Earnings call transcript Q2 2023

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Bin Chiang

Good afternoon, everyone. Welcome to Grid Dynamics Second Quarter 2023 Earnings Conference Call. I'm Bin Chiang, Head of Investor Relations. At this time, all participants are in listen-only mode.

Joining us on the call today are CEO, Leonard Livschitz; and CFO, Anil Doradla.

we the remarks, questions. for prepared their will call open your Following note recorded. being conference Please is today's

Before I includes earnings the discussion some to will with financial we the that filings and release of contain everyone begin, outlook SEC. uncertainties statements the forward-looking and would your like risks questions. other statements. are answers and company's This the our Such and remind business to to subject today's in described

our will provided discuss filed to certain press During performance. this of supplemental are GAAP SEC. financial measures information release call, in and reconciliations we with the X-K non-GAAP non-GAAP earnings and financial the the

the section You all information can Relations have the of just find described website. Investor in our I

over to Leonard, With I that, our call will now the CEO. turn

Leonard Livschitz

and Good you Bin. us today. everyone, you, joining afternoon, for thank Thank

published have in was significantly guidance quarter you from As seen Grid exceeded Dynamic's second non-GAAP revenue results, range EBITDA expectations. and our our

basis, public income GAAP net we record a on company. Also, achieved a becoming since

are commendable Our un-relentless our and to company's results clients. reflect the commitment

new a past the reflects offering. our noteworthy from won strengths we There were quarters, that logos for theme has including over and contributions meaningful logo couple This been ecosystem. deeper trends, relationships wins, partnership and several of with our quarters recurring the past some the strong of

the business. a interest our across initiative, With our continued GigaCube with KPIs and positively our engagement to clients operationalized Additionally, impact significant company. initiatives on artificial intelligence we many

our macro, opinions unchanged. the On remained have

and we continued During with the recalibration of our quarter, investments. spending priorities of witnessed many clients,

we clients. And to for cost offshore their locations delivery to to continued higher this our have lower in our footprint global locations. transition choice in customers is Also, a of plain locations favor, as from cost projects

with ensured the second the level our discipline our quarter off paid current demand During with profitability. environment and this we aligned quarter, spending

conclusions. third three trends are too. lead play positive These the in We're us quarter to incrementally also witnessing out that trends to the important expected

are customers resets across magnitude the diminishing. our First, of

Second, accounts. across the majority business our we're seeing of stabilization in

and and And are with logos willingness engagements, the needs. our intelligence, their This on transformation new rise. clients clients, existing us forms new activities the finally, on with thirdly, enhanced on digital of of new partnerships, engagements work to artificial both with includes

early the While snapback, and we any in definitive moving commentary leading too the are certainties to incrementally the conservative underlying positive trends we it's Yet, make right persist, demand view. us around our believe in to remain quarter third outlook. direction,

our in efficient Grid reliable highlighted past, the I a stronger economic company is as partner As in of customers' Dynamic's delivering the be objectives out business in cycles, proves to an coming manner.

Also, industry also different opportunity the sales has visible adding and us initiatives. realign city verticals, organizations. We're great new high access witnessing great talent quality both talent provided to our across current organize our as cycle the according economic in GigaCube to and more and a This became includes strengths to across industry. differentiation

includes past There artificial have toward several quarters, positive R&D trends This exciting technology our are the resources invested engineering with and many our with in Over accelerators, artifacts, of new incrementally intelligence couple organization. opportunities AI. building capabilities. we

robust projects a generative in and and portfolio solutions, AI data We're harmonization AI, enterprise capabilities, solutions. including billable clients, Generative AI, broad exponential demos, have been and solutions, and engaged and in our created witnessing center of front currently across AI we're particularly multiple has in range conversational interest of others. a

during currently quarter over nine the and R&D involved enterprise organization AI completed with clients. XX projects we're

prompt application internal management, as and language seven to knowledge are models with support. successful years With As as visualization, a design image our customers on in AI research wealth of based generation large to Grid than Dynamics guided retrieval, reminder, Generative the more partner AI well offering, and and implementations. engagements and we product customer employ

