Grid Dynamics Holdings, Inc. Q2 FY2025 earnings call

• AI-first approach: Infusing AI into various aspects of business, with AI and Data accounting for 23% of organic growth in H1 2025, growing almost 3x faster than overall organic business.
• Acquisitions: JUXT enhanced banking and financial services expertise; Mobile Computing improved follow-the-sun capabilities.
• Partnerships: Partnership-influenced revenues reached 17.9% of total revenue in Q2 2025, with increased traction with hyperscalers.
• India expansion: India is a top 2 country by headcount, serving as a hub for multi-agent, multi-modal platform engineering.
• Internship program: Over 16,000 applicants with high placement rates into billable roles.
• Project highlights: Modernizing data processing infrastructure for a global tech company, developing AI platforms for a home improvement retailer, and AI initiatives for fintech companies.

Retail was the largest vertical, contributing 29.2% of total revenues in Q2 2025, with year-over-year growth of 10.4% but a sequential decline of 6.2%. The finance vertical accounted for 25.1% of total revenues, growing 1.4% sequentially and doubling year-over-year. TMT made up 24.9% of total revenues, with a quarter-over-quarter growth of 6.7% and year-over-year growth of 8.4%. CPG and manufacturing represented 10.5% of quarterly revenues, flat sequentially but up 7.7% year-over-year. Other verticals contributed 7.8% of total revenues, with sequential growth of 10.1% and 4.6% year-over-year growth. Healthcare and pharma made up 2.5% of revenues. Total headcount was 5,013, with U.S. headcount at 7.2% and non-U.S. headcount at 92.8%.

• Third quarter 2025 revenue expected to be in the range of $103 million to $105 million, with acquisitions contributing approximately 12% of revenues. Non-GAAP EBITDA expected to be in the range of $12 million to $13 million.
• Full-year 2025 revenue outlook remains $415 million to $435 million, driven by innovation-led projects despite macroeconomic uncertainties.

• Macroeconomic uncertainties affecting traditional digital transformation spending.
• Currency fluctuations impacting costs.
• Client portfolio rationalization leading to a decline in the number of customers.

Q: Mayank Tandon asked about pipeline, deal conversion, pricing, utilization, and hiring plans.

A: Anil and Leonard discussed robust pipeline, AI data business growth, pricing dynamics, and hiring/training for AI-first SDLC.

Q: Puneet Jain asked about training/hiring for AI and SDLC changes, and AI adoption across verticals.

A: Eugene talked about senior engineers and AI-native employees, Leonard discussed AI growth across verticals with some traditional areas affected by macros.

Q: Bryan Bergin asked about AI-powered engagement model, client testing, and margin/headcount balance.

A: Vasily and Leonard discussed AI engagement model adoption, margin impact, and balancing cost optimization with future investments.

Q: Matt Dezort asked about partner program growth and client count rationalization.

A: Leonard and Anil talked about partner program with hyperscalers, big players, and customers, and client count rationalization due to focus on enterprise customers.

Q: Surinder Thind asked about AI capability scenario and firm evolution.

A: Leonard and Eugene discussed AI in software development, human touch in key decisions, and progression of AI capabilities.