Grid Dynamics Holdings, Inc.: Form 10-K for the period ended Dec 31, 2025

Business Overview

Grid Dynamics Holdings, Inc. (“Grid Dynamics,” the “Company,” “we,” “us,” or “our”) is an Enterprise Artificial Intelligence (“AI”) transformation partner for the Fortune 1000. We combine deep AI expertise with proven enterprise-scale delivery to help clients identify where to invest in AI, deliver systems that work at scale, and capture real business value from AI deployments. The building blocks of AI have always been our foundation — distributed systems, real-time data, machine learning algorithms, and natural language processing. What has changed is that these capabilities have now converged into Enterprise AI.

This technical heritage is matched with business acumen. We solve the most pressing technical challenges and enable positive business outcomes for enterprise companies. A key differentiator is our nearly two decades of technology leadership and pioneering enterprise AI expertise. This is supported by deep capabilities and ongoing investment in data and machine learning platform engineering, cloud platform and product engineering, Internet of Things (“IoT”) and edge computing, and digital engagement services.

Founded in 2006, Grid Dynamics is headquartered in Silicon Valley with offices across the Americas, Europe, and India.

Industry Background and Grid Dynamics Strategic Differentiators

Grid Dynamics serves as the strategic architect and technical expert for Fortune 1000 companies transitioning into AI-driven enterprises. As the industry moves from automating business processes to automating decision-making itself, we provide the specialized engineering required to navigate this shift. Enterprises are increasingly moving away from off-the-shelf software toward custom-engineered solutions that leverage proprietary data, specific business processes, and competitive differentiators. This evolution drives significant demand for partners that can deliver AI implementations that work at enterprise scale and provide a measurable return on investment.

Our market position is defined by several key strategic differentiators:

• Preference for AI-Native Partners Over Generalist Consultancies

Enterprises increasingly seek partners with deep-rooted AI capabilities rather than general-purpose firms attempting to pivot into the space. Grid Dynamics, as an AI-native firm, is built upon a twenty-year track record of engineering the complex systems that now define Enterprise AI. In addition to those investments and training specialized talent, we have gained experience and insights from complex deployments at Fortune 1000 companies. We have developed over 40 pre-built, production-ready solution accelerators across AI, data platforms, and cloud engineering. This accumulated knowledge — ranging from technical architecture patterns to change management — compresses time-to-value that we believe provides us with a competitive advantage.

• Restructuring of the IT Services Workforce

The traditional IT services pyramid, which relied on large pools of junior developers, is being fundamentally restructured. Modern AI implementations require the inverse: senior engineers and data scientists who can design sophisticated systems and work alongside AI agents to increase productivity. We believe this structural shift provides us with a competitive advantage, as we prioritize experienced senior talent over volume staffing to handle the complexity of production-grade infrastructure.

• Engineering Mastery for the Agentic AI Age

The emergence of Agentic AI — systems where multiple AI agents collaborate autonomously to complete complex business processes — represents the next enterprise inflection point. Agentic AI systems must coordinate across workflows, maintain state, handle failures, and operate reliably at scale. Organizations attempting to deploy agentic systems without this foundation encounter the same reliability and scalability challenges associated with distributed enterprise software. Grid Dynamics’ strengths in distributed computing, fault-tolerant design, and high-performance enterprise systems directly address these challenges. The engineering disciplines that enable real-time commerce and mission-critical cloud platforms are essential for production-grade agentic AI.

• Rigorous Focus on ROI and Business Outcomes

Return on investment (“ROI”) has become a primary decision criterion for AI initiatives. Enterprises are moving past experimentation toward projects that deliver demonstrable value, such as increased revenue, reduced costs, or improved customer satisfaction. At Grid Dynamics, we tie AI implementations to concrete business outcomes through value measurement frameworks and possess the engineering depth to deliver systems at a global enterprise scale.

• Strategic Ecosystem Partnerships

Our strategic partnerships with major hyperscale cloud providers and leading platform AI companies are key to our enterprise strategy. These relationships are co-development partnerships that give us and our clients privileged access to emerging capabilities, accelerated innovation cycles, and solutions that leverage best-in-class technologies. Our partnerships facilitate enhanced joint solution development and co-selling opportunities, helping our clients employ and scale AI using the most advanced infrastructure available. The capabilities from these providers are then integrated, customized, and optimized for each enterprise’s specific needs.

• Solving the Production “Bottleneck”

We believe that the primary obstacle to further widespread AI adoption is not the models themselves, but the surrounding engineering: integration, observability, governance, and cost control. Our approach combines strategic advisory services with hands-on engineering to address these realities. By combining deep enterprise context with technical prowess, we help Fortune 1000 companies move from AI pilot programs to industrial-grade execution.

Our Approach

At Grid Dynamics, our strategic approach combines world-class engineering discipline with a specialized AI-native framework, enabling global enterprises to deploy business-driven solutions at scale. We serve as a strategic technology partner, providing the architecture and technical rigor required to transform complex challenges into competitive advantages.

• The GAIN Engagement Model

Our strategic foundation is the Grid Dynamics AI-Native (“GAIN”) engagement model. This model provides a development framework for software delivery in the AI era, which fundamentally rethinks team composition, engineering workflows, and delivery practices. The GAIN model represents a shift from effort-based development to AI and human collaboration optimized for global, enterprise-scale delivery, with emphasis on domain specialists, software architects, and experts in emerging technology.

This model addresses three critical enterprise challenges: identifying where to invest in AI, delivering systems that work at scale, and capturing business value from AI deployments. We enable AI-powered transformation in several areas including:

• Digital labor: Deploying AI agents that augment and automate the workforce.
• Enhanced customer experience: Creating customer-facing AI that drives engagement.
• New revenue streams: Developing AI-enabled products, services, and capabilities.
• Reduced risk: Implementing fraud detection, compliance, quality control, and safety systems.
• Co-Creation Strategy

We recognize that meaningful innovation requires service providers to help shape, not just execute, innovation programs. Grid Dynamics utilizes a co-creation model that integrates our senior-weighted engineering talent directly into client teams. This approach involves working side-by-side in technical, project, and program management, ensuring continuous knowledge transfer. As projects progress, clients gain the internal expertise to manage new skills and roles, supported by our digital transformation blueprints and industry accelerators.

• Accountability Through Value Measurement

Our approach anchors engagements to tangible business results rather than just resource allocation. Our Value Measurement Framework utilizes dashboards to provide stakeholders with clarity through integrated KPIs, progress updates, and satisfaction reviews. This customer-focused methodology helps ensure predictable quality, speed, and cost from initial concept to full-scale enterprise deployment.

• Strategic Ecosystem and Global Scale

Our technological expertise is enhanced by a senior-weighted workforce focused on Fortune 1000 companies and a comprehensive partnership ecosystem. Collaboration with hyperscalers, including Google Cloud, AWS, Microsoft Azure, and AI leaders like NVIDIA and Temporal Technologies, creates a flywheel effect that accelerates sales cycles and enables differentiated solutions. These partnerships contributed over 19% of our revenue in the year ended December 31, 2025.

With a global delivery model, we provide continuous development with U.S.-based leadership while optimizing for both quality and cost efficiency. Our strategic acquisitions of JUXT Ltd. (“JUXT”) in the United Kingdom and Mobile Computing S.A. (“Mobile Computing”) in Argentina in 2024 further strengthened our market position and expanded our addressable opportunities across Europe and the Americas.

Services and Solutions

Grid Dynamics delivers comprehensive services across the full spectrum of digital transformation. We focus on areas where AI, data, and cloud technologies create the most value. Our services are organized around client business outcomes rather than technical silos, ensuring our solutions address strategic priorities.

• Artificial Intelligence Services

Our AI services help enterprises move from experimentation to measurable impact through a four-stage process: prepare for AI readiness, identify high-value use cases, deliver robust infrastructure, and scale across the enterprise.

• AI-Readiness: We establish the foundation for successful AI adoption through strategy consulting, data modernization, rapid and deployment-ready prototyping, and Software Development Lifecycle (“SDLC”) transformation, helping enterprises break the cycle of pilot programs that never reach deployment.
• Identify AI Use Cases: We deploy AI across customer-facing, operational, and knowledge management scenarios. Applications span intelligent customer interactions that reduce costs while improving satisfaction, predictive AI for demand forecasting and operational optimization, autonomous workflows that complete complex multi-step processes without human intervention, knowledge systems that surface institutional expertise on demand, and generative capabilities that accelerate content creation, visual design, and document processing. Each implementation targets specific revenue, efficiency, or experience outcomes across industries.
• Robust AI Infrastructure: We deliver platforms that industrialize AI at scale. This includes agentic systems that autonomously execute business processes, orchestration layers that coordinate multiple AI models and workflows, production-grade management of large language models, unified semantic foundations for enterprise data, and AI-native development approaches throughout the software lifecycle. These capabilities enable enterprises to deploy AI with security, governance, and reliability.
• Enterprise AI Scale: We help enterprises gain enterprise-wide efficiency with deployment expertise gained from implementations across diverse industries and use cases. After establishing AI capabilities in one area, we help organizations expand to other business units, geographies, and use cases while maintaining governance and quality standards.
• Cloud Platform and Product Engineering

We modernize legacy systems and deliver cloud-native platforms that enable continuous delivery and operational excellence. Our services span application migration and re-architecture, AI-native SDLC, platform engineering, DevOps and AIOps automation, quality assurance (“QA”) automation, observability and site reliability engineering, and FinOps. We emphasize development that leverages cloud platforms for resilience, scalability, and automation while integrating AI capabilities from design through deployment.

• Digital Engagement

We deliver modular composable commerce platforms that enable integration of AI applications throughout the buying process — from defining the goals and requirements through purchase, delivery, and after-sales support. Our AI-powered approach to customer experience, discovery, and conversion centers on three capabilities: intelligent search that understands intent and context, our Merchandising Experience Platform (“MXP”) for centralized control of product presentation and promotions, and catalog enrichment that generates and enhances product content at scale. Additional capabilities include front-end engineering, customer 360 personalization engines, conversational AI search and recommendations, agentic commerce that autonomously completes shopping, conversational shopping and knowledge assistants and virtual try-ons, AI-powered digital experience platforms (“DXPs”), loyalty programs, omnichannel order management and inventory systems, and AI focus groups that simulate customer feedback.

• IoT and Edge Computing

We assist manufacturers and logistics providers in implementing Physical AI to enhance operational safety and intelligence. Our IoT Control Tower offering serves as a centralized intelligence framework that enables clients to use operational data to create business value through customized predictive analytics and AI-driven guidance. We also provide engineering services to develop digital twin simulations for system modeling, collaborative robotics architectures to augment human labor, and edge computing solutions that facilitate real-time data processing for immediate operational response.

• AI and Data Platforms

We design and deliver the data infrastructure that powers AI and analytics at scale. This includes architectures that break down data silos and ensure quality, real-time streaming platforms that enable event-driven intelligence, analytics environments that support exploration and insight discovery, machine learning Ops systems that operationalize both traditional machine learning and large language models, multi-agent orchestration frameworks, and durable execution platforms for reliable long-running workflows. These platforms create the foundation for data-driven transformation across the enterprise.

Industry-Focused Verticals

Grid Dynamics focuses on large enterprises and Fortune 1000 companies.

During each of the years ended December 31, 2025 and 2024, we had one customer that accounted for 15.4% and 16.0% of our revenues, respectively. We generated approximately 57.7% and 55.7% of our revenues from our 10 largest clients during the years ended December 31, 2025 and 2024, respectively. We seek to expand our customer base and diversify our revenue streams while organizing our business around industry verticals where we have deep domain expertise and proven track records.

Grid Dynamics has strong vertical-specific domain knowledge backed by extensive experience. By merging technology with business processes, Grid Dynamics delivers tailored solutions in several key industry verticals. The following table presents our revenues by vertical and revenues as a percentage of total revenues by vertical for the periods indicated:

(in thousands, except percentages of revenues)

• Retail

Retail is a leadership vertical for Grid Dynamics where we serve major retailers and brands with solutions that drive measurable conversion improvements and operational efficiency. Our retail expertise spans AI-Powered Discovery through visual search, conversational AI, and intelligent merchandising; Composable Commerce with headless architectures and best-of-breed components; Omnichannel Fulfillment including real-time inventory, intelligent routing, and last-mile optimization; and Physical AI for in-store robotics, computer vision, and digital twin simulation. We work with department stores, specialty retailers, consumer electronics companies, and direct-to-consumer brands to transform how they engage customers and operate their businesses.

• Technology, Media and Telecom

We serve technology-native clients that demand cutting-edge AI capabilities at scale, including technology companies, media enterprises, and telecommunications providers with cloud platform engineering, AI-native application development, data platforms, and scalability solutions. Our work in this vertical frequently involves delivering platforms and products that serve millions of end users. We believe technology companies value our cutting edge work while maintaining enterprise-grade reliability and scale.

• Finance

Finance represents our fastest-growing vertical, driven by strong fintech demand and deep banking relationships. We serve banks, insurance companies, wealth management firms, and fintech innovators with solutions spanning AI-powered, bitemporal analytics, agentic regulatory compliance automation, customer experience platforms, financial advisor AI copilots, and core banking modernization. The highly regulated nature of financial services demands both technical excellence and deep understanding of compliance requirements — capabilities we have built through our experience in the sector.

• Consumer Packaged Goods (“CPG”) and Manufacturing

We serve CPG companies and manufacturers with AI-powered operations solutions, including smart manufacturing, supply chain optimization platforms, IoT implementations, anomaly detection, predictive maintenance, visual process monitoring, digital twins, and collaborative robotics applications. Our AI capabilities enable these clients to connect assets, optimize processes, and drive efficiency across operations. Digital twin technology allows manufacturers to simulate changes before implementing them in physical facilities, reducing cost and risk, and accelerating innovation.

• Healthcare and Pharma

Leading companies leverage our cloud, app modernization, data science, and digital commerce solutions to accelerate drug discovery, product development, and time-to-market, optimize marketing and sales operations, and personalize customer experiences with valuable data insights and automation.

• Other Verticals

We also serve clients in other sectors where we believe our AI and engineering capabilities create significant value. Each vertical benefits from our core capabilities while requiring specialized domain knowledge and industry-specific solutions.

Geographic Presence and Global Delivery Model

Grid Dynamics operates a global delivery model, leveraging talent across the Americas, Europe, and Asia. This geographic footprint enables us to serve clients with continuous development, U.S.-based leadership, access to specialized talent pools, and delivery optimized for both quality and cost efficiency.

Our presence in the Americas is anchored by our Silicon Valley headquarters in San Ramon, California. We maintain offices across the United States for client engagement, solution architecture, and strategic delivery functions. We also have a growing presence in Mexico and Jamaica that supports nearshore delivery for North American clients. Argentina has emerged as a strategic delivery location in South America, while Mexico enables effective nearshore delivery with time zone alignment and cultural affinity for clients in the Americas.

Our European operations center in the United Kingdom where we have deep expertise and go-to-market positioning in banking and financial services markets. We maintain a presence across multiple European countries, providing both local market access and delivery capabilities.

India has become one of our top-two countries by headcount, representing a strategic expansion of our delivery capabilities with access to deep talent pools in AI, data engineering, and cloud platforms, while enabling cost-effective delivery at scale.

