Core Points - Grid Dynamics Holdings Inc. will replace Revelyst Inc. in the S&P SmallCap 600 effective January 2, 2025 [1][2] - The acquisition of Revelyst by Strategic Value Partners is expected to close soon, pending final conditions [1] Summary by Category Company Changes - Grid Dynamics Holdings (Ticker: GDYN) will be added to the S&P SmallCap 600 [2] - Revelyst (Ticker: GEAR) will be removed from the S&P SmallCap 600 [2] Sector Information - Grid Dynamics operates in the Information Technology sector [2] - Revelyst operates in the Consumer Discretionary sector [2]

Grid Dynamics (GDYN) came out with quarterly earnings of $0.10 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.08 per share a year ago. These figures are adjusted for non-recurring items.A quarter ago, it was expected that this company would post earnings of $0.07 per share when it actually produced earnings of $0.08, delivering a surprise of 14.29%.Over the last four quarters, the company has surpassed consensus EPS estimates just once.Grid Dynamics, which belongs to t ...

Revenue Growth and Performance - Record quarterly revenues of $87.4 million, up 12.9% year-over-year[101] - Revenues for the three months ended September 30, 2024 increased by 12.9% to $87.4 million compared to $77.4 million in the prior-year period[116] - Revenues for the nine months ended September 30, 2024 grew 6.6% to $250.3 million compared to $234.8 million in the prior-year period[116] - Retail vertical contributed 34.1% of total revenues in the third quarter of 2024, with revenues increasing 12.4% to $29.8 million compared to $26.5 million in the prior-year period[118] - Finance vertical revenues almost doubled, reaching $14.2 million and $37.0 million for the three and nine months ended September 30, 2024, respectively, compared to $7.3 million and $20.6 million in the prior-year periods[121] Profitability and Margins - GAAP gross profit margins improved to 37.4% in Q3 2024, up 1.0% from the prior year[101] - Gross profit increased 16.3% to $32.7 million in the third quarter of 2024 and 5.8% to $90.0 million for the nine-month period[127] - Net income of $4.3 million in Q3 2024, compared to $0.7 million in 2023[101] - Net income for the three months ended September 30, 2024 was $4.3 million, compared to $0.7 million in the prior-year period[115] - Net loss for the nine months ended September 30, 2024 was $0.5 million, compared to a net loss of $4.7 million in the prior-year period[116] - Non-GAAP EBITDA of $14.8 million, or 16.9% of revenues, compared to $10.7 million, or 13.9% of revenues, in Q3 2023[102] - Non-GAAP EBITDA for Q3 2024 was $14.8 million, up from $10.7 million in Q3 2023, and $36.8 million for the nine months ended September 30, 2024, compared to $33.6 million in the same period of 2023[143] - Non-GAAP net income for Q3 2024 was $8.1 million, up from $5.9 million in Q3 2023, and $19.4 million for the nine months ended September 30, 2024, compared to $19.4 million in the same period of 2023[145] - Non-GAAP diluted EPS for Q3 2024 was $0.10, up from $0.08 in Q3 2023, and $0.25 for the nine months ended September 30, 2024, compared to $0.25 in the same period of 2023[145] Expenses and Costs - Cost of revenues increased 11.0% to $54.7 million in the third quarter of 2024 and 7.0% to $160.3 million for the nine-month period[126] - Engineering, research, and development expenses grew 30.7% to $4.4 million in the third quarter of 2024 and 19.0% to $12.9 million for the nine-month period[129] - Sales and marketing expenses increased 11.2% to $6.8 million in the third quarter of 2024 and 20.7% to $21.4 million for the nine-month period[131] - General and administrative expenses increased by 4.6% to $19.3 million in Q3 2024 compared to $18.5 million in the prior year period, but decreased by 3.2% to $59.0 million for the nine months ended September 30, 2024, primarily due to lower stock-based compensation expenses[133] Cash Flow and Financial Position - Operating cash inflows reached $9.2 million, with $39.5 million invested in the acquisition of JUXT[102] - Cash and cash equivalents decreased to $231.3 million as of September 30, 2024, from $257.2 million at December 31, 2023, with $38.7 million held outside the United States[148] - The company has a $30.0 million revolving credit facility with JPMorgan Chase Bank, N.A., with no debt outstanding as of September 30, 2024[147] - Net cash provided by operating activities decreased by $10.4 million to $23.1 million in the nine months ended September 30, 2024, compared to $33.5 million in the same period of 2023[150] - Net cash used in investing activities increased to $41.3 million in the nine months ended September 30, 2024, primarily due to the $32.1 million acquisition of JUXT and a 50% increase in capital expenditures to $9.1 million[151] - Net cash used in financing activities decreased by $6.7 million to $7.8 million in the nine months ended September 30, 2024, compared to $14.5 million in the same period of 2023[152] Customer and Employee Metrics - Top one customer accounted for 17.1% of revenues in Q3 2024, up from 14.3% in Q3 2023[114] - Top five customers accounted for 39.8% of revenues in Q3 2024, up from 36.8% in Q3 2023[114] - Total number of customers decreased from 265 in 2023 to 229 in 2024[112] - Total employees increased to 4,298 as of September 2024, up from 3,823 in 2023[109] Foreign Currency Exposure - Approximately 43.0% of Grid Dynamics' $85.3 million combined cost of revenues and operating expenses were denominated in non-U.S. dollar currencies in Q3 2024, up from 38.0% in Q3 2023[158] - A 10% decrease in the value of the Polish zloty against the U.S. dollar would increase Grid Dynamics' income from operations by $1.5 million in Q3 2024, while a 10% increase would decrease it by $1.8 million[158] - A 10% decrease in the value of the Mexican peso against the U.S. dollar would increase Grid Dynamics' income from operations by $0.3 million in Q3 2024, while a 10% increase would decrease it by $0.4 million[159] - Approximately 41.2% of Grid Dynamics' $253.7 million combined cost of revenues and operating expenses were denominated in non-U.S. dollar currencies in the nine months ended September 30, 2024, up from 38.0% in the same period of 2023[161] - A 10% decrease in the value of the Polish zloty against the U.S. dollar would increase Grid Dynamics' income from operations by $4.0 million in the nine months ended September 30, 2024, while a 10% increase would decrease it by $4.9 million[161] - A 10% decrease in the value of the Mexican peso against the U.S. dollar would increase Grid Dynamics' income from operations by $1.0 million in the nine months ended September 30, 2024, while a 10% increase would decrease it by $1.2 million[162] - Grid Dynamics does not currently hedge its foreign currency exposure but may evaluate new hedging strategies in future periods[165] Other Income and Tax Provisions - Other income reached $3.5 million in Q3 2024 and $8.7 million for the nine months ended September 30, 2024, driven by gains from money market funds and increased fair value of marketable equity securities[135] - Provision for income tax decreased to $1.3 million in Q3 2024 from $2.6 million in Q3 2023, and to $5.8 million for the nine months ended September 30, 2024 from $8.0 million in the same period of 2023, mainly due to Section 162(m) compensation deduction limitations and foreign inclusion adjustments[137] Operational Changes - Grid Dynamics ceased operations in Russia and liquidated its former subsidiary as of May 2023[105]

Grid Dynamics (GDYN) came out with quarterly earnings of $0.08 per share, beating the Zacks Consensus Estimate of $0.07 per share. This compares to earnings of $0.09 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 14.29%. A quarter ago, it was expected that this company would post earnings of $0.08 per share when it actually produced earnings of $0.07, delivering a surprise of -12.50%. Over the last four quarters, the company ...

