0:02 Good day and thank you for standing by. Welcome to the EPAM Systems Fourth Quarter and Full Year 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers presentation, there will be a question-and-answer session [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions]. 0:25 I would now like to hand the conference over to your speaker today, David Straube, Head of Investor Relations. Please go ahead.

0:41 Thank you, operator, and good morning, everyone. By now, you should have received your copy of the earnings release for the company’s fourth quarter and full year 2021 results. If you have not, a copy is available on epam.com in the Investors section. 0:54 With me on todays’ call are Arkadiy Dobkin, CEO and President; and Jason Peterson, Chief Financial Officer. I would like to remind those listening that some of the comments made on today’s call may contain forward-looking statements. These statements are subject to risks and uncertainties, as described in the company’s earnings release and SEC filings. Additionally, all references to reported results that are non-GAAP measures have been reconciled to the comparable GAAP measures and are available in our quarterly earnings material located in the Investors section of our website. 1:27 With that said, I’ll now turn the call over to Ark.

1:30 Thank you, David. Good day, everyone, and thank you for joining us today. Before turning to Jason to provide a detailed update on our fourth quarter overall 2021 results and our 2022 outlook, I would like to spend some time reflecting on last year performance and share some thoughts on our positioning for 2022. But even before doing that, I would like to share a couple of other thoughts. 1:59 Just last week, we celebrated the 10-year anniversary of our initial public offering on the New York Stock Exchange. So that is why this call is a bit special. Exactly 10 years ago, we provided our first guidance on our first earnings call. 2:17 EPAM in Q1 2012 was a company with 7,000 people and about $335 million in revenue. We recall back then, which reflected a strong priority indeed. EPAM was very much an unknown start-up with a minimal presence in the United States and Western Europe and with development centers across just a few countries in Eastern Europe. And we were extremely nervous because of all of that. 2:54 During our first call, we shared that our quarterly revenue grew 34% and our annual headcount increased by about 30%. And we guided that our 2012 revenue should go up around 23%, 25% from the prior year of 2011. Ten years later, we are a very different company. Since our IPO, EPAM has grown more than tenfold, expanded our global footprint across five continents and growing our team of professionals to more than 58,000 people and across 40 countries to become a recognized world leader in digital engineering and consulting services. 3:39 So at this moment, I would like to personally thank all of our employees, customers and shareholders who participated in achieving this notable milestone in EPAM…

14:03 Thank you, Ark, and good day to all. In the fourth quarter, EPAM delivered extremely strong results, reflecting continued high levels of demand for the company's services across a full range of industry verticals and geographies. During the quarter, EPAM generated revenues of $1.107 billion, a year-over-year increase of 53.1% on a reported basis and 54.1% in constant currency terms, reflecting a negative foreign exchange impact of 100 basis points. 14:34 Q4 was the first quarter EPAM delivered quarterly revenues in excess of $1 billion, a notable milestone in the company's journey. Performance across the industry verticals in the quarter was consistent and very strong, long-standing trends, which have been driving significant growth continue and include the need to modernize and transform applications while transitioning them to the cloud. 14:57 Human-centered innovation is the merging of physical and digital experiences continues to spread across industries and creation of new digital products and businesses, while harnessing the resulting data to improve our customers' revenue growth, supply chain operations and end customer experiences. 15:14 Turning to the performance of our industry verticals. Travel & consumer grew 91.3%, driven by very strong growth from both our consumer and retail clients. The accelerated growth in the quarter is partially the result of recent acquisitions. Financial services grew 60.3% with very strong growth coming from payments, banking, asset management and insurance. Larger consulting-led engagements are helping to drive higher levels of growth. 15:45 Software & hi-tech grew 34.7% in the quarter. Life sciences & healthcare grew 33.9%. Business information & media delivered 32.9% growth in the quarter. And finally, our emerging verticals delivered 67.6% growth, driven by clients in manufacturing and automotive, energy and telecommunications. 16:08 Moving to our geographic performance. In Q4, we renamed our geographic regions to better reflect EPAM's ongoing geographic…

28:02 Thank you [Operator Instructions] Our first question comes from Ramsey El-Assal with Barclays. Your line is open.

28:18 Hi, and thanks so much for taking my call. And congratulations on your anniversary. I wanted to ask about the situation in Ukraine, whether you could give us a little more color on your potential continuity plans in the event that the conflict there sort of escalated and also maybe we've in whether the post pandemic remote work, model has made it a little bit easier to contemplate, shifting workloads around?

