Key Highlights

  • Revenues rose 9.7% to $114.3 million in the third quarter, from $104.2 million a year earlier.
  • Gross Margin reached 40.3%, up 700 basis points from 33.3%.
  • Net income was $6.2 million, or $0.08 per diluted share, versus $1.2 million, or $0.01.
  • Non-GAAP EBITDA was $22.9 million, compared with $12.7 million in the prior year quarter.
  • Cash and cash equivalents were $304.3 million at September 30, 2026, with no revolver Debt outstanding.

Revenue climbs 9.7% as one vertical does the heavy lifting

Grid Dynamics (NASDAQ:GDYN) describes itself as an enterprise AI transformation partner for Fortune 1000 companies, combining engineering services with an AI-native delivery model it calls GAIN. It filed its Quarterly Report for the period ended September 30, 2026 on October 29, 2026.

Revenues were $114.3 million, up from $104.2 million a year earlier. For the nine months, revenues were $326.6 million, up 6.8% from $305.7 million.

Technology, media and telecom drives growth while other verticals lag

Technology, Media and Telecom Revenue rose 29.3% to $37.0 million, or 32.3% of the total, on higher Demand from the largest technology customers and new customers. Retail grew 13.3% to $31.1 million on demand from specialty retailers.

Finance was flat at $25.7 million, and CPG and Manufacturing was flat at $12.5 million. Healthcare and Pharma slipped to $2.1 million from $2.4 million as certain engagements completed, and the Other vertical fell 21.7%.

Gross margin gains come from utilization and a leaner team

Cost of revenues fell 1.8% to $68.2 million even as revenue grew, which the company tied to cost optimization and improved billable utilization. Gross Profit rose 32.8% to $46.1 million, and gross margin expanded to 40.3% from 33.3%, driven by greater efficiencies, higher revenue per employee and higher utilization.

Personnel totaled 4,559 at September 30, 2026, compared with 4,971 a year earlier, a decline of about 8.3% on a calculated basis. European headcount fell to 2,820 from 3,227, while the Americas rose to 867 from 835.

Operating profit turns positive and non-GAAP measures double

Total operating expenses were $36.9 million, up 5.7%, with general and administrative costs at $23.3 million. Income from operations was $9.1 million, compared with a loss of $0.2 million in the prior year quarter, and Net Income was $6.2 million.

Non-GAAP net income was $14.7 million, or $0.18 per diluted share, versus $8.2 million, or $0.09. For the nine months, GAAP net income was $7.5 million, or $0.09 per share, below $9.4 million, or $0.11, because other income fell to $8.7 million from $15.3 million and the tax provision rose.

Customer concentration, cash and buybacks

The top five customers accounted for 45.4% of third quarter revenue, up from 40.1%, and the largest customer was 17.9%, up from 16.4%. The company had 222 customers in each nine month period.

Cash and cash equivalents were $304.3 million, down from $342.1 million at December 31, 2025. Over the nine months, Operating Cash Flow was $30.5 million, the company spent $35.5 million on repurchases under a $50.0 million program authorized on October 23, 2025, and it paid $14.1 million net of cash acquired for the Acquisition of Ekumen.

What to watch after the margin step up

The quarter shows how margin can expand when revenue grows faster than delivery costs. Whether the 40.3% gross margin holds will depend on utilization and on how reliant revenue stays on a handful of large technology accounts.

The filing also flags geopolitical risk around operations in Ukraine and nearby regions, which could affect delivery.