SEC Form 10-Q filed by Grid Dynamics Holdings Inc.

4/30/26 4:40:12 PM ET

$GDYN

Computer Software: Prepackaged Software

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38685

Grid Dynamics Holdings, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware						83-0632724
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

6101 Bollinger Canyon Road, Suite 465

San Ramon, CA 94583

(Address of principal executive offices)

(650) 523-5000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

GDYN

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	¨	Accelerated filer	☒
Non-accelerated filer	¨	Smaller reporting company	¨
Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of April 24, 2026, there were 83,626,054 shares of registrant’s common stock outstanding.

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TABLE OF CONTENTS


		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Income/(Loss)	2
	Condensed Consolidated Statements of Comprehensive Income/(Loss)	3
	Condensed Consolidated Statements of Stockholders’ Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	30

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Default Upon Senior Securities	32
Item 4.	Mine Safety Disclosures	32
Item 5.	Other Information	33
Item 6.	Exhibits	33

SIGNATURES		34

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipates,” “believes,” “could,” “seeks,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would,” or similar expressions and the negatives of those terms. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

•the rapid evolution of the digital engineering and information technology services landscape facing our customers and prospects, including as a result of artificial intelligence (“AI”) and related technologies;

•our ability to educate the market regarding the advantages of our digital transformation products;

•our ability to maintain an adequate rate of revenue growth;

•our future financial and operating results;

•our business plan and our ability to effectively manage our growth and associated investments;

•beliefs and objectives for future operations;

•our ability to maintain and expand a leadership position in enterprise-level digital transformation;

•our ability to attract and retain customers;

•our ability to further penetrate our existing customer base;

•our ability to maintain our competitive technological advantages against new entrants and existing companies in our industry;

•our ability to timely and effectively scale and adapt our existing technology;

•our ability to innovate new products and services and bring them to market in a timely manner;

•our ability to maintain, protect, and enhance our brand and intellectual property;

•our increasing use of artificial intelligence;

•our cyber security systems and protocols;

•our ability to capitalize on changing market conditions;

•our ability to develop strategic partnerships;

•benefits associated with the use of our services;

•our ability to expand internationally and to integrate companies that we acquire;

•our ability to raise financing in the future;

•operating expenses, including changes in research and development, sales and marketing, and general administrative expenses;

•the effects of seasonal trends on our results of operations;

•our ability to grow and manage growth profitably and retain our key employees;

•our ability to realize the expected benefits and effects of strategic acquisitions of business, products or technologies;

•changes in applicable laws or regulations;

•the military action launched by Russian forces in Ukraine, the actions that have been and could be taken by other countries, including new and stricter sanctions and actions taken in response to such sanctions, and the effect of recent worsening developments on our business and results of operations;

•the possibility that we have been and may continue to be adversely affected by macroeconomic conditions, inflationary pressures, the geopolitical climate, including as a result of the conflict with Iran, the risk of recession, the impact of tariffs and other economic, business, and/or competitive factors; and

•other risks and uncertainties indicated in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K, including those set forth in Item 1A, “Risk Factors.”

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We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors, including those described in Item 1A, “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q and in Item 1A, “Risk Factors” in our Annual Report on Form 10-K. Moreover, new risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on any forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described in such forward-looking statements.

Neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Moreover, the forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, restructurings, joint ventures, partnerships, or investments we may make.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

iii

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PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

GRID DYNAMICS HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)


	As of
	March 31, 2026		December 31, 2025
Assets
Current assets
Cash and cash equivalents	$	327,468	$	342,058
Trade receivables, net of allowance of $3,916 and $3,721 as of March 31, 2026 and December 31, 2025, respectively	87,422		79,485
Prepaid expenses and other current assets	17,348		17,987
Total current assets	432,238		439,530
Property and equipment, net	17,805		17,666
Operating lease right-of-use assets, net	16,694		16,383
Intangible assets, net	39,576		41,608
Goodwill	83,975		84,364
Deferred tax assets	9,409		8,865
Other noncurrent assets	5,319		4,474
Total assets	$	605,016	$	612,890

Liabilities and equity
Current liabilities
Accounts payable	$	4,330	$	3,698
Accrued compensation and benefits	27,790		25,555
Operating lease liabilities, current	5,374		6,253
Accrued expenses and other current liabilities	17,372		16,608
Total current liabilities	54,866		52,114
Deferred tax liabilities	7,690		7,920
Operating lease liabilities, noncurrent	12,042		10,783
Other noncurrent liabilities	301		—
Total liabilities	$	74,899	$	70,817

Commitments and contingencies (Note 13)
Stockholders’ equity
Common stock, $0.0001 par value; 110,000 shares authorized; 85,570 and 84,843 issued, 83,568 and 84,642 outstanding, as of March 31, 2026 and December 31, 2025, respectively	$	9	$	8
Additional paid-in capital	549,651		545,188
Accumulated deficit	(3,650)		(2,177)
Treasury stock	(13,464)		(2,000)
Accumulated other comprehensive income/(loss)	(2,429)		1,054
Total stockholders’ equity	$	530,117	$	542,073
Total liabilities and stockholders’ equity	$	605,016	$	612,890

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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GRID DYNAMICS HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME/(LOSS)

(In thousands, except per share data)


	Three Months Ended March 31,
	2026		2025
Revenues	$	104,100	$	100,415
Cost of revenues	67,868		63,418
Gross profit	36,232		36,997

Operating expenses
Engineering, research, and development	6,079		6,486
Sales and marketing	7,694		8,257
General and administrative	26,140		24,291
Total operating expenses	39,913		39,034

Loss from operations	(3,681)		(2,037)
Other income, net	3,241		4,506
Income/(loss) before income taxes	(440)		2,469
Provision/(benefit) for income taxes	1,033		(443)
Net income/(loss)	$	(1,473)	$	2,912

Income/(loss) per share
Basic	$	(0.02)	$	0.03
Diluted	$	(0.02)	$	0.03

Weighted-average shares outstanding
Basic	84,680		84,123
Diluted	84,680		87,786

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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GRID DYNAMICS HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

(In thousands)


	Three Months Ended March 31,
	2026		2025
Net income/(loss)	$	(1,473)	$	2,912
Other comprehensive income/(loss):
Foreign currency translation adjustment	(2,633)		1,750
Other comprehensive loss, net of tax	(850)		—
Other comprehensive income/(loss), net of tax	(3,483)		1,750
Comprehensive income/(loss)	$	(4,956)	$	4,662

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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GRID DYNAMICS HOLDINGS, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)


	Common Stock			Additional paid-in capital		Accumulated deficit		Treasury Stock			Accumulated other comprehensive income/(loss)		Total stockholders’ equity
	Shares	Amount						Shares	Amount
Balance at December 31, 2025	84,843	$	8	$	545,188	$	(2,177)	200	$	(2,000)	$	1,054	$	542,073
Net loss	—	—		—		(1,473)		—	—		—		(1,473)
Stock-based compensation	—	—		8,454		—		—	—		—		8,454
Issuance of shares and payments of tax obligations resulted from net share settlement of vested stock awards	727	1		(3,991)		—		—	—		—		(3,990)
Repurchase of common stock	—	—		—		—		1,801	(11,464)		—		(11,464)
Other comprehensive loss, net of tax	—	—		—		—		—	—		(3,483)		(3,483)
Balance at March 31, 2026	85,570	$	9	$	549,651	$	(3,650)	2,001	$	(13,464)	$	(2,429)	$	530,117


	Common Stock			Additional paid-in capital		Accumulated deficit		Treasury Stock			Accumulated other comprehensive income/(loss)		Total stockholders’ equity
	Shares	Amount						Shares	Amount
Balance at December 31, 2024	83,609	$	8	$	532,578	$	(11,845)	—	$	—	$	(2,912)	$	517,829
Net income	—	—		—		2,912		—	—		—		2,912
Stock-based compensation	—	—		10,743		—		—	—		—		10,743
Exercise of stock options	42	—		363		—		—	—		—		363
Issuance of shares and payments of tax obligations resulted from net share settlement of vested stock awards	837	—		(16,236)		—		—	—		—		(16,236)
Other comprehensive income, net of tax	—	—		—		—		—	—		1,750		1,750
Balance at March 31, 2025	84,488	$	8	$	527,448	$	(8,933)	—	$	—	$	(1,162)	$	517,361

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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GRID DYNAMICS HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)


	Three Months Ended March 31,
	2026		2025
Cash flows from operating activities
Net income/(loss)	$	(1,473)	$	2,912
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
Depreciation and amortization	5,203		4,719
Operating lease right-of-use assets amortization expense	1,305		1,236
Bad debt expense	281		406
Stock-based compensation	8,454		10,743
Deferred income taxes	(583)		(267)
Other income, net	(439)		(1,691)
Changes in assets and liabilities:
Trade receivable	(8,218)		(12,718)
Prepaid expenses and other assets	(531)		3,147
Accounts payable	626		563
Accrued compensation and benefits	2,376		5,560
Operating lease liabilities	(1,311)		(1,205)
Income taxes, net	(471)		(3,042)
Accrued expenses and other liabilities	3,172		(1,012)
Net cash provided by operating activities	8,391		9,351
Cash flows from investing activities
Purchase of property and equipment	(3,960)		(3,339)
Net cash used in investing activities	(3,960)		(3,339)
Cash flows from financing activities
Payments for repurchases of common stock	(11,464)		—
Payments of tax obligations resulting from net share settlement of vested stock awards	(3,993)		(16,236)
Payment of contingent consideration related to previously acquired businesses	(2,120)		—
Proceeds from exercises of stock options, net of shares withheld for taxes	—		401
Net cash used in financing activities	(17,577)		(15,835)
Effect of exchange rate changes on cash and cash equivalents	(1,444)		655
Net decrease in cash and cash equivalents	(14,590)		(9,168)
Cash, cash equivalents and restricted cash, beginning of period	342,058		335,155
Cash, cash equivalents and restricted cash, end of period	$	327,468	$	325,987

