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1. Company Snapshot

1.a. Company Description

Grid Dynamics Holdings, Inc., together with its subsidiaries, provides enterprise-level digital transformation services in the areas of search, analytics, and release automation for Fortune 1000 corporations in North America, Europe, and internationally.It works in collaboration with its clients on digital transformation initiatives that cover strategy consulting, early prototypes, and enterprise-scale delivery of new digital platforms.The company offers technical consulting, software design, development, testing, and internet service operations services.


It serves customers that operate in the retail, technology and telecommunications, media, consumer packaged goods/manufacturing, financial services, and other sectors.The company was formerly known as ChaSerg Technology Acquisition Corp.and changed its name to Grid Dynamics Holdings, Inc.


Grid Dynamics Holdings, Inc.was founded in 2006 and is headquartered in San Ramon, California.

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1.b. Last Insights on GDYN

Grid Dynamics Holdings, Inc.'s recent performance was driven by strong Q4 earnings, surpassing estimates with $0.12 per share, a 71% year-over-year increase. The company's revenue of $100.3 million exceeded its October 2024 outlook range, with year-over-year growth. The inclusion in the S&P SmallCap 600 index is also a positive driver, enhancing the company's visibility and credibility. Additionally, the company's leadership in artificial intelligence and digital transformation is expected to continue driving growth.

1.c. Company Highlights

2. Grid Dynamics' Q3 2025 Earnings: A Strong Performance Driven by AI Demand

Grid Dynamics reported a record revenue of $104.2 million for Q3 2025, representing a 19.1% year-over-year growth, slightly higher than the midpoint of guidance. Non-GAAP EBITDA came in at $12.7 million, within the higher end of guidance. The company's EPS was $0.09, in line with estimates. The revenue growth was largely driven by AI demand, which contributed to over 25% of organic revenue and grew 10% sequentially. As CEO Leonard Livschitz noted, "AI has become a significant driver of growth, with the company expecting to end the year with a materially higher billable run rate."

Publication Date: Nov -04

📋 Highlights
  • Record Revenue:: Q3 revenue reached $104.2 million, up 19.1% YoY, driven by 10% sequential AI demand growth (25% of organic revenue).
  • Share Repurchase:: $50 million buyback program authorized, representing 15% of cash reserves, signaling confidence in long-term value.
  • Partnership Revenue:: Ecosystem-driven partnerships now contribute 18% of total revenue, with a long-term target of 25-30%.
  • Vertical Growth:: Finance vertical surged 81% YoY to 24.6% of revenue, while TMT grew 18.2% YoY to 27.4% of revenue.
  • EBITDA Expansion:: Non-GAAP EBITDA at $12.7 million (12.2% of revenue) with a target of 300 bps margin expansion in 12 months.

Segment Performance

The company's verticals performed variably, with Retail contributing $27.8 million of total revenues, experiencing a 2.1% sequential decline and a 2.9% year-over-year decline. In contrast, TMT accounted for 27.4% of total revenues, with growth of 13.5% and 18.2% on a quarter-over-quarter basis and year-over-year basis, respectively. The Finance vertical saw significant growth, with an 81% year-over-year increase, accounting for 24.6% of total revenues.

Partnership and AI Initiatives

Grid Dynamics has strengthened its partnerships with hyperscalers and expanded certifications, with partnership influence revenue growing to over 18% of total company revenue. The company is also actively developing solutions on NVIDIA's advanced software stack, underscoring its commitment to AI initiatives. Vasily Sizov mentioned that the company is seeing expansion in the use of Agentic AI to solve business cases, with the technology evolving rapidly.

Outlook and Valuation

The company expects revenues to be in the range of $105 million to $107 million in Q4 2025, representing a 17.1% to 17.7% growth in full-year revenue. For 2026, Grid Dynamics is optimistic, with a meaningful increase in billable headcount in the second half of 2025 positioning it well for growth. Analysts estimate next year's revenue growth at 10.1%. With a P/E Ratio of 54.59 and an EV/EBITDA of 30.67, the market appears to have priced in significant growth expectations.

Margin Expansion and Cost Management

Grid Dynamics expects to generate 300 basis points of EBITDA margin expansion over the next 12 months, driven by its growth and increasing EBITDA. The company is focusing on cost optimization, prioritizing pricing and costs while continuing to invest in technology. This approach is expected to drive margin expansion, even if budgets and growth remain constrained.

3. NewsRoom

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Intech Investment Management LLC Reduces Position in Grid Dynamics Holdings, Inc. $GDYN

Dec -01

Source: defenseworld.net

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The Bottom Fishing Club - Grid Dynamics: Underappreciated AI Pick

Nov -05

Source: seekingalpha.com

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Grid Dynamics Holdings, Inc. (GDYN) Q3 2025 Earnings Call Transcript

Oct -31

Source: seekingalpha.com

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Grid Dynamics (GDYN) Meets Q3 Earnings Estimates

Oct -30

Source: zacks.com

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Bear Of The Day: Grid Dynamics (GDYN)

Oct -30

Source: zacks.com

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SuperX and Teamsun Announce Formation of "SuperX Global Service" Joint Venture

Oct -30

Source: prnewswire.com

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Analysts Set Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) Target Price at $14.80

Oct -20

Source: defenseworld.net

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Grid Dynamics: New Gemini And OpenAI Modules Imply Undervaluation

Oct -02

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (13.29%)

6. Segments

Retail

Expected Growth: 12%

Retail segment growth of 12% driven by increasing adoption of e-commerce, omnichannel experiences, and digital transformation. Growing demand for cloud-based services, AI-powered customer service, and data analytics also contribute to this growth. Additionally, Grid Dynamics' expertise in retail-specific solutions, such as order management and inventory optimization, supports this rapid expansion.