28:49 Hello, this is Arkadiy. I think number one that we continue to work in normal environment, there is not any impact on day-to-day operation at this point. So we talked about our experience started from 2014. And in 2015, actually, it was active operations on the border with Ukraine and was questionable part of the lens there, and it was a very active military activities there. During all this time, it didn't have any impact on the EPAM operation. What we can bring, in addition to what you're reading, that nobody from EPAM and right now, it's a pretty big number of people. We have almost 13,000 production people in the country. So we have anybody who is drafted or anybody who is invited or requested for any type of military training or drills or anything. So that's probably kind of additional color, which we can bring. 30:13 The second point that also since almost eight years of tension in the region, we did a lot of special preparations for this, like we practically completely independent from local infrastructure, any project infrastructure -- any project activities, so -- and on top of your question about COVID and remote work. So it means that from building of any attributes of engagement depending on Lacao, it doesn't -- practically it doesn't exist. I think it will be a lot of questions, so I will add a little bit more to it. There is not any active relocations. Probably from the total number of people, we should have between 50 and 100 participated right now in some kind of pilots or testing of BCP activities. And we are living for -- in the past or currently for one, two, three weeks to [Indiscernible]. So other than that, again, it's completely normal.

31:53 Okay. I appreciate that. And I wanted to ask also on margin guidance in fiscal '22. It's down about 50 basis points at the midpoint from the fiscal '21 guide. And I know you mentioned investing in people and ops. I was just wondering if you can give a little bit more color about the margin drivers and maybe the cadence we should model through this year.

32:18 Yes. So maybe what I'll do is I'll respond to the full year, and I'll also talk about Q1 specifically. And so what we continue to see is a business that obviously is growing at a rapid rate with extremely strong demand. We've talked about our ongoing investment in sort of people on processes, education and also just the ongoing diversification of the business globally as we grow into different centers around the world. Those are probably somewhat less optimized at this time than our more mature kind of traditional geographies. But if I were really sort of provide color that's probably easiest to understand is that we continue to see elevated wage inflation, not maybe significantly higher than 2021, but maybe somewhat elevated as we go from 2021 to 2022. We, at the same time, are also seeing substantially better pricing environment. But the pricing does not fully offset the impact of the wage inflation. So one of the negatives you've got here is that ongoing impact 33:11 At the same time, I think that you'll see a little bit more normalization of activities related to travel related to in-person. And so I think you'll see a little bit higher SG&A over time. We've talked about the fact that the variable compensation is going to come off a bit or we expect that it would come off a little bit between 2021 and 2022. But right now, between the somewhat ongoing impact of the wage inflation and pricing, not totally sort of compensating in what I expected somewhat elevated SG&A for the full year, we've guided to 16.5% to 17.5%, and I believe that we'll probably operate at the midpoint or somewhat higher than the midpoint of the 16% to 17.5% guide. 34:17 However, I want to be…

35:55 Super helpful, thank you.

35:59 Thank you. Our next question comes from Bryan Bergin with Cowen. Your line is open.

36:05 Hi, good morning. Thank you. First, I wanted to follow-up on Ukraine. Can you just talk about the nature of client conversations and whether there's any increased selectivity or preference by them for where new work will be delivered from and then collectively, we see that Belarus and Ukraine as a mix of headcount declined year-over-year by a noble amount. Just based on your global expansion plans, how are you thinking about the mix of those two countries as you would exit this year?

36:36 Okay. I think in general, the action and conversation very, very similar to what was eight years back. There are some clients which very worried and kind of situation, wait and see. There are some clients which continue as usual, and this is majority of them. There are some clients who are preparing for more active BCP if some specific triggers would happen, which is very difficult to define the figures. And this is a very small minority. 37:16 So -- and the risk category between those like especially in wait and see, which prefer to start somewhere else. And it was a very similar situation again, eight years ago. And we have many more options today to work an alternative because as you know, [Indiscernible] what's happening. To be in Belarus and Russia today, so probably around 5% of our delivery capacity versus eight years ago, it was probably over seven.

38:12 Okay. Okay. And then as far as workforce goes and just the -- another big addition here this quarter sequentially, I think we estimate over 4,000 organically again. Can you just talk about your comfort levels in the pace of resource additions and kind of what you're anticipating attrition utilization within that 2022 outlook?