Our global footprint enables true continuous development cycles. Work progresses continuously as it moves across time zones. When teams in Europe and India conclude their workday, teams in the Americas continue to progress the project, and when the Americas teams finish, teams in India advance the work further. This round-the-clock development compresses project timelines, accelerates issue resolution, and provides clients with continuous forward momentum rather than the stop-start cycles typical of single-location delivery models. The result is faster time-to-market, steady progress visibility, and consistent quality. This model works particularly well for large-scale transformations, rapid development initiatives, and situations requiring continuous production support. In addition, an important element of our global strategy is to seek employees with the appropriate skills and cost structure across the relevant locations to optimize both the delivery of services and cost efficiency.

Customer-Focused Delivery Excellence

We believe our customer-focused delivery excellence framework differentiates Grid Dynamics through measurable outcomes, engineering precision, and accountability. This integrated methodology combines four core pillars that work together to help ensure client success:

• Value Measurement Framework

We provide transparency through dashboards that capture project progress, ROI, and risk in real-time. Integrated KPIs, progress updates, and satisfaction reviews ensure stakeholders remain informed so that projects perform to expectations. This data-driven approach is designed to keep clients aligned, accountable, and on track throughout the engagement lifecycle.

• Delivery Framework

Our delivery approach leverages AI-native development tools and our global engineering teams provide continuous development cycles. Real-time visibility into progress, combined with flexible engagement models tailored to each client’s business and product lifecycle, enables faster time-to-market while maintaining consistently high quality. Our AI-native development frameworks streamline the software development lifecycle from planning and code generation through testing and deployment, enabling teams to dedicate more time to value-added features while significantly reducing technical debt.

• Tech Leadership & Development Capabilities

We maintain a delivery engine driven by continuous R&D innovation and over 40 proprietary industry accelerators that address recurring enterprise challenges. Our engineering teams focus on business results, applying cutting-edge capabilities in Generative AI, Agentic AI, AI-enabled software development lifecycle, edge computing, and cloud-native modernization to deliver measurable impact rather than merely implementing technology for its own sake.

• Talent Management Framework

We recruit senior engineering talent and invest in development through Grid University, our comprehensive online education platform featuring thousands of hours of technical training. This commitment to ongoing learning is designed to ensure that our teams combine deep technical skills with cultural fit and the ability to rapidly adapt to emerging technologies.

Sales and Marketing

Grid Dynamics employs a consultative, relationship-driven sales approach focused on solving complex business challenges for Fortune 1000 enterprises. Our sales organization combines direct enterprise sales teams, strategic account management, partnership-driven business development, and thought leadership marketing.

Our enterprise sales teams focus on new logo acquisition within target Fortune 1000 accounts. These teams engage with executives, technology leaders, and others to understand strategic priorities and craft solutions that address business challenges. The sales cycle for enterprise deals typically ranges from three to nine months and involves technical validation, architecture discussions, and business case development.

Strategic account managers maintain and develop relationships with clients, identifying expansion opportunities, helping ensure delivery excellence, and serving as trusted advisors, who understand our clients’ businesses and needs.

Partnership-driven business development leverages our relationships with Google Cloud, AWS, Microsoft Azure, NVIDIA, and other technology leaders to generate opportunities through joint go-to-market initiatives, co-innovation projects, and ecosystem relationships that accelerate deal cycles.

Our marketing strategy emphasizes thought leadership, technical credibility, and demonstrable expertise. We invest in producing high-quality content, including white papers, case studies, technical blog posts, ebooks, solution briefs, webinars, demo videos, and conference presentations. We participate in industry conferences, partner events, and technology community gatherings, establishing Grid Dynamics as a recognized thought leader in AI transformation.

Competition

Grid Dynamics operates in competitive markets for AI and digital engineering services. We face competition from global IT services providers as well as firms based in Central and Eastern Europe (“CEE”), Latin America, and India. We believe the principal competitive factors in our business include technical expertise and industry knowledge, culture, reputation and track record for high-quality delivery, effective employee recruiting and retention, responsiveness to clients’ business needs, and financial stability. In addition, companies may choose to build capabilities in-house rather than engage outside providers.

We face competition primarily from:

• emerging mid-cap digital services companies, such as Globant S.A. and Endava plc.;
• large global consulting and outsourcing firms, such as Accenture plc, EPAM Systems, Inc., and Capgemini SE;
• India-based technology outsourcing IT services providers, such as Cognizant Technology Solutions Corporation, Infosys Technologies, Tata Consultancy Services Limited and Wipro;
• specialized AI and data science consultancies; and
• in-house IT departments of our clients and potential clients.

Competitive Strengths

We believe our principal competitive strengths in our business include deep technical expertise and industry knowledge, a culture of engineering excellence, a reputation and a track record for high-quality delivery, effective employee recruiting and retention, responsiveness to clients’ business needs, and our financial stability. Given our focus on complex digital transformation programs, technical employee base, and continuous development in new software technology, we believe Grid Dynamics is a leading provider in the IT services and consulting space. Our engineering-led model helps ensure technical excellence, deep understanding of how technology transforms business performance, and the ability to blend technical expertise with cultural fit in ways we believe traditional IT service providers cannot easily replicate.

We believe our position combining deep AI expertise with enterprise-scale delivery creates a structural competitive advantage. While competitors attempt to retrofit AI capabilities onto traditional service delivery models, we have built our approach from the ground up around AI. We have developed specialized talent, proven frameworks, production-ready accelerators, and customer-focused delivery excellence through extensive AI innovation.

Our combination of deep technical capabilities and business consulting focus enables us to provide differentiated value to both technology leaders and business innovators. This positioning, combined with our comprehensive partnership ecosystem, customer-focused delivery framework, and access to global technical talent, positions us to deliver quality, speed, and cost from initial concept to full-scale enterprise deployment.

Human Capital and Employees

People are critical to Grid Dynamics’ success. Our ability to attract, develop, and retain exceptional technical talent is fundamental to our business model and competitive position. As of December 31, 2025, Grid Dynamics had 4,961 personnel across the Americas, Europe, and India.

Recruitment and Retention

Grid Dynamics hires for both technical skills and cultural fit, with focus on recruiting exceptional global engineering talent. Our rapidly changing technological landscape demands that engineering personnel continuously acquire new proficiencies and skills. We target top technical talent from leading universities and maintain deep relationships with premier computer science programs worldwide.

Our hiring is demand-driven, based on current and projected client needs. We constantly review projections to ensure we maintain proper recruiting and training pipelines. Our geographical spread helps us avoid location constraints and accelerate identification and recruitment of top technical talent. Many of our engineering personnel hold bachelor’s or advanced degrees in computer science or related technical fields.

To attract, retain, and motivate IT professionals, we provide an environment and culture that rewards entrepreneurial initiative and performance. We offer challenging work on cutting-edge projects for high-profile Fortune 1000 clients, ongoing skills development initiatives through Grid University and external training programs, attractive career advancement opportunities, and a flexible work environment. Our employee value proposition emphasizes the opportunity to work with the most advanced technologies, solve complex problems with real business impact, and grow professionally in an organization that values technical excellence.

Grid Dynamics believes it maintains good working relationships with its employees and has not experienced any labor disputes. Our employees have not entered into collective bargaining agreements.

Training and Development

Our approach to talent development reflects a culture-first philosophy: to have our employees develop the expertise and other skills to earn the trust of business leaders, increasingly emerging as part of AI enterprise adoption, who combine a vision of business transformation with a deep understanding of modern technology’s possibilities.

We select, train, and promote our leadership based on four principles:

1. Global Integration — the demands of modern businesses transcend cultural and language boundaries; accordingly, we build teams that are distributed across countries, time zones, and reporting lines;

2. Partnership with Clients — we demand accountability and ownership of a client’s success, whether or not such success is a contractual matter, and understanding client goals and the ability to manage such goals across reporting lines are required for any leadership role within Grid Dynamics;

3. Technological Innovation — understanding AI-native transformation and successfully delivering strategic programs are impossible without a strong understanding of emerging technology, and deep knowledge of how cloud, big data, and AI transform the way corporations develop their businesses is a prerequisite for leadership roles; and

4. Education — as technology changes rapidly, our employees must adapt even more rapidly, and we offer many formal and informal training programs to ensure that professionals can continuously expand and enhance their capabilities.

Grid Dynamics dedicates significant resources to training and development of technical talent. Our Grid University online education platform provides thousands of hours of training content across over 250 courses in more than 30 learning tracks, covering emerging technologies, AI-first software development lifecycle methodologies, generative AI, agentic AI, context engineering, and other specialized domains. This comprehensive learning environment ensures that professionals can continuously expand and enhance their capabilities. Also, we sponsor employees’ participation in external training programs and certifications from technology leaders in both open-source and proprietary ecosystems.

Furthermore, we maintain partnerships with leading technology providers that enable our engineers to pursue advanced certifications and specialized badges. As of December 31, 2025, our engineers held over 1,600 hyperscaler certifications across over 100 different certification types. We also provide ongoing English language training at all delivery centers to maintain and enhance language skills necessary for effective client communication and global collaboration.

Internship Program

Grid Dynamics has a long-standing tradition of running internship programs for students and junior engineers. We run approximately 10 internship cycles annually, attracting over 16,000 applicants with high placement rates into billable roles. Each intern works with a mentor who helps them adapt, shares knowledge, and supports development of necessary skills. Our internship program focuses on big data, machine learning, AI, and other emerging technologies, creating a pipeline of engineers who have grown up with AI agents as core tools rather than attempting to retrofit new ways of working onto established practices.

Talent Management Framework

Our talent management framework leverages smart platforms and data-driven approaches to maximize team effectiveness. Our Team Data AI platform uses predictive analytics to assemble high-performing teams and allocate resources optimally. Our Skill Tree system maps engineers’ expertise and seniority for optimal role fit across projects. InGrid, our internal education program, enables employees to learn new technologies and pioneer new methodologies to keep client businesses ahead of technology curves. This systematic approach ensures that the right engineers with the right skills are matched to the right projects, maximizing value for clients and career growth for our people.

Intellectual Property

Protection of intellectual property rights is paramount to Grid Dynamics and our clients. We rely on a combination of trade secret, patent, copyright, and trademark laws, as well as confidentiality procedures and contractual provisions to protect our intellectual property and that of our clients.

We require employees, independent contractors, vendors, and clients to enter into written confidentiality agreements upon commencement of their relationships with Grid Dynamics. These agreements generally provide that any confidential or proprietary information disclosed or otherwise made available by Grid Dynamics must be kept confidential.

We customarily enter into non-disclosure agreements with our clients concerning the use of their software systems and platforms. Our clients usually own the intellectual property in the software or systems Grid Dynamics develops for them. We retain rights to our general methodologies, frameworks, and reusable components — including over 40 of our industry accelerators and proprietary delivery frameworks. Grid Dynamics and our clients often use open-source software to improve quality and reduce time-to-market, and we work closely with our clients' compliance departments to ensure compliance with their open-source licensing agreements and internal policies and maintain rigorous processes for managing open-source dependencies and license obligations.

Regulations

Due to the industry and geographic diversity of Grid Dynamics’ operations and services, we are subject to a variety of laws and regulations in the United States and the foreign jurisdictions in which we operate. Key regulatory areas include employment and labor laws, tax regulations, data privacy and protection, intellectual property laws, anti-corruption and anti-bribery regulations, export controls, and industry-specific regulations applicable to our clients’ sectors. See Item 1A, “Risk Factors—Risks Related to Regulations, Legislation and Legal Proceedings.”

We maintain compliance programs and internal controls designed to ensure adherence to applicable laws and regulations. Our ISO 27001 certification provides a framework for information security management that addresses many regulatory requirements. We regularly review and update our compliance programs to address evolving regulatory requirements and emerging risks. For further information regarding risks related to legal and regulatory compliance can be found in Item 1A, “Risk Factors—Risks Related to Regulations, Legislation and Legal Proceedings.”

Available Information

We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and, accordingly, file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, with the Securities and Exchange Commission (the “SEC”). In addition, the SEC maintains a website (http://www.sec.gov) that contains material regarding issuers that file electronically, such as ourselves, with the SEC.

We maintain a website at www.griddynamics.com (http://www.griddynamics.com), to which we regularly post copies of our press releases as well as additional information about us. Our filings with the SEC will be available free of charge through the website as soon as reasonably practicable after being electronically filed with or furnished to the SEC. Information contained in our website is not a part of, nor incorporated by reference into, this Report or our other filings with the SEC, and should not be relied upon.

This Annual Report on Form 10-K contains forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks and uncertainties include, but are not limited to, the risk factors set forth below. The risks and uncertainties described in this Annual Report on Form 10-K are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently believe are immaterial may also affect our business. See the section titled “Special Note Regarding Forward-Looking Statements” of this Annual Report on Form 10-K for a discussion of the forward-looking statements that are qualified by these risk factors. If any of these known or unknown risks or uncertainties actually occurs and have a material adverse effect on us, our business, financial condition and results of operations could be seriously harmed.

Summary of Risk Factors

Our business is subject to numerous risks and uncertainties that you should consider before investing in our Company, as fully described below. The principal factors and uncertainties that make investing in our Company risky include, among others:

Risks Related to Our Business, Operations and Industry

• We operate in a rapidly evolving industry, which makes it difficult to evaluate future prospects and increases the risk that we will not continue to be successful and may adversely impact our stock price, financial condition and results of operations.
• We may be unable to effectively manage our growth or achieve anticipated growth, particularly as we expand into new geographies and industries, which could place significant strain on our management personnel, systems and resources.
• Our revenues have historically been highly dependent on a limited number of clients and industries, and accordingly any decrease in demand for outsourced services by these clients or in these industries may reduce our revenues and adversely affect our business, financial condition and results of operations.
• We have incurred net losses in recent years; accordingly, we may incur losses, even significant, in the future and we may not be able to generate sufficient revenue to maintain profitability.
• Macroeconomic conditions, inflationary pressures, economic downturns, and market volatility could adversely affect our operating results and growth prospects.
• The impact of the military action in Ukraine, which has worsened in recent periods, has affected and may continue to affect our business.
• Our revenues are highly dependent on clients primarily located in the U.S.
• We face intense competition, and any damage to our reputation could adversely impact our ability to generate and retain business.

Risks Related to Our Use of Technology and Artificial Intelligence

• Technologies, methodologies, and industry standards, including that relate to artificial intelligence (“AI”), are rapidly changing, on an accelerated basis; these changes, and our failure to adopt to them, may have a material adverse effect on our business, financial condition, and results of operations.
• Social and ethical issues relating to the extensive use of AI in our offerings may result in reputational harm or liability.
• Security breaches and incidents, system failures or errors, and other disruptions to our networks and systems, could result in unauthorized access to, or the disclosure or other processing of, confidential information and expose us to liability, which would cause our business and reputation to suffer.
• Undetected software design defects, errors or failures may result in loss of business or in liabilities that could have a material adverse effect on our reputation, business and results of operations.

Risks Related to Our Acquisition Strategy

• Acquisitions could be difficult to identify and integrate, divert the attention of management, disrupt our business, dilute stockholder value and adversely affect our financial condition and results of operations. We may not achieve the financial and strategic goals that were contemplated at the time of a transaction, and we may be exposed to claims, liabilities and disputes as a result of the transaction that may adversely impact our business, operating results and financial condition.

Risks Related to Our Personnel

• Our failure to successfully attract, hire, develop, motivate and retain highly skilled personnel in the relevant regions could have a significant adverse effect on our business, financial condition, and results of operations.
• Our business operations may be severely disrupted if we lose the services of our senior executives and key employees.

