Grid Dynamics Reports Second Quarter 2025 Financial Results
Record Revenues of
We are pleased to report second quarter 2025 revenues of
Retail remained our largest vertical, contributing
“Our second quarter revenue was a record aided by demand from both our new and existing customers, which are prioritizing innovation-centric initiatives from a spending perspective. Our ability to provide high-caliber technology consulting and engineering services continues to promote success for our clients.
Across the majority of our customers, AI is having a profound impact on how they plan their future initiatives. Companies are actively seeking AI-native partners that can lead and drive adoption within their organizations. Grid Dynamics is aligning every aspect of its business with an AI-first approach. I’m pleased to report that in the first half of 2025, our AI and Data practice accounted for
I’m excited to see the growth in our opportunity pipeline as we enter the third quarter with accelerated business momentum. Grid Dynamics has emerged stronger with greater differentiation from our industry peers whenever the industry has undergone transitions, whether due to economic cycles or technological shifts,” said Leonard Livschitz, CEO.
Second Quarter 2025 Financial Highlights
-
Total revenues were
$101.1 million 21.7% on a year-over-year basis. -
GAAP gross profit was
$34.5 million 34.1% of revenues, compared to$29.6 million 35.6% of revenues, in the second quarter of 2024. -
Non-GAAP gross profit was
$35.1 million 34.7% of revenues, compared to$30.1 million 36.2% of revenues, in the second quarter of 2024. -
GAAP net income was
$5.3 million $0.06 $0.8 million $0.01 -
Non-GAAP net income was
$8.3 million $0.10 $8.5 million $0.11 -
Non-GAAP EBITDA (earnings before interest, taxes, depreciation, amortization, other income and expenses, fair value adjustments, stock-based compensation, transaction and transformation-related costs, restructuring costs as well as geographic reorganization expenses), a non-GAAP metric, was
$12.7 million $11.7 million
See “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Information” below for a discussion of our non-GAAP measures.
Cash Flow and Other Metrics
-
Cash provided by operating activities was
$23.7 million $13.9 million -
Cash and cash equivalents totaled
$336.8 million $334.7 million - Total headcount was 5,013 as of June 30, 2025, compared with 3,961 as of June 30, 2024.
Financial Outlook
Third Quarter
-
The Company expects revenue in the third quarter of 2025 to be in the range of
$103 $105 million -
Non-GAAP EBITDA in the third quarter of 2025 is expected to be between
$12 $13 million - For the third quarter of 2025, we expect our basic share count to be in the 84 - 85 million range and diluted share count to be in the 87 - 89 million range.
Full Year
-
The Company expects full-year 2025 revenues to be in the range of
$415 $435 million 18.4% to24.1% on a year-over-year basis.
Grid Dynamics is not able, at this time, to provide GAAP targets for net income/(loss) for the third quarter of 2025 because of the difficulty of estimating certain items excluded from Non-GAAP EBITDA that cannot be reasonably predicted, such as interest income, taxes, other income/(expenses), fair-value adjustments, geographic reorganization expenses, restructuring expenses, transaction-related costs and charges related to stock-based compensation expense. The effect of these excluded items may be significant.
Conference Call and Webcast
Grid Dynamics will host a video conference call at 4:30 p.m. ET on Thursday, July 31, 2025 to discuss its second quarter financial results. Investors and other interested parties can access a webcast of the video conference call on the Investor Relations section of the Company’s website at https://www.griddynamics.com/investors.
A replay will also be available after the call at https://www.griddynamics.com/investors with the passcode $Q2@2025.
About Grid Dynamics
Grid Dynamics (Nasdaq: GDYN) is a leading provider of technology consulting, platform and product engineering, AI, and digital engagement services. Fusing technical vision with business acumen, we solve the most pressing technical challenges and enable positive business outcomes for enterprise companies undergoing business transformation. A key differentiator for Grid Dynamics is our 8 years of experience and leadership in enterprise AI, supported by profound expertise and ongoing investment in data and ML platform engineering, cloud platform and product engineering, IoT and edge computing, and digital engagement services. Founded in 2006, Grid Dynamics is headquartered in Silicon Valley with offices across the
Non-GAAP Financial Measures
To supplement the financial measures presented in Grid Dynamics press release in accordance with generally accepted accounting principles in
A “non-GAAP financial measure” refers to a numerical measure of Grid Dynamics historical or future financial performance or financial position that is included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP. Grid Dynamics provides certain non-GAAP measures as additional information relating to its operating results as a complement to results provided in accordance with GAAP. The non-GAAP financial information presented herein should be considered in conjunction with, and not as a substitute for or superior to, the financial information presented in accordance with GAAP and should not be considered a measure of liquidity and profitability.