38:35 Yes. So let me provide a little bit of color on that and also kind of follow up on one of the other questions you had earlier. And so you're correct that we've seen a significant growth in our productive capabilities outside of the traditional Ukraine, Belarus region. So to be specific, Ukraine, Belarus, Russia from a production standpoint grew by 22% on a year-over-year basis between '20 and '21. And we had greater than 80%, almost 90% growth in the other regions, including India and Latin America, where we've seen particularly high growth. And so we've moved from a Ukraine, Belarus, Russia. And again, the idea was that we're becoming an increasingly global company, where we're larger, we need to have a broader pool of labor that we access. At the same time, it clearly has diversification benefits from a risk standpoint. So we've gone from 68% of production capacity in Ukraine and Belarus in 2020 to 58%. We expect to continue to see accelerated growth, particularly in places like Latin America, Eastern Europe, let's call it, Central Europe and APAC. And as a result, you'll continue to see -- I expect you'll continue to see that number drive down. So I don't know if it would approach 50% or something, but certainly it would be lower than it is today and certainly much lower than it was in 2020. 40:02 From an attrition and utilization standpoint, I think we see utilization at about the same level as 2021. And then from an attrition standpoint, we are still below 20% with both voluntary and involuntary as we exit Q4. We generally would see a little bit of benefit in Q1 as people wait to get vesting of stock and bonus. So you usually see a little bit of a dip in attrition in Q1. And for the full year, we think attrition might be up slightly. But at the same time, we expect that 2022 attrition will definitely remain below 20% as well.

40:45 Thank you for the color.

40:47 Sure.

40:48 Thank you. Our next question comes from James Faucette with Morgan Stanley. Your line is open.

40:54 Great. Just continue to ask about kind of situation and flexibility. If we think about operationally, if there were a disruption or you needed to move out of kind of the region where you're seeing potential disruption out of Ukraine, et cetera, how flexible are you and how quickly can you move those operations into other regions for delivery, et cetera, just thinking about those contingency plans? And then separately on pricing. Jason, you mentioned that the wage increases aren't keeping -- or are moving faster than you can move pricing. Is there a time frame under which you can better balance those and fully recapture kind of what you're experiencing from a wage inflation perspective in your pricing with your customers? Thanks.

41:53 On the first part of the first question, first of all, there is no one kind of approach or rule how to operate in this situation because we have BCP plans, which were [Indiscernible] engagements or accounts or even specific engagement within these accounts, depending on risk factors, distribution of the team, infrastructure on general part like the mix of clients and us, again, it's independent from Ukraine. But still, there are some specifics there. So it is very, very specific. And those plans is very detailed, including like definition of the key personnel and timing on doing this. Also, it is pretty pragmatic because we were experiencing the pressure and very real events eight years ago and then during this period, multiple escalation as well. It wasn't so much covered by media as happening today, but it was very, very similar. 43:28 So we feel that we're pretty prepared for this. We also have our understanding again from a lot of local science, which is again not necessarily exactly in line with what we're reading on synergy. And our understanding of what could happen is relatively limited across the boarder in Ukraine, and we have a number of large development centers across Ukraine. So we have plans how to move people from one to another, farther from the border if necessary. At the same time, again, we do believe that even those, which is closer to the border, still in pretty kind of safe zone today and will be in the future. So I think a specific timing in triggering that's very specific to clients and engagements.

44:21 Yes. And on the pricing question, we continue to focus on both rate increases with existing clients and then taking new opportunities where the value EPAM quality delivery is such that the pricing is also somewhat superior, so a little bit more selective in terms of the deals that we take. I think that what -- clearly, what wage inflation is going to be at the end of 2022, it's kind of hard to predict at the beginning of 2022. But I think what you'll continue to see is sort of price not just at the beginning of the year and also in Q2, but we'll continue to see sort of price improvements throughout the year. And hopefully, by the time we get to 2023, there's a better balance between price and wage inflation.

45:17 Thank you. Our next question comes from Jason Kupferberg with Bank of America, your line is open.