PART I. FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited Q1 2024 financial statements detail total assets of $435.3 million, a net loss of $3.9 million, and flat revenues of $79.8 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $249,437 | $257,227 | | Accounts receivable, net | $53,039 | $49,824 | | Goodwill | $53,868 | $53,868 | | Total assets | $435,261 | $435,165 | | **Liabilities & Equity** | | | | Total current liabilities | $43,120 | $42,223 | | Total liabilities | $52,450 | $52,258 | | Total stockholders' equity | $382,811 | $382,907 | | Total liabilities and stockholders' equity | $435,261 | $435,165 | Condensed Consolidated Statements of Loss (in thousands) | Account | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Revenues | $79,817 | $80,080 | | Gross profit | $27,665 | $28,575 | | Loss from operations | $(5,542) | $(5,992) | | Net loss | $(3,948) | $(7,970) | | Diluted loss per share | $(0.05) | $(0.11) | Condensed Consolidated Statement of Cash Flows Highlights (in thousands) | Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $3,240 | $11,674 | | Net cash used in investing activities | $(3,936) | $(1,589) | | Net cash used in financing activities | $(6,998) | $(8,941) | | Net (decrease)/increase in cash and cash equivalents | $(7,790) | $1,639 | Revenue by Vertical (in thousands) | Vertical | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Retail | $24,629 | $25,396 | | Technology, Media and Telecom | $24,033 | $26,811 | | Finance | $10,243 | $6,515 | | CPG/Manufacturing | $9,559 | $12,646 | | Healthcare and Pharma | $3,009 | $3,152 | | Other | $8,344 | $5,560 | | **Total Revenues** | **$79,817** | **$80,080** | - The company completed the acquisition of **NextSphere Technologies** for **$25.2 million** and **Mutual Mobile** for **$16.1 million** to enhance technical capabilities and expand its global footprint[36](index=36&type=chunk)[37](index=37&type=chunk) - Total stock-based compensation expense was **$11.3 million** for Q1 2024, a decrease from **$13.3 million** in Q1 2023, with **$7.9 million** allocated to General and Administrative expenses[76](index=76&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reports flat Q1 2024 revenue of $79.8 million, a reduced net loss of $3.9 million, and strong liquidity with $249.4 million in cash Q1 2024 Financial Highlights (in thousands) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Revenues | $79,817 | $80,080 | | Gross profit | $27,665 | $28,575 | | Loss from operations | $(5,542) | $(5,992) | | Net loss | $(3,948) | $(7,970) | | Non-GAAP EBITDA | $10,292 | $10,832 | | Non-GAAP net income | $5,238 | $6,523 | - The company ceased operations in the **Russian Federation** and liquidated its subsidiary as of May 2023, continuing to monitor the impact of the **Ukraine conflict**[98](index=98&type=chunk)[100](index=100&type=chunk) Customer Concentration by Revenue | Customer Group | % of Revenue Q1 2024 | % of Revenue Q1 2023 | | :--- | :--- | :--- | | Top one customer | 16.7% | 13.9% | | Top five customers | 39.6% | 40.8% | | Top ten customers | 55.3% | 60.4% | - Revenue from **Finance** and **Other** verticals grew over **50%** year-over-year, offset by declines in **TMT (-10.4%)** and **CPG/Manufacturing (-24.4%)**[118](index=118&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk) - General and administrative expenses decreased to **$21.5 million** in Q1 2024 from **$24.7 million** in Q1 2023, primarily due to lower stock-based compensation[129](index=129&type=chunk) - Net cash from operating activities decreased to **$3.2 million** in Q1 2024 from **$11.7 million** in Q1 2023, due to timing of payments[149](index=149&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk stems from foreign currency fluctuations, with **39.1%** of Q1 2024 costs in non-USD currencies, mainly Polish zloty and Mexican peso - In Q1 2024, **39.1%** of combined costs were non-USD denominated, an increase from **34.9%** in Q1 2023[157](index=157&type=chunk) Foreign Currency Sensitivity Analysis (Q1 2024) | Currency Fluctuation vs. USD | Impact on Income from Operations | | :--- | :--- | | 10% decrease in Polish zloty | $1.3 million increase | | 10% increase in Polish zloty | $1.5 million decrease | | 10% decrease in Mexican peso | $0.4 million increase | | 10% increase in Mexican peso | $0.4 million decrease | - The company does not currently hedge foreign currency exposure but may evaluate future hedging strategies[160](index=160&type=chunk) [Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal controls - The CEO and CFO concluded that disclosure controls and procedures were **effective** as of March 31, 2024[161](index=161&type=chunk) - No material changes occurred in the company's internal control over financial reporting during Q1 2024[162](index=162&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings and is unaware of any contemplated against it - The company is not currently a party to any **material legal proceeding**[165](index=165&type=chunk) [Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including client concentration, geopolitical impacts, intense competition, talent retention, cybersecurity threats, AI adoption, and regulatory compliance - The company's revenues are highly dependent on a limited number of clients, with the **top ten clients** accounting for **55.3%** of Q1 2024 revenue[175](index=175&type=chunk) - The **military action in Ukraine** continues to disrupt service delivery, impair financial transactions, and cause work shifts[181](index=181&type=chunk)[182](index=182&type=chunk) - The company faces **intense competition** from global consulting firms and IT service providers, many with greater resources[189](index=189&type=chunk)[190](index=190&type=chunk) - Failure to attract and retain **highly skilled IT professionals** in a competitive market could significantly harm the business[193](index=193&type=chunk) - Social, ethical, and regulatory issues concerning **Artificial Intelligence (AI)** may lead to reputational harm, liability, or increased R&D costs[197](index=197&type=chunk)[198](index=198&type=chunk) - **Security breaches** and system failures could expose the company to liability, litigation, and reputational damage from unauthorized data access[199](index=199&type=chunk)[201](index=201&type=chunk) - Acquisitions may be difficult to integrate, divert management attention, and fail to achieve strategic goals, potentially exposing the company to unforeseen liabilities[254](index=254&type=chunk)[256](index=256&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=61&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the period - None[320](index=320&type=chunk) [Default Upon Senior Securities](index=62&type=section&id=Item%203.%20Default%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - None[323](index=323&type=chunk) [Mine Safety Disclosures](index=62&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable, the company reported no mine safety disclosures - None[324](index=324&type=chunk) [Other Information](index=62&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during Q1 2024 - No director or officer adopted or terminated a **Rule 10b5-1** or **non-Rule 10b5-1 trading arrangement** during Q1 2024[325](index=325&type=chunk) [Exhibits](index=62&type=section&id=Item%206.%20Exhibits) The report includes filed exhibits such as CEO and CFO certifications under Sarbanes-Oxley Sections 302 and 906, and XBRL data files - Exhibits filed include **CEO and CFO certifications** under **Sarbanes-Oxley Sections 302 and 906**, and various **XBRL documents**[328](index=328&type=chunk)

Exhibit 99.1 Grid Dynamics Reports First Quarter 2024 Financial Results Revenue of $79.8 million and GAAP Net Loss of $3.9 million San Ramon, Calif. May 2, 2024 – Grid Dynamics Holdings, Inc. (Nasdaq: GDYN) ("Grid Dynamics" or "Company"), a leader in enterprise-level digital transformation, today announced results for the first quarter ended March 31, 2024. We are very pleased to report the first quarter 2024 revenues of $79.8 million that was higher than our outlook range of $77.0 million to $79.0 million ...

Part I [Business](index=6&type=section&id=Item%201.%20Business) Grid Dynamics offers technology consulting and engineering services, specializing in enterprise AI, cloud, data, and customer experience - Grid Dynamics provides technology consulting, platform engineering, and advanced analytics, distinguished by **over 7 years of Enterprise AI experience**[20](index=20&type=chunk)[21](index=21&type=chunk) - Core service areas include **Cloud Platform, AI/Machine Learning, Digital Engagement, and Supply Chain/IoT engineering**[32](index=32&type=chunk)[33](index=33&type=chunk)[35](index=35&type=chunk) - As of December 31, 2023, Grid Dynamics employed **3,920 personnel** across engineering centers in 12 countries[45](index=45&type=chunk)[57](index=57&type=chunk) - The company competes with **emerging digital services firms, global consulting firms, India-based IT providers, and in-house IT departments**[55](index=55&type=chunk)[58](index=58&type=chunk) - In 2023, **one customer accounted for 10% or more of revenue**, a decrease in top-client concentration from prior years[54](index=54&type=chunk) Revenues