Grid Dynamics Holdings, Inc.

Good afternoon, everyone. Welcome to Grid Dynamics' fourth quarter and full year 2024 Earnings Conference Call. I'm Cary Savas, Director of Branding and Communications. At this time, our participants are in listen-only mode. Joining us on the call today are CEO Leonard Lifshitz, CFO Anil Dharadla, COO Yuri Grislov, and SVP Americas Vasily Sizov. Following the prepared remarks, we will open the call to your questions. Please note that today's conference call is being recorded. Before we begin, I would like to remind everyone that today's discussion will contain forward-looking statements. This includes our business in a financial outlook and the answers to some of your questions. Such statements are subject to the risks and uncertainty as described in the company's earnings release and other filings with the SEC. During this call, we will discuss certain non-GAAP measures of our performance. GAAP to non-GAAP financial reconciliations and supplemental financial information are provided in the earnings press release and the 8-K filed with the SEC. You can find all the information I just described in the Investor Relations section of our website. I now turn the call over to Leonard, our CEO.

Thank you, Kerry. Good afternoon, everyone, and thank you for joining us today. I'm delighted to share that Green Dynamics delivered another strong quarter, exceeding our own outlook and Wall Street expectations on revenue and non-GAAP EBITDA. Green Dynamics revenue and profitability was the highest in a company's history, and in the fourth quarter we achieved an important milestone of $100 million revenue. These record-breaking results were fueled by contributions from both new and existing clients. To put it in perspective, when we went public in early 2020, Our annual revenue was in the $100 million range, and we achieved it now just in one quarter. I'm proud of this milestone, and I thank you, global team, for the numerous efforts and unwavering dedication. Coming to the demand environment, we saw improvements across our customers and industry verticals in the fourth quarter. This has been a consistent pattern for our company over the past several quarters and we anticipate it will carry forward in 2025. Furthermore, the foundations of our business model are well intact and our long-term targets for growth, profitability and technical leadership remain unchanged. In Q4 and into Q1 2025, we are seeing a continuation of improving trends in booking and pipeline. In fact, we reached some of the highest levels of these metrics since post-COVID revenue acceleration in 2021, indicating robust demand for our services. In addition to growth, our new customers were witnessing new deal activity within existing customers across industry verticals. Partnerships are also playing a pivotal role in our growth strategy with a focus on hyperscalers. After setting record levels in second and third quarter, the company once again attained its highest ever billable engineering headcount by the end of Q4. a leading indicator of future growth. And we achieved that before factoring in contribution from recent acquisitions. Additionally, in the fourth quarter, we witnessed the highest levels of open engineering positions during the last three years. Customers, both existing and new, are contributing to our strong results. At our top customers, we provide a significant proportion of our revenues, which we continue to execute exceptionally well. Additionally, in the fourth quarter, we signed three notable enterprise clients. First one is related to the Motiva industry. The second one is one of the largest global auction company. And the third one is one of the world's largest grocery retail group. Now shifting our focus to AI initiatives. I'm pleased to share that our AI capabilities are gaining strong momentum across our customer base. We have significantly expanded our AI portfolio, offering tailored solutions and services designed specifically for Fortune 1000 companies across diverse industries. These solutions aim to drive both revenue growth and operational efficiency for our enterprise clients. On the revenue side, we are enhancing customer experiences and optimizing marketing, pricing and product strategies. On the cost side, our focus remains on improving efficiency and advancing enterprise knowledge management. There are several reasons to be optimistic in 2025. Improving trends in the demand, growth in our existing new customers, growth in our hyperscale partnership business, and increasing demand for IT partners with strong technology focus are just a few examples of why we believe 2025 will be a good year. Given our incremental confidence, we are providing a full year outlook. For 2025, we expect our revenues to be in the range of $415 to $435 million with a potential growth of 20% plus over 2024. To achieve our 2025 growth targets, we have identified five priorities to support our GigaCube strategy. First, leveraging our strengths in data and AI to enhance productivity across client business processes. Second, increasing the portfolio of accelerators and technological artifacts to address industry-specific business needs. Third, increasing industry diversification by enhanced focus in verticals such as finance, manufacturing, pharma, and healthcare. Fourth, ensuring our Follow the Sun strategy provides global support to our clients. And finally, fifth, leveraging our strong relationship with our partners and new and existing customers. To talk more about these five priorities of 2025, let me hand it over to our COO, Yuri Grislov. Yuri?

