GRID DYNAMICS HOLDINGS, INC.

Previous wording

•Our revenues reached $101.1 million, an increase of 21.7% on a year-over-year basis.

Current wording

•Our revenues were $104.2 million, representing an increase of 19.1% on a year-over-year basis.

Previous 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.

Current wording

•Our non-GAAP EBITDA totaled $12.7 million, or 12.2% of revenues for the quarter, compared to $14.8 million, or 16.9% of revenues in the corresponding period of 2024.

Previous 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.

Current wording

In 2022, Russian forces launched a significant military action against Ukraine, with increased attacks and other activity in recent periods. 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

We have no way to predict the progress or outcome of the military action in Ukraine or the chance and terms of any possible peaceful or other resolution of the war, as the conflict and government responses continue to develop and are beyond our control. Prolonged unrest, military activities, expansion of hostilities, or broad-based sanctions could have a material adverse effect on our operations and business outlook. For example, if Russia were to invade other countries, such as Moldova, it could adversely affect our business. In addition, the current geopolitical situations in Armenia and separately in Serbia create additional uncertainty in the region, and could adversely affect our business.

Current wording

We have no way to predict the progress or outcome of the military action in Ukraine, its continued escalation or the chance and terms of any possible peaceful or other resolution of the war, as the conflict and government responses continue to develop and are beyond our control. Continued unrest, military activities, expansion of hostilities, or broad-based sanctions could have a material adverse effect on our operations and business outlook. For example, if Russia were to invade other countries, such as Moldova, it could adversely affect our business. In addition, the current geopolitical situations in Armenia, Serbia and elsewhere in Eastern Europe create additional uncertainty in the region, and could adversely affect our business.

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. The total number of customers for thesix months ended June 30, 2025 was 211 customers, down from 220 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 thenine months ended September 30, 2025 was 222 customers, a small decrease from 229 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 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.

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 nine months ended September 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 following table sets forth a summary of Grid Dynamics’ consolidated results of operations for the interim periods indicated, and the changes between periods:

Current wording

The following table sets forth a summary of Grid Dynamics’ consolidated results of operations for the periods indicated, and the changes between periods:

Previous wording

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 wording

Our total revenues grew by 19.1% and 22.1% on a quarterly and year-to-date basis, reaching $104.2 million and $305.7 million for the three and nine months ended September 30, 2025, respectively. Our growth reflected the continued diversification of our customer base across multiple verticals and the benefit of strategic acquisitions completed during 2024.

Previous 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.

Current wording

Retail continued to represent our largest vertical, contributing 27.8% and 29.5% of total revenues for the three and nine months ended September 30, 2025, respectively. Retail revenues declined by 2.9% year-over-year during the third quarter and achieved 10.8% growth on a year-to-date basis, reaching $29.0 million and $90.0 million, respectively, compared to $29.8 million and $81.2 million for the corresponding periods in 2024. The year-over-year decline reflected lower activity from a number of large customers, some of whom have since returned to growth. The year-to-date growth was primarily driven by increased demand from specialty retail customers and new customer engagements.

Previous wording

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 wording

During the third quarter of 2025, the Technology, Media and Telecom (“TMT”) vertical surpassed Finance for the first time since the fourth quarter of 2024, becoming our second largest vertical. TMT revenues increased 18.2% on a quarterly and 8.3% on a year-to-date basis, reaching $28.6 million for the third quarter and $77.4 million for the nine months ended September 30, 2025. Growth was primarily attributable to higher demand from our largest technology customers.

Previous 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.

Current wording

Our Finance vertical continued to deliver strong results, contributing 24.6% and 24.9% of total revenues for the three and nine months ended September 30, 2025, respectively. Third-quarter revenues increased to $25.6 million, up from $14.2 million in the prior-year period. On a year-to-date basis, the Finance vertical grew by $39.1 million, reaching $76.0 million. Growth was driven by continued strong demand from fintech customers, along with contributions from our 2024 acquisitions.

Previous 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.

Current wording

The Healthcare and Pharma vertical generated $2.4 million and $7.4 million of revenues for the three and nine months ended September 30, 2025, representing 2.3% and 2.4% of total revenues, respectively. This compares to $2.5 million and $8.7 million, or 2.9% and 3.5% of total revenues, for the corresponding periods of 2024.

Previous wording

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 wording

Cost of revenues was $69.5 million for the three months ended September 30, 2025, an increase of $14.7 million, or 27.0%, compared to $54.7 million in the same period of 2024. For the nine months ended September 30, 2025, cost of revenues increased by $39.1 million, or 24.4%, reaching $199.5 million, compared to the prior-year period. The increase in cost of revenues reflected our continued investment in delivery to support growing customer demand.

Previous 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.

Current wording

Our engineering, research, and development expenses increased 29.5% and 46.7% for the three and nine months ended September 30, 2025, respectively, reaching $5.8 million in the third quarter and $19.0 million for the nine-month period. The increase primarily reflected our continued investments in customer delivery capabilities and internally developed software, including AI technologies, aimed at enhancing our scalability, operational efficiency and long-term competitiveness.

Previous wording

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 wording

General and administrative expenses increased 13.1% to $21.9 million for the three months ended September 30, 2025, compared to $19.3 million in the prior-year period. For the nine months ended September 30, 2025, general and administrative expenses totaled $66.9 million, up 13.4% from $59.0 million in the same period of 2024. The increase was primarily driven by higher costs associated with our 2024 acquisitions, including increased compensation, depreciation, amortization, and other acquisition-related costs. This increase was partially offset by a reduction in stock-based compensation expenses.

Previous wording

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 wording

Expressed as a percentage of revenues, general and administrative expenses continued to decrease, reaching 21.0% and 21.9% for the three and nine months September 30, 2025, respectively, compared to 22.1% and 23.6% for the corresponding periods in 2024, reflecting cost optimization across various corporate functions.

Previous 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.

Current wording

During the three months ended September 30, 2025, we recognized income tax expense of $1.9 million, compared to $1.3 million in the same period of 2024. The increase was primarily attributable to higher non-deductible executive compensation in the current period. During the nine months ended September 30, 2025, we recognized income tax expense of $3.5 million, compared to $5.8 million in the same period of 2024. The decrease in the tax provision was attributable mainly to the income tax benefit related to equity compensation.

Previous wording

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.

Current wording

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.

Previous wording

The following table presents the reconciliation of Grid Dynamics’ Non-GAAP EBITDA to its GAAP net income/(loss), the most directly comparable GAAP measure, for the periods indicated:

Current wording

The following table presents the reconciliation of Grid Dynamics’ Non-GAAP EBITDA to its GAAP net income, the most directly comparable GAAP measure, for the periods indicated:

Previous wording

(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 statements of income/(loss) and comprehensive income/(loss).

Current wording

(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 statements of income/(loss).

Previous wording

The following table presents a reconciliation of Grid Dynamics’ Non-GAAP diluted EPS and its Non-GAAP net income to its GAAP net income/(loss) for the periods indicated:

Current wording

The following table presents a reconciliation of Grid Dynamics’ Non-GAAP diluted EPS and its Non-GAAP net income to its GAAP net income for the periods indicated:

Previous wording

(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 statements of income/(loss) and comprehensive income/(loss).

Current wording

(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 statements of income/(loss).

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 and $5.3 million for the three and six months ended June 30, 2024, respectively.

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 $2.8 million and $8.1 million for the three and nine months ended September 30, 2024, respectively.

Previous 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.

Current wording

As of September 30, 2025, Grid Dynamics had cash and cash equivalents amounting to $338.6 million compared to $334.7 million at December 31, 2024. Of these amounts, $40.9 million and $38.6 million, respectively, were held outside the United States, and included Switzerland, the U.K., India, Netherlands, Armenia, Poland, Moldova, and other countries. We did not have any debt outstanding under the revolving credit facility as of September 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 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.

Current wording

Operating Activities. Net cash provided by operating activities totaled $30.7 million for the nine months ended September 30, 2025, an increase of $7.6 million compared to $23.1 million in the same period of 2024. The improvement was primarily driven by changes in working capital, including timing of employee compensation payments offset by customer collections.

Previous 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.

Current wording

Investing Activities. Net cash used in investing activities was $11.3 million for the nine months ended September 30, 2025, compared to $41.3 million in the prior-year period. The cash outflow in 2025 was primarily related to our capital expenditures and the capitalization of internally developed projects. Net cash used in investing activities during the nine months ended September 30, 2024 primarily reflects the acquisition of JUXT that resulted in the payment of $32.1 million, net of cash acquired.

Previous 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.

Current wording

Financing Activities. Net cash used in financing activities amounted to $17.5 million for the nine months ended September 30, 2025, largely driven by tax withholding obligations related to the issuance of shares in connection with vested equity awards. These obligations were $9.1 million higher as compared to the same period of 2024. Net cash used in financing activities for the nine months ended September 30, 2024 was $7.8 million.