Tech, Media and Telecom

Expected Growth: 18%

Grid Dynamics Holdings, Inc.'s 18% growth in Tech, Media and Telecom is driven by increasing demand for digital transformation, cloud adoption, and 5G network infrastructure development. Additionally, the rise of online content consumption, streaming services, and cybersecurity threats are fueling growth in media and telecom. Furthermore, the need for efficient data management and analytics is boosting demand for tech services.

Consumer Packed Goods/Manufacturing

Expected Growth: 10%

Grid Dynamics Holdings, Inc.'s 10% growth in Consumer Packed Goods/Manufacturing is driven by increasing demand for e-commerce and digital transformation, coupled with the need for supply chain optimization and operational efficiency. Additionally, the company's focus on innovation, product diversification, and strategic partnerships have contributed to its growth momentum.

Other

Expected Growth: 8%

Grid Dynamics Holdings, Inc.'s 8% growth is driven by increasing demand for digital transformation, cloud adoption, and artificial intelligence solutions. The company's expertise in cloud-native applications, data analytics, and DevOps enables it to capitalize on the growing need for digitalization in various industries, resulting in sustained revenue growth.

Finance

Expected Growth: 14%

Grid Dynamics Holdings, Inc.'s 14% growth is driven by increasing demand for digital transformation, cloud adoption, and DevOps services. Strong partnerships with leading technology companies, expansion into new markets, and strategic acquisitions also contribute to the growth. Additionally, the company's expertise in emerging technologies such as artificial intelligence, machine learning, and cybersecurity further fuels its growth momentum.

7. Detailed Products

Digital Transformation Services

Grid Dynamics provides digital transformation services to help businesses modernize their technology stack, improve customer experience, and increase operational efficiency.

Cloud and DevOps Services

Grid Dynamics offers cloud and DevOps services to help businesses migrate to the cloud, improve application performance, and reduce costs.

Artificial Intelligence and Machine Learning Services

Grid Dynamics provides AI and ML services to help businesses develop intelligent systems, automate processes, and gain insights from data.

Data Analytics and Science Services

Grid Dynamics offers data analytics and science services to help businesses gain insights from data, improve decision-making, and drive business outcomes.

Quality Engineering and Assurance Services

Grid Dynamics provides quality engineering and assurance services to help businesses improve application quality, reduce defects, and ensure compliance.

8. Grid Dynamics Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Grid Dynamics Holdings, Inc. is medium due to the availability of alternative services and products in the market.

Bargaining Power Of Customers

The bargaining power of customers for Grid Dynamics Holdings, Inc. is low due to the company's strong brand reputation and customer loyalty.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Grid Dynamics Holdings, Inc. is medium due to the company's dependence on a few key suppliers.

Threat Of New Entrants

The threat of new entrants for Grid Dynamics Holdings, Inc. is high due to the low barriers to entry in the industry.

Intensity Of Rivalry

The intensity of rivalry for Grid Dynamics Holdings, Inc. is high due to the presence of several established competitors in the market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 2.79%
Debt Cost 3.95%
Equity Weight 97.21%
Equity Cost 8.79%
WACC 8.66%
Leverage 2.87%

11. Quality Control: Grid Dynamics Holdings, Inc. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
IBEX

A-Score: 5.0/10

Value: 5.0

Growth: 5.7

Quality: 6.1

Yield: 0.0

Momentum: 10.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Usio

A-Score: 4.0/10

Value: 6.2

Growth: 4.7

Quality: 5.8

Yield: 0.0

Momentum: 5.0

Volatility: 2.3

1-Year Total Return ->

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Stock-Card
WidePoint

A-Score: 3.8/10

Value: 5.1

Growth: 4.6

Quality: 4.4

Yield: 0.0

Momentum: 7.5

Volatility: 1.3

1-Year Total Return ->

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Stock-Card
Conduent

A-Score: 3.6/10

Value: 8.4

Growth: 3.7

Quality: 4.2

Yield: 0.0

Momentum: 1.5

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
Grid Dynamics

A-Score: 2.9/10

Value: 4.3

Growth: 4.3

Quality: 5.5

Yield: 0.0

Momentum: 0.5

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
TTEC

A-Score: 2.6/10

Value: 8.1

Growth: 1.3

Quality: 2.2

Yield: 2.0

Momentum: 1.0

Volatility: 1.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

9.49$

Current Price

9.49$

Potential

-0.00%

Expected Cash-Flows