Grid Dynamics(US:GDYN)2025-10-30 20:38Financial Performance - Revenues for the three months ended September 30, 2025, were $104.2 million, representing a year-over-year increase of 19.1%[124] - Net income for the same period was $1.2 million, a decrease from $4.3 million in the prior-year quarter, primarily due to higher cost of revenues[124] - Non-GAAP EBITDA totaled $12.7 million, or 12.2% of revenues for the quarter, compared to $14.8 million, or 16.9% of revenues in the corresponding period of 2024[124] - Total revenues for the nine months ended September 30, 2025, reached $305.7 million, reflecting a year-to-date growth of 22.1% compared to $250.3 million in 2024[137] - Gross profit for the nine months ended September 30, 2025, increased to $106.2 million, an 18.1% growth from $90.0 million in the prior year[146] - Non-GAAP EBITDA for the nine months ended September 30, 2025, was $40.050 million, an increase from $36.839 million in the same period of 2024[162] - The company generated $30.704 million in net cash from operating activities for the nine months ended September 30, 2025, up from $23.130 million in the prior year[172] - The company reported a Non-GAAP net income of $8.150 million for the three months ended September 30, 2025, compared to $10.828 million in the same period of 2024[165] - Non-GAAP diluted EPS for the nine months ended September 30, 2025, was $0.30, down from $0.34 in the same period of 2024[165] Operating Expenses - Total operating expenses for the three months ended September 30, 2025, were $34.9 million, an increase of 14.2% from $30.6 million in the prior-year quarter[135] - Engineering, research, and development expenses increased by 29.5% year-over-year, reflecting the company's commitment to innovation[135] - General and administrative expenses totaled $66.9 million for the nine months ended September 30, 2025, reflecting a 13.4% increase from $59.0 million in 2024[153] - Sales and marketing expenses increased by 6.2% year-to-date, totaling $22.7 million for the nine months ended September 30, 2025[150] Customer Metrics - The number of customers for the nine months ended September 30, 2025, was 222, a slight decrease from 229 a year ago, highlighting challenges in customer retention[129] - The top one customer accounted for 16.4% of revenues in Q3 2025, compared to 17.1% in Q3 2024, indicating a slight decrease in revenue concentration[132] - Retail vertical contributed 29.5% of total revenues for the nine months ended September 30, 2025, despite a year-over-year decline of 2.9% in the third quarter[138] - Finance vertical revenues increased to $76.0 million for the nine months ended September 30, 2025, up from $36.9 million in the prior year, representing a growth of $39.1 million[140] - Technology, Media, and Telecom vertical revenues reached $77.4 million for the nine months ended September 30, 2025, marking an 8.3% year-to-date growth[139] Employee Metrics - The total number of employees as of September 30, 2025, was 4,971, an increase from 4,298 in 2024, with significant growth in the Americas and Europe[125] Geopolitical Risks - Grid Dynamics continues to monitor geopolitical risks, particularly related to military actions in Ukraine, which could materially affect operations and business outlook[120] Currency Exposure and Hedging - Approximately 51.8% of Grid Dynamics' combined cost of revenues and total operating expenses for the three months ended September 30, 2025, were denominated in currencies other than the U.S. dollar, compared to 43.0% in the same period of 2024[180] - In the nine months ended September 30, 2025, approximately 49.4% of Grid Dynamics' $308.1 million combined cost of revenues and total operating expenses were denominated in currencies other than the U.S. dollar[182] - Grid Dynamics has implemented a hedging program to manage exposure to foreign currency fluctuations, entering into short-term foreign exchange forward contracts for Polish zloty[184] - A 10% decrease in the value of the Polish zloty against the U.S. dollar would have resulted in a $1.8 million increase in Grid Dynamics' income from operations[181] - A 10% decrease in the value of the Indian rupee against the U.S. dollar would have resulted in a $0.6 million increase in Grid Dynamics' income from operations in the three months ended September 30, 2025[181] - A 10% decrease in the value of the Mexican peso against the U.S. dollar would have resulted in a $0.3 million increase in Grid Dynamics' income from operations in the three months ended September 30, 2025[181] - A 10% increase in the value of the Polish zloty would have resulted in a $2.1 million decrease in income from operations in the three months ended September 30, 2025[181] - A 10% increase in the value of the Indian rupee would have resulted in a $0.7 million decrease in income from operations in the three months ended September 30, 2025[181] - Grid Dynamics analyzes sensitivity to the zloty and peso separately due to distinct macroeconomic and geopolitical factors affecting these currencies[183] - As of September 30, 2025, all foreign exchange forward contracts qualified for hedge accounting, with no collateral required to be posted[184] Liquidity - Grid Dynamics' liquidity is primarily supported by cash generated from operations and a recent public offering that raised $107.6 million in net proceeds[167] - The company has a revolving credit facility with $30.0 million available, with maturity extended to March 15, 2028[167] - Net cash used in investing activities decreased significantly to $11.339 million for the nine months ended September 30, 2025, compared to $41.314 million in the same period of 2024[173]