Risks Related to Our Clients and Our Client Agreements

• Failing to successfully deliver contracted services or causing disruptions to clients’ businesses may have a material adverse effect on our reputation, business, financial condition and results of operations.
• We do not have long-term commitments from our clients, and our clients may terminate contracts before completion or choose not to renew contracts.
• If we are unable to accurately estimate the cost of service or if we fail to maintain favorable pricing for our services, our contracts may be unprofitable.
• We face risks associated with the long selling and implementation cycles for our services that require significant resource commitments prior to realizing revenues for those services.
• Failure to obtain engagements for and effectively manage increasingly large and complex projects may have an adverse effect on our business, financial condition and results of operations.

Risks Related to Regulations, Legislation and Legal Proceedings

• We are exposed to various risks related to the global regulatory environment as well as legal proceedings and claims.
• Regulatory issues relating to the development and use of AI may adversely affect our business, financial condition, and results of operations.
• Our global business, especially in Commonwealth of Independent States (“CIS”), Central and Eastern European (“CEE”) countries, and Latin America, exposes us to significant legal, economic, tax and political risks.
• We are subject to governmental export controls and trade and economic sanctions that could impair our ability to compete in international markets and subject us to liability if we are found to violate these controls.
• Negative publicity about offshore outsourcing or anti-outsourcing legislation may have an adverse effect on our business.

Risks Related to Our Tax Treatment

• Our effective tax rate could be adversely affected by a variety of factors.

Risks Related to Our Financial Condition

• Failure to collect receivables from, or bill for unbilled services to, clients may have a material adverse effect on our results of operations and cash flows.
• We may need additional capital and failure to raise additional capital on terms favorable to us, or at all, could limit our ability to grow our business and develop or enhance our service offerings to respond to market demand or competitive challenges.
• Our debt service obligations may adversely affect our financial condition and cash flows from operations.

Risks Related to Intellectual Property

• We may not be able to prevent unauthorized use of our intellectual property, and our intellectual property rights may not be adequate to protect our business, financial condition and results of operations.
• We may face intellectual property infringement claims that could be time-consuming and costly to defend and failure to defend against such claims may have a material adverse effect on our reputation, business, financial condition and results of operations.
• Our use of open source software and our failure to comply with the terms of the underlying open source software licenses could negatively affect sales and create potential liability.

Risks Related to Our Common Stock

• Our bylaws limit the forum in which stockholders may bring a suit for substantially all disputes between us and our stockholders.
• The price of our common stock may continue to be volatile.

Risks Related to Our Business, Operations and Industry

We operate in a rapidly evolving industry, which makes it difficult to evaluate future prospects and increases the risk that we will not continue to be successful and may adversely impact our stock price, financial condition and results of operations.

The technology services industry is competitive and continuously evolving, subject to rapidly changing demands and constant technological developments, particularly in recent years with the development and proliferation of AI. As a result, success and performance metrics are difficult to predict and measure. Since services and technologies are rapidly evolving and each company within the industry can vary greatly in terms of the services it provides, its business model and its results of operations, it can be difficult to predict how any company’s services, including ours, will be received in the market.

While many Fortune 1000 enterprises, including our clients, have been willing to devote significant resources to incorporate AI and other emerging technologies and related market trends into their business models, they may not continue to spend any significant portion of their budgets on services like those provided by us. Neither our past financial performance nor the past financial performance of any other company in the technology services industry is indicative of how we will fare financially in the future. Our future profits may vary substantially from our past profits and those of other companies, making an investment in us risky and speculative. If clients’ demand for our services declines as a result of economic conditions, market factors, shifts in the technology industry, competition or otherwise, our business, financial condition and results of operations would be adversely affected.

Our stock performance is highly dependent on our ability to successfully execute and grow the business. Consequently, our stock price may be adversely impacted by our inability to execute our plan, to meet or exceed financial and other forecasts, and to achieve our stated short-term and long-term goals.

We may be unable to effectively manage our growth or achieve anticipated growth, particularly as we expand into new geographies and industries, which could place significant strain on our management personnel, systems and resources.

Continued growth and expansion increase challenges we face in recruiting, training and retaining sufficiently skilled professionals and management personnel, maintaining effective oversight of personnel and delivery centers, developing financial and management controls, coordinating effectively across geographies and business units, and preserving our culture and values. Failure to manage growth effectively could have a material adverse effect on the quality of the execution of our engagements, and our ability to attract and retain IT professionals, as well as on our business, financial condition and results of operations.

In addition, as we increase the size and complexity of projects that we undertake with clients, add new delivery sites, introduce new services or enter into new markets, we may face new market, technological, operational, compliance and administrative risks and challenges, including risks and challenges unfamiliar to us. We may not be able to mitigate these risks and challenges to achieve our anticipated growth or successfully execute large and complex projects, which could materially adversely affect our business, prospects, financial condition and results of operations.

These risks are heightened as we continue to expand geographically, including through acquisitions, such as our acquisitions of JUXT in the U.K. and Mobile Computing in Argentina in 2024. As we grow, we continue to explore other geographies for expansion. This may result in higher costs, such as increased overhead related to compliance with new regulatory frameworks, affecting our profitability levels. Furthermore, as we expand to new geographies, we may not be able to sustain the level of competitiveness, including the high quality and low cost, of our workforce that has contributed to our success. Additionally, we do not have a long history of operating our business, including recruiting, training and retaining employees, in these new geographies, and our competitiveness may decline if we are not able to effectively manage these risks.

Our revenues have historically been highly dependent on a limited number of clients and industries, and accordingly any decrease in demand for outsourced services by these clients or in these industries may reduce our revenues and adversely affect our business, financial condition and results of operations.

Our revenues have historically been highly dependent on a limited number of clients. For example, we generated approximately 57.7% and 55.7% of our revenues from our 10 largest clients during the years ended December 31, 2025 and 2024, respectively. During each of the years ended December 31, 2025 and 2024, we had one customer that accounted for 15.4% and 16.0% of our revenues, respectively. Since a substantial portion of our revenue is derived through time and materials contracts, which are mostly short-term in nature and cancellable by our customers on limited notice, a major client in one year may not provide the same level of revenues for us in any subsequent year. In addition, substantially all of our revenues is concentrated in our top four industry verticals: Retail; Technology, Media and Telecom; Finance; and CPG/Manufacturing. Our growth largely depends on our ability to diversify the industries in which we serve, continued demand for our services from clients in these industry verticals and other industries that we may target, and trends in these industries to outsource the type of services we provide.

Our business is also subject to seasonal trends that impact our revenues and profitability between quarters, driven by the timing of holidays in the countries in which we operate and the U.S. retail cycle, which drives the behavior of several of our retail customers.

A reduction in demand for our services and solutions caused by seasonal trends, downturns in any of our targeted industries, a slowdown or reversal of the trend to outsource IT services in any of these industries or the introduction of regulations that restrict or discourage companies from outsourcing IT services may result in a decrease in the demand for our services and could have a material adverse effect on our business, financial condition and results of operations.

We have incurred net losses in recent years; accordingly, we may incur losses, even significant, in the future and we may not be able to generate sufficient revenue to maintain profitability.

Although we had net income of $9.7 million and $4.0 million for the years ended December 31, 2025 and 2024, respectively, we incurred net losses of $1.8 million for the year ended December 31, 2023. We may incur losses, even significant, in the future for a number of reasons, including, unforeseen and high levels of operating expenses, expansion into higher-cost geographies, and increased personnel costs due to wage inflation, or otherwise.

We anticipate that our operating expenses will increase in the foreseeable future as we invest in our business for growth. This includes, but is not limited to acquisition-related integration costs, costs associated with maintaining compliance as a public company, and increased spending related to sales, marketing and R&D. These increased expenditures may make it more difficult to achieve and maintain profitability. In addition, our efforts to grow our business may be more expensive than we expect, and we may not be able to generate sufficient revenue to offset increased operating expenses. If we are required to reduce our expenses, our growth strategy could be materially affected. We will need to generate and sustain significant revenue levels in future periods in order to become profitable, and, even if we do, we may not be able to maintain or increase our level of profitability.

Accordingly, we cannot assure you that we will achieve sustainable operating profits as we continue to expand our business and infrastructure, further develop our marketing efforts, and otherwise implement our growth initiatives. Any failure to increase our revenue sufficiently to keep pace with our investments and other expenses could prevent us from achieving and maintaining profitability or positive cash flow on a consistent basis. If we are unable to successfully address these risks and challenges as we encounter them, our business, results of operations and financial condition would be adversely affected. In the event that we fail to achieve or maintain profitability, this could negatively impact the value of our common stock.

Macroeconomic conditions, inflationary pressures, economic downturns, and market volatility could adversely affect our operating results and growth prospects.

We operate globally and as a result our business, revenues and profitability are impacted by global macroeconomic conditions. Our operations have been, and could be, affected by general economic and market conditions, including, among others, inflation rate fluctuations, currency exchange rates, interest rates, tax rates, economic downturns and uncertainty, market volatility, fluctuations in consumer spending, political instability, changes in laws and global trade policies, tariffs and sanctions. Further, a federal government shutdown resulting from failing to pass budget appropriations, adopt continuing funding resolutions, or raise the debt ceiling, and other budgetary decisions limiting or deferral government spending, may negatively impact U.S. or global economic conditions, including corporate and consumer spending, and liquidity of capital markets. Such economic volatility could adversely affect our clients’ business, as well as our business, financial condition, results of operations and cash flows, and future market disruptions could negatively impact us. Because of our concentration on our clients’ capital-intensive digital transformation programs, our clients, and therefore our business, may be particularly sensitive to rising interest rates. Geopolitical destabilization could continue to impact global currency exchange rates, commodity prices, trade and movement of resources, which may adversely affect the technology spending of our clients and potential clients.

Changes by the U.S. administration to fiscal, political, regulatory and other policies may adversely affect our business, financial condition and results of operations.

Changes by the U.S. administration to fiscal, political, regulatory and other policies, including new policies and other changes, may adversely affect our business, financial condition and results of operations. In particular, there is substantial regulatory uncertainty regarding international trade and trade policy, including the imposition of tariffs, which have and likely will continue to, trigger retaliatory actions from other foreign governments, potentially resulting in a “trade war.”

While we cannot predict the future policy positions of the U.S. or other countries, the adoption of policies that amount to or create restrictions upon the import or export of our work product and services in the future could have an adverse impact on demand for our services and sales, and affect the macroeconomic climate in the U.S. and elsewhere, which could have an adverse effect on our business, financial condition and results of operations.

Current and future geopolitical instability, in particular in geographies where we have personnel, such as Ukraine, could adversely affect our business, results of operations and financial condition.

We face risks related to geopolitical events, international hostilities, epidemics, outbreaks, and other macroeconomic events that are outside of our control. Any material adverse effect from conflicts, political instability or unrest, administration or regime changes, coups or other geopolitical events may disrupt our delivery of services, impair our ability to complete financial or banking transactions, cause us to shift all or portions of our work occurring in the region to other countries, and may restrict our ability to engage in certain projects in the region or in projects involving certain customers in the region. For example, the continued military action against Ukraine initiated by Russia and the conflicts involving Israel and others in the Middle East have affected and will further affect our business and have resulted in disruptions in the broader global economic and geopolitical environment, which may further affect our business. Further, actions implemented by governments in response to any geopolitical instability, such as sanctions, tariffs, trade embargos or otherwise, could impact our ability to deliver services, execute our operational strategy and have an adverse impact on our results of operations.

Our business may be adversely affected by instability, disruption or destruction in a geographic region in which we operate, regardless of cause, including war, terrorism, riot, civil insurrection or social unrest, coups, climate change, and natural or man-made disasters, including famine, flood, fire, earthquake, storm or pandemic events and spread of disease. Such events and conflicts may cause clients to delay their decisions on spending for the services provided by us and give rise to sudden significant changes in regional and global economic conditions and cycles. These events also pose significant risks to our personnel and to physical facilities and operations, which could materially adversely affect our financial results.

The impact of the military action in Ukraine, which has worsened in recent periods, has affected and may continue to affect our business.

The ongoing Russian military conflict with Ukraine, which has even worsened, has impacted our business and may continue to pose risks to our business. The impact to Ukraine as well as actions taken by other countries, including new and stricter sanctions imposed by the United States, European Union, the United Kingdom, Canada and other countries against officials, individuals, regions, and industries in Russia, and actions taken by Russia in response to such sanctions, and each country’s potential response to such sanctions, tensions, and military actions could have a material adverse effect on our operations. Any such material adverse effect from the conflict and enhanced sanctions activity may disrupt our delivery of services, impair our ability to complete financial or banking transactions, cause us to shift all or portions of our work occurring in the region to other countries, and may restrict our ability to engage in certain projects in the region or involving certain customers in the region.

We are actively monitoring the security of our personnel and the stability of our infrastructure, including communications and internet availability. We have adapted to developments as they occur to protect the safety of our people and handle potential impacts to our delivery infrastructure. We are actively working with our personnel and with our customers to meet their needs and to ensure smooth delivery of services.

We have no way to predict the progress or outcome of the military action in Ukraine, as the conflict and government reactions continue to develop and are beyond our control. Prolonged unrest, military activities, expansion of hostilities, or broad-based sanctions, could have a material adverse effect on our operations and business outlook. In addition, the current geopolitical situations in Serbia and elsewhere in Eastern Europe create additional uncertainty in the region, and could adversely affect our business.

Our revenues are highly dependent on clients primarily located in the U.S. Any economic downturn in the U.S. or in other parts of the world, including Europe, or disruptions in the credit markets may have a material adverse effect on our business, financial condition and results of operations.

The IT services industry is particularly sensitive to the economic environment and tends to decline during general economic downturns. We derive the majority of our revenues from clients in the U.S. In the event of an economic downturn in the U.S. or in other parts of the world, including Europe, our existing and prospective clients may reduce or postpone their technology spending significantly, which may in turn lower the demand for our services and may have a material adverse effect on our business, financial condition and results of operations. In addition, if a disruption in the credit markets were to occur, it could pose a risk to our business if clients or vendors are unable to obtain financing to meet payment or delivery obligations to us or if we are unable to obtain necessary financing. Any downturn in our clients’ business or industries could result in their decision to forego, delay or otherwise reduce digital transformation programs, and thereby reduce our clients’ need for our services.

We face intense competition.

The market for technology and IT services is highly competitive and subject to rapid change and evolving industry standards, particularly around the use and development of AI solutions, and we expect competition to persist and intensify. We face competition from offshore IT services providers in outsourcing destinations with low wage costs such as India, China, CEE countries and Latin America, as well as competition from large, global consulting and outsourcing firms and in-house IT departments of large corporations. Typically, clients tend to engage multiple IT services providers instead of using an exclusive IT services provider, which could reduce our revenues to the extent that our clients obtain services from competing companies. Industry clients may prefer IT services providers that have more locations or that are based in countries that are more cost competitive, stable and/or secure than some of the emerging markets in which we operate. Companies may decide to retain work internally rather than out-source it to us.

Our primary competitors include global consulting and traditional IT service providers such as Accenture plc, EPAM Systems, Inc., Capgemini SE, Cognizant Technology Solutions Corporation, Infosys Technologies, Tata Consultancy Services Limited,

Wipro, digital transformation providers such as Globant S.A., and Endava plc., and specialized AI and data science consultancies. Many of our present and potential competitors have substantially greater financial, marketing and technical resources, and name recognition than we do. Therefore, they may be able to compete more aggressively on pricing or devote greater resources to the development and promotion of technology and IT services. Thus, we may be unable to successfully compete and retain our clients against such competitors. Increased competition as well as our inability to compete successfully may have a material adverse effect on our business, prospects, financial condition and results of operations.

