GRID DYNAMICS HOLDINGS, INC.
For the period ended Jun 30, 2025. Filed Jul 31, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Jul 31, 2025
GDYN$13.10-3.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-01.
0001628280-25-021584
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-07-31.
0001628280-25-037042
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 102 previous paragraphs and 103 current paragraphs.
71 unchanged; 21 reworded; 11 added; 10 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
•Our GAAP gross profit margin decreased 1.5% compared to the prior year quarter, and showed a small increase of 0.4% for the six-month periods, reaching 35.5% for the six months ended June 30, 2025 compared to 35.1% for the six-month period of 2024.
Current report
Our total revenues grew by 21.7% and 23.7% on a quarterly and year-to-date basis, reaching $101.1 million and $201.5 million for the three and six months ended June 30, 2025, respectively. Our growth was driven by strong performance across the Finance and Retail verticals and our 2024 acquisitions.
Current report
The Technology, Media and Telecom (“TMT”) vertical revenue increased 8.4% on a quarterly and 3.2% on a year-to-date basis, reaching $25.2 million for the second quarter and $48.8 million for the first half of 2025. Growth was primarily driven by demand from our technology customers.
Current report
CPG and Manufacturing revenues increased 7.7% year-over-year to $10.6 million in the second quarter of 2025, up from $9.8 million in the same period of 2024. On a year-to-date basis, revenues increased 10.2% to $21.4 million compared to $19.4 million in prior-year period. This growth was driven primarily by contributions from our 2024 acquisitions.
Current report
Lastly, the Other vertical remained relatively flat on a quarterly basis but declined $0.9 million on a year-to-date basis. The decrease was primarily from customers in hospitality industry. The Other vertical contributed 7.8% and 7.4% of total revenues for the three and six months ended June 30, 2025, down from 9.0% and 9.7% during the respective prior-year periods.
Current report
Cost of revenues was $66.6 million for the three months ended June 30, 2025, an increase of $13.1 million, or 24.5%, compared to $53.5 million in the same period of 2024. For the six months ended June 30, 2025, cost of revenues increased by $24.4 million, or 23.1%, reaching $130.0 million, compared to the prior year period. The increase was primarily attributable to higher headcount, including personnel added through recent acquisitions and foreign currency headwinds.
Current report
Gross profit increased to $34.5 million for the second quarter of 2025, up 16.7% from the same period in 2024. For the six-month period, gross profit grew 24.9% year-over-year to $71.5 million. Expressed as a percentage of revenues, gross margin declined on a quarterly basis from 35.6% in the second quarter of 2024 to 34.1% in the current year period. At the same time, on a year-to-date basis, gross margin showed positive trends, reaching 35.5% for the first half of 2025, compared to 35.1% in the prior year period.
Current report
Our sales and marketing expenses remained relatively flat in the second quarter of 2025 compared to the same period in the prior year, amounting to somewhat above $7.0 million in both periods. On a year-to-date basis, sales and marketing expenses increased by 5.5%, reaching $15.4 million for the six months ended June 30, 2025, compared to $14.6 million in the prior year period. Despite the increase in absolute dollars, our sales and marketing expenses, expressed as a percentage of revenues, declined, reaching 7.0% and 7.6% for the three and six months ended June 30, 2025, respectively, compared to 8.8% and 9.0%, in the corresponding periods of 2024.
Current report
General and administrative expenses increased by 14.7% to $20.8 million for the three months ended June 30, 2025, compared to $18.1 million in the prior year period. For the six-month period ended June 30, 2025, general and administrative expenses totaled $45.1 million, reflecting a 13.6% increase from $39.7 million in the prior year period. The increase was primarily attributed to costs associated with recent acquisitions, including increased compensation, depreciation, amortization, and other acquisition-related costs. This increase was partially offset by a reduction in stock-based compensation expenses.
Current report
Expressed as a percentage of revenues, general and administrative expenses continued to decline, reaching 20.5% and 22.4% for the three and six months June 30, 2025, respectively, compared to 21.8% and 24.3% in the prior year periods of 2024.
Current report
Provision for Income Tax
Removed paragraphs (10)
Previous report
•Our GAAP gross profit margin improved 2.1% compared to the prior year quarter and reached 36.8%. The increase was largely due to higher revenues and improved utilization.
