Grid Dynamics reported record third-quarter 2026 revenue of $114.3 million, slightly above the high end of its July forecast. The enterprise technology and digital-transformation company also reported sharply higher year-over-year profit margins and said AI-related work reached 31% of revenue.
Revenue grew 9.7% from a year earlier and 5.7% from the second quarter. Management said the company entered the final quarter of the year with momentum and described the outlook for 2027 as positive, but the results provided no specific fourth-quarter or full-year forecast.
Key details
- Revenue topped guidance: Third-quarter revenue of $114.3 million exceeded the company’s forecast range of $112 million to $114 million.
- AI is a growing part of the business: AI revenue made up 31% of total revenue. The company said AI revenue had grown more than 45% year over year for three consecutive quarters. It also said AI programs were in production at large enterprise customers.
- Technology, Media and Telecom led growth: The sector generated 32.3% of revenue, up 29.3% year over year and 7.6% sequentially. Grid Dynamics attributed the increase to stronger demand from major technology customers and new customers.
- Retail was the second-largest vertical: Retail contributed 27.2% of revenue, up 13.3% year over year and 8.5% sequentially, with demand from specialty retailers supporting growth.
- Finance grew sequentially: Finance accounted for 22.5% of revenue, up 3.9% from the second quarter, supported by demand from global capital-markets customers.
- Other business lines: Consumer packaged goods and manufacturing represented 10.9% of revenue, up 5.8% sequentially. Healthcare and pharmaceuticals contributed 1.8%, and other business contributed 5.3%.
- Gross margins improved substantially: GAAP gross profit was $46.1 million, or 40.3% of revenue, compared with $34.7 million, or 33.3%, a year earlier. On a non-GAAP basis, gross profit was $46.5 million, or 40.6% of revenue, versus $35.2 million, or 33.8%.
- Net income rose: GAAP net income increased to $6.2 million, or 8 cents per diluted share, from $1.2 million, or 1 cent per share, in the third quarter of 2025. Non-GAAP net income was $14.7 million, or 18 cents per diluted share, compared with $8.2 million, or 9 cents, a year earlier.
- Share count was lower: The diluted weighted-average share count was 81.9 million, down from 85.8 million a year earlier.
What changes for investors
The quarter paired moderate revenue growth with a marked improvement in gross margins and earnings. AI-related work is now a sizeable part of revenue, while the largest reported growth contribution came from Technology, Media and Telecom. Management said the company reached a 20% EBITDA margin and exceeded its 300-basis-point margin commitment a quarter earlier than planned, describing the improvement as the result of business-model changes rather than a one-time event.