Grid Dynamics Reaccelerates Growth as AI Revenue Hits Record Share
Second-quarter revenue reached $108.2 million, edging past the company’s guidance.
Grid Dynamics Holdings (GDYN), a digital-engineering services provider, returned to sequential growth in the second quarter as technology, media and telecom became its largest vertical and AI revenue reached a record share of sales.
Revenue rose 3.9% from the first quarter, reversing the sequential contraction at the start of the year. Year-over-year growth reaccelerated to 7.0% from 3.7% in the prior quarter, interrupting a deceleration that had persisted since mid-2024.
Revenue exceeded the top of Grid Dynamics’ forecast by $0.2 million. Non-GAAP net income increased to $9.0 million, or $0.11 a share, from $8.3 million, or $0.10 a share, a year earlier.
GAAP gross margin expanded to 36.6% from 34.8% sequentially and 34.1% a year earlier, extending its recovery from the second half of 2024. The company swung to operating income of $1.3 million and net income of $2.9 million, though net income remained 46% below the year-earlier level as restructuring costs increased.
Technology, media and telecom revenue grew 36.4% from a year earlier and accounted for 31.8% of total revenue, overtaking retail at 26.5%. Retail revenue was nearly flat, while finance revenue declined to $24.7 million from $25.4 million.
AI revenue reached 30.7% of sales, crossing 30% for the first time, and grew more than 50% for a second consecutive quarter. AI-native delivery productivity and cost controls supported the margin expansion and kept the company on track for the 300-basis-point improvement commitment announced in 2024.
Cash generation weakened despite the earnings improvement. Operating cash flow for the first half fell 39% to $14.5 million, while cash declined to $298.4 million from $342.1 million at the end of 2024.
Grid Dynamics expects third-quarter revenue of $112 million to $114 million, implying sequential growth of 3.5% to 5.4%. It projects non-GAAP EBITDA of $16.5 million to $17.5 million and continues to forecast full-year revenue of $435 million to $465 million.
The company added Ekumen during the quarter, extending its AI business into robotics software and other physical-AI applications beyond its internally developed GAIN platforms.