Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) Q1 2021 Earnings Conference Call May 6, 2021 4:30 PM ET Company Participants Lilia Chernova - IR Leonard Livschitz - CEO Anil Doradla - CFO Conference Call Participants Mayank Tandon - Needham & Company Maggie Nolan - William Blair Joseph Vafi - Canaccord Bryan Bergin - Cowen and Company Josh Siegler - Canter Fitzgerald Operator Greetings, and welcome to the Grid Dynamics Holdings, Inc. First Quarter 2021 Earnings Call. [Operator Instructions] As a reminder, this c ...

0 Grid Dynamics 1 trusted engineering partner for digital transformation Grid Dynamics Investor Presentation NASDAQ: GDYN | Q1 2021 www.griddynamics.com Disclaimer 2 Forward-Looking Statements This communication contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that are not historical facts,and involve risks and uncertainties that could cause actual results of Grid Dynamics to differ materially from th ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38685 Grid Dynamics Holdings, Inc. (Exact Name of Registrant as Specified in its Charter) (State or other jurisdiction of incor ...

0 Grid Dynamics 1 trusted engineering partner for digital transformation Grid Dynamics Investor Presentation NASDAQ: GDYN | Q4 2020 www.griddynamics.com Disclaimer 2 Forward-Looking Statements This communication contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that are not historical facts,and involve risks and uncertainties that could cause actual results of Grid Dynamics to differ materially from th ...

Call Start: 16:30 January 1, 0000 5:28 PM ET Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) Q4 2020 Earnings Conference Call March 4, 2021 16:30 ET Company Participants Lilly Tranova - Investor Relations Leonard Livschitz - Chief Executive Officer Anil Doradla - Chief Financial Officer Conference Call Participants Mayank Tandon - Needham Joseph Vafi - Canaccord Bryan Bergin - Cowen & Company Maggie Nolan - William Blair Tim Savageaux - Northland Capital Operator Good day, ladies and gentlemen, and welcome to th ...

PART I [Business](index=6&type=section&id=Item%201.%20Business) Grid Dynamics is a global digital engineering and IT services provider specializing in enterprise-level digital transformations - Grid Dynamics completed a business combination on **March 5, 2020**, and began trading on NASDAQ under **GDYN**[20](index=20&type=chunk) - The company acquired Netherlands-based **Daxx Web Industries B.V.** on **December 14, 2020**, to expand its European presence[24](index=24&type=chunk) Revenue by Industry Vertical (2018-2020) | Vertical | 2020 Revenue ($ thousands) | 2020 % of Revenue | 2019 Revenue ($ thousands) | 2019 % of Revenue | 2018 Revenue ($ thousands) | 2018 % of Revenue | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Tech, Media and Telecom | $45,362 | 40.8% | $32,337 | 27.3% | $23,485 | 25.6% | | Retail | $33,975 | 30.5% | $67,367 | 56.9% | $58,544 | 63.7% | | Finance | $13,589 | 12.2% | $12,479 | 10.6% | $8,089 | 8.8% | | CPG/Manufacturing | $14,202 | 12.8% | $4,850 | 4.1% | $1,330 | 1.4% | | Other | $4,155 | 3.7% | $1,293 | 1.1% | $417 | 0.5% | | **Total** | **$111,283** | **100.0%** | **$118,326** | **100.0%** | **$91,865** | **100.0%** | - The company employs a **"land and expand" sales strategy**, targeting **85%** revenue from long-term clients, **10%** from mid-term, and **5%** from new clients[54](index=54&type=chunk)[55](index=55&type=chunk) - As of **December 31, 2020**, the company had **1,894 personnel** across six countries, primarily in Central and Eastern Europe engineering centers[50](index=50&type=chunk)[62](index=62&type=chunk) [Risk Factors](index=17&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from client concentration, market downturns, competition, international operations, and regulatory compliance - Revenue concentration is high, with the **top 10 clients** accounting for **79% of 2020 revenue**, and the **top two clients** each exceeding **10%**[87](index=87&type=chunk) - The **COVID-19 pandemic** negatively impacted revenues, especially the retail segment, with most retail customer revenues not returning to pre-pandemic levels[92](index=92&type=chunk) - Intense competition stems from emerging digital services firms, large global consulting firms, India-based IT providers, and clients' in-house IT departments[64](index=64&type=chunk)[98](index=98&type=chunk) - Operations in **Russia, Ukraine, Poland, and Serbia** expose the company to significant legal, economic, tax, and political risks[126](index=126&type=chunk)[128](index=128&type=chunk)[130](index=130&type=chunk) - The company is subject to evolving data privacy laws like **GDPR** and **CCPA/CPRA**, imposing stringent requirements and potential penalties[178](index=178&type=chunk)[179](index=179&type=chunk) - A material weakness in internal controls over financial reporting, identified in **2019**, was remediated as of **December 31, 2020**[121](index=121&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk) [Unresolved Staff Comments](index=52&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None [Properties](index=52&type=section&id=Item%202.%20Properties) Grid Dynamics leases **12 facilities** totaling approximately **140,000 square feet** across six countries, with principal executive offices in San Ramon, California - The company leases all its facilities, totaling approximately **140,000 square feet** across **12 locations** in **six countries**[223](index=223&type=chunk) - Engineering centers are located in the **U.S., Poland, Serbia, Ukraine, the Netherlands, and Russia**[223](index=223&type=chunk) [Legal Proceedings](index=53&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently a party to any material legal or governmental proceedings - Grid Dynamics is not currently a party to any material legal proceedings[225](index=225&type=chunk) [Mine Safety Disclosures](index=53&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=54&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NASDAQ under **GDYN** since **March 2020**, with **53.8 million shares outstanding** and no dividends expected - Common stock began trading on NASDAQ under **GDYN** on **March 6, 2020**[229](index=229&type=chunk) - As of **February 28, 2021**, **53,802,690 shares** of common stock were outstanding[6](index=6&type=chunk)[230](index=230&type=chunk) - The company has not paid cash dividends and does not expect to declare any, intending to retain all earnings for business operations[231](index=231&type=chunk) [Selected Financial Data](index=54&type=section&id=Item%206.%20Selected%20Financial%20Data) This section is not applicable as the company has elected not to provide this information - None [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=54&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In **2020**, revenue decreased to **$111.3 million** due to **COVID-19's impact on Retail**, offset by **TMT growth**, resulting in a **net loss** Financial Highlights (2018-2020) | Metric | 2020 ($ million) | 2019 ($ million) | 2018 ($ million) | | :--- | :--- | :--- | :--- | | Revenues | $111.3M | $118.3M | $91.9M | | Gross Profit | $41.6M | $48.2M | $39.3M | | Income/(loss) from operations | $(15.4)M | $15.6M | $13.8M | | Net income/(loss) | $(12.6)M | $10.8M | $9.2M | | Diluted EPS | $(0.28) | $0.49 | $0.46 | | Adjusted EBITDA | $12.5M | $23.7M | $19.4M | - The Retail vertical revenue declined by approximately **50%** year-over-year in **2020** due to COVID-19 disruptions, from **$67.4 million** in **2019** to **$34.0 million** in **2020**[243](index=243&type=chunk)[279](index=279&type=chunk) - The Technology, Media & Telecom (TMT) vertical grew by **40%** year-over-year, becoming the largest vertical at **41% of 2020 revenue**[242](index=242&type=chunk) - General and administrative expenses increased by **76.9%** to **$37.7 million** in **2020**, primarily due to **$11.1 million** in stock-based compensation and retention bonuses[284](index=284&type=chunk) - The company ended **2020** with **$112.7 million** in cash and cash equivalents and no outstanding debt[297](index=297&type=chunk)[298](index=298&type=chunk) Cash Flow Summary (2018-2020) | Cash Flow Activity ($ thousands) | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $5,932 | $12,534 | $10,584 | | Net cash used in investing activities | $(18,339) | $(2,811) | $(3,079) | | Net cash provided by financing activities | $82,967 | $14,604 | $0 | [Quantitative and Qualitative Disclosures about Market Risk](index=74&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is foreign currency exchange rate risk, with significant operating expenses denominated in **Russian rouble, Ukrainian hryvnia, and Polish zloty** - The company is exposed to foreign currency risk as a significant portion of operating expenses are in **Russian roubles, Ukrainian hryvnia, and Polish zloty**, while revenues are in U.S. dollars[326](index=326&type=chunk)[327](index=327&type=chunk) - A hypothetical **10% decrease** in the **Russian rouble** against the USD in **2020** would have increased income from operations by **$1.6 million**, and a **10% decrease** in the **Polish zloty** by **$1.1 million**[328](index=328&type=chunk) [Financial Statements and Supplementary Data](index=75&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for **2018-2020**, including balance sheets, income statements, equity statements, cash flows, and notes Consolidated Balance Sheet Summary (in thousands) | Account | Dec 31, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $112,745 | $42,189 | | Total current assets | $134,616 | $66,015 | | Goodwill | $14,690 | $0 | | **Total assets** | **$167,135** | **$71,531** | | **Liabilities and Equity** | | | | Total current liabilities | $13,318 | $8,300 | | **Total liabilities** | **$15,411** | **$8,300** | | **Total stockholders' equity** | **$151,724** | **$54,044** | Consolidated Statement of Income/(Loss) Summary (in thousands) | Account | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Revenue | $111,283 | $118,326 | $91,865 | | Gross profit | $41,621 | $48,236 | $39,306 | | Total operating expenses | $57,069 | $32,611 | $25,477 | | Income/(loss) from operations | $(15,448) | $15,625 | $13,829 | | **Net income/(loss)** | **$(12,599)** | **$10,807** | **$9,228** | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=111&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 [Controls and Procedures](index=111&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that internal control over financial reporting and disclosure controls were effective as of **December 31, 2020**, following the remediation of a **2019 material weakness** - A material weakness related to a lack of sufficient resources with **U.S. GAAP expertise**, identified prior to **2020**, was remediated as of **December 31, 2020**[481](index=481&type=chunk)[483](index=483&type=chunk) - Remediation included hiring a new **CFO** and **Global Controller**, additional qualified accounting personnel, and implementing a new **ERP system**[483](index=483&type=chunk) - Management, including the **CEO** and **CFO**, concluded that internal control over financial reporting and disclosure controls were effective as of **December 31, 2020**[485](index=485&type=chunk)[486](index=486&type=chunk) [Other Information](index=112&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None PART III [Directors, Executive Officers and Corporate Governance](index=113&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the upcoming Definitive Proxy Statement - Information is incorporated by reference from the company's upcoming Proxy Statement[492](index=492&type=chunk) [Executive Compensation](index=113&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the upcoming Definitive Proxy Statement - Information is incorporated by reference from the company's upcoming Proxy Statement[494](index=494&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=113&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership of beneficial owners, management, and related stockholder matters is incorporated by reference from the upcoming Definitive Proxy Statement - Information is incorporated by reference from the company's upcoming Proxy Statement[495](index=495&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=113&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on certain relationships, related transactions, and director independence is incorporated by reference from the upcoming Definitive Proxy Statement - Information is incorporated by reference from the company's upcoming Proxy Statement[496](index=496&type=chunk) [Principal Accounting Fees and Services](index=113&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information on principal accounting fees and services is incorporated by reference from the upcoming Definitive Proxy Statement - Information is incorporated by reference from the company's upcoming Proxy Statement[497](index=497&type=chunk) PART IV [Exhibit and Financial Statement Schedules](index=114&type=section&id=Item%2015.%20Exhibit%20and%20Financial%20Statement%20Schedules) This section lists the financial statements and exhibits filed as part of the Annual Report on Form 10-K - This section lists all financial statements and exhibits filed with the Form 10-K[500](index=500&type=chunk)[501](index=501&type=chunk) [Form 10-K Summary](index=118&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has not provided a summary for this item - None

Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) Q3 2020 Earnings Conference Call November 5, 2020 4:30 PM ET Company Participants Leonard Livschitz - CEO Anil Kumar Doradla - CFO Conference Call Participants Joseph Vafi - Canaccord Maggie Nolan - William Blair Operator Good day, ladies and gentlemen, and welcome to the Grid Dynamics Holdings Inc. Third Quarter 2020 Earnings Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions] A question-and-answer session will follow ...

0 Grid Dynamics 1 trusted engineering partner for digital transformation Grid Dynamics Investor Presentation NASDAQ: GDYN | Q3 2020 www.griddynamics.com Disclaimer Forward-Looking Statements This communication contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that are not historical facts,and involve risks and uncertainties that could cause actual results of Grid Dynamics to differ materially from thos ...

trusted engineering partner for digital transformation Grid Dynamics Investor Presentation NASDAQ: GDYN | Q2 2020 www.griddynamics.com Disclaimer Forward-Looking Statements This communication contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that are not historical facts and involve risks and uncertainties that could cause actual results of Grid Dynamics to differ materially from those expected and pro ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q For the transition period from to Commission File Number: 001-38685 (Mark One) Grid Dynamics Holdings, Inc. (Exact Name of Registrant as Specified in its Charter) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (State or other jurisdiction of incorporation or organization) For the quarterly period ended March 31, 2020 5000 Executive Parkway, Suite 520 San Ramon, CA 94583 (Address of pr ...