Supplemental disclosure of cash flow information:
Cash paid for income taxes, net of refunds	$	2,002	$	2,803

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The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets:


	As of
	March 31, 2026		March 31, 2025
Balance sheet classification
Cash and cash equivalents	$	327,468	$	325,547
Restricted cash in Prepaid expenses and other current assets	—		440
Total cash, cash equivalents and restricted cash	$	327,468	$	325,987

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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GRID DYNAMICS HOLDINGS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

Note 1 — Nature of operations and summary of significant accounting policies

Grid Dynamics Holdings, Inc. (the “Company”) is a leading provider of enterprise artificial intelligence (“AI”) and digital transformation services, primarily serving Fortune 1000 corporations. The Company provides consulting, engineering, and operational services designed to enable clients to build and deploy large-scale digital platforms. The Company’s core service offerings encompass distributed systems architecture, real-time data analytics, machine learning, natural language processing, and cloud platform engineering. Additionally, the Company offers specialized services in Internet of Things (“IoT”), edge computing, and digital engagement. The Company’s headquarters and principal place of business is in San Ramon, California.

The following is a summary of critical accounting policies consistently applied in the preparation of the accompanying unaudited condensed consolidated financial statements. A full description of our significant accounting policies is provided in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as filed with the Securities and Exchange Commission (“SEC”) on March 5, 2026.

Basis of presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial information and in accordance with the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of the Company’s management, necessary for the fair presentation of the results of operations for the interim periods. Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. These interim financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 5, 2026.

Principles of consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and all of its subsidiaries that are directly or indirectly owned or controlled. Intercompany transactions and balances have been eliminated upon consolidation.

The Company provides services to its customers utilizing its own personnel as well as personnel from subcontractors. One of the subcontractors (the “Affiliate”) exclusively supports and performs services on behalf of the Company and its customers. The Company had no ownership in the Affiliate as of March 31, 2026. The Company is required to apply accounting standards which address how a business enterprise should evaluate whether it has a controlling financial interest in a variable interest entity (“VIE”) through means other than voting rights and accordingly should determine whether or not to consolidate the entity. The Company has determined that it is required to consolidate the Affiliate because the Company has the power to direct the VIE’s most significant activities and is the primary beneficiary of the Affiliate. The assets and liabilities of the Affiliate primarily consist of inter-company balances and transactions, all of which have been eliminated in consolidation. There was minimal activity in the Affiliate during the three months ended March 31, 2026.

Use of estimates

The preparation of the unaudited condensed consolidated financial statements in accordance with the U.S. GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. The Company evaluates its estimates on an ongoing basis including allowance for credit losses, determination of fair value, useful lives and recoverability of intangible assets and goodwill, valuation of stock-based compensation and contingent consideration payable, determination of provision for income taxes, deferred tax assets and liabilities and uncertain tax positions. The Company builds its estimates on historical data and assumptions as well as forward-looking expectations that the Company believes to be reasonable under current conditions and circumstances. Actual results could differ from these estimates and such differences could be material.

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Allowance for credit losses

The Company maintains an allowance against accounts receivable for the estimated probable losses on uncollectible accounts. The allowance is based upon historical loss experience, as adjusted for the current market conditions and forecasts about future economic conditions. As of March 31, 2026 and December 31, 2025, the Company recorded $3.9 million and $3.7 million of allowance for credit losses, respectively.

Accumulated other comprehensive income/(loss)

Accumulated other comprehensive income/(loss) consists of changes in the cumulative foreign currency translation adjustments, unrealized gains and losses on designated cash flow hedges, and actuarial gains and losses on the Company’s defined benefit pension plans. Actuarial gains and losses are initially deferred in accumulated other comprehensive income/(loss) and amortized into net periodic benefit cost in future periods to the extent they exceed the corridor threshold under ASC 715, Compensation — Retirement Benefits (Topic 715). The Company recognizes the overfunded or underfunded status of its defined benefit plans as an asset or liability in its consolidated balance sheets.

Prior period reclassifications

Certain amounts on the unaudited condensed consolidated balance sheets, unaudited consolidated statements of stockholders’ equity, and unaudited condensed consolidated statements of cash flows in prior periods have been reclassified to conform with the current period presentation.

Recently issued accounting pronouncements

Changes to U.S. GAAP are established by the Financial Accounting Standards Board (the “FASB”), in the form of Accounting Standards Updates (“ASUs”), to the FASB’s Accounting Standards Codification (“ASC”). The Company will adopt these changes according to the various timetables the FASB specifies.

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. This update establishes specific guidance for the recognition, measurement, and presentation of government grants received by business entities. The amendments are effective for annual reporting periods beginning after December 15, 2028, including interim periods within those fiscal years, with early adoption permitted as of the beginning of an annual reporting period. The Company is currently evaluating the timing of adoption and the impact of this standard on its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Accounting for Internal-Use Software Costs. The update simplifies the accounting for internal-use software by eliminating the project stage framework and replacing it with a new capitalization threshold based on whether significant development uncertainty exists. Under the new guidance, costs cannot be capitalized if the software involves novel technological innovations or if significant performance requirements remain undefined or subject to revision. The amendment is effective for annual periods beginning December 31, 2027, with early adoption permitted using a prospective, modified, or retrospective transition approach. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures, as well as the available transition methods.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring more detailed information about the types of expenses included in certain expense captions presented in the consolidated statements of income. Additionally, this amendment requires the disclosure of a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively and the disclosure of the total amount of selling expenses. The new guidance is effective for annual periods beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027 on a prospective or retrospective basis, with an early adoption permitted. The Company’s annual reporting requirements relating to this ASU will be effective for fiscal year 2027. The Company is in the process of analyzing the impact of the ASU on related disclosures.

Note 2 — Fair value

Estimates of fair value of financial instruments not carried at fair value on a recurring basis are generally subjective in nature, and are determined as of a specific point in time based on the characteristics of the financial instruments and relevant market information. The Company’s financial assets and liabilities are generally short-term in nature; therefore, the carrying value of these items approximates their fair value. The following table summarizes certain fair value information as of March 31, 2026

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and December 31, 2025 for financial assets and liabilities measured at fair value on a recurring basis, as well as estimated fair values of certain other financial assets and liabilities not measured on a recurring basis:


					Fair Value Hierarchy
	Balance		Estimated Fair Value		Level 1		Level 2		Level 3
	(in thousands)
March 31, 2026
Financial Assets:
Cash equivalents:
Money market funds	$	266,395	$	266,395	$	266,395	$	—	$	—
Long-term investments:
Non-marketable equity securities(1)	$	1,250
Financial Liabilities:
Contingent consideration payable	$	1,250	$	1,250	$	—	$	—	$	1,250
Foreign exchange derivative liabilities	$	496	$	496	$	—	$	496	$	—

December 31, 2025
Financial Assets:
Cash equivalents:
Money market funds	$	271,513	$	271,513	$	271,513	$	—	$	—
Foreign exchange derivative assets	$	196	$	196	$	—	$	196	$	—
Long-term investments:
Non-marketable equity securities(1)	$	1,250
Financial Liabilities:
Contingent consideration payable	$	3,370	$	3,370	$	—	$	—	$	3,370

__________________________

(1)Equity securities that do not have readily determinable fair value and are measured at cost.

Contingent consideration payable

The fair value of contingent consideration payable is determined using the Monte-Carlo model, which is primarily based on projected financial results of acquired business adjusted to market risk assumptions, probability of achievement of performance targets set in purchase agreements and respective discount rates. Even though there is significant judgment involved, the Company believes its estimates and assumptions are reasonable. Changes in financial projections, discount rates, timing and amount of specific milestone estimates, as well as probability assumptions related to achieving the various performance milestones, would result in a change in the fair value of the recorded contingent consideration payable. Such changes, if any, are recorded in Other income, net in the unaudited condensed consolidated statements of income/(loss).

In February 2026, the Company amended the earnout arrangement associated with the acquisition of Mobile Computing completed in October 2024. Pursuant to the amendment, the earnout consideration attributable to the initial performance period was settled at $1.8 million, which was paid in February 2026. The remaining maximum aggregate earnout consideration of $1.3 million is subject to two additional performance periods ending June 30, 2026 and December 31, 2026, respectively, based on the revenue performance of the acquired business.

