GRID DYNAMICS HOLDINGS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

Note 1 —Nature of operations and summary of significant accounting policies

Grid Dynamics Holdings, Inc. (the “Company”) is a leading provider of technology consulting, platform and product engineering, and advanced analytics services. The Company’s core business includes cloud platform and product engineering, supply chain and advanced manufacturing, and data and machine learning platform engineering. Grid Dynamics also helps organizations become more agile and create innovative digital products and experiences through its deep expertise in emerging technology, such as artificial intelligence (“AI”), data science, cloud computing, big data and DevOps, lean software development practices and a high-performance product culture. The Company’s headquarters and principal place of business is in San Ramon, California.

The following is a summary of critical accounting policies consistently applied in the preparation of the accompanying unaudited condensed consolidated financial statements. A full description of our significant accounting policies is provided in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as filed with the SEC on February 27, 2025.

Basis of presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of the Company’s management, necessary for the fair presentation of the results of operations for the interim periods. Operating results for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. These interim financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2024 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 27, 2025.

Principles of consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and all of its subsidiaries that are directly or indirectly owned or controlled. Intercompany transactions and balances have been eliminated upon consolidation.

The Company provides services to its customers utilizing its own personnel as well as personnel from subcontractors. One of the subcontractors (the “Affiliate”) exclusively supports and performs services on behalf of the Company and its customers. The Company had no ownership in the Affiliate as of June 30, 2025. The Company is required to apply accounting standards which address how a business enterprise should evaluate whether it has a controlling financial interest in a variable interest entity (“VIE”) through means other than voting rights and accordingly should determine whether or not to consolidate the entity. The Company has determined that it is required to consolidate the Affiliate because the Company has the power to direct the VIE’s most significant activities and is the primary beneficiary of the Affiliate. The assets and liabilities of the Affiliate primarily consist of inter-company balances and transactions all of which have been eliminated in consolidation. There was minimal activity in the Affiliate during the three and six months ended June 30, 2025.

Use of estimates

The preparation of the unaudited condensed consolidated financial statements in accordance with the U.S. GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ from these estimates and such differences could be material. Significant estimates include determination of fair value, useful lives and recoverability of intangible assets and goodwill, valuation of stock-based compensation and contingent consideration payable, determination of provision for income taxes, deferred tax assets and liabilities and uncertain tax positions.

Allowance for credit losses

The Company maintains an allowance against accounts receivable for the estimated probable losses on uncollectible accounts. The allowance is based upon historical loss experience, as adjusted for the current market conditions and forecasts about future economic conditions. As of June 30, 2025 and December 31, 2024, the Company recorded $3.3 million and $2.7 million of allowance for credit losses, respectively.

Prior period reclassifications

Certain amounts on the unaudited condensed consolidated balance sheet and unaudited condensed consolidated statement of cash flows in prior periods have been reclassified to conform with the current period presentation.

Recently issued accounting pronouncements

Changes to U.S. GAAP are established by the Financial Accounting Standards Board (the “FASB”), in the form of Accounting Standards Updates (“ASUs”), to the FASB’s Accounting Standards Codification (“ASC”). The Company will adopt these changes according to the various timetables the FASB specifies.

On December 14, 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740)—Improvements to Income Tax Disclosures, which expands annual disclosure requirements around income taxes primarily related to the rate reconciliation and income taxes paid. The new guidance is effective for the Company’s 2025 annual reporting period and can be applied either prospectively or retrospectively. The Company is currently evaluating the impact that the guidance will have on its financial statement disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring more detailed information about the types of expenses included in certain expense captions presented on the consolidated statements of income. Additionally, this amendment requires the disclosure of a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively and the disclosure of the total amount of selling expenses. The new guidance is effective for the Company’s 2027 annual periods and its interim periods beginning in 2028, with early adoption permitted. The standard can be applied either prospectively or retrospectively. The Company is in the process of assessing the timing of adoption and the impact the ASU will have on its financial statement disclosures.

Note 2 —Acquisitions

Overview of transactions

Mobile Computing— On October 4, 2024, the Company acquired all shares of Mobile Computing S.A. (“Mobile Computing”), an Argentina-based company, for a purchase price of $16.0 million including cash paid at closing of $13.3 million and contingent consideration with an acquisition-date fair value of $2.7 million. The maximum amount of potential contingent cash consideration is $3.0 million, subject to attainment of certain revenue and gross profit metrics within 12 months. The acquisition of Mobile Computing expanded the Company’s client portfolio, strengthened its expertise in digital product co-creation and User Interface (“UI”)/User Experience (“UX”) services and significantly contributed to the “Follow-the-Sun” model to better serve clients.

