Grid Dynamics Surges Over 33% on Record Revenue and a 20% EBITDA Margin as AI Reaches 31% of Sales

Grid Dynamics (GDYN) shares surged more than 33% on Oct. 30 after the digital engineering firm reported record third-quarter revenue of $114.3 million and record non-GAAP EBITDA of $22.9 million. Non-GAAP earnings of $0.18 per share topped the roughly $0.12 to $0.13 analysts expected, and management said AI-related work, now 31% of revenue, continues to grow more than 45% a year. The jump followed an 8% gain in the regular session on Oct. 29, when the stock closed near $9.49, according to market data.

Results against last year

Non-GAAP EBITDA rose about 80% from a year ago on revenue growth of 9.7%, and non-GAAP EPS doubled, by our calculation. The gap shows how much of the quarter came from margin expansion rather than sales growth. In his comments, CEO Leonard Livschitz said the margin gains reflect "substantial enhancements to our business model, not a one-time event."

AI is now almost a third of revenue

AI revenue made up 31% of the total and has grown more than 45% from a year earlier for three straight quarters. Management said on the call it expects the AI practice to approach or exceed 40% of revenue over time, so overall growth should increasingly follow it. Examples cited included a payments platform that cut screening time per transaction by about 70% and an AI workspace used daily by more than 180,000 bank employees. For how AI demand is showing up in larger cloud results, see our Alphabet cloud earnings article and Microsoft earnings article.

Where the revenue comes from

Technology, media and telecom was the largest vertical, driven by the company's largest technology customers and new customers, while retail growth came from specialty retailers.

The outlook is flat

Guidance implies a step back from the record margin, and management said on the call it expects healthy double-digit growth in 2027 and plans larger acquisitions. Several risks stand out: customers are concentrated, with the top five accounting for about 45% of revenue, up from about 40% a year ago, and headcount fell about 8% to 4,559 from 4,971 a year earlier, by our calculation, so growth depends on productivity gains from AI-assisted delivery.

Cash and buybacks

Grid Dynamics held $304.3 million in cash and equivalents at quarter-end, down from $342.1 million at the end of 2025. It repurchased 5.3 million shares for $35.5 million in the first nine months under a $50 million program, an average of about $6.70 a share, by our calculation, well below the prior close.

What it means

The report shows a services firm converting AI demand into profit faster than revenue. A move of more than 33% on a roughly $10 stock reflects how low expectations were and how large the margin change was. The question now is whether margins hold near 20% once the benefits of the new delivery model are in the base, and whether revenue growth can accelerate beyond the high single digits.

Sources: Grid Dynamics' third-quarter 2026 results release (SEC filing, Oct. 29, 2026) and earnings call remarks. Analyst estimates, share prices and percentage moves are from market data and will change. This is informational, not a recommendation to buy or sell.