Investor Presentation - May 2021 - Investors
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Investor
Presentation
May 2021
© 2021 EPAM Systems, Inc.Safe Harbor Statement
These materials contain forward-looking statements. You should not place undue reliance on these statements because they are subject
to numerous uncertainties and factors relating to the Company's operations and business environment, all of which are difficult to
predict and many of which are beyond the Company's control. Forward-looking statements include information concerning the
Company's possible or assumed future results of operations, including descriptions of its business strategy. These statements may
include words such as "may," "will," "should," "believe," "expect," "anticipate," "intend," "plan," "estimate" or similar expressions. These
statements are based on assumptions that we have made in light of management's experience in the industry as well as our perceptions
of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the
circumstances. You should understand that these statements are not guarantees of performance or results. They involve known and
unknown risks, uncertainties and assumptions, including the potential impacts of the COVID-19 pandemic on our business operations
and the business operations of our customers; civil unrest in the geographies where we operate; the world economy; our expected
financial performance; and macroeconomic and market conditions and volatility. Although the Company believes that these forward-
looking statements are based on reasonable assumptions, you should be aware that many factors could affect the Company's actual
financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements.
These factors are discussed in more detail in the Company's filings with the Securities and Exchange Commission. These risks could cause
actual results to differ materially from those implied by forward-looking statements. You should keep in mind that any forward-looking
statement made herein, or elsewhere, speaks only as of the date on which it is made. New risks and uncertainties come up from time to
time, and it is impossible to predict these events or how they may affect the Company. The Company has no obligation to update any
forward-looking statements after the date hereof, except as required by federal securities laws.
CONFIDENTIAL | © 2021 EPAM Systems, Inc. 2Table of Contents
1. Who We Are 4
2. The EPAM Story 8
3. Our Positioning 10
4. Market Trends 13
5. How We Do It 15
6. Highlights 19
CONFIDENTIAL | © 2021 EPAM Systems, Inc. 31. Who
We Are
CONFIDENTIAL | © 2021 EPAM Systems, Inc. 4About EPAM
We are consultants, designers, architects and engineers who enable our
customers to be competitive and disruptive in the marketplace through
innovative technology solutions while helping them to navigate successfully
through multiple waves of technology change.
We help our customers be more We adopt a global growth strategy,
competitive by delivering solutions thinking and acting like start-ups,
through best-in-class engineering working in multidisciplinary teams
combined with strategy, design, and delivering results. Relentlessly.
consulting and innovation services.
CONFIDENTIAL | © 2021 EPAM Systems, Inc. 5EPAM Fast Facts – Q1 2021*
FOUNDED IN U.S. HEADQUARTERED REVENUES 2020 REVENUES REVENUE GROWTH
PUBLIC COMPANY 5 Year Revenue
1993 $781M $2.7B
(NYSE:EPAM) CAGR of 24%
(2015-2020)
GAAP EPS of $1.86, +26.5% Non-GAAP EPS of $1.81, +26.6%
43,450 EPAMers 38,800+ Engineers, Designers & Consultants 35+ Countries
R E V E N U E S BY I N D U S T RY V E R T I C A L R E V E N U E S BY G E O G R A P H Y
( R e p o r t e d $ & Yo Y G r o w t h ) ( R e p o r t e d $ & Yo Y G r o w t h )
Software & Hi-tech
Europe
$147 M 20.7% Financial Services
$260 M 16.3%
$169 M 28.3%
Life Sciences & Healthcare
Travel & Consumer
$91 M 31.6%
$139 M 16.3% North America
CIS
$30 M 21.2% $470 M 20.6%
Business Information & Media Emerging
$148 M 6.5% $87 M 23.6% APAC
$21 M 53.9%
*Figures are as of Q1 2021, percentages are presented on a YoY basis unless otherwise noted.. CONFIDENTIAL | © 2021 EPAM Systems, Inc. 6Growing, Global Presence in More Than 35 Countries1
N O RTH AME R I C A E U RO PE
Canada A u stri a
Mex i co B u l ga ri a
U n i ted S tates C zec h Rep u b l i c
F ra n c e
CIS G eorg i a
G erma ny
A rmen i a
H u n ga r y
B el a ru s
Irel a n d
Ka za k h sta n
Li th u a n i a
Ru s s i a
Ma l ta
U z b ek i sta n
N eth erl a n d s
Pol a n d
APAC Roma n i a
A u stra l i a Spain
China Swed en
H on g Kon g SA R Swi tzerl a n d
In d i a U k ra i n e
Japan U n i ted Ki n gd om
S i n ga p ore Is ra el
V i etn a m U n i ted A ra b E mi rates
Footnote References on Page 23
CONFIDENTIAL | © 2021 EPAM Systems, Inc. 72. The EPAM
Story
CONFIDENTIAL | © 2021 EPAM Systems, Inc. 8The EPAM Advantage - More Than 25 Years of Software & Digital Platform Expertise
1993 $0 revenues
1996 1997 2003 $35M revenues
2004
3 employees 500 employees
EPAM opens for business EPAM is chosen to help The success of Colgate- EPAM completes its first EPAM enters the European
with three employees. Colgate-Palmolive develop Palmolive’s Salesforce decade having built a market, beginning a multi-year
a Salesforce Automation Automation solution opens foundation of delivering journey of geographic and
solution and deploy it across the door to EPAM’s first Software Products industry diversification.
their organizations in Europe major software product and Solutions for more
and Latin America. development client: SAP AG. than 200 independent
software companies.
