Grid Dynamics Holdings Inc (GDYN) Q2 2024 Earnings Call Highlights: Record Revenue and ...

GuruFocus News
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In This Article:

  • Revenue: $83 million, exceeding guidance range of $80 million to $82 million.

  • Non-GAAP EBITDA: $11.7 million, above guidance range of $10.5 million to $11.5 million.

  • Retail Vertical Revenue: 32.2% of total revenue, grew 8.7% sequentially and 2.9% year-over-year.

  • TMT Vertical Revenue: 28% of total revenue, decreased 3.3% sequentially and 3.6% year-over-year.

  • CPG and Manufacturing Revenue: 11.9% of total revenue, increased 3% sequentially, decreased 9.5% year-over-year.

  • Healthcare and Pharma Revenue: 3.8% of total revenue, increased 5% sequentially, decreased 14.8% year-over-year.

  • Gross Profit (GAAP): $29.6 million or 35.6% of revenue.

  • Gross Profit (Non-GAAP): $30.1 million or 36.2% of revenue.

  • GAAP Net Loss: $0.8 million or $0.01 per share.

  • Non-GAAP Net Income: $6 million or $0.08 per share.

  • Cash and Cash Equivalents: $256 million as of June 30, 2024.

  • Total Headcount: 3,961 employees.

  • Third Quarter Revenue Guidance: $84 million to $86 million.

  • Third Quarter Non-GAAP EBITDA Guidance: $12.3 million to $13.3 million.

Release Date: August 01, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Grid Dynamics Holdings Inc (NASDAQ:GDYN) reported its highest-ever quarterly revenue, driven entirely by organic growth.

  • The company achieved a record number of billable engineers, indicating strong operational capacity.

  • Grid Dynamics Holdings Inc (NASDAQ:GDYN) won four industry awards, highlighting its innovation and excellence in digital transformation.

  • The company expanded its AI capabilities significantly, offering approximately 30 solutions targeting Fortune 500 companies.

  • Grid Dynamics Holdings Inc (NASDAQ:GDYN) demonstrated strong financial performance, exceeding guidance on both revenue and non-GAAP EBITDA.

Negative Points

  • The TMT vertical experienced a decline in revenue, both sequentially and year-over-year, due to reduced spending from a technology startup.

  • The healthcare and pharma vertical showed a significant year-over-year revenue decrease of 14.8%.

  • The number of customers decreased year-over-year, reflecting efforts to rationalize the portfolio of nonstrategic customers.

  • Despite strong performance, the company did not reinstate full-year guidance, indicating potential uncertainty in business visibility.

  • Pricing remains largely flat, with limited room for significant increases, impacting potential revenue growth.

Q & A Highlights

Q: How is Grid Dynamics managing margins on an account-by-account basis with the new Follow-the-Sun strategy? A: Leonard Livschitz, CEO, explained that managing margins on a key account basis is crucial. The company continues to hire across regions, with a focus on India, and is implementing smart hiring strategies, including adding more interns. As projects stabilize and grow, they can manage cost efficiency within teams, emphasizing profitability for key clients.

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