Group 1 - The new temporal agentic AI platform and AI-powered engagement model launched by Grid Dynamics Holdings, Inc. could enhance cash generation [1] - The company has a long-term position in the market, indicating stability and potential for growth [1] Group 2 - The analysis focuses on cash flow statements and unlevered free cash flow figures, which are critical for assessing the company's financial health [1] - The financial models may include various metrics such as cost of capital, cost of debt, WACC, share count, and net debt [1] - The company is not typically associated with growth stocks, suggesting a focus on established financial performance [1]

Grid Dynamics to Announce Third Quarter 2025 Financial Results on October 30 Share Oct 1, 2025 9:15 AM Eastern Daylight Time SAN RAMON, Calif.--(BUSINESS WIRE)--Grid Dynamics Holdings, Inc. (Nasdaq: GDYN) ("Grid Dynamics†), a leader in enterprise-level digital transformation services and solutions, today announced that it will host a video conference call at 4:30 p.m. ET on Thursday, October 30, 2025 to discuss its third quarter 2025 financial results. A press release containing these results will be avai ...

Grid Dynamics Holdings Inc. (NASDAQ:GDYN) is one of the best tech stocks under $10 to invest in. On September 25, Needham analyst Mayank Tandon reiterated a Buy rating on the stock with an unchanged price target of $15. The analyst emphasized that the company’s strategy of integrating artificial intelligence across its operations is a significant driver of growth. As economic conditions improve, clients are expected to increase IT budgets, creating a more favorable environment for demand. Why Needham Stay ...

Core Insights - Loomis Sayles Small Cap Growth Fund reported a return of 9.37% for Q2 2025, underperforming the Russell 2000 Growth Index which returned 11.97% due to security selection issues in the information technology and financial sectors [1] Company Analysis - Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) experienced a one-month return of -3.37% and a 52-week loss of 44.56%, closing at $7.74 per share with a market capitalization of $676.513 million as of September 29, 2025 [2] - The company faced challenges due to overly aggressive guidance provided in February, which analysts viewed skeptically. The lack of an increase in guidance for the fiscal year in May broke a trend of 'beat and raise' reports, contributing to selling pressures on the stock [3] - Grid Dynamics reported revenue of $101.1 million in Q2 2025, marking a 21.7% increase compared to Q2 2024. However, it is noted that 12 hedge fund portfolios held the stock at the end of Q2, down from 20 in the previous quarter, indicating reduced interest among hedge funds [4]

Market Overview - The stock market experienced high volatility in Q2 2025, with a 7% drop in stock prices from April 2 to April 7 due to an unexpected tariff announcement [1] - Following the Trump Administration's retreat from extreme tariff proposals, the market saw a dramatic recovery [1] - Positive corporate earnings and solid economic data indicate potential economic growth ahead [1] Renaissance Investment Management Insights - The Renaissance Investment Small Cap Growth Strategy outperformed the Russell 2000 Growth Index in Q2 2025 [1] - The fund's investor letter highlighted Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) as a key stock, which reported a one-month return of -5.28% and a 52-week loss of 44.63% [2] Grid Dynamics Holdings, Inc. Analysis - Grid Dynamics Holdings, Inc. reported revenue of $101.1 million in Q2 2025, marking a 21.7% increase compared to Q2 2024 [4] - The company acknowledged a more uncertain macroeconomic outlook while maintaining its full-year revenue guidance [3] - Increased investments in AI are expected to pressure margins in the short term, but the company is well-positioned for digital transformation and AI adoption [3] Hedge Fund Interest - Grid Dynamics Holdings, Inc. was held by 12 hedge fund portfolios at the end of Q2 2025, a decrease from 20 in the previous quarter [4]