The Company records short-term contingent consideration payable in Accrued expenses and other current liabilities in its unaudited condensed consolidated balance sheet. A reconciliation of the beginning and ending balances of Level 3 acquisition-

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related contingent consideration payable using significant unobservable inputs for the three months ended March 31, 2026 is as follows:


	Amount
	(in thousands)
Contingent consideration payable as of January 1, 2026	$	3,370
Payment of contingent consideration - JUXT	(370)
Payment of contingent consideration - Mobile Computing	(1,750)
Contingent consideration payable as of March 31, 2026	$	1,250

Note 3 — Property and equipment, net

Property and equipment, net consisted of the following:


	Estimated Useful Life	As of
		March 31, 2026		December 31, 2025
	(in years)	(in thousands)
Computers and equipment	2-6	$	19,319	$	19,111
Furniture and fixtures	3-10	1,761		1,763
Software	3-5	1,577		1,388
Leasehold improvements	2-8	1,552		1,580
Office equipment	2-5	849		779
Vehicles	5	126		129
		$	25,184	$	24,750
Less: Accumulated depreciation and amortization		(18,762)		(18,334)
		$	6,422	$	6,416

Capitalized software development costs	2	$	31,696	$	29,348
Less: Accumulated amortization		(20,313)		(18,098)
		$	11,383	$	11,250
Property and equipment, net		$	17,805	$	17,666

Note 4 — Intangible assets, net

Intangible assets, net consisted of the following:


	Estimated Useful Life	As of
		March 31, 2026		December 31, 2025
	(in years)	(in thousands)
Customer relationships	8-12	$	53,579	$	53,875
Tradenames	2-10	6,991		7,012
Acquired software	2.5	995		995
Non-compete agreements	2	584		584
		$	62,149	$	62,466
Less: Accumulated amortization		(22,573)		(20,858)
Intangible assets, net		$	39,576	$	41,608

Based on the carrying value of the Company’s existing intangible assets as of March 31, 2026, the estimated amortization expense for the future years is as follows:

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	Amount
	(in thousands)
2026 (excluding three months ended March 31, 2026)	$	5,271
2027	6,470
2028	6,325
2029	5,819
2030	5,794
Thereafter	9,897
Total	$	39,576

Note 5 — Accrued expenses and other current liabilities

The components of accrued expenses and other current liabilities were as follows:


	As of
	March 31, 2026		December 31, 2025
	(in thousands)
Accrued expenses	$	7,445	$	6,131
Accrued income taxes	2,232		2,159
Value added tax payable	1,954		1,514
Deferred revenue	1,811		1,469
Contingent consideration payable, current	1,250		3,370
Other liabilities	2,680		1,965
Total accrued expenses and other current liabilities	$	17,372	$	16,608

Note 6 — Debt

Revolving Credit Facility — On March 15, 2022, the Company entered into a Credit Agreement (as amended, the “Credit Agreement”) by and among the Company, as borrower, the guarantors party thereto from time to time, the lenders party thereto from time to time, and JPMorgan Chase Bank, N.A., as administrative agent for the lenders. The Credit Agreement provides for a secured multi-currency revolving loan facility with an initial aggregate principal amount of up to $30.0 million, with a $10.0 million letter of credit sub-limit. The Company may increase the size of the revolving loan facility up to $50.0 million, subject to certain conditions and additional commitments from existing and/or new lenders. On May 20, 2025, the Credit Agreement was amended to extend its maturity to March 15, 2028.

At the Company’s option, borrowings under the Credit Agreement accrue interest at a per annum rate based on either (i) the base rate plus a margin ranging from 1.0% to 1.5%, (ii) an adjusted term Secured Overnight Financing Rate (“SOFR”) or adjusted the Euro Interbank Offer Rate (“EURIBOR”) (based on one, three or six-month interest periods) plus a margin ranging from 2.0% to 2.5%, or (iii) an adjusted daily simple SOFR rate (or SONIA rate in the case of loans denominated in pounds sterling, or SARON rate in the case of loans denominated in Swiss francs), plus a margin ranging from 2.0% to 2.5%, in each case, with the applicable margin determined based on the Company’s consolidated total leverage ratio. The Company is also obligated to pay other closing fees, administration fees, commitment fees and letter of credit fees customary for a credit facility of this size and type.

The Company’s obligations under the Credit Agreement are required to be guaranteed by certain of its domestic subsidiaries meeting materiality thresholds set forth in the Credit Agreement. Such obligations, including the guaranties, are secured by substantially all of the personal property of the Company and the Company’s subsidiary guarantors.

The Credit Agreement contains customary affirmative and negative covenants, including covenants limiting the ability of the Company and its subsidiaries to, among other things, incur debt, grant liens, undergo certain fundamental changes, make investments and acquisitions, make certain restricted payments, dispose of assets, enter into certain transactions with affiliates, and enter into burdensome agreements, in each case, subject to limitations and exceptions set forth in the Credit Agreement. The Company is also required to maintain compliance with a consolidated total leverage ratio, determined in accordance with

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the terms of the Credit Agreement. As of March 31, 2026, the Company was in compliance with all covenants contained in the Credit Agreement.

As of March 31, 2026 and December 31, 2025, the Company did not have any outstanding debt under the Credit Agreement.

Note 7 — Revenues

Disaggregation of revenues

The tables below present disaggregated revenues from contracts with customer by customer location, industries and contract-types. The Company believes this disaggregation best depicts how the nature, amount, timing and uncertainty of its revenues and cash flows are affected by industry, market and other economic factors. The Company has a single reportable segment for the three months ended March 31, 2026 and 2025.

The following table shows the disaggregation of the Company’s revenues by major customer location. Revenues are attributed to geographic regions based upon location of the customer served irrespective of the location billed, or the location of the delivery center performing the work. Substantially all of the revenue in our North America region relates to operations in the United States.


	Three Months Ended March 31,
	2026		2025
Customer Location	(in thousands)
North America	$	71,023	$	72,684
Europe	24,632		18,963
Other	8,445		8,768
Revenues	$	104,100	$	100,415

The following table shows the disaggregation of the Company’s revenues by main vertical markets:


	Three Months Ended March 31,
	2026		2025
Vertical	(in thousands)
Technology, Media and Telecom	$	30,759	$	23,602
Retail	29,569		31,521
Finance	24,454		25,028
CPG/Manufacturing(1)	9,762		10,771
Healthcare and Pharma	2,154		2,405
Other	7,402		7,088
Revenues	$	104,100	$	100,415

__________________________

(1)CPG stands for Consumer Packaged Goods.

The following table shows the disaggregation of the Company’s revenues by contract types:

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	Three Months Ended March 31,
	2026		2025
Contract Type	(in thousands)
Time-and-material	$	95,539	$	92,418
Fixed-fee	8,561		7,362
Other revenues	—		635
Revenues	$	104,100	$	100,415

Contract balances

A contract asset is a right to consideration that is conditional upon factors other than the passage of time. A contract liability, or deferred revenue, consists of advance payments and billings in excess of revenues recognized.

The Company’s contract balances as of the below dates were as follows:


	As of
	March 31, 2026		December 31, 2025		December 31, 2024
	(in thousands)
Trade receivables, net:
Billed receivables	$	77,691	$	71,260	$	64,754
Unbilled receivables	$	9,731	$	8,225	$	4,617
Contract liabilities in Accrued expenses and other current liabilities	$	1,811	$	1,469	$	2,690

As of March 31, 2026, December 31, 2025 and 2024, the Company did not have contract assets recorded in its condensed consolidated balance sheets.

During the three months ended March 31, 2026, and 2025 the Company recognized $0.2 million and $1.6 million of revenues, respectively, that were included in Accrued expenses and other current liabilities at December 31, 2025 and 2024, respectively.

Remaining performance obligations

ASC Topic 606 requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of March 31, 2026. This disclosure is not required for:

1)contracts with an original duration of one year or less, including contracts that can be terminated for convenience without a substantive penalty,

2)contracts for which the Company recognizes revenues based on the right to invoice for services performed,

3)variable consideration allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation in accordance with ASC 606-10-25-14(b), for which the criteria in ASC 606-10-32-40 have been met, or

4)variable consideration in the form of a sales-based or usage-based royalty promised in exchange for a license of intellectual property.

All of our performance obligations met one or more of these exemptions as of March 31, 2026.

Customer concentration

The following table shows the amount of revenue derived from each customer exceeding 10% of the Company’s revenues:

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	Three Months Ended March 31,
	2026		2025
Customer 1	17.2	%	14.2	%

The following table shows the number of customers exceeding 10% of the Company’s billed and unbilled receivables balances:


	As of
	March 31, 2026	December 31, 2025
Billed receivables	1	1
Unbilled receivables	2	2

Transactions with related parties

During the three months ended March 31, 2026 and 2025, the Company conducted transactions with a number of companies affiliated with the members of the Company’s Board of Directors. As a result, during the three months ended March 31, 2026 and 2025, the Company recorded revenues from related parties of $7.6 million and $6.7 million, respectively. As of March 31, 2026 and December 31, 2025, billed receivables from related parties were $5.6 million and $4.6 million, respectively. Unbilled receivables from related parties as of March 31, 2026 and December 31, 2025 were $0.3 million in both periods, respectively.

Note 8 — Leases

A major part of the Company’s lease obligations is for office real estate. The Company may also lease corporate apartments, cars and office equipment. Payments on some of our leases may depend on index or rate, including Consumer Price Index. Such payments are included in the calculation of lease liability and assets at the commencement dates, all future changes are accounted as variable payments similar to other variable payments, such as common area maintenance, property and other taxes, utilities and insurance that are based on the lessor’s cost.

The Company’s leases have remaining lease terms ranging from 0.1 to 5.3 years as of March 31, 2026. Certain lease agreements may include the option to extend or terminate before the end of the contractual term and are often non-cancelable or cancellable only by the payment of penalties. The Company includes these options in the lease term when it is reasonably certain that they will be exercised.