IPO
2009 2012 $434M revenues
2013 2016 $1.2B revenues 2019 $2.3B revenues
10,000 employees 22,000 employees 36,000 employees
In the midst of a historic EPAM approaches the end of its The Company establishes its EPAM extends its leadership The Company launches EPAM
global recession, EPAM second decade serving most of Digital Engagement practice position into Digital Product & Continuum, the company’s
focuses on investing in talent the world’s major new platform and accelerates services to help Platform Engineering Services vision for integrated Consulting
and tools, which will serve companies who were changing clients in customer experience, space2, and is named one of and Engineering services.
as the platform to support everything from search to design and eCommerce, the top 25 Fastest Growing Of our top 100 clients, 20% are in
the company's future growth. transportation to collaboration. in addition to expanding its Public Tech Companies the Fortune 500 and more than
offerings in Agile, BI/Analytics by Forbes. 50% are in the Forbes Global 2000.
and Mobile.
Footnote References on Page 23
CONFIDENTIAL | © 2021 EPAM Systems, Inc. 93. Our
Positioning
CONFIDENTIAL | © 2021 EPAM Systems, Inc. 10Enterprise IT Services is a $1 Trillion Total Addressable Market3
“BUILD” “ M A I N TA I N ”
Infrastructure
Consulting 20% 16% Management Services
Hardware
Management
7%
Services
Solutions Build &
Implementation Application
8%
Management
Services
25%
19%
IaaS & Infrastructure Business Process
Utility Services 5% Outsourcing
Footnote References on Page 23
CONFIDENTIAL | © 2021 EPAM Systems, Inc. 11Digital Platform & Product Engineering – A Subset of the Construct & Consulting Market
EPAM is Positioned in the Most Dynamic Subset of the Construct & Consulting Services Market
Construct & Consulting Services Digital Platform + Product Engineering
$460B Market3 $150B Market4
“BUILD” “MAINTAIN”
Infrastructure
Digital Platform Engineering Services
Management
Consulting
20% Services 10%
Hardware Product Engineering
5%
Management
Services
Solutions Build &
Application
Implementation
Management
Services
25%
IaaS & Infrastructure Business Process
Utility Services Outsourcing
Footnote References on Page 23
CONFIDENTIAL | © 2021 EPAM Systems, Inc. 124. Market
Trends
CONFIDENTIAL | © 2021 EPAM Systems, Inc. 13The Enterprise Landscape is Increasingly More Competitive, Complex
and in Need of Change
MARKET TECHNOLOGY ENTERPRISE
New competitors Mobile devices Smart sensors
Adaptiveness
running on nimble
technologies IoT platforms Big data analytics &
advanced algorithms Agile IT
The customer centric Location-detection
experience technologies Multilevel customer Application
interaction & modernization
Pushing digital Advanced human- customer profiling
capabilities through machine interfaces Talent
products and services Augmented reality transformation
Authentication & & wearables
fraud detection
Cloud computing
3D printing
CONFIDENTIAL | © 2021 EPAM Systems, Inc. 145. How We
Do It
CONFIDENTIAL | © 2021 EPAM Systems, Inc. 15HOW WE DO IT
We e n ab l e o u r cl i e nts’ b u si n e ss tran sfo rm ati o n by e n gagi n g m u l ti -d i sci p l i n ar y te am s w h o co m b i n e
d e e p b u si n e ss exp e rti se w i th d e si gn th i n ki n g , wo rl d -cl ass e n gi n e e ri n g , m o d e rn o p e rati o n s p racti ce s
an d l e ad i n g to o l s an d fram ewo rks fo r o pti m i z i n g p e rfo rm an ce . We are Di gi tal O rch e strato rs an d we
d e l i ve r agi l e tran sfo rm ati o n at scal e .
C O N S U LT DESIGN ENGINEER O P E R AT E OPTIMIZE
We h a r n e s s t h e p o w e r o f o u r Our talented designers bring We m a k e t e c h n o l o g y We d e p l o y c o m m e r c i a l We t u r n p r o c e s s o p t i m i z a t i o n
integrated cons ulting talent, clients’ ideas to life. They transformation happen. s oftware product practices into platforms for innovation
alongside our data expertise, know how to humanize Clients get omni-channel to deliver next-generation, through data-driven
to work out where we can technology and business to software platforms integrated and s mart-run decisions, using a
provide value and address create meaningful, architected for the future services. product-centric approach.
clients’ unique needs. multimodal digital and built to scale.
experiences.
