|
1,199,068
|
|
|
960,033
|
|
||
Property and equipment, net
|
102,646
|
|
|
86,419
|
|
||
Intangible assets, net
|
57,065
|
|
|
44,511
|
|
||
Goodwill
|
166,832
|
|
|
119,531
|
|
||
Deferred tax assets
|
69,983
|
|
|
24,974
|
|
||
Other noncurrent assets
|
16,208
|
|
|
14,788
|
|
||
Total assets
|
$
|
1,611,802
|
|
|
$
|
1,250,256
|
|
|
|
|
|
|
|||
Liabilities
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Accounts payable
|
$
|
7,444
|
|
|
$
|
5,574
|
|
Accrued expenses and other current liabilities
|
127,937
|
|
|
89,812
|
|
||
Due to employees
|
49,683
|
|
|
38,757
|
|
||
Deferred compensation due to employees
|
9,920
|
|
|
5,964
|
|
||
Taxes payable, current
|
67,845
|
|
|
40,860
|
|
||
Total current liabilities
|
262,829
|
|
|
180,967
|
|
||
Long-term debt
|
25,031
|
|
|
25,033
|
|
||
Taxes payable, noncurrent
|
43,685
|
|
|
59,874
|
|
||
Other noncurrent liabilities
|
17,661
|
|
|
9,435
|
|
||
Total liabilities
|
349,206
|
|
|
275,309
|
|
||
Commitments and contingencies (Note 14)
|
|
|
|
|
|
||
Stockholders’ equity
|
|
|
|
|
|
||
Common stock, $0.001 par value; 160,000,000 authorized; 54,099,927 and 53,003,420 shares issued, 54,080,192 and 52,983,685 shares outstanding at December 31, 2018 and December 31, 2017, respectively
|
54
|
|
|
53
|
|
||
Additional paid-in capital
|
544,700
|
|
|
473,874
|
|
||
Retained earnings
|
759,533
|
|
|
518,820
|
|
||
Treasury stock
|
(177
|
)
|
|
(177
|
)
|
||
Accumulated other comprehensive loss
|
(41,514
|
)
|
|
(17,623
|
)
|
||
Total stockholders’ equity
|
1,262,596
|
|
|
974,947
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,611,802
|
|
|
$
|
1,250,256
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenues
|
$
|
1,842,912
|
|
|
$
|
1,450,448
|
|
|
$
|
1,160,132
|
|
Operating expenses:
|
|
|
|
|
|
|
|||||
Cost of revenues (exclusive of depreciation and amortization)
|
1,186,921
|
|
|
921,352
|
|
|
737,186
|
|
|||
Selling, general and administrative expenses
|
373,587
|
|
|
327,588
|
|
|
265,863
|
|
|||
Depreciation and amortization expense
|
36,640
|
|
|
28,562
|
|
|
23,387
|
|
|||
Income from operations
|
245,764
|
|
|
172,946
|
|
|
133,696
|
|
|||
Interest and other income, net
|
3,522
|
|
|
4,601
|
|
|
4,848
|
|
|||
Foreign exchange gain/(loss)
|
487
|
|
|
(3,242
|
)
|
|
(12,078
|
)
|
|||
Income before provision for income taxes
|
249,773
|
|
|
174,305
|
|
|
126,466
|
|
|||
Provision for income taxes
|
9,517
|
|
|
101,545
|
|
|
27,200
|
|
|||
Net income
|
$
|
240,256
|
|
|
$
|
72,760
|
|
|
$
|
99,266
|
|
Foreign currency translation adjustments, net of tax
|
(21,338
|
)
|
|
20,065
|
|
|
(2,538
|
)
|
|||
Unrealized loss on cash-flow hedging instruments, net of tax
|
(2,553
|
)
|
|
—
|
|
|
—
|
|
|||
Comprehensive income
|
$
|
216,365
|
|
|
$
|
92,825
|
|
|
$
|
96,728
|
|
|
|
|
|
|
|
||||||
Net income per share:
|
|
|
|
|
|
|
|||||
Basic
|
$
|
4.48
|
|
|
$
|
1.40
|
|
|
$
|
1.97
|
|
Diluted
|
$
|
4.24
|
|
|
$
|
1.32
|
|
|
$
|
1.87
|
|
Shares used in calculation of net income per share:
|
|
|
|
|
|
|
|||||
Basic
|
53,623
|
|
|
52,077
|
|
|
50,309
|
|
|||
Diluted
|
56,673
|
|
|
54,984
|
|
|
53,215
|
|
|
|
||||||||||||||||||||||||||||
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Treasury Stock
|
|
Accumulated Other Comprehensive (Loss)/ Income
|
|
Total Stockholders’ Equity
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
Shares
|
|
Amount
|
|
|
|
|
||||||||||||||
Balance, January 1, 2016
|
50,166,537
|
|
|
$
|
49
|
|
|
$
|
303,363
|
|
|
$
|
345,054
|
|
|
10,507
|
|
|
$
|
(93
|
)
|
|
$
|
(35,150
|
)
|
|
$
|
613,223
|
|
Forfeiture of stock issued in connection with acquisitions
|
(9,228
|
)
|
|
—
|
|
|
84
|
|
|
—
|
|
|
9,228
|
|
|
(84
|
)
|
|
—
|
|
|
—
|
|
||||||
Stock issued under the 2012 Non-Employee Directors Compensation Plan
|
6,510
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Restricted stock units vested, net of shares withheld for employee taxes
|
38,064
|
|
|
—
|
|
|
2,069
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,069
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
46,100
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46,100
|
|
||||||
Proceeds from stock option exercises
|
895,804
|
|
|
1
|
|
|
18,027
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,028
|
|
||||||
Excess tax benefits
|
—
|
|
|
—
|
|
|
5,264
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,264
|
|
||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,538
|
)
|
|
(2,538
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
99,266
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
99,266
|
|
||||||
Balance, December 31, 2016
|
51,097,687
|
|
|
$
|
50
|
|
|
$
|
374,907
|
|
|
$
|
444,320
|
|
|
19,735
|
|
|
$
|
(177
|
)
|
|
$
|
(37,688
|
)
|
|
$
|
781,412
|
|
Restricted stock units vested
|
140,043
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Restricted stock units withheld for employee taxes
|
(43,479
|
)
|
|
—
|
|
|
(3,300
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,300
|
)
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
48,173
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48,173
|
|
||||||
Proceeds from stock option exercises
|
1,789,434
|
|
|
3
|
|
|
54,094
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54,097
|
|
||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,065
|
|
|
20,065
|
|
||||||
Cumulative effect of the adoption of ASU 2016-09
|
—
|
|
|
—
|
|
|
—
|
|
|
1,740
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,740
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
72,760
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
72,760
|
|
||||||
Balance, December 31, 2017
|
52,983,685
|
|
|
$
|
53
|
|
|
$
|
473,874
|
|
|
$
|
518,820
|
|
|
19,735
|
|
|
$
|
(177
|
)
|
|
$
|
(17,623
|
)
|
|
$
|
974,947
|
|
|
|
||||||||||||||||||||||||||||
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Treasury Stock
|
|
Accumulated Other Comprehensive (Loss)/ Income
|
|
Total Stockholders’ Equity
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
Shares
|
|
Amount
|
|
|
|
|
||||||||||||||
Balance, December 31, 2017
|
52,983,685
|
|
|
$
|
53
|
|
|
$
|
473,874
|
|
|
$
|
518,820
|
|
|
19,735
|
|
|
$
|
(177
|
)
|
|
$
|
(17,623
|
)
|
|
$
|
974,947
|
|
Restricted stock units vested
|
222,675
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Restricted stock units withheld for employee taxes
|
(71,334
|
)
|
|
—
|
|
|
(8,131
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,131
|
)
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
44,279
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44,279
|
|
||||||
Proceeds from stock option exercises
|
945,166
|
|
|
1
|
|
|
34,678
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34,679
|
|
||||||
Foreign currency translation adjustments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,338
|
)
|
|
(21,338
|
)
|
||||||
Change in unrealized gains and losses on cash flow hedges, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,553
|
)
|
|
(2,553
|
)
|
||||||
Cumulative effect of the adoption of ASU 2014-09
|
—
|
|
|
—
|
|
|
—
|
|
|
457
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
457
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
240,256
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
240,256
|
|
||||||
Balance, December 31, 2018
|
54,080,192
|
|
|
$
|
54
|
|
|
$
|
544,700
|
|
|
$
|
759,533
|
|
|
19,735
|
|
|
$
|
(177
|
)
|
|
$
|
(41,514
|
)
|
|
$
|
1,262,596
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
240,256
|
|
|
$
|
72,760
|
|
|
$
|
99,266
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization expense
