Grid Dynamics delivered Q3 results that met Wall Street’s expectations, with management attributing revenue growth to sustained demand for artificial intelligence (AI) solutions and a notable expansion in billable engineering headcount. CEO Leonard Livschitz highlighted the company’s progress in securing multi-quarter AI engagements, stating that "AI grew 10% on a sequential basis and contributed to over 25% of our third quarter organic revenue." The team pointed to the success of new client wins, especially in technology and financial services, and a pipeline of projects that are larger and longer in duration than earlier in the year.
Is now the time to buy GDYN? Find out in our full research report (it’s free for active Edge members).
Grid Dynamics (GDYN) Q3 CY2025 Highlights:
- Revenue: $104.2 million vs analyst estimates of $103.7 million (19.1% year-on-year growth, in line)
- Adjusted EPS: $0.09 vs analyst estimates of $0.09 (in line)
- Adjusted EBITDA: $12.7 million vs analyst estimates of $12.42 million (12.2% margin, 2.2% beat)
- Revenue Guidance for Q4 CY2025 is $106 million at the midpoint, below analyst estimates of $110.2 million
- EBITDA guidance for Q4 CY2025 is $13.5 million at the midpoint, above analyst estimates of $12.71 million
- Operating Margin: -0.2%, down from 2.4% in the same quarter last year
- Market Capitalization: $760.4 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Grid Dynamics’s Q3 Earnings Call
- Puneet Jain (JPMorgan): Asked about the sustainability of billable headcount growth and whether AI-driven initiatives could accelerate revenue in 2026. CEO Leonard Livschitz emphasized multi-quarter AI programs and preferred vendor status with top clients as key drivers for future growth.
- Bryan Bergin (TD Cowen): Queried the split between Agentic AI managed services and traditional software development work. SVP Vasily Sizov explained that most revenue is currently project-based, with managed services representing an emerging opportunity.
- Surinder Thind (Jefferies): Sought clarification on the partnership program’s revenue contribution and future potential. SVP Rahul Bindlish projected long-term growth in partnership-influenced revenue to 25–30% as more joint solutions and certifications roll out.
- Mayank Tandon (Needham): Inquired whether Q4 could benefit from a client budget flush. CFO Anil Doradla responded that growth is primarily tied to multi-quarter programs rather than year-end spending, with 2026 budgets already influencing current activity.
- Matt Dezort (William Blair): Pressed on whether margin expansion depends on revenue growth reacceleration. Doradla stated that operational efficiencies and pricing actions should drive margin gains even if growth remains constrained.
Catalysts in Upcoming Quarters
Looking forward, the StockStory team will watch (1) whether AI-driven client engagements continue to ramp as clients move from pilots to enterprise-scale deployments, (2) evidence that margin expansion initiatives—such as geographic optimization and higher-value offerings—translate into improved profitability, and (3) progress in growing partnership-influenced revenue as cloud and AI ecosystem collaborations deepen. Maintaining momentum in billable headcount and converting pipeline opportunities into signed contracts will also be critical for sustained growth.
Grid Dynamics currently trades at $8.88, up from $7.58 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free for active Edge members).
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