Grid Dynamics has included these non-GAAP financial measures because they are financial measures used by Grid Dynamics’ management to evaluate Grid Dynamics’ core operating performance and trends, to make strategic decisions regarding the allocation of capital and new investments and are among the factors analyzed in making performance-based compensation decisions for key personnel.
Grid Dynamics believes the use of non-GAAP financial measures, as a supplement to GAAP measures, is useful to investors in that they eliminate items that are either not part of core operations or do not require a cash outlay, such as stock-based compensation expense. Grid Dynamics believes these non-GAAP measures provide investors and other users of its financial information consistency and comparability with its past financial performance and facilitate period to period comparisons of operations. Grid Dynamics believes these non-GAAP measures are useful in evaluating its operating performance compared to that of other companies in its industry, as they generally eliminate the effects of certain items that may vary for different companies for reasons unrelated to overall operating performance.
There are significant limitations associated with the use of non-GAAP financial measures. Further, these measures may differ from the non-GAAP information, even where similarly titled, used by other companies and therefore should not be used to compare our performance to that of other companies. Grid Dynamics compensates for these limitations by providing investors and other users of its financial information a reconciliation of non-GAAP measures to the related GAAP financial measures. Grid Dynamics encourages investors and others to review its financial information in its entirety, not to rely on any single financial measure, and to view its non-GAAP measures in conjunction with GAAP financial measures. Please see the reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures attached to this release.
Forward-Looking Statements
This communication contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that are not historical facts, and involve risks and uncertainties that could cause actual results of Grid Dynamics to differ materially from those expected and projected. These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “will,” “potential,” “projects,” “predicts,” “continue,” or “should,” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include, without limitation, the quotations of management, the section titled “Financial Outlook,” and statements concerning Grid Dynamics’s expectations with respect to future performance, particularly in light of the macroeconomic environment and the Russian invasion of
These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside Grid Dynamics’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to: (i) Grid Dynamics operates in a rapidly evolving industry, which makes it difficult to evaluate future prospects and may increase the risk that it will not continue to be successful; (ii) Grid Dynamics may be unable to effectively manage its growth or achieve anticipated growth, particularly as it expands into new geographies, which could place significant strain on Grid Dynamics’ management personnel, systems and resources; (iii) Grid Dynamics’ revenues are highly dependent on a limited number of clients and industries, and any decrease in demand for outsourced services in these industries may reduce Grid Dynamics’ revenues and adversely affect Grid Dynamics’ business, financial condition and results of operations; (iv) macroeconomic conditions, inflationary pressures, the risk of recession, the impact of tariffs and other factors impacting world trade, and the geopolitical climate, including the Russian invasion of
Grid Dynamics cautions that the foregoing list of factors is not exclusive. Grid Dynamics cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Grid Dynamics does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based. Further information about factors that could materially affect Grid Dynamics, including its results of operations and financial condition, is set forth under the “Risk Factors” section of the Company’s quarterly report on Form 10-Q filed May 1, 2025, in its annual report on Form 10-K filed February 27, 2025 and in other periodic filings Grid Dynamics makes with the SEC.
