Grid Dynamics Posts Record Revenue of $114.3 Million, Beats Third-Quarter Expectations
Key Facts
Grid Dynamics reported record revenue of $114.3 million in the third quarter ended September 30, 2026, up 9.7% year over year and 5.7% from the previous quarter, according to its earnings release issued on October 29. Revenue exceeded the top end of the company’s July guidance range of $114.0 million. It also topped analysts’ estimate of $112.77 million, according to Reuters via Investing.com. Adjusted earnings per share were $0.18, versus an estimate of $0.13. The results reflected a combination of sales growth and margin improvement, while the company looks to the fourth quarter with revenue guidance topping out at $115.5 million.
The technology, media and telecom sector was the main growth driver, accounting for 32.3% of quarterly revenue. Its revenue rose 29.3% year over year and 7.6% from the second quarter. The company attributed the performance to demand from its largest technology customers and work from new clients. Retail accounted for 27.2% of revenue, with revenue growth of 13.3% year over year and 8.5% quarter over quarter, driven by increased demand from specialty retailers. The financial sector accounted for 22.5% of revenue, and its revenue increased 3.9% from the previous quarter. The figures show growth across several major sectors, with the pace varying among them.
The company said AI revenue grew more than 45% year over year for three consecutive quarters and accounted for 31% of total third-quarter revenue. In its release, it said, "AI revenue grew more than 45% year over year for three consecutive quarters and now represents 31% of total revenue." This share places AI among the revenue components whose weight the company disclosed, alongside the sectors for which it reported growth rates. The company linked growth in technology, media and telecom to demand from its largest technology customers and new clients. It also attributed retail growth to increased demand from specialty retailers. Together, these figures reflect an expansion in AI activity and higher revenue in specific business sectors, according to the company’s disclosure.
Gross margin under generally accepted accounting principles improved to 40.3% from 33.3% in the third quarter of 2025. Adjusted EBITDA margin was 20.0%, compared with 12.2% a year earlier. Net income under generally accepted accounting principles rose to $6.2 million, or $0.08 per share, from $1.2 million and $0.01 per share in the year-earlier period. Net income on a non-GAAP basis was $14.7 million, or $0.18 per diluted share. The comparison shows broad year-over-year improvement in margins and earnings, while adjusted earnings measures remain separate from reported accounting results.
Cash provided by operating activities was $30.5 million in the nine months ended September 30, 2026, compared with $30.7 million in the same period a year earlier. The company spent $35.5 million to repurchase 5.3 million shares during the nine months, under a $50 million share repurchase program. At the end of September, cash and cash equivalents totaled $304.3 million, versus $342.1 million on December 31, 2025. Headcount also declined to 4,559 on September 30 from 4,971 a year earlier. These figures put the improvement in profitability alongside operating cash flow that was nearly stable year over year, as cash and headcount fell from the cited comparison levels.
In trading, the stock closed at $8.75 on October 28, compared with $8.56 on October 22, according to EL7 data. On October 29, it rose 8.46% to close at $9.49, then gained 4.85% after the close to $9.95, according to Reuters via Investing.com. The moves came on the day the company announced results that beat analysts’ estimates for revenue and adjusted earnings per share. The company forecast fourth-quarter 2026 revenue of between $113.5 million and $115.5 million. It also forecast adjusted EBITDA of between $20.0 million and $22.0 million for the same quarter.