by Vertical (2021-2023) | Vertical | 2023 Revenue (in thousands) | 2023 % of Revenue | 2022 Revenue (in thousands) | 2022 % of Revenue | 2021 Revenue (in thousands) | 2021 % of Revenue | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Retail | $102,551 | 32.8% | $99,681 | 32.1% | $61,717 | 29.2% | | Tech, Media and Telecom | $98,830 | 31.6% | $98,334 | 31.7% | $67,689 | 32.0% | | CPG/Manufacturing | $42,861 | 13.7% | $61,216 | 19.7% | $43,461 | 20.6% | | Finance | $28,842 | 9.2% | $21,893 | 7.1% | $17,515 | 8.3% | | Other | $39,826 | 12.7% | $29,358 | 9.4% | $20,898 | 9.9% | | **Total** | **$312,910** | **100.0%** | **$310,482** | **100.0%** | **$211,280** | **100.0%** | [Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from client concentration, the Ukraine conflict, macroeconomic pressures, intense competition, and talent retention - Revenue concentration remains high, with the **top 10 clients accounting for 56.1% of revenue in 2023**[81](index=81&type=chunk) - The **military conflict in Ukraine impacted operations**, leading to employee relocation and cessation of Russian Federation operations[88](index=88&type=chunk)[89](index=89&type=chunk)[90](index=90&type=chunk) - Macroeconomic conditions, including **inflation and rising interest rates**, could adversely affect client spending and growth[93](index=93&type=chunk) - Intense competition comes from **global consulting firms, digital transformation providers, and India-based IT service providers**[96](index=96&type=chunk)[97](index=97&type=chunk) - Failure to **attract and retain highly skilled IT professionals** poses a significant risk to operating costs and project delivery[100](index=100&type=chunk)[101](index=101&type=chunk) - Risks include **security breaches and cyberattacks** that could lead to unauthorized data access, liability, and reputational damage[108](index=108&type=chunk) - Social, ethical, and regulatory issues concerning **AI use could lead to reputational harm and decreased demand** for AI solutions[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk) - Strategic acquisitions like **Tacit, Mutual Mobile, and NextSphere** carry integration risks and may not achieve anticipated goals[156](index=156&type=chunk) [Unresolved Staff Comments](index=40&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the SEC - None[218](index=218&type=chunk) [Cybersecurity](index=40&type=section&id=Item%201C.%20Cybersecurity) Grid Dynamics maintains an established cybersecurity risk management framework, overseen by the Board of Directors - The company has **established policies and processes for managing cybersecurity threats**, integrated into its overall risk management system[219](index=219&type=chunk)[220](index=220&type=chunk) - Cybersecurity governance is managed by a **CISO and management committee**, with Board audit committee oversight[227](index=227&type=chunk)[228](index=228&type=chunk) - The **COO reports quarterly to the audit committee** on cybersecurity risks, incidents, and system testing[230](index=230&type=chunk) - No cybersecurity incident has had a **significant impact on operations or financial standing**[225](index=225&type=chunk) [Properties](index=42&type=section&id=Item%202.%20Properties) Grid Dynamics leases all of its 23 facilities across 12 countries, with its principal executive office located in San Ramon, California - The company operates **23 leased facilities in 12 countries**, with its principal executive office in San Ramon, CA[231](index=231&type=chunk) [Legal Proceedings](index=42&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings and is not aware of any material legal or governmental proceedings contemplated against it - Grid Dynamics is **not currently a party to any material legal proceedings**[232](index=232&type=chunk) [Mine Safety Disclosures](index=42&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[233](index=233&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=43&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Grid Dynamics' common stock is listed on NASDAQ under "GDYN"; no cash dividends are expected - The company's common stock has been listed on the NASDAQ under the symbol **"GDYN" since March 6, 2020**[236](index=236&type=chunk) - The company has **not paid cash dividends** and does not expect to in the foreseeable future, retaining earnings[238](index=238&type=chunk) Stock Performance Comparison (March 6, 2020 - December 31, 2023) | Company/Index | 03/06/2020 | 12/31/2020 | 12/31/2021 | 12/31/2022 | 12/31/2023 | | :--- | :--- | :--- | :--- | :--- | :--- | | Grid Dynamics Holdings, Inc. | $100.00 | $107.60 | $324.25 | $95.82 | $113.83 | | S&P 500 | $100.00 | $129.07 | $166.12 | $136.04 | $171.80 | | Peer Group | $100.00 | $154.70 | $237.79 | $154.37 | $190.69 | [Reserved](index=44&type=section&id=Item%206.