0001743725-26-000007
SEC filingGrid Dynamics Holdings, Inc. reported record revenues of $411.8 million for FY 2025, representing a 17.5% year-over-year increase. The company achieved net income of $9.7 million, a significant improvement from $4.0 million in the prior year, despite a slight operating loss of $1.9 million. Revenue growth was driven by strong performance across most verticals, particularly Finance which grew 66.9% to $100.4 million, and Technology, Media & Telecom which grew 13.0% to $107.5 million. Gross profit increased to $142.3 million, though gross margin declined 160 basis points to 34.6% due to higher delivery costs and foreign exchange impacts. The company generated $40.6 million in operating cash flow and ended the year with $342.1 million in cash and cash equivalents, maintaining a strong liquidity position.
Grid Dynamics reported record revenues of $411.8 million for FY 2025, representing 17.5% year-over-year growth from $350.6 million in FY 2024. The company achieved net income of $9.7 million, a significant improvement from $4.0 million in the prior year, despite reporting a loss from operations of $1.9 million (improved from $2.1 million loss in FY 2024). The improvement in net income was primarily driven by $17.6 million in interest and other income, net, which included fair value adjustments related to acquisition-related contingent consideration. Gross profit increased to $142.3 million from $127.0 million, though gross margin declined to 34.6% from 36.2% due to higher cost basis in key delivery geographies and foreign exchange fluctuations.
Revenue growth was driven by strong performance across most verticals, with Finance being the largest contributor to growth, increasing 66.9% to $100.4 million (24.4% of total revenue). Technology, Media and Telecom grew 13.0% to $107.5 million (26.1% of total revenue), while Retail increased 5.7% to $120.5 million (29.3% of total revenue). The company benefited from strategic acquisitions completed during 2024 (JUXT and Mobile Computing), which contributed to revenue growth and expanded market position. Geographic revenue distribution shows North America representing $289.4 million (70.3% of total), Europe $86.4 million (21.0%), and other regions $36.1 million (8.7%). Customer concentration remains high, with the top customer representing 15.4% of revenue and top ten customers representing 57.7% of revenue.
Gross margin declined 160 basis points to 34.6% in FY 2025 from 36.2% in FY 2024, primarily due to higher cost basis in key delivery geographies and foreign exchange fluctuations. Operating expenses totaled $144.2 million, representing 35.0% of revenue, with general and administrative expenses being the largest component at $90.5 million (22.1% of revenue). Engineering, research and development expenses increased 29.0% to $23.7 million, reflecting continued investments in customer delivery capabilities and internally developed solutions. Sales and marketing expenses were $30.0 million (7.3% of revenue), showing improved operating leverage as revenue growth outpaced sales-related costs. The effective tax rate decreased to 38.4% from 63.4% in the prior year, primarily due to an increase in pre-tax book income from non-taxable fair value changes of contingent consideration.
The company generated $40.6 million in operating cash flow, a significant increase from $30.2 million in the prior year. Investing activities used $15.1 million primarily for property and equipment purchases, while financing activities used $19.9 million mainly for tax obligations from stock settlements and share repurchases. The company ended the year with $342.1 million in cash and cash equivalents, up from $334.7 million at the end of FY 2024. Total assets increased to $612.9 million from $592.2 million, with current assets of $439.5 million. Total liabilities decreased to $70.8 million from $74.4 million, resulting in stockholders' equity of $542.1 million. The company has no outstanding debt under its $30 million revolving credit facility.
The company's strategic focus remains on serving Fortune 1000 companies as an AI-native transformation partner, with continued emphasis on its GAIN (Grid Dynamics AI-Native) engagement model. Strategic partnerships with hyperscale cloud providers and AI leaders contributed over 19% of revenue in FY 2025. The company completed acquisitions in 2024 (JUXT and Mobile Computing) to strengthen market position in Europe and the Americas. Key risk factors include customer concentration, competition for IT professionals impacting margins, and foreign currency exchange rate risks. The company maintains a global delivery model with 4,961 personnel across the Americas, Europe, and India, enabling continuous development cycles and cost optimization.