PART I. FINANCIAL INFORMATION This part encompasses the company's unaudited financial statements, management's analysis, market risk, and internal controls [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents Grid Dynamics' unaudited financial statements and notes on accounting policies and financial items [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2022 | December 31, 2021 | | :-------------------------------- | :------------ | :-------------- | | **Assets** | | | | Cash and cash equivalents | $150,018 | $144,364 | | Total current assets | $207,753 | $192,764 | | Total assets | $278,173 | $256,719 | | **Liabilities and Equity** | | | | Total current liabilities | $38,568 | $25,344 | | Total liabilities | $45,248 | $29,668 | | Total stockholders' equity | $232,925 | $227,051 | | Total liabilities and stockholders' equity | $278,173 | $256,719 | [Condensed Consolidated Statements of Loss and Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Loss%20and%20Comprehensive%20Loss) This section presents the company's financial performance over periods, including revenue, expenses, and net loss Condensed Consolidated Statements of Loss and Comprehensive Loss (in thousands, except per share data) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $77,335 | $47,676 | $148,745 | $86,810 | | Gross profit | $28,861 | $19,797 | $55,640 | $35,134 | | Income/(loss) from operations | $(10,849) | $1,384 | $(10,646) | $(394) | | Net loss | $(13,186) | $(1,483) | $(15,853) | $(3,545) | | Comprehensive loss | $(13,968) | $(1,518) | $(16,918) | $(3,531) | | Basic loss per share | $(0.20) | $(0.03) | $(0.24) | $(0.07) | | Diluted loss per share | $(0.20) | $(0.03) | $(0.24) | $(0.07) | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This section details changes in the company's equity, including net loss, stock-based compensation, and stock option exercises Condensed Consolidated Statements of Stockholders' Equity (in thousands) | Metric | Balance at Dec 31, 2021 | Net Loss (Q1 2022) | Stock-based Compensation (Q1 2022) | Exercise of Stock Options (Q1 2022) | Issuance/Tax Settlement (Q1 2022) | FX Adjustment (Q1 2022) | Balance at Mar 31, 2022 | | :-------------------------------- | :---------------------- | :----------------- | :--------------------------------- | :-------------------------------- | :--------------------------------- | :---------------------- | :---------------------- | | Total stockholders' equity | $227,051 | $(2,667) | $8,661 | $292 | $(1,802) | $(283) | $231,252 | | Metric | Balance at Mar 31, 2022 | Net Loss (Q2 2022) | Stock-based Compensation (Q2 2022) | Exercise of Stock Options (Q2 2022) | Issuance/Tax Settlement (Q2 2022) | FX Adjustment (Q2 2022) | Balance at Jun 30, 2022 | | :-------------------------------- | :---------------------- | :----------------- | :--------------------------------- | :-------------------------------- | :--------------------------------- | :---------------------- | :---------------------- | | Total stockholders' equity | $231,252 | $(13,186) | $16,387 | $538 | $(1,284) | $(782) | $232,925 | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes the cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $15,322 | $6,650 | | Net cash used in investing activities | $(4,213) | $(32,525) | | Net cash used in financing activities | $(4,390) | $(18,910) | | Effect of exchange rate changes on cash and cash equivalents | $(1,065) | $14 | | Net increase/(decrease) in cash and cash equivalents | $5,654 | $(44,771) | | Cash and cash equivalents, end of period | $150,018 | $67,974 | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section presents Grid Dynamics' unaudited financial statements and notes on accounting policies and financial items [Note 1 — Background and nature of operations](index=11&type=section&id=Note%201%20%E2%80%94%20Background%20and%20nature%20of%20operations) This note describes Grid Dynamics Holdings, Inc.'s business, incorporation, and NASDAQ listing - **Grid Dynamics Holdings, Inc.** provides enterprise-level **digital transformation services** in search, analytics, and release automation to **Fortune 1000 companies**. The company was incorporated in Delaware on May **21, 2018**, as ChaSerg Technology Acquisition Corp. and changed its name to **Grid Dynamics Holdings, Inc.** on March **5, 2020**, following a business combination. Its **common stock** is listed on NASDAQ under the symbol "GDYN"[25](index=25&type=chunk)[26](index=26&type=chunk) [Note 2 — Basis of presentation and summary of significant accounting policies](index=11&type=section&id=Note%202%20%E2%80%94%20Basis%20of%20presentation%20and%20summary%20of%20significant%20accounting%20policies) This note outlines the basis for financial statement preparation and key accounting policies, including lease adoption - The unaudited **condensed consolidated financial statements** are prepared in accordance with U.S. GAAP for interim financial information and SEC rules, reflecting normal and recurring adjustments. The Company consolidates all directly or indirectly owned or controlled subsidiaries, including GD Ukraine, LLC and GD AM, LLC, which are considered **Variable Interest Entities (VIEs)** due to the Company's power to direct their significant activities and being their primary beneficiary[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) - The Company adopted Topic **842, Leases**, effective January **1, 2022**, using the current period adjustment method, resulting in the recognition of **$5.9 million** in **Right-of-Use (RoU) Assets** and **$5.7 million** in **operating lease liabilities**. This adoption did not impact the statements of loss, stockholders' equity, or cash