45:22 Good morning, guys. So in 2021, you guys just posted I guess it was 36% revenue growth, organic, constant currency, or guiding to least 22%, or sorry, at least 32% on the same basis in 2022. So it's just the incredibly strong growth seems like it's continuing to persist. I mean, how do you now think about your true kind of underlying organic revenue growth rate on kind of a multiyear basis? I mean, we used to talk about 20% plus, and, obviously, there's been a surge in demand from the pandemic, but just as you've assessed, how long that that may last, and how your competitive position has evolved would really be curious on your thoughts on what do you think normalized growth, looks like even beyond 2022?

46:18 Yeah, So let me just -- to I guess, restate what you said. Absolutely correct that in a 37% growth guide, the organic constant currency contribution would be about 32%. That compares to the 35.5-ish kind of percent organic constant currency contribution or growth rate in 2021. So what you've seen in 2021 and also as we enter 2022, is we've had three quarters now if you include the guide for Q1 of 2022, where we're 50% year-over-year revenue growth rates. And so clearly, that's an extraordinary number. Part of that has been the result of the huge additional headcount additions on an organic basis, plus some of the acquisition-related activity. 47:09 So we don't think that 50% year-over-year revenue growth rate is sustainable. And I think if you sort of decompose the guide with the growth rate in Q1 and the guidance that we have for the full year, you'll see that we would expect a deceleration in growth rate throughout the year. But even as you exit Q4, I think you're going to see us with a growth rate, including acquisitions, in excess of 25%. So I think what you would do is you would exit Q4 with a somewhat accelerated growth rate relative to the historic above 20%, and we'll get to the guide for 2023 as we get closer to that time period. But again, you would see somewhat of a decelerating growth rate throughout the year, and that is somewhat intentional. We believe that it's appropriate to get back to a more sustainable growth rate. But I still think you'll see us exit Q4 at a growth rate that is higher than that traditional somewhat above 20%

48:10 Right, right. Okay. Yeah, no, that all makes sense. And then if we think about your headcount growth targets for the year, obviously, you're going to have some pricing to help on the on the revenue side. So should we think about headcount growth, kind of modestly, lagging revenue growth in 2022?

48:32 Ark, are you something you want to say, sponsored?

48:37 I just wanted to address on -- I think the main kind of lesson right now that we thought about growth in 20 plus percent before and what happened during the last year that we tested ourselves at a much higher level. So we still have to wait and see an expectation that we'll come to a more normal growth rates in the future. But where this border will be coming on 20%, 25% to 25%, 30% or whatever, we will need to test it. But again, we feel more comfortable to answer now the question, which we were asked in the past. Would you be able to grow faster than what you were saying in the past? Yes, it is possible, and that's what we probably kind of positive lesson which we have right now.

49:35 And yes, I guess for the growth rates, one of the things that you see when you've got this organic growth rate of -- from a headcount standpoint of greater than 4,000 in Q3 and Q4 plus, of course, the acquisitions that we've done. By the time you get to Q1 and Q2, it does produce very, very high growth. Again, particularly on a year-over-year basis, we are comparing Q1 of 2022 to Q1 of 2021, and you've had all that headcount addition in the second half of 2021. Right now, what we -- the last two quarters, we've had organic headcount growth of about 4,000 or somewhat over 4,000. And right now, what we're planning is for organic head count growth somewhat above 3,000, okay, with the idea that we believe that, that might be a more sustainable growth rate for the time being. And that still produces the strong growth rates that we're talking about, the 37% plus for the full year 2022.

50:39 Great, well, thanks throughout the year for that.

50:43 Thank you. Our next question comes from Surinder Thind with Jefferies. Your line is open.

50:51 Thank you. A question about kind of the breadth of demand that you guys are seeing at this point. Obviously, even if we adjust out the acquisitions, very strong growth outside the top 20 in terms of your clients. Can you maybe talk about the pace at which you're adding new clients and the considerations when you onboard those clients? How selective do you have to be in the current environment? Or how selective are you? And what are the considerations? Are these all clients that you believe that will get to $5 million in revenues at some point? Or how should we think about the trade-offs of having the breadth of clients versus a strategy that's maybe focused on EPAM becoming more ingrained with a larger percentage of a given clients' revenues?