JUXT— On September 26, 2024, the Company acquired 100% of a group of UK-based companies, including Headrunner Limited and Congreve Computing Ltd., with their wholly owned subsidiary JUXT Ltd. (collectively referred to as “JUXT”). The total purchase consideration was $47.0 million, consisting of cash consideration of $39.5 million paid at closing and fair value of the contingent consideration at the date of the acquisition of $7.5 million. The maximum amount of potential contingent cash consideration is $9.4 million, subject to attainment of certain revenue and gross profit metrics within 12 months. The acquisition of JUXT strengthened the Company’s go-to-market positioning in the Finance vertical and opened new opportunities across the European market.

Assets acquired and liabilities assumed

The following table summarizes the fair values of the assets acquired and liabilities assumed as updated for any changes as of June 30, 2025.

During the second quarter of 2025, the Company finalized the working capital adjustment for JUXT that resulted in a decrease of original purchase price in the amount of $0.2 million with a corresponding net change in goodwill. The Company then finalized the fair value of the assets acquired and liabilities assumed in the acquisition of JUXT. The amounts related to Mobile Computing acquisition represent the Company’s provisional fair value estimates and are subject to subsequent adjustments as additional information is obtained during the applicable measurement period. The primary provisional amounts include certain working capital accounts that are not yet finalized. The Company expects to complete the purchase price allocation of Mobile Computing as soon as practicable but no later than one year from the acquisition date.

(1)The estimated fair values of trade receivables equaled their gross contractual amounts due as of the acquisition dates, all of which were collected by the Company as of June 30, 2025.

(2)The goodwill recognized as a result of the Mobile Computing acquisition is primarily attributed to the value the Company expects to achieve through growth opportunities in Latin America as well as the assembled workforce acquired. The goodwill is not deductible for income tax purposes.

(3)The goodwill recognized as a result of the JUXT acquisition is primarily attributed to synergies expected to be achieved by expanding the Company’s ability to serve customers in Europe and the assembled workforce acquired. The goodwill is not deductible for income tax purposes.

The estimated fair value, useful lives and amortization methods of identifiable intangible assets as of the date of acquisition updated for any changes during the six months ended June 30, 2025 are as follows:

Effect on operating results

The following table summarizes the effect on operating results of the Company for the three and six months ended June 30, 2025 and 2024:

(1)Revenues generated by JUXT and Mobile Computing during the period of one year starting from the applicable acquisition date.

These unaudited pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the results of operations as they would have been had the acquisitions of Mobile Computing and JUXT occurred on the assumed date, nor are they necessarily an indication of future operating results.

Note 3 —Fair value

Estimates of fair value of financial instruments not carried at fair value on a recurring basis are generally subjective in nature, and are determined as of a specific point in time based on the characteristics of the financial instruments and relevant market information. The Company’s financial assets and liabilities are generally short-term in nature; therefore, the carrying value of these items approximates their fair value. The following table summarizes certain fair value information as of June 30, 2025 and

December 31, 2024 for financial assets and liabilities measured at fair value on a recurring basis, as well as estimated fair values of certain other financial assets and liabilities not measured on a recurring basis:

(1)Equity securities of a related party, a company affiliated with the member of the Company’s Board of Directors, that do not have readily determinable fair value and are measured at cost.

Contingent consideration payable

The fair value of contingent consideration payable is determined using the Monte-Carlo model, which is primarily based on projected financial results of acquired business adjusted to market risk assumptions, probability of achievement of performance targets set in purchase agreements and respective discount rates. Even though there is significant judgment involved, the Company believes its estimates and assumptions are reasonable. Changes in financial projections, discount rates, timing and amount of specific milestone estimates, as well as probability assumptions related to achieving the various performance milestones, would result in a change in the fair value of the recorded contingent consideration payable. Such changes, if any, are recorded in Other income, net in the unaudited condensed consolidated statements of income/(loss) and comprehensive income/(loss).

