Grid Dynamics Holdings, Inc.

Good afternoon, everyone. Welcome to Grid Dynamics' first quarter 2025 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, CTO Eugene Steinberg, and SVP Americas Vassily 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. gap to non-gap financial reconciliations, and supplemental financial information are provided in the earnings press release and the 8K 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. That was our second consecutive quarter of $100 million in quarterly revenue or more. There were many positive trends, several of which I will highlight on the call today. I'm sure many of you are interested in knowing how the current macro environment is impacting our company. While you're all well aware of the risks and uncertainties with the global economy, in the first quarter, our performance was largely driven by customer-specific trends. In other words, the patterns in the demand from our customers and the resulting monthly billable headcount shaped the quarter, with the ongoing tariff issues having minimal impact. Our laser focus on technology and engineer excellence continues to ensure our success with our clients. Furthermore, the $100 million quarterly milestone would not have been possible without the dedication of our global teams. I am deeply grateful for their outstanding efforts and incredibly proud of what we have achieved together. Now, let me provide you with some granular commentary around the demand environment. Every year, the first quarter is influenced by a degree of seasonality as our customers are establishing their yearly spend. Consequently, we typically start off slow in January. As the quarter progresses, business trends improve. Contrary to historic trends, we start in January strong in terms of billable positions. That said, in February, we witnessed some changing priorities as the start of the year impacted some of the clients. In March, we signed several sizable new deals with existing and new customers. These deals spanned across industry verticals that included automotive, financial, and CPG, and these included engagement with Agentic AI, cloud migration, and supply chain applications. Also, for the first time in the company history, three of our top 10 customers are in the financial industry. After setting record levels in late 2024, the company once again attained its highest ever billable engineer headcount, a leading indicator of future growth. Our second quarter outlook reflects these trends. I am pleased to share that our acquisitions are performing well. As I mentioned previously, with both acquisitions, we are anticipating realizing synergies more quickly than with any of our past acquisitions, and I am happy to report that we are well on track in delivering against the goal. Argentina-based mobile computing acquired in October of last year enhanced our Follow the Sun capabilities. In the first quarter, we enhanced our sales team and talent acquisition teams to support the incremental demand. Additionally, in the quarter, we successfully integrated engineering teams to support our enterprise accounts based out of the United States. UK-based JOXT, which we acquired in September of last year, elevated 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 in financial services. Since acquiring JOXT, several global banks based in the US have expressed interest in working with Grid Dynamics. In the first quarter, we initiated several new projects across multiple global banks. We expected the customer to continue ramping their business throughout 2025. Coming to AI, our AI initiatives continue to gain significant traction across our customer base, with our pipeline of opportunities growing steadily quarter over quarter. We're seeing a clear shift from proof of concept to enterprise-scale implementations that deliver measurable business outcomes. Our primary focus areas include AI-based search solutions that consistently open doors to new accounts. A genetic AI platform being developed for clients in consumer goods and fintech industries, comprehensive knowledge systems for enterprise knowledge management, and AI-enabled productivity tools that enhance software development capabilities. These implementations underscore our ability to move clients beyond basic AI applications to sophisticated solutions that deliver substantial business impact in area ranging from sales enablement to supply chain optimization and development productivity. Our CTO, Eugene Steinberg, who is on the call today, will provide you more color. A key element of our 2025 strategy is to ensure that our investments are aligned to the changing needs of the industry. These investments will ensure that our technological leadership is maintained. This includes focused CTO-driven teams creating innovative artifacts, training engineers for specific flavors of AI implementation, and newer training resources with our great university. I'm happy to report that for 2025, we're maintaining our full year revenue outlook that we provided to you all in February. We expect the second half to be seasonally stronger in comparison to first half and expect the ramp up of several deals signed recently to assist us in achieving our outlook. We acknowledge the ongoing uncertainty