Previous report
For the three months ended March 31, 2025, our total revenues showed significant growth of 25.8%, reaching $100.4 million, compared to $79.8 million in the same period of 2024. This growth was driven by a strong performance across multiple verticals, with notable contributions from Finance and Retail along with contributions from our recent acquisitions.
Previous report
The Technology, Media and Telecom (“TMT”) vertical remained relatively flat, generating $23.6 million and $24.0 million of revenues during the three months ended March 31, 2025 and 2024, respectively. While we experienced growth from our technology customers, it was offset by decreased demand from some of our telecom customers during the first quarter of 2025.
Previous report
Revenues for the CPG and Manufacturing vertical increased 12.7% year-over-year, growing from $9.6 million in the first quarter of 2024 to $10.8 million during the current year period. This growth was driven by a combination of increased demand from existing customers and our recent acquisitions.
Previous report
Lastly, our Other vertical declined 15.1% year-over-year with revenues of $7.1 million in the first quarter of 2025 compared to $8.3 million in the year-ago quarter. The decline was largely driven by decreased demand from a subset of customers tied to the hospitality industry. The Other vertical contributed 7.1% and 10.4% of total revenues for the three months ended March 31, 2025 and 2024, respectively.
Previous report
For the three months ended March 31, 2025, our cost of revenues was $63.4 million, an increase of $11.3 million, or 21.6%, compared to $52.2 million in the same period of 2024. The increase was primarily driven by higher headcount, including from our recent acquisitions.
Previous report
Gross profit for the first quarter of 2025 increased 33.7% year-over-year to $37.0 million, primarily as a result of higher revenues and utilization levels. Expressed as a percentage of revenues, our gross margins improved by 2.1% to 36.8% for the three months ended March 31, 2025, from 34.7% in 2024.
Previous report
Our sales and marketing expenses showed modest growth of $1.0 million to $8.3 million for the three months ended March 31, 2025, compared to $7.3 million in the same period of 2024. Despite the increase in absolute dollars, our sales and marketing expenses, expressed as a percentage of revenues, decreased to 8.2% from 9.1% in the prior-year period.
Previous report
General and administrative expenses increased by 12.8% to $24.3 million for the three months ended March 31, 2025, compared to $21.5 million in the prior-year period. The increase was primarily driven by increased costs associated with our recent acquisitions, which included expenses related to compensation, depreciation, amortization, and acquisition-related costs, partially offset by lower levels of stock-based compensation expenses. Expressed as a percentage of revenues, our general and administrative expenses decreased by 2.8% to 24.2% during the three months March 31, 2025, compared to 27.0% in the year-ago period.
Previous report
(Benefit from)/Provision for Income Tax
Reworded paragraphs (21)
Previous wording
The statements contained in this Quarterly Report on Form 10-Q that are not historical facts are forward-looking statements (within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act) that involve risks and uncertainties. Such forward-looking statements may be identified by, among other things, the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “seek,” “intends,” “plans,” “estimates,” “projects,” “anticipates,” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. Actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause future results to differ materially from those projected in the forward-looking statements include, but are not limited to, those discussed in the section titled “Cautionary Note Regarding Forward Looking Statements,” included elsewhere in this Quarterly Report on Form 10-Q, and the section titled "Risk Factors" in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K.
Current wording
The statements contained in this Quarterly Report on Form 10-Q that are not historical facts are forward-looking statements (within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act) that involve risks and uncertainties. Such forward-looking statements may be identified by, among other things, the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “seek,” “intends,” “plans,” “estimates,” “projects,” “anticipates,” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. Actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause future results to differ materially from those projected in the forward-looking statements include, but are not limited to, those discussed in the section titled “Cautionary Note Regarding Forward Looking Statements,” included elsewhere in this Quarterly Report on Form 10-Q, and the section titled "Risk Factors" in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2025 and in our Annual Report on Form 10-K.
Previous wording
•Our revenues reached $100.4 million, an increase of 25.8% on a year-over-year basis.
Current wording
•Our revenues reached $101.1 million, an increase of 21.7% on a year-over-year basis.
Previous wording
•We recorded net income of $2.9 million compared to a net loss of $3.9 million in prior-year quarter.
Current wording
•We recorded net income of $5.3 million compared to a net loss of $0.8 million in the prior-year quarter.