|
|
36,640
|
|
|
28,562
|
|
|
23,387
|
|
|||
Bad debt expense
|
|
848
|
|
|
51
|
|
|
1,539
|
|
|||
Deferred taxes
|
|
(48,000
|
)
|
|
12,561
|
|
|
(3,304
|
)
|
|||
Stock-based compensation expense
|
|
59,188
|
|
|
52,407
|
|
|
49,244
|
|
|||
Excess tax benefit on stock-based compensation plans
|
|
—
|
|
|
—
|
|
|
(5,264
|
)
|
|||
Other
|
|
(1,712
|
)
|
|
(4,010
|
)
|
|
6,228
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
||||
(Increase)/decrease in operating assets:
|
|
|
|
|
|
|
|
|
||||
Accounts receivable
|
|
(31,005
|
)
|
|
(58,745
|
)
|
|
(30,612
|
)
|
|||
Unbilled revenues
|
|
(15,897
|
)
|
|
(22,743
|
)
|
|
34,777
|
|
|||
Prepaid expenses and other assets
|
|
(8,432
|
)
|
|
1,061
|
|
|
(2,391
|
)
|
|||
Increase/(decrease) in operating liabilities:
|
|
|
|
|
|
|
||||||
Accounts payable
|
|
(772
|
)
|
|
1,221
|
|
|
741
|
|
|||
Accrued expenses and other liabilities
|
|
41,929
|
|
|
37,282
|
|
|
(13,926
|
)
|
|||
Due to employees
|
|
1,535
|
|
|
1,933
|
|
|
5,261
|
|
|||
Taxes payable
|
|
17,640
|
|
|
70,480
|
|
|
2,271
|
|
|||
Net cash provided by operating activities
|
|
292,218
|
|
|
192,820
|
|
|
167,217
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
||||
Purchases of property and equipment
|
|
(37,574
|
)
|
|
(29,806
|
)
|
|
(29,317
|
)
|
|||
Decrease in time deposits, net
|
|
418
|
|
|
—
|
|
|
29,597
|
|
|||
Acquisition of businesses, net of cash acquired (Note 2)
|
|
(74,268
|
)
|
|
(6,810
|
)
|
|
(5,500
|
)
|
|||
Other investing activities, net
|
|
(699
|
)
|
|
465
|
|
|
(4,100
|
)
|
|||
Net cash used in investing activities
|
|
(112,123
|
)
|
|
(36,151
|
)
|
|
(9,320
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
||||
Proceeds from stock option exercises
|
|
34,845
|
|
|
53,984
|
|
|
17,996
|
|
|||
Excess tax benefit on stock-based compensation plans
|
|
—
|
|
|
—
|
|
|
5,264
|
|
|||
Payments of withholding taxes related to net share settlements of restricted stock
units
|
|
(7,747
|
)
|
|
(3,194
|
)
|
|
(539
|
)
|
|||
Proceeds from debt (Note 8)
|
|
—
|
|
|
25,000
|
|
|
20,000
|
|
|||
Repayment of debt (Note 8)
|
|
(3,494
|
)
|
|
(25,103
|
)
|
|
(30,129
|
)
|
|||
Acquisition of businesses, deferred consideration (Note 2)
|
|
—
|
|
|
—
|
|
|
(2,260
|
)
|
|||
Other financing activities, net
|
|
(603
|
)
|
|
(941
|
)
|
|
135
|
|
|||
Net cash provided by financing activities
|
|
23,001
|
|
|
49,746
|
|
|
10,467
|
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
|
(14,240
|
)
|
|
11,776
|
|
|
(3,387
|
)
|
|||
Net increase in cash, cash equivalents and restricted cash
|
|
188,856
|
|
|
218,191
|
|
|
164,977
|
|
|||
Cash, cash equivalents and restricted cash, beginning of period
|
|
582,855
|
|
|
364,664
|
|
|
199,687
|
|
|||
Cash, cash equivalents and restricted cash, end of period
|
|
$
|
771,711
|
|
|
$
|
582,855
|
|
|
$
|
364,664
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
||||||
Cash paid during the year for:
|
|
|
|
|
|
|
||||||
Income taxes
|
|
$
|
40,437
|
|
|
$
|
26,669
|
|
|
$
|
37,488
|
|
Bank interest
|
|
$
|
777
|
|
|
$
|
548
|
|
|
$
|
566
|
|
Supplemental disclosure of non-cash investing and financing activities
|
|
|
|
|
|
|
||||||
Acquisition-date fair value of contingent consideration issued for acquisition of businesses
|
|
$
|
8,390
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
As of December 31, 2018
|
|
As of
December 31,
2017
|
|
As of
December 31,
2016
|
||||||
Balance sheet classification
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
|
$
|
770,560
|
|
|
$
|
582,585
|
|
|
$
|
362,025
|
|
Restricted cash in Prepaid and other current assets
|
|
14
|
|
|
91
|
|
|
2,400
|
|
|||
Restricted cash in Other noncurrent assets
|
|
1,137
|
|
|
179
|
|
|
239
|
|
|||
Total restricted cash
|
|
1,151
|
|
|
270
|
|
|
2,639
|
|
|||
Total cash, cash equivalents and restricted cash
|
|
$
|
771,711
|
|
|
$
|
582,855
|
|
|
$
|
364,664
|
|
1.
|
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
|
Balance as of
December 31, 2017 |
|
Adjustments
Due to Topic 606 |
|
Balance as of
January 1, 2018 |
||||||
Balance Sheet
|
|
|
|
|
|
||||||
Assets
|
|
|
|
|
|
||||||
Unbilled revenues
|
$
|
86,500
|
|
|
$
|
(78
|
)
|
|
$
|
86,422
|
|
Deferred tax assets
|
$
|
24,974
|
|
|
$
|
(173
|
)
|
|
$
|
24,801
|
|
Liabilities
|
|
|
|
|
|
||||||
Accrued expenses and other current liabilities
|
$
|
89,812
|
|
|
$
|
(708
|
)
|
|
$
|
89,104
|
|
Stockholders’ equity
|
|
|
|
|
|
||||||
Retained earnings
|
$
|
518,820
|
|
|
$
|
457
|
|
|
$
|
519,277
|
|
|
As of December 31, 2018
|
||||||||||
|
As Reported
|
|
Balances Without Adoption of Topic 606
|
|
Effect of Change Higher/(Lower)
|
||||||
Balance Sheet
|
|
|
|
|
|
||||||
Liabilities
|
|
|
|
|
|
||||||
Accrued expenses and other current liabilities
|
$
|
127,937
|
|
|
$
|
127,690
|
|
|
$
|
247
|
|
Other noncurrent liabilities
|
$
|
17,661
|
|
|
$
|
17,716
|
|
|
$
|
(55
|
)
|
Stockholders’ equity
|
|
|
|
|
|
||||||
Retained earnings
|
$
|
759,533
|
|
|
$
|
759,725
|
|
|
$
|
(192
|
)
|
|
Year Ended December 31, 2018
|
||||||||||
|
As Reported
|
|
Balances Without Adoption of Topic 606
|
|
Effect of Change Higher/(Lower)
|
||||||
Income Statement
|
|
|
|
|
|
||||||
Revenues
|
$
|
1,842,912
|
|
|
$
|
1,843,159
|
|
|
$
|
(247
|
)
|
Income from operations
|
$
|
245,764
|
|
|
$
|
246,011
|
|
|
$
|
(247
|
)
|
Provision for income taxes
|
$
|
9,517
|
|
|
$
|
9,572
|
|
|
$
|
(55
|
)
|
Net income
|
$
|
240,256
|
|
|
$
|
240,448
|
|
|
$
|
(192
|
)
|
|
Year Ended December 31, 2017
|
||||||||||
|
As Originally Reported
|
|
Restated
|
|
Effect
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Prepaid expenses and other assets
|
$
|
3,605
|
|
|
$
|
1,061
|
|
|
$
|
(2,544
|
)
|
Net cash provided by operating activities
|
$
|
195,364
|
|
|
$
|
192,820
|
|
|
$
|
(2,544
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Decrease in restricted cash and time deposits, net
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
(8
|
)
|
Acquisition of businesses, net of cash acquired
|
$
|
(6,840
|
)
|
|
$
|
(6,810
|
)
|
|
$
|
30
|
|
Net cash used in investing activities
|
$
|
(36,173
|
)
|
|
$
|
(36,151
|
)
|
|
$
|
22
|
|
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
|
$
|
11,623
|
|
|
$
|
11,776
|
|
|
$
|
153
|
|
Net increase in cash, cash equivalents and restricted cash
|
$
|
220,560
|
|
|
$
|
218,191
|
|
|
$
|
(2,369
|
)
|
Cash, cash equivalents and restricted cash, beginning of period
|
362,025
|
|
|
364,664
|
|
|
2,639
|
|
|||
Cash, cash equivalents and restricted cash, end of period
|
$
|
582,585
|
|
|
$
|
582,855
|
|
|
$
|
270
|
|
|
Year Ended December 31, 2016
|
||||||||||
|
As Originally Reported
|
|
Restated
|
|
Effect
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Prepaid expenses and other assets
|
$
|
(4,791
|
)
|
|
$
|
(2,391
|
)
|
|
$
|
2,400
|
|
Net cash provided by operating activities
|
$
|
164,817
|
|
|
$
|
167,217
|
|
|
$
|
2,400
|
|
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Decrease in restricted cash and time deposits, net
|
$
|
29,595
|
|
|
$
|
29,597
|
|
|
$
|
2
|
|
Net cash used in investing activities
|
$
|
(9,322
|
)
|
|
$
|
(9,320
|
)
|
|
$
|
2
|
|
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
|
$
|
(3,386
|
)
|
|
$
|
(3,387
|
)
|
|
$
|
(1
|
)
|
Net increase in cash, cash equivalents and restricted cash
|
$
|
162,576
|
|
|
$
|
164,977
|
|
|
$
|
2,401
|
|
Cash, cash equivalents and restricted cash, beginning of period
|
199,449
|
|
|
199,687
|
|
|
238
|
|
|||
Cash, cash equivalents and restricted cash, end of period
|
$
|
362,025
|
|
|
$
|
364,664
|
|
|
$
|
2,639
|
|
2.
