Grid Dynamics (NASDAQ:GDYN) reported second-quarter revenue and profitability above its guidance range, as the technology services company pointed to expanding demand for artificial intelligence programs, deeper relationships with major technology and financial-services customers, and progress in physical AI and robotics.
Revenue for the second quarter totaled $108.2 million, up 7% from a year earlier and slightly above the company’s guidance range of $106 million to $108 million. Non-GAAP EBITDA was $14.7 million, or 13.6% of revenue, near the high end of its $14 million to $15 million outlook.
Management said its largest accounts, particularly in technology and financial services, continued to drive growth through expanded programs and broader adoption of its GAIN AI platform. The company said some clients are embedding GAIN into their operations as an ongoing capability rather than using it only for individual projects.
AI Adoption Moves From Pilots to Production
Vasily Sizov, Grid Dynamics’ chief revenue officer, said customers are directing AI spending toward applications with measurable business outcomes, including automation, operating-cost reductions, customer-service improvements and new revenue opportunities.
“These investments are increasingly moving beyond experimentation,” Sizov said, describing a shift toward production deployments that automate complex manual processes and improve scalability and speed.
He said enterprise-scale AI adoption is also creating demand for data engineering, cloud services, application modernization and platform engineering, as clients update underlying systems to support AI workloads. Customers are also seeking help with process consulting, performance benchmarking and change management, according to Sizov.
Grid Dynamics highlighted several customer engagements, including an AI-powered credit-claims platform for a food-service distributor. The platform validates claims against photographic evidence and, in testing, processed about 400 claims supported by 1,000 images in under 15 seconds per claim. The system is now live, and the client approved a longer-term roadmap for additional automation.
For a home-improvement retailer, the company deployed logistics software supporting next-day delivery and AI-based vehicle routing for fragile items. Grid Dynamics said the system reduced average delivery time by more than half from three and a half days and is expected to support up to $500 million in incremental annual revenue for the customer.
Platform Partnerships and Physical AI Expansion
Partner-influenced revenue was 19.1% of second-quarter revenue, driven primarily by relationships with Google Cloud, Amazon Web Services and Microsoft Azure. Grid Dynamics reiterated its longer-term goal for partner-influenced revenue to account for 25% to 30% of company revenue.
The company said it expanded its Google Cloud work in banking and financial services, including its first joint win at a global bank. It also cited growing AWS activity in application modernization and agentic AI, while its NVIDIA relationship is gaining traction in agentic and physical AI.
Physical AI, which combines AI models with robotics, simulation, hardware integration and enterprise deployments, remains an emerging focus. The company said its active programs include humanoid robotics for pharmaceutical intralogistics, autonomous-driving systems for construction equipment and manufacturing policy-control platforms.
During the quarter, Grid Dynamics announced a strategic partnership with robotics manufacturer Doosan and opened an engineering office in Dresden, Germany, to support European manufacturing clients. It also added Ekumen, a robotics engineering team that joined the company in May and brings expertise in the Robot Operating System software ecosystem.
Yury Gryzlov, chief operating officer, said the company’s physical AI platform, Incarno, is designed to help enterprises build robotic workflows, deploy models and monitor robotic lines using digital twins. He said a construction and mining equipment manufacturer engagement has expanded into a multiyear program across several regions.
Margins Improve as Headcount Declines
Chief Financial Officer Anil Doradla said the company’s GAAP gross margin rose to 36.6% from 34.8% in the first quarter and 34.1% a year earlier. Non-GAAP gross margin increased to 36.9%, supported by revenue growth outpacing delivery costs, improved resource utilization and working-time benefits.
GAAP net income was $2.9 million, or $0.03 per diluted share, compared with a net loss of $1.5 million in the prior quarter. Non-GAAP net income rose to $9 million, or $0.11 per diluted share, from $7.5 million, or $0.09 per share, in the first quarter.
Total headcount ended the quarter at 4,838, down from 4,964 in the first quarter and 5,013 a year earlier. Doradla said reductions were focused on non-engineering and non-billable roles as the company rationalizes its workforce and geographic footprint.
Technology, media and telecommunications remained the largest vertical, representing 31.8% of quarterly revenue and growing 36.4% year over year. Retail accounted for 26.5% of revenue, finance represented 22.9%, and consumer packaged goods and manufacturing made up 10.9%.
Revenue concentration increased, with the top five customers accounting for 43.5% of second-quarter revenue and the top 10 accounting for 61.5%.
Outlook and Capital Allocation
For the third quarter, Grid Dynamics forecast revenue of $112 million to $114 million and non-GAAP EBITDA of $16.5 million to $17.5 million. The company maintained its full-year 2026 revenue outlook of $435 million to $465 million.
Cash and cash equivalents totaled $298.4 million as of June 30, down from $327.5 million at the end of the first quarter. Since its prior earnings call, the company repurchased approximately 2.6 million shares for $17.3 million. Since authorization of its $50 million repurchase program, it has bought back about 4.4 million shares for $30.8 million.
Management said it expects second-half growth to be supported by seasonally higher working time, increased billable headcount, new programs and potential acquisitions. The company also reiterated its commitment to 300 basis points of margin expansion on a fourth-quarter year-over-year basis.
About Grid Dynamics (NASDAQ:GDYN)
Grid Dynamics (NASDAQ: GDYN) is a digital engineering and technology services company that helps enterprises accelerate their digital transformation initiatives. The company specializes in designing and implementing scalable, cloud-native solutions that leverage advanced analytics, machine learning and artificial intelligence to optimize operations, enhance customer experiences and drive revenue growth. Its technology expertise spans e-commerce platforms, modern data architectures, DevOps and automation, as well as custom application development across a range of industries including retail, financial services, high tech and automotive.
Key service offerings include cloud migration and modernization, data engineering and analytics, AI/ML-driven insights, digital commerce and omnichannel solutions.