The following table presents the weighted average discount rates for risk-free performance targets and time value used to determine fair values of contingent considerations payables for acquisitions completed during the year ended December 31, 2024 as of June 30, 2025:

The Company records short-term contingent consideration payable in Accrued expenses and other current liabilities in its unaudited condensed consolidated balance sheet. A reconciliation of the beginning and ending balances of Level 3 acquisition- related contingent consideration payable using significant unobservable inputs for the six months ended June 30, 2025 is as follows:

Note 4 —Property and equipment, net

Property and equipment, net consisted of the following:

Note 5 —Intangible assets, net

Intangible assets, net consisted of the following:

Based on the carrying value of the Company’s existing intangible assets as of June 30, 2025, the estimated amortization expense for the future years is as follows:

Note 6 —Accrued expenses and other current liabilities

The components of accrued expenses and other current liabilities were as follows:

Note 7 —Debt

Revolving Credit Facility — On March 15, 2022, the Company entered into a Credit Agreement (as amended, the “Credit Agreement”) by and among the Company, as borrower, the guarantors party thereto from time to time, the lenders party thereto from time to time, and JPMorgan Chase Bank, N.A., as administrative agent for the lenders. The Credit Agreement provides for a secured multicurrency revolving loan facility with an initial aggregate principal amount of up to $30.0 million, with a $10.0 million letter of credit sublimit. The Company may increase the size of the revolving loan facility up to $50.0 million, subject to certain conditions and additional commitments from existing and/or new lenders. On May 20, 2025, the Credit Agreement was amended to extend its maturity to March 15, 2028.

At the Company’s option, borrowings under the Credit Agreement accrue interest at a per annum rate based on either (i) the base rate plus a margin ranging from 1.0% to 1.5%, (ii) an adjusted term Secured Overnight Financing Rate (“SOFR”) or adjusted the Euro Interbank Offer Rate (“EURIBOR”) (based on one, three or six-month interest periods) plus a margin ranging from 2.0% to 2.5%, or (iii) an adjusted daily simple SOFR rate (or SONIA rate in the case of loans denominated in pounds sterling, or SARON rate in the case of loans denominated in Swiss francs), plus a margin ranging from 2.0% to 2.5%, in each case, with the applicable margin determined based on the Company’s consolidated total leverage ratio. The Company is also obligated to pay other closing fees, administration fees, commitment fees and letter of credit fees customary for a credit facility of this size and type.

The Company’s obligations under the Credit Agreement are required to be guaranteed by certain of its domestic subsidiaries meeting materiality thresholds set forth in the Credit Agreement. Such obligations, including the guaranties, are secured by substantially all of the personal property of the Company and the Company’s subsidiary guarantors.

The Credit Agreement contains customary affirmative and negative covenants, including covenants limiting the ability of the Company and its subsidiaries to, among other things, incur debt, grant liens, undergo certain fundamental changes, make investments and acquisitions, make certain restricted payments, dispose of assets, enter into certain transactions with affiliates, and enter into burdensome agreements, in each case, subject to limitations and exceptions set forth in the Credit Agreement. The Company is also required to maintain compliance with a consolidated total leverage ratio, determined in accordance with the terms of the Credit Agreement. As of June 30, 2025, the Company was in compliance with all covenants contained in the Credit Agreement.

As of June 30, 2025 and December 31, 2024, the Company didnot have any outstanding debt under the Credit Agreement.

Note 8 —Revenues

Disaggregation of revenues

The tables below present disaggregated revenues from contracts with customer by customer location, industries and contract-types. The Company believes this disaggregation best depicts how the nature, amount, timing and uncertainty of its revenues and cash flows are affected by industry, market and other economic factors. The Company has a single reportable segment for the three and six months ended June 30, 2025 and 2024.

The following table shows the disaggregation of the Company’s revenues by major customer location. Revenues are attributed to geographic regions based upon location of the customer served irrespective of the location billed, or the location of the delivery center performing the work. Substantially all of the revenue in our North America region relates to operations in the United States.

The following table shows the disaggregation of the Company’s revenues by main vertical markets:

(1)CPG stands for Consumer Packaged Goods.

The following table shows the disaggregation of the Company’s revenues by contract types:

Contract balances

A contract asset is a right to consideration that is conditional upon factors other than the passage of time. A contract liability, or deferred revenue, consists of advance payments and billings in excess of revenues recognized.

The Company’s contract balances as of the below dates were as follows:

As of June 30, 2025, December 31, 2024 and 2023 the Company didnot have contract assets recorded in its unaudited condensed consolidated balance sheets.

During the three and six months ended June 30, 2025, the Company recognized $0.7 million and $2.3 million of revenues, respectively, that were included in Accrued expenses and other current liabilities at December 31, 2024. During the three and six months ended June 30, 2024, the Company recognized $0.1 million and $0.4 million of revenues, respectively, that were included in Accrued expenses and other current liabilities at December 31, 2023.