%20%5BReserved%5D) This item is not applicable - Not applicable[244](index=244&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2023, Grid Dynamics reported **$312.9 million in revenue**, a slight increase, with a significantly reduced net loss [Fiscal Year Highlights](index=45&type=section&id=Fiscal%20Year%20Highlights) - In 2023, **revenue increased by 0.8% to $312.9 million**, while **GAAP gross margin decreased to 36.2%** and **net loss significantly decreased by 94.0% to $1.8 million**[249](index=249&type=chunk)[250](index=250&type=chunk) Summary of Financial Results (2021-2023) | Metric | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Revenues | $312,910 | $310,482 | $211,280 | | Gross profit | $113,146 | $120,590 | $87,728 | | Income/(loss) from operations | ($5,580) | ($21,008) | $50 | | Net loss | ($1,765) | ($29,214) | ($7,700) | | Diluted loss per share | ($0.02) | ($0.42) | ($0.13) | | Non-GAAP EBITDA | $44,246 | $58,213 | $39,077 | | Non-GAAP net income | $25,077 | $36,627 | $24,160 | | Non-GAAP diluted EPS | $0.32 | $0.51 | $0.36 | [Recent Acquisitions](index=46&type=section&id=Recent%20Acquisitions) - On April 18, 2023, the company acquired **NextSphere Technologies Inc.** to enhance technical offerings and expand its global footprint[252](index=252&type=chunk) - On December 23, 2022, the company acquired **Mutual Mobile Inc.** to accelerate strategic expansion into India[253](index=253&type=chunk) [Key Performance Indicators and Other Factors Affecting Performance](index=46&type=section&id=Key%20Performance%20Indicators%20and%20Other%20Factors%20Affecting%20Performance) Personnel by Region (as of Dec 31) | Region | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Americas | 567 | 521 | 386 | | Europe | 2,806 | 3,034 | 2,888 | | Rest of the world | 547 | 243 | — | | **Total** | **3,920** | **3,798** | **3,274** | Revenue Concentration by Customer Group | Customer Group | 2023 % of Revenue | 2022 % of Revenue | 2021 % of Revenue | | :--- | :--- | :--- | :--- | | Top one customer | 14.4% | 12.6% | 11.6% | | Top five customers | 37.0% | 43.5% | 43.9% | | Top ten customers | 56.1% | 59.7% | 60.4% | | Top twenty customers | 68.3% | 72.6% | 72.5% | [Results of Operations](index=50&type=section&id=Results%20of%20Operations) - **Revenue increased by 0.8% to $312.9 million in 2023**, with Retail growing 2.9% and CPG/Manufacturing decreasing 30.0%[284](index=284&type=chunk)[286](index=286&type=chunk) - **Gross margin decreased from 38.8% to 36.2% in 2023**, primarily due to increased cost of revenues from acquisitions and higher compensation[289](index=289&type=chunk)[290](index=290&type=chunk) - **General and administrative expenses decreased by 24.7% to $79.8 million in 2023**, driven by lower stock-based compensation and reorganization costs[296](index=296&type=chunk) - **Other income increased to $10.4 million in 2023** from $0.6 million, mainly from money market funds and a $4.2 million write-off[299](index=299&type=chunk) [Non-GAAP Measures](index=52&type=section&id=Non-GAAP%20Measures) Reconciliation of GAAP Net Loss to Non-GAAP EBITDA | (in thousands) | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | **GAAP net loss** | **($1,765)** | **($29,214)** | **($7,700)** | | Depreciation and amortization | $8,926 | $6,626 | $5,049 | | Provision for income taxes | $6,603 | $8,761 | $5,248 | | Stock-based compensation | $35,516 | $60,968 | $33,036 | | Geographic reorganization | $1,858 | $11,023 | $0 | | Transaction and transformation-related costs | $2,038 | $604 | $942 | | Restructuring | $1,488 | $0 | $0 | | Other (income)/expense, net | ($10,418) | ($555) | $2,502 | | **Non-GAAP EBITDA** | **$44,246** | **$58,213** | **$39,077** | [Liquidity and Capital Resources](index=54&type=section&id=Liquidity%20and%20Capital%20Resources) - As of December 31, 2023, the company held **$257.2 million in cash and cash equivalents**, primarily from operations[311](index=311&type=chunk)[312](index=312&type=chunk) Summary of Cash Flows (in thousands) | Cash Flow Activity | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $41,093 | $31,652 | $17,973 | | Net cash used in investing activities | ($25,950) | ($16,323) | ($35,366) | | Net cash (used in)/provided by financing activities | ($16,321) | $97,758 | $49,134 | [Quantitative and Qualitative Disclosures about Market Risk](index=56&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is **foreign currency