CONFIDENTIAL | © 2021 EPAM Systems, Inc. 16We fuse integrated consulting with
EPAM’s engineering expertise to
accelerate breakthrough thinking
into meaningful impact.
CONFIDENTIAL | © 2021 EPAM Systems, Inc. 17As one of the world’s leading engineering companies –
we help clients dream it, design it and build it. We make it real.
W E HELP CLIEN TS SET THE RIGHT DIRECTION THEN W E DELIV ER A T SPEED A N D SCA LE
Multidisciplinary teams in EPAM Continuum look at We then support agile and iterative development teams
problems through specialty lenses – working with clients within EPAM – ensuring ongoing improvements and
to frame the right problems to solve enhancements along a multi-phase roadmap
Opportunity Solution Prototype MVP BETA Scale &
Identification Definition Testing Operate
CONFIDENTIAL | © 2021 EPAM Systems, Inc. 186. Financial &
Investment
Highlights
CONFIDENTIAL | © 2021 EPAM Systems, Inc. 19A History of Strong & Consistent Financial Performance
Strong Revenue Growth (Bn) Stable Non-GAAP Operating Margins5 Strong Non-GAAP EPS Growth6
$3.3 19.0%
$6.34
CAGR $5.42
18.0% CAGR 7
$2.6 3 Year – 22%
3 Year – 22%
5 Year – 24% $4.38
17.0%
$3.46
$1.9 $2.90
16.0%
$1.2
15.0%
$0.5 14.0%
2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
Cash Balance (Bn) Total Shareholder Return8 Cumulative Total Return9
$1.5 CAGR 280%
5 Year CAGR
$1.2 220%
3 Year CAGR 49%
$0.9 160%
35% EPAM
26% 27% S&P 500 IT
$0.6 100%
Russell 1000
13% 13%
$0.3 40%
$0.0 -20%
2015 2016 2017 2018 2019 2020 Russell 1000 S&P 500 IT EPAM 2017 2018 2019 2020
Footnote References on Page 23 CONFIDENTIAL | © 2021 EPAM Systems, Inc. 20Investment Highlights
1 2 3 4
MARKET STRONG REVENUE STRONG STRONG
POSITIONING GROWTH & PROFITABILITY CASH FLOW &
VISIBILITY BALANCE SHEET
Well positioned in a large Industry leading 3- and 5-Year Stable operating margins $494M of cash flow from
$150B market revenue CAGR of 22% and supporting superior operations for the
24%, respectively earnings growth last 12 months10
Of our top 100 clients, more
than 25% are in the Fortune 80-90% revenue visibility Proven ability to grow and $1.4B cash balance with
500 and more than 50% are throughout the fiscal year sustain strong profitability nominal debt10
in the Forbes Global 2000. 90% recurring revenues from with 3 Year Non-GAAP EPS
Capital allocation focused
clients greater than one year CAGR of 22%6
Diversified client portfolio on acquisitions to add to or
across 11 key industries Approximately 85% Consistent levels of enhance capabilities
of revenues is profitability allowing for
Loyal client base with an continuous investment to $275M line of credit
average of 8 years among time & material available in U.S.10
support top-line growth
our top 10 clients1
Footnote References on Page 23
CONFIDENTIAL | © 2021 EPAM Systems, Inc. 21Thank
You
CONFIDENTIAL | © 2021 EPAM Systems, Inc. 22Footnotes
1. As of 2020
2. Forrester Wave™: Digital Platform Engineering Services, Q2 2016
3. Gartner Forecast Analysis: IT Spending, Worldwide September 2019
4. Company's estimate of the Digital Platform + Product Engineering market as percentages of the $1 trillion Enterprise IT Services market.
5. Non-GAAP Operating Margin is adjusted from GAAP Income from Operations Margin to exclude stock-based compensation expenses, acquisition related costs including
amortization of intangible assets, impairment of assets, and certain other one-time charges and benefits
6. Non-GAAP EPS is adjusted from GAAP EPS to exclude stock-based compensation expenses, acquisition-related costs including amortization of intangible assets,
impairment of assets, certain other one-time charges and benefits, changes in fair value of contingent consideration, foreign exchange gains and losses, excess tax
benefits related to stock-based compensation, and the related effect on income taxes of the pre-tax adjustments
7. In 2016, EPAM revised its non-GAAP policy to consider, among other things, related effect on income taxes of the pre-tax adjustments. This revised policy has been
consistently applied since 2016. Amounts reported prior to 2016 were excluded from the historical presentation as these amounts were prepared under a previous
methodology and are not comparable
8. Total Shareholder Return CAGRs are based on market and stock performance through 2020
9. Cumulative Total Return assumes that on December 31, 2017, equal amounts was invested in EPAM and in each of the other two indices. The performance shown in the
graph represents past performance and should not be considered an indication of future performance.
10. As of Q1 2021
CONFIDENTIAL | © 2021 EPAM Systems, Inc. 23You can also read