Damage to our reputation may adversely impact our ability to generate and retain business.

Since our business involves providing tailored services and solutions to clients, we believe that our corporate reputation is a significant factor when an existing or prospective client is evaluating whether to engage our services as opposed to those of our competitors. In addition, we believe that our brand name and reputation also play an important role in recruiting, hiring and retaining highly skilled personnel.

Our brand name and reputation are potentially susceptible to damage by factors beyond our control, including actions or statements made by current or former clients and employees, competitors, vendors, adversaries in legal proceedings, government regulators and the media. There is a risk that negative information about us, even if untrue, could adversely affect our business. Any damage to our reputation could be challenging to repair, could make potential or existing clients reluctant to select us for new engagements, could adversely affect our recruitment and retention efforts, and could reduce investor confidence.

If we are not able to maintain an effective system of internal control over financial reporting, particularly as we grow and expand into new geographies, investors could lose confidence in our financial reporting, which could harm our business and have an adverse effect on our stock price. We cannot provide assurances that material weaknesses, or significant deficiencies, will not occur in the future.

Any failure to maintain effective internal controls over our financial reporting could materially and adversely affect us. Section 404 of the Sarbanes-Oxley Act requires us to include in our annual reports on Form 10-K an assessment by management of the effectiveness of our internal controls over financial reporting and have our independent public accounting firm attest to and report on management’s assessment of the effectiveness of our internal control over financial reporting. In the future, if we are unable to conclude that we have effective internal control over financial reporting or if our independent auditors are unable to provide us with an attestation and an unqualified report as to the effectiveness of our internal control over financial reporting, investors could lose confidence in the reliability of our financial statements, which could result in a decrease in the value of our securities.

If any material weaknesses or significant deficiencies in our internal control over financial reporting are discovered in the future, they may adversely affect our ability to record and report financial information in a timely and accurate manner and, as a result, our financial statements may contain material misstatements or omissions. Our reputation, operations, and financial condition may be adversely impacted if we are required to restate our financial statements in the future due to any misstatement or omissions contained in our financial statements.

Risks Related to Our Use of Technology and Artificial Intelligence

Technologies, methodologies, and industry standards are rapidly changing on an accelerated basis; these changes, and our failure to adapt to them, may have a material adverse effect on our business, financial condition, and results of operations.

We operate in an industry characterized by rapidly changing technologies, methodologies and industry standards related to such technologies, which continue to change on an accelerated basis. In particular, generative and agentic AI technologies, which can be used to independently create seemingly new outputs (such as computer code) and may soon operate effectively with limited (or no) human intervention, could significantly alter the way we and our industry operate. Our future success depends in part on the impact of these rapidly evolving changes and on our ability to anticipate how these and other developments may affect our business, and our ability to enhance our existing services and develop and introduce new services to keep pace with such changes and developments and meet changing client needs.

Development and introduction of new services and products, including generative and agentic AI, are increasingly complex and expensive, involve a significant commitment of time and resources, and are subject to a number of risks challenges, and/or associated costs, including with respect to:

• updating services, applications, tools and software and developing new services quickly enough to meet clients’ needs;
• making software features work effectively and securely over the internet or with new or changed operating systems;
• updating software and services to keep pace with evolving industry standards, methodologies, regulatory and other developments in the industries where our clients operate; and
• maintaining a high level of quality and reliability as we implement new technologies and methodologies.

We may not be successful in anticipating or responding to relevant technological developments in a timely manner, and even if we do so, the services, technologies or methodologies we develop or implement may not be successful in the marketplace. Clients may decide to use AI and other new tools and technologies themselves, including in open-source and other products, tools and content, rather than engaging us. Furthermore, services, technologies or methodologies that are developed by competitors may render our services noncompetitive or obsolete. These market, technological developments and competitive pressures could significantly reduce demand for our services, thereby materially and adversely affecting our business, financial condition and results of operations. Our failure to adapt and enhance our existing services and to develop and introduce new services, in light of these ongoing changes, to promptly address the needs of our clients may have a material adverse effect on our business, financial condition and results of operations.

Social and ethical issues relating to the extensive use of AI in our offerings may result in reputational harm or liability.

Social and ethical issues relating to the use of new and evolving technologies such as AI in our offerings, particularly where the AI outputs may not align with our or our customers’ expectations, may result in reputational harm and liability, and may cause us to incur additional research and development or other costs to resolve such issues. We are increasingly building AI into many of our offerings, including demand forecasting, and price, promotional, and supply chain optimization; we also use generative AI-based knowledge assistant and similar tools. As with many innovations, AI presents risks and challenges that could affect its adoption, and therefore our business. The use of AI presents emerging ethical issues and if we enable or offer solutions that draw controversy due to their perceived or actual impact on consumers or society, we may experience brand or reputational harm, competitive harm, or legal liability. Potential government regulation in the space of AI ethics may also increase the burden and cost of research and development in this area, which may have a material adverse effect on our business, financial condition and results of operations. Failure to address AI ethics issues by us or others in our industry could undermine public confidence in AI, in the use of AI within our industry, and slow adoption of AI in our services.

Security breaches and incidents, system failures or errors, and other disruptions to our networks and systems could result in unauthorized access to, or the disclosure or other processing of, confidential information and expose us to liability, which would cause our business and reputation to suffer.

We often have access to, or are required to collect, use, transmit, store, or otherwise process, sensitive or confidential client and customer data, including intellectual property, proprietary business information of the Company and our clients, and personal information of our clients, customers, employees, contractors, service providers and others. We use our data centers and networks, and certain networks and other facilities and equipment of our third-party contractors and service providers, for these purposes. Despite our implementation of security measures and protocols that we believe to be reasonable, our information technology systems and infrastructure, or those on which we rely, may be vulnerable to attacks and disruptions by hackers or other third parties, the introduction of ransomware or other malicious code, or otherwise may be breached or subject to security incidents or compromises due to human error, denial of service incidents, phishing attacks, social engineering, insider threats, zero-day vulnerabilities, malfeasance or other disruptions. Because of increases in the number of our personnel, and those of our contractors and service providers working remotely, we face increased risks of such attacks and disruptions that may affect our systems and networks or those of our clients, contractors and service providers. Increased risks of such attacks and disruptions, including a heightened risk of potential cyberattacks by state actors and state affiliated actors, such as China, among others, also exist because of geopolitical events such as Russia’s significant military action against Ukraine. Such risks could increase as we expand our geographic footprint. Further, cyberattacks are becoming increasingly sophisticated, including as a result of the proliferation of AI and machine learning tools.

Any resulting breach, incident or disruption could compromise the availability or integrity of our data centers, networks and other equipment and the sensitive, confidential, proprietary, and other business information stored or processed thereby or thereon could be accessed, disclosed, altered, misappropriated, lost, stolen, rendered unavailable, or otherwise processed without authorization. In addition, any failure or security breach or incident in a client’s system relating to the services we provide could also result in loss or misappropriation of, or unauthorized access, alteration, use, acquisition, disclosure, or other processing of our sensitive or confidential information, and may result in a perception that we or our contractors or service providers caused such an incident, even if our and our contractors’ and service providers’ networks and other facilities and equipment were not compromised. Although we maintain industry standard information security controls, including supply chain security verification, anti-phishing training and testing, and vulnerability management consistent with our ISO 27001 certification, no safeguard or combination of safeguards can prevent all incidents from happening.

Our contractors and service providers face similar risks with respect to their facilities and networks on which we rely, and they also may suffer outages, disruptions, and security incidents and breaches.

While we have not experienced any material cybersecurity incidents, we cannot guarantee that our or our third-party vendors and service providers’ systems and networks have prevented, or will in the future prevent, all exploitable vulnerabilities, defects or bugs that could result in a breach of or disruption to our systems and networks or the systems and networks of third parties that support us and our services. Breaches and security incidents suffered by us and our contractors and service providers may remain undetected for an extended period. Any such breach, disruption or other circumstance leading to loss, alteration, misappropriation, or unauthorized use, access, acquisition, disclosure, destruction, or other processing of sensitive, proprietary, or confidential client or customer data, including personal information, suffered by us or our contractors or service providers, or the perception that any may have occurred, could expose us to claims, litigation, and liability, regulatory investigations and proceedings, cause us to lose clients and revenue, disrupt our operations and the services provided to clients, damage our reputation, cause a loss of confidence in our services, require us to expend significant resources to remediate harms, protect against further similar breaches or incidents and to rectify problems caused by these events, which may result in significant operational impacts and/or financial and other potential losses.

Although we maintain insurance for liabilities incurred as a result of certain security-related damages, our coverage may not be adequate for liabilities actually incurred, insurance may not continue to be available to us on economically reasonable terms, or at all, or any insurer may deny coverage as to any future claim. The successful assertion of one or more large claims against us that exceeds available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or coinsurance requirements, could have a material adverse effect on our business, including our financial condition, results of operations, and reputation.

Undetected software design defects, errors or failures may result in loss of business or in liabilities that could have a material adverse effect on our reputation, business and results of operations.

Our services involve developing software solutions for our clients and we may be required to make certain representations and warranties to our clients regarding the quality and functionality of our software. Given that our software solutions have a high degree of technological complexity, they could contain design defects or errors that are difficult to detect or correct. We cannot provide assurances that, despite testing by us, errors or defects will not be found in our software solutions, and further, that any such errors will not contribute or lead to a cyber security incident. Any such errors or defects could result in litigation, or other claims for damages against us, and/or the loss of current clients, revenues, and market share, and could hinder our ability to attract new clients or achieve market acceptance, and divert resources, and thus could have a material adverse effect on our reputation, business, financial condition and results of operations.

We rely on software, hardware and SaaS technologies from third parties that may be difficult to replace or that may cause errors or defects in, or failures of, our services or solutions.

We rely on software and hardware from various third parties as well as hosted Software as a Service (“SaaS”) applications from third parties to deliver our services and solutions. If any of these software, hardware or SaaS applications become unavailable due to loss of license, extended outages, interruptions, or because they are no longer available on commercially reasonable terms, there may be delays in the provisioning of our services until equivalent technology is either developed by us, or, is identified, obtained and integrated, which could increase our expenses. Furthermore, third-party service providers may sunset or otherwise cease to provide software updates or patches, which may require that we expend additional financial or operational resources to ensure ongoing operability and the security of our systems or products. Any errors or defects in or failures of third-party software, hardware or SaaS applications could result in errors or defects in or failures of our services and solutions, which could be costly to correct and have an adverse effect on our reputation, financial condition and results of operations.

Risks Related to Our Acquisition Strategy

Acquisitions could be difficult to identify, and could divert the attention of management, disrupt our business, dilute stockholder value and adversely affect our financial condition and results of operations, we may not achieve the financial and strategic goals that were contemplated at the time of a transaction, and we may be exposed to claims, liabilities and disputes as a result of the transaction that may adversely impact our business, operating results and financial condition.

We continuously review and consider strategic acquisitions of businesses, products or technologies. For example, in April 2023 we acquired NextSphere, in September 2024 we acquired JUXT and in October 2024 we acquired Mobile Computing. We seek to acquire or invest in other businesses, products or technologies that we believe could complement or expand our services, enhance our technical capabilities or otherwise offer growth opportunities. The pursuit of potential acquisitions may divert the attention of management and cause us to incur various expenses in identifying, investigating and pursuing suitable acquisitions, whether or not the acquisition purchases are completed. Additionally, we may not be able to find and identify desirable acquisition targets or be successful in entering into an agreement with any particular target or obtain adequate financing to complete such acquisitions. If we acquire businesses, we may not be able to successfully integrate the acquired personnel, operations and technologies, or effectively manage the combined business following the acquisition.

Acquisitions could also result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect our financial condition, cash flows and results of operations. In addition, if an acquired business fails to meet our expectations, we may not achieve the financial and strategic goals that were contemplated at the time of a transaction, and our business, financial condition and results of operations may be adversely affected. Furthermore, we may acquire businesses that have inferior margins and profitability levels in comparison to our existing business and this may dilute our overall profitability of the company. This, in turn, may result in adverse financial results and dilution to existing stockholders.

Our operating results or financial condition may be adversely impacted by claims or liabilities that we assume from an acquired company or technology or other claims or liabilities otherwise related to an acquisition, including, among others, claims from governmental and regulatory agencies or bodies, terminated employees, current or former customers, current or former stockholders or other third parties, or arising from contingent payments related to the acquisition; pre-existing contractual relationships that we assume from an acquired company that we would not have otherwise entered into, the termination or modification of which may be costly or disruptive to our business; unfavorable revenue recognition or other accounting treatment as a result of an acquired company’s practices; and intellectual property claims or disputes. We may fail to identify or assess the magnitude of certain liabilities, shortcomings or other circumstances prior to acquiring a company or technology, which could result in unexpected litigation or regulatory exposure and other adverse effects on our business, operating results and financial condition.

We face risks associated with integrating acquired businesses that, if realized, may adversely impact our business, operating results and financial condition.

We face risks in successfully integrating an acquired business and effectively managing the combined business following the acquisition. We face additional costs and risks associated with implementing procedures and policies, such as those related to financial reporting, disclosure controls and procedures, and cyber and information security, as well as assumed litigation and other liabilities of the acquired company. Some of the additional risks associated with acquiring a business include, but are not limited to:

• inability to integrate or benefit from acquired technologies or services;
• product synergies, cost reductions, increases in revenue and economies of scale may not materialize as expected;
• the business culture of the acquired entity may not match well with our culture;
• unforeseen delays, unanticipated costs and liabilities may arise when integrating operations, processes and systems in geographies where we have not conducted business;
• unanticipated costs or liabilities associated with the strategic transactions and incurrence of transaction-related costs;
• assumption of the existing obligations or unforeseen liabilities of the acquired business;
• difficulty integrating the accounting systems, security infrastructure, operations and personnel of the acquired business;
• difficulties and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business;
• difficulty converting the current and prospective customers of the acquired business onto our platform and contract terms, including disparities in the revenue, licensing, support or professional services model of the acquired company;
• diversion of management’s attention from other business concerns;
• adverse effects to our existing business relationships with business partners and customers as a result of the strategic transactions;
• unexpected costs may arise due to unforeseen changes in tax, payroll, pension, labor, trade, environmental and safety policies in new jurisdictions where the acquired entity operates;
• difficulty in retaining, motivating and integrating key management and other employees of the acquired business;
• use of resources that are needed in other parts of our business;
• dispute over contingent payments; and
• use of substantial portions of our available cash to consummate the strategic transaction.

We may not realize the expected benefits from a strategic transaction. We may have difficulties as a result of entering into new markets where we have limited or no direct prior experience or where competitors may have stronger market positions.

If any of these circumstances occur, individually or in the aggregate, they may have a material adverse impact on our business, operating results and financial condition.

We face risks associated with the transparency, quality, and reliability of financial information of a business we acquire.

Although we perform due diligence on a targeted business that we intend to acquire, we are exposed to risks associated with the quality and reliability of the financial statements of the acquired business. This risk may be higher with smaller businesses and businesses that are operated in jurisdictions and countries with poorer regulatory and compliance requirements. In such situation where we acquire a target with unreliable financial statements, we are exposed to material risks that may impact the reliability of our overall financial statements and may adversely impact our stock price.