|
ACQUISITIONS
|
|
Continuum
|
|
Think
|
||||
|
As of
March 15, 2018
|
|
As of
November 1, 2018
|
||||
Cash and cash equivalents
|
$
|
2,251
|
|
|
$
|
2,344
|
|
Accounts receivable
|
6,676
|
|
|
2,259
|
|
||
Unbilled revenues
|
2,463
|
|
|
284
|
|
||
Prepaid and other current assets
|
936
|
|
|
609
|
|
||
Goodwill
|
26,617
|
|
|
22,482
|
|
||
Intangible assets
|
14,450
|
|
|
6,882
|
|
||
Property and equipment and other noncurrent assets
|
8,902
|
|
|
642
|
|
||
Total assets acquired
|
$
|
62,295
|
|
|
$
|
35,502
|
|
Accounts payable, accrued expenses and other current liabilities
|
$
|
2,745
|
|
|
$
|
2,205
|
|
Due to employees
|
1,001
|
|
|
13
|
|
||
Long-term debt (Note 8)
|
3,220
|
|
|
—
|
|
||
Other noncurrent liabilities
|
490
|
|
|
1,040
|
|
||
Total liabilities assumed
|
$
|
7,456
|
|
|
$
|
3,258
|
|
Net assets acquired
|
$
|
54,839
|
|
|
$
|
32,244
|
|
|
Continuum
|
|
Think
|
||||||||
|
Weighted Average Useful Life (in years)
|
|
Amount
|
|
Weighted Average Useful Life (in years)
|
|
Amount
|
||||
Customer relationships
|
6.5
|
|
$
|
5,800
|
|
|
7
|
|
$
|
6,117
|
|
Favorable lease
|
11.2
|
|
5,500
|
|
|
—
|
|
—
|
|
||
Contract royalties
|
8
|
|
1,900
|
|
|
—
|
|
—
|
|
||
Trade names
|
5
|
|
1,250
|
|
|
5
|
|
765
|
|
||
Total
|
|
|
$
|
14,450
|
|
|
|
|
$
|
6,882
|
|
|
North America
|
|
Europe
|
|
Total
|
||||||
Balance as of January 1, 2017
|
$
|
76,812
|
|
|
$
|
32,477
|
|
|
$
|
109,289
|
|
Other acquisitions
|
199
|
|
|
4,533
|
|
|
4,732
|
|
|||
Other acquisitions purchase accounting adjustments
|
(285
|
)
|
|
2,100
|
|
|
1,815
|
|
|||
Effect of currency translation
|
564
|
|
|
3,131
|
|
|
3,695
|
|
|||
Balance as of December 31, 2017
|
77,290
|
|
|
42,241
|
|
|
119,531
|
|
|||
Continuum acquisition (Note 2)
|
26,617
|
|
|
—
|
|
|
26,617
|
|
|||
Think acquisition (Note 2)
|
—
|
|
|
22,482
|
|
|
22,482
|
|
|||
Effect of currency translation
|
(365
|
)
|
|
(1,433
|
)
|
|
(1,798
|
)
|
|||
Balance as of December 31, 2018
|
$
|
103,542
|
|
|
$
|
63,290
|
|
|
$
|
166,832
|
|
|
As of December 31, 2018
|
||||||||||||
|
Weighted average life at acquisition (in years)
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net
carrying amount
|
||||||
Customer relationships
|
9.5
|
|
$
|
78,042
|
|
|
$
|
(29,580
|
)
|
|
$
|
48,462
|
|
Favorable lease
|
11.2
|
|
5,500
|
|
|
(410
|
)
|
|
5,090
|
|
|||
Trade names
|
5.3
|
|
6,111
|
|
|
(4,300
|
)
|
|
1,811
|
|
|||
Contract royalties
|
8
|
|
1,900
|
|
|
(198
|
)
|
|
1,702
|
|
|||
Total
|
|
|
$
|
91,553
|
|
|
$
|
(34,488
|
)
|
|
$
|
57,065
|
|
|
As of December 31, 2017
|
||||||||||||
|
Weighted average life at acquisition (in years)
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net
carrying amount
|
||||||
Customer relationships
|
10
|
|
$
|
66,646
|
|
|
$
|
(22,200
|
)
|
|
$
|
44,446
|
|
Trade names
|
5
|
|
4,099
|
|
|
(4,034
|
)
|
|
65
|
|
|||
Total
|
|
|
$
|
70,745
|
|
|
$
|
(26,234
|
)
|
|
$
|
44,511
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Customer relationships
|
|
$
|
7,637
|
|
|
$
|
6,643
|
|
|
$
|
6,858
|
|
Favorable lease
|
|
410
|
|
|
—
|
|
|
—
|
|
|||
Trade names
|
|
266
|
|
|
896
|
|
|
1,139
|
|
|||
Contract royalties
|
|
198
|
|
|
—
|
|
|
—
|
|
|||
Non-competition agreements
|
|
—
|
|
|
23
|
|
|
173
|
|
|||
Total
|
|
$
|
8,511
|
|
|
$
|
7,562
|
|
|
$
|
8,170
|
|
|
|
Amount
|
||
2019
|
|
$
|
9,520
|
|
2020
|
|
9,520
|
|
|
2021
|
|
9,520
|
|
|
2022
|
|
9,379
|
|
|
2023
|
|
8,153
|
|
|
Thereafter
|
|
10,973
|
|
|
Total
|
|
$
|
57,065
|
|
4.
|
PROPERTY AND EQUIPMENT, NET
|
|
|
Weighted Average Useful Life
(in years)
|
|
As of
December 31, 2018 |
|
As of
December 31, 2017 |
||||
Computer hardware
|
|
3
|
|
$
|
74,884
|
|
|
$
|
62,132
|
|
Building
|
|
49
|
|
34,458
|
|
|
34,058
|
|
||
Leasehold improvements
|
|
9
|
|
25,036
|
|
|
13,186
|
|
||
Furniture and fixtures
|
|
7
|
|
21,544
|
|
|
18,071
|
|
||
Office equipment
|
|
7
|
|
13,203
|
|
|
10,825
|
|
||
Purchased computer software
|
|
4
|
|
10,406
|
|
|
8,379
|
|
||
Land improvements
|
|
20
|
|
1,474
|
|
|
1,474
|
|
||
|
|
|
|
181,005
|
|
|
148,125
|
|
||
Less accumulated depreciation and amortization
|
|
|
|
(78,359
|
)
|
|
(61,706
|
)
|
||
Total
|
|
|
|
$
|
102,646
|
|
|
$
|
86,419
|
|
5.
|
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
|
|
|
As of
December 31, 2018 |
|
As of
December 31, 2017 |
||||
Accrued compensation expense and related costs
|
|
$
|
97,877
|
|
|
$
|
67,034
|
|
Deferred revenue
|
|
4,558
|
|
|
4,498
|
|
||
Other current liabilities and accrued expenses
|
|
25,502
|
|
|
18,280
|
|
||
Total
|
|
$
|
127,937
|
|
|
$
|
89,812
|
|
6.