exchange rate fluctuations**, impacting a significant portion of operating expenses - The company faces **foreign currency risk**, with **37.9% of combined cost of revenue and operating expenses in 2023** denominated in non-USD currencies[321](index=321&type=chunk)[322](index=322&type=chunk) - A 10% decrease in **Polish zloty against USD would increase income from operations by $3.7 million**[323](index=323&type=chunk) - The company **does not currently hedge foreign currency exposure** but aims to minimize it by matching expenses to revenue currencies[325](index=325&type=chunk) [Financial Statements and Supplementary Data](index=57&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for fiscal years 2021-2023 - Grant Thornton LLP issued an **unqualified opinion on the company's financial statements** and internal control over financial reporting[330](index=330&type=chunk)[331](index=331&type=chunk)[337](index=337&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=96&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[514](index=514&type=chunk) [Controls and Procedures](index=96&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's internal control over financial reporting and disclosure controls were effective - Management concluded that the company's **internal control over financial reporting was effective** as of fiscal 2023 end[517](index=517&type=chunk) - The evaluation of internal control excluded **NextSphere Technologies, Inc.**, acquired during 2023[516](index=516&type=chunk) - The **CEO and CFO concluded disclosure controls and procedures were effective** as of December 31, 2023[518](index=518&type=chunk) [Other Information](index=96&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[521](index=521&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=97&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[522](index=522&type=chunk) Part III This section incorporates information by reference from the company's upcoming Definitive Proxy Statement for the Annual Meeting of Stockholders [Directors, Executive Officers and Corporate Governance](index=98&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the company's upcoming Proxy Statement - Information for this item will be **incorporated by reference from the company's Proxy Statement**[524](index=524&type=chunk) [Executive Compensation](index=98&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's upcoming Proxy Statement - Information for this item will be **incorporated by reference from the company's Proxy Statement**[526](index=526&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=98&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership is incorporated by reference from the company's upcoming Proxy Statement - Information for this item will be **incorporated by reference from the company's Proxy Statement**[527](index=527&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=98&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the company's upcoming Proxy Statement - Information for this item will be **incorporated by reference from the company's Proxy Statement**[528](index=528&type=chunk) [Principal Accounting Fees and Services](index=98&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services is incorporated by reference from the company's upcoming Proxy Statement - Information for this item will be **incorporated by reference from the company's Proxy Statement**[529](index=529&type=chunk) Part IV [Exhibit and Financial Statement Schedules](index=99&type=section&id=Item%2015.%20Exhibit%20and%20Financial%20Statement%20Schedules) This section lists documents filed as part of the Annual Report, with financial statements referenced under Item 8 - All financial statement schedules are **omitted as not required or included elsewhere** in the consolidated financial statements[532](index=532&type=chunk) [Form 10-K Summary](index=101&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has not provided a summary for this item - None[537](index=537&type=chunk)