Cloud half and customer Google XXXX with industry the partnership in second implement solutions. global in for position partnership generative partnership wins significant AI innovative incremental Grid of Dynamics' a Dynamics in a announced an to leader of as This result AI. Grid we beyond. develop and quarter, the reflection will is this During Also,

will that Cloud Google Vertex insurance Grid partnership, science services AI, solutions pharma capabilities. leverage significantly generation advanced models incorporates Dynamics and the language foundational and develop With innovative powerful platform industries. life AI and manufacturing a across this expect to we image financial and large accelerate

the continue make On progress. we GigaCube good initiative, to

out operations, a It M&A. marketing, framework billion is $X our lays includes revenue. as for sales, organization As to blueprint that strategic you over all of as company the a well know, GigaCube R&D, involves that parts

our made additions I additions These penetration Pharma will vertical senior sales to some you would exciting our GigaCube In industrial new accelerate initiatives. executive there of and with in trends specialist them. and leader We highlighted sales automotive, quarter, were to and our the like insurance. a some several team. includes This notable share across

logos signed enterprise new in total large This XX. clients. we nine Logo brings momentum. quarter, to In enterprise the added XXXX second the

Additionally, and for Dynamics of recent up confidence we further with in current the large believe environment. from QX competency the is testament acquisition enterprises acquisitions. global new added a Grid We customers our sign client to

health and craft Some a wear and leading and proud American of company, hotel differentiation of very a We're our our global value to our achievements the testament customers. of this chain, change. a North mention hospitality art bring most global ones digital global is to payment a notable company, we consumer a and service company, a include athletic

Delivery location support.

our dedicated our ramp delivery recent At teams to together execution logo more across Moving remains wins, some to locations. able operations, we delivery were and flawless. put global our up quickly

and NextSphere started customers dozen with across our functions. over Mutual operations have in implement choice and synergies Europe, a engineering America, Today, countries swing Central Mobile and of other and North is back-end full India. a to have across integration our a Additionally,

for choice support. strategy sun to fashion diversification our locations engineering Clients the served geographic be an of interrupted clock. around follow clients our in Our enables the support and

European business.

our expanding we across verticals During good the progress with clients. quarter, in made industry European our footprint

company, significant tied initiative automotive specialty major maintenance a and platform. to part involved data wear entire automotive commerce global we're tire another transformation predictive implementing At automotive modernization global digital using composable in and engineering analytics. a their company, we're As a

artificial finally, with images. in company have become and significant With to high-end European-based we're part using description contributor with And generation. Netherlands a product growth in domaining attributes apparel our global and intelligence, also engaged our process truck of manufacturer, a lead

also with they world our solutions. to the that business addition verticals many AI few move real partnership spoke rule I of Cloud In to we're clients with concepts ago, across minutes transformation as generative industry advanced a from working Google

Grid for its advanced been expanding us earned modernization Microsoft, Microsoft recognized future. specialization Dynamics has in with by the relationship Azure membership Our Azure Microsoft AWS and and are program. migration the which of

independence of Chief C-suite. partnerships digital to we Chief Officer, We're and chain, domains. Additionally, in with others. supply deliver enhancing Market number growing across invest continue engaging Product commerce the experience, we vendor value of expecting We're Operating entire marketing, in the Chief and and Officer, Officer,

integrate integration plus manufacturing. such of backend M&A. fintech, With April To acquisition operational acquired as working of of short functions. to the three we months, XX, strategic well. presence acquisition in is Technologies, and a which healthcare, M&A, to report I'm the that remind in happy verticals XXXX, NextSphere were strengthens this able our we time our you,

Dynamics able office. constructed to in the Hyderabad Additionally, we're to employees relocate the Grid new

on start office have an and We're currently Chennai next to synergies across the development expect a in quarters. our working as well. cross-selling customer couple business also in of We base

time as M&A Beyond to the acquisitions, we'll and for robust. provide on updates happy our actively recent working pipeline We're the becomes be opportunities is opportunities multiple right.

As a focuses capabilities, M&A and reminder, clients, key locations. our on delivery

thousands financial notable data access some services projects. platform. the financial Grid offers to with and direct we're During natural innovative piloting At platform delivered firm's knowledge the management an the best management quarter, advisors enterprise firm, languages. wealth Dynamics renowned via AI-based This of

advisors will and Leveraging of to language retrieval personalized and models, productivity clients. platform highly offerings the create augmented help updates generation to and large technology improve their them financial leading

We're This data address fault processing pipelines diverse data signals, play and as technology a usage massive amounts a spending We These such data demographics, new scalability to in more. solution encompassing ensures frequencies, a to crucial executed platform. aspects leading tolerance. role of and growing cloud an global extensive better segmentation a company. pipelines deciles, range of user of migration user successfully

their prominent enable factor shoppers of to the conversion mobile in a uninstalled enhance United and payments, membership-only substantially browse-to-pay the tens in user frictionless by is we security, mobile of app of an experience. the better increase reduced and a States. At chain, resulted in Xx. millions modernized the and app serving effort The Currently, rate

layout or potential bags For a the major satisfaction. for It to brand, customer scan hardware. in time client's deployed items. a modification decrease Once their increase with and shorted stores small and physical significantly labor minimum checkout has solution many tags uses to shopping we store security even XXX-plus their delivered requires to stores, existing orders significantly across that POS CPG costs