Previous wording
•Our non-GAAP EBITDA reached $14.6 million, or 14.5% of revenues, compared to $10.3 million, or 12.9% of revenues, in the corresponding period of 2024.
Current wording
•Our non-GAAP EBITDA reached $12.7 million, or 12.6% of revenues, compared to $11.7 million, or 14.1% of revenues, in the corresponding period of 2024.
Previous wording
•Operating cash inflows improved by $6.1 million compared to the prior-year quarter, reaching $9.4 million.
Current wording
•Operating cash inflows improved by $3.7 million compared to the prior-year quarter, reaching $14.4 million.
Previous wording
In February 2022, Russian forces launched a significant military action against Ukraine, with progress by Russia over the past several months. The impact on Ukraine, coupled with the actions taken by other countries, including sanctions imposed by the U.S., Canada, the U.K., the European Union, and other countries, companies and organizations against officials, individuals, regions, and industries in Russia and certain regions of Ukraine, and each country’s potential response to such sanctions, tensions, and military actions could have a material adverse effect on our operations. For example, Russia could attempt to take control of assets in Ukraine belonging to companies registered in the U.S., such as Grid Dynamics. Any such material adverse effect from the conflict and enhanced sanctions activity may disrupt our delivery of services, impair our ability to complete financial or banking transactions, cause us to continue to shift all or portions of our work occurring in the region to other countries, and may restrict our ability to engage in certain projects in the region or involving certain customers in the region.
Current wording
In February 2022, Russian forces launched a significant military action against Ukraine, with increased activity in recent months. The impact on Ukraine, coupled with the actions taken by other countries, including sanctions imposed by the U.S., Canada, the U.K., the European Union, and other countries, companies and organizations against officials, individuals, regions, and industries in Russia and certain regions of Ukraine, and each country’s potential response to such sanctions, tensions, and military actions could have a material adverse effect on our operations. For example, Russia could attempt to take control of assets in Ukraine belonging to companies registered in the U.S., such as Grid Dynamics. Any such material adverse effect from the conflict and enhanced sanctions activity may disrupt our delivery of services, impair our ability to complete financial or banking transactions, cause us to continue to shift all or portions of our work occurring in the region to other countries, and may restrict our ability to engage in certain projects in the region or involving certain customers in the region.
Previous wording
Grid Dynamics’ ability to retain and expand its relationships with existing customers and add new customers are key indicators of its revenue potential. New customers have a direct impact on the Company’sability to diversify sources of revenue and replace customers that may no longer require its services. As of March 31, 2025, the Company had 204 customers, a slight decrease from 210 a year ago.
Current wording
Grid Dynamics’ ability to retain and expand its relationships with existing customers and add new customers are key indicators of its revenue potential. New customers have a direct impact on the Company’sability to diversify sources of revenue and replace customers that may no longer require its services. The total number of customers for thesix months ended June 30, 2025 was 211 customers, down from 220 a year ago.
Previous wording
Grid Dyna mics has a relatively high level of revenue concentration with certain customers and constantly works toward decreasing those levels. During the three months ended March 31, 2025 and 2024, one customer accounted for 10% or more of Grid Dynamics’ revenues in each of the periods indicated. The Company expects to continue its focus on maintaining long-term relationships with customers while diversifying its customer base.
Current wording
Grid Dyna mics has a relatively high level of revenue concentration with certain customers and constantly works toward decreasing those levels. During each of the three and six months ended June 30, 2025 and 2024, one customer accounted for 10% or more of Grid Dynamics’ revenues. The Company expects to continue its focus on maintaining long-term relationships with customers while diversifying its customer base.
Previous wording
The three months ended March 31, 2025 compared to the three months ended March 31, 2024
Current wording
The three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024
Previous wording
Retail continued to be our largest vertical, accounting for 31.4% of total revenues in the first quarter of 2025. Revenues from this vertical increased 28.0% on a year-over-year basis, reaching $31.5 million for the three months ended March 31, 2025. This growth was primarily driven by our specialty retail clients.
Current wording
Retail remained our largest vertical, contributing 29.2% and 30.3% of total revenues for the three and six months ended June 30, 2025, respectively. Revenues from this vertical increased 10.4% year-over-year to $29.6 million in the second quarter and grew 18.8% to $61.1 million on a year-to-date basis, compared to $26.8 million and $51.4 million for the same periods in 2024. This growth was primarily driven by increased demand from our specialty retail customers and new customer engagements.