51:47 So we're definitely more selective than in the past, and definitely the new clients, which, in our view, when we review this is much high potential. And we have probably a dozen of clients which we landed during the last 12 months, which already bring in at least one million per quarter and growing fast. So I think it's actually becoming much more strategic portfolio, so. But you are continuing to see that traditional EPAM growth in existing customers. And as Ark said, continued growth level from new customers, but maybe we're a little bit more strategic and selective about the new customers that we bring in to EPAM. The other thing I think we're hearing is demand continues to be probably still in somewhat of the unprecedented camp. Maybe clients are a little bit more thoughtful around their budgets, but again, still strong, strong desire to invest, and there's still an awful lot of work to do, and again, continues to be very broad-based across industry verticals.

52:57 Having more and more clients, which is reason like 12, 24 months becoming our top shift to, or even top 20 as well.

53:07 Yeah. And that speaks to I think, clients, and we keep hearing this, when we do our channel checks internally, clients are looking at EPAM differently as a true transformation partner with the ability to take on projects of much greater sort of scale and scope.

53:24 Got it. And then would the reverse be true in the situation if you're being more selective that you're turning away business at this point?

53:34 I mean I wouldn't say that we're turning away business. But I mean, I think there's been a disconnect between supply and demand for the last probably 1.5 years or certainly throughout 2021. And so by definition, you are being somewhat selective. I think in some cases, Ark said it well, right, is that we're looking for clients that have the potential to grow. Sometimes, we're obviously looking for very interesting projects or programs. We're looking for clients who have sufficient funding, and we're also looking for clients who are willing to pay the rates that we've been talking about when it comes to price. And so all those things would factor in, and there'll be some self-selecting by clients and obviously, some self-selecting by EPAM as to which clients we do business with.

54:23 Got it.

54:25 Okay. It seems like -- let me rephrase it. Like first of all, from the general portfolio configuration, we're still looking for some clients, which as in the past, allowing us to really work in the very much cutting edge of technology and improve our engineering kind of capabilities and understanding what's happening because that's the skills which we strategically focused in the past, right now and will be doing in the future, and we hope that it differentiates us. At the same time, I think our criteria is changing. It's criteria changing not only because of the environment because of the size of operation and general direction of the company where we can refer now much more end-to-end study from consulting to engineering. And we're looking for some clients, which actually looking for somebody who can speed up the whole continuum kind of transformation. So -- and with all these criteria together, definitely, there is very different selection retails. And some clients, which will be working in the past, we probably not bring in work today.

55:43 Got it. And then in terms of just a follow-on in terms of the questions around geopolitical risk. When you kind of look ahead, is there any acceleration in your view of -- or perhaps acceleration towards investing towards building global delivery capabilities faster? Or do you kind of just kind of continue at the current pace, given that obviously, you cited rates earlier where you are building the -- a large percentage of your capability is already out there. Do you accelerate that? Or do you just kind of keep going?

56:22 I think we do pretty obvious acceleration. But you also need -- we also need to consider that it's not only because of geopolitical risk. It's in general, and that's why we try today kind of to give you perspective what's happened during the last 10 years from 7,000 people to 58,000 people. So it's not only about geopolitics, it's in general the globalization of our services. And we started to do it back then 10 years ago, very big acceleration happened in 2014, '15, when we practically opened India and Latin America, and India and Latin America growing right now faster than Eastern Europe. So both criteria is important. And as Jason mentioned already before, by the end of this year, probably depending on our core locations, we will be closer to 50% versus 80-plus percent, which we have 10 years back.

57:34 Got it? That's helpful. Thank you. Those are my questions.

57:37 Yeah. Thank you.

57:39 Our next question comes from Maggie Nolan with William Blair, your line is open.

57:43 Thank you, congratulations. Ark, you dangled this kind of $10 billion company in front of us, I'm wondering what remains consistent about the company, as you get to that level, and then what operationally or strategically would be significantly different until $10 billion, or as you get to $10 billion?

58:09 First of all, we're doing it in front of us, not only in front of you. And I think it's a lot of criteria there. And we talked about all of them over the last years. We building company, which becoming more end-to-end solution provider, and this sounds very trivial, but how to do it well, it's much less still than it seems to because we believe that it's still open opportunity to do it right, and this is continuous inflow of the talent. So we need to like to find a way how to grow the talent, and that's a very big component of our ecosystem education, digital platform, how to make sure that people from different sites working together efficiently. So it's a lot of simple things, which have to come together in our view because it is a very competitive market. And while we're thinking the $10 billion is very realistic, how to do it better is still the challenge. I think it's a very separate conversation. Hopefully, we will be able to answer this a little bit in more details in May when we're going to do our Investor Day.

