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 (GDYN, Financial) 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 (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 (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.
Q: Is there a change in the scope or type of projects as customers are more willing to spend?
A: Leonard Livschitz, CEO, noted that Grid Dynamics focuses on technology projects that impact sales, particularly in AI. The company is moving from proof-of-concept to broader implementation, leveraging a variety of platforms and expanding partnerships to deepen project implementation.
Q: Why hasn't Grid Dynamics reinstated full-year guidance despite improving conditions?
A: Anil Doradla, CFO, stated that while conditions are improving, the company remains conservative. They are inclined to provide full-year guidance when ready, aiming to offer as much visibility as possible to the market.
Q: Can you discuss the scaling of new enterprise logos and trends in these relationships?
A: Leonard Livschitz, CEO, explained that new relationships often start small and grow through technical expertise and referrals. Rapid scaling occurs when there is familiarity with Grid Dynamics, and the company is shifting to understand clients' business models better.
Q: What are the growth prospects for top clients versus non-top 10 clients?
A: Leonard Livschitz, CEO, outlined a threefold strategy: maintaining 24/7 engagement with top clients, selectively growing with large clients where the footprint is smaller, and focusing on partnerships for new innovative clients. The company aims to offer competitive solutions to enhance client business success.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