With that, Anil, let detail. call in Anil? the over more who will discuss turn QX me to results

Anil Doradla

Good Leonard. afternoon, Thanks, everyone.

million quarter in $XX.X a on negligible. call currency of currency, a were Our it $XX as our May On revenue growth basis, second was in year-over-year million the on movements we that the reported and reiterated within both impacts you provided to range million constant $XX our of to June flat earnings guidance all was and of X.

revenue by On a basis, X.X%. our declined sequential

levels. rationalize as During of headwinds spending our quarter, we customers witnessed the to from some they continued their

others. logo During quarter, revenues the offset from macro-driven caution new contributions

second largest revenues, vertical basis. sequential retail, on our our grew year-over-year increased a quarter, representing the X.X% basis X.X% of During and by a on XX.X%

basis, home areas Within stores, the retail vertical, on a department from improvement, witnessed such retail. growth we and specialty as sequential

represented year-over-year XX.X% at our basis, and XX% continued was sequential by witnessed on offset growth TMT, On quarter of TMT both we a existing sequential X% from revenues, decreased our second new grew a our on vertical, largest of logos. basis, some second large a caution and This basis. customers. by

Here of the verticals. the other of mix revenue are details

on decrease of current and sequential In came some the the manufacturing of a customers, a quarter, Our on their a year-over-year XX% macro CPG and levels basis second to our decline large represented XX.X% environment. on from basis. a of as spending basis sequential our and The readjusted XX.X% year-over-year they revenue.

from X.X% on growth and technology The an our a was strong sequential pharma The And basis. XX.X% customers and logos. on finally, finance financial as customers. quarter driven sequential a XX.X% and The represented of second our well of at sequential came of a healthcare represented revenue of X.X% new by was up other increase combination basis. growth a basis, vertical quarter in revenues, growth XX.X% as the on segments year-over-year

April. in of second was the employees, largely of up the quarter the second we from sequential due in headcount X,XXX, acquisition quarter of exited XXX X,XXX The We X.X% with in NextSphere quarter or up employees first recent of which to from acquired increase X,XXX Technologies, total XXXX. XXXX a and of our

At the the of of the our This was of the the or quarter level same XXX, U.S. first of XXXX, slightly and headcount. total second largely headcount X.X% The X.X% on X.X% locations, end the company's compared of quarter greater year-over-year slight headcount. total quarter. in resulting year-over-year remained driven our from non-U.S. mix decline of decreased was as at by in growth revenue to in a total offshore XXXX percentage

Our In XX.X% the XX.X%. XX.X% respectively. or non-U.S. in quarter, and and a Netherlands, India, headcount same our and X,XXX, from ago Mexico, UK, year Europe, other versus period located XX.X% Central respectively XX five customers revenues in the and Eastern were top second top the locations XX.X% was

year-ago up quarter, from from XXX commercial from on first on in the total focuses customers The a basis down customers, our XXX the quarter. largely a we sequential and was business, which the of of quarter had in in customers. XXX XXXX, During smaller decline

logos business. we enterprise quarter, our signed nine the During new from

On versus $XX.X million, from quarter. quarter. $XX.X XX.X% of the basis, $XX.X from or $XX statement, million, in income $XX.X was XX.X% XX.X% or XX.X% our million, XXXX, margin non-GAAP million, in was first gross during XX.X% of profit or versus the our million, year-ago in in the and down GAAP or and down to quarter a the first XX.X% the Moving XXXX or or quarter $XX.X gross quarter year-ago million, the

amortization, basis, and expenses utilization sequential from in down first or $XX.X and geographic quarter. of on non-GAAP Non-GAAP margin to to second increase related higher and costs that Transaction a EBITDA XXXX XX.X% a engineering compensation, stock-based basis, both in from of gross was was organizations. or or excluded XX.X% quarter due million, in a the percentage resources. million, up The and largely restructuring, during the depreciation other and as GAAP XX.X% the year-ago $XX.X million, related quarter $XX on

year-over-year a compared was increase The expenses. a from was percentage driven our operating in sequential EBITDA a with largely acquisitions. the of On recent margin as higher gross to increase non-GAAP combination non-GAAP EBITDA basis, due expenses operating in lower by in of levels decline

