Grid Dynamics Holdings, Inc. reported first‑quarter 2026 results, with total revenue of $104.1 million, down 3.7% from $106.2 million in Q4 2025 but up 3.7% from $100.4 million in Q1 2025. AI‑driven revenue reached $30.4 million, representing 29.3% of total revenue, a 60% year‑over‑year increase from $19.1 million in Q4 2025 and up from 25% of revenue in the same period a year earlier.
The AI mix was driven by strong demand in the Technology, Media and Telecom (TMT) and Finance verticals, which together accounted for 53% of total revenue. TMT contributed 29.5% of revenue, while Finance contributed 23.5%. Partnership‑influenced revenue, largely from hyperscaler collaborations, made up 19.1% of total revenue.
Margin compression was evident, with non‑GAAP gross margin falling to 35.3% from 37.4% in Q1 2025. Management attributed the decline to FX headwinds that produced a $1.2 million negative EBITDA impact and higher cost structures across delivery locations, while noting that investment in new AI capabilities and a higher proportion of lower‑margin services also weighed on margins. Non‑GAAP EPS of $0.09 missed analyst forecasts by a penny, reflecting the margin pressure.
Management reiterated a full‑year revenue target of $435 million to $465 million and a Q2 revenue outlook of $106 million to $108 million. The company also maintained its 2026 margin growth target of 300 basis points, citing the AI‑native GAIN platform model as a key driver of future margin expansion.
CEO Leonard Livschitz said, "Last quarter, we called 2026 a pivotal year for the accelerated adoption of our AI offerings. Our first quarter results are clear validation that our AI transformation is working, with AI revenues reaching 29.3% of total revenues." He added, "For the first time, our top five accounts are entirely outside of retail, reflecting meaningful diversification into technology and financial services, sectors where AI adoption is accelerating and our capabilities are highly differentiated." CFO Anil Cheriyan noted, "In the first quarter, there was a negative impact from FX fluctuations on a year‑over‑year basis. We are exposed to a currency basket across Europe, Latin America, and India." He also stated, "Non‑GAAP EBITDA was $12.5 million, or 12% of revenues and was at the midpoint of our $12 million to $13 million guidance range." Global Head of Partnerships and Marketing Rahul Bindlish said, "Our partnership‑influenced revenues reached 19.1% of total revenues, with the majority coming from the top three hyperscalers and a meaningful proportion derived from AI engagements."
Investors responded positively to the results, citing the strong AI revenue growth, the shift of top accounts away from retail, and the continued partnership momentum with hyperscalers as key factors supporting the company's strategic transition to AI‑centric services.
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