Group 1 - The individual has a strong foundation in portfolio construction and capital markets, emphasizing a hybrid investment strategy that combines stable, high-conviction holdings with tactical allocations to dynamic assets [1] - The investment approach reflects a belief that successful investing is about making money rather than merely being right [1] - There is a particular interest in the gaming sector, supported by both professional experience and personal passion [1] Group 2 - The individual writes on Seeking Alpha to enhance their investment skills, sharpen analysis, and provide insights for better-informed decision-making [1]

Core Insights - Grid Dynamics reported a GAAP revenue increase to $101.1 million for Q2 2025, surpassing analyst expectations and its own guidance midpoint [1][2] - Non-GAAP earnings per share were $0.10, exceeding consensus estimates by $0.01, while gross margin narrowed to 34.1% from 35.6% in Q2 2024 [1][2] - The company experienced significant growth in AI and Finance services, with AI and Data practice accounting for 23% of total organic revenue [1][7] Financial Performance - Q2 2025 GAAP revenue grew by 21.7% year-over-year from $83.0 million in Q2 2024 [2][5] - The Finance segment revenue more than doubled to $25.0 million, accounting for 25.1% of total revenues [5][10] - Non-GAAP gross profit increased to $35.1 million, a 16.6% rise from $30.1 million in Q2 2024 [2][6] Business Model and Strategy - Grid Dynamics specializes in digital transformation, software engineering, and technology consulting for global enterprises [3] - The company emphasizes AI-driven projects, talent development, and expanding its international presence, particularly in India and Latin America [4] - The acquisition strategy has diversified the client base and enhanced international delivery capabilities [8] Cost and Margin Trends - Non-GAAP gross margin decreased to 34.7% from 36.2% in Q2 2024, reflecting increased R&D and administrative costs [6][9] - R&D expenses surged by 63.4% year-over-year, while general and administrative costs rose by 17.3% [6][9] Future Outlook - Management set revenue guidance for Q3 2025 at $103 million to $105 million, with full-year 2025 revenue guidance unchanged at $415 million to $435 million [12] - The company anticipates stronger seasonal performance in the second half of 2025 due to ramp-up from recently signed deals [12] - Key areas to monitor include hiring pace, integration of acquisitions, and operational developments [13]

分组1 - Grid Dynamics reported quarterly earnings of $0.1 per share, matching the Zacks Consensus Estimate, and showing an increase from $0.08 per share a year ago [1] - The company achieved revenues of $101.1 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 0.70% and up from $83.04 million year-over-year [2] - Over the last four quarters, Grid Dynamics has surpassed consensus EPS estimates two times and revenue estimates four times [2] 分组2 - The stock has underperformed significantly, losing about 56.4% since the beginning of the year, while the S&P 500 has gained 8.2% [3] - The current consensus EPS estimate for the upcoming quarter is $0.12 on revenues of $105.37 million, and for the current fiscal year, it is $0.46 on revenues of $416.12 million [7] - The Computers - IT Services industry, to which Grid Dynamics belongs, is currently ranked in the bottom 38% of over 250 Zacks industries, indicating potential challenges ahead [8]

