Grid Dynamics(US:GDYN)2025-07-31 21:30Financial Data and Key Metrics Changes - The company reported a record second quarter revenue of $101 million, representing a year-over-year growth of 21.7% [4][28] - Non-GAAP EBITDA for the quarter was $12.7 million, within the guidance range [28] - GAAP net income was $5.3 million, or $0.06 per share, compared to a net income of $2.9 million in the previous quarter [35] Business Line Data and Key Metrics Changes - The retail vertical contributed 29.2% of total revenues, growing 10.4% year-over-year but declining 6.2% sequentially [30] - The finance vertical accounted for 25.1% of total revenues, doubling year-over-year and growing 1.4% sequentially [31] - Technology, Media, and Telecommunications (TMT) represented 24.9% of revenues, with a growth of 6.7% quarter-over-quarter and 8.4% year-over-year [32] Market Data and Key Metrics Changes - The company experienced a decline in the number of customers, with 194 customers in the second quarter, down from 204 in the previous quarter [33] - The top five customers contributed 37.5% of total revenues, slightly down from 38.5% year-over-year [33] Company Strategy and Development Direction - The company is focusing on an AI-first approach, integrating AI into all aspects of its business, including service offerings and talent management [5][6] - Recent acquisitions, particularly in banking and financial services, are expected to enhance industry expertise and customer engagement [7][8] - The company aims to leverage its unique market position in AI and data, with 23% of its organic revenue coming from AI and data practices [6][37] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth pipeline despite macroeconomic uncertainties, highlighting a strong demand for AI-native partners [6][7] - The company anticipates continued growth in AI-related business, expecting this segment to increase in the coming quarters [37] Other Important Information - The company ended the quarter with a total headcount of 5,013, up from 4,926 in the previous quarter [32] - Cash and cash equivalents totaled $336.8 million, an increase from $325.5 million in the previous quarter [35] Q&A Session Questions and Answers Question: Can you discuss the pipeline and deal conversion pace? - Management indicated a robust pipeline and expressed optimism for the second half of the year, with significant opportunities in AI and data projects [41][50] Question: How should we think about the pricing climate and hiring plans? - The company noted competitive pricing in innovative projects and emphasized the importance of maintaining a skilled workforce while optimizing costs [46][52] Question: How is AI changing the nature of work and hiring? - Management highlighted the need for training in AI context engineering and the importance of senior engineers in overseeing AI agents [57][60] Question: What is the outlook for partner growth? - The company is focusing on innovation and partnerships, particularly with hyperscalers and robotics companies, to drive growth [93][96] Question: When can we expect stabilization in client count? - The decline in client count is primarily due to rationalization efforts post-acquisitions, with a focus on enterprise customers [100][101]