Financial Data and Key Metrics Changes - The fourth quarter revenue was $78.1 million, slightly above guidance and Wall Street expectations, with a sequential growth of 0.8% but a year-over-year decline of 3.1% [24] - Non-GAAP net income for the fourth quarter was $5.7 million, or $0.07 per share, compared to $5.9 million, or $0.08 per share in the previous quarter [9] - GAAP net income in the fourth quarter totaled $2.9 million, or $0.04 per share, an increase from $0.7 million, or $0.01 per share in the third quarter [78] Business Line Data and Key Metrics Changes - The Retail segment, the largest vertical, represented 31.5% of revenues, decreasing by 7.4% sequentially and 4.2% year-over-year [75] - The Finance vertical represented 10.6% of revenue, increasing by 13.4% sequentially and 32.6% year-over-year, driven by financial technology customers and new logos [47] - The Other segment accounted for 14.5% of fourth quarter revenue, up 11.5% sequentially, driven by strength in healthcare and restaurant industries [25] Market Data and Key Metrics Changes - Revenue from the top five customers was 39.7%, down from 43.2% year-over-year, indicating greater diversification [30] - The company serves customers across 18 countries, with a focus on expanding its presence in India, Poland, and Romania [29][43] - The demand environment is improving, with customers either maintaining or moderately increasing their spending [18] Company Strategy and Development Direction - The GigaCube strategy aims for a billion-dollar revenue target, focusing on knowledge management, partnerships, new verticals, and larger deals [44] - The company is investing in AI capabilities, with over 25% of engineers trained in generative AI, reflecting a commitment to enhancing service offerings [17] - Partnerships contributed 13% of overall revenue in 2023, with a focus on capturing greater wallet share from hyperscalers and SaaS companies [72] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about returning to positive momentum, particularly with new enterprise logos and existing customer trends [4] - The company anticipates a rebound in growth, with Q2 expected to be a new high watermark for revenue [82] - The macro environment is stabilizing, with a reduction in revenue headwinds from large existing customers expected in 2024 [41] Other Important Information - Cash and cash equivalents totaled $257.2 million at the end of Q4, up from $253.7 million in the previous quarter [50] - The company is focused on maintaining a lower growth rate in operating expenses compared to revenue growth [93] Q&A Session Summary Question: Visibility on second quarter performance - Management expects Q2 to be a new high watermark in revenue, indicating optimism about recovery [82] Question: Headcount growth and demand recovery - Headcount growth is seen as a sign of future demand recovery, particularly in India [86] Question: Changes in sales strategy for 2024 - The company plans to balance efforts between expanding existing client relationships and acquiring new logos [88] Question: Contribution from partnerships in 2024 - Partnerships are expected to continue contributing significantly, with a focus on becoming an advisory partner [107][109] Question: Update on capital allocation - The focus is on M&A and cash generation, with an emphasis on developing AI skills [111][112] Question: AI-related metrics and demand - There is significant activity in AI projects, with many new engagements incorporating AI components [114][135]

Exhibit 99.1 Grid Dynamics Reports Fourth Quarter and Full Year 2023 Financial Results Fourth Quarter Revenue of $78.1 million and Full Year Revenue of $312.9 million San Ramon Calif. – February 22, 2024 – Grid Dynamics Holdings, Inc. (NASDAQ: GDYN) ("Grid Dynamics", "the Company"), a leader in enterprise-level digital transformation, today announced results for its fourth quarter and full year ended December 31, 2023. We are very pleased to report revenue of $78.1 million in the fourth quarter 2023 that wa ...

Financial Performance - Total revenue for Q3 2023 was $77.4 million, a 0.1% increase sequentially but a (4.6)% decrease year-over-year[28] - GAAP gross profit was $28.2 million, representing 36.4% of revenue in Q3 2023[28] - Non-GAAP gross profit was $28.7 million, or 37.0% of revenue[28] - Non-GAAP EBITDA was $10.7 million, representing 13.9% of revenue[28] - Net Income was $0.7M, 0.9% of revenue[28] - Non-GAAP Net Income was $5.9M, 7.6% of revenue[28] Business Strategy and Growth - Grid Dynamics aims to reach $1 billion in annual revenue through the GigaCube growth framework[36] - The company employs an 85-10-5 approach to revenue growth, focusing on mature clients, emerging clients, and new logos respectively[157] - Grid Dynamics leverages a globally distributed delivery model to execute acquisitions and drive growth[170] - The company is focused on expanding its presence across Europe, India, and the Americas[37] Industry Focus and Expertise - Retail accounted for 29% of Q3 2023 revenue[42] - TMT (Technology, Media, and Telecom) accounted for 32% of revenue[75] - Finance accounted for 8% of Q3 2023 revenue[42] - CPG (Consumer Packaged Goods) accounted for 21% of revenue[75]