EPAM Systems, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the EPAM Systems Second Quarter 2020 Earnings Conference Call. At this time, all participant lines are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, David Straube. Thank you. Please go ahead, sir.

Thank you, operator, and good morning, everyone. By now, you should have received your copy of the earnings release for the company's second quarter fiscal 2020 results. If you have not, a copy is available on epam.com in the investor section. With me on today's call are Kati Dopkin, CEO and President, and Jason Peterson, Chief Financial Officer. Before we begin, I'd like to remind you that some of the comments made on today's call may contain forward-looking statements. These statements are subject to risk 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 GAAP and are available in our quarterly earnings materials located in the investor section of our website. With that said, I will now turn the call over to Arc.

Thank you, David, and good morning, everyone. I hope that all of you are staying safe and healthy at the time, and thank you for joining us today. Before I go into the second quarter highlights, I would like to reflect on the overall environment in the context of a pump business. First of all, since our last conversation in the beginning of May, the environment is definitely stabilized across our client portfolio. As our customers were responding to the many disruptions and in some cases, permanent changes in their end markets. At the same time, very much in line with what we shared during our Q1 point of view call, the impact we are seeing is very immediate, serious, and localized for each and every one of us and our customers. And more importantly, while it's not in use anymore for anybody, we do understand that we are still far from the end of the event, as today's dynamic environment continues to be influenced daily by global health crisis, social unrest, and economic anxieties. We also can state that there are many examples where the current situation is changing the way our clients are doing business, engaging their customers, and dealing with their end markets. As a result, this change has required them to accelerate digital programs and projects, or in some cases, new models of engagement. have taken the challenge of COVID to drive much further our own adaptive program by bringing EPUM leadership closer to the field and making the field operations across EPUM market locations collaborating at much higher levels. This closeness has taken our agility to the next level, enabling us to be more responsive to our clients' needs, new business opportunities, as well as making faster many of our decisions. The enhanced view of demand also has been pivotal to helping us gain much more real-time insight, be able to better match in global supply to the client's needs, and to optimize business effect efficiencies and to drive results. And as remote working model has quickly become widely accepted and proven way to serve our clients, we believe this way of working will serve us well in the future as we continue to manage the downside risk but also take advantage of expanded options when it comes to the talent acquisition and retention. In result, we are working very closely with our clients' teams to refine and respond to demand in much more condensed timeframe. These new patterns of engagement are supported by our increased investment in knowledge management, collaboration, and productivity platforms, enabling quicker access to information and improved business processes, to empower our teams to connect faster, share information seamlessly, and be more productive when responding to a relentlessly fast-paced environment. Today, that is one of the most important areas of focus for us. Moving to our second quarter results, we delivered revenue of $632 million, representing 15.5% in constant currency growth, a non-GAAP EPS of $1.46, a 15% rounded year-over-year increase. Our Q2 results reflect an efficiency and execution on low levels of demand, while focusing on driving higher levels of performance across the company. Within the quarter, there were a few highlights that are worth mentioning to bring better insight to what we already stated in general terms. As I shared previously, there is a level of stability in our end markets. which has allowed many of our customers to resume or move forward with their change programs. A number of our customers are focusing on streamlining their efforts as they reduce the number of service providers and consolidate across fewer preferred key vendors. In many of such cases, we are benefiting by being asked to do more in helping with their critical business transformational efforts. To balance this, there are some industries and specific customers which remain significantly impacted by the global pandemic, and we don't know when they will return to business as usual level of activity. With all of that, there are some cases which are showing not stopping growth even in the current environment. For example, Epic Games achieved that no other gaming company has before. A digital ecosystem that provides the infrastructure and services needed to power gaming and Fortnite massive scale for every developer to access across any platform, engine, and store. Combined with a hand-picked library of games through the Epic Games Store, as well as the Unreal Engine, the world's most open and advanced real-time 3D tool. We are proud to have been part of Epic Games' story since before the creation of Fortnite. With our big data, software engineering, and AWS expertise, EPAM has collaborated with Epic Games to provide the flexibility, reliability, and scalability needed to continue to push the boundaries of online gaming and help Fortnite grow from 1 million players in 2017 to 350 million to date. In Q2, we also began working for several large new customers who have undertaken a multi-year transformation of their business. IPAM has been engaged to help with application development and enhancement efforts across several key areas of the organization. And while it's still only days in the relationship, we believe there is a potential to add one or two of them to top 20 customers list over the next 12 to 24 months. We are also proud to share our recent partnership with UNICEF resulted into developing a multi-featured health body COVID-19 information app designed to protect children, families, and communities across Europe and Central Asia by dispelling the myths and rumors associated with COVID-19. And lastly, probably as a result of everything we just shared, in recent quarterly sector outlook for IT services webinar, Gartner provided competitive assessment across 15 largest IT service providers, highlighting EPAM as one of only two companies which are best positioned for COVID and after COVID times. With that, let me share how we are looking at the second half of our fiscal 2020. We expect some continuous disruption in our end markets, which will result in lower growth in a few industries we serve. While some of the variability in our client behavior has reduced, we still believe it's challenging to talk about our business outlook beyond the next quarter, which Jason will cover right after. Similarly, as we shared with you during our previous earnings call, our key priorities remain unchanged. We will continue to protect our people and our financial position, as well as to make continuous investments in our core capabilities and platforms to be prepared for eventual comebacks. We strongly believe our position as a leading provider of digital product and platform engineering services combined with our integrated and maturing consulting expertise is our key differentiator. That is why we are very confident in our ability to come out of this challenging time being a more value and result-driven company and continue growing in post-pandemic environment with 20% plus rate. Now, let me hand the call over to Jason.