Our or on quarter share to $X.X a $X.XX quarter a or $XX.X income levels year-over-year of million, the significant based million, based of $X.XX on income count XX.X compensation basic shares totaled year-ago net GAAP of loss a first geographic in or compared million, share lower of and of quarter. stock-based was count of loss in per $X XX.X a million on second to net due and $X.XX million the shares, the GAAP increase XX.X based in reorganization million, expenses. largely The decrease in loss basic basic share

quarter based was million a a XX.X share basis, million, shares, largely based sequential non-GAAP based income in million income or XX.X of non-GAAP a net diluted the in basis, to diluted our first net million, $X.XX expenses. quarter, or shares income increase per or On in the on driven and by net was on per diluted million diluted $X.XX share second the $X.X on On shares, million, XX.X compensation share in quarter. compared year-ago per the $X.X GAAP $X reduction stock-based $X.XX non-GAAP

decrease the non-GAAP from in operating higher to was levels The to increase was due second largely largely in income higher year-ago gross margins the operating expenses. lower income in net quarter The net and comparison the from of non-GAAP quarter expense.

due April for $XXX.X On first the million sequential cash key equivalents a all-cash XXXX, which $XXX.X was June our NextSphere down the and the basis acquisition decrease Technologies, of was on XX. XX, from to of XXXX. cash The made on totaled reason quarter in million,

for to quarter levels expect both in similar Coming and QX revenues the we third EBITDA guided May. be what to guidance, at non-GAAP we to

million to range be the revenues to of $XX in to million. be to range expect We of the non-GAAP $XX $XX $XX million EBITDA and in million,

it quarter, to the we expect in to the we our $XX share in million $XX the to million be to count diluted $XX count, share range, For expect for third million basic $XX and range. million be

prepared questions. concludes That take to we Bin, remarks. ready my are

Bin Chiang

Anil. you, Thank

we your and your Q&A please unmute go At turn session, on your As the will to announce line this camera. first moment, name. I

from of Jain JPMorgan. first the question from comes go line Our Puneet Please ahead.

Puneet Jain

total XX% Leonard, is Hey, thanks I you about of like sort would enterprise out you customers of for who are question. AI so providing services. you XX XXX providing total talked are generative taking whom AI our some that customers, believe like which of clients services, of a to like be

So to about can of you type win AI in talk these what to going share of are your to some clients And those services clients? providing also peers how since you at AI? you those in outsource customers well, are as

Leonard Livschitz

them some quite question, have run the we're AI actually substantial it's defined comprehensive out the of Hey, our of we so was projects at that Puneet. for to. we proud base. a modernization captured before quite percentage of revolution, pointing technologies. Well, thank AI We're a client a cradle you basically percentage still as started, expansion of the The already so from

of models, and in other learning, knowing been large features. data machine own investments formatting, science, We've data our

tangible it creating part when we now the a participate. trends we've more actually for of So of monetization kind seen becomes as some clients, where some

intelligence, First and is a for us, foremost, the which and for and the demand, on mostly, models what a others. travel, supply enterprise variances large ultimate artificial predicted AI the supply with Since of of we forecast, is generative are of do. we logistic enterprises chain definition the focused subset the only comes

help relate medical areas which basically life management to financial When it clients the internal is the which portfolios. of on it's bespoke and models, certain of the talk adjustments, critical pharmaceutical where and most own to relate in forget When to science, so forth, to wealth them about development, not the accelerate personal work to on world, comes consumer decision those accelerating about we companies, so beloved their BXC. the our

of world, We with scaling amount a which of the customer the anticipate cost So it's large the far, BXC In very businesses. BXB associated I've lot consumer behaviors, significant a and mostly. those to savings mentioned preparation. are

absolutely I everybody up competition, our Now, in true. intelligence. mean, of we in stands the and says, terms artificial leaders are it's

taking a ROIs, customer modest the start to We're cases are at looking proven approach. in intangible. financial gains more of more other the words, We more where and become

speak. but the do comes few even Dynamics, of one we convertible into this quite as So, years we key the initiative a of proper of think proven I some to over Grid analytics concepts, we fruition seven started advantages since ago,

So, if very we'll you expansion a continue we the in United States. and we bullish update new need to on team, look

Puneet Jain

as No, thanks comprehensive for a answer well.

have a talked new past ask contribution in XX-XX-X logo XX-XX, about let about model. you me So, the

like new new seeing, business contribution but logo understand you'd year? at where that client where at that activity, like And year, the contribution? the expect be the expect our to remaining in client you point to given in normal strong normal is them be you'd point of weak, So, clients I new a are a any a are XX% is

