Revenue growth has decelerated to 3.7% in 2026Q1 while gross margins have compressed to 34.8%, reflecting a struggle to maintain pricing power against rising technical talent costs.
| Sales/Revenue | 415.51M | 411.83M | 350.57M | 312.91M | 310.48M | 211.28M | 111.28M | 118.33M | 91.86M | 70.68M |
| Revenue Growth % | 11.95% | 17.47% | 12.04% | 0.78% | 46.95% | 89.86% | -5.95% | 28.8% | 29.97% | - |
| Cost of Goods Sold | 273.93M | 269.48M | 223.57M | 199.76M | 189.89M | 123.55M | 69.66M | 70.09M | 52.56M | 40.64M |
| COGS % of Revenue | - | 65.44% | 63.77% | 63.84% | 61.16% | 58.48% | 62.6% | 59.23% | 57.21% | 57.49% |
| Gross Profit | 141.58M | 142.35M | 127M | 113.15M | 120.59M | 87.73M | 41.62M | 48.24M | 39.31M | 30.05M |
| Gross Margin % | 34.07% | 34.56% | 36.23% | 36.16% | 38.84% | 41.52% | 37.4% | 40.77% | 42.79% | 42.51% |
| Gross Profit Growth % | - | 12.08% | 12.25% | -6.17% | 37.46% | 110.78% | -13.71% | 22.72% | 30.82% | - |
| Operating Expenses | 143.81M | 140.03M | 129.11M | 118.73M | 141.6M | 87.68M | 57.07M | 32.61M | 25.48M | 16.94M |
| OpEx % of Revenue | - | 34% | 36.83% | 37.94% | 45.61% | 41.5% | 51.28% | 27.56% | 27.73% | 23.97% |
| Selling, General & Admin | 120.55M | 120.58M | 110.76M | 103.98M | 125.83M | 79.22M | 47.76M | 23.46M | 22.83M | 14.96M |
| SG&A % of Revenue | - | 29.28% | 31.6% | 33.23% | 40.53% | 37.49% | 42.92% | 19.83% | 24.86% | 21.17% |
| Research & Development | 23.26M | 23.66M | 18.35M | 14.74M | 15.77M | 8.46M | 9.31M | 4.35M | 2.64M | 1.98M |
| R&D % of Revenue | - | 5.75% | 5.23% | 4.71% | 5.08% | 4% | 8.37% | 3.67% | 2.88% | 2.79% |
| Other Operating Expenses | 0 | -4.21M | 0 | 0 | 555K | 0 | 236K | 4.8M | 0 | 1K |
| Operating Income | -2.23M | 2.31M | -2.1M | -5.58M | -21.01M | 50K | -15.45M | 15.63M | 13.83M | 13.11M |
| Operating Margin % | -0.54% | 0.56% | -0.6% | -1.78% | -6.77% | 0.02% | -13.88% | 13.21% | 15.05% | 18.54% |
| Operating Income Growth % | - | 209.88% | 62.28% | 73.44% | -42116% | 100.32% | -198.87% | 12.99% | 5.51% | - |
| EBITDA | 10.66M | 27.12M | 16.63M | 6.54M | -11.36M | 5.1M | -12.78M | 17.94M | 15.14M | 13.77M |
| EBITDA Margin % | 2.57% | 6.58% | 4.74% | 2.09% | -3.66% | 2.41% | -11.48% | 15.16% | 16.48% | 19.48% |
| EBITDA Growth % | -57.8% | 63.04% | 154.39% | 157.55% | -322.81% | 139.91% | -171.23% | 18.46% | 9.98% | - |
| D&A (Non-Cash Add-back) | 12.89M | 24.8M | 18.74M | 12.12M | 9.65M | 5.05M | 2.67M | 2.31M | 1.31M | 660K |
| EBIT | 1.14M | 2.31M | -2.1M | -5.58M | -21.01M | 50K | -15.45M | 15.63M | 13.08M | 13.11M |
| Net Interest Income | 0 | 0 | 13.16M | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Income | 0 | 0 | 13.16M | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Income/Expense | 15.02M | 13.39M | 13.16M | 10.42M | 555K | -2.5M | 236K | -176K | -746K | 1K |
| Pretax Income | 12.79M | 15.7M | 11.05M | 4.84M | -20.45M | -2.45M | -15.21M | 15.45M | 13.08M | 13.11M |
| Pretax Margin % | 3.08% | 3.81% | 3.15% | 1.55% | -6.59% | -1.16% | -13.67% | 13.06% | 14.24% | 18.54% |
| Income Tax | 7.51M | 6.03M | 7.01M | 6.6M | 8.76M | 5.25M | -2.61M | 4.64M | 3.85M | -76K |
| Effective Tax Rate % | 58.7% | 38.42% | 63.45% | 136.48% | -42.83% | -214.03% | 17.18% | 30.05% | 29.47% | -0.58% |
| Net Income | 5.28M | 9.67M | 4.04M | -1.76M | -29.21M | -7.7M | -12.6M | 10.81M | 9.23M | 13.18M |
| Net Margin % | 1.27% | 2.35% | 1.15% | -0.56% | -9.41% | -3.64% | -11.32% | 9.13% | 10.05% | 18.65% |
| Net Income Growth % | -51.54% | 139.25% | 328.95% | 93.96% | -279.4% | 38.88% | -216.58% | 17.11% | -30.01% | - |
| Net Income (Continuing) | 5.28M | 9.67M | 4.04M | -1.76M | -29.21M | -7.7M | -12.6M | 10.81M | 9.23M | 13.18M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 0.06 | 0.11 | 0.05 | -0.02 | -0.42 | -0.13 | -0.28 | 0.22 | 0.18 | 2.40 |
| EPS Growth % | -55.5% | 117.82% | 314.89% | 94.4% | -223.08% | 53.57% | -227.27% | 22.22% | -92.5% | - |
| EPS (Basic) | - | 0.11 | 0.05 | -0.02 | -0.42 | -0.13 | -0.28 | 0.22 | 0.18 | 2.40 |
| Diluted Shares Outstanding | 84.68M | 86.89M | 79.97M | 75.19M | 69.2M | 58.66M | 44.74M | 50.23M | 50.83M | 5.5M |