Remaining performance obligations

As of June 30, 2025, the aggregate amount of transaction price allocated to remaining performance obligations was $1.3 million. Our remaining performance obligations represent commitments for future services for which work has not been performed and revenues are to be recorded in future periods. The Company expects to recognize all of its remaining performance obligations as revenues during the remaining 6 months of fiscal year 2025. Remaining performance obligations include amounts that will be invoiced in future periods and excludes the contracts that meet at least one of the following criteria under ASC Topic 606 “Revenue from Contracts with Customers”:

1)contracts with an original duration of one year or less, including contracts that can be terminated for convenience without a substantive penalty,

2)contracts for which the Company recognizes revenues based on the right to invoice for services performed,

3)variable consideration allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation in accordance with ASC 606-10-25-14(b), for which the criteria in ASC 606-10-32-40 have been met, or

4)variable consideration in the form of a sales-based or usage-based royalty promised in exchange for a license of intellectual property.

Many of the Company’s contracts met one or more of these exemptions as of June 30, 2025.

Customer concentration

The following table shows the amount of revenue derived from each customer exceeding 10% of the Company’s revenue:

The following table shows the number of customers exceeding 10% of the Company’s billed and unbilled receivable balances:

Transactions with related parties

During the three and six months ended June 30, 2025 and 2024, the Company conducted transactions with a number of companies affiliated with the members of the Company’s Board of Directors. As a result, during the three and six months ended June 30, 2025, the Company recorded revenues from related parties of $7.5 million and $14.2 million, respectively. During the same periods of 2024, the Company recorded revenues from related parties of $4.5 million and $7.3 million, respectively. As of June 30, 2025 and December 31, 2024, billed receivables from related parties were $5.1 million and $3.8 million, respectively. Unbilled receivables from related parties as of both June 30, 2025 and December 31, 2024 were $0.1 million.

Note 9 —Leases

A major part of the Company’s lease obligations is for office real estate. The Company may also lease corporate apartments, cars and office equipment. Payments on some of our leases may depend on index or rate, including Consumer Price Index. Such payments are included in the calculation of lease liability and assets at the commencement dates, all future changes are accounted as variable payments similar to other variable payments, such as common area maintenance, property and other taxes, utilities and insurance that are based on the lessor’s cost.

The Company’s leases have remaining lease terms ranging from 0.2 to 6.0 years as of June 30, 2025. Certain lease agreements may include the option to extend or terminate before the end of the contractual term and are often non-cancelable or cancellable only by the payment of penalties. The Company includes these options in the lease term when it is reasonably certain that they will be exercised.

As of June 30, 2025 and December 31, 2024, the Company had no finance leases.

Operating lease expense is recorded on a straight-line basis over the lease term. During the three and six months ended June 30, 2025 and 2024, lease costs were as follows:

Supplemental information related to operating lease transactions is as follows:

Weighted average remaining lease term and discount rate as of June 30, 2025 and December 31, 2024 were as follows:

As of June 30, 2025, operating lease liabilities will mature as follows:

There were no lease agreements signed with related parties as of June 30, 2025 and December 31, 2024.

As of June 30, 2025, the Company had committed to payments of $2.3 million related to an operating lease agreement that had not yet commenced. This operating lease commences in the fourth quarter of 2025 with the lease term offive years. The Company does not have finance lease agreements that had not yet commenced.

Note 10 —Income taxes

The Company recorded income tax expense of $2.0 million and $3.5 million for the three months ended June 30, 2025 and 2024, respectively. The Company’s effective tax rate was 27.8% and 130.2% for the second quarter of 2025 and 2024, respectively. The Company recorded income tax expense of $1.6 million and $4.5 million for the six months ended June 30, 2025 and 2024, respectively. The Company’s effective tax rate for the six months ended June 30, 2025 was 16.2% and was not meaningful for the same period of 2024 due to an immaterial loss before tax compared to the income tax expense recorded during the period. The change in the effective tax rate for the three and six months ended June 30, 2025, as compared to the same periods in 2024, was attributable mainly to the income tax benefit related to equity compensation and the change in pre-tax loss to pre-tax income.

For the three and six months ended June 30, 2024, the Company used a discrete effective tax rate method to calculate income taxes due to sensitivity of the forecast. Through June 30, 2024, the Company determined that small changes in the estimated “ordinary” income would result in significant changes in the estimated annual effective tax rate causing material distortion in the year-to-date tax provision.

As of June 30, 2025, the Company determined that it can reliably estimate full-year ordinary income and income tax expense. Therefore, for the six months ended June 30, 2025, the income tax expense was calculated by applying the estimated annual effective tax rate to the Company’s year-to-date pre-tax income taking into account discrete items.

On July 4, 2025, the “One Big Beautiful Bill Act” (the “Act”) was enacted into law. The Act includes changes to the U.S. tax law that will be applicable to Grid Dynamics beginning in the third quarter of 2025. These changes include provisions allowing accelerated tax deductions for qualified property and research expenditures. The Company is in the process of evaluating the impact of the Act on its financial statements but does not anticipate it to have a material effect.