Leonard Livschitz

Very yourself memory. started good of good is, high a you some question, the very beginning enterprise important at why the year expect which a know their So, of year right? a the clients, that spending, of at come traditional that that reality The have swing. the ago well year, reason since full new the second monetization XX clients will reported half in it's we reduced we level

continuously Now, their mode. in because were hyperscaler expand not we notable tend some lend but cautious were of ISVs. all and them the a of with quite still for first are cloud transformation them, to There projects be few the engagements

few a we of the systems, project, started there related in the much like come into work defined to are level. higher Some but payment them the

five returns. down, absolute to because the not numbers the but the value increasing, that XX because I but see is make beaten, we that want are sure So, goes

more is, the we'll see the contribution. likely yes, answer higher So, but

Puneet Jain

Thank you.

Bin Chiang

Puneet. you, Thank

Our from next from Josh go question Cantor comes Fitzgerald. Please Siegler ahead.

Josh Siegler

question hi. taking today. for Thanks Yes, my

given I'd of gaining and a to traction. lot like its it's just obviously AI, First, start significance, on

So, AI vertical is solutions helping you any over broad further, are interest Grid's seeing additions? for to from is you solutions, And nice logo demand? X any or it provide pipeline future another new for specific AI a strong know,

Leonard Livschitz

processing with area of the momentum for the because side been bespoke results BXC to to known been the language business, leadership continue we've short-term, the it of verify the the in So, time enormous, we is now language easy models, large for natural comes very to in on be a when the a Well, very more brands, and long time, a Okay. we've right? long position. leaders are retail, a

that space, So, pretty just the of from our significant. percentage is businesses,

tell chain, us. upcoming supply expanding the becoming to We a the certainly momentum for obviously, and which life The notable team, science, the and the that's it's the more what of with in in a I substantial manufacturing, without us. subset it's my is big that's business or more be going momentum, see

we it's So, a we'd the our models working. with custom early in be for pencils stage, sharpening better bespoke are but them, which

much is, itself, part the AI. emphasize area of but want we enterprise because the the pretty tech by, everything tech partnering to the, I the and the reason to provide And for the are solutions together

Those combination So, on enterprise the with So, source would becoming with competitive I races, models, own AI companies more the be their and right? the is science which both manufacturing, models, trend. enterprise tech the proprietary models partners. sides and life and more very the and on a would the two side, is have really the said, falls participate the fintech, open of there what

investing of of it some provided. cybersecurity. for happening becomes is the are data notable more part a now cybersecurity where discoveries which even a very AI number been the simultaneously while, massive being with other actually sets critical becomes into And We've for us critical

enterprise the but lot and defined and more of capable cloud of capabilities enterprise. And is it, capabilities working finally, more one run on a to computational grow critical. and become will part continue a on And

in fronts, of our positioning So, are and terms very we bullish from the partners. with it's really our attacking all

Josh Siegler

gross then which as some much. And Understood. utilization foster And I move to your remarks, your these utilization we Can the from more you this? you remain to color mentioned of employees, is into higher on very margins. elevated That’s helpful helping you XXXX? color. do provide believe expect driving Thank in half higher back you those levels prepared of

Leonard Livschitz

building about level point when think the Well, business good right? to does and material next your it's You're be a never going inflection always what momentum growth. momentum the business hit you the enough, return is to to

time, the us So, models, sets we of tailor retraining doing predictable are the which better people. variance of terms build understanding we to skill same massive the business, our the of the of and own probability But in help internally the people. at

lower project. other into then going, new in projects level we have So, words, the delays between to turning much of people business get involvement we versus into when profitable intro

enterprise And when for you capable wait people the a to trained it's notable get months and implement. become till you clients, can't new

which project to clients. foster So, with that's probably system the engineering continue internally impact, the the our training and will level workforce on biggest the how of level, capability fit to the

Anil Doradla

I Josh, Just put, because the to think Leonard that, forward, the leverage statement that's a in going the model right? very resources. have We that's key statement adding that one

impact, trends work will a we We an demand capabilities, that put and positive back, all have of these have see and come impact. people these the then see to you'll some as

Josh Siegler

it. very Appreciate much. Understood. Thank you

Bin Chiang

you, for your Thank Josh question.