Previous wording
Our Finance vertical continued its strong performance, doubling revenues year-over-year for the third consecutive quarter. Revenues reached $25.0 million in the first quarter of 2025, up from $10.2 million in the corresponding period of 2024. The significant growth in this vertical was driven by increased demand from fintech and insurance customers, as well as contributions from our recent acquisitions that added global banking customers. As a result, Finance became our second largest vertical, contributing 24.9% of total revenues for the quarter.
Current wording
Our Finance vertical continued its strong performance, doubling year-over-year for the fourth consecutive quarter. Second quarter revenues reached $25.4 million, up from $12.6 million in the prior-year period. On a year-to-date basis, the Finance vertical grew by $27.6 million to $50.4 million. Growth in this vertical was driven by increased demand from fintech and insurance customers, along with contributions from our 2024 acquisitions. As a result, Finance has become our second-largest vertical, accounting for approximately 25.0% of total revenues on both a quarterly and year-to-date basis.
Previous wording
The Healthcare and Pharma vertical generated $2.4 million of revenues in the first quarter of 2025, representing 2.4% of total revenues, compared to $3.0 million, or 3.8%, of total revenues, in the prior-year period.
Current wording
The Healthcare and Pharma vertical generated revenues of $2.6 million and $5.0 million for the three and six months ended June 30, 2025, representing 2.5% of total revenues in both periods. This compares to $3.2 million and $6.2 million, or 3.8% of total revenues, in the corresponding periods of 2024.
Previous wording
Our engineering, research, and development expenses increased 48.4% during the first quarter of 2025 to $6.5 million compared to $4.4 million in the prior-year period. Growth primarily reflects our continued investments in customer delivery operations and internally developed software aimed at enhancing our long-term competitiveness.
Current wording
Our engineering, research, and development expenses grew 63.4% and 55.7% for the three and six months ended June 30, 2025, respectively, reaching $6.7 million in the second quarter and $13.2 million for the six-month period. The increase reflects our ongoing investments in customer delivery operations and internally developed software aimed at enhancing our long-term scalability and competitiveness.
Previous wording
Other income, net was $4.5 million for the first quarter of 2025, compared to $2.5 million in the prior-year period. The increase in other income, net during the first quarter of 2025 was primarily driven by the revaluation of acquisition-related contingent consideration liabilities and higher gains from investments in money market funds, partially offset by foreign currency headwinds.
Current wording
For the three and six months ended June 30, 2025, other income, net, reached $7.4 million and $11.9 million, respectively, compared to $2.7 million and $5.2 million in the prior year periods. The increase in other income, net during the three and six months ended June 30, 2025 was primarily driven by the remeasurement of acquisition-related contingent consideration liabilities and higher gains from investments in money market funds, partially offset by foreign currency headwinds.
Previous wording
During the three months ended March 31, 2025, we recognized an income tax benefit of $0.4 million compared to income tax expense of $0.9 million in the same period of 2024. The difference in the tax provision was attributable mainly to the income tax benefit for equity compensation during the first quarter of 2025 and the change from pre-tax loss to pre-tax income.
Current wording
During the three and six months ended June 30, 2025, we recognized income tax expense of $2.0 million and $1.6 million, respectively, compared to $3.5 million and $4.5 million in the same periods of 2024. The difference in the tax provision was attributable mainly to the income tax benefit for equity compensation during the first and second quarters of 2025 and the change from pre-tax loss to pre-tax income.
Previous wording
(4)Other (income)/expense, net consists 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 for the three months ended March 31, 2024.
Current wording
(4)Other (income)/expense, net consists 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, respectively.
Previous wording
Our principal source of liquidity continues to be cash generated from our operations. From time to time, we seek additional financing by means of follow-on public offerings of our common stock. The latest offering closed on November 14, 2024 and resulted in $107.6 million of net proceeds, after deducting underwriting discounts and commissions. Additionally, we entered into an agreement establishing a revolving credit facility with JPMorgan Chase Bank, N.A., as an administrative agent for the lenders. The revolving credit facility provides us with $30.0 million of available borrowing capacity. The maturity of this facility was recently extended to May 30, 2025. See Note 7 “Debt” in the notes to our condensed consolidated financial statements in “Part I. Item 1. Financial Statements (Unaudited)” of this Quarterly Report for information regarding our debt.
