Grid Dynamics(US:GDYN)2025-05-01 21:32Financial Data and Key Metrics Changes - The company reported revenues of $100.4 million for Q1 2025, representing a year-over-year growth of 25.8% and slightly exceeding guidance [33] - Non-GAAP EBITDA for the quarter was $14.6 million, outperforming guidance and reflecting strong revenue recognition timing [33] - GAAP net income was $2.9 million, a decrease from the previous quarter due to higher operating costs [39] Business Line Data and Key Metrics Changes - Retail accounted for 31.4% of total revenues, growing 28% year-over-year but declining 3.7% sequentially [34] - Finance became the second largest vertical, contributing 24.9% of total revenues with a year-over-year growth of 144.3% driven by recent acquisitions [34] - TMT represented 23.5% of revenues, remaining flat sequentially and declining 1.8% year-over-year [35] Market Data and Key Metrics Changes - The company experienced a strong demand environment, particularly in the financial sector, with three of the top ten customers now in finance [7] - Partnerships contributed 16% of total revenue in Q1, with expectations for acceleration throughout 2025 [14] - The company noted increased traction with hyperscalers, particularly Google, leading to significant migration and modernization programs [15] Company Strategy and Development Direction - The company aims to align investments with changing industry needs, focusing on technological leadership and innovative solutions [13] - AI initiatives are a key focus, with a growing pipeline of opportunities and a shift towards enterprise-scale implementations [11] - The strategy includes expanding capabilities in AI and platform engineering to deliver measurable client impact [29] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing macroeconomic uncertainties but expressed confidence in navigating near-term volatility [14] - The outlook for Q2 2025 anticipates revenues between $100 million and $102 million, with a full-year revenue outlook maintained at $415 million to $435 million [40][41] - Management highlighted a strong billable engineering headcount as a leading indicator of future growth [8] Other Important Information - The company successfully integrated engineering teams from recent acquisitions to support enterprise accounts [10] - The internship program gained momentum, with several hundred interns placed in billable roles [20] - The company is expanding its presence in India, which is expected to become a significant delivery hub [79] Q&A Session Summary Question: Can you provide insights on client behavior and decision-making pace? - Management noted no major impacts from recent economic activities, with strategic projects continuing uninterrupted [47][48] Question: What is the guidance for the year based on current contracts? - Management indicated that contractually committed projects are stable, with a good ramp-up expected in the coming months [50][51] Question: How is the hiring strategy evolving? - The company has maintained a consistent hiring approach, focusing on internal skill development rather than market dependency [54][56] Question: Are there any changes in client behavior, particularly in retail? - Management reported stable client relationships, with no significant slowdowns expected, especially in online services [62][67] Question: What drives the visibility for growth in the second half of the year? - Management highlighted a combination of existing client ramp-ups and new client acquisitions as key growth drivers [81][88]