Our question Blair. William Nolan comes from Maggie from

open. is line Your

Maggie Nolan

Leonard. Hi, Anil. Hi,

or worth pickup you AI pretty investment and in moment. have Should on to of we what any building clear terms AI, to that of of in in expect like expertise So, that dollar up kind magnitude? or AI, spend it's Gen perceptible would this years then see look

Leonard Livschitz

the the is is crystal here, but so, Yeah, ball not. magic wand

right? consultancy, model, there. It's the have build the do it's recommendation we scale necessary scale the more how all the the model, creating the as become to to So, predictable ability Because tools business. a really is

variances may besides the other the time business, forecasting model, optimization only verify vary but the some stuff. are the other train because to on the of benefit just it and not Depending impact. takes there financial financial Because

trends competitive market all for the trends, clients. For example, the

projects massive run at try transformation do, to they So, than want what what least take we they this and to those at point, involved. to are try rather cases, they

but there when to transformation remember those from So, hybrid capabilities. the public the sizable I to on-prem the almost are trend for private kind lot a cloud cloud, of computational a cloud, cloud, to dollars, now of we reversing moved

I now, means function. see the sizable factors IT of of ask, step one we're business, part notable, early the would those us, Will the the Right a how bit up people for limited, a So, of it's in the role stage which I and the important that to dollars have future of the to going are there going are require where are I software still many projects the but think look roll into engineers? we're what's people, questions IT of like? but less

we would call Dynamics, engineers. not Grid IT And

from professionals intellectually development space, and more some it's a match the relatively the meeting beneficial expanding in suppliers. industry cloud data which trained, goes space, versus traditional highly a that and the to capabilities, more means into and are We transformation, IT software while more we developed in us through are

Maggie Nolan

Thanks, about Leonard. quarters? the And of quarter. couple a that expenses. these next Anil, you talk little bit if wondering, I'm the operating trend margins strong possibility specific this drivers lower Is over a of there can were

Anil Doradla

greater We EBITDA question. on engineers. comments we the bps this roughly utilization you gross expansion margin the by saw had for expanding, saw, driven in remarks our we that had of Maggie, Thanks around almost as right? prepared side, so, XXX quarter, of

about on we're fact largely our operating the environment down million that saw also, it investments prioritizing just front, by driven go by dollars, then spend. you that a given we're the in, and And the

deem be certain prioritized. spending. and said, projects into Now, of that the essential year, the half on back being are as our we continues go initiatives cautious the we But that to approach as

tailwinds. we see the will you go margins see lot at know, we'll aspiration revenue a point hope how of from things Obviously, is, out a a the be we should view, And side, time. on to But, the leverage one and of on there's there. the some So, quarter play side. demand going

Maggie Nolan

Thank you, guys.

Bin Chiang

Maggie. Thanks,

Bryan from comes Bergin question Please TD Cowen. Next from ahead. go

Bryan Bergin

industry existing Good see Wanted kind guys. next to base go start Good afternoon. expectations Hey, you of to and the on into as quarter. you.

in you the talk are kind And So, and CPG specifically, plan stabilization of a little as becoming you're in third whether signs the seeing can base, seeing what about broad-based? bit quarter? of key client you can you you that if existing on for more TMT are

Leonard Livschitz

vertical. would So, Bryan, specific I any not select

pretty it's point. of at think all across much them do this We stabilization. see goes I

the little it's specifically, bit goes more a because right? a backseat. client, takes different bit but it's science. department active On to from CPG, technology other But a So manufacturing one life client spending, they're one very, the space more bit little mostly the giants, in little no than or

that start But something We of doing then QX, very more be an deterministic more start won see bit of by anticipation, preparing, we becoming bit maybe that's And even which and investment. conversations see And little little inflection that are point companies more recently, there's are dynamics couple is notable because great those we we a there the a speculative. in QX. RFPs, aggressive. for a dollars kind will of late for anyways, us

facts. the because would I from customers, doesn't know existing we're We fine, that, But short-term dynamics on that, create of the the customers perspective. reflect based with doing engagement already you but inflection guidance it revenue say from our the new

So, coming there is some be believe in. to we do positive going momentum

Bryan Bergin

a And generative then question so Okay. for to That's you, internally. AI hear. more good but

share developer a productivity? measures just early applying can proof of you early any obviously So, around internally, more about AI, success talk can how of concepts generative you you're bit

of Meaning, viewpoint a of specialized you also for opportunity vendors scale? wanted I think do your versus in positioning see that potentially whether the high-level really players? the this leg large-scale some the And competitive you a question, on benefits this some competitive global reduce of smaller, have an more as technology up to can