| Basic Shares Outstanding | 84.68M | 84.54M | 77.47M | 75.19M | 69.2M | 58.66M | 44.74M | 50.23M | 50.83M | 5.5M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | 18.51% | - | 23.01% |
Client concentration and margin compression
According to recent financial disclosures, GDYN's year-over-year revenue growth has decelerated significantly from a peak of 28.5% in 2024Q4 to a modest 3.7% in 2026Q1, suggesting that the company's previous high-growth phase is encountering substantial friction within its core retail and technology client verticals.
The sharp decline in top-line expansion suggests that the company's reliance on discretionary IT spending is becoming a liability in the current macro environment. Investors should monitor whether this deceleration reflects a structural saturation of their niche engineering services or merely a temporary pause in client project cycles.
As reported in quarterly filings, Grid Dynamics' gross margin has compressed from a high of 37.4% in 2024Q3 to 34.8% in 2026Q1, indicating that the firm is struggling to maintain pricing power amidst rising costs for specialized technical talent in its global delivery centers.
The inability to sustain gross margins above the 35% threshold suggests that the company lacks the necessary pricing leverage to offset wage inflation. This margin erosion appears to be a fundamental challenge, as the firm attempts to balance competitive compensation with the need to maintain profitability in a high-cost labor market.
Based on the company's income statements, operating income has fluctuated into negative territory, reaching -$3.7 million in 2026Q1, which demonstrates that SG&A expenses are currently scaling faster than gross profit and preventing the realization of meaningful operating leverage for the business.
The persistent volatility in operating income suggests that the company's corporate infrastructure is not yet optimized for its current revenue scale. Investors should investigate whether the elevated SG&A levels are a result of necessary strategic investments or an inability to control overhead costs during periods of slower growth.
Analysis of recent SEC filings reveals that stock-based compensation remains a significant non-cash expense, frequently exceeding $8 million per quarter, which consistently masks the underlying operational profitability and complicates the assessment of true GAAP earnings for the firm's shareholders.
The recurring reliance on stock-based compensation as a primary component of the cost structure warrants caution, as it suggests that reported net income may not accurately reflect the cash-generating capacity of the business. This practice appears to dilute shareholder value while simultaneously obscuring the true cost of retaining elite engineering talent.
Data from the last ten quarters suggests that the company's transition to a near-zero operating margin environment may indicate a fundamental shift in the business model, raising concerns about whether the firm can achieve sustainable profitability without a significant pivot in its service delivery strategy.
Short-term volatility in net income, coupled with the recent trend of negative operating margins, suggests that the company's current path may be unsustainable if revenue growth does not re-accelerate. Investors should monitor the risk that the firm's specialized engineering model is becoming commoditized, thereby forcing it to compete on price rather than technical differentiation.
Quick answers to the most common questions about buying GDYN stock.
For fiscal year 2025, Grid Dynamics Holdings, Inc. (GDYN) reported total revenue of $411.8M. This represents a 482.6% increase compared to $70.7M in 2017.
Grid Dynamics Holdings, Inc. (GDYN) is profitable, generating $9.7M in net income for the fiscal year ending 2025 with a net profit margin of 2.3%.
Grid Dynamics Holdings, Inc. (GDYN) reported an operating income of $2.3M, resulting in an operating profit margin of 0.6%. This margin reflects the operational efficiency of the business before interest and taxes.
Grid Dynamics Holdings, Inc. (GDYN) generated $142.3M in gross profit for the year, representing a gross profit margin of 34.6%. This demonstrates the company's core pricing power and production efficiency.