Current wording
Our principal source of liquidity continues to be cash generated from our operations. From time to time, we seek additional financing by means of follow-on public offerings of our common stock. The latest offering closed on November 14, 2024 and resulted in $107.6 million of net proceeds, after deducting underwriting discounts and commissions. Additionally, we entered into an agreement establishing a revolving credit facility with JPMorgan Chase Bank, N.A., as an administrative agent for the lenders. The revolving credit facility provides us with $30.0 million of available borrowing capacity. On May 20, 2025, the maturity of this facility was extended to March 15, 2028. See Note 7 “Debt” in the notes to our condensed consolidated financial statements in “Part I. Item 1. Financial Statements (Unaudited)” of this Quarterly Report for information regarding our debt.
Previous wording
As of March 31, 2025, Grid Dynamics had cash and cash equivalents amounting to $325.5 million compared to $334.7 million at December 31, 2024. Of these amounts, $43.2 million and $38.6 million, respectively, were held outside the United States, and included Switzerland, the U.K., Netherlands, India, Argentina, Armenia, Mexico, Moldova, Poland and other countries. We did not have any debt outstanding under the revolving credit facility as of March 31, 2025. We believe that our cash and cash equivalents balance, cash generated from operating activities and proceeds from our November 2024 offering will be sufficient to fund currently expected levels of operating, investing and financing expenditures for a period of twelve months from the date of this filing. However, if our resources are insufficient to satisfy our cash requirements, we may need to seek additional equity or debt financing, which may be subject to conditions outside of our control and may not be available on terms acceptable to our management or at all.
Current wording
As of June 30, 2025, Grid Dynamics had cash and cash equivalents amounting to $336.8 million compared to $334.7 million at December 31, 2024. Of these amounts, $42.7 million and $38.6 million, respectively, were held outside the United States, and included Switzerland, the U.K., India, Mexico, Netherlands, Armenia, Moldova, Poland and other countries. We did not have any debt outstanding under the revolving credit facility as of June 30, 2025. We believe that our cash and cash equivalents balance, cash generated from operating activities and proceeds from our November 2024 offering will be sufficient to fund currently expected levels of operating, investing and financing expenditures for a period of twelve months from the date of this filing. However, if our resources are insufficient to satisfy our cash requirements, we may need to seek additional equity or debt financing, which may be subject to conditions outside of our control and may not be available on terms acceptable to our management or at all.
Previous wording
Operating Activities. Net cash provided by operating activities for the three months ended March 31, 2025 increased by $6.1 million to $9.4 million from $3.2 million provided in the same period of 2024, driven by changes in working capital, including the timing of compensation payments to our employees and collections from customers.
Current wording
Operating Activities. Net cash provided by operating activities totaled $23.7 million for the six months ended June 30, 2025, an increase of $9.8 million compared to $13.9 million provided in the same period of 2024. The improvement was primarily driven by changes in working capital, including timing of employee compensation payments and customer collections.
Previous wording
Investing Activities. Net cash used in investing activities showed minimal changes year-over year, amounting to $3.3 million for the three months ended March 31, 2025 compared to $3.9 million in the same period of 2024. The majority of cash outflow was related to our capital expenditures and capitalized projects.
Current wording
Investing Activities. Net cash used in investing activities was $7.3 million for the six months ended June 30, 2025, compared to $6.8 million in the prior year period, remaining relatively stable. The cash outflows in both periods were primarily related to our capital expenditures and the capitalization of internally developed projects.
Previous wording
Financing Activities. Net cash used in financing activities in the three months ended March 31, 2025 was $15.8 million, and mainly reflected the tax withholding obligations due to the issuance of shares in connection with vested awards that were $8.7 million higher as compared to the first quarter of 2024.
Current wording
Financing Activities. Net cash used in financing activities amounted to $16.9 million for the six months ended June 30, 2025, largely driven by tax withholding obligations related to the issuance of shares in connection with vested equity awards. These obligations were $8.5 million higher as compared to the first half of 2024. Net cash used in financing activities for the six months ended June 30, 2024 was $7.9 million.