Leonard Livschitz

last the me let one. start Well, with

investment in the The to world is on would per se. the can this failures, not I the than Big big invest. lead of can time That the saying, better to course, dollars love nobody there proven. tell be models Of compete is right? you guys size us, how smart must because dollars. big to It's you big invest

the a, till their bias, You condition, and remove and who's correlation. to forecasting the done the variance, this to industry, the really look all environment anybody can't result models in the they is to need hope sizable need noise. I prove you of the the modeling, to there And boundary how at the that stuff. sensitive the you realize consistent

put that's a technical I X So do that rather we're side. to of a laser-focused believe engagement more on than going announcement broad-based on See, a billion dollars.

of there happening. lot are seeing do a Now, we things internally, what

So first itself, next natural all, commands, code, the you -- the secret. be controls, say, the there's, of say, level of the with not code code would artificially automation can with, driven where to augmentation it's quality factors. a on the I developed the People know,

long there. this productivity, a been always before internally, those clients the codes we're map, lot great it selection what in a using ourselves. for skill in mean, say, question, paying mentioned test of But there's with we've set you to because, asked you did the importance know, terms for skill, of of time, the the Again, terms works just guesswork samples I and of I which the of

stochastic processes becoming models. large think by little more I deterministic using it's on a the the bit

also stream. that internal to vendor models, believe implement do is into software substitutions ability and the on our increases, products we on the focus experimenting independent but code productivity So the, major the

Bryan Bergin

you. Thank that's clear. Okay,

Anil Doradla

Thanks, Bryan.

Bin Chiang

Thank you, Bryan.

Citi. from go Our comes ahead. Potter Ryan next from Please question

Ryan Potter

evolved I trends wanted question. some over on give of pricing how increased in have more my you of also Yeah. I if seen quarters. back to Are of your the start models? new was on is fee fixed you adoption criteria it the past few taking could for a any pod And Thanks guys. on color pricing. or price, hey wondering more Yeah, pushing clients becoming or wins? logo paring have kind

Anil Doradla

Sure. those question. we've a one Clients to I is for that in that Thanks this internal the mean, is price, Look, of want past, question there's no the exception and right? today. even that better always answered always themes.

that time again, these we of where difficult every go edge whether whether the is solve. ourselves spend to we of dollar back per think some high. a partner of I these what it of on value dollar it's prove be And is spent, to choice some problems they client to is cutting value technologies,

Now, in we've one-on-one as a there out, talk with the if we clients, past, some incremental pressure seen we environment, the headwinds on them in is have have macro current with as basis. the play

we sometimes we to where some their and requests, levels. have short-term accommodate then historical We of arrangements revert back

fundamentally I help as long-term. would out. say But our give-and-take we of of to clients pressure, nothing whether term, add a something. a of point some them, want from good little changed being has that know, a them you there's also the and bit I pricing Leonard, of face partners in don't short view,

Leonard Livschitz

with We're of just expanding Yeah, pricing mouth a too few I the acquisitions much? think and the or color force Because out you secret you is the coming it's move position? the existing scale dealing your we your Well, volunteering Central I'm are you question biggest probably no of Did becomes, already. an of it take all when done out mind from of Europe we've pricing your team. India, back How what's on guys. the I India? Eastern

pricing well, are good this with organizations. teams our intervined. because and quality hire we're holding the is We I European well-trained intervined extremely people think and

We're from necessarily global, one the strategy. region. don't just run sun we follow projects So truly

more the way, we'll it's we're the see a approach hiring world, involved around more is, work and As maintain we on high focus addition business, interns. hold. people, our how going the also to the quality kind of creating the which great of that top clients, people all getting maintaining the to of with by consultancy the Indian quality same But and offices our the

now right fine. So, it's

I'm all GigaCube with think Anil consistently but very sun that implement approach was the proud follow we generic telling our the quite it's I across the trend, you, what a regions.

Ryan Potter

kind Turkey, additions, Got And it. added X additional like they broadly, more delivery your of strategy on come delivery Spain, mix, the A and follow-up acquisitions? earnings discuss in to then and deck, you you can these diversification? your organic like around countries were expansion it looks did GigaCube, delivery or Portugal, through

Leonard Livschitz

of terms locations. Well, synergies the who center people in hires engineering we are review with And of lot as with is a with great also of big other of these filter mix a we a have not yet. added the each people. a There some locations. centers we relocated countries have local And of

not little of bring partnership. just sticker visited make And to with to It's the value which I a has from a, for place the every countries named. geographies. I'm need of tourists, you need recently the a country pretty with right? That's we put you in every collector the we And go, the you much of one local We suitcase, visit, those all you not the walk and for things a money business.