As of March 31, 2026 and December 31, 2025, the Company had no finance leases.

Operating lease expense is recorded on a straight-line basis over the lease term. During the three months ended March 31, 2026 and 2025, lease costs were as follows:


	Three Months Ended March 31,
	2026		2025
	(in thousands)
Operating lease cost	$	1,623	$	1,480
Variable lease cost	133		121
Short-term lease cost	302		220
Total lease cost	$	2,058	$	1,821

Supplemental information related to operating lease transactions is as follows:


	Three Months Ended March 31,
	2026		2025
	(in thousands)
Lease liability payments	$	1,630	$	1,365
Lease right-of-use assets obtained in exchange for liabilities	$	2,052	$	—

Weighted average remaining lease term and discount rate as of March 31, 2026 and December 31, 2025 were as follows:

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	As of
	March 31, 2026		December 31, 2025
Weighted average remaining lease term, in years	3.7		3.7
Weighted average discount rate	7.7	%	7.6	%

As of March 31, 2026, operating lease liabilities will mature as follows:


	Lease Payments
	(in thousands)
2026 (excluding three months ended March 31, 2026)	$	5,034
2027	5,837
2028	3,690
2029	3,009
2030	2,304
Thereafter	280
Total lease payments	20,154
Less: imputed interest	(2,738)
Total	$	17,416

There were no lease agreements signed with related parties as of March 31, 2026 and December 31, 2025.

As of March 31, 2026, the Company had committed to payments of $0.5 million related to an operating lease agreement that had not yet commenced. The operating lease will commence in the second quarter of 2026 with a term of 3.0 years. The Company does not have finance lease agreements that had not yet commenced.

Note 9 — Income taxes

The Company recorded income tax expense of $1.0 million and income tax benefit of $0.4 million for the three months ended March 31, 2026 and 2025, respectively. The Company’s effective tax rate was (234.8)% and (17.9)% for the first quarter of 2026 and 2025, respectively. The significant change in the effective tax rate, as compared to the same period in 2025, was primarily attributable to a shift from pre-tax income to pre-tax loss, higher tax expense for stock-based compensation, and additional tax expense related to prior year state tax returns.

On July 4, 2025, the “One Big Beautiful Bill Act” (the “Act”) was enacted into law. The Act includes certain changes to the U.S. tax law applicable to the Company in 2026. These changes include provisions allowing accelerated tax deductions for qualified property and research expenditures, including immediate expensing for qualifying domestic research expenditures, and revisions to the U.S. taxation of profits derived from international operations. The Act did not have a material impact on the Company's consolidated financial statements for the three months ended March 31, 2026.

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Note 10 — Stockholders’ equity

Stock-based compensation expense

Employee stock-based compensation cost recognized in the unaudited condensed consolidated statements of income/(loss) was as follows:


	Three Months Ended March 31,
	2026		2025
	(in thousands)
Cost of revenues	$	510	$	570
Engineering, research, and development	454		1,143
Sales and marketing	1,231		1,840
General and administrative	6,259		7,190
Total stock-based compensation	$	8,454	$	10,743

Stock Options

2018 Stock Plan

Stock option activity under the Company’s 2018 Stock Plan is set forth below:


	Number of Options	Weighted Average Exercise Price		Aggregate Intrinsic Value (in thousands)		Weighted Average Contractual Term (in years)
Options outstanding as of January 1, 2026	1,240,525	$	3.54	$	6,811
Options exercised	—	$	—
Options outstanding as of March 31, 2026	1,240,525	$	3.54	$	2,680	2.8

Options vested and exercisable as of March 31, 2026	1,240,525	$	3.54	$	2,680	2.8

As of March 31, 2026, the Company fully recognized stock-based compensation costs related to 2018 Stock Plan options.

2020 Equity Incentive Plan

As of March 31, 2026, 4.8 million shares were available for grant under 2020 Equity Incentive Plan, as amended (“2020 Plan”).

Stock option activity under the Company’s 2020 Plan is set forth below:


	Number of Options	Weighted Average Exercise Price		Aggregate Intrinsic Value (in thousands)		Weighted Average Contractual Term (in years)
Options outstanding as of January 1, 2026	2,502,500	$	12.61	$	833
Options forfeited	(12,358)	$	12.46
Options expired	(13,464)	$	16.36
Options outstanding as of March 31, 2026	2,476,678	$	12.59	$	—	4.9

Options vested and exercisable as of March 31, 2026	2,279,953	$	12.58	$	—	4.8

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The Company elected the policy to account for forfeitures upon occurrence. The total unrecognized compensation expenses related to 2020 Stock Plan options as of March 31, 2026 were $1.0 million to be expensed on a straight-line basis over the remaining 0.9 years.

Restricted Stock Units (“RSUs”)

RSUs granted do not participate in earnings or dividends, and do not have voting rights until vested.

The following table summarizes activity of the Company’s RSUs for the three months ended March 31, 2026:


	Number of Shares	Weighted Average Grant Date Fair Value
Unvested awards as of January 1, 2026	1,225,283	$	14.30
Awards granted	911,600	$	8.77
Awards vested and released	(205,761)	$	15.85
Awards forfeited	(7,638)	$	15.94
Unvested awards as of March 31, 2026	1,923,484	$	11.51

The total unrecognized compensation expenses related to 2020 Stock Plan RSUs as of March 31, 2026 were $19.4 million to be expensed on a straight-line basis over 2.3 years.

Performance Stock Units (“PSUs”)

The following table summarizes activity of the Company’s PSUs for the three months ended March 31, 2026:


	Number of Shares	Weighted Average Grant Date Fair Value
Unvested awards as of January 1, 2026(1)	1,769,358	$	15.84
Awards granted	687,500	$	9.70
Performance achievement adjustment	101,229	$	10.68
Modifier adjustments rTSR	(203,760)	$	—
Modifier adjustments rCAGR	203,760	$	12.30
Awards vested and released	(1,080,953)	$	16.21
Unvested awards as of March 31, 2026(2)	1,477,134	$	14.05

__________________________

(1)Reported at the estimated performance adjustment of 206% for the tranches based on performance for the year ended December 31, 2025 and 131% for the remaining tranches.

(2)Reported at the estimated performance achievement of 135% for the tranches based on expected performance for the year ending December 31, 2026 and 100% for the remaining tranches.

The total estimated unrecognized compensation expenses related to 2020 Stock Plan PSUs as of March 31, 2026 were $10.7 million to be expensed over 1.3 years.

Stock Repurchase Program

On October 23, 2025, the Board of Directors authorized a share repurchase program of up to $50.0 million of the Company’s common stock. The Company accounts for treasury stock under the cost method and reports it as a reduction of stockholders’ equity in the consolidated balance sheets.

During the three months ended March 31, 2026, the Company repurchased 1.8 million shares of common stock for an aggregate cost of $11.5 million. These shares are held as treasury stock. Accordingly, as of March 31, 2026, $36.5 million remained available for future repurchases under the program.

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Note 11 — Earnings/(loss) per share

The following table sets forth the computation of basic and diluted earnings/(loss) per share as follows:


	Three Months Ended March 31,
	2026		2025
	(in thousands, except per share data)
Numerator for basic and diluted income/(loss) per share
Net income/(loss)	$	(1,473)	$	2,912

Denominator:
Weighted-average shares outstanding – basic	84,680		84,123
Net effect of dilutive stock options and restricted stock units	—		3,663
Weighted-average shares outstanding – diluted	84,680		87,786

Income/(loss) per share
Basic	$	(0.02)	$	0.03
Diluted	$	(0.02)	$	0.03

The following table represents the number of share equivalents outstanding during the period that were excluded from the calculation of diluted net income/(loss) per share attributable to common stockholders because including them would have had an anti-dilutive effect.


	Three Months Ended March 31,
	2026	2025
	(in thousands)
Stock options to purchase common stock	3,729	482
Restricted stock units	1,902	133
Performance stock units	2,153	564
Total	7,784	1,179

Note 12 — Segment and geographic information

Operating segments are components of the Company for which separate financial information is available and is regularly reviewed and evaluated by the chief operating decision maker (“CODM”) to assess performance of each operating segment and to allocate resources. The Company’s CODM is the Chief Executive Officer (“CEO”).

The Company operates as a single operating segment engaged in delivery of various software development and hosting services to customers across its five main industry-based verticals: Retail, Finance, TMT, CPG/Manufacturing, and Healthcare and Pharma. The Company derives revenues from multiple locations; however, North America continues to be its main sales market.

The Company’s determination that it operates as a single segment is based on the financial information regularly reviewed by the CODM. The CODM assesses core operating performance and allocates operating and capital resources of the Company based on gross profit, income/(loss) from operations and net income/(loss) that are also reported on the unaudited condensed consolidated statements of income/(loss). All three metrics are used to analyze budget-to-actual variances on a monthly and quarterly basis and to decide on the allocation of operating and capital resources to a single segment or new acquisitions. Additionally, the CODM reviews operating expenses, including cost of revenues, engineering, research, and development, sales and marketing, general and administrative expenses and trade receivables at the consolidated level to manage the Company’s operations. The Company does not generate, analyze and evaluate any discrete financial information for individual verticals or sales markets as of the reporting date. The CODM does not evaluate operating performance using asset or liability information.

Geographic Information

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The following table presents revenues by customer location for the three months ended March 31, 2026 and 2025. The Company attributes customers to respective countries based upon the location of the customer served.