|
TAXES PAYABLE
|
|
|
As of
December 31, 2018 |
|
As of
December 31, 2017 |
||||
Income taxes payable
|
|
$
|
27,538
|
|
|
$
|
9,488
|
|
Payroll, social security, and other taxes payable
|
|
20,322
|
|
|
16,696
|
|
||
Value added taxes payable
|
|
19,985
|
|
|
14,676
|
|
||
Total
|
|
$
|
67,845
|
|
|
$
|
40,860
|
|
7.
|
INCOME TAXES
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Income/(loss) before provision for income taxes:
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
44,527
|
|
|
$
|
(6,595
|
)
|
|
$
|
(9,300
|
)
|
Foreign
|
|
205,246
|
|
|
180,900
|
|
|
135,766
|
|
|||
Total
|
|
$
|
249,773
|
|
|
$
|
174,305
|
|
|
$
|
126,466
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Current
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
10,814
|
|
|
$
|
65,571
|
|
|
$
|
13,324
|
|
State
|
|
4,123
|
|
|
(204
|
)
|
|
(63
|
)
|
|||
Foreign
|
|
42,580
|
|
|
23,617
|
|
|
17,243
|
|
|||
Deferred
|
|
|
|
|
|
|
||||||
Federal
|
|
(37,785
|
)
|
|
7,235
|
|
|
(3,581
|
)
|
|||
State
|
|
(3,548
|
)
|
|
(90
|
)
|
|
312
|
|
|||
Foreign
|
|
(6,667
|
)
|
|
5,416
|
|
|
(35
|
)
|
|||
Total
|
|
$
|
9,517
|
|
|
$
|
101,545
|
|
|
$
|
27,200
|
|
•
|
The one-time transition tax on accumulated foreign subsidiary earnings not previously subject to U.S. income tax requires the Company to pay U.S. income tax at a rate of
15.5%
to the extent of foreign cash and certain other net current assets and
8.0%
on the remaining earnings. During the year ended December 31, 2017, the Company recorded a provisional income tax expense and corresponding income taxes payable of
$64,321
to be paid over the next
8
years associated with the one-time transition tax. During the year ended December 31, 2018, the Company completed its assessment and refined its estimate reducing the provisional charge by
$4,935
. The total charge for the one-time transition tax now totals
$59,386
.
|
•
|
In 2017, the Company provisionally reduced its net deferred tax assets by
$10,311
reflecting the impact of the change in the U.S. statutory tax rate from
35.0%
to
21.0%
in the periods in which the net deferred tax assets are expected to be realized as a result of the U.S. Tax Act. In 2018, the Company completed its analysis, and consequently recorded an additional charge of
$926
to further reduce its net deferred tax assets for a total charge of
$11,237
.
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Provision for income taxes at federal statutory rate
|
|
$
|
52,452
|
|
|
$
|
61,007
|
|
|
$
|
44,263
|
|
Increase/(decrease) in taxes resulting from:
|
|
|
|
|
|
|
||||||
Impact from U.S. Tax Act
|
|
(4,009
|
)
|
|
74,632
|
|
|
—
|
|
|||
Entity classification election deferred tax asset impact
|
|
(25,962
|
)
|
|
—
|
|
|
—
|
|
|||
GILTI and BEAT U.S. taxes
|
|
1,526
|
|
|
—
|
|
|
—
|
|
|||
Excess tax benefits relating to stock-based compensation
|
|
(17,370
|
)
|
|
(9,307
|
)
|
|
—
|
|
|||
Subsidiary withholding tax liability and related foreign tax credit
|
|
(4,850
|
)
|
|
4,850
|
|
|
—
|
|
|||
Foreign tax expense and tax rate differential
|
|
(88
|
)
|
|
(39,997
|
)
|
|
(33,477
|
)
|
|||
Effect of permanent differences
|
|
2,724
|
|
|
3,205
|
|
|
5,042
|
|
|||
State taxes, net of federal benefit
|
|
3,452
|
|
|
(116
|
)
|
|
1,192
|
|
|||
Change in valuation allowance
|
|
151
|
|
|
783
|
|
|
—
|
|
|||
Stock-based compensation expense
|
|
652
|
|
|
6,908
|
|
|
9,535
|
|
|||
Other
|
|
839
|
|
|
(420
|
)
|
|
645
|
|
|||
Provision for income taxes
|
|
$
|
9,517
|
|
|
$
|
101,545
|
|
|
$
|
27,200
|
|
|
|
As of
December 31, 2018 |
|
As of
December 31, 2017 |
||||
Deferred tax assets:
|
|
|
|
|
||||
Property and equipment
|
|
$
|
4,531
|
|
|
$
|
170
|
|
Intangible assets
|
|
1,262
|
|
|
1,456
|
|
||
Accrued expenses
|
|
32,067
|
|
|
4,392
|
|
||
Net operating loss carryforward
|
|
4,983
|
|
|
5,069
|
|
||
Deferred revenue
|
|
5,802
|
|
|
1,280
|
|
||
Stock-based compensation
|
|
27,558
|
|
|
16,197
|
|
||
Foreign currency exchange
|
|
5,772
|
|
|
—
|
|
||
Other assets
|
|
782
|
|
|
1,415
|
|
||
Deferred tax assets
|
|
$
|
82,757
|
|
|
$
|
29,979
|
|
Less: valuation allowance
|
|
(3,189
|
)
|
|
(924
|
)
|
||
Total deferred tax assets
|
|
$
|
79,568
|
|
|
$
|
29,055
|
|
|
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
|
||||
Property and equipment
|
|
$
|
1,480
|
|
|
$
|
1,868
|
|
Intangible assets
|
|
5,582
|
|
|
3,077
|
|
||
Accrued revenue and expenses
|
|
1,540
|
|
|
1,352
|
|
||
U.S. taxation of foreign subsidiaries
|
|
3,000
|
|
|
—
|
|
||
Subsidiary withholding tax liability
|
|
—
|
|
|
4,850
|
|
||
Stock-based compensation
|
|
—
|
|
|
1,498
|
|
||
Other liabilities
|
|
933
|
|
|
239
|
|
||
Total deferred tax liabilities
|
|
$
|
12,535
|
|
|
$
|
12,884
|
|
Net deferred tax assets
|
|
$
|
67,033
|
|
|
$
|
16,171
|
|
8.
|
LONG-TERM DEBT
|
|
As of
December 31, 2018 |
|
As of
December 31, 2017 |
||||
Outstanding debt
|
$
|
25,000
|
|
|
$
|
25,000
|
|
Interest rate
|
3.5
|
%
|
|
2.6
|
%
|
||
Irrevocable standby letters of credit
|
$
|
382
|
|
|
$
|
1,294
|
|
Available borrowing capacity
|
$
|
274,618
|
|
|
$
|
273,706
|
|
Current maximum borrowing capacity
|
$
|
300,000
|
|
|
$
|
300,000
|
|
9.