Financial Data and Key Metrics Changes - The company reported a record second quarter revenue of $101 million, representing a year-over-year growth of 21.7% [4][28] - Non-GAAP EBITDA for the quarter was $12.7 million, within the guidance range [28] - GAAP net income was $5.3 million, or $0.06 per share, compared to a net income of $2.9 million in the previous quarter [35] Business Line Data and Key Metrics Changes - The retail vertical contributed 29.2% of total revenues, growing 10.4% year-over-year but declining 6.2% sequentially [30] - The finance vertical accounted for 25.1% of total revenues, doubling year-over-year and growing 1.4% sequentially [31] - Technology, Media, and Telecommunications (TMT) represented 24.9% of revenues, with a growth of 6.7% quarter-over-quarter and 8.4% year-over-year [32] Market Data and Key Metrics Changes - The company experienced a decline in the number of customers, with 194 customers in the second quarter, down from 204 in the previous quarter [33] - The top five customers contributed 37.5% of total revenues, slightly down from 38.5% year-over-year [33] Company Strategy and Development Direction - The company is focusing on an AI-first approach, integrating AI into all aspects of its business, including service offerings and talent management [5][6] - Recent acquisitions, particularly in banking and financial services, are expected to enhance industry expertise and customer engagement [7][8] - The company aims to leverage its unique market position in AI and data, with 23% of its organic revenue coming from AI and data practices [6][37] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth pipeline despite macroeconomic uncertainties, highlighting a strong demand for AI-native partners [6][7] - The company anticipates continued growth in AI-related business, expecting this segment to increase in the coming quarters [37] Other Important Information - The company ended the quarter with a total headcount of 5,013, up from 4,926 in the previous quarter [32] - Cash and cash equivalents totaled $336.8 million, an increase from $325.5 million in the previous quarter [35] Q&A Session Questions and Answers Question: Can you discuss the pipeline and deal conversion pace? - Management indicated a robust pipeline and expressed optimism for the second half of the year, with significant opportunities in AI and data projects [41][50] Question: How should we think about the pricing climate and hiring plans? - The company noted competitive pricing in innovative projects and emphasized the importance of maintaining a skilled workforce while optimizing costs [46][52] Question: How is AI changing the nature of work and hiring? - Management highlighted the need for training in AI context engineering and the importance of senior engineers in overseeing AI agents [57][60] Question: What is the outlook for partner growth? - The company is focusing on innovation and partnerships, particularly with hyperscalers and robotics companies, to drive growth [93][96] Question: When can we expect stabilization in client count? - The decline in client count is primarily due to rationalization efforts post-acquisitions, with a focus on enterprise customers [100][101]

[CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=4&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section warns that the report contains forward-looking statements subject to substantial risks and uncertainties - The report contains forward-looking statements identifiable by terms such as "anticipates," "believes," "expects," and "will," which involve **substantial risks and uncertainties**[8](index=8&type=chunk) - Key factors influencing future performance include the evolution of digital engineering, ability to educate the market, **revenue growth rate**, **financial results**, GigaCube growth strategy, leadership in digital transformation, **customer acquisition and retention**, **competitive advantages**, technology scaling, new product innovation, brand protection, **AI use**, **cybersecurity**, **market capitalization**, strategic partnerships, international expansion, financing, **operating expenses**, seasonal trends, **employee retention**, acquisition benefits, regulatory changes, and geopolitical events (e.g., Ukraine conflict)[8](index=8&type=chunk) - Investors should not rely on forward-looking statements as predictions of future events, as actual results may differ materially due to various risks and uncertainties, including those detailed in "Item 1A, Risk Factors" in this and previous reports[10](index=10&type=chunk) [PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents unaudited condensed consolidated financial statements, including balance sheets, income, equity, and cash flows - The financial statements are unaudited, prepared in accordance with U.S. GAAP for interim information and SEC rules, and include all normal and recurring adjustments[27](index=27&type=chunk) - Operating results for the three and six months ended June 30, 2025, are not necessarily indicative of the full year's results[27](index=27&type=chunk) [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance sheets show financial position, with total assets increasing to **$608.9 million** and equity growing to **$532.2 million** | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Cash and cash equivalents | $336,752 | $334,655 | | Trade receivable, net | $77,727 | $69,371 | | Total current assets | $433,019 | $423,304 | | Total assets | $608,907 | $592,192 | | Total current liabilities | $58,723 | $55,544 | | Total liabilities | $76,693 | $74,363 | | Total stockholders' equity | $532,214 | $517,829 | [Condensed Consolidated Statements of Income/(Loss) and Comprehensive Income/(Loss)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%2F(Loss)%20and%20Comprehensive%20Income%2F(Loss)) Revenues increased to **$101.1 million** (Q2) and **$201.5 million** (H1), achieving net income of **$5.3 million** and **$8.2 million** | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $101,095 | $83,037 | $201,510 | $162,854 | | Cost of revenues | $66,592 | $53,474 | $130,010 | $105,626 | | Gross profit | $34,503 | $29,563 | $71,500 | $57,228 | | (Loss)/income from operations | $(123) | $40 | $(2,160) | $(5,502) | | Other income, net | $7,424 | $2,665 | $11,930 | $5,190 | | Income/(loss) before income tax | $7,301 | $2,705 | $9,770 | $(312) | | Provision for income taxes | $2,028 | $3,522 | $1,585 | $4,453 | | Net income/(loss) | $5,273 | $(817) | $8,185 | $(4,765) | | Basic EPS | $0.06 | $(0.01) | $0.10 | $(0.06) | | Diluted EPS | $0.06 | $(0.01) | $0.09 | $(0.06) | - **Net income** for Q2 2025 was **$5.3 million**, a **significant improvement** from a **net loss** of **$0.8 million** in Q2 2024[17](index=17&type=chunk) - **Diluted EPS** for Q2 2025 was **$0.06**, **up from** **$(0.01)** in Q2 2024[17](index=17&type=chunk) [UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY](index=8&type=section&id=UNAUDITED%20CONSOLIDATED%20STATEMENTS%20OF%20STOCKHOLDERS'%20EQUITY) Stockholders' equity increased to **$532.2 million** by June 30, 2025, driven by net income and stock-based compensation | Metric (in thousands) | Balance at Dec 31, 2024 | Balance at June 30, 2025 | | :-------------------- | :---------------------- | :----------------------- | | Additional paid-in capital | $532,578 | $533,389 | | Accumulated deficit | $(11,845) | $(3,660) | | Accumulated other comprehensive income/(loss) | $(2,912) | $2,477 | | Total stockholders' equity | $517,829 | $532,214 | - Key drivers of equity changes for the six months ended June 30, 2025, include **net income** (**$8.2 million**), **stock-based compensation** (**$17.5 million**), and foreign currency translation adjustment (**$5.4 million**), partially offset by issuance of shares and payments of tax obligations from net share settlement of vested stock awards (**$(17.1 million)**)[19](index=19&type=chunk)[22](index=22&type=chunk) [UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS](index=10&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Operating cash flow increased to **$23.7 million**, while financing activities used **$16.9 million**, primarily for tax obligations | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $23,731 | $13,917 | | Net cash used in investing activities | $(7,313) | $(6,843) | | Net cash used in financing activities | $(16,853) | $(7,910) | | Net increase/(decrease) in cash, cash equivalents and restricted cash | $1,727 | $(1,185) | | Cash, cash equivalents and restricted cash, end of period | $336,882 | $256,042 | - **Operating cash flow improved by** **$9.8 million** year-over-year, primarily due to changes in working capital, including timing of employee compensation payments and customer collections[164](index=164&type=chunk) - **Financing activities used** **$16.9 million**, mainly due to **$17.1 million** in tax obligations from net share settlement of vested stock awards, an **increase of** **$8.5 million** compared to the prior year[166](index=166&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes support the financial statements, covering policies, acquisitions, fair value, assets, liabilities, revenue, leases, taxes, and equity [Note 1 — Nature of operations and summary of significant accounting policies](index=12&type=section&id=Note%201%20%E2%80%94%20Nature%20of%20operations%20and%20summary%20of%20significant%20accounting%20policies) Grid Dynamics provides technology consulting and engineering services, specializing in AI, cloud, data, and DevOps, with financial statements prepared under U.S. GAAP - **Grid Dynamics** is a leading provider of technology consulting, platform and product engineering, and advanced analytics services, with expertise in **AI**, data science, cloud computing, big data, and DevOps[25](index=25&type=chunk) - The company consolidates a variable interest entity (VIE) subcontractor because it has the power to direct the VIE's most significant activities and is its primary beneficiary[29](index=29&type=chunk) - The **allowance for credit losses** was **$3.3 million** as of June 30, 2025, **up from** **$2.7