59:39 Okay, thanks. And then I think, Jason, I think it was you that mentioned that consulting was a one of the drivers behind the growth in financial services, is that widespread across the business? And then when you first rolled out consulting, it wasn't billed separately, and you would caution us to think about it as something that would be driving margins up, has that changed as your consulting capabilities have matured over the last several years?

60:07 I think it's not only about financial services. So it's happening in multiple sectors and less time selling [Indiscernible] in retail right now. So and for us girls to know to have a separate consult consultant client. Services, but actually very much integrated and we still don't have very specific separate kind of accounting for this because it's not just specific number of people in this category. It's very much overlap, across department, we have consultant capabilities and very different organizational units of report and as a whole effort how to orchestrate that correctly it was right before. So from this point of view, nothing change at this point.

61:04 Thank you.

61:08 Thank you.

61:09 Our next question comes from Ashwin Shirvaikar with Citi. Your line is open.

61:14 Thank you. Ark and Jason, good morning. Congratulations on the quarter and the milestone. Good journey. Happy to be along on it. I guess my first question is, when I look at every single revenue bucket cohort has grown. So you have clients over $20 million, between $10 million and $20 million, between $5 million and so on, all of them have grown, which is obviously a good thing. But it leads to the question of sort of what is sort of the serviceable market opportunity in front of you from the current set of clients, just from increasing penetration, could you perhaps help quantify or put a direction on that, if you could?

62:16 Yes, I probably couldn't do anything more than just kind of anecdotally. But even in our largest customers, there's -- in our top 10 or top 20, there's a significant opportunity across a range of those customers for significant ongoing growth. Certainly, in some of the areas which are kind of established for many companies, but still somewhat newer areas for EPAM. I think insurance we're still very early days in terms of our penetration of those accounts. So there's a significant opportunity there. In financial services, you're continuing to see growth in existing banks, new banks, wealth management, asset management and very, very high growth in insurance. Healthcare and life sciences continues to be a significant growth opportunity for the company with both existing and new clients. And then certainly, as you look at the emerging, as I talked about in the past, manufacturing and logistics for us is not even a breakout. It's still kind of part of our emerging verticals. And so I don't think the story has changed that much in that there continues to be a significant growth opportunity with existing customers. And then a lot of those new customers that Ark talked about that are already at $10 million or more per quarter, there's significant wallet opportunity in those new customers.

63:33 And I think you're asking how much we have kind of run rate from existing client base. And I think we do believe that it's a huge opportunity exactly present in our existing clients. And it seems like -- and it's probably not -- it's probably true for many other vendors today that after COVID kind of the new life was discovered in old clients. It was a lot of concern like two years ago and then some of them started to behave differently from our expectation because as we were sharing before, most of them understand the total investment, which were done in digital before probably not enough or should already be done because the situation around has changed so much. So there is a very big part from existing client base. That's why we have to be very selective who will be bringing on top of them as a new logos.

64:39 Understood, understood. The other question I had was, obviously, this is a multi-year trend, not necessarily a new thing, but as gross margins, steadily have gone towards the mid-30s. It’s pretty clear SG&A offset to that and sort of a two part question, if you could kind of break down the gross margin, is that more a function of adding capabilities? Then wage inflation gets added to the mix incrementally? How does that change and for how long the hell perhaps the SG&A offset capability, so that operating margins continued to get delivered?

65:26 Yes. So I have kind of, I guess, about a 5-year history with the company. And I remember when -- to be quite honest, we struggled to sort of stay above 16% profitability. So here, when we're guiding to 16.5% to 17.5% with the possibility of being, let's say, somewhat above the 17% for 2022, it feels still like a pretty good place. You are right that gross margins have declined over time. Some of what's happened over the last couple of years really has been the whole kind of wage inflation in the market, which I think is unprecedented and probably can't last forever. So I do think you might see stabilization at some point in the future, hard to speculate when. Some of it would be the additional capabilities. And specifically, I would say, the new geographies. So again, if we were just to grow in our historic Russia, Belarus, Ukraine, and continue to sort of focus on optimizing the cost effectiveness of those delivery locations, you might see a somewhat different gross margin profile, but you would also see a different sort of growth potential. And so I think it really has been beneficial. But at the same time, it probably has come with a little bit of moderation. 66:36 The other thing I don't think I totally called out is that our recent acquisitions, in many cases, are operating more in the low teens and in some cases, the single digits from an adjusted IFO standpoint. And that puts a little bit of downward pressure, particularly on the 2022 results where we've got greater acquisition-related revenue. The SG&A, I think, will continue to stay low in part because I do think facilities as a cost is going to continue to be a benefit. And so I do expect, as we exit the fiscal year, that we'd still kind of be below 16%. And so I think the balance of those things allows the company to potentially operate somewhat above 17% in 2022, and I think that's not a bad place to be with a 37% plus growth rate.