|
REVENUES
|
|
Year Ended December 31, 2018
|
|||||||||||||||||||||||
Reportable Segments
|
North America
|
|
Europe
|
|
Russia
|
|
Total Segment Revenues
|
|
Other Income Included in Segment Revenues
|
|
Consolidated Revenues
|
|||||||||||||
Customer Locations
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
North America
|
$
|
1,046,333
|
|
|
$
|
52,859
|
|
|
$
|
75
|
|
|
$
|
1,099,267
|
|
|
$
|
(100
|
)
|
—
|
|
$
|
1,099,167
|
|
Europe
|
16,693
|
|
|
596,559
|
|
|
52
|
|
|
613,304
|
|
|
(832
|
)
|
—
|
|
612,472
|
|
||||||
CIS
|
8,437
|
|
|
336
|
|
|
72,930
|
|
|
81,703
|
|
|
—
|
|
—
|
|
81,703
|
|
||||||
APAC
|
5,631
|
|
|
44,113
|
|
|
91
|
|
|
49,835
|
|
|
(265
|
)
|
—
|
|
49,570
|
|
||||||
Revenues
|
$
|
1,077,094
|
|
|
$
|
693,867
|
|
|
$
|
73,148
|
|
|
$
|
1,844,109
|
|
|
$
|
(1,197
|
)
|
|
$
|
1,842,912
|
|
|
Year Ended December 31, 2018
|
||||||||||||||||||||||
Reportable Segments
|
North America
|
|
Europe
|
|
Russia
|
|
Total Segment Revenues
|
|
Other Income Included in Segment Revenues
|
|
Consolidated Revenues
|
||||||||||||
Industry Verticals
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Financial Services
|
$
|
112,528
|
|
|
$
|
253,089
|
|
|
$
|
59,337
|
|
|
$
|
424,954
|
|
|
$
|
(977
|
)
|
|
$
|
423,977
|
|
Travel & Consumer
|
177,913
|
|
|
208,445
|
|
|
7,467
|
|
|
393,825
|
|
|
(182
|
)
|
|
393,643
|
|
||||||
Software & Hi-Tech
|
269,067
|
|
|
79,121
|
|
|
2,627
|
|
|
350,815
|
|
|
—
|
|
|
350,815
|
|
||||||
Business Information & Media
|
251,081
|
|
|
72,898
|
|
|
54
|
|
|
324,033
|
|
|
—
|
|
|
324,033
|
|
||||||
Life Sciences & Healthcare
|
151,449
|
|
|
20,272
|
|
|
13
|
|
|
171,734
|
|
|
(31
|
)
|
|
171,703
|
|
||||||
Emerging Verticals
|
115,056
|
|
|
60,042
|
|
|
3,650
|
|
|
178,748
|
|
|
(7
|
)
|
|
178,741
|
|
||||||
Revenues
|
$
|
1,077,094
|
|
|
$
|
693,867
|
|
|
$
|
73,148
|
|
|
$
|
1,844,109
|
|
|
$
|
(1,197
|
)
|
|
$
|
1,842,912
|
|
|
Year Ended December 31, 2018
|
||||||||||||||||||||||
Reportable Segments
|
North America
|
|
Europe
|
|
Russia
|
|
Total Segment Revenues
|
|
Other Income Included in Segment Revenues
|
|
Consolidated Revenues
|
||||||||||||
Contract Types
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Time-and-material
|
$
|
983,433
|
|
|
$
|
628,710
|
|
|
$
|
40,754
|
|
|
$
|
1,652,897
|
|
|
$
|
—
|
|
|
$
|
1,652,897
|
|
Fixed-price
|
89,831
|
|
|
62,078
|
|
|
32,342
|
|
|
184,251
|
|
|
—
|
|
|
184,251
|
|
||||||
Licensing
|
2,748
|
|
|
1,332
|
|
|
17
|
|
|
4,097
|
|
|
—
|
|
|
4,097
|
|
||||||
Other revenues
|
1,082
|
|
|
1,747
|
|
|
35
|
|
|
2,864
|
|
|
(1,197
|
)
|
|
1,667
|
|
||||||
Revenues
|
$
|
1,077,094
|
|
|
$
|
693,867
|
|
|
$
|
73,148
|
|
|
$
|
1,844,109
|
|
|
$
|
(1,197
|
)
|
|
$
|
1,842,912
|
|
|
Year Ended December 31, 2018
|
||||||||||||||||||||||
Reportable Segments
|
North America
|
|
Europe
|
|
Russia
|
|
Total Segment Revenues
|
|
Other Income Included in Segment Revenues
|
|
Consolidated Revenues
|
||||||||||||
Timing of Revenue Recognition
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Transferred over time
|
$
|
1,076,083
|
|
|
$
|
692,024
|
|
|
$
|
73,135
|
|
|
$
|
1,841,242
|
|
|
$
|
—
|
|
|
$
|
1,841,242
|
|
Transferred at a point of time
|
1,011
|
|
|
1,843
|
|
|
13
|
|
|
2,867
|
|
|
(1,197
|
)
|
|
1,670
|
|
||||||
Revenues
|
$
|
1,077,094
|
|
|
$
|
693,867
|
|
|
$
|
73,148
|
|
|
$
|
1,844,109
|
|
|
$
|
(1,197
|
)
|
|
$
|
1,842,912
|
|
|
Less than 1 year
|
|
1 Year
|
|
2 Years
|
|
3 Years
|
|
Total
|
||||||||||
Contract Type
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-price
|
$
|
7,202
|
|
|
$
|
402
|
|
|
$
|
56
|
|
|
$
|
—
|
|
|
$
|
7,660
|
|
|
As of
December 31, 2018 |
|
As of
January 1,
2018
|
||||
Contract assets included in Unbilled revenues
|
$
|
13,522
|
|
|
$
|
7,901
|
|
Contract liabilities included in Accrued expenses and other current liabilities
|
$
|
4,558
|
|
|
$
|
4,498
|
|
Contract liabilities included in Other noncurrent liabilities
|
$
|
224
|
|
|
$
|
—
|
|
10.
|
DERIVATIVE FINANCIAL INSTRUMENTS
|
|
|
|
|
As of December 31, 2018
|
|
As of December 31, 2017
|
||||||||||||
|
|
Balance Sheet Classification
|
|
Asset Derivatives
|
|
Liability Derivatives
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||
Foreign exchange forward contracts -
Designated as hedging instruments
|
|
Prepaid and other current assets
|
|
$
|
181
|
|
|
|
|
$
|
—
|
|
|
|
||||
|
|
Accrued expenses and other current liabilities
|
|
|
|
$
|
3,475
|
|
|
|
|
$
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange forward contracts -
Not designated as hedging instruments
|
|
Prepaid and other current assets
|
|
$
|
—
|
|
|
|
|
$
|
114
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Foreign exchange forward contracts - Designated as hedging instruments:
|
|
|
|
|
|
||||||
Change in fair value recognized in Accumulated other comprehensive loss
|
$
|
(3,294
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Net loss reclassified from Accumulated other comprehensive loss into Cost of revenues (exclusive of depreciation and amortization)
|
$
|
(4,161
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign exchange forward contracts - Not designated as hedging instruments:
|
|
|
|
|
|
||||||
Net gain recognized in Foreign exchange gain/(loss)
|
$
|
44
|
|
|
$
|
425
|
|
|
$
|
92
|
|
11.
|
FAIR VALUE MEASUREMENTS
|
|
|
As of December 31, 2018
|
||||||||||||||
|
|
Balance
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Foreign exchange derivative assets
|
|
$
|
181
|
|
|
$
|
—
|
|
|
$
|
181
|
|
|
$
|
—
|
|
Total assets measured at fair value on a recurring basis
|
|
$
|
181
|
|
|
$
|
—
|
|
|
$
|
181
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange derivative liabilities
|
|
$
|
3,475
|
|
|
$
|
—
|
|
|
$
|
3,475
|
|
|
$
|
—
|
|
Contingent consideration
|
|
7,468
|
|
|
—
|
|
|
—
|
|
|
7,468
|
|
||||
Total liabilities measured at fair value on a recurring basis
|
|
$
|
10,943
|
|
|
$
|
—
|
|
|
$
|
3,475
|
|
|
$
|
7,468
|
|
|
|
Amount
|
||
Contractual contingent liabilities as of January 1, 2016
|
|
$
|
5,364
|
|
Acquisition date fair value of contractual contingent liabilities — other acquisitions
|
|
800
|
|
|
Liability-classified stock-based awards
|
|
5,148
|
|
|
Changes in fair value of contractual contingent liabilities included in Selling, general and administrative
expenses
|
|
1,232
|
|
|
Changes in fair value of contractual contingent liabilities recorded against goodwill
|
|
200
|
|
|
Settlements of contractual contingent liabilities
|
|
(8,955
|
)
|
|
Reclassification of contractual contingent liabilities out of Level 3
|
|
(3,789
|
)
|
|
Contractual contingent liabilities as of December 31, 2016
|
|
$
|
—
|
|
|
|
Amount
|
||
Contractual contingent liabilities as of December 31, 2017
|
|
$
|
—
|
|
Acquisition date fair value of contingent consideration — Continuum acquisition (Note 2)
|
|
2,400
|
|
|
Acquisition date fair value of contingent consideration — Think acquisition (Note 2)
|
|
5,990
|
|
|
Changes in fair value of contingent consideration included in Interest and other income, net (Note 2)
|
|
(900
|
)
|
|
Effect of net foreign currency exchange rate changes
|
|
(22
|
)
|
|
Contractual contingent liabilities as of December 31, 2018
|
|
$
|
7,468
|
|
•
|
for financial instruments that have quoted market prices, those quoted prices are used to estimate fair value;
|
•
|
for financial instruments for which no quoted market prices are available, fair value is estimated using information obtained from independent third parties, or by discounting the expected cash flows using an estimated current market interest rate for the financial instrument;
|
•
|
for financial instruments for which no quoted market prices are available and that have no defined maturity, have a remaining maturity of 360 days or less, or reprice frequently to a market rate, the Company assumes that the fair value of these instruments approximates their reported value, after taking into consideration any applicable credit risk.