Schedule 1: GRID DYNAMICS HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME/(LOSS) AND COMPREHENSIVE INCOME/(LOSS) Unaudited (In thousands, except per share data) |
|||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
2025 |
|
|
|
2024 |
|
|
|
2025 |
|
|
|
2024 |
|
Revenues |
$ |
101,095 |
|
|
$ |
83,037 |
|
|
$ |
201,510 |
|
|
$ |
162,854 |
|
Cost of revenues |
|
66,592 |
|
|
|
53,474 |
|
|
|
130,010 |
|
|
|
105,626 |
|
Gross profit |
|
34,503 |
|
|
|
29,563 |
|
|
|
71,500 |
|
|
|
57,228 |
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses |
|
|
|
|
|
|
|
||||||||
Engineering, research, and development |
|
6,744 |
|
|
|
4,127 |
|
|
|
13,230 |
|
|
|
8,499 |
|
Sales and marketing |
|
7,116 |
|
|
|
7,286 |
|
|
|
15,373 |
|
|
|
14,578 |
|
General and administrative |
|
20,766 |
|
|
|
18,110 |
|
|
|
45,057 |
|
|
|
39,653 |
|
Total operating expenses |
|
34,626 |
|
|
|
29,523 |
|
|
|
73,660 |
|
|
|
62,730 |
|
|
|
|
|
|
|
|
|
||||||||
(Loss)/income from operations |
|
(123 |
) |
|
|
40 |
|
|
|
(2,160 |
) |
|
|
(5,502 |
) |
Other income, net |
|
7,424 |
|
|
|
2,665 |
|
|
|
11,930 |
|
|
|
5,190 |
|
Income/(loss) before income tax |
|
7,301 |
|
|
|
2,705 |
|
|
|
9,770 |
|
|
|
(312 |
) |
Provision for income taxes |
|
2,028 |
|
|
|
3,522 |
|
|
|
1,585 |
|
|
|
4,453 |
|
Net income/(loss) |
$ |
5,273 |
|
|
$ |
(817 |
) |
|
$ |
8,185 |
|
|
$ |
(4,765 |
) |
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments |
|
3,639 |
|
|
|
(127 |
) |
|
|
5,389 |
|
|
|
(305 |
) |
Comprehensive income/(loss) |
$ |
8,912 |
|
|
$ |
(944 |
) |
|
$ |
13,574 |
|
|
$ |
(5,070 |
) |
|
|
|
|
|
|
|
|
||||||||
Income/(loss) per share |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
0.06 |
|
|
$ |
(0.01 |
) |
|
$ |
0.10 |
|
|
$ |
(0.06 |
) |
Diluted |
$ |
0.06 |
|
|
$ |
(0.01 |
) |
|
$ |
0.09 |
|
|
$ |
(0.06 |
) |
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding |
|
|
|
|
|
|
|
||||||||
Basic |
|
84,578 |
|
|
|
76,604 |
|
|
|
84,352 |
|
|
|
76,377 |
|
Diluted |
|
86,447 |
|
|
|
76,604 |
|
|
|
87,166 |
|
|
|
76,377 |
|
Schedule 2: GRID DYNAMICS HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS Unaudited (In thousands, except share and per share data) |
|||||||
|
As of |
||||||
|
June 30,
|
|
December 31,
|
||||
Assets |
|
|
|
||||
Current assets |
|
|
|
||||
Cash and cash equivalents |
$ |
336,752 |
|
|
$ |
334,655 |
|
Trade receivable, net of allowance of |
|
77,727 |
|
|
|
69,371 |
|
Prepaid expenses and other current assets |
|
18,540 |
|
|
|
19,278 |
|
Total current assets |
|
433,019 |
|
|
|
423,304 |
|
|
|
|
|
||||
Property and equipment, net |
|
16,260 |
|
|
|
14,018 |
|
Operating lease right-of-use assets, net |
|
14,738 |
|
|
|
12,108 |
|
Intangible assets, net |
|
45,599 |
|
|
|
47,918 |
|
Goodwill |
|
85,189 |
|
|
|
83,407 |
|
Deferred tax assets |
|
9,409 |
|
|
|
8,774 |
|
Other noncurrent assets |
|
4,693 |
|
|
|
2,663 |
|
Total assets |
$ |
608,907 |
|
|
$ |
592,192 |
|
|
|
|
|
||||
Liabilities and equity |
|
|
|
||||
Current liabilities |
|
|
|
||||
Accounts payable |
$ |
6,299 |
|
|
$ |
4,069 |
|
Accrued compensation and benefits |
|
27,992 |
|
|
|
21,677 |
|
Operating lease liabilities, current |
|
5,804 |
|
|
|
5,420 |
|
Accrued expenses and other current liabilities |
|
18,628 |
|
|
|
24,378 |
|
Total current liabilities |
|
58,723 |
|
|
|
55,544 |
|
|
|
|
|
||||
Deferred tax liabilities |
|
8,490 |
|
|
|
8,914 |
|
Operating lease liabilities, noncurrent |
|
9,480 |
|
|
|
7,205 |
|
Contingent consideration payable, noncurrent |
|
— |
|
|
|
2,700 |
|
