Grid Dynamics Holdings (NASDAQ: GDYN) reported second-quarter FY26 revenues of $108.2 million, surpassing the high end of its guidance range of $106.0 million to $108.0 million. The results were anchored by a structural shift in its business mix, with artificial intelligence (AI) revenues crossing 30% of total company revenue for the first time, reaching 30.7%. This milestone signals that the company’s strategy to transition enterprise AI workloads from pilots to production is gaining significant traction among its Fortune 1000 clients.

Non-GAAP net income rose to $9.0 million, or $0.11 per diluted share, up from $8.3 million, or $0.10 per share, in the second quarter of 2025. GAAP net income was $2.9 million, or $0.03 per share, compared to $5.3 million, or $0.06 per share, in the prior year period. The divergence between GAAP and non-GAAP metrics highlights the impact of non-cash items and restructuring costs on reported profitability, while the underlying operational performance showed improvement through disciplined cost control and productivity gains from its AI-Native Delivery model.

Vertical Performance

The Technology, Media and Telecom (TMT) vertical emerged as the principal growth driver, contributing 31.8% of total revenues. TMT revenues increased 36.4% year-over-year and 11.7% sequentially, fueled by strong demand from the company’s largest technology customers. Retail remained the second-largest segment, accounting for 26.5% of revenues, supported by robust demand from key accounts. The Finance vertical contributed 22.9%, while Consumer Packaged Goods (CPG) and Manufacturing represented 10.9%. Healthcare and Pharma, along with Other verticals, made up the remaining 7.9% of the total.

Financial Highlights

Total headcount decreased to 4,838 as of June 30, 2026, down from 5,013 in the prior year quarter, reflecting ongoing efficiency initiatives. Cash provided by operating activities for the six months ended June 30, 2026, was $14.5 million, compared to $23.7 million in the same period last year. Cash and cash equivalents totaled $298.4 million at the end of the quarter, a decrease from $342.1 million at the end of FY25.

GAAP gross profit was $39.6 million, or 36.6% of revenues, an expansion from 34.1% in the second quarter of 2025. Non-GAAP gross profit stood at $40.0 million, or 36.9% of revenues, compared to 34.7% in the prior year. Non-GAAP EBITDA reached $14.7 million, up from $12.7 million in the second quarter of 2025.

What the Numbers Show

The surge in AI revenue to 30.7% is not merely a top-line metric but indicates a deepening of client relationships in high-value sectors. Leonard Livschitz, Chief Executive Officer, noted that Technology and Financial services now define the most strategic customer relationships, precisely where AI adoption is moving fastest. The addition of Ekumen has further strengthened Grid Dynamics’ Physical AI capabilities, providing end-to-end depth from robotics software to enterprise-scale deployment. This strategic focus, combined with margin expansion commitments, suggests that the company is successfully leveraging its AI-native delivery model to improve profitability while scaling complex enterprise solutions.

Grid Dynamics Holdings (NASDAQ: GDYN) has reaffirmed its fiscal year 2026 sales guidance, projecting revenue between $435.000 million and $465.000 million. The updated outlook matches the company’s prior expectations and aligns closely with the market consensus estimate of $438.918 million, signaling stability in the firm’s demand visibility for the period.

The affirmation indicates that management sees no material deviation from its earlier forecasts despite broader market dynamics. By keeping the guidance range unchanged, Grid Dynamics suggests that its order book and client engagement levels remain on track to support the projected revenue band.

Guidance Details

The following table outlines the key figures from the latest update:

What the Numbers Show

The midpoint of Grid Dynamics’ guidance range is $450.000 million, which exceeds the market estimate of $438.918 million by approximately $11.082 million. This divergence suggests that the company’s internal view of demand is slightly more optimistic than the consensus analyst expectation, or that the market estimate may be anchored to a more conservative baseline within the disclosed range.