flows[33](index=33&type=chunk)[37](index=37&type=chunk) - The Company, as an **emerging growth company**, has elected to use the **extended transition period** for complying with new or revised financial accounting standards. It is currently evaluating the impact of ASU **2016-13 (Credit Losses)** and ASU **2020-3 (Financial Instruments)** on its **consolidated financial statements**, with ASU **2016-13** effective for fiscal years beginning after December **15, 2022**[32](index=32&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk) [Note 3 — Acquisitions](index=14&type=section&id=Note%203%20%E2%80%94%20Acquisitions) This note details the acquisition of Tacit Knowledge Inc., including purchase price allocation and revenue contribution - On May **29, 2021**, Grid Dynamics acquired **100%** of Tacit Knowledge Inc., a global digital commerce solutions provider, for **$37.6 million**, comprising **$33.6 million** cash and **$4.0 million** in contingent consideration. The **acquisition** added approximately **180** employees, augmented service offerings, strengthened competitive position, and leveraged near-shore capabilities in Mexico[42](index=42&type=chunk)[43](index=43&type=chunk) Tacit Acquisition Purchase Price Allocation (in thousands) | Asset/Liability | Fair Value | | :-------------------------- | :--------- | | Current assets | $9,145 | | Property, plant and equipment | $466 | | Intangible assets | $12,913 | | Goodwill | $21,268 | | Total assets acquired | $43,792 | | Accounts payable and accrued expenses | $(3,675) | | Deferred taxes | $(2,500) | | Total liabilities assumed | $(6,175) | | Purchase price allocation | $37,617 | - Tacit contributed approximately **$14.3 million** in **revenue** for the six months ended June **30, 2022**, and **$2.5 million** from acquisition date to June **30, 2021**. Pro forma **revenue** for the six months ended June **30, 2022**, including Tacit as if acquired at the beginning of **2021**, was **$148.7 million**, compared to **$94.8 million** for the same period in **2021**[46](index=46&type=chunk)[49](index=49&type=chunk) [Note 4 — Fair value](index=15&type=section&id=Note%204%20%E2%80%94%20Fair%20value) This note explains the measurement of contingent consideration and other investments at fair value - The Company measures **contingent consideration payable** at **fair value** using a Monte-Carlo model, based on budgets and discounted cash flow analysis. As of June **30, 2022**, the **contingent consideration payable** was **$5.0 million**, down from **$6.9 million** at December **31, 2021**, following a **$1.9 million** payment related to Daxx[51](index=51&type=chunk)[54](index=54&type=chunk) - The Company holds a **$1.0 million** **investment in equity securities** of a related party, recorded at cost, classified as 'Other noncurrent assets' as of June **30, 2022**[54](index=54&type=chunk) [Note 5 — Prepaid expenses](index=16&type=section&id=Note%205%20%E2%80%94%20Prepaid%20expenses) This note provides a breakdown of the company's prepaid expenses and other current assets Prepaid Expenses (in thousands) | Category | June 30, 2022 | December 31, 2021 | | :-------------------------------- | :------------ | :-------------- | | Prepaid expenses | $3,888 | $2,188 | | Prepaid insurance | $1,462 | $921 | | Guarantee deposits placed | $1,388 | $345 | | Value added tax receivable | $911 | $931 | | Other assets | $156 | $118 | | Total prepaid expenses and other current assets | $7,805 | $4,503 | [Note 6 — Property and equipment, net](index=17&type=section&id=Note%206%20%E2%80%94%20Property%20and%20equipment,%20net) This note details the company's property, equipment, and capitalized software development costs, net of depreciation Property and Equipment, Net (in thousands) | Category | June 30, 2022 | December 31, 2021 | | :-------------------------------- | :------------ | :-------------- | | Computers and equipment | $12,128 | $10,784 | | Machinery and automobiles | $282 | $246 | | Furniture and fixtures | $1,194 | $1,174 | | Software | $513 | $513 | | Leasehold improvements | $500 | $486 | | Total gross property and equipment | $14,617 | $13,203 | | Less: Accumulated depreciation and amortization | $(8,477) | $(8,240) | | Net property and equipment | $6,140 | $4,963 | | Capitalized software development costs | $5,340 | $4,656 | | Less: Accumulated amortization | $(4,137) | $(3,450) | | Net capitalized software development costs | $1,203 | $1,206 | | **Property and equipment, net** | **$7,343** | **$6,169** | [Note 7 — Intangible assets, net](index=17&type=section&id=Note%207%20%E2%80%94%20Intangible%20assets,%20net) This note presents the company's intangible assets, including customer relationships and tradenames, net of amortization Intangible Assets, Net (in thousands) | Category | June 30, 2022 | December 31, 2021 | | :-------------------------------- | :------------ | :-------------- | | Customer relationships | $15,971 | $15,971 | | Tradenames | $4,676 | $4,676 | | Non-compete agreements | $440 | $440 | | Total gross intangible assets | $21,087 | $21,087 | | Less: Accumulated amortization | $(3,231) | $(1,990) | | **Intangible assets, net** | **$17,856** | **$19,097** | [Note 8 — Other current liabilities](index=17&type=section&id=Note%208%20%E2%80%94%20Other%20current%20liabilities) This note provides a breakdown of other current liabilities, including contingent consideration and VAT payable Other Current Liabilities (in thousands) | Category | June 30, 2022 | December 31, 2021 | | :-------------------------------- | :------------ | :-------------- | | Contingent consideration payable | $5,000 | $6,933 | | Value added tax payable | $1,232 | $1,274 | | Customer deposits | $752 | $798 | | Other liabilities | $638 | $594 | | **Total other current liabilities** | **$7,622** | **$9,599** | - As of June **30, 2022**, the Company had **$0.6 million** payable to a related party, classified under **Other current liabilities**[59](index=59&type=chunk) [Note 9 — Debt](index=19&type=section&id=Note%209%20%E2%80%94%20Debt) This note describes the company's new secured multicurrency revolving loan facility and compliance with covenants - On March **15, 2022**, Grid Dynamics entered into a new Credit Agreement for a **secured multicurrency revolving loan facility** of up to **$30.0 million**, with a **$10.0 million** letter of credit sublimit, maturing on March **15, 2025**. The facility can be increased to **$50.0 million**[60](index=60&type=chunk) - Borrowings accrue interest based on base rate, adjusted SOFR/EURIBOR, or adjusted daily simple SOFR, with margins determined by the Company's consolidated total leverage ratio. The Company was in compliance with all covenants as of June **30, 2022**, and had no **outstanding debt** under this facility or its previous **Line of Credit** (closed March **2022**)[61](index=61&type=chunk)[63](index=63&type=chunk)[65](index=65&type=chunk) [Note 10 — Revenue](index=19&type=section&id=Note%2010%20%E2%80%94%20Revenue) This note disaggregates revenue by customer location, vertical market, and contract type, identifying major customers Disaggregated Revenue by Customer Location (in thousands) | Customer Location | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | North America | $63,658 | $38,783 | $121,267 | $71,389 | | Europe | $13,596 | $8,855 | $27,331 | $15,383 | | Other | $81 | $38 | $147 | $38 | | **Total Revenues** | **$77,335** | **$47,676** | **$148,745** | **$86,810** | Disaggregated Revenue by Vertical Market (in thousands) | Vertical | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Retail | $25,452 | $12,729 | $48,759 | $21,579 | | Technology, Media and Telecom | $23,391 | $16,115 | $44,835 | $30,526 | | CPG/Manufacturing | $16,090 | $9,899 | $31,069 | $18,624 | | Finance | $5,049 | $4,071 | $9,576 | $7,509 | | Other | $7,353 | $4,862 | $14,506 | $8,572 | | **Total Revenues** | **$77,335** | **$47,676** | **$148,745** | **$86,810** | Disaggregated Revenue by Contract Type (in thousands) | Contract Type | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Time-and-material | $71,002 | $44,230 | $136,208 | $80,470 | | Fixed-fee | $6,333 | $3,446 | $12,537 | $6,340 | | **Total Revenues** | **$77,335** | **$47,676** | **$148,745** | **$86,810** | - For the three and six months ended June **30, 2022**, **Customer 1** and **Customer 2** each accounted for over **10%** of **total revenue**. **Revenue** from **related parties** was **$1.4 million** and **$2.6 million** for the three and six months ended June **30, 2022**, respectively[73](index=73&type=chunk) [Note 11 — Leases](index=21&type=section&id=Note%2011%20%E2%80%94%20Leases) This note details the company's lease obligations, primarily for office real estate, and operating lease costs - The Company's **lease obligations** primarily consist of office real estate, with remaining lease terms ranging from **0.4** to **4.1 years**. **Operating lease cost** for the six months ended June **30, 2022**, was **$1.552 million**, with **total lease cost** at **$1.747 million**[75](index=75&type=chunk)[76](index=76&type=chunk)[78](index=78&type=chunk) Operating Lease Maturities (in thousands) | Years ending December 31, | Lease Payments | | :------------------------ | :------------- | | 2022 (excluding six months ended June 30, 2022) | $1,263 | | 2023 | $1,604 | | 2024 | $1,404 | | 2025 | $565 | | 2026 | $172 | | Total lease payments | $5,008 | | Less: imputed interest | $(290) | | **Total** | **$4,718** | [Note 12 — Income taxes](index=22&type=section&id=Note%2012%20%E2%80%94%20Income%20taxes) This note explains the income tax expense, effective tax rate, and the discrete effective tax rate method used - **Income tax expense** for the three months ended June **30, 2022**, was **$1.7 million** (**effective tax rate** of **-14.9%**), compared to **$2.8 million** (**effective tax rate** of **213.6%**) in **2021**, primarily due to **Section 162(m) compensation deduction limitations** and **foreign rate differential**. For the six months ended June **30, 2022**, **income tax expense** increased to **$3.9 million** (**effective tax rate** of **-32.4%**) from **$2.0 million** (**effective tax rate** of **-132.8%**) in **2021**[79](index=79&type=chunk)[80](index=80&type=chunk) - The Company used a **discrete effective tax rate method** for the three and six months ended June **30, 2022**, due to the inability to reliably forecast **2022 operating expenses** and uncertainties from **geopolitical risks**, which would otherwise cause significant changes and material distortion in the **estimated annual effective tax rate**[81](index=81&type=chunk)[82](index=82&type=chunk) [Note 13 — Stockholders' equity](index=23&type=section&id=Note%2013%20%E2%80%94%20Stockholders'%20equity) This note details the company's common stock outstanding and the accounting treatment of warrants - As of June **30, 2022**, the Company had **67.3 million** shares of **common stock outstanding**. Following the **SEC's Staff Statement on SPAC Warrants**, the Company determined its **private warrants** should be accounted for as liabilities. By June **30, 2022**, all **private warrants** and **public warrants** were exchanged for **common stock**, resulting in no **outstanding warrants**[84](index=84&type=chunk)[85](index=85&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) [Note 14 — Stock-based