Total liabilities |
$ |
76,693 |
|
|
$ |
74,363 |
|
|
|
|
|
||||
Stockholders’ equity |
|
|
|
||||
Common stock, |
$ |
8 |
|
|
$ |
8 |
|
Additional paid-in capital |
|
533,389 |
|
|
|
532,578 |
|
Accumulated deficit |
|
(3,660 |
) |
|
|
(11,845 |
) |
Accumulated other comprehensive income/(loss) |
|
2,477 |
|
|
|
(2,912 |
) |
Total stockholders’ equity |
|
532,214 |
|
|
|
517,829 |
|
Total liabilities and stockholders’ equity |
$ |
608,907 |
|
|
$ |
592,192 |
|
Schedule 3: GRID DYNAMICS HOLDINGS, INC. RECONCILIATION OF NON-GAAP INFORMATION Unaudited (In thousands, except per share data) |
|||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
2025 |
|
2024 |
|
2025 |
|
2024 |
||||
Revenues |
$ |
101,095 |
|
$ |
83,037 |
|
$ |
201,510 |
|
$ |
162,854 |
Cost of revenues |
|
66,592 |
|
|
53,474 |
|
|
130,010 |
|
|
105,626 |
GAAP gross profit |
|
34,503 |
|
|
29,563 |
|
|
71,500 |
|
|
57,228 |
Stock-based compensation |
|
564 |
|
|
510 |
|
|
1,134 |
|
|
992 |
Non-GAAP gross profit |
$ |
35,067 |
|
$ |
30,073 |
|
$ |
72,634 |
|
$ |
58,220 |
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
2025 |
|
|
|
2024 |
|
|
|
2025 |
|
|
|
2024 |
|
GAAP net income/(loss) |
$ |
5,273 |
|
|
$ |
(817 |
) |
|
$ |
8,185 |
|
|
$ |
(4,765 |
) |
Adjusted for: |
|
|
|
|
|
|
|
||||||||
Depreciation and amortization |
|
4,900 |
|
|
|
3,241 |
|
|
|
9,619 |
|
|
|
6,155 |
|
Provision for income taxes |
|
2,028 |
|
|
|
3,522 |
|
|
|
1,585 |
|
|
|
4,453 |
|
Stock-based compensation |
|
6,717 |
|
|
|
7,491 |
|
|
|
17,460 |
|
|
|
18,830 |
|
Transaction and transformation-related costs(1) |
|
323 |
|
|
|
213 |
|
|
|
761 |
|
|
|
667 |
|
Geographic reorganization(2) |
|
467 |
|
|
|
445 |
|
|
|
811 |
|
|
|
946 |
|
Restructuring costs(3) |
|
461 |
|
|
|
304 |
|
|
|
863 |
|
|
|
930 |
|
Interest and other income, net (4) |
|
(7,424 |
) |
|
|
(2,665 |
) |
|
|
(11,930 |
) |
|
|
(5,190 |
) |
Non-GAAP EBITDA |
$ |
12,745 |
|
|
$ |
11,734 |
|
|
$ |
27,354 |
|
|
$ |
22,026 |
|
| (1) | Transaction and transformation-related costs include, when applicable, external deal costs, transaction-related professional fees, transaction-related retention bonuses, which are allocated proportionally across cost of revenues, engineering, research and development, sales and marketing and general and administrative expenses as well as other transaction-related costs including integration expenses consisting of outside professional and consulting services. | |
| (2) | Geographic reorganization includes expenses connected with military actions of |
|
| (3) | Our restructuring costs are comprised of severance charges and respective taxes, and are included in General and administrative expenses in the Company’s unaudited condensed consolidated statement of income/(loss) and comprehensive income/(loss). | |
| (4) | Interest and other income, net consist primarily of gains and losses on foreign currency transactions, fair value adjustments, interest on cash held at banks and returns on investments in money-market funds, and other miscellaneous non-operating expenses. | |
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
2025 |
|
|
|
2024 |
|
|
|
2025 |
|
|
|
2024 |
|
GAAP net income/(loss) |
$ |
5,273 |
|
|
$ |
(817 |
) |
|
$ |
8,185 |
|
|
$ |
(4,765 |
) |
Adjusted for: |
|
|
|
|
|
|
|
||||||||
Stock-based compensation |
|
6,717 |
|
|
|
7,491 |
|
|
|
17,460 |
|
|
|
18,830 |
|
Transaction and transformation-related costs (1) |
|
323 |
|
|
|
213 |
|
|
|
761 |
|
|
|
667 |
|
Geographic reorganization (2) |
|
467 |
|
|
|
445 |
|
|
|
811 |
|
|
|
946 |
|