	Three Months Ended March 31,
	2026		2025
	(in thousands)
United States	$	70,925	$	72,638
United Kingdom	12,737		10,716
India	4,010		2,279
Poland	3,644		3,364
Other	12,784		11,418
Total Revenues	$	104,100	$	100,415

Long-lived assets include property and equipment, net of accumulated depreciation and amortization. Physical locations and values of the Company’s long-lived assets are summarized below:


	As of
	March 31, 2026		December 31, 2025
	(in thousands)
Poland	$	5,806	$	5,672
Serbia	2,259		2,375
Ukraine	2,210		2,174
United States	1,573		1,491
Armenia	1,413		1,364
Moldova	1,282		1,329
Other	3,262		3,261
Total	$	17,805	$	17,666

Note 13 — Commitments and contingencies

Legal Matters

The Company is subject to legal proceedings and claims that arise in the ordinary course of its business. Management evaluates each claim and provides for potential loss when the claim is probable to be paid and reasonably estimable. While adverse decisions in certain of these litigation matters, claims and administrative proceedings could have a material effect on a particular period’s results of operations, subject to the uncertainties inherent in estimating future costs for contingent liabilities, management believes that any future accruals with respect to these currently known contingencies would not have a material effect on the financial condition, liquidity or cash flows of the Company. There were no material amounts required to be reflected in these unaudited condensed consolidated financial statements related to contingencies.

Note 14 — Subsequent events

The Company performed its subsequent event procedures through April 30, 2026, the date these unaudited condensed consolidated financial statements were issued.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

The following discussion and analysis of the financial condition and results of operations of Grid Dynamics Holdings, Inc. should be read in conjunction with the unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the audited financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations for the fiscal year ended December 31, 2025 included in the Company's Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission (“SEC”) on March 5, 2026.

The statements contained in this Quarterly Report on Form 10-Q that are not historical facts are forward-looking statements (within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act) that involve risks and uncertainties. Such forward-looking statements may be identified by, among other things, the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “seek,” “intends,” “plans,” “estimates,” “projects,” “anticipates,” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. Actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause future results to differ materially from those projected in the forward-looking statements include, but are not limited to, those discussed in the section titled “Cautionary Note Regarding Forward Looking Statements,” included elsewhere in this Quarterly Report on Form 10-Q, and the section titled "Risk Factors" in our Annual Report on Form 10-K.

Overview

Grid Dynamics Holdings, Inc. (“Grid Dynamics,” the “Company,” “we,” “us,” or “our”) is an enterprise artificial intelligence (“AI”) transformation partner for the Fortune 1000. We combine deep AI expertise with proven enterprise-scale delivery to help clients identify where to invest in AI, build systems that work at scale, and capture real business value from AI deployments. The building blocks of AI have always been our foundation — distributed systems, real-time data, machine learning algorithms, and natural language processing. What has changed is that these capabilities have now converged into Enterprise AI.

This technical heritage is matched with business acumen. We solve the most pressing technical challenges and enable positive business outcomes for enterprise companies. A key differentiator is our nearly two decades of technology leadership and pioneering enterprise AI expertise. This is supported by deep capabilities and ongoing investment in data and machine learning platform engineering, cloud platform and product engineering, Internet of Things and edge computing, and digital engagement services.

The following table sets forth a summary of Grid Dynamics’ financial results for the periods indicated:


	Three Months Ended March 31,
	2026				2025
	(in thousands, except per share data and percentages)
Revenues	$	104,100	100.0	%	$	100,415	100.0	%
Gross profit	$	36,232	34.8	%	$	36,997	36.8	%
Loss from operations	$	(3,681)	(3.5)	%	$	(2,037)	(2.0)	%
Net income/(loss)	$	(1,473)	(1.4)	%	$	2,912	2.9	%
Diluted income/(loss) per share	$	(0.02)	n/a		$	0.03	n/a
Non-GAAP Financial Information(1)
Non-GAAP EBITDA(1)	$	12,518	12.0	%	$	14,609	14.5	%
Non-GAAP net income(1)	$	7,497	7.2	%	$	9,952	9.9	%
Non-GAAP diluted EPS(1)	$	0.09	n/a		$	0.11	n/a

__________________________

(1)Non-GAAP EBITDA, Non-GAAP net income and Non-GAAP diluted EPS are non-GAAP financial measures. See “Non-GAAP Measures” below for additional information and reconciliations to the most directly comparable GAAP financial measures.

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Quarterly Highlights

Our key metrics for the three months ended March 31, 2026 are presented below:

•Revenues: Total revenues increased 3.7% year-over-year to $104.1 million, primarily driven by increased demand in our Technology, Media and Telecom vertical.

•Operating loss: Loss from operations increased to $3.7 million, compared to $2.0 million in the prior-year quarter. This increase in loss was primarily attributable to higher operating expenses.

•Net income/(loss) and EPS: Net loss of $1.5 million during the first quarter of 2026, compared to net income of $2.9 million in the prior-year quarter. The change was largely attributable to higher cost of revenues and operating expenses. Diluted GAAP loss per share was $0.02, compared to diluted GAAP income per share of $0.03 for the three months ended March 31, 2025.

•Non-GAAP measures: Non-GAAP EBITDA was $12.5 million for the three months ended March 31, 2026, compared to $14.6 million in the prior-year quarter. Diluted Non-GAAP earnings per share was $0.09 per share, compared to $0.11 per share in the prior-year quarter.

•Cash flows: Operating cash flow was $8.4 million, a decrease from $9.4 million in the prior-year quarter.

The operating results in any period are not necessarily indicative of the results that may be expected for any future period.

Business Update Regarding Military Action in Ukraine

In February 2022, Russian forces launched a significant military action against Ukraine, which continues and even worsens. The impact on Ukraine, coupled with the actions taken by other countries, including sanctions imposed by the U.S., Canada, the U.K., the European Union, and other countries, companies and organizations against officials, individuals, regions, and industries in Russia and certain regions of Ukraine, and each country’s potential response to such sanctions, tensions, and military actions could have a material adverse effect on our operations. For example, Russia could attempt to take control of assets in Ukraine belonging to companies registered in the U.S., such as Grid Dynamics. Any such material adverse effect from the conflict and enhanced sanctions activity may disrupt our delivery of services, impair our ability to complete financial or banking transactions, cause us to continue to shift all or portions of our work occurring in the region to other countries, and may restrict our ability to engage in certain projects in the region or involving certain customers in the region.

We continue to actively monitor the security of our personnel and the stability of our infrastructure, including communications and internet availability. We executed our business continuity plan and have adapted to developments as they occur to protect the safety of our people and handle potential impacts to our delivery infrastructure. We continue to actively work with our personnel and with our customers to meet their needs and to ensure smooth delivery of services.

We have no way to predict the progress or outcome of the military action in Ukraine, as the conflict and government responses continue to develop and even worsen and are beyond our control. The prolonged unrest, military activities, expansion of hostilities, or broad-based sanctions could have a material adverse effect on our operations and business outlook. For example, if Russia were to invade other countries, such as Moldova, it could adversely affect our business. In addition, the current geopolitical situations in Armenia, and separately in Serbia create additional uncertainty in the region, and could adversely affect our business.

Key Performance Indicators and Other Factors Affecting Performance

Grid Dynamics uses the following key performance indicators and assesses the following factors, among others, to analyze its business performance, to make budgets and financial forecasts and to develop strategic plans:

Employees by Region

Attracting and retaining top talent in key regions is vital to Grid Dynamics’ success and our ability to drive revenue growth. Our long-term prospects depend on recruiting qualified IT professionals who support a global delivery model across the Americas, Europe, and Asia. This geographic footprint allows us to provide clients with continuous development, US-based leadership, and specialized talent pools optimized for both quality and cost-efficiency. We seek to employ the appropriate professionals in locations to optimize our employee costs and expenses. Currently, the vast majority of our workforce consists of these highly skilled IT professionals.

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The following table shows the number of Grid Dynamics personnel (including full-time and part-time employees and contractors serving in similar capacities) by region, as of the dates indicated:


	As of March 31,
	2026	2025
Americas(1)	761	846
Europe(2)	3,208	3,209
Rest of the world(3)	995	871
Total	4,964	4,926

__________________________

(1)Americas includes personnel located in North, Central and South America.

(2)Europe includes personnel located in Western, Central and Eastern Europe.

(3)Rest of the world includes personnel located in India and other countries not included in regions described above.

Attrition

There is competition for IT professionals in the regions in which Grid Dynamics operates, and such competition may adversely impact Grid Dynamics’ business and gross profit margins. Employee retention is one of Grid Dynamics’ main priorities and is a key driver of our operational efficiency. Grid Dynamics seeks to retain top talent by providing the opportunity to work on exciting, cutting-edge projects for high profile clients, a flexible work environment and training and development programs.

Hours and Utilization

As most of Grid Dynamics’ customer projects are performed and invoiced on a time and materials basis, Grid Dynamics’ management tracks and projects billable hours as an indicator of business volume and corresponding resource needs for IT professionals. To maintain its gross profit margins, Grid Dynamics must effectively utilize its IT professionals, which depends on its ability to integrate and train new personnel, to efficiently transition personnel from completed projects to new assignments, to forecast customer demand for services and to attract and deploy personnel in the right regions with appropriate skills and seniority to projects. Grid Dynamics’ management generally tracks utilization with respect to subsets of employees, by location or by project, and calculates the utilization rate for each subset by dividing (x) the aggregate number of billable hours for a period by (y) the aggregate number of total available hours for the same period. Grid Dynamics’ management analyzes and projects utilization to measure the efficiency of its workforce and to inform management’s budget and personnel decisions.

