Grid Dynamics Q3 Revenue Rises 9.7% as Margins Expand

Grid Dynamics Holdings reported higher third-quarter revenue and a sharp expansion in profitability, as gross margin improved from both the previous quarter and the year-earlier period. Revenue reached $114.3 million in Q3 2026, up 5.7% sequentially and 9.7% year over year, while non-GAAP EBITDA rose to $22.9 million, or 20.0% of revenue.

GAAP gross profit increased to $46.1 million, representing a 40.3% margin. That compared with $39.6 million and a 36.6% margin in Q2 2026, and $34.7 million and a 33.3% margin in Q3 2025. On a non-GAAP basis, gross profit was $46.5 million, or 40.6% of revenue, versus margins of 36.9% in the previous quarter and 33.8% a year earlier.

The digital engineering and technology services company recorded GAAP net income of $6.2 million, equal to 5.4% of revenue, and diluted earnings of $0.08 per share. Non-GAAP net income was $14.7 million, or 12.8% of revenue, with diluted earnings of $0.18 per share. The diluted share count was 81.9 million.

Non-GAAP EBITDA increased from $14.7 million in Q2 2026 and $12.7 million in Q3 2025. Grid Dynamics’ non-GAAP measures exclude items including stock-based compensation, transaction-related costs, restructuring expenses, certain one-time charges and specified non-operating items.

Retail leads a diversified revenue mix

Retail was Grid Dynamics’ largest industry market during the quarter, generating $37.0 million, or 32.3% of revenue. Technology, media and telecom contributed $31.1 million, or 27.2%, while finance accounted for $25.7 million, or 22.5%.

Consumer packaged goods and manufacturing produced $12.5 million, representing 10.9% of revenue. Other business contributed $6.0 million, or 5.3%, and healthcare and pharmaceuticals generated $2.1 million, or 1.8%.

Partner-influenced revenue totaled $21.5 million in Q3, equivalent to 18.8% of total revenue. Grid Dynamics highlighted its relationships with Google Cloud, Microsoft, OpenAI, GitHub and other technology platforms as part of its partner-led demand strategy. The company said referrals and expansion within established client accounts remain important sources of business, while its direct outbound pipeline continues to mature.

Enterprise AI remains a central operating focus

Grid Dynamics, which has about 4,600 employees across 19 countries, described its strategy as combining cloud, data and application engineering with AI systems deployed in production. Its work spans AI-enabled customer experiences, data and engineering platforms, employee and back-office automation, and an emerging physical AI practice focused on areas such as robotics, computer vision and digital twins.

The company said growth is generated predominantly by expanding mature client relationships, supplemented by emerging accounts and new-logo wins. It also pointed to vendor-consolidation decisions at several large clients in which Grid Dynamics was retained, presenting those outcomes as evidence of durable customer relationships.

Management’s operating priorities include moving clients from initial discovery and prototyping into broader transformation programs, using reusable technology assets to shorten delivery cycles, and expanding successful projects across additional business units. The presentation did not provide a formal revenue or earnings outlook for a future quarter or full year.

Grid Dynamics cautioned that its outlook is subject to macroeconomic and geopolitical uncertainty, including inflation, recession risk, tariffs and disruptions to global trade. Other disclosed risks include dependence on a limited number of clients and industries, exposure to U.S. customer demand, intense competition, challenges in attracting skilled employees, acquisition integration, cybersecurity incidents and rapidly changing AI technology and regulation. The company also noted that AI could reduce demand for outsourced services or create operational, reputational and liability risks if it is not deployed effectively.