Restructuring costs(3) |
|
461 |
|
|
|
304 |
|
|
|
863 |
|
|
|
930 |
|
Other (income)/expense, net(4) |
|
(4,357 |
) |
|
|
(21 |
) |
|
|
(5,658 |
) |
|
|
64 |
|
Tax impact of non-GAAP adjustments(5) |
|
(591 |
) |
|
|
878 |
|
|
|
(4,177 |
) |
|
|
(562 |
) |
Non-GAAP net income |
$ |
8,293 |
|
|
$ |
8,493 |
|
|
$ |
18,245 |
|
|
$ |
16,110 |
|
Number of shares used in the GAAP diluted EPS |
|
86,447 |
|
|
|
76,604 |
|
|
|
87,166 |
|
|
|
76,377 |
|
GAAP diluted EPS |
$ |
0.06 |
|
|
$ |
(0.01 |
) |
|
$ |
0.09 |
|
|
$ |
(0.06 |
) |
Number of shares used in the non-GAAP diluted EPS |
|
86,447 |
|
|
|
77,899 |
|
|
|
87,166 |
|
|
|
78,134 |
|
Non-GAAP diluted EPS |
$ |
0.10 |
|
|
$ |
0.11 |
|
|
$ |
0.21 |
|
|
$ |
0.21 |
|
| (1) | Transaction and transformation-related costs include, when applicable, external deal costs, transaction-related professional fees, transaction-related retention bonuses, which are allocated proportionally across cost of revenues, engineering, research and development, sales and marketing and general and administrative expenses as well as other transaction-related costs including integration expenses consisting of outside professional and consulting services. | |
| (2) | Geographic reorganization includes expenses connected with military actions of |
|
| (3) | Our restructuring costs are comprised of severance charges and respective taxes, and are included in General and administrative expenses in the Company’s unaudited condensed consolidated statement of income/(loss) and comprehensive income/(loss). | |
| (4) | Other (income)/expense, net consist primarily of gains and losses on foreign currency transactions, fair value adjustments, and other miscellaneous non-operating income and expense. During the fourth quarter ended December 31, 2024, the Company started to include interest (income)/expense, net in its calculation of non-GAAP net income. As a result, the Company has adjusted previously reported Other expense, net adjustment to include interest income, net of 2.6 million and 5.3 million for the three and six months ended June 30, 2024. | |
| (5) | Reflects the estimated tax impact of the non-GAAP adjustments presented in the table. | |
Schedule 4: GRID DYNAMICS HOLDINGS, INC. REVENUE BY VERTICALS Unaudited (In thousands, except percentages) |
||||||||||||||||||||||||
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||||||||||
|
|
2025 |
|
2024 |
|
2025 |
|
2024 |
||||||||||||||||
|
|
(in thousands, except percentages of revenues) |
||||||||||||||||||||||
Retail |
|
$ |
29,557 |
|
29.2 |
% |
|
$ |
26,779 |
|
32.2 |
% |
|
$ |
61,078 |
|
30.3 |
% |
|
$ |
51,408 |
|
31.6 |
% |
Finance |
|
|
25,386 |
|
25.1 |
% |
|
|
12,566 |
|
15.1 |
% |
|
|
50,414 |
|
25.0 |
% |
|
|
22,809 |
|
14.0 |
% |
Technology, Media and Telecom |
|
|
25,188 |
|
24.9 |
% |
|
|
23,228 |
|
28.0 |
% |
|
|
48,790 |
|
24.2 |
% |
|
|
47,261 |
|
29.0 |
% |
CPG/Manufacturing |
|
|
10,604 |
|
10.5 |
% |
|
|
9,843 |
|
11.9 |
% |
|
|
21,375 |
|
10.6 |
% |
|
|
19,402 |
|
11.9 |
% |
Healthcare and Pharma |
|
|
2,556 |
|
2.5 |
% |
|
|
3,158 |
|
3.8 |
% |
|
|
4,961 |
|
2.5 |
% |
|
|
6,167 |
|
3.8 |
% |
Other |
|
|
7,804 |
|
7.8 |
% |
|
|
7,463 |
|
9.0 |
% |
|
|
14,892 |
|
7.4 |
% |
|
|
15,807 |
|
9.7 |
% |
Total |
|
$ |
101,095 |
|
100.0 |
% |
|
$ |
83,037 |
|
100.0 |
% |
|
$ |
201,510 |
|
100.0 |
% |
|
$ |
162,854 |
|
100.0 |
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20250731354980/en/
Grid Dynamics Investor Relations:
investorrelations@griddynamics.com
Source: Grid Dynamics Holdings, Inc.