67:23 Clearly, I agree with that. Thank you.

67:26 Thank you.

67:28 Our last question comes from David Grossman with Stifel, your line is open.

67:33 Thank you. I was hoping I'd just ask two really quick follow-ups to some of the questions that have been asked. So the first is on the growth of the cohorts. Outside of the top 20, it's accelerated. It's been accelerating all year. I guess my interpretation of that dynamic was that there was a resource allocation decision that had to be made during the pandemic. And now that things have kind of changed a little bit from a resourcing standpoint, that you've been able now to pursue growth outside the top 20, which historically has actually been one of the major contributors to your growth rates. So is there any really anything different going on there or maybe I'm missing something here?

68:16 Yes, I would say yes, yes to that thesis. And then the other piece is the recent acquisitions have incorporated clients that are generally below the top 20 and in some cases, below the top 200. And so that has also contributed to the growth. But certainly, I think particularly deep in the pandemic, much of the resources were consumed by a handful of clients. And obviously, that's changed throughout 2021.

68:45 Right. Okay. And then just to follow up on the situation in the Ukraine. Historically in geopolitical hotspots, the issue is getting people to work or transportation and disruption to that and infrastructure with clients having fairly sophisticated global risk management strategies of their own before they even decide to put work over to different geographic areas. So you seem to have addressed with work from home, the getting to work kind of risk seems to have diminished and you've got your own infrastructure. So you grew through the last crisis, we all remember that. So are the risks in this current situation any different kind of what they've been historically? Is there anything different about the situation that we should be thinking about?

69:37 David, you know you're asking pretty difficult question because like big guys cannot answer. And at the same time, we definitely went through multiple geopolitical kind of tensions and crises during the last, not even 10 years, which has started to share today kind of what, 20-plus years. And in my view, from our operational point of view, there is not much difference. And -- but the only answer we will get like probably in another three months or maybe nine months or maybe in 24 months. But from work which we're doing, I think impact would be very, very minimal, in my opinion. And also, what also in this specific like history was telling us that even if some clients' policies and risk mitigation actions will be changing the direction, in general, the kind of demand for the talent is so big that we are pretty sure that we will be operating in the countries where we are today, like years from now, and it would be in the talent in demand. And that's exactly what happened. Again, for example, eight years ago, one or two clients where it was too difficult for them to swallow the situation, practically immediately different clients were willing to accept the [Indiscernible] kind of efforts which we bring in from the region.

71:30 And I would just say, David, that the guidance for the full year also concludes that any impact would be minimal, and so that's the basis for our guidance.

71:39 But we -- but again, we cannot predict the future. So the history, and we have -- as you know, we have pretty interesting configuration of our management team, which have a lot of experience in the regions and on cruises over the years.

72:04 Right. So it sounds so that the client response to the crisis has been really -- I mean, I'm sure there are differences here and there. But if you aggregate it all together, it sounds like the response hasn't been terribly dissimilar to what you experienced here.

72:22 Because like, yes, I can tell you that at this point, probably eight years ago, it was more difficult situation from some client reactions. I think it's much more balanced this time. As I said, we have some pilots for BCP, but it's very, very minimal right now.

72:44 Right. Okay. Great. Thanks very much.

72:48 Thank you. I would now like to turn the call back over to Arkadiy Dobkin for closing remarks.

72:54 Okay. Thank you again, everybody, and I hope it was not necessarily usual call today and first of all, because we celebrated just 10 years of our IPO, but also recently challenged simultaneously. And as I just shared, we have a strong team. We went through crisis, and we do believe that it's just one of them, and we probably will have some in the future as well. Pretty sure about it. So thank you and talk to you in three months.

73:34 Thank you.

73:35 This concludes today’s conference call. Thank you for participating. You may now disconnect.