We also cannot assure you that the diligence we conduct when evaluating future acquisitions will reveal all material issues that may be present, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of our control will not later arise. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Further, as a result of a completed acquisition, purchase accounting, and integration of the acquired business, we may be required to take write-offs or write-downs, restructuring and impairment or other charges that could negatively affect our business, assets, liabilities, prospects, outlook, financial condition and results of operations.

Risks Related to Our Personnel

Our failure to successfully attract, hire, develop, motivate and retain highly skilled personnel in the relevant regions could have a significant adverse effect on our business, financial condition, and results of operations.

Our continued growth, success and operational efficiency is dependent on our ability to attract, hire, develop, motivate and retain highly skilled personnel, including IT engineers and other technical personnel, in the geographically diverse locations in which we operate and into which we are expanding. Competition for highly skilled IT professionals is intense and as a consequence, we may witness increasing challenges around employee retention, talent shortages, and attrition rates. The significant market demand for highly skilled IT personnel and competitors’ activities may induce our qualified personnel to leave and make it more difficult for us to recruit new employees with suitable knowledge, experience and professional qualifications. High attrition rates of IT personnel would increase our operating costs, including hiring and training costs, and could have an adverse effect on our ability to complete existing contracts in a timely manner, meet client objectives and expand our business. Failure to attract, hire, develop, motivate and retain personnel in the locations and with the skills necessary to serve our clients could decrease our ability to meet and develop ongoing and future business and could materially adversely affect our business, financial condition and results of operations.

Our business operations may be severely disrupted if we lose the services of our senior executives and key employees.

Our success depends substantially upon the continued services of our senior executives and other key employees. If we lose the services of one or more of such senior executives or key employees, our business operations may be disrupted, and we may not be able to replace them easily or at all. In addition, competition for senior executives and key personnel in our industry is intense, and we may be unable to retain such personnel or attract and retain such personnel in the future, in which case our business may be severely disrupted.

Increases in compensation expenses, including stock-based compensation expenses, could lower our profitability, and dilute our existing stockholders.

Wages and other compensation costs in the countries in which we maintain significant operations and delivery centers are lower than comparable wage costs in more developed countries. However, wages in the technology industry in these countries may increase at a faster rate than in the past, which may make us less competitive unless we are able to increase the efficiency and productivity of our people. If we increase operations and hiring in more developed economies, our compensation expenses will increase because of the higher wages demanded by technology professionals in those markets. Wage inflation, whether driven by competition for talent, ordinary course pay increases or otherwise, could increase our cost of services as well as selling, general and administrative expenses and reduce our profitability if we are not able to pass those costs on to our customers or charge premium prices when justified by market demand.

In addition, we have granted certain equity-based awards under our equity incentive plans and expect to continue doing so. For the years ended December 31, 2025, 2024, and 2023 we recorded $30.3 million, $34.2 million, and $35.5 million respectively, of stock-based compensation expense related to the grant of equity-based awards. If we do not grant equity awards, or if we reduce the value of equity awards we grant, we may not be able to attract, hire and retain key personnel. If we grant more equity awards to attract, hire and retain key personnel, the expenses associated with such additional equity awards could materially adversely affect our results of operations. If the anticipated value of these equity awards does not materialize because of volatility or lack of positive performance in our stock price, we may be unable to retain our key personnel or attract and retain new key employees in the future, in which case our business may be severely disrupted and our ability to attract and retain personnel could be adversely affected. The issuance of equity-based compensation may also result in dilution of our common stock.

Risks Related to Our Clients and Our Client Agreements

Failing to successfully deliver contracted services or causing disruptions to clients’ businesses may have a material adverse effect on our reputation, business, financial condition and results of operations.

Our business is dependent on our ability to successfully deliver contracted services in a timely manner. Any failure of our equipment or systems, or any major disruption to basic infrastructure, such as power and telecommunications in the locations in which we operate, could impede our ability to provide contracted services to our clients. In addition, if our professionals make errors in the course of delivering services to our clients or fail to consistently meet the service requirements of a client, these errors or failures could disrupt the client’s business. Any failure to successfully deliver contracted services, or any resulting disruptions to a client’s business, including the occurrence of any failure in a client’s system or breach of security relating to the services provided by us, may expose us to substantial liabilities and have a material adverse effect on our reputation, business, financial condition and results of operations.

Additionally, our clients may perform audits or require us to perform audits and provide audit reports with respect to the IT and financial controls and procedures that we use in the performance of services for our clients. Our ability to acquire new clients and retain existing clients may be adversely affected and our reputation could be harmed if we receive a qualified opinion, or if we cannot obtain an unqualified opinion in a timely manner, with respect to our controls and procedures in connection with any such audit. We could also incur liability if our controls and procedures, or the controls and procedures we manage for a client, were to result in an internal control failure or impair our client’s ability to comply with its own internal control requirements. If we or our partners fail to meet our contractual obligations or otherwise breach obligations to our clients, we could be subject to legal liability, which may have a material and adverse effect on our reputation, business, financial condition and results of operations.

We do not have long-term commitments from our clients, and our clients may terminate contracts before completion or choose not to renew contracts.

Our clients are generally not obligated for any long-term commitments to us. Although a substantial majority of our revenues are generated from repeated business, which we define as revenues from a client that also contributed to our revenues during the prior year, our engagements with our clients are typically for projects that are singular in nature. In addition, our clients can terminate many of our master services agreements and work orders with or without cause, and in most cases without any cancellation charge. Therefore, we must continually seek to obtain new engagements with existing clients and secure new clients to expand our business.

There are a number of factors relating to our clients that are outside of our control which might lead them to terminate a contract or project with us, choose not to renew contracts or decline engaging us for future projects, including:

• a change in strategic or other priorities, resulting in elimination of the impetus for the project or a reduced level of technology spending;
• a change in outsourcing strategy resulting in moving more work to the client’s in-house technology departments or to our competitors, or electing to use new technology solutions (including AI tools) instead of our services or products;
• the replacement by our clients of existing software with packaged software supported by licensors;
• financial difficulties for the client;
• mergers, acquisitions and significant corporate restructurings; and
• changes in the macroeconomic environment resulting in weak demand at our customers’ business.

Failure to perform or observe any contractual obligations could result in cancellation or nonrenewal of a contract, which could cause us to experience a higher than expected number of unassigned employees and an increase in our cost of revenues as a percentage of revenues, until we are able to reduce or reallocate our headcount. The ability of our clients to terminate agreements makes our future revenues uncertain. We may not be able to replace any client that elects to terminate or not renew its contract with us, which could materially adversely affect our revenues and our results of operations.

In addition, some of our agreements specify that if a change of control of our company occurs during the term of the agreement, the client has the right to terminate the agreement. If any future event triggers any change-of-control provision in our client contracts, these master services agreements may be terminated, which would result in loss of revenues.

Our profitability may suffer if we are unable to maintain our resource utilization and productivity levels.

As most of our client projects are performed and invoiced on a time and materials basis, our management tracks and projects billable hours as an indicator of business volume and corresponding resource needs for IT professionals. To maintain our gross profit margins, we must effectively utilize our IT professionals, which depends on our ability to:

• integrate and train new personnel;
• efficiently transition personnel from completed projects to new assignments;
• forecast customer demand for services; and
• deploy personnel with appropriate skills and seniority to projects.

If we experience a slowdown or stoppage of work for any client, or on any project for which we have dedicated personnel or facilities, we may be unable to reallocate these personnel or assets to other clients and projects to keep their utilization and productivity levels high. If we are unable to maintain appropriate resource utilization levels, our profitability may suffer.

If we are unable to accurately estimate the cost of service or if we fail to maintain favorable pricing for our services, our contracts may be unprofitable.

In order for our contracts to be profitable, we must be able to accurately estimate our costs to provide the services required by the applicable contract and appropriately price our contracts. Such estimates and pricing structures used by us for our contracts are highly dependent on internal forecasts, assumptions and predictions about our projects, the marketplace, global economic conditions (including foreign exchange rate volatility) and the coordination of operations and personnel in multiple locations with different skill sets and competencies. Due to the inherent uncertainties that are beyond our control, we may underprice our projects, fail to accurately estimate the costs of performing the work or fail to accurately assess the risks associated with potential contracts. In select cases, we also offer volume discounts once a client reaches certain contractual spend thresholds, which may lower the reference price for a client or result in a loss of profits if we do not accurately estimate the number of discounts to be provided. We may not be able to recognize revenues from fixed-fee contracts in the period in which our services are performed, which may cause our margins to fluctuate. Any increased or unexpected costs, delays or failures to achieve anticipated cost savings we encounter in connection with the performance of our contracts, including those caused by factors outside our control, could make these contracts less profitable or unprofitable.

We face risks associated with the long selling and implementation cycle for our services that require significant resource commitments prior to realizing revenues for those services.

We have a long selling cycle for our services, which requires us to expend substantial time and resources to educate clients on the value of our services and our ability to meet their requirements. In certain cases, we may begin work and incur costs prior to executing a contract. Our selling cycle is subject to many risks and delays over which we have little or no control, including clients’ decisions to choose alternatives to our services (such as other IT services providers or in-house resources) and the timing of clients’ budget cycles and approval processes. Therefore, selling cycles for new clients can be especially unpredictable and we may fail to close sales with prospective clients to whom we have devoted significant time and resources. Any significant failure to generate revenue or delay in recognizing revenues after incurring costs related to sales processes could have a material adverse effect on our business, financial condition and results of operations.

Failure to obtain engagements for and effectively manage increasingly large and complex projects may have an adverse effect on our business, financial condition and results of operations.

Our operating results are dependent on the scale of our projects and the prices we are able to charge for our services. In order to successfully perform larger and more complex projects, we need to establish and maintain effective, close relationships with our clients, continue high levels of client satisfaction and develop a thorough understanding of our clients’ needs. We may also face a number of challenges managing larger and more complex projects, including:

• maintaining high quality control and process execution standards;
• maintaining planned resource utilization rates on a consistent basis;
• using an efficient mix of on-site, off-site and offshore staffing;
• maintaining productivity levels;
• implementing necessary process improvements;
• recruiting and retaining sufficient numbers of highly skilled IT personnel; and
• controlling costs.

There is no guarantee that we may be able to overcome such challenges. In addition, large and complex projects may involve multiple engagements or stages, and there is a risk that a client may choose not to retain us for additional stages or may cancel or delay additional planned engagements. Our failure to successfully obtain engagements for and effectively manage large and complex projects may have an adverse effect on our business, financial condition and results of operations.

Existing insurance coverage and limitation of liability provisions in service contracts may be inadequate to protect us against losses.

We maintain certain insurance coverage, including professional liability insurance, director and officer insurance, property insurance for certain of our facilities and equipment, and business interruption insurance for certain of our operations. However, we do not insure for all risks in our operations and if any claims for injury are brought against us, or if we experience any business disruption, litigation or natural disaster, we might incur substantial costs and diversion of resources.

Most of the agreements we have entered into with our clients require us to purchase and maintain specified insurance coverage during the terms of the agreements, including commercial general insurance or public liability insurance, umbrella insurance, product liability insurance and workers’ compensation insurance. Some of these types of insurance are not available on reasonable terms or at all in some countries in which we operate.

Our liability for breach of our obligations is in some cases limited under client contracts. Such limitations may be unenforceable or otherwise may not protect us from liability for damages. In addition, our existing contracts may not limit certain liabilities, such as claims of third parties for which we may be required to indemnify our clients. The successful assertion of one or more large claims against us in amounts greater than those covered by our current insurance policies could materially adversely affect our business, financial condition and results of operations. Even if such assertions against us are unsuccessful, we may incur reputational harm and substantial legal fees.

Risks Related to Regulations, Legislation and Legal Proceedings

We are exposed to various risks related to the global regulatory environment as well as legal proceedings, claims and the like.

As a public company with global operations, we are subject to the laws of the United States and multiple foreign jurisdictions and the rules and regulations of various governing bodies, which may differ among jurisdictions, including those related to financial and other disclosures, accounting standards, corporate governance, intellectual property, tax, trade (including import, export and customs), antitrust, environment, health and safety (including those relating to climate change), employment, immigration and travel regulations, privacy, data protection and localization, anti-corruption, investment and treasury regulations. Changing, inconsistent or conflicting laws, rules and regulations, and ambiguities in their interpretation and application create uncertainty and challenges, and compliance with laws, rules and regulations may be onerous and expensive, divert management time and attention from revenue-generating activities, and otherwise adversely impact our business operations. Violations or alleged violations of law, rules and regulations, including, among others, those described above, could result in fines, criminal penalties, restrictions on our business, and damage to our reputation, and could have an adverse impact on our business operations, financial condition and results of operations.

From time to time we are involved in legal proceedings or claims regarding a variety of legal or regulatory matters or receive governmental or third-party requests for information regarding compliance or regulatory matters. Legal proceedings, claims, and such requests for information, regardless of merit, may be time-consuming and expensive; divert management’s attention and other resources; result in adverse judgments for damages, injunctive relief, penalties and fines; and negatively affect our business. There can be no assurance regarding the outcome of any legal proceedings, claims or the like.

Regulatory issues relating to the development and use of AI may adversely affect our business, financial condition, and results of operations.

As with many technological innovations, AI presents risks and challenges that could affect its adoption, and therefore our business. Uncertainty in the regulatory regime relating to AI may require significant resources to modify and maintain business practices to comply with U.S. and non-U.S. laws, including to implement policies and procedures to balance the benefits of such technologies against potential harms to consumers, the extent and nature of which cannot be determined at this time. Several jurisdictions around the globe, including Europe and certain U.S. states, have already proposed or enacted laws expressly governing AI, while other regulators have applied existing law to AI uses-cases and may do so in potentially unexpected ways the future. Moreover, other jurisdictions may decide to adopt similar or more restrictive legislation that may complicate our compliance efforts and may render the use of such technologies more challenging. The uncertain nature of the regulatory landscape, combined with potentially conflicting obligations imposed under jurisdiction-specific AI frameworks, increases our operational risks. For instance, AI regulatory obligations may make it harder for us to conduct our business, or they may increase the burden and cost of research and development, and any failure to comply with applicable laws may expose us to regulatory scrutiny, fines, penalties, reputational damage or other liability, require us to change our business practices or otherwise implement and maintain potentially onerous new policies or procedures, or prevent or limit our use of AI or our customers’ demand for AI solutions. If we cannot use AI or our customers’ demand for AI solutions decreases, our business may be less efficient, or we may struggle to attract or retain customers. Any of these factors could adversely affect our business, financial condition, and results of operations, or subject us to brand, reputational, or competitive harms.

Restriction on immigration and the ability to obtain visas to travel may have an adverse effect on our business.

Some of our projects may involve our personnel obtaining visas to travel and work at customer sites outside of our personnel’s home countries and often in the United States. Our reliance on visas to staff projects with employees who are not citizens of the country where the work is to be performed makes us vulnerable to legislative and administrative changes in the number of visas to be issued in any particular year and other work permit laws and regulations. The process to obtain the required visas and work permits can be lengthy and difficult and variations due to political forces and economic conditions in the number of permitted applications, as well as application and enforcement processes, may cause delays or rejections when trying to obtain visas. Delays in obtaining visas may result in delays in the ability of our personnel to travel to meet with and provide services to our customers or to continue to provide services on a timely basis. In addition, if we are not able to obtain a sufficient number of visas without significant additional costs, our ability to provide services to our customers on a timely and cost-effective basis or manage our sales and delivery centers could be adversely impacted. Delays in or the unavailability of visas and work permits could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Our global business, especially in CIS, CEE and Latin American countries, exposes us to significant legal, economic, tax and political risks.

We have significant operations in certain emerging market economies, and are expanding into other countries, which creates legal, economic, tax and political risks. Risks inherent in conducting international operations include:

• less established legal systems and legal ambiguities, inconsistencies and anomalies;
• changes in laws and regulations;
• application and imposition of protective legislation and regulations relating to import or export, including tariffs, quotas and other trade protection measures;
• difficulties in enforcing intellectual property and/or contractual rights;
• bureaucratic obstacles and corruption;
• compliance with a wide variety of foreign laws and regulations, including those relating to privacy, data protection and cybersecurity;
• restrictions on the repatriation of dividends or profits;
• expropriation or nationalization of property;
• restrictions on currency convertibility and exchange controls;
• fluctuations in currency exchange rates;
• potentially adverse tax consequences;
• competition from companies with more experience in a particular country or with international operations;
• civil strife;
• unstable political and military situations; and
• overall foreign policy and variability of foreign economic conditions.

The legal systems of Ukraine, Poland, Serbia, India, Mexico, Moldova, Romania, Argentina and other countries are often beset by legal ambiguities as well as inconsistencies and anomalies due to the relatively recent enactment of many laws that may not always coincide with market developments. Furthermore, legal and bureaucratic obstacles and corruption exist to varying degrees in each of these countries. In such environments, our competitors may receive preferential treatment from governments, potentially giving them a competitive advantage.

Governments may also revise existing contract rules and regulations or adopt new ones at any time and for any reason, and government officials may apply contradictory or ambiguous laws and regulations in ways that could materially adversely affect our business and operations. Any of these changes could impair our ability to operate in a given country, obtain new contracts, or renew or enforce existing contracts to which we are a party. Any new contracting methods could be costly or administratively difficult for us to implement, which could materially adversely affect our business and operations. We cannot guarantee that regulators, judicial authorities or third parties in these and other countries will not challenge our (including our subsidiaries’) compliance with applicable laws, decrees and regulations. In addition to the foregoing, selective or arbitrary government actions may include withdrawal of licenses, sudden and unexpected tax audits, criminal prosecutions and civil actions, all of which could have a material adverse effect on our business, financial condition and results of operations.

The banking and other financial systems in certain CIS, CEE, and Latin American countries where we operate remain subject to periodic instability and generally do not meet the banking standards of more developed markets. Armed conflict, or the threat of armed conflict, including the significant military action against Ukraine launched by Russia, as well as sanctions targeting banks in the region in response to such military action, could contribute to banking challenges or a banking crisis in these countries. Such events, or a financial crisis or the bankruptcy or insolvency of banks through which we receive, or with which we hold, funds may result in the loss of our deposits or adversely affect our ability to complete banking transactions in that region, which could materially adversely affect our business and financial condition.

Furthermore, existing tensions and the emergence of new or escalated tensions in CIS and CEE countries, including the significant military action against Ukraine launched by Russia, has exacerbated and could further exacerbate tensions between such countries and the U.S. Such tensions, concerns regarding information security, and actual and potential imposition of additional sanctions by the U.S. and other countries, or responses by Russia to such additional sanctions, may discourage existing or prospective clients to engage our services, have a negative effect on our ability to develop or maintain our operations in the countries where we currently operate, and disrupt our ability to attract, hire and retain employees. The occurrence of any such event may have a material adverse effect on our business, financial condition and results of operations.

In 2024, we acquired and expanded operations in Argentina and the United Kingdom, in addition to our expanded operations in India and Mexico, among others. The laws and regulations in Mexico, India and Argentina to which we have become subject thereby, and interpretations thereof, may change, sometimes substantially, as a result of a variety of factors beyond our control, including political, economic, regulatory or social events. Any policies, laws and regulations that are adopted in the jurisdictions in which we operate could result in a deterioration of investment sentiment, political and economic uncertainty, and increased costs for our business, which may in turn have a material adverse effect on our business, financial condition, liquidity and results of operations.

Failure to comply with laws and regulations relating to privacy, data protection, and cybersecurity could lead to government enforcement actions, private litigation and adverse publicity.

We receive, store and process personal information from and about customers, employees and contractors. Our handling of such information is subject to a variety of laws and regulations, including regulation by various government agencies and various state, local and foreign agencies, as well as contractual obligations and certain industry standards with which we undertake to comply. The privacy, data protection, and cybersecurity regulatory landscape is evolving rapidly, creating potentially conflicting legal obligations across jurisdictions; this may result in ever-increasing regulatory and public scrutiny and potentially escalating levels of enforcement and sanctions for failures to comply with applicable requirements.

For example, the European Union’s General Data Protection Regulation (“GDPR”) has a significant impact on how businesses can collect, process, use and transfer the personal data of individuals in the European Economic Area (“EEA”), and it imposes significant penalties for non-compliance (up to the greater of €20 million or 4% of global annual turnover). We rely upon the European Union-approved standard contractual clauses (“EU SCCs”) to legitimize transfers of EEA personal data to third countries, including the United States; however, the EU SCCs have been the subject of ongoing legal challenges and may in the future be modified or invalidated as a result of such challenges. In that event, we may be unsuccessful in maintaining legitimate means for the transfer and receipt of personal data from the EEA, which could adversely impact our business operations and financial condition and potentially subject us to regulatory or other enforcement proceedings. Additionally, the United Kingdom has enacted legislation that substantially implements the GDPR (“UK GDPR”), including similar penalties, and has issued UK-specific standard contractual clauses. We may experience additional costs or other operational challenges (e.g., contract renegotiation) associated with our efforts to comply with these requirements relating to cross-border data transfers from the EEA, Switzerland, or the United Kingdom to the U.S., or otherwise to comply with GDPR and UK GDPR. We may face the risk of enforcement action or other liabilities should our efforts in this regard fail. Any such enforcement action or liability could result in substantial costs and diversion of resources, distract management and technical personnel, require changes to our handling of personal data, and negatively affect our business, operating results, financial condition or reputation.

In the U.S., California and other states have enacted so-called “comprehensive” privacy laws that impose detailed privacy and security obligations on entities handling certain personal information of state residents, including requiring covered companies to provide certain disclosures and to afford consumers certain rights such as the right to request deletion of their personal information. California’s law came into effect on January 1, 2020, and numerous other states have enacted similar legislation that have come into effect since, or will do so through 2026. Other states have passed data- or sector-specific privacy legislation. Aspects of these state laws, and their interpretations remain unclear, and their implementation or enforcement are uncertain. Other countries and jurisdictions throughout the world are considering or enacting laws and regulations requiring the local storage of data. We cannot fully predict the impact of these laws on our business or operations, but developments regarding these and other privacy and data protection laws and regulations around the world may require us to modify our data collection and processing practices and policies and to incur substantial additional costs and expenses in an effort to maintain ongoing compliance.

We have been undertaking measures in an effort to comply with these and other applicable privacy and data protection laws and regulations, and such efforts may require us to incur substantial operational costs. The costs of our measures designed to comply with, and other burdens imposed by, such laws, regulations and policies that are applicable to us may limit the use and adoption of our products and solutions, alter the way we conduct business and/or could otherwise have a material adverse impact on our results of operations. For example, we may find it necessary to establish systems to maintain data originated in certain jurisdictions within those jurisdictions, which may involve substantial expense and distraction from other aspects of our business. Further, the costs of compliance with, and other burdens imposed by, such laws, regulations and policies that are applicable to us, may limit the use and adoption of our products and solutions and could have a material adverse impact on our results of operations.

Any failure or perceived failure (including as a result of deficiencies in our policies, procedures or measures relating to privacy, data protection, cybersecurity, marketing or client communications) by us to comply with laws, regulations, policies, legal or contractual obligations, industry standards, or regulatory guidance relating to privacy, data protection or cybersecurity may result in governmental investigations and enforcement actions, litigation, fines and penalties or adverse publicity and could cause our clients to lose trust in us, which could have a material adverse effect on our reputation, business, financial condition and results of operations.

We expect that there will continue to be new proposed laws, regulations and industry standards relating to privacy, data protection, cybersecurity, marketing, consumer communications and information security in the U.S., the European Union, Russia and other jurisdictions, and we cannot determine the impact such future laws, regulations and standards may have on our business. Future laws, regulations, standards and other obligations or any changed interpretation or enforcement of existing laws or regulations could impair our ability to develop and market new services and maintain and grow our client base and increase revenue.

We are subject to governmental export controls and trade and economic sanctions that could impair our ability to compete in international markets and subject us to liability if we are found to violate these controls.

Our operations are subject to laws and regulations restricting our operations, including activities involving restricted countries, organizations, entities and persons that have been identified as unlawful actors or that are subject to U.S. sanctions imposed by the Office of Foreign Assets Control (“OFAC”) or other international economic sanctions that prohibit us from engaging in trade or financial transactions with certain countries, businesses, organizations and individuals. Additionally, the U.S. and various governments have imposed controls, export license requirements and restrictions on the import or export of certain products, technologies and software. Obtaining the necessary export license or other authorization for a particular sale may be time-consuming and may result in the delay or loss of sales opportunities.

Any investigation of any potential violations or violations of such laws by the U.S. or other jurisdictions could also have an adverse impact on our reputation, business, financial condition and results of operations.

While our operations are not directly impacted by recent tariffs, trade restrictions, or geopolitical tensions, many of our customers operate in the retail, CPG and technology sectors. Uncertainty in global trade policies, the imposition of significant tariffs, the escalation of trade disputes and the risk of recession could adversely affect our customers' business performance, budgets, and demand for our services, which in turn could negatively impact our business, financial condition, and results of operations.

We are subject to anti-bribery, anti-corruption laws and anti-money laundering laws, our failure to comply with these and similar laws could subject us to penalties and other adverse consequences.

We are subject to the U.S. Foreign Corrupt Practices Act of 1977 (the “FCPA”), the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the United Kingdom Bribery Act 2010, as well as other anti-bribery, anti-corruption laws and anti-money laundering laws in countries where we conduct our activities. Anti-corruption and anti-bribery laws have been enforced aggressively in recent years and are interpreted broadly to generally prohibit companies, their employees, agents, and other third-party intermediaries from authorizing, offering, or providing, directly or indirectly, improper payments or benefits to recipients in the public or private sector.

In many parts of the world, local business customs and practices may not strictly conform with anti-corruption laws and regulations to which we are subject. Through our employees, agents, and other third-party intermediaries, we may have direct or indirect interactions with government officials, state-owned or affiliated entities and we may be held liable for their corrupt or other illegal activities even if we do not explicitly authorize such activities. We cannot assure you that all of our employees, agents, or other third-party intermediaries will not take actions in violation of applicable law for which we may be ultimately held responsible. As we increase our international sales and business, our risks under these laws may increase.

These laws also require that we keep accurate books, records, and maintain internal controls and compliance procedures designed to prevent any such actions. Our policies and procedures are designated to comply with such laws. Any violations of the FCPA, and other laws, regulations and sanctions, and our compliance policies and procedures by our employees, agents, or other third-party intermediaries may expose us to liability, including administrative, civil or criminal penalties, or fines, which may have an adverse effect on our reputation, business, results of operations, and prospects. Responding to any investigation or action may also result in a materially significant diversion of management’s attention and resources, significant defense costs and other professional fees.

Our subsidiaries in CEE countries can be forced into liquidation on the basis of formal noncompliance with certain legal requirements.

We operate in CEE countries primarily through locally organized subsidiaries. Certain provisions of local laws may allow a court to order liquidation of a locally organized legal entity on the basis of its formal noncompliance with certain requirements during formation, reorganization and during its operations. If a company fails to comply with certain requirements including those relating to minimum net assets, governmental authorities can seek the involuntary liquidation of such company in court, and the company’s creditors will have the right to accelerate their claims or demand early performance of the company’s obligations as well as demand compensation for any damages. If involuntary liquidation of any of our subsidiaries were to occur, such liquidation could materially adversely affect our business, financial condition and results of operations.

Negative publicity about offshore outsourcing or anti-outsourcing legislation may have an adverse effect on our business.

The issue of companies outsourcing services to organizations operating in other countries is a topic of political discussion in many countries, including the U.S., which is our largest source of revenues. Many organizations and public figures in the U.S. and Europe have publicly expressed concern about a perceived association between offshore outsourcing IT services providers and the loss of jobs in their home countries. For example, measures aimed at limiting or restricting outsourcing by U.S. companies are periodically considered in Congress and in numerous state legislatures to address concerns over the perceived association between offshore outsourcing and the loss of jobs in the U.S. A number of U.S. states have passed legislation that restricts state government entities from outsourcing certain work to offshore IT services providers.

Given the ongoing debate over this issue, the introduction and consideration of other restrictive legislation is possible. If enacted, such measures may broaden restrictions on outsourcing by federal and state government agencies and on government contracts with firms that outsource services directly or indirectly, impact private industry with measures such as tax disincentives or intellectual property transfer restrictions, and/or restrict the use of certain business visas. In addition, current or prospective clients may be discouraged from transferring services to providers that utilize offshore delivery centers such as us to avoid any negative perceptions that may be associated with using an offshore provider or for data privacy and security concerns. As a result, our ability to service our clients could be impaired and we may not be able to compete effectively with competitors that operate primarily from within the countries in which our clients operate. Any such slowdown or reversal of the existing industry trends toward offshore outsourcing may have a material adverse effect on our business, financial condition and results of operations. These risks may become more acute as we continue to expand to new geographies.

Risks Related to Our Tax Treatment

Our effective tax rate could be adversely affected by a variety of factors.

We conduct business globally and file income tax returns in multiple jurisdictions. Our effective tax rate could be materially adversely affected by several factors, including changes in the amount of income taxed by, or allocated to, the various jurisdictions in which we operate that have differing statutory tax rates; changing tax laws, regulations and interpretations of such tax laws in multiple jurisdictions; and the resolution of issues arising from tax audits or examinations and any related interest or penalties. In particular, there have been significant changes to the taxation systems in CEE countries in recent years as the authorities have gradually amended or adopted legislation regulating the application of major taxes such as corporate income tax, value-added tax, corporate property tax, personal income taxes and payroll taxes. The Organization for Economic Cooperation and Development (the “OECD”) has made a number of proposals, including implementing a new global minimum effective corporate tax rate of 15% for large multinational companies and rules that would result in the reallocation of certain profits to market jurisdictions where customers and users are located. A number of jurisdictions in which we operate have implemented domestic legislation to give effect to the OECD’s proposals for a global minimum effective corporate tax rate. Furthermore, any significant changes to U.S. tax law could materially adversely affect our effective tax rate.

The determination of our provision for income taxes and other tax liabilities requires estimates, judgment and calculations where the ultimate tax determination may not be certain. Our determination of tax liability is subject to review or examination by authorities in various jurisdictions. If a tax authority in any jurisdiction reviews our tax returns and proposes an adjustment, including a determination that the transfer prices and terms we have applied are not appropriate, such an adjustment could have an adverse effect on our business, financial condition and results of operations.

We are unable to predict what tax reforms may be proposed or enacted in the future or what effect such changes would have on our business. To the extent tax reforms are implemented in jurisdictions in which we operate, such changes could increase our estimated tax liability, and otherwise affect our financial position, future results of operations, cash flows or effective tax rates and increase the complexity, burden and cost of tax compliance.

There may be adverse tax and employment law consequences if the independent contractor status of some of our personnel or the exempt status of our employees is successfully challenged.

Certain of our personnel are retained as independent contractors. The criteria to determine whether an individual is considered an independent contractor or an employee are typically fact intensive and vary by jurisdiction. If a government authority or court makes any adverse determination with respect to some or all of our independent contractors, we could incur significant costs, including for prior periods, for amounts related to tax withholding, social security taxes or payments, workers’ compensation and unemployment contributions (or their equivalent employer-paid contributions in jurisdictions in which we operate outside the United States), and recordkeeping in the impacted jurisdiction, or we may be required to modify our business model, any of which could materially adversely affect our business, financial condition and results of operations.

Global mobility of employees may potentially create additional tax liabilities for us in different jurisdictions.

In performing services for clients, our employees have been and may be required to travel to various locations. Depending on the length of the required travel and the nature of employees’ activities, the tax implications of travel arrangements vary with generally more extensive tax consequences in cases of longer travel. Such tax consequences mainly include payroll tax liabilities related to employee compensation and, in cases envisaged by international tax legislation, taxation of profits generated by employees during their time of travel.

We have internal procedures, policies and systems, including an internal mobility program, for monitoring our tax liabilities arising in connection with business travel. However, our operations may be adversely affected by additional tax charges related to the business travel of our employees.

Tax authorities may disagree with our positions and conclusions regarding certain tax positions, or may apply existing rules in an arbitrary or unforeseen manner, resulting in unanticipated costs, taxes or non-realization of expected benefits.

A tax authority may disagree with tax positions that we have taken, which could result in increased tax liabilities. For example, a tax authority could challenge our allocation of income by tax jurisdiction, and the amounts paid between our affiliated companies pursuant to our intercompany arrangements and transfer pricing policies, including methodologies for valuing developed technology and amounts paid with respect to our intellectual property development.

A tax authority may take the position that material income tax liabilities, interest and penalties are payable by us, where there has been a technical violation of contradictory laws and regulations that are relatively new and have not been subject to extensive review or interpretation, in which case we expect that we might contest such assessment. Many companies must negotiate their tax bills with tax inspectors who may demand higher taxes than what the applicable law appears to provide. Contesting such an assessment may be lengthy and costly and if we are unsuccessful in disputing the assessment, the implications could increase our anticipated effective tax rate, where applicable.

Risks Related to Our Financial Condition

Our business, financial condition and results of operations may be adversely affected by fluctuations in foreign currency exchange rates.

We are exposed to foreign currency exchange rate risk and are subject to volatility due to changes in foreign currency exchange rates relative to the U.S. dollar. Our functional currency is the U.S. dollar. That said, our revenues and costs are exposed to a number of currencies that include Euro, British pounds, Mexican pesos, Polish zloty, Indian rupees and Argentine pesos. With our acquisition of Mobile Computing, and our expectations of further operations, we are particular susceptible to fluctuations of the Argentinian peso, which, in the previous year, has experienced Argentinian hyper-inflation. Although we recently started to implement a hedging program with respect to the Polish zloty, we continue to be exposed to foreign currency exchange transaction risk related to funding our non-U.S. operations and to foreign currency translation risk related to certain of our subsidiaries’ cash balances that are denominated in currencies other than the U.S. dollar. In addition, our profit margins are subject to volatility as a result of changes in foreign exchange rates. In 2025, approximately 49.7% of our combined cost of revenues and total operating expenses were denominated in currencies other than the U.S. dollar. Any significant fluctuations in currency exchange rates may have a material impact on our business and results of operations.

In some countries, we may be subject to regulatory or practical restrictions on the movement of cash and the exchange of foreign currencies, which would limit our ability to use cash across our global operations and increase our exposure to currency fluctuations. This risk could increase as we continue expanding our global operations, which may include entering emerging markets that may be more likely to impose these types of restrictions. Currency exchange volatility caused by political or economic instability or other factors, could also materially impact our results. See Item 7A “Quantitative and Qualitative Disclosures about Market Risk—Foreign Currency Exchange Rate Risk” in this Annual Report on Form 10-K for more information about our exposure to foreign currency exchange rates.

Failure to collect receivables from, or bill for unbilled services to, clients may have a material adverse effect on our results of operations and cash flows.

Our business depends on our ability to successfully obtain payment from our clients of the amounts they owe for work performed. We usually bill and collect such amounts on relatively short cycles and maintain allowances for doubtful accounts. However, actual losses on client balances could differ from those that we anticipate and, as a result, we might need to adjust our allowances.

There is no guarantee that we will accurately assess the creditworthiness of our clients. If clients suffer financial difficulties, it could cause them to delay payments, request modifications to their payment arrangements, or default on their payment obligations.

In addition, some of our clients may delay payments due to changes in internal payment procedures driven by rules and regulations to which they are subject. Timely collection of client balances also depends on our ability to complete our contractual commitments, bill and collect contracted revenues. If we are unable to meet our contractual requirements, we may experience delays in collection of or inability to collect accounts receivable. If this occurs, our financial condition, results of operations and cash flows could be materially adversely affected.

We may need additional capital and failure to raise additional capital on terms favorable to us, or at all, could limit our ability to grow our business and develop or enhance our service offerings to respond to market demand or competitive challenges.

We may require additional cash resources due to changed business conditions or other future developments. If existing resources are insufficient to satisfy cash requirements, we may seek to sell additional equity or debt securities or obtain one or more credit facilities. The sale of additional equity securities could result in dilution to stockholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financing covenants that would restrict our operations. In addition, actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. Our cash is held with high-quality financial institutions. Deposits held with banks may, at times, exceed the amount of insurance provided on such deposits. Additionally we hold cash deposits in countries where the banking sector remains periodically unstable, banking and other financial systems generally do not meet the banking standards of more developed markets, and bank deposits made by corporate entities are not insured. Such countries in addition to Ukraine include Argentina, Armenia, Moldova, Romania, Serbia and Mexico. We place our cash with financial institutions considered stable in the region and conduct ongoing evaluations of the creditworthiness of the financial institutions with which we operate. However, a banking crisis, bankruptcy or insolvency of banks that process or hold our funds, may result in the loss of our deposits or adversely affect our ability to complete banking transactions, which could adversely affect our liquidity, business and financial condition.

Our ability to obtain additional capital on acceptable terms is subject to a variety of uncertainties, including investors’ perception of, and demand for, securities of IT services companies, conditions in the capital markets in which we may seek to raise funds, our future results of operations and financial condition, and general economic and geopolitical conditions. Financing may not be available on terms acceptable to us, or at all, which could limit our ability to grow our business and develop or enhance our service offerings to respond to market demand or competitive challenges.

Our debt service obligations may adversely affect our financial condition and cash flows from operations.

Our credit agreement provides for a three-year secured multicurrency revolving loan facility in an initial aggregate principal amount of up to $30.0 million, with a $10.0 million letter of credit sublimit. We may increase the size of the revolving loan facility up to $50.0 million, subject to certain conditions and additional commitments from existing and/or new lenders. The credit agreement contains customary affirmative and negative covenants, including covenants limiting the ability of the Company and its subsidiaries to, among other things, incur debt, grant liens, undergo certain fundamental changes, make investments and acquisitions, make certain restricted payments, dispose of assets, enter into certain transactions with affiliates, and enter into burdensome agreements, in each case, subject to limitations and exceptions. The Company is also required to maintain compliance with a consolidated total leverage ratio. Our obligations under the credit agreement are required to be guaranteed by certain of our domestic subsidiaries. Such obligations, including the guaranties, are secured by substantially all of our and our subsidiary guarantors’ personal property. Our credit agreement expires in March 2028; there can be no assurance that we will be able to extend the credit agreement, or that the terms of any such extension will be favorable to us, or available at all.

Maintenance of our indebtedness, contractual restrictions and additional issuances of indebtedness could:

• cause us to dedicate a substantial portion of our cash flows from operations towards debt service obligations and principal repayments;
• increase our vulnerability to adverse changes in general economic, industry and competitive conditions;
• limit our flexibility in planning for, or reacting to, changes in our business and our industry;
• impair our ability to obtain future financing for working capital, capital expenditures, acquisitions, general corporate, or other purposes; and
• due to limitations within the debt instruments, restrict our ability to take certain corporate actions, subject to customary exceptions.

We are required to comply with the covenants set forth in our credit agreement. If we breach any of the covenants and do not obtain a waiver from the lenders, then, subject to applicable cure periods, we would not be able to incur additional indebtedness under the credit agreement, and any outstanding indebtedness under the credit agreement may be declared immediately due and payable.

Risks Related to Intellectual Property

We may not be able to prevent unauthorized use of our intellectual property, and our intellectual property rights may not be adequate to protect our business, financial condition and results of operations.

Our success largely depends on methodologies, practices, tools and technical expertise and other intellectual property that we use in designing, developing, implementing and maintaining our services and solutions. We rely upon a combination of nondisclosure, confidentiality, assignment of invention and other contractual arrangements as well as trade secret, patent, copyright and trademark laws to protect our intellectual property rights. Trade secret, patent, copyright and trademark laws are subject to change at any time and could further limit our ability to obtain or maintain intellectual property protection. For example, the intellectual property legal landscape relating to AI (including generative AI) is expected to continue to evolve in many countries in which we operate. As a result, there is uncertainty concerning the scope of intellectual property protection for AI models, software and business methods, which are fields in which we rely on intellectual property laws to protect our rights.

The agreements that we enter into with our employees, independent contractors, vendors and clients in order to protect our proprietary information may not provide sufficient protection against unauthorized use, misappropriation or disclosure for trade secrets, know-how or other proprietary information. We may not be able to deter current and former employees, contractors, vendors, clients and other parties from breaching confidentiality agreements and misappropriating or disclosing our trade secrets, know-how or other proprietary information. If these agreements are breached, we may not have adequate remedies for such breach. It is possible that third parties may copy, reverse engineer, or otherwise obtain and use our information and proprietary technology without authorization or otherwise infringe, misappropriate or violate our intellectual property rights. Further, there can be no assurance that others will not independently develop the know-how and trade secrets or develop better methods than us. Policing unauthorized use of such proprietary information is difficult and expensive. Our inability to protect our intellectual property against unauthorized copying or use could delay sales or the implementation of our work product, impair the functionality of our work product, delay introductions of new work product, result in our substituting less-advanced or more-costly technologies into our work product or harm our reputation. In addition, if we are unsuccessful in defending our intellectual property, we may be required to license additional intellectual property from third parties to develop and market new services, and we cannot assure you that we could license that intellectual property on commercially reasonable terms or at all.

In addition, our current and former employees or contractors could challenge our exclusive rights in the intellectual property they have developed in the course of their employment. In certain countries in which we operate, an employer is deemed to own the copyright in works created by its employees during the course, and within the scope, of their employment, provided certain requirements are met. While we believe that we have complied with all such requirements and have fulfilled the requirements necessary to acquire all rights in intellectual property developed by our employees, contractors and subcontractors, these requirements are often ambiguously defined and enforced.

Implementation of intellectual property-related laws in CIS, CEE, and Latin American countries in which we operate has historically been lacking and there is no assurance that we will be able to enforce or defend our rights under our non-disclosure, confidentiality or assignment of invention agreements or that protection of intellectual property rights in such countries will be as effective as that in the U.S.

We have registered or applied to register certain patents, copyrights, and trademarks in the United States and may do so in countries outside the United States. However, there is no guarantee that these registrations will not be challenged, invalidated, or circumvented by third parties. Further, there can also be no assurance that pending or future United States or foreign trademark or patent applications will be approved in a timely manner or at all, or that such registrations will effectively protect our intellectual property or brand.

In some cases, legal action may be necessary to enforce our intellectual property rights and contractual rights or to protect our trade secrets. Litigation could be costly, time consuming and distracting to management and could result in the impairment or loss of portions of our intellectual property. Furthermore, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims and countersuits attacking the validity and enforceability of our intellectual property rights and exposing us to significant damages or injunctions.

Due to the foregoing reasons, we cannot guarantee that we will be successful in maintaining existing or obtaining future intellectual property rights or registrations, be able to detect unauthorized use of our intellectual property and take appropriate steps to enforce and protect our rights, or that any such steps will be successful. We can also neither guarantee that we have taken all necessary steps to enforce our intellectual property rights in each jurisdiction in which we operate nor that the intellectual property laws of any jurisdiction in which we operate are adequate to protect our interests or that any favorable judgment obtained by us with respect thereto will be enforced in the courts. Unauthorized use by third parties of, or other failure to protect, our intellectual property, including the costs of enforcing intellectual property rights, could have a material adverse effect on our business, financial condition and results of operations.

We may face intellectual property infringement claims that could be time-consuming and costly to defend and failure to defend against such claims may have a material adverse effect on our reputation, business, financial condition and results of operations.

Our success largely depends on our ability to use and develop our technology, tools, code, methodologies and services without infringing the intellectual property rights of third parties, including patents, copyrights, trade secrets and trademarks. We may be subject to litigation involving claims of patent infringement or violation of other intellectual property rights of third parties.

Our customer contracts often require us to indemnify clients who purchase our services and solutions against potential infringement of intellectual property rights, which subjects us to the risk of indemnification claims. These claims may require us to initiate or defend protracted and costly litigation on behalf of our clients, regardless of the merits of these claims and are often not subject to liability limits or exclusion of consequential, indirect or punitive damages. If any of these claims succeed, we may be forced to pay damages on behalf of our clients, redesign or cease offering the allegedly infringing services or solutions or obtain licenses for the intellectual property such services or solutions allegedly infringe. If we cannot obtain all necessary licenses on commercially reasonable terms or at all, our clients may be forced to stop using our services or solutions and may seek refunds of amounts they have paid us for such services or solutions.

The holders of patents and other intellectual property rights potentially relevant to our service offerings may make claims that we infringe, misappropriate, or otherwise violate their intellectual property rights. There can be no assurance that we will be successful in defending against these allegations or reaching a business resolution that is satisfactory to us. Any intellectual property claim, with or without merit, could be very time-consuming and expensive to settle or litigate, could cause us to incur significant expenses, pay substantial amounts in damages, ongoing royalty or license fees, or other payments, require us to cease making, licensing or using our offerings that incorporate or use the challenged intellectual property, require us to re-engineer all or a portion of our business or require that we comply with other unfavorable terms. The costs of litigation are considerable, and such litigation may divert management and key personnel’s attention and resources, which might seriously harm our business, financial condition and results of operations. Third parties making infringement claims may make it difficult for us to enter into royalty or license agreements which may not be available on commercially acceptable terms. Also, we may be unaware of intellectual property registrations or applications relating to our services that may give rise to potential infringement claims against us. There may also be technologies licensed to and relied on by us that are subject to infringement or other corresponding allegations or claims by third parties which may damage our ability to rely on such technologies.

Parties making infringement claims may be able to obtain substantial damages for the infringement and an injunction to prevent us from delivering our services or using technology involving the allegedly infringing intellectual property if, as a result of a successful infringement claim, we are required to develop non-infringing technology or cease making, licensing or using products that have infringed a third party’s intellectual property rights, all of which may be time-consuming and expensive. Protracted litigation could also result in existing or prospective clients deferring or limiting their purchase or use of our services or solutions until resolution of such litigation or could require us to indemnify our clients against infringement claims in certain instances. Any intellectual property claims or litigation, whether or not we ultimately win or lose, could damage our reputation and materially adversely affect our business, financial condition and results of operations.

Our use of open source software, and our failure to comply with the terms of the underlying open source software licenses could negatively affect sales and create potential liability.

We often incorporate software licensed by third parties under so-called “open source” licenses, which generally do not provide support, warranties, indemnification, or other contractual protections regarding infringement claims, security or the quality of the code. Although we monitor our use of open source software in an effort both to comply with the terms of the applicable open source licenses and to avoid subjecting our client deliverables to conditions we do not intend, the terms of many open source licenses have not been interpreted by courts in relevant jurisdictions, and there is a risk that these licenses could be construed in a way that could impose unanticipated conditions or restrictions on the services developed for our clients. We cannot assure you that our processes for controlling our use of open source software in our products will be effective, and any failure to do so may expose us to claims of non-compliance with the terms of the applicable license.

Some open source licenses require that we make available source code for modifications or derivative works we create based upon the open source software. For such open source licenses, we could be required to release the source code of our proprietary software or software developed for a customer to the public. While we believe we take appropriate measures to control our use of open source software, there is a a risk that a third-party claim may require us to publicly release the affected portions of source code, re-engineer all, or a portion of, the applicable software, or seek license(s) from third parties to continue using the impacted source code. Disclosing our proprietary source code could allow our or our clients’ competitors to create similar products with lower development effort, cost and time.

Additionally if the license terms for the open source code change, we may be forced to re-engineer our software or incur additional costs. Any of these events could create liability for us and damage our reputation, or harm our competitive advantage against our peers, which could have a material adverse effect on our business, financial condition and results of operations.

Risks Related to Our Common Stock

Our bylaws limit the forum in which stockholders may bring a suit for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us.

Our bylaws provide that the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, another State court in Delaware or the federal district court for the District of Delaware) shall, to the fullest extent permitted by law, be the sole and exclusive forum for the following (subject to limited exceptions):

• any derivative action or proceeding brought on our behalf;
• any action asserting a claim of breach of a fiduciary duty owed by, or otherwise wrongdoing by, any of our directors, officers or other employees to us or our stockholders;
• any action arising pursuant to any provision of the Delaware General Corporation Law (the “DGCL”), our certificate of incorporation or bylaws;
• any action to interpret, apply, enforce or determine the validity of our certificate of incorporation or bylaws; and
• any other action asserting a claim that is governed by the internal affairs doctrine.

However, claims brought to enforce any liability or duty created under the Exchange Act and the Securities Act are not subject to the exclusive forum provisions set forth in our bylaws. Our bylaws also provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States shall be the sole and exclusive forum for any action asserting a claim arising pursuant to the Securities Act.

These exclusive forum provisions may discourage a stockholder from seeking judicial relief and limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees.

The price of our common stock continues to be volatile.

The price of our common stock may fluctuate due to a variety of factors, including:

• the announcement of the introduction of new products or services, or enhancements thereto, by us or our competitors;
• the rapid, and even accelerating, changes in technologies, methodologies and industry standards, whether due to AI or otherwise, which may result in significantly decreased demand for our services, and our ability to adapt to such changes;
• evolving consumer, investor and market perceptions regarding the ubiquity and capabilities of commercial AI technologies, which may lead to significant uncertainty about the continued demand for our services and the future of our industry;
• developments concerning intellectual property rights;
• changes in legal, regulatory and enforcement frameworks impacting our products and services;
• variations in our and our competitors’ results of operations;
• the hiring or departure of key personnel;
• announcements by us or our competitors of acquisitions, investments or strategic alliances;
• actual or perceived cybersecurity incidents or breaches;
• actual or anticipated fluctuations in our quarterly and annual results and those of our competitors;
• the failure of securities analysts to publish research about us, or shortfalls in our results of operations compared to levels forecast by securities analysts;
• any delisting of our common stock from Nasdaq due to any failure to meet listing requirements;
• policy changes, geopolitical instability and military actions in countries in which we operate or in which our employees are located that impact our operations or industry;
• adverse developments from litigation;
• our ability to effectively service any current and future outstanding debt obligations;
• the general state of the securities market, including valuation adjustments and lowering multiples; and
• the military action launched by Russian forces in Ukraine, the actions that have been and could be taken by other countries, including new and stricter sanctions and actions taken in response to such sanctions, and the effect of these developments on our business and results of operations.

Market and industry factors may materially reduce the market price of our common stock, regardless of our operating performance.

As of December 31, 2025, approximately 23.8 percent of our outstanding common stock was held or beneficially owned by our executive officers and directors, or by stockholders controlled by our executive officers or directors.

The concentration of ownership provides such persons with substantial control over us, which could limit your ability to influence the outcome of key transactions, including a change of control, and future resales of our common stock held by such persons may cause the market price of our common stock to drop significantly. As a result, such stockholders, acting together, have significant influence over all matters that require approval by our stockholders, including the election of directors and approval of significant corporate transactions. Corporate action might be taken even if other stockholders oppose them. This concentration of ownership might also have the effect of delaying or preventing a change of control of our company that other stockholders may view as beneficial.

To the extent that such persons purchase or are awarded additional shares, the percentage of our outstanding common stock held by them will increase, decreasing the percentage of shares that are held by other stockholders.

If any significant stockholder sells large amounts of our common stock in the open market or in privately negotiated transactions, this could increase volatility in the price of our common stock or put significant downward pressure on the price of our common stock.

We do not currently intend to pay dividends on our common stock and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.

We have not paid any cash dividends on our common stock since we became a public company. The payment of any cash dividends is dependent upon our revenue, earnings and financial condition from time to time. The payment of any dividends is within the discretion of our board of directors. It is presently expected that we will retain all earnings for use in our business operations and, accordingly, it is not expected that our board of directors will declare any dividends in the foreseeable future. Our ability to declare dividends may be limited by the terms of any financing and/or other agreements entered into by us or our subsidiaries from time to time and by requirements under the laws of our subsidiaries’ respective jurisdictions of incorporation to set aside a portion of their net income in each year to legal reserves.

Therefore, you are not likely to receive any dividends on your common stock for the foreseeable future and the success of an investment in shares of our common stock will depend upon any future appreciation in its value. There is no guarantee that shares of our common stock will appreciate in value or even maintain the price at which our stockholders have purchased their shares.

Our certificate of incorporation, bylaws and the DGCL contain certain provisions, including anti-takeover provisions, that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.

Our certificate of incorporation and bylaws, and the DGCL, contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by our board of directors. Among other things, our certificate of incorporation and bylaws include provisions regarding:

• a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our board of directors;
• the ability of our board of directors to issue shares of preferred stock, including “blank check” preferred stock, and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;
• the limitation of the liability of, and the indemnification of our directors and officers;
• the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;
• the requirement that directors may only be removed from our board of directors for cause;
• a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of stockholders and could delay the ability of stockholders to force consideration of a stockholder proposal or to take action, including the removal of directors;
• the requirement that a special meeting of stockholders may be called only by our board of directors, the chairman of our board of directors, or our chief executive officer, which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors;
• controlling the procedures for the conduct and scheduling of board of directors and stockholder meetings;
• the requirement for the affirmative vote of holders of at least a majority of the voting power of all of the then-outstanding shares of the voting stock, voting together as a single class, to amend, alter, change or repeal any provision of our certificate of incorporation or our bylaws, which could delay changes in our board of directors and also may inhibit the ability of an acquirer to affect such amendments to facilitate an unsolicited takeover attempt;
• the ability of our board of directors to amend the bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt; and
• advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our board of directors and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our Company.

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our board of directors or management.

In addition, as a Delaware corporation, we are subject to provisions of Delaware law, including Section 203 of the DGCL, which may prohibit certain stockholders holding 15% or more of our outstanding capital stock from engaging in certain business combinations with us for a specified period of time.

Any provision of our certificate of incorporation, bylaws or Delaware law that has the effect of delaying or preventing a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock.

Risk Management and Strategy

Managing Material Risks & Integrated Risk Management

We have established policies and processes for assessing, identifying, and managing material risk from cybersecurity threats, and have integrated these processes into our overall risk management systems and procedures. We routinely assess material risks from cybersecurity threats, including any potential unauthorized occurrence on or conducted through our information systems that may result in adverse effects on the confidentiality, integrity, or availability of our information systems or any information residing therein.

We conduct regular risk assessments to identify cybersecurity threats, including in the event of a material change in our business practices or established procedures that may affect information systems, which are vulnerable to such cybersecurity threats. These risk assessments include identification of reasonably foreseeable internal and external risks, the likelihood and potential damage that could result from such risks, attack surface state and threat modeling, and the sufficiency of existing policies, procedures, systems, and safeguards in place to manage such risks. We regularly perform internal audits of our cybersecurity procedures, review and adjust as appropriate role-based data access rights, conduct system vulnerability scans and prepare incident logs, alerts and threat reviews. We have maintained our ISO 27001 certification since 2014 and are subject to annual ISO 27001 standard compliance monitoring audits and periodic customer security audits. During the year ended December 31, 2025, our ISO 27001:2022 audit, conducted by NQA USA, identified no non-conformities.

We incorporate results of these risk assessments into our formal policies and procedures, to maintain reasonable safeguards on an ongoing basis and to minimize identified risks; reasonably address any identified gaps in existing safeguards; and regularly monitor the effectiveness of our safeguards.

As part of our overall risk management system, we monitor and test our safeguards and train our employees on these safeguards as part of onboarding and on an annual and ad hoc basis thereafter, in collaboration with human resources, IT, and a dedicated “Grid University” training department. Personnel at all levels and departments are made aware of our cybersecurity policies through multiple channels of communication and training.

Engage Third-Parties on Risk Management

We typically engage third party auditors in connection with our risk assessment processes. These service providers assist us with designing and implementing our cybersecurity policies and procedures, as well as with monitoring and testing our safeguards at different levels. To address and mitigate potential risks associated with our use of such third parties, we require each third-party service provider to ensure that it has the technical capability to implement and maintain appropriate security measures, consistent with all applicable laws, to implement and maintain reasonable security measures in connection with their work with us, and to promptly report any suspected breach of its security measures that may affect our company. We conduct periodic due diligence and oversight to confirm compliance with such obligations.

Risks from Cybersecurity Threats

We have not experienced any cybersecurity events, including cybersecurity incidents, that have had or which are likely to have any material impact on our business strategy, results of operations or financial position.

For additional information regarding risks related to cybersecurity threats, please refer to Item 1A, “Risk Factors,” in this Annual Report on Form 10-K, including the risk factor entitled “Failure to comply with laws and regulations relating to privacy, data protection, and cybersecurity could lead to government enforcement actions, private litigation and adverse publicity.”

Governance

Board of Directors Oversight

Our board of directors is responsible for monitoring and assessing strategic risk exposure, including cybersecurity risks, and our executive officers are responsible for the day-to-day management of the material risks we face. Our board of directors administers its cybersecurity risk oversight function directly as a whole, as well as through the audit committee.

Management’s Role Managing Risk

We devote significant resources, and designate high-level personnel, including our Chief Information Security Officer (“CISO”) and Data Protection Officer (“DPO”), who each report to our Chief Operating Officer (“COO”), to manage our cyber-related risk assessment and mitigation processes. Our CISO, who has been leading the team for 13 years, has over 20 years of industry experience, is a Certified Information Systems Security Professional and lead ISO 27001 auditor, and has authored five books on information security auditing strategy, wired and wireless network security, and penetration testing.

Our CISO and our management committee on cybersecurity, which includes our Chief Executive Officer (“CEO”), COO and IT Director, are primarily responsible for assessing and managing our material risks from cybersecurity threats. They are assisted by dedicated information security and IT staff, our DPO, HR Director, and legal and finance representatives as well as a third party Security Operation Center (“SOC”) managed service provider that ensures 24/7/365 security monitoring and response. Our current management committee on cybersecurity includes dedicated full-time specialists in relevant fields ranging from code, application, system, and network security to computer forensics, data privacy, applied cryptography, physical security, social engineering and red teaming.

Our CISO and management committee on cybersecurity oversee our cybersecurity policies and procedures, including those described in the “Risk Management and Strategy” section, above. Our formal information security program includes measures to address: risk assessment and management, policy development and implementation, prevention strategies, detection mechanisms, incident response and mitigation, remediation and recovery, reporting and communication, compliance and legal considerations, efforts at continuous improvement, and training and awareness. Through these measures, our CISO and management committee on cybersecurity are informed about and monitor the lifecycle (i.e., prevention, detection, mitigation, and remediation) of cybersecurity threats or incidents.

Reporting to Board of Directors

Our COO reports to our audit committee on a quarterly basis regarding the Company’s current cybersecurity risks and activities, including any recent cybersecurity incidents and related responses, customer escalations and requests, cybersecurity systems testing, relevant threat landscape and activities of third parties, security controls implementation status and the implementation of any new cybersecurity tools. Our audit committee regularly reports its activities, including review of cybersecurity matters, to our board of directors. There is also an annual senior management meeting and report to our CEO and COO that follows our internal information security audit, which is overseen by the CEO.

Facilities

Our principal executive office is located at 6101 Bollinger Canyon Rd, Suite 465, San Ramon, CA 94583. We currently provide our services through a network of 28 facilities in 14 countries including offices located in Plano, Texas and Tampa, Florida, U.S.; as well as Guadalajara, Mexico; Buenos Aires, Argentina; Yerevan in Armenia; Hyderabad, Chennai and Bangalore in India; Krakow, Gdansk, Warsaw and Wroclaw in Poland; Belgrade and Novi Sad in Serbia; Zug in Switzerland; various cities across Ukraine; Chisinau, Moldova; Amsterdam, the Netherlands; Kingston, Jamaica; London, the United Kingdom and Bucharest and Iasi, Romania. We do not own any real property. We believe that our existing facilities are adequate to support our current operations and that we have ample opportunities to expand office space to sustain expected growth.

Although we are, from time to time, involved in litigation and claims arising out of our operations in the normal course of business, we are not currently a party to any material legal proceeding. In addition, we are not aware of any material legal or governmental proceedings against us or contemplated to be brought against us. Future litigation may be necessary, among other things, to defend us or our customers by determining the scope, enforceability and validity of third-party proprietary rights or to establish our proprietary rights. The results of any litigation cannot be predicted with certainty and, regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the accompanying notes thereto included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements based upon current plans, expectations, and beliefs, involving risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements. You should review the section titled “Special Note Regarding Forward-Looking Statements” for a discussion of forward-looking statements and in Item 1A, “Risk Factors” for a discussion of factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis and elsewhere in this Annual Report on Form 10-K. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

Overview

Grid Dynamics Holdings, Inc. (“Grid Dynamics,” the “Company,” “we,” “us,” or “our”) is an enterprise artificial intelligence (“AI”) transformation partner for the Fortune 1000. We combine deep AI expertise with proven enterprise-scale delivery to help clients identify where to invest in AI, build systems that work at scale, and capture real business value from AI deployments. The building blocks of AI have always been our foundation — distributed systems, real-time data, machine learning algorithms, and natural language processing. What has changed is that these capabilities have now converged into Enterprise AI.

This technical heritage is matched with business acumen. We solve the most pressing technical challenges and enable positive business outcomes for enterprise companies. A key differentiator is our nearly two decades of technology leadership and pioneering enterprise AI expertise. This is supported by deep capabilities and ongoing investment in data and machine learning platform engineering, cloud platform and product engineering, Internet of Things and edge computing, and digital engagement services.

Fiscal Year Highlights

The following table sets forth a summary of Grