GRID DYNAMICS HOLDINGS, INC.

Grid Dynamics Holdings, Inc. is an Enterprise Artificial Intelligence (AI) transformation partner for Fortune 1000 companies, combining deep AI expertise with enterprise-scale delivery to assist clients in identifying AI investment areas, delivering scalable AI systems, and realizing business value from AI deployments. The company's foundation is built upon distributed systems, real-time data, machine learning algorithms, and natural language processing, which have converged into Enterprise AI. Grid Dynamics serves as a strategic architect and technical expert, providing specialized engineering for companies transitioning to AI-driven operations, moving beyond off-the-shelf software to custom-engineered solutions leveraging proprietary data and specific business processes. The company's market position is defined by its AI-native approach, a twenty-year track record in complex system engineering, and over 40 pre-built, production-ready solution accelerators across AI, data platforms, and cloud engineering. This expertise is complemented by a restructuring of the IT services workforce towards senior engineers and data scientists, engineering mastery for Agentic AI systems, a rigorous focus on ROI and business outcomes, and strategic ecosystem partnerships with major hyperscale cloud providers and leading platform AI companies. The company also addresses the "production bottleneck" in AI adoption by combining strategic advisory services with hands-on engineering for integration, observability, governance, and cost control.

Grid Dynamics' core business model revolves around providing consulting, engineering, and operational services for digital transformation, with a focus on areas where AI, data, and cloud technologies generate the most value. The company's revenue is primarily generated through time and materials contracts, which accounted for $378.899 million ¹ in 2025, and fixed-fee contracts, which contributed $30.521 million ² in the same period. Other revenues amounted to $2.407 million ³. The company serves Fortune 1000 companies across several industry verticals, with a significant portion of its revenue concentrated among its largest clients. In 2025, one customer accounted for 15.4% ⁴ of total revenues, and the top 10 clients generated approximately 57.7% ⁵ of revenues. The company employs a co-creation model, integrating its senior-weighted engineering talent directly into client teams to ensure continuous knowledge transfer and internal expertise development.

The company's services and solutions are organized around client business outcomes and encompass several key areas. Artificial Intelligence Services guide enterprises from AI readiness and use case identification to robust infrastructure delivery and enterprise-wide scaling, focusing on digital labor, enhanced customer experience, new revenue streams, and reduced risk. Cloud Platform and Product Engineering modernizes legacy systems and delivers cloud-native platforms, emphasizing AI-native SDLC, DevOps, AIOps, QA automation, observability, and FinOps. Digital Engagement services create modular composable commerce platforms, integrating AI for intelligent search, the Merchandising Experience Platform (MXP), catalog enrichment, customer 360 personalization, conversational AI, agentic commerce, and AI focus groups. IoT and Edge Computing assists manufacturers and logistics providers with Physical AI, offering an IoT Control Tower, digital twin simulations, collaborative robotics, and edge computing solutions. Finally, AI and Data Platforms design and deliver the data infrastructure for AI and analytics, including real-time streaming platforms, analytics environments, machine learning Ops, multi-agent orchestration, and durable execution platforms.

For the fiscal year ended December 31, 2025, Grid Dynamics reported total revenues of $411.827 million ⁶, an increase of 17.5% ⁷ year-over-year. Gross profit was $142.348 million ⁸, resulting in a gross margin of 34.6% ⁹. Operating loss narrowed to $(1.895) million ¹⁰, compared to $(2.105) million ¹¹ in the prior year. Net income increased significantly to $9.668 million ¹² from $4.041 million ¹³ in 2024. Diluted GAAP EPS was $0.11 ¹⁴, up from $0.05 ¹⁵ in the previous year. Non-GAAP EBITDA increased by 2.5% ¹⁶ to $53.792 million ¹⁷, while Non-GAAP diluted EPS was $0.40 ¹⁸, down from $0.47 ¹⁹ in 2024. Cash and cash equivalents stood at $342.058 million ²⁰ as of December 31, 2025, compared to $334.655 million ²¹ in 2024. The company did not have any outstanding debt under its revolving credit facility at year-end. Net cash provided by operating activities was $40.600 million ²².

Comparing 2025 to 2024, total revenues increased by $61.256 million ²³, or 17.5% ²⁴. Retail revenues grew by $6.550 million ²⁵, or 5.7% ²⁶, to $120.507 million ²⁷. Technology, Media and Telecom (TMT) revenues increased by $12.403 million ²⁸, or 13.0% ²⁹, reaching $107.451 million ³⁰. Finance vertical revenues saw substantial growth, increasing by $40.227 million ³¹, or 66.9% ³², to $100.384 million ³³, making it the largest contributor to overall revenue growth. CPG/Manufacturing revenues increased by $2.590 million ³⁴, or 6.4% ³⁵, to $43.058 million ³⁶. Healthcare and Pharma revenues decreased to $10.183 million ³⁷ from $11.109 million ³⁸ in the prior year, representing a decline of 8.3% ³⁹. Gross margin decreased by 160 basis points to 34.6% ⁴⁰ from 36.2% ⁴¹, primarily due to a higher cost basis in key delivery geographies and foreign exchange fluctuations. Engineering, research, and development expenses increased by 29.0% ⁴² to $23.665 million ⁴³, reflecting continued investments in customer delivery capabilities and internally developed solutions. Sales and marketing expenses increased by $1.410 million ⁴⁴ to $30.032 million ⁴⁵, but decreased as a percentage of revenues to 7.3% ⁴⁶ from 8.2% ⁴⁷, indicating improved operating leverage. General and administrative expenses increased by $8.405 million ⁴⁸, or 10.2% ⁴⁹, to $90.546 million ⁵⁰, mainly due to the full-year impact of 2024 acquisitions, but decreased as a percentage of revenues to 22.1% ⁵¹ from 23.4% ⁵².

During 2024, Grid Dynamics completed two strategic acquisitions: JUXT Ltd. in the United Kingdom on September 26, 2024, for a total purchase consideration of $47.0 million ⁵³, and Mobile Computing S.A. in Argentina on October 4, 2024, for a purchase price of $16.0 million ⁵⁴. These acquisitions expanded the company's client portfolio, strengthened expertise in digital product co-creation and UI/UX services, and contributed to the "Follow-the-Sun" delivery model, enhancing market position across Europe and the Americas. The company also renewed its software subscription services agreement for an additional term of 5 years starting from June 1, 2024. In October 2025, the Board of Directors authorized a share repurchase program of up to $50.0 million ⁵⁵ of the company's common stock, under which 200,249 ⁵⁶ shares were repurchased for $2.0 million ⁵⁷ during December 2025.

The company anticipates that its operating expenses will increase in the foreseeable future as it invests in business growth, including acquisition-related integration costs, public company compliance costs, and increased spending related to sales, marketing, and research and development. These increased expenditures may make it more challenging to achieve and maintain profitability. The company will need to generate and sustain significant revenue levels to become profitable and cannot assure sustainable operating profits as it expands its business and infrastructure.

A major growth area for Grid Dynamics is its strategic ecosystem partnerships with major hyperscale cloud providers such as Google Cloud, AWS, and Microsoft Azure, and leading platform AI companies like NVIDIA and Temporal Technologies. These relationships are described as co-development partnerships that provide privileged access to emerging capabilities, accelerated innovation cycles, and solutions leveraging best-in-class technologies. These partnerships facilitate enhanced joint solution development and co-selling opportunities, helping clients employ and scale AI using advanced infrastructure. In the year ended December 31, 2025, these partnerships contributed over 19% ⁵⁸ of the company's revenue. The company's global delivery model, leveraging talent across the Americas, Europe, and India, supports continuous development and optimizes for quality and cost efficiency.

Another significant growth vector is the company's focus on Enterprise AI transformation for Fortune 1000 companies. Grid Dynamics aims to capitalize on the industry shift from automating business processes to automating decision-making, providing specialized engineering for AI implementations that work at enterprise scale and deliver measurable ROI. The company's AI-native approach, built on a twenty-year track record of engineering complex systems, and its development of over 40 pre-built, production-ready solution accelerators across AI, data platforms, and cloud engineering, are key differentiators. The emergence of Agentic AI, where multiple AI agents collaborate autonomously, is identified as a next enterprise inflection point, directly addressed by Grid Dynamics' strengths in distributed computing, fault-tolerant design, and high-performance enterprise systems. The company's GAIN (Grid Dynamics AI-Native) engagement model provides a development framework optimized for global, enterprise-scale delivery, with an emphasis on domain specialists, software architects, and experts in emerging technology.

Operationally, the company's gross margin decreased by 160 basis points to 34.6% ⁵⁹ in 2025 from 36.2% ⁶⁰ in 2024, driven by a higher cost basis in key delivery geographies and foreign exchange fluctuations. Engineering, research, and development expenses increased by 29.0% ⁶¹ to $23.665 million ⁶² in 2025, reflecting continued investments in customer delivery capabilities and internally developed solutions, including the integration of AI technologies to enhance scalability and operational efficiency. General and administrative expenses, as a percentage of revenues, decreased by 1.3 percentage points to 22.1% ⁶³ in 2025 from 23.4% ⁶⁴ in the prior year, indicating effective cost optimization across corporate functions.

The company's supply chain posture and manufacturing capacity are not explicitly detailed in the filing. However, the company emphasizes its global delivery model, leveraging talent across the Americas, Europe, and India, to provide continuous development and optimize for both quality and cost efficiency. India has become one of the top-two countries by headcount, representing a strategic expansion of delivery capabilities with access to deep talent pools in AI, data engineering, and cloud platforms. The company's talent management framework, including Grid University, its online education platform with thousands of hours of technical training across over 250 courses, ensures continuous skill development in emerging technologies, AI-first SDLC, generative AI, agentic AI, and context engineering. The Team Data AI platform uses predictive analytics to assemble high-performing teams and optimize resource allocation, while the Skill Tree system maps engineers' expertise for optimal project fit.

In terms of capital allocation, the Board of Directors authorized a share repurchase program of up to $50.0 million ⁶⁵ of the company's common stock on October 23, 2025. During December 2025, the company repurchased 200,249 ⁶⁶ shares for an aggregate cost of $2.0 million ⁶⁷, leaving $48.0 million ⁶⁸ available for future repurchases. The company has not paid any cash dividends on its common stock since its merger in March 2020 and expects to retain all earnings for business operations in the foreseeable future. The company's credit agreement provides for a three-year secured multicurrency revolving loan facility of up to $30.0 million ⁶⁹, with a $10.0 million ⁷⁰ letter of credit sublimit, which was extended to March 15, 2028 ⁷¹. The company may increase the size of this facility up to $50.0 million ⁷².

The company explicitly flags several structural headwinds and execution risks. The rapidly evolving digital engineering and IT services landscape, particularly with the acceleration of AI and related technologies, makes it difficult to evaluate future prospects and increases the risk of not maintaining success. The company's ability to effectively manage growth, especially as it expands into new geographies and industries, could strain management personnel, systems, and resources. Historically, revenues have been highly dependent on a limited number of clients and industries, with 57.7% ⁷³ of revenues from the top 10 clients in 2025, making the company vulnerable to decreased demand from these clients or industries. The company has incurred net losses in recent years, including a net loss of $1.8 million ⁷⁴ in 2023, and may incur future losses due to unforeseen operating expenses, expansion into higher-cost geographies, and increased personnel costs. The long selling and implementation cycles for services require significant resource commitments before revenue realization, posing a risk if sales are not closed or revenues are delayed.

Geographic, regulatory, and macro factors are also identified as constraints. Macroeconomic conditions, inflationary pressures, economic downturns, and market volatility, including rising interest rates, could adversely affect operating results and growth prospects. The ongoing military action in Ukraine, which has worsened, has impacted and may continue to affect the business, potentially disrupting service delivery, impairing financial transactions, and forcing work shifts to other countries. Geopolitical situations in Serbia and Armenia also create additional uncertainty. The company's global business, particularly in CIS, CEE, and Latin American countries, exposes it to significant legal, economic, tax, and political risks, including less established legal systems, changes in laws, difficulties in enforcing intellectual property rights, bureaucratic obstacles, corruption, and restrictions on currency convertibility. Failure to comply with laws and regulations relating to privacy, data protection, and cybersecurity, which are rapidly evolving globally, could lead to government enforcement actions, private litigation, and adverse publicity. Restrictions on immigration and the ability to obtain visas for personnel to travel and work at customer sites outside their home countries could also adversely impact the business.

Grid Dynamics faces material risks including the rapidly evolving technology services industry, particularly with AI, which makes future prospects difficult to evaluate and could adversely impact financial performance. The company's historical dependence on a limited number of clients and industries, with 15.4% ⁷⁵ of 2025 revenues from one customer and 57.7% ⁷⁶ from the top ten, exposes it to significant revenue concentration risk. Macroeconomic conditions, inflationary pressures, and market volatility, including rising interest rates, could adversely affect client spending on digital transformation programs. Geopolitical instability, specifically the ongoing military action in Ukraine, and tensions in regions like Serbia and Armenia, pose risks of service disruption, impaired financial transactions, and forced operational shifts. The company's global operations, especially in CIS, CEE, and Latin American countries, expose it to legal, economic, tax, and political risks, including less established legal systems, regulatory changes, and currency fluctuations, such as the susceptibility to Argentinian peso fluctuations due to hyper-inflation. Failure to attract and retain highly skilled personnel in competitive markets, particularly IT engineers, could significantly affect business and gross profit margins. The extensive use of AI in offerings presents social and ethical issues that could result in reputational harm or liability, and evolving AI regulations may increase R&D costs or limit AI use. Security breaches, system failures, or errors could lead to unauthorized access to confidential information and expose the company to liability, despite ISO 27001 certification. Acquisitions, such as JUXT and Mobile Computing in 2024, carry integration risks, potential dilution, and the possibility of not achieving financial and strategic goals. Non-compliance with open-source software licenses could negatively affect sales and create liability. The company's effective tax rate could be adversely affected by changes in tax laws, particularly in CEE countries and due to OECD proposals for a global minimum effective corporate tax rate of 15% ⁷⁷.

Management's message to shareholders emphasizes the company's position as an Enterprise AI transformation partner for Fortune 1000 companies, leveraging deep AI expertise and enterprise-scale delivery to help clients identify AI investment areas, build scalable systems, and capture business value. The overall tone highlights the company's nearly two decades of technology leadership and pioneering enterprise AI expertise as a key differentiator, supported by ongoing investment in data and machine learning platform engineering, cloud platform and product engineering, IoT and edge computing, and digital engagement services. Management notes the rapid evolution of the digital engineering and information technology services landscape, particularly with the acceleration of AI, and stresses the importance of adapting to these changes. Strategic priorities include maintaining an adequate rate of revenue growth, expanding a leadership position in enterprise-level digital transformation, attracting and retaining customers, further penetrating the existing customer base, and innovating new products and services. The company also focuses on its global delivery model and strategic acquisitions, such as JUXT and Mobile Computing in 2024, to strengthen market position and expand addressable opportunities. Management explicitly states that the company generated record revenues of $411.8 million ⁷⁸ in 2025, an increase of 17.5% ⁷⁹ year-over-year, and that net income increased to $9.7 million ⁸⁰ from $4.0 million ⁸¹ in the prior year, with diluted GAAP EPS of $0.11 ⁸².