Note 11 —Stock-based compensation

Employee stock-based compensation cost recognized in the unaudited condensed consolidated statements of income/(loss) and comprehensive income/(loss) was as follows:

Stock Options

2018 Stock Plan

Stock option activity under the Company’s 2018 Stock Plan is set forth below:

As of June 30, 2025, the Company fully recognized stock-based compensation costs related to 2018 Stock Plan options.

2020 Equity Incentive Plan

As of June 30, 2025,2.9 million shares were available for grant under 2020 Equity Incentive Plan (“2020 Plan”).

Stock option activity under the Company’s 2020 Plan is set forth below:

The Company elected the policy to account for forfeitures upon occurrence. The total unrecognized compensation expenses related to 2020 Stock Plan options as of June 30, 2025 were $2.8 million to be expensed on a straight-line basis over the remaining 1.5 years.

Restricted Stock Units (“RSUs”)

RSUs granted do not participate in earnings or dividends, and do not have voting rights until vested.

The following table summarizes activity of the Company’s RSUs for the six months ended June 30, 2025:

The total unrecognized compensation expenses related to 2020 Stock Plan RSUs as of June 30, 2025 were $18.4 million to be expensed on a straight-line basis over 2.1 years.

Performance Stock Units (“PSUs”)

The following table summarizes activity of the Company’s PSUs for the six months ended June 30, 2025:

(1)Reported at the estimate performance adjustment of 208% of the first tranche granted in 2024 and 100% for the remaining tranches.

(2)Reported at the estimate performance achievement of 179% and 100% for the second and third tranches of the target shares granted in 2024 and 2025, respectively.

The total estimated unrecognized compensation expenses related to 2020 Stock Plan PSUs as of June 30, 2025 were $10.5 million to be expensed over 1.0 years.

Note 12 —Earnings/(loss) per share

The following table sets forth the computation of basic and diluted earnings/(loss) per share as follows:

The following table represents the number of share equivalents outstanding during the period that were excluded from the calculation of diluted net income/(loss) per share attributable to common stockholders because including them would have had an anti-dilutive effect.

Note 13 —Segment and geographic information

Operating segments are components of the Company for which separate financial information is available and is regularly reviewed and evaluated by the chief operating decision maker (“CODM”) to assess performance of each operating segment and to allocate resources. The Company’s CODM is the Chief Executive Officer (“CEO”).

The Company operates as a single operating segment engaged in delivery of various software development and hosting services to customers across itsfive main industry-based verticals: Retail, Finance, TMT, CPG/Manufacturing, and Healthcare and Pharma. The Company derives revenues from multiple locations; however, North America continues to be its main sales market.

The Company’s determination that it operates as a single segment is based on the financial information regularly reviewed by the CODM. The CODM assesses core operating performance and allocates operating and capital resources of the Company based on gross profit, income/(loss) from operations and net income/(loss) that are also reported on the unaudited condensed consolidated statements of income/(loss) and comprehensive income/(loss). All three metrics are used to analyze budget-to-actual variances on a monthly and quarterly basis and to decide on the allocation of operating and capital resources to a single segment or new acquisitions. Additionally, the CODM reviews operating expenses, including cost of revenues, engineering, research, and development, sales and marketing, general and administrative expenses and trade receivables at the consolidated level to manage the Company’s operations. The Company does not generate, analyze and evaluate any discrete financial information for individual verticals or sales markets as of the reporting date. The CODM does not evaluate operating performance using asset or liability information.

Geographic Information

The following table presents revenues by customer location for the three and six months ended June 30, 2025 and 2024. The Company attributes customers to respective countries based upon the location of the customer served.

Long-lived assets include property and equipment, net of accumulated depreciation and amortization. Physical locations and values of the Company’s long-lived assets are summarized below:

Note 14 —Commitments and contingencies

Legal Matters

The Company is subject to legal proceedings and claims that arise in the ordinary course of its business. Management evaluates each claim and provides for potential loss when the claim is probable to be paid and reasonably estimable. While adverse decisions in certain of these litigation matters, claims and administrative proceedings could have a material effect on a particular period’s results of operations, subject to the uncertainties inherent in estimating future costs for contingent liabilities, management believes that any future accruals with respect to these currently known contingencies would not have a material effect on the financial condition, liquidity or cash flows of the Company. There were no material amounts required to be reflected in these unaudited condensed consolidated financial statements related to contingencies.

Note 15 —Subsequent events

The Company performed its subsequent event procedures through July 31, 2025, the date these unaudited condensed consolidated financial statements were issued.