|
•
|
cash and cash equivalents;
|
•
|
restricted cash and time deposits;
|
•
|
employee loans;
|
•
|
long-term debt (Note
8
“Long-Term Debt”)
|
|
|
|
|
|
|
Fair Value Hierarchy
|
||||||||||||||
|
|
Balance
|
|
Estimated Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
770,560
|
|
|
$
|
770,560
|
|
|
$
|
770,560
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted cash
|
|
$
|
1,151
|
|
|
$
|
1,151
|
|
|
$
|
1,151
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Employee loans
|
|
$
|
3,525
|
|
|
$
|
3,525
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,525
|
|
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings under 2017 Credit Facility
|
|
$
|
25,020
|
|
|
$
|
25,020
|
|
|
$
|
—
|
|
|
$
|
25,020
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Fair Value Hierarchy
|
||||||||||||||
|
|
Balance
|
|
Estimated Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
582,585
|
|
|
$
|
582,585
|
|
|
$
|
582,585
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Time deposits and restricted cash
|
|
$
|
673
|
|
|
$
|
673
|
|
|
$
|
—
|
|
|
$
|
673
|
|
|
$
|
—
|
|
Employee loans
|
|
$
|
4,210
|
|
|
$
|
4,210
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,210
|
|
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings under 2017 Credit Facility
|
|
$
|
25,009
|
|
|
$
|
25,009
|
|
|
$
|
—
|
|
|
$
|
25,009
|
|
|
$
|
—
|
|
12.
|
STOCK-BASED COMPENSATION
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cost of revenues (exclusive of depreciation and amortization)
|
|
$
|
27,245
|
|
|
$
|
20,868
|
|
|
$
|
16,619
|
|
Selling, general and administrative expenses
|
|
31,943
|
|
|
31,539
|
|
|
32,625
|
|
|||
Total
|
|
$
|
59,188
|
|
|
$
|
52,407
|
|
|
$
|
49,244
|
|
|
Number of
Options
|
|
Weighted Average
Exercise Price
|
|
Aggregate
Intrinsic Value
|
|
Weighted Average
Remaining Contractual Term (in years) |
|||||
Options outstanding as of January 1, 2016
|
7,450,914
|
|
|
$
|
34.07
|
|
|
$
|
331,938
|
|
|
|
Options granted
|
313,088
|
|
|
$
|
70.27
|
|
|
|
|
|
||
Options exercised
|
(895,804
|
)
|
|
$
|
20.13
|
|
|
|
|
|
||
Options forfeited/cancelled
|
(227,759
|
)
|
|
$
|
47.89
|
|
|
|
|
|
||
Options expired
|
(3,200
|
)
|
|
$
|
1.52
|
|
|
|
|
|
||
Options outstanding as of December 31, 2016
|
6,637,239
|
|
|
$
|
37.20
|
|
|
$
|
179,936
|
|
|
|
Options granted
|
261,373
|
|
|
$
|
73.40
|
|
|
|
|
|
||
Options exercised
|
(1,789,434
|
)
|
|
$
|
30.23
|
|
|
|
|
|
||
Options forfeited/cancelled
|
(200,210
|
)
|
|
$
|
57.09
|
|
|
|
|
|
||
Options expired
|
(7,220
|
)
|
|
$
|
4.63
|
|
|
|
|
|
||
Options outstanding as of December 31, 2017
|
4,901,748
|
|
|
$
|
40.91
|
|
|
$
|
326,064
|
|
|
|
Options granted
|
160,181
|
|
|
$
|
112.81
|
|
|
|
|
|
||
Options exercised
|
(945,166
|
)
|
|
$
|
36.69
|
|
|
|
|
|
||
Options forfeited/cancelled
|
(32,569
|
)
|
|
$
|
63.28
|
|
|
|
|
|
||
Options expired
|
(1,250
|
)
|
|
$
|
25.72
|
|
|
|
|
|
||
Options outstanding as of December 31, 2018
|
4,082,944
|
|
|
$
|
44.54
|
|
|
$
|
291,846
|
|
|
5.5
|
|
|
|
|
|
|
|
|
|||||
Options vested and exercisable as of December 31, 2018
|
3,183,103
|
|
|
$
|
36.10
|
|
|
$
|
254,360
|
|
|
4.9
|
Options expected to vest as of December 31, 2018
|
867,711
|
|
|
$
|
73.93
|
|
|
$
|
36,539
|
|
|
7.3
|
|
For the Years Ended December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Expected volatility
|
33.8
|
%
|
|
30.5
|
%
|
|
31.9
|
%
|
Expected term (in years)
|
6.25
|
|
|
6.25
|
|
|
6.24
|
|
Risk-free interest rate
|
2.7
|
%
|
|
2.1
|
%
|
|
1.5
|
%
|
Expected dividends
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
Equity-Classified
Equity-Settled
Restricted Stock
|
|
Equity-Classified
Equity-Settled
Restricted Stock Units
|
|
Liability-Classified
Cash-Settled
Restricted Stock Units
|
|||||||||||||||
|
Number of
Shares
|
|
Weighted Average Grant Date
Fair Value Per Share
|
|
Number of
Shares
|
|
Weighted Average Grant Date
Fair Value Per Share
|
|
Number of
Shares
|
|
Weighted Average Grant Date
Fair Value Per Share
|
|||||||||
Unvested service-based awards outstanding as of January 1, 2016
|
306,839
|
|
|
$
|
41.14
|
|
|
149,272
|
|
|
$
|
57.55
|
|
|
—
|
|
|
$
|
—
|
|
Awards granted
|
6,510
|
|
|
$
|
73.00
|
|
|
408,629
|
|
|
$
|
70.39
|
|
|
207,586
|
|
|
$
|
70.53
|
|
Awards vested
|
(156,535
|
)
|
|
$
|
42.64
|
|
|
(41,015
|
)
|
|
$
|
55.60
|
|
|
—
|
|
|
$
|
—
|
|
Awards forfeited/cancelled
|
(2,689
|
)
|
|
$
|
45.32
|
|
|
(31,698
|
)
|
|
$
|
70.44
|
|
|
(3,085
|
)
|
|
$
|
70.52
|
|
Unvested service-based awards outstanding as of December 31, 2016
|
154,125
|
|
|
$
|
40.89
|
|
|
485,188
|
|
|
$
|
67.69
|
|
|
204,501
|
|
|
$
|
70.53
|
|
Awards granted
|
—
|
|
|
$
|
—
|
|
|
424,623
|
|
|
$
|
73.89
|
|
|
170,295
|
|
|
$
|
74.21
|
|
Awards modified
|
—
|
|
|
$
|
—
|
|
|
(2,570
|
)
|
|
$
|
26.85
|
|
|
2,570
|
|
|
$
|
73.27
|
|
Awards vested
|
(152,285
|
)
|
|
$
|
43.39
|
|
|
(140,043
|
)
|
|
$
|
66.54
|
|
|
(52,004
|
)
|
|
$
|
70.56
|
|
Awards forfeited/cancelled
|
—
|
|
|
$
|
—
|
|
|
(79,186
|
)
|
|
$
|
70.30
|
|
|
(10,533
|
)
|
|
$
|
71.72
|
|
Unvested service-based awards outstanding as of December 31, 2017
|
1,840
|
|
|
$
|
54.37
|
|
|
688,012
|
|
|
$
|
71.60
|
|
|
314,829
|
|
|
$
|
72.50
|
|
Awards granted
|
—
|
|
|
$
|
—
|
|
|
380,864
|
|
|
$
|
115.84
|
|
|
85,380
|
|
|
$
|
112.65
|
|
Awards modified
|
—
|
|
|
$
|
—
|
|
|
(3,110
|
)
|
|
$
|
80.27
|
|
|
3,110
|
|
|
$
|
120.18
|
|
Awards vested
|
(1,047
|
)
|
|
$
|
47.76
|
|
|
(217,800
|
)
|
|
$
|
70.10
|
|
|
(91,684
|
)
|
|
$
|
72.69
|
|
Awards forfeited/cancelled
|
—
|
|
|
$
|
—
|
|
|
(50,063
|
)
|
|
$
|
86.97
|
|
|
(8,668
|
)
|
|
$
|
81.40
|
|
Unvested service-based awards outstanding as of December 31, 2018
|
793
|
|
|
$
|
63.10
|
|
|
797,903
|
|
|
$
|
92.13
|
|
|
302,967
|
|
|
$
|
83.99
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Equity-classified equity-settled
|
|
|
|
|
|
||||||
Restricted stock
|
$
|
142
|
|
|
$
|
12,607
|
|
|
$
|
11,431
|
|
Restricted stock units
|
24,987
|
|
|
10,620
|
|
|
2,932
|
|
|||
Liability-classified cash-settled
|
|
|
|
|
|
||||||
Restricted stock units
|
10,349
|
|
|
3,811
|
|
|
—
|
|
|||
Total fair value of vested service-based awards
|
$
|
35,478
|
|
|
$
|
27,038
|
|
|
$
|
14,363
|
|
|
Equity-Classified
Equity-Settled Restricted Stock |
|
Liability-Classified
Equity-Settled Restricted Stock |
|
Equity-Classified
Equity-Settled Restricted Stock Units |
|||||||||||||||
|
Number of
Shares
|
|
Weighted Average Grant Date
Fair Value Per Share
|
|
Number of
Shares
|
|
Weighted Average Grant Date
Fair Value Per Share
|
|
Number of
Shares
|
|
Weighted Average Grant Date
Fair Value Per Share
|
|||||||||
Unvested performance-based awards outstanding as of January 1, 2016
|
22,090
|
|
|
$
|
37.52
|
|
|
211,206
|
|
|
$
|
39.65
|
|
|
14,000
|
|
|
$
|
70.22
|
|
Awards granted
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Awards vested
|
(9,978
|
)
|
|
$
|
40.15
|
|
|
(105,604
|
)
|
|
$
|
40.44
|
|
|
(4,666
|
)
|
|
$
|
70.22
|
|
Awards forfeited/cancelled
|
(6,539
|
)
|
|
$
|
36.97
|
|
|
—
|
|
|
$
|
—
|
|
|
(4,667
|
)
|
|
$
|
70.22
|
|
Unvested performance-based awards outstanding as of December 31, 2016
|
5,573
|
|
|
$
|
33.47
|
|
|
105,602
|
|
|
$
|
38.86
|
|
|
4,667
|
|
|
$
|
70.22
|
|
Awards granted
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Awards vested
|
(5,573
|
)
|
|
$
|
33.47
|
|
|
(105,602
|
)
|
|
$
|
38.86
|
|
|
—
|
|
|
$
|
—
|
|
Awards forfeited/cancelled
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
(4,667
|
)
|
|
$
|
70.22
|
|
Unvested performance-based awards outstanding as of December 31, 2017
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Awards granted
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
45,375
|
|
|
$
|
121.75
|
|
Awards vested
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
(8,769
|
)
|
|
$
|
121.75
|
|
Awards forfeited/cancelled
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
(7,014
|
)
|
|
$
|
121.75
|
|
Unvested performance-based awards outstanding as of December 31, 2018
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
29,592
|
|
|
$
|
121.75
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Equity-classified equity-settled
|
|
|
|
|
|
||||||
Restricted stock
|
$
|
—
|
|
|
$
|
452
|
|
|
$
|
690
|
|
Restricted stock units
|
1,046
|
|
|
—
|
|
|
348
|
|
|||
Liability-classified equity-settled
|
|
|
|
|
|
||||||
Restricted stock
|
—
|
|
|
8,633
|
|
|
7,955
|
|
|||
Total fair value of vested performance-based awards
|
$
|
1,046
|
|
|
$
|
9,085
|
|
|
$
|
8,993
|
|
13.