related to the macro environment. We are successfully navigating through the near-term volatility and the strength of our business is reflected in our Q1 results. In the quarter, there are several trends and I want to share some of the notable ones. Partnerships. In the first quarter, partnership influence revenue represented 16% of our total revenue, and we anticipate this contribution to accelerate throughout the remaining quarters of 2025. Mirroring our historic trends. We're experiencing increased traction with all hyperscalers, notably with Google. Our pipeline is robust and includes significant migration and modernization programs, as well as a growing number of data and AI projects. Our signature sponsorship of the Google Next event proved highly successful. We engaged in several conversations with Google, clients and prospects, which we expect to translate into expanded revenues. Number two, European business. We successfully completed B2C multi-brand digital commerce re-platforming for the European brands of a major global automotive part distributor. We successfully launched a GENTI code review and elaboration services, as well as a conversation AI as a part of the major internal development productivity initiative at the large investment bank. At a leading global HR solution provider, we are evaluating readiness to democratize data for business-driven AI initiatives. At a leading meal preparation company, we continue to modernize their operational systems, including the customer service platform and security solutions in collaboration with one of the hyperscalers. Number three, India expansion. India is one of the top locations and it continues to attract talent as our other European locations, especially NAI, GenAI data, cloud and cybersecurity. India serves many of our key enterprise customers across technology, CPG, retail, healthcare, and financial services industry. India has now emerged as a hub for multi-agent, multi-modal platform engineering, as demonstrated by recent wins. One of them with a leading multinational beverage company, the other one is a well-known leader in the fintech industry. As part of our global initiative, India has upskilled a majority of its engineers and delivery leaders in AI-assisted accelerated delivery with expertise across the entire value chain of agentic digital platform engineering at enterprise scale. Number four, internships. Our internship program gained strong momentum in the first quarter. We had a solid performance across all our operating regions. Our internship program typically lasts six months and trained interns in solving real-world problems. In the first quarter, out of 11,000 applications received, we selected several hundred gifted individuals. Additionally, many of the interns graduating from our training were placed in available roles at the clients. Now, let me turn over the call to Vasily, who will talk about notable projects during the quarter.

Thank you, Leonard. I'm excited to share some key highlights from the quarter that showcase the impact of our work. First, for a leading global technology company, Grid Dynamics developed a project intelligence tool that automatically consolidates information from various sources into a centralized platform. This tool streamlines project execution by providing a single intuitive dashboard with real-time consolidated insights. Designed to support over a hundred of internal teams, the tool enables faster issue resolution, accelerates time to market, and enhances overall product quality. For a leading luxury retail group, Grid Dynamics transformed their search experience by implementing Google Vertex AI Search. This innovative solution delivered immediate and significant improvements across key business metrics. Conversion rates increased by 9%, click-through rates by 21%, orders by 3%, and revenue per visit by 9%. Based on these impressive results, we anticipate significant interest in this solution from other clients within our portfolio. For a leading payments technology company, we modernized a costly legacy banking integration system by transforming it into a cloud-native microservices platform on Microsoft Azure. This modern architecture significantly reduces the total cost of ownership while delivering the scalability and resiliency demanded by today's banks. With this new platform, continuous deployment pipelines now push new features to production without downtime enabling the business to keep pace with evolving market demands and regulatory requirements. Additionally, we estimate that our solution reduced the integration cycle duration by 90%, therefore dramatically accelerating customer onboarding and driving faster revenue generation. For another client, a leading US specialty retailer with over 2,000 stores, we partnered to build a cutting-edge generative AI platform. Specifically, we developed a retrieval augmented generation pipeline powered by Google Verdicts AI. That solution analyzes prior clicks, surveys, and local inventory to recommend the ideal product and bundled offers. We estimate that this platform will drive up to a 10% increase in user engagement and up to a 3% boost in revenues. Now, let me turn this call over to our Chief Technology Officer, Eugene Steinberg. Eugene?