Customer Concentration

Grid Dynamics’ ability to retain and expand its relationships with existing customers and add new customers are key indicators of its revenue potential. New customers have a direct impact on the Company’s ability to diversify sources of revenue and replace customers that may no longer require its services. The total number of customers for the three months ended March 31, 2026 was 183 customers, a decrease from 204 a year ago.

Grid Dynamics has a relatively high level of revenue concentration with certain customers and constantly works toward achieving a more diversified revenue mix. During each of the three months ended March 31, 2026 and 2025, one customer accounted for 10% or more of Grid Dynamics’ revenues. The Company expects to continue its focus on maintaining long-term relationships with customers while diversifying its customer base.

The following table presents revenue concentration by amount and as a percentage of Grid Dynamics’ revenues for the periods indicated:

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	Three Months Ended March 31,
	2026				2025
	(in thousands, except percentages)
Top one customer	$	17,905	17.2	%	$	14,224	14.2	%
Top five customers	$	42,445	40.8	%	$	35,782	35.6	%
Top ten customers	$	62,132	59.7	%	$	56,859	56.6	%
Top twenty customers	$	79,016	75.9	%	$	73,118	72.8	%
Customers below top twenty	$	25,084	24.1	%	$	27,297	27.2	%

Results of Operations

The three months ended March 31, 2026 compared to the three months ended March 31, 2025

The following table sets forth a summary of Grid Dynamics’ consolidated results of operations for the periods indicated, and the changes between periods:


	Three Months Ended March 31,				Change
	2026		2025		Dollars		Percentage
	(in thousands, except percentages)
Revenues	$	104,100	$	100,415	$	3,685	3.7	%
Cost of revenues	67,868		63,418		4,450		7.0	%
Gross profit	36,232		36,997		(765)		(2.1)	%
Engineering, research, and development	6,079		6,486		(407)		(6.3)	%
Sales and marketing	7,694		8,257		(563)		(6.8)	%
General and administrative	26,140		24,291		1,849		7.6	%
Total operating expense	39,913		39,034		879		2.3	%
Loss from operations	(3,681)		(2,037)		(1,644)		80.7	%
Other income, net	3,241		4,506		(1,265)		(28.1)	%
Income/(loss) before income taxes	(440)		2,469		(2,909)		(117.8)	%
Provision/(benefit) from income taxes	1,033		(443)		1,476		(333.2)	%
Net income/(loss)	$	(1,473)	$	2,912	$	(4,385)	(150.6)	%

Revenues

Our total revenues for the first quarter of 2026 were $104.1 million, an increase of $3.7 million, or 3.7%, compared with $100.4 million in the first quarter of 2025. The increase in revenues was primarily attributable to higher demand from our largest technology customers for our engineering services supporting their AI, cloud, and data initiatives.

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Revenues by Verticals. We assign our customers into one of our five main vertical markets or a group of various industries where we seek to increase our presence, which we label as “Verticals”. The following table presents our revenues by vertical and revenues as a percentage of total revenues for the periods indicated:


	Three Months Ended March 31,
	2026				2025
	(in thousands, except percentages)
Technology, Media and Telecom	$	30,759	29.5	%	$	23,602	23.5	%
Retail	29,569		28.4	%	31,521		31.4	%
Finance	24,454		23.5	%	25,028		24.9	%
CPG/Manufacturing	9,762		9.4	%	10,771		10.7	%
Healthcare and Pharma	2,154		2.1	%	2,405		2.4	%
Other	7,402		7.1	%	7,088		7.1	%
Total	$	104,100	100.0	%	$	100,415	100.0	%

The Technology, Media and Telecom (“TMT”) vertical became our largest vertical in the first quarter of 2026, contributing 29.5% of total revenues. TMT revenues increased 30.3% year-over-year, primarily driven by expanded engagements with our largest technology customers.

During the three months ended March 31, 2026, revenues in our Retail vertical decreased 6.2% year-over-year, primarily due to lower demand from customers in the home improvement, offset by expanded engagement with our apparel customers and growth in our grocery sub-vertical. Retail represented 28.4% of total revenues during the quarter.

During the three months ended March 31, 2026, revenues in the Finance vertical decreased 2.3% year-over-year, primarily due to lower revenues from the completion of engagements with some of our insurance customers, offset by increased demand from our fintech and banking customers in North America and Europe. The Finance vertical contributed 23.5% of total revenues for the quarter.

The Consumer Packaged Goods/Manufacturing (“CPG”) vertical contributed 9.4% of total revenues in the first quarter of 2026, decreasing 9.4% year-over-year. We continue to witness strength from our manufacturing customers in North America along with new engagements in Europe. That said, the decline was due to decreased demand from consumer goods customers.

The Healthcare and Pharma vertical generated $2.2 million of revenues for the three months ended March 31, 2026, representing 2.1% of total revenues. This compares to $2.4 million, or 2.4% of total revenues, in the corresponding period of 2025.

During the three months ended March 31, 2026, revenues in the Other vertical increased 4.4% primarily due to higher demand from customers in the services sub-vertical. The Other vertical represented 7.1% of total revenues in the first quarter of both 2026 and 2025.

Cost of Revenues and Gross Margin

Our cost of revenues consists primarily of salaries and employee benefits, including performance bonuses and stock-based compensation, and project-related travel expenses of client-serving professionals. Cost of revenues also includes depreciation and amortization expenses related to client-serving activities.

Cost of revenues was $67.9 million for the three months ended March 31, 2026, an increase of $4.5 million, or 7.0%, compared to $63.4 million in the same period of 2025. The increase in cost of revenues reflected our continued investment in delivery to support growing customer demand.

Gross profit decreased to $36.2 million for the first quarter of 2026, down 2.1% from the same period in 2025. Expressed as a percentage of revenues, gross margin declined to 34.8% for the three months ended March 31, 2026, compared to 36.8% in the

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corresponding period of 2025. Our gross profit decline was largely attributable to higher cost structures across our key delivery locations and adverse foreign exchange impacts.

Engineering, Research and Development

The principal components of engineering, research and development expenses are salaries and employee benefits, including performance bonuses and stock-based compensation for personnel engaged in the design and development of solutions, as well as depreciation and amortization expenses related to engineering, research and development activities.

During the three months ended March 31, 2026, engineering, research, and development expenses were $6.1 million, a decrease of $0.4 million from $6.5 million in the corresponding period of 2025. The decrease primarily reflected our cost optimization of customer delivery capabilities and internally developed software. Expressed as a percentage of revenues, engineering, research, and development expenses were 5.8% compared with 6.5% in the prior year period.

Sales and Marketing

Sales and marketing expenses represent spending associated with promoting and selling our services. These expenses are comprised of personnel costs, including performance bonuses and stock-based compensation, marketing events, and travel expenses, as well as depreciation and amortization expenses related to such activities.

During the three months ended March 31, 2026, sales and marketing expenses were $7.7 million, a decrease of $0.6 million, or 6.8%, from $8.3 million in the corresponding period of 2025. Expressed as a percentage of revenues, sales and marketing expenses were 7.4% compared to 8.2% in the prior year period. The decline primarily reflected operating leverage and cost optimization initiatives of sales and business-development functions.

General and Administrative

General and administrative expenses include costs to support the business and consist primarily of administrative personnel and officers’ salaries, employee benefits including performance bonuses, stock-based compensation, legal and audit expenses, insurance, operating lease expenses of office premises and other facility costs, workforce global mobility initiatives, restructuring and employee relocation costs not directly related to customer projects, and depreciation and amortization expenses related to such activities. General and administrative expenses include a substantial majority of Grid Dynamics’ stock-based compensation costs for the financial periods discussed herein.

General and administrative expenses increased 7.6% to $26.1 million for the three months ended March 31, 2026, compared to $24.3 million in the prior-year period. The increase was primarily driven by higher professional fees associated with potential acquisitions and increased facility and IT-related expenses, partially offset by cost optimization initiatives of operational functions.

Expressed as a percentage of revenues, general and administrative expenses increased, reaching 25.1% for the three months ended March 31, 2026, compared to 24.2% for the corresponding period in 2025.

Other Income, Net

Other income, net represents interest earned on our cash and cash equivalents, including money market funds, interest expense related to our borrowings, and foreign exchange gains and losses as well as changes in the fair value of contingent consideration and investments in equity securities.

During the three months ended March 31, 2026, other income, net, decreased to $3.2 million from $4.5 million in the prior-year period. The decrease in other income, net on a year-to-date basis was primarily driven by a gain from the remeasurement of acquisition-related contingent consideration liabilities in the prior year period, partially offset by foreign currency tailwinds.

Provision for Income Tax

Grid Dynamics follows the asset and liability method of accounting for income taxes. The provision for income taxes reflects income earned and taxed in the various U.S. federal and state and non-U.S. jurisdictions. Jurisdictional tax law changes, increases or decreases in permanent differences between book and tax items, accruals or adjustments of accruals for tax contingencies or valuation allowances, and the change in the mix of earnings from these taxing jurisdictions all affect the overall effective tax rate.

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During the three months ended March 31, 2026, we recognized income tax expense of $1.0 million, compared to income tax benefit of $0.4 million in the same period of 2025. The change in the tax provision was primarily attributable to a shift from pre-tax income in the prior year period to a pre-tax loss in the current period, higher tax expense for stock-based compensation, and additional tax expense related to prior year state tax returns.