|
EARNINGS PER SHARE
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Numerator for basic and diluted earnings per share:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
240,256
|
|
|
$
|
72,760
|
|
|
$
|
99,266
|
|
Numerator for basic and diluted earnings per share
|
|
$
|
240,256
|
|
|
$
|
72,760
|
|
|
$
|
99,266
|
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares for basic earnings per share
|
|
53,622,989
|
|
|
52,077,011
|
|
|
50,309,362
|
|
|||
Net effect of dilutive stock options, restricted stock units and restricted stock awards
|
|
3,049,687
|
|
|
2,907,162
|
|
|
2,906,030
|
|
|||
Weighted average common shares for diluted earnings per share
|
|
56,672,676
|
|
|
54,984,173
|
|
|
53,215,392
|
|
|||
|
|
|
|
|
|
|
||||||
Net Income per share:
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
$
|
4.48
|
|
|
$
|
1.40
|
|
|
$
|
1.97
|
|
Diluted
|
|
$
|
4.24
|
|
|
$
|
1.32
|
|
|
$
|
1.87
|
|
14.
|
COMMITMENTS AND CONTINGENCIES
|
Year Ending December 31,
|
|
Operating Leases
|
||
2019
|
|
$
|
46,082
|
|
2020
|
|
38,715
|
|
|
2021
|
|
32,126
|
|
|
2022
|
|
24,341
|
|
|
2023
|
|
20,118
|
|
|
Thereafter
|
|
77,484
|
|
|
Total minimum lease payments
|
|
$
|
238,866
|
|
15.
|
SEGMENT INFORMATION
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Total segment revenues:
|
|
|
|
|
|
|
||||||
North America
|
|
$
|
1,077,094
|
|
|
$
|
796,126
|
|
|
$
|
642,216
|
|
Europe
|
|
693,867
|
|
|
593,167
|
|
|
474,988
|
|
|||
Russia
|
|
73,148
|
|
|
62,994
|
|
|
43,611
|
|
|||
Total segment revenues
|
|
$
|
1,844,109
|
|
|
$
|
1,452,287
|
|
|
$
|
1,160,815
|
|
Segment operating profit:
|
|
|
|
|
|
|
||||||
North America
|
|
$
|
221,846
|
|
|
$
|
169,340
|
|
|
$
|
143,021
|
|
Europe
|
|
115,876
|
|
|
92,080
|
|
|
67,545
|
|
|||
Russia
|
|
11,377
|
|
|
13,906
|
|
|
7,555
|
|
|||
Total segment operating profit
|
|
$
|
349,099
|
|
|
$
|
275,326
|
|
|
$
|
218,121
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Total segment revenues
|
|
$
|
1,844,109
|
|
|
$
|
1,452,287
|
|
|
$
|
1,160,815
|
|
Other income included in segment revenues
|
|
(1,197
|
)
|
|
(1,839
|
)
|
|
(683
|
)
|
|||
Revenues
|
|
$
|
1,842,912
|
|
|
$
|
1,450,448
|
|
|
$
|
1,160,132
|
|
|
|
|
|
|
|
|
||||||
Total segment operating profit:
|
|
$
|
349,099
|
|
|
$
|
275,326
|
|
|
$
|
218,121
|
|
Unallocated amounts:
|
|
|
|
|
|
|
||||||
Other income included in segment revenues
|
|
(1,197
|
)
|
|
(1,839
|
)
|
|
(683
|
)
|
|||
Stock-based compensation expense
|
|
(59,188
|
)
|
|
(52,407
|
)
|
|
(49,244
|
)
|
|||
Non-corporate taxes
|
|
(9,856
|
)
|
|
(9,659
|
)
|
|
(5,909
|
)
|
|||
Professional fees
|
|
(6,188
|
)
|
|
(8,032
|
)
|
|
(8,265
|
)
|
|||
Depreciation and amortization
|
|
(8,057
|
)
|
|
(7,632
|
)
|
|
(8,290
|
)
|
|||
Bank charges
|
|
(2,358
|
)
|
|
(1,969
|
)
|
|
(1,515
|
)
|
|||
One-time charges and other acquisition-related expenses
|
|
(2,055
|
)
|
|
(1,741
|
)
|
|
(706
|
)
|
|||
Other operating expenses
|
|
(14,436
|
)
|
|
(19,101
|
)
|
|
(9,813
|
)
|
|||
Income from operations
|
|
245,764
|
|
|
172,946
|
|
|
133,696
|
|
|||
Interest and other income, net
|
|
3,522
|
|
|
4,601
|
|
|
4,848
|
|
|||
Foreign exchange gain/(loss)
|
|
487
|
|
|
(3,242
|
)
|
|
(12,078
|
)
|
|||
Income before provision for income taxes
|
|
$
|
249,773
|
|
|
$
|
174,305
|
|
|
$
|
126,466
|
|
|
As of
December 31, 2018 |
|
As of
December 31, 2017 |
|
As of
December 31,
2016
|
||||||
Belarus
|
$
|
50,085
|
|
|
$
|
49,866
|
|
|
$
|
46,011
|
|
United States
|
13,101
|
|
|
3,371
|
|
|
2,618
|
|
|||
Russia
|
9,902
|
|
|
9,617
|
|
|
7,203
|
|
|||
Ukraine
|
8,433
|
|
|
6,995
|
|
|
5,610
|
|
|||
India
|
7,019
|
|
|
2,698
|
|
|
1,650
|
|
|||
Hungary
|
3,168
|
|
|
3,901
|
|
|
3,485
|
|
|||
China
|
2,651
|
|
|
2,608
|
|
|
1,887
|
|
|||
Poland
|
2,637
|
|
|
2,893
|
|
|
2,213
|
|
|||
Other
|
5,650
|
|
|
4,470
|
|
|
2,939
|
|
|||
Total
|
$
|
102,646
|
|
|
$
|
86,419
|
|
|
$
|
73,616
|
|
16.