compensation](index=23&type=section&id=Note%2014%20%E2%80%94%20Stock-based%20compensation) This note provides a breakdown of stock-based compensation expense and unrecognized compensation expenses for various plans Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cost of revenue | $272 | $149 | $521 | $260 | | Engineering, research, and development | $1,638 | $617 | $2,502 | $1,171 | | Sales and marketing | $1,207 | $453 | $1,878 | $1,244 | | General and administrative | $13,270 | $5,456 | $20,147 | $9,671 | | **Total stock-based compensation** | **$16,387** | **$6,675** | **$25,048** | **$12,346** | - As of June **30, 2022**, **unrecognized compensation expenses** for the **2018 Plan options** totaled **$0.1 million** (expensed over **1.19 years**) and for the **2020 Plan options** totaled **$9.6 million** (expensed over **2.83 years**). For **RSUs**, **unrecognized compensation expenses** were **$27.3 million** (expensed over **1.79 years**), and for **PSUs**, **$25.7 million** (expensed over **0.67 years** based on **218% performance goal achievement**)[90](index=90&type=chunk)[91](index=91&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk) [Note 15 — Earnings per share](index=25&type=section&id=Note%2015%20%E2%80%94%20Earnings%20per%20share) This note presents the basic and diluted earnings per share calculations and anti-dilutive share equivalents Basic and Diluted EPS (in thousands, except per share data) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(13,186) | $(1,483) | $(15,853) | $(3,545) | | Weighted-average shares outstanding – basic and diluted | 67,136 | 54,431 | 67,028 | 53,044 | | Basic loss per share | $(0.20) | $(0.03) | $(0.24) | $(0.07) | | Diluted loss per share | $(0.20) | $(0.03) | $(0.24) | $(0.07) | Anti-Dilutive Share Equivalents Excluded from EPS Calculation (in thousands) | Category | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Stock options to purchase common stock | 4,380 | 6,435 | 4,280 | 6,495 | | Restricted stock units | 2,178 | 2,186 | 1,817 | 2,522 | | Performance stock units | 1,131 | 938 | 1,153 | 966 | | Warrants to purchase common stock | — | 4,611 | — | 6,523 | | **Total** | **7,689** | **14,170** | **7,250** | **16,506** | [Note 16 — Commitments and contingencies](index=26&type=section&id=Note%2016%20%E2%80%94%20Commitments%20and%20contingencies) This note addresses the company's legal proceedings, claims, and management's assessment of material impact - The Company is subject to **legal proceedings and claims** in the ordinary course of business but currently has no **material legal proceedings or claims** requiring financial statement reflection. Management believes any future accruals for known contingencies would not materially affect **financial condition, liquidity, or cash flows**[100](index=100&type=chunk) [Note 17 — Subsequent events](index=26&type=section&id=Note%2017%20%E2%80%94%20Subsequent%20events) This note confirms the date through which subsequent events were evaluated for the financial statements - The Company performed **subsequent event procedures** through August **4, 2022**, the date the **condensed consolidated financial statements** were issued[101](index=101&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Grid Dynamics' financial condition, operational results, liquidity, and critical accounting policies [Overview](index=27&type=section&id=Overview) This section introduces Grid Dynamics' business, services, and key financial highlights - **Grid Dynamics Holdings, Inc.** is a leader in enterprise-level **digital transformation services** for **Fortune 1000 companies**, offering strategy consulting, prototype development, and enterprise-scale delivery of new digital platforms. The company specializes in emerging technologies like **AI, data science, cloud computing, big data, and DevOps**, emphasizing a **product-over-project culture** and **client success**[105](index=105&type=chunk)[106](index=106&type=chunk) Summary of Financial Results (in thousands, except per share data) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $77,335 | $47,676 | $148,745 | $86,810 | | Gross profit | $28,861 (37.3%) | $19,797 (41.5%) | $55,640 (37.4%) | $35,134 (40.5%) | | Income/(loss) from operations | $(10,849) (-14.0%) | $1,384 (2.9%) | $(10,646) (-7.2%) | $(394) (-0.5%) | | Net loss | $(13,186) (-17.1%) | $(1,483) (-3.1%) | $(15,853) (-10.7%) | $(3,545) (-4.1%) | | Diluted loss per share | $(0.20) | $(0.03) | $(0.24) | $(0.07) | | Non-GAAP EBITDA | $13,282 (17.2%) | $9,731 (20.4%) | $24,657 (16.6%) | $14,994 (17.3%) | | Non-GAAP Net Income | $8,230 (10.6%) | $6,090 (12.8%) | $15,178 (10.2%) | $9,155 (10.5%) | | Non-GAAP Diluted EPS | $0.12 | $0.10 | $0.22 | $0.15 | [Quarterly Highlights](index=28&type=section&id=Quarterly%20Highlights) This section summarizes key financial and operational achievements for the quarter, including revenue growth and net loss - In Q2 **2022**, **revenues** reached **$77.3 million**, an **8.3% sequential increase** from Q1 **2022** and a **62.2% year-over-year increase** from Q2 **2021**, marking the **eighth consecutive sequential growth quarter**. This **growth** was driven by strong demand for **digital transformation initiatives** across industry verticals[109](index=109&type=chunk)[144](index=144&type=chunk) - **Retail** was the **largest industry vertical** in Q2 **2022**, comprising **32.9%** of **revenue**, up **9.2%** sequentially and **100.0%** year-over-year. **Top 5 customer revenue concentration** slightly decreased to **44.2%** from **45.4%** year-over-year, indicating **diversification** through new and existing customer **growth**[110](index=110&type=chunk)[111](index=111&type=chunk) - **GAAP Net Loss** increased to **$13.2 