Non-GAAP Measures

To supplement Grid Dynamics’ consolidated financial data presented on a basis consistent with U.S. GAAP, this Quarterly Report contains certain non-GAAP financial measures, including Non-GAAP EBITDA, Non-GAAP net income and Non-GAAP diluted earnings per share, or EPS. Grid Dynamics has included these non-GAAP financial measures because they are financial measures used by Grid Dynamics’ management to evaluate Grid Dynamics’ core operating performance and trends, to make strategic decisions regarding the allocation of capital and new investments and are among the factors analyzed in making performance-based compensation decisions for key personnel. These measures exclude certain expenses that are required under U.S. GAAP. Grid Dynamics excludes these items because they are not part of core operations or, in the case of stock-based compensation, non-cash expenses that are determined based in part on Grid Dynamics’ underlying performance.

Grid Dynamics believes these supplemental performance measurements are useful in evaluating operating performance, as they are similar to measures reported by its public industry peers and those regularly used by security analysts, investors and other interested parties in analyzing operating performance and prospects. These non-GAAP financial measures are not intended to be a substitute for any GAAP financial measures and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry.

There are significant limitations associated with the use of non-GAAP financial measures. Further, these measures may differ from the non-GAAP information, even where similarly titled, used by other companies and therefore should not be used to compare our performance to that of other companies. Grid Dynamics compensates for these limitations by providing investors and other users of its financial information a reconciliation of non-GAAP measures to the related GAAP financial measures. Grid Dynamics encourages investors and others to review its financial information in its entirety, not to rely on any single financial measure and to view its non-GAAP measures in conjunction with GAAP financial measures.

Grid Dynamics defines and calculates its non-GAAP financial measures as follows:

•Non-GAAP EBITDA: Net income/(loss) before interest income/(expense), provision for income taxes and depreciation and amortization, and further adjusted for the impact of stock-based compensation expense, transaction-related costs (which include, when applicable, professional fees, retention bonuses, and consulting, legal and advisory costs related to Grid Dynamics’ merger and acquisition and capital-raising activities), impairment of long-lived assets, restructuring costs, one-time charges, and non-operating income/(expenses), net (which includes mainly foreign currency transaction gains and losses, fair value adjustments and other miscellaneous expenses).

•Non-GAAP net income: Net income/(loss) adjusted for the impact of stock-based compensation expense, transaction-related costs (which include, when applicable, professional fees, retention bonuses, and consulting, legal and advisory costs related to Grid Dynamics’ merger and acquisition and capital-raising activities), impairment of long-lived assets, restructuring costs, one-time charges, and non-operating income/(expenses), net (which includes mainly foreign currency transaction gains and losses, fair value adjustments and other miscellaneous expenses), and the tax impacts of these adjustments.

•Non-GAAP diluted EPS: Non-GAAP net income, divided by the diluted weighted-average number of diluted shares outstanding for the period.

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The following table presents the reconciliation of Grid Dynamics’ Non-GAAP EBITDA to its GAAP net income/(loss), the most directly comparable GAAP measure, for the periods indicated:


	Three Months Ended March 31,
	2026		2025
	(in thousands)
GAAP net income/(loss)	$	(1,473)	$	2,912
Adjusted for:
Depreciation and amortization	5,203		4,719
Provision/(benefit) for income taxes	1,033		(443)
Stock-based compensation	8,454		10,743
Transaction and transformation-related costs (1)	526		438
Geographic reorganization (2)	361		344
Restructuring costs (3)	1,655		402
Interest and other income, net (4)	(3,241)		(4,506)
Non-GAAP EBITDA	$	12,518	$	14,609

__________________________

(1)Transaction and transformation-related costs include, when applicable, external deal costs, transaction-related professional fees, transaction-related retention bonuses, which are allocated proportionally across cost of revenues, engineering, research and development, sales and marketing and general and administrative expenses as well as other transaction-related costs including integration expenses consisting of outside professional and consulting services.

(2)Geographic reorganization includes expenses connected with military actions of Russia against Ukraine and the exit plan announced by the Company and includes travel and relocation-related expenses of employees from the aforementioned countries, severance payments, allowances as well as legal and professional fees related to geographic repositioning in various locations. These expenses are incremental to those expenses incurred prior to the crisis, clearly separable from normal operations, and not expected to recur once the crisis has subsided and operations return to normal.

(3)Our restructuring costs are comprised of severance charges and respective taxes, and are included in general and administrative expenses in the Company’s unaudited condensed consolidated statements of income/(loss).

(4)Interest and other income, net consist primarily of gains and losses on foreign currency transactions, fair value adjustments, interest on cash held at banks and returns on investments in money-market funds, and other miscellaneous non-operating expenses.

The following table presents a reconciliation of Grid Dynamics’ Non-GAAP diluted EPS and its Non-GAAP net income to its GAAP net income/(loss) for the periods indicated:


	Three Months Ended March 31,
	2026		2025
	(in thousands, except per share data)
GAAP net income/(loss)	$	(1,473)	$	2,912
Adjusted for:
Stock-based compensation	8,454		10,743
Transaction and transformation-related costs (1)	526		438
Geographic reorganization (2)	361		344
Restructuring costs (3)	1,655		402
Other (income)/expense, net (4)	(691)		(1,301)
Tax impact of non-GAAP adjustments (5)	(1,335)		(3,586)
Non-GAAP net income	$	7,497	$	9,952
Number of shares used in the GAAP diluted EPS	84,680		87,786
GAAP diluted EPS	$	(0.02)	$	0.03
Number of shares used in the Non-GAAP diluted EPS	85,912		87,786
Non-GAAP diluted EPS	$	0.09	$	0.11

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__________________________

(4)Other (income)/expense, net consists primarily of gains and losses on foreign currency transactions, fair value adjustments, and other miscellaneous non-operating income and expense.

(5)Reflects the estimated tax impact of the non-GAAP adjustments presented in the table.

Liquidity and Capital Resources

We measure liquidity in terms of our ability to fund the cash requirements of our business operations, including working capital needs, capital expenditures, contractual obligations, and other commitments with cash flows from operations and other sources of funding. Our current liquidity needs relate mainly to compensation and benefits of our employees and contractors and capital investments to support our growth and geographical expansion. Our ability to expand and grow our business will depend on many factors including our capital expenditure needs and the evolution of our operating cash flows. We may need more cash resources due to changed business conditions or other developments, including investments or acquisitions.

Our principal source of liquidity continues to be cash generated from our operations. From time to time, we seek additional financing by means of follow-on public offerings of our common stock. The latest offering closed on November 14, 2024 and resulted in $107.6 million of net proceeds, after deducting underwriting discounts and commissions. Additionally, we entered into an agreement establishing a revolving credit facility with JPMorgan Chase Bank, N.A., as an administrative agent for the lenders. The revolving credit facility provides us with $30.0 million of available borrowing capacity. On May 20, 2025, the maturity of this facility was extended to March 15, 2028. See Note 6 “Debt” in the notes to our condensed consolidated financial statements in “Part I. Item 1. Financial Statements (Unaudited)” of this Quarterly Report for information regarding our debt.

As of March 31, 2026, Grid Dynamics had cash and cash equivalents amounting to $327.5 million compared to $342.1 million at December 31, 2025. Of these amounts, $49.0 million and $48.4 million, respectively, were held outside the United States, and included Switzerland, the U.K., India, Netherlands, Mexico, Moldova, Armenia, Argentina, Poland, and other countries. We did not have any debt outstanding under the revolving credit facility as of March 31, 2026. We believe that our cash and cash equivalents balance, cash generated from operating activities and proceeds from our November 2024 offering will be sufficient to fund currently expected levels of operating, investing and financing expenditures for a period of twelve months from the date of this filing. However, if our resources are insufficient to satisfy our cash requirements, we may need to seek additional equity or debt financing, which may be subject to conditions outside of our control and may not be available on terms acceptable to our management or at all.

See Note 6 “Debt”, Note 8 “Leases” and Note 13 “Commitments and contingencies” in the notes to our condensed consolidated financial statements in “Part I. Item 1. Financial Statements (Unaudited)” of this Quarterly Report for detailed information on our contractual obligations and commitments.

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Cash Flows

The following table summarizes Grid Dynamics’ cash flows for the periods indicated:


	Three Months Ended March 31,
	2026		2025
	(in thousands)
Net cash provided by operating activities	$	8,391	$	9,351
Net cash used in investing activities	$	(3,960)	$	(3,339)
Net cash used in financing activities	$	(17,577)	$	(15,835)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	$	(1,444)	$	655
Net decrease in cash, cash equivalents and restricted cash	$	(14,590)	$	(9,168)
Cash, cash equivalents and restricted cash (beginning of period)	$	342,058	$	335,155
Cash, cash equivalents and restricted cash (end of period)	$	327,468	$	325,987

Operating Activities. Net cash provided by operating activities was $8.4 million for the three months ended March 31, 2026, compared to $9.4 million in the prior-year quarter. The $1.0 million decrease was primarily driven by changes in working capital, specifically regarding the timing of payments to vendors and settlement of employee-related liabilities.

Investing Activities. Net cash used in investing activities was $4.0 million for the three months ended March 31, 2026, compared to $3.3 million in the prior-year period, and was related to our capital expenditures and the capitalization of internally developed projects in both periods.