|
QUARTERLY FINANCIAL DATA (UNAUDITED)
|
|
|
Three Months Ended
|
|
|
||||||||||||||||
2018
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
Full Year
|
||||||||||
Revenues
|
|
$
|
424,148
|
|
|
$
|
445,647
|
|
|
$
|
468,186
|
|
|
$
|
504,931
|
|
|
$
|
1,842,912
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of revenues (exclusive of depreciation and amortization)
|
|
277,634
|
|
|
289,175
|
|
|
301,081
|
|
|
319,031
|
|
|
1,186,921
|
|
|||||
Selling, general and administrative expenses
|
|
89,641
|
|
|
93,273
|
|
|
93,226
|
|
|
97,447
|
|
|
373,587
|
|
|||||
Depreciation and amortization expense
|
|
8,176
|
|
|
8,962
|
|
|
9,319
|
|
|
10,183
|
|
|
36,640
|
|
|||||
Income from operations
|
|
48,697
|
|
|
54,237
|
|
|
64,560
|
|
|
78,270
|
|
|
245,764
|
|
|||||
Interest and other income/(expense), net
|
|
(551
|
)
|
|
1,052
|
|
|
1,941
|
|
|
1,080
|
|
|
3,522
|
|
|||||
Foreign exchange gain/(loss)
|
|
(247
|
)
|
|
1,830
|
|
|
(514
|
)
|
|
(582
|
)
|
|
487
|
|
|||||
Income before provision for/(benefit from) income taxes
|
|
47,899
|
|
|
57,119
|
|
|
65,987
|
|
|
78,768
|
|
|
249,773
|
|
|||||
Provision for/(benefit from) income taxes
|
|
(16,519
|
)
|
|
6,864
|
|
|
369
|
|
|
18,803
|
|
|
9,517
|
|
|||||
Net income
|
|
$
|
64,418
|
|
|
$
|
50,255
|
|
|
$
|
65,618
|
|
|
$
|
59,965
|
|
|
$
|
240,256
|
|
Comprehensive income
|
|
$
|
67,796
|
|
|
$
|
32,345
|
|
|
$
|
63,426
|
|
|
$
|
52,798
|
|
|
$
|
216,365
|
|
Basic net income per share
(1)
|
|
$
|
1.21
|
|
|
$
|
0.94
|
|
|
$
|
1.22
|
|
|
$
|
1.11
|
|
|
$
|
4.48
|
|
Diluted net income per share
(1)
|
|
$
|
1.15
|
|
|
$
|
0.89
|
|
|
$
|
1.15
|
|
|
$
|
1.05
|
|
|
$
|
4.24
|
|
(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
|
|
|
||||||||||||||||
2017
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
Full Year
|
||||||||||
Revenues
|
|
$
|
324,651
|
|
|
$
|
348,977
|
|
|
$
|
377,523
|
|
|
$
|
399,297
|
|
|
$
|
1,450,448
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of revenues (exclusive of depreciation and amortization)
|
|
207,730
|
|
|
220,132
|
|
|
239,369
|
|
|
254,121
|
|
|
921,352
|
|
|||||
Selling, general and administrative expenses
|
|
79,283
|
|
|
81,143
|
|
|
81,732
|
|
|
85,430
|
|
|
327,588
|
|
|||||
Depreciation and amortization expense
|
|
6,672
|
|
|
7,020
|
|
|
7,174
|
|
|
7,696
|
|
|
28,562
|
|
|||||
Income from operations
|
|
30,966
|
|
|
40,682
|
|
|
49,248
|
|
|
52,050
|
|
|
172,946
|
|
|||||
Interest and other income, net
|
|
584
|
|
|
802
|
|
|
1,416
|
|
|
1,799
|
|
|
4,601
|
|
|||||
Foreign exchange (loss)/gain
|
|
(2,955
|
)
|
|
1,562
|
|
|
(77
|
)
|
|
(1,772
|
)
|
|
(3,242
|
)
|
|||||
Income before provision for income taxes
|
|
28,595
|
|
|
43,046
|
|
|
50,587
|
|
|
52,077
|
|
|
174,305
|
|
|||||
Provision for income taxes
|
|
4,954
|
|
|
5,687
|
|
|
7,953
|
|
|
82,951
|
|
|
101,545
|
|
|||||
Net income/(loss)
|
|
$
|
23,641
|
|
|
$
|
37,359
|
|
|
$
|
42,634
|
|
|
$
|
(30,874
|
)
|
|
$
|
72,760
|
|
Comprehensive income/(loss)
|
|
$
|
30,027
|
|
|
$
|
41,910
|
|
|
$
|
48,337
|
|
|
$
|
(27,449
|
)
|
|
$
|
92,825
|
|
Basic net income/(loss) per share
(1)
|
|
$
|
0.46
|
|
|
$
|
0.72
|
|
|
$
|
0.81
|
|
|
$
|
(0.58
|
)
|
|
$
|
1.40
|
|
Diluted net income/(loss) per share
(1) (2)
|
|
$
|
0.44
|
|
|
$
|
0.68
|
|
|
$
|
0.77
|
|
|
$
|
(0.58
|
)
|
|
$
|
1.32
|
|
(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.
|
(2)
|
Due to the net loss during the three months ended December 31, 2017,
zero
incremental shares are included in the calculation of diluted loss per share because of their antidilutive effect.
|
|
|
Balance at
Beginning of
Year
|
|
Additions
|
|
Deductions/
Write offs
|
|
Balance at End of Year
|
||||||
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
||||||
Allowance for doubtful accounts for accounts receivable
|
|
$
|
1,186
|
|
|
2,722
|
|
|
(2,351
|
)
|
|
$
|
1,557
|
|
Valuation allowance on deferred tax assets
|
|
$
|
924
|
|
|
2,265
|
|
|
—
|
|
|
$
|
3,189
|
|
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
||||||
Allowance for doubtful accounts for accounts receivable
|
|
$
|
2,014
|
|
|
998
|
|
|
(1,826
|
)
|
|
$
|
1,186
|
|
Valuation allowance on deferred tax assets
|
|
$
|
—
|
|
|
924
|
|
|
—
|
|
|
$
|
924
|
|
Year Ended December 31, 2016
|
|
|
|
|
|
|
|
|
||||||
Allowance for doubtful accounts for accounts receivable
|
|
$
|
1,729
|
|
|
3,500
|
|
|
(3,215
|
)
|
|
$
|
2,014
|
|
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 (Switzerland) GmbH
|
Switzerland
|
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 FLLC
|
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
|
Vested Development, Inc.
|
Delaware Corp. USA
|
EPAM Systems (Hong Kong) Limited
|
Hong Kong
|
EPAM Systems Netherlands B.V.
|
Netherlands
|
EPAM Systems Netherlands B.V.
|
Italy - branch of Netherlands
|
EPAM Systems Belgium
|
Belgium - branch of 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
|
EPAM Systems (Asia) Limited
|
Hong Kong
|
EPAM Systems (Shenzhen) Co. Ltd.
|
China
|
J8 Corp
|
British Virgin Islands
|
Jointech Software Pte. Ltd.
|
Singapore
|
EPAM Systems
|
Armenia
|
EPAM Systems (Ireland) Limited
|
Ireland
|
Great Fridays Limited
|
U.K.
|
Great Fridays Inc.
|
Delaware Corp USA
|
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
|
Navigation Arts LLC
|
Delaware LLC USA
|
EPAM Systems Spain SL
|
Spain
|
Alliance Consulting Global Holdings, Inc.
|
Delaware Corp USA
|
Alliance Global Services, Inc.
|
Delaware Corp USA
|
Alliance Global Services, LLC
|
Delaware LLC USA
|
EPAM Systems India Private Limited
|
India
|
EPAM Systems (Suzhou) Co., Ltd.
|
China
|
Shanghai Tang Rui Software Co., Ltd.
|
China
|
Guangzhou Dextrys Software Co., Ltd.
|
China
|
EPAM Systems Philippines
|
Philippines
|
EPAM Systems FZ-LLC
EPAM Systems FZ-LLC
|
UAE
UAE - non-free zone branch office
|
EPAM Consulting BV
|
Netherlands
|
Continuum Innovation LLC
|
Delaware LLC USA
|
Continuum LLC
|
Massachusetts LLC USA
|
Continuum SrL
|
Italy
|
Design Continuum
|
China
|
Continuum Korea (South Korea)
|
South Korea
|
EPAM Systems Japan G.K.
|
Japan
|
Think Limited
|
U.K.
|
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.
|
/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.
|
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.
|
/s/ Jason Peterson
|
|
Jason Peterson
|
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer
(principal financial officer)
|
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of EPAM Systems, Inc.
|
/s/ Arkadiy Dobkin
|
|
Arkadiy Dobkin
|
|
|
|
Chairman, Chief Executive Officer and President
(principal executive officer)
|
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of EPAM Systems, Inc.
|
/s/ Jason Peterson
|
|
Jason Peterson
|
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer
(principal financial officer)
|
|