million** (**-17.1%** of **revenue**) in Q2 **2022**, from **$1.5 million** (**-3.1%** of **revenue**) in Q2 **2021**, primarily due to higher **stock-based compensation** and **operating expenses**, including **geographic reorganization costs** related to the **Ukraine conflict**. **Non-GAAP EBITDA** increased to **$13.3 million** (**17.2%** of **revenue**) from **$9.7 million** (**20.4%** of **revenue**) year-over-year, driven by **increased business volume**[112](index=112&type=chunk) [COVID-19 Related Updates](index=29&type=section&id=COVID-19%20Related%20Updates) This section discusses the ongoing impact of the COVID-19 pandemic on global economic activity and company operations - The **COVID-19 pandemic** continues to impact **global economic activity**, with initial headwinds in March **2020** primarily affecting **retail customers**. Despite a low point in May **2020**, retail business has steadily improved, and **quarterly revenues** now exceed **pre-COVID levels**. The Company continues **precautionary measures**, with most employees working remotely, and facilities open following local guidelines, resulting in **minimal operational disruption**[113](index=113&type=chunk) - Future impacts depend on the **pandemic's duration**, **new variants**, **vaccine efficacy**, **government actions**, and **altered consumer behavior**. Challenges include **employee retention** and **talent shortages**, with **growth** and investor confidence potentially weakened by **supply chain disruptions**, **inflationary pressures**, and **global labor shortages**[113](index=113&type=chunk)[206](index=206&type=chunk)[207](index=207&type=chunk) [Business Update Regarding Military Action in Ukraine](index=29&type=section&id=Business%20Update%20Regarding%20Military%20Action%20in%20Ukraine) This section details the impact of the Ukraine conflict on operations, including employee relocation and cessation of Russian operations - The **military action in Ukraine** and associated **sanctions** pose **material adverse effects** on operations, potentially **disrupting service delivery**, **financial transactions**, and requiring **work reallocation**. **Grid Dynamics** has implemented its **business continuity plan**, **relocating affected employees** to safer locations within and outside Ukraine, and reallocating work to other global geographies[114](index=114&type=chunk)[115](index=115&type=chunk) - In April **2022**, the Company announced it would **cease remaining operations in the Russian Federation**, relocating most Russia-based employees and managing projects to eliminate client impact. As of August **2022**, minimal office personnel remain in Russia, and no client services are performed from there. The Company also expanded to a **new European hub in Zug, Switzerland**, and opened an **engineering office in Yerevan, Armenia**, with **workforce expansion in India**[116](index=116&type=chunk)[201](index=201&type=chunk) - The progress and outcome of the conflict are **unpredictable**, and **prolonged unrest**, **military activities**, or **expanded sanctions** could materially adversely affect operations and **business outlook**[117](index=117&type=chunk) [Key Performance Indicators and Other Factors Affecting Performance](index=30&type=section&id=Key%20Performance%20Indicators%20and%20Other%20Factors%20Affecting%20Performance) This section outlines critical metrics and external factors influencing Grid Dynamics' success, including personnel and currency risk - Attracting and retaining **skilled IT professionals** is critical for **Grid Dynamics' success** and **revenue growth**. The company's **personnel count** increased from **2,510** in June **2021** to **3,763** in June **2022**, with significant **growth** in **Central and Eastern Europe, U.K., and the Netherlands**[119](index=119&type=chunk)[120](index=120&type=chunk) - **Employee retention** is a priority, with a target **voluntary attrition rate** no higher than **mid-teen percentages**. Effective **utilization of IT professionals**, tracked by **billable hours** and **utilization rates**, is crucial for maintaining **gross profit margins**[121](index=121&type=chunk)[122](index=122&type=chunk) Customer Base and Revenue Concentration | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total customers (for the period) | 208 | 212 | 232 | 226 | | Customers >$5.0 million | 13 | 9 | 13 | 9 | | Customers >$2.5 – 5.0 million | 7 | 4 | 7 | 4 | | Customers >$1.0 – 2.5 million | 26 | 15 | 26 | 15 | | Top five customers (% of revenue) | 44.2% | 45.4% | 43.5% | 48.6% | | Top ten customers (% of revenue) | 60.2% | 62.3% | 59.0% | 64.3% | | Top five customers (revenue in thousands) | $34,166 | $21,634 | $64,710 | $42,213 | | Top ten customers (revenue in thousands) | $46,539 | $29,690 | $87,826 | $55,786 | - **Grid Dynamics** is exposed to **foreign currency exchange rate risk**, with a significant portion of **combined cost of revenue and operating expenses** denominated in **non-U.S. dollar currencies** (**31.2%** in Q2 **2022**, **35.1%** in H1 **2022**). The company does not currently **hedge this exposure** but seeks to minimize it by matching expenses to **U.S. dollars** and limiting cash transfers[125](index=125&type=chunk) - The business is subject to **seasonal trends**, with historically higher **revenue** and **gross profit** in Q2 and Q3 compared to Q1 and Q4, influenced by holidays and the **U.S. retail cycle**[126](index=126&type=chunk) [Non-GAAP Measures](index=31&type=section&id=Non-GAAP%20Measures) This section explains the use of Non-GAAP financial measures and provides reconciliations to GAAP equivalents - **Grid Dynamics** uses **Non-GAAP EBITDA**, **Non-GAAP Net