the the new say one then mean, relationships be early not people countries homegrown certainly I those prosper, that's that's how We will repeated for there. part. number relationship scalable with relocate. creating the the will is countries met a very one the that, we homegrown shelters key I as for times, universities, is organization with just young in notable as need talent we're say can to But the definitively be. universities. we a So new to those I would And multiple stage, universities. some factor guiding relationship with

Romania, will I India, in and going right growth is unquestionably updated. between we'll is the Poland, and stop you some But Central the from extent. focus Serbia Europe and So overall keep to Mexico, now,

factors you have But and all But keep Ukraine We take have a good in need a places. we team we'll still expand, good other few we we in a into consideration. these to Armenia, posted. team as

Ryan Potter

Thanks. All right.

Anil Doradla

Thank you, Ryan.

Bin Chiang

Thank Ryan. you,

Tandon Our the comes line Please from Mayank ahead. from next from Needham. question go

Mayank Tandon

evening. I a of had couple Good you. Thank questions.

First you didn't fourth specifically. was, comment the quarter on

our want billing the as days quarter? we are just that Just third sure on off curious, quarter modeling one. to fourth we're So revenue fewer check make there

of given pent-up quarter? potential hearing us there's around a peers, that from the frame been sort fourth we've demand help flush comments certain secondly, companies, of And the budget that some building. for your that that's to Any

Anil Doradla

Sure.

So which right? you effects, absolutely opposing things two right. You're have bring

view tends no quarter industry. a exception. And Fourth we're to be from the point across right. billing of absolutely based You're

number past, start these with little growing, of a movement But in the bit company a a in the also decline. they view, projects yes, smaller impact timing general, of of being of days of Now, QX. QX can high the growth, point a from to from there's one-off actually some climb, if

up point. we the don't Now, Like on. And to point second have if that budget industry. of see an spend flush, bit right? cycles, that all lose good a you it, it, what is is as previous little There's that is bring very you we something you going which a saw in

quarter QX into doing right, at the that of business. points time. you I But stage, and process upon, two this are look at want a these our to we're planning So we up don't valid part one comment very bring is as

Leonard Livschitz

new on contribution Yeah. that. a the One asked of early very discreet comment session, the the question more this of Puneet about In clients.

more of And So it's the being a contribution that that's larger will through about also industries, we the the necessarily And in to reason is as with the flush. going month or to of in would in calendar Time medium a tell we larger year, so tell medium. grow see years. we years not we'll not I tend or be the areas the budget later and aligned where diversity customers, time the one will a whether they from November. the fiscal or be this existing have talk call two, find it more

they to as reason. start see earlier. a missing this again, slightly it's investments do it's the for from earlier bit in Anil QX, a speculative, but consider we What what's it's the not may said, the year, without But

Mayank Tandon

Then second going That's we or And industry that the the quarter? good really contribution assume Was full drops is a the from more as One, should my then Anil, what question is also, in see expense the we housekeeping. stock percentage. really maybe revenue with quarter? second expect further helpful for down compensation the was acquisition peers? to that more Should color. line rate come a forward the run in

Anil Doradla

So model minus Yes, way X.X seven-- end remainder around is, the I'll about I'll start quarter, of second So right? leave at for the the this year. we the of range the with question. that you should plus had

that's that good So made. a observation you

as logos mean you acquisition at I as XX, in digits April year to the new know, we what mid-single my for revenue looking be should you right? new next In And terms contribution. said of too, is the and low last was acquired of, kind quarter on contribution,

Mayank Tandon

in to single just dollars, be clear, Sorry, terms of low right? absolute digits

Anil Doradla

Percentage.

Mayank Tandon

Got so much. it. Thanks Great.

Leonard Livschitz

Thank you.

Bin Chiang

back remarks. of I'll the for Thanks Leonard closing Mayank. Ladies all your today. be to question. Thank for this Q&A and session you, will gentlemen, line At the that moment, pass

Leonard Livschitz

Thank joining the call you, today. everybody, for us on

and this our us coming business. focus of are There out execution, on flawless our leadership, towards to well economic strong positive executing stated continue spike. up set dynamics, many to feel We reasons technology about Great delivery goals. extremely

a only exciting strengths in abilities Thank Our billion revenue Recent execute continue new I place company. gearing and we towards you. to and many to in continue their our AI clients updates with November. to confidence our you technology sharing and trends for plan, forward validate our $X with look

Grid Dynamics (GDYN) 3 Aug 232023 Q2 Earnings call transcript