Financing Activities. Net cash used in financing activities was $17.6 million for the three months ended March 31, 2026, largely driven by repurchases of our common stock initiated in the fourth quarter of 2025, payment of contingent consideration for our 2024 acquisitions and tax withholding obligations related to the issuance of shares in connection with vested equity awards. Net cash used in financing activities for the three months ended March 31, 2025 was $15.8 million and was primarily related to tax withholding obligations in connection with vested equity awards.

Off-Balance Sheet Arrangements and Commitments

We do not have any material off-balance sheet commitments or contractual arrangements other than those disclosed in Note 8 “Leases” and Note 13 “Commitments and contingencies” of our condensed consolidated financial statements in “Part I. Item 1. Financial Statements (Unaudited)” of this Quarterly Report.

As a result of analysis related to Grid Dynamics’ functional control of its subcontractors, one subcontractor was determined to be a variable interest entity (“VIE”) and is therefore consolidated in Grid Dynamics’ financial statements. The assets and liabilities of this VIE consist primarily of intercompany balances and transactions, all of which have been eliminated in consolidation.

Recently Adopted and Issued Accounting Pronouncements

Recently issued and adopted accounting pronouncements are described in Note 1 to Grid Dynamics’ condensed consolidated financial statements in “Part I. Item 1. Financial Statements (Unaudited)” of this Quarterly Report.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Grid Dynamics has in the past and may in the future be exposed to certain market and credit risks in the ordinary course of business, including exposure related to fluctuations in foreign currency rates, and on occasion and to a lesser extent, changes in interest rates and concentration of credit risk. In addition, Grid Dynamics’ international operations are subject to risks related to differing economic conditions, changes in political climate, differing tax structures, and other regulations and restrictions. See “Part I. Item 1A. Risk Factors” in our Annual Report on Form 10-K for additional information.

Foreign Currency Exchange Rate Risk

Grid Dynamics is exposed to foreign currency exchange transaction risk related to funding its non-US operations and to foreign currency translation risk related to certain of its subsidiaries’ cash balances that are denominated in currencies other than the

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U.S. dollar. In addition, Grid Dynamics’ profit margins are subject to volatility as a result of changes in foreign exchange rates. Grid Dynamics’ functional currency apart from the U.S. dollar includes Euro, British pounds, Mexican pesos, Polish zloty, Serbian dinars, and Indian rupees. When and where possible, Grid Dynamics seeks to match expenses of each entity to currencies in which revenues are generated, creating a natural hedge. In future periods, Grid Dynamics may also become materially exposed to changes in the value of Argentinian pesos against the U.S. dollar, due to expansion of operations in these countries.

In the three months ended March 31, 2026, approximately 48.3% of Grid Dynamics’ $107.8 million combined cost of revenues and total operating expenses were denominated in currencies other than the U.S. dollar. Comparatively, approximately 46.1% of Grid Dynamics’ $102.5 million of combined cost of revenues and total operating expenses were denominated in currencies other than the U.S. dollar in the three months ended March 31, 2025.

In the three months ended March 31, 2026:

•a 10% decrease in the value of the Polish zloty against the U.S. dollar would have resulted in a $0.5 million increase in Grid Dynamics’ income from operations, while a 10% increase in the zloty’s value would have resulted in a $0.6 million decrease in income from operations.

•a 10% decrease in the value of the Indian rupees against the U.S. dollar would have resulted in a $0.5 million increase in Grid Dynamics’ income from operations, while a 10% increase in the rupee’s value would have resulted in a $0.6 million decrease in income from operations.

•a 10% decrease in the value of the Serbian dinars against the U.S. dollar would have resulted in a $0.3 million increase in Grid Dynamics’ income from operations, while a 10% increase in the dinar's value would have resulted in a $0.4 million decrease in income from operations.

In the three months ended March 31, 2025:

•a 10% decrease in the value of the Polish zloty against the U.S. dollar would have resulted in a $1.4 million increase in Grid Dynamics’ income from operations, while a 10% increase in the zloty’s value would have resulted in a $1.7 million million decrease in income from operations.

•a 10% decrease in the value of the Serbian dinars against the U.S. dollar would have resulted in a $0.1 million increase in Grid Dynamics’ income from operations, while a 10% increase in the dinar’s value would have resulted in a $0.1 million decrease in income from operations.

Grid Dynamics analyzes sensitivity to the zloty, rupees, and Serbian dinars separately because, in management’s experience, fluctuations in the value of these currencies against the U.S. dollar are frequently driven by distinct macroeconomic and geopolitical factors and have the largest effect on our results during the quarter ended March 31, 2026.

Grid Dynamics manages its exposure to foreign currency fluctuations through hedging program under which the Company enters into short-term foreign exchange forward contracts designed as cash flow hedges of forecasted transactions denominated in Polish zloty. These contracts generally mature during six months or less. As of March 31, 2026, all foreign exchange forward contracts qualified for hedge accounting, with no collateral required to be posted.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this quarterly report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, our disclosure controls and procedures were effective in recording, processing, summarizing and reporting on a timely basis, information required to be disclosed by us in the reports that we file or submit under the Exchange Act and were

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effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

Our management, including the Chief Executive Officer and Chief Financial Officer, confirmed there have been no changes in our internal control over financial reporting during the three months ended March 31, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, do not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management to override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

Although we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we are not currently a party to any material legal proceeding. In addition, we are not aware of any material legal or governmental proceedings against us or contemplated to be brought against us. Future litigation may be necessary, among other things, to defend us or our customers by determining the scope, enforceability and validity of third-party proprietary rights or to establish our proprietary rights. The results of any litigation cannot be predicted with certainty and, regardless of the outcome, litigation can have an adverse impact on our Company because of defense and settlement costs, diversion of management resources and other factors.

Item 1A. Risk Factors

For a discussion of our potential risks and uncertainties, see the risk factors disclosed in “Part I. Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 5, 2026.

The risks and uncertainties that we face are not limited to those set forth in our Annual Report on Form 10-K. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business and the trading price of our common stock.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Issuer Purchases of Equity Securities

On October 23, 2025, the Board of Directors authorized a share repurchase program of up to $50.0 million of the Company’s common stock. The common stock may be repurchased at prices that the Company deems appropriate and subject to market conditions, applicable law and other factors deemed relevant in the Company’s sole discretion. Such repurchases may be effected through open market purchases, privately negotiated transactions or otherwise, including repurchase plans that satisfy the conditions of Rule 10b5-1 under the Securities Exchange Act of 1934. The stock repurchase program has no termination date, may be suspended or discontinued at any time and does not obligate the Company to repurchase any dollar amount or number of shares.

The following information describes the Company's stock repurchases during the quarter ended March 31, 2026.


Period	Total number of shares purchased	Average price paid per share(1)		Total numbers of shares purchased as part of publicly announced plans or programs	Maximum approximate dollar value of shares that may yet be purchased under the program
	(in thousands, except per share amounts)
January 1, 2026 to January 31, 2026	—	$	—	—	$	48,000
February 1, 2026 to February 28, 2026	—	$	—	—	$	48,000
March 1, 2026 to March 31, 2026	1,801	$	6.37	2,001	$	36,536
Total	1,801			2,001

__________________________

(1)Average price paid per share includes commission.

Item 3. Default Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Table of Contents

Item 5. Other Information

(a) No director or officer, as defined in Rule 16a-1(f), adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as defined in Regulation S-K Item 408, during the three months ended March 31, 2026.

Item 6. Exhibits.

The exhibits listed in the accompanying Exhibit Index are filed or incorporated by reference as part of this Quarterly Report on Form 10-Q.

EXHIBIT INDEX

Exhibit Number

Description

Incorporated by Reference From Form

Incorporated by Reference From Exhibit Number

Date Filed

3.1

Amended and Restated By-Laws of Grid Dynamics Holdings, Inc., as amended and restated as of February 26, 2026

8-K

3.1

February 27, 2026

31.1

Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act.

Filed herewith

31.2

Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act.

Filed herewith

32.1*

Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act.

Furnished herewith

32.2*

Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act.

Furnished herewith

101.INS

XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

Filed herewith

101.SCH

XBRL Taxonomy Extension Schema Document

Filed herewith

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

Filed herewith

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

Filed herewith

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

Filed herewith

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

Filed herewith

104

Cover Page Interactive Data File the cover page interactive data is embedded within the Inline XBRL document or included within the Exhibit 101 attachments

Filed herewith

* The certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	Grid Dynamics Holdings, Inc.

Date: April 30, 2026	By:	/s/ Leonard Livschitz
		Leonard Livschitz
		Chief Executive Officer (Principal Executive Officer)

Date: April 30, 2026	By:	/s/ Anil Doradla
		Anil Doradla
		Chief Financial Officer (Principal Financial and Accounting Officer)

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Date	Price Target	Rating	Analyst
5/29/2026	$8.00	Buy → Hold	Jefferies
9/22/2025	$11.00	Buy	Jefferies
8/2/2024	$12.00 → $16.00	Hold → Buy	TD Cowen
5/24/2024	$13.00	Outperform	Wedbush
3/4/2022	$40.00 → $22.50	Outperform	Northland Capital Markets
3/4/2022	$45.00 → $22.00	Buy	Needham
11/5/2021	$30.00 → $45.00	Buy	Needham
11/1/2021	$35.00	Buy	Citigroup

SEC Form 10-Q filed by Grid Dynamics Holdings Inc.

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