Income**, and **Non-GAAP Diluted EPS** to evaluate **core operating performance**, make **strategic decisions**, and determine **performance-based compensation**. These measures exclude certain GAAP expenses like **stock-based compensation**, **transaction-related costs**, and **geographic reorganization expenses**[127](index=127&type=chunk)[128](index=128&type=chunk)[132](index=132&type=chunk) Reconciliation of Non-GAAP EBITDA to GAAP Net Loss (in thousands) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GAAP net loss | $(13,186) | $(1,483) | $(15,853) | $(3,545) | | Depreciation and amortization | $1,691 | $1,154 | $3,280 | $2,100 | | Provision for income taxes | $1,711 | $2,788 | $3,881 | $2,022 | | Stock-based compensation | $16,387 | $6,675 | $25,048 | $12,346 | | Transaction and transformation-related costs | — | $518 | — | $942 | | Geographic reorganization | $6,053 | — | $6,975 | — | | Other expenses | $626 | $79 | $1,326 | $1,129 | | **Non-GAAP EBITDA** | **$13,282** | **$9,731** | **$24,657** | **$14,994** | Reconciliation of Non-GAAP Diluted EPS and Non-GAAP Net Income to GAAP Net Loss (in thousands, except per share data) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GAAP net loss | $(13,186) | $(1,483) | $(15,853) | $(3,545) | | Stock-based compensation | $16,387 | $6,675 | $25,048 | $12,346 | | Transaction and transformation-related costs | — | $518 | — | $942 | | Geographic reorganization | $6,053 | — | $6,975 | — | | Other expenses | $626 | $79 | $1,326 | $1,129 | | Tax impact of non-GAAP adjustments | $(1,650) | $301 | $(2,318) | $(1,717) | | **Non-GAAP Net Income** | **$8,230** | **$6,090** | **$15,178** | **$9,155** | [Key Components of Revenue and Expenses](index=34&type=section&id=Key%20Components%20of%20Revenue%20and%20Expenses) This section describes the primary sources of revenue and the categorization of the company's operating expenses - **Grid Dynamics** primarily generates **revenue** from **software engineering, development, integration, testing, and operations services**, mainly on a **time and materials basis**, with a smaller portion from **fixed-fee contracts**. **Revenue** is recognized as hours and costs are incurred for **time and materials**, and as work is performed for **fixed-fee contracts**[135](index=135&type=chunk) - **Cost of revenue** includes **salaries, employee benefits, performance bonuses, stock-based compensation, travel expenses** for client-serving personnel, and related **depreciation and amortization**. **Operating expenses** are categorized into **Engineering, Research and Development**; **Sales and Marketing**; and **General and Administrative**, each including salaries, benefits, and **stock-based compensation**, with **G&A** also covering **administrative costs, legal/audit, insurance, operating leases, and geographic reorganization expenses**[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk) - **Provision for income taxes** follows the **asset and liability method**, recognizing **deferred income taxes** for **temporary differences**. The **effective tax rate** is influenced by **income allocation across jurisdictions**, **tax law changes**, and **audit resolutions**[142](index=142&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) This section provides a detailed comparison of Grid Dynamics' revenues and expenses for the reported periods Consolidated Results of Operations (in thousands, except percentages) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Change (Dollars) | Change (Percentage) | | :-------------------------------- | :------------------------------- | :------------------------------- | :--------------- | :------------------ | | Revenue | $77,335 | $47,676 | $29,659 | 62.2% | | Cost of revenue | $48,474 | $27,879 | $20,595 | 73.9% | | Gross profit | $28,861 | $19,797 | $9,064 | 45.8% | | Engineering, research, and development | $3,840 | $1,772 | $2,068 | 116.7% | | Sales and marketing | $5,132 | $2,837 | $2,295 | 80.9% | | General and administrative | $30,738 | $13,804 | $16,934 | 122.7% | | Total operating expense | $39,710 | $18,413 | $21,297 | 115.7% | | Income/(loss) from operations | $(10,849) | $1,384 | $(12,233) | -883.9% | | Other expenses | $(626) | $(79) | $(547) | 692.4% | | Income/(loss) before income taxes | $(11,475) | $1,305 | $(12,780) | -979.3% | | Provision for income taxes | $1,711 | $2,788 | $(1,077) | -38.6% | | Net loss | $(13,186) | $(1,483) | $(11,703) | 789.1% | Consolidated Results of Operations (in thousands, except percentages) | Metric | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | Change (Dollars) | Change (Percentage) | | :-------------------------------- | :------------------------------- | :------------------------------- | :--------------- | :------------------ | | Revenue | $148,745 | $86,810 | $61,935 | 71.3% | | Cost of revenue | $93,105 | $51,676 | $41,429 | 80.2% | | Gross profit | $55,640 | $35,134 | $20,506 | 58.4% | | Engineering, research, and development | $6,936 | $3,555 | $3,381 | 95.1% | | Sales and marketing | $9,347 | $5,869 | $3,478 | 59.3% | | General and administrative | $50,003 | $26,104 | $23,899 | 91.6% | | Total operating expense | $66,286 | $35,528 | $30,758 | 86.6% | | Loss from operations | $(10,646) | $(394) | $(10,252) | 2,602.0% | | Other expenses | $(1,326) | $(1,129) | $(197) | 17.4% | | Loss before income taxes | $(11,972) | $(1,523) | $(10,449) | 686.1% | | Provision for income taxes | $3,881 | $2,022 | $1,859 | 91.9% | | Net loss | $(15,853) | $(3,545) | $(12,308) | 347.2% | Revenues by Vertical (in thousands, except percentages) | Vertical | Three Months Ended June 30, 2022 | % of Revenue | Three Months Ended June 30, 2021 | % of Revenue | | :---------------------------- | :------------------------------- | :----------- | :------------------------------- | :----------- | | Retail | $25,452 | 32.9% | $12,729 | 26.7% | | Technology, Media and Telecom | $23,391 | 30.2% | $16,115 | 33.8% | | CPG/Manufacturing | $16,090 | 20.8% | $9,899 | 20.8% | | Finance | $5,049 | 6.5% | $4,071 | 8.5% | | Other | $7,353 | 9.6% | $4,862 | 10.2% | | **Total** | **$77,335** | **100.0%** | **$47,676** | **100.0%** | | Vertical | Six Months Ended June 30, 2022 | % of Revenue | Six Months Ended June 30, 2021 | % of Revenue | | :---------------------------- | :------------------------------- | :----------- | :------------------------------- | :----------- | | Retail | $48,759 | 32.8% | $21,579 | 24.9% | | Technology, Media and Telecom | $44,835 | 30.1% | $30,526 | 35.2% | | CPG/Manufacturing | $31,069 | 20.9% | $18,624 | 21.5% | | Finance | $9,576 | 6.4% | $7,509 | 8.6% | | Other | $14,506 | 9.8% | $8,572 | 9.8% | | **Total** | **$148,745** | **100.0%** | **$86,810** | **100.0%** | - **Revenue increased** by **62.2%** to **$77.3 million** in Q2 **2022** and **71.3%** to **$148.7 million** in H1 **2022**, driven by **improved business conditions**, **increased billable headcount**, and **billable hours**. **Cost of revenue increased** by **73.9%** in Q2 **2022** and **80.2%** in H1 **2022** due to **higher personnel costs** supporting **increased revenue**[144](index=144&type=chunk)[145](index=145&type=chunk) - **Gross profit increased** by **45.8%** to **$28.9 million** in Q2 **2022** and **58.4%** to **$55.6 million** in H1 **2022**. However, **gross margin decreased** to **37.3%** in Q2 **2022** (from **41.5%**) and **37.4%** in H1 **2022** (from **40.5%**), impacted by **higher costs associated with employee relocation due to the Russian invasion of Ukraine**[146](index=146&type=chunk)[147](index=147&type=chunk) - **Engineering, research, and development expenses rose** by **116.7%** in Q2 **2022** and **95.1%** in H1 **2022** due to **increased staffing and investments in customer delivery operations**. **Sales and marketing expenses increased** by **80.9%** in Q2 **2022** and **59.3%** in H1 **2022**, mainly from **increased sales personnel, initiatives, and wages**[148](index=148&type=chunk)[149](index=149&type=chunk) - **General and administrative expenses increased** by over **70%** in both Q2 and H1 **2022**, driven by **higher stock-based compensation, wages, bonuses, facilities expenses, amortization of intangibles, and geographic reorganization costs**. **Other expenses increased** by **$0.5 million** in Q2 **2022** due to **currency fluctuations**[150](index=150&type=chunk)[151](index=151&type=chunk) - **Net loss** for Q2 **2022** was **$13.2 million** and for H1 **2022** was **$15.9 million**, compared to **$1.5 million** and **$3.5 million** in the respective prior periods, primarily due to the aforementioned increases in **operating expenses and stock-based compensation**[153](index=153&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, funding sufficiency, and access to credit facilities - As of June **30, 2022**, **Grid Dynamics** had **$150.0 million** in **cash and cash equivalents**, an **increase** from **$144.4 million** at December **31, 2021**. Of this, **$14.3 million** was **held outside the U.S.** (up from **$8.5 million**), intended for future **operating needs** in those regions[155](index=155&type=chunk) - The Company believes its current **cash position** is sufficient to fund **operating, investing, and financing expenditures** for the next twelve months. However, **additional equity or debt financing** may be sought if resources are insufficient[154](index=154&type=chunk) - **Cash in banks in Ukraine, Russia, Poland, Moldova, Serbia, Armenia, and Mexico** may be subject to risks due to **periodic instability, sanctions, and less rigorous banking standards** compared to the U.S[155](index=155&type=chunk) - A new **$30.0 million revolving credit facility** was established on March **15, 2022**, with no **outstanding debt** as of June **30, 2022**[156](index=156&type=chunk) [Cash Flows](index=39&type=section&id=Cash%20Flows) This section summarizes the company's cash flows from operating, investing, and financing activities Summary of Cash Flows (in thousands) | Category | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $15,322 | $6,650 | | Net cash used in investing activities | $(4,213) | $(32,525) | | Net cash used in financing activities | $(4,390) | $(18,910) | | Effect of exchange rate changes on cash and cash equivalents | $(1,065) | $14 | | Net increase/(decrease) in cash and cash equivalents | $5,654 | $(44,771) | | Cash, cash equivalents (beginning of period) | $144,364 | $112,745 | | Cash, cash equivalents (end of period) | $150,018 | $67,974 | - **Net cash provided by operating activities increased** by **$8.7 million** to **$15.3 million** in H1 **2022**, driven by higher **cash operating profit**. **Net cash used in investing activities** was **$(4.2) million** in H1 **2022**, mainly for **capital expenditures and an investment**, significantly lower than **$(32.5) million** in H1 **2021** which included the **Tacit acquisition**[157](index=157&type=chunk)[158](index=158&type=chunk) - **Net cash used in financing activities** was **$(4.4) million** in H1 **2022**, reflecting **contingent consideration payments and tax withholding for vested awards**, compared to **$(18.9) million** in H1 **2021**, primarily due to **tax withholding**[159](index=159&type=chunk) [Off-Balance Sheet Arrangements and Commitments](index=39&type=section&id=Off-Balance%20Sheet%20Arrangements%20and%20Commitments) This section addresses Grid