Thank you, Leonard. Let's review our priorities in more detail. First, I'm pleased to share that our AI capabilities are gaining strong momentum across our customer base. We have significantly expanded our AI portfolio, offering tailored solutions and services designed specifically for Fortune 1000 companies across diverse industries. In Q4, we identified 130 AI opportunities, a 30% increase over the third quarter. This growing demand reflects the changing expectations of customers with AI-based systems becoming increasingly prevalent in both consumer and enterprise environments. Our top AI initiatives include search, agentic systems, and supply chain optimization. As 2025 unfolds, we expect the pipeline we've developed over the past couple of quarters to convert into meaningful projects. Second, expanding our technology offerings. Our portfolio continues to diversify, driven by our deep understanding of customer needs and aspirations. Our core strengths in data and AI, digital engagement platforms, and modern application development remain highly valued by our customers and align closely with their strategic priorities. Our CTO organization continues to develop innovative accelerators that shorten sales cycles and improve customer speed to value. This investment in our technology portfolio positions us well as enterprises increase their digital transformation investments. Third, industry diversification. Our capabilities are in high demand across verticals. This in turn gives us the opportunity to expand beyond our established industries such as TMT, retail and CPG. We achieve this organically or through acquisitions. In the fourth quarter of 2024, we acquired UK-based Juxt, elevating our industry expertise in banking and financial services. Their focus on risk platforms, structured products, equity derivatives and financial reporting is highly complementary to our current offerings. Since acquiring Juxt, several global banks based in the US have expressed interest in working with us and we expect those opportunities to convert in 2025. Fourth, our Follow the Sun strategy. This continues to be our guiding principle, enabling uninterrupted around-the-clock client service. In just three years, we have expanded our geographic footprint substantially, and I am proud of our ability to serve our customers across 19 countries spanning North America, Europe, and India. We are committed to investing in our engineers' skills and knowledge globally. We have launched a comprehensive AI training program that includes both introductory and advanced tracks along with partnership-centric training. Thousands of our engineers are currently participating in this program and we're excited to see the innovative solutions they will develop as they apply their AI skills in billable roles. Since launching operations in India three years ago, the country has become a top three delivery location for the company. Most of our efforts in India are centered on supporting US businesses, and we continue to work closely with many global captive centers across industry domains. In the fourth quarter, we set up an AI innovation team to support a global financial client and expanded the team to support a global credit agency client. Argentina-based mobile computing acquired in October of last year also enhanced our Follow the Sun capabilities. Several US-based customers have already engaged us to provide engineering skills from Argentina and we expect to significantly scale operations in 2025. By adding this talented team in Argentina, our clients now have expanded options in the Americas, complementing our established presence in the United States, Mexico, and Jamaica. Fifth, our partnerships. In 2024, 18% of our total revenue was driven by partnerships, with hyperscalers playing a significant role. In 2025, we expect our hyperscale partnerships to continue growing significantly. Our confidence in 2025 is driven by three noteworthy trends. First, our commitment to technology innovation and engineering excellence has resulted in greater appreciation by global enterprise customers. This has resulted in grid dynamics being chosen by many of our partners' Tier 1 customers. second our partner relationships are evolving we are now more engaged in strategic discussions with senior management at our key partners and third at an operational level we have enhanced collaboration between the sales and marketing teams at great dynamics and our partners all of this has translated into more opportunities for our entry into new global projects and programs across industry verticals During the fourth quarter, there were several notable client achievements and updates. Let me now hand it over to our SVP Americas, Vasily Sizov.