Record Revenue of $47.7 million, up 21.8% sequentially and 113.1% year-over-year
Grid Dynamics Holdings, Inc. (Nasdaq: GDYN) (“Grid Dynamics”), a leader in enterprise-level digital transformation, today announced results for the second quarter ended June 30, 2021.
We are very pleased to report the highest quarterly revenue in the company’s history. Our revenue of $47.7 million in the second quarter 2021 was up 21.8% on a sequential basis and 113.1% on a year-over-year basis. After factoring out revenues of $9.3 million from our recent acquisitions of Daxx Web Industries B.V. (“Daxx”) and Tacit Knowledge (“Tacit’), our second quarter revenue of $38.4 million grew 17.7% on a sequential basis and was an all-time high for the company. As we enter into the second half of 2021, we continue to see strong demand and are confident of our third quarter and full year 2021 outlook as customers continue prioritizing their digital transformation initiatives by seeking our expertise around cloud transformation, data science and machine learning.
Our non-retail industry verticals represented 73.3% of revenue in the second quarter and grew 15.4% on a sequential basis and 90.3% on a year-over-year basis. Totaling 33.8% of our second quarter revenue, the Technology, Media and Telecom vertical grew 11.8% on a sequential basis and 34.6% on a year-over-year basis and represented the company’s largest vertical. During the second quarter we had 212 customers, 161 coming from our acquisitions of Daxx and Tacit and the remaining of 51 from our organic business. Of these 51 customers, during the second quarter we added 5 new customers.
“Our second quarter results exceeded our expectations on multiple fronts as we witnessed healthy business momentum across all our industry verticals. In addition to reporting a record quarter on the revenue front, we were able to achieve our long-term targets on the profitability. Since going public in March 2020, we have doubled our revenue, successfully navigated the company through the pandemic, completed two strategic acquisitions, and have announced the redemption of all unexercised public warrants on August 30, 2021. I am very proud of what we accomplished and thank our entire team for their continued hard work in achieving our goals,” said Leonard Livschitz, CEO.
Second Quarter of 2021 Financial Highlights
- Total revenue was $47.7 million, an increase of 21.8% sequentially and 113.1% year-over-year.
- GAAP gross profit was $19.8 million or 41.5% of revenue, compared to GAAP gross profit of $15.3 million or 39.2% of revenue in the first quarter of 2021 and to GAAP gross profit of $8.4 million or 37.5% of revenue in the second quarter of 2020. Non-GAAP gross profit was $19.9 million or 41.8% of revenue, compared to non-GAAP gross profit of $15.4 million or 39.5% of revenue in the first quarter of 2021 and to Non-GAAP gross profit of $8.4 million or 37.8% of revenue in the second quarter of 2020.
- GAAP Net loss attributable to common stockholders was $(1.5) million, or $(0.03) per share, based on 54.4 million weighted-average common shares outstanding, compared to GAAP Net loss attributable to common stockholders of $(2.1) million or $(0.04) per share based on 51.6 million weighted-average common shares outstanding in the first quarter of 2021 and to GAAP Net loss of $(2.2) million, or $(0.04) per share, based on 49.6 million weighted-average common shares outstanding in the second quarter of 2020. Non-GAAP Net income was $6.1 million, or $0.10 per diluted share, based on 61.0 million weighted-average common shares outstanding, compared to Non-GAAP Net income of $3.1 million or $0.05 per diluted share based on 60.2 million weighted-average common shares outstanding first quarter of 2021 and to Non-GAAP Net income of $0.4 million, or $0.01 per diluted share, based on 53.1 million weighted-average common shares outstanding in the second quarter of 2020.
- Non-GAAP EBITDA (earnings before interest, taxes, depreciation, amortization, other income, fair value adjustments, stock-based compensation, and transaction and transformation-related costs), a non-GAAP metric, was $9.7 million, compared with Non-GAAP EBITDA of $5.3 million in the first quarter of 2021 and Non-GAAP EBITDA of $1.2 million in the second quarter of 2020.
See “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Information” below for a discussion of our non-GAAP measures.
Cash Flow and Other Metrics
- Cash provided by operating activities was $6.7 million for the six months ended June 30, 2021, compared to cash used in operating activities of $(0.9) million for the six months ended June 30, 2020.
- Cash and cash equivalents totaled $68.0 million as of June 30, 2021, compared to $112.7 million as of December 31, 2020. This amount does not include $78.3 million in net proceeds received from our recent public offering, which closed on July 6, 2021.
- Total headcount was 2,510 as of June 30, 2021, compared with 1,237 employees as of June 30, 2020.
Financial Outlook
- The company expects revenue in the third quarter of 2021 to be in the range of $50.0 million and $51.5 million. This includes a projected contribution of $11.0 million from Daxx and Tacit.
- Non-GAAP EBITDA in the third quarter of 2021 is expected to be between $8.3 million and $9.3 million.
- For the full year of 2021, revenues are expected to be at least $189.0 million. This includes a contribution of $38.0 million from Daxx and Tacit.
- For the third quarter of 2021, we expect our basic share count to be in the 63.0-65.0 million range and diluted share count to be in the 69.0-71.0 million range.
Grid Dynamics is not able, at this time, to provide GAAP targets for net income for the third quarter of 2021 because of the difficulty of estimating certain items excluded from Non-GAAP EBITDA that cannot be reasonably predicted, such as interest, taxes, other income, fair-value adjustments, and charges related to stock-based compensation expense. The effect of these excluded items may be significant.
Conference Call and Webcast
Grid Dynamics will host a conference call at 4:30 p.m. ET on Thursday, August 5, 2021 to discuss its second quarter financial results. Investors and other interested parties can access the call in the following ways: A webcast of the conference call can be accessed on the Investor Relations section of the Company’s website at https://ir.griddynamics.com/), or by dialing +1(855)327-6837 or +1(631)891-4304 (outside of the U.S.).
A replay will be available approximately one hour after the call on https://ir.griddynamics.com/ or by dialing +1(844)512-2921 or +1(412)317-6671 (outside of the U.S.) and entering the conference ID10015481. The replay will start on August 5, 2021, 7:30 p.m. ET and will be available until August 19, 2021 at 11:59 p.m. ET.
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