Dynamics' off-balance sheet arrangements, contingent commitments, and consolidated VIEs - **Grid Dynamics** has no **material off-balance sheet arrangements or contingent commitments**, except for **credit support for letters of credit and corporate credit card balances**, and **operating leases**. **Subcontractors GD Ukraine, LLC and GD AM, LLC** are **consolidated as Variable Interest Entities (VIEs)**[160](index=160&type=chunk)[161](index=161&type=chunk) [Critical Accounting Policies and Estimates](index=39&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights the significant judgments, estimates, and assumptions used in preparing the financial statements - The Company's **financial statements** rely on **judgments, estimates, and assumptions**, particularly for **revenue, expenses, assets, liabilities, and contingent items**. **Critical estimates** include **allowances for receivables, accrued liabilities, stock-based compensation, and fair value of intangible assets**[31](index=31&type=chunk)[162](index=162&type=chunk) - **Lease accounting** involves determining if an arrangement is a lease, classifying it, and measuring **RoU assets and liabilities** based on **present value of future lease payments**, using **incremental borrowing rates** if implicit rates are unavailable. The Company elected **practical expedients** to **combine lease and non-lease components** and for **short-term lease recognition**[164](index=164&type=chunk)[165](index=165&type=chunk) [Emerging Growth Company Accounting Election](index=40&type=section&id=Emerging%20Growth%20Company%20Accounting%20Election) This section explains Grid Dynamics' election to use the extended transition period for new accounting standards - **Grid Dynamics** is an "**emerging growth company**" and has elected to take advantage of the **extended transition period** for complying with **new or revised financial accounting standards**, meaning it adopts new standards at the same time as **private companies**. The Company expects to **lose this status on December 31, 2022**[166](index=166&type=chunk) [Recently Adopted and Issued Accounting Pronouncements](index=40&type=section&id=Recently%20Adopted%20and%20Issued%20Accounting%20Pronouncements) This section refers to Note 2 for details on recently adopted and issued accounting pronouncements - Recently adopted and issued accounting pronouncements are detailed in **Note 2 to the condensed consolidated financial statements**[167](index=167&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=

1 trusted engineering partner for digital transformation Grid Dynamics Investor Presentation NASDAQ: GDYN | Q1 2022 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 those expected an ...

Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) Q4 2021 Earnings Conference Call March 3, 2022 4:30 PM ET Company Participants Bin Chiang - Head, Investor Relations Leonard Livschitz - CEO & Director Anil Doradla - CFO & Secretary Conference Call Participants Mayank Tandon - Needham & Company Joshua Siegler - Cantor Fitzgerald & Co. Maggie Nolan - William Blair & Company Puneet Jain - JPMorgan Chase & Co. Ryan Potter - Citigroup Bryan Bergin - Cowen and Company Operator Welcome to Grid Dynamics Fourth Quarter an ...

Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) Q3 2021 Earnings Conference Call November 4, 2021 4:30 PM ET Company Participants Lilia Chernova - Head of Investor Relations Leonard Livschitz - Chief Executive Officer Anil Doradla - Chief Financial Officer Conference Call Participants Mayank Tandon - Needham Maggie Nolan - William Blair Bryan Bergin - Cowen Josh Siegler - Canter Fitzgerald Ryan Potter - Citi Operator Greetings. Welcome to the Grid Dynamics Third Quarter 2021 Earnings Call. At this time, all part ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 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) | Delaware | 83 ...

Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) Q2 2021 Earnings Conference Call August 5, 2021 4:30 PM ET Company Participants Lilia Chernova - Head of Investor Relations Leonard Livschitz - Chief Executive Officer Anil Doradla - Chief Financial Officer Conference Call Participants Mayank Tandon - Needham Puneet Jain - JPMorgan Zack Ajzenman - Cowen Joseph Vafi - Canaccord Maggie Nolan - William Blair Josh Siegler - Canter Fitzgerald Operator Welcome to the Grid Dynamics Holdings Inc. Second Quarter 2021 Earnin ...

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 ...

Company Overview - Grid Dynamics is a technology consulting, agile custom software development, and data analytics provider for Fortune 1000 corporations undergoing digital transformation[5] - The company's Q1 2021 revenue was $39.1 million, with expectations of $40.5 million to $42 million for Q2 2021[8] - The company expects FY 2021 revenue to be $165 million[8] - The company has 2056 employees[9] and 60.2 million diluted shares outstanding[8, 11] Financial Performance - Q1 2021 revenue increased by 30% sequentially and 21% year-over-year[63] - GAAP gross profit for Q1 2021 was $15.3 million, representing 39% of revenue[63] - Non-GAAP gross profit for Q1 2021 was $15.4 million, representing 39% of revenue[64] - Non-GAAP EBITDA for Q1 2021 was $5.3 million, representing 13.4% of revenue[62] Client and Market Diversification - In Q1 2021, Technology, Media, and Telecom (TMT) accounted for 37% of revenue, Retail 23%, Finance 12%, CPG 22%, and Other 9%[47] - The company's revenue growth strategy focuses on mature clients (>2 years relationship) contributing 85%, emerging clients (1-2 years) contributing 10%, and new logos contributing 5%[55]

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 ...