Highlights

  • Third-quarter 2026 Revenue rose 9.7% year over year to US$114.3 million, above the top of company guidance.
  • Non-GAAP EBITDA reached US$22.9 million, or 20.0% of revenue, compared with 12.2% in the prior-year quarter.
  • AI-related work contributed a record 31% of quarterly revenue, extending growth above 45% for three straight quarters.
  • The company repurchased 5.3 million shares for US$35.5 million during the first nine months of 2026.

Wider margins, not just higher sales, defined the third quarter for Grid Dynamics Holdings, Inc. (NASDAQ:GDYN). The San Ramon, California-based technology services company reported record revenue of US$114.3 million for the three months ended 30 September 2026, while its gross Margin crossed 40% and non-GAAP EBITDA margin reached 20%.

Chief Executive Officer Leonard Livschitz called the quarter pivotal, noting that the company met its 300-basis-point margin improvement commitment one quarter ahead of schedule. He attributed the gains to structural changes in the Business model rather than a one-time effect.

Record Revenue and Sharply Higher Profitability

Q3 2026 revenue increased 9.7% from US$104.2 million a year earlier and 5.7% from the previous quarter, exceeding the company's guidance range of US$112.0 million to US$114.0 million. For the nine months to 30 September 2026, revenue reached US$326.6 million, compared with US$305.7 million a year earlier.

GAAP gross margin improved to 40.3% from 33.3%, and GAAP income from operations was US$9.1 million against a small operating loss in Q3 2025. GAAP Net Income rose to US$6.2 million, or US$0.08 per diluted share, from US$1.2 million. Non-GAAP net income was US$14.7 million, or US$0.18 per diluted share, while non-GAAP EBITDA climbed to US$22.9 million from US$12.7 million. Results included US$2.0 million of restructuring costs in the quarter.

Technology and Retail Clients Drive Growth

Technology, media and telecom remained the largest vertical at US$37.0 million, or 32.3% of revenue, up 29.3% year over year. Retail contributed US$31.1 million, up 13.3%, while finance generated US$25.7 million, broadly flat on the prior year. CPG and Manufacturing added US$12.5 million, or 10.9% of the total. AI work accounted for a record 31% of total revenue.

The company also widened its services. On 27 October 2026, it launched a business process consulting practice aimed at linking AI Investment with business results, and on 15 October 2026 it announced that Sysco had named it Partner of the Year. Total headcount stood at 4,559 at quarter end, down from 4,971 a year earlier.

Buybacks, Cash Position and Fourth-Quarter Outlook

Grid Dynamics repurchased 0.9 million shares for US$6.7 million during Q3 2026 under its US$50 million program. Cash and cash equivalents were US$304.3 million at 30 September 2026, compared with US$342.1 million at 31 December 2025, and nine-month Operating Cash Flow was US$30.5 million. Weighted average diluted shares fell to 81.9 million in the quarter from 85.8 million a year earlier.

For Q4 2026, management expects revenue of US$113.5 million to US$115.5 million and non-GAAP EBITDA of US$20.0 million to US$22.0 million, with a diluted share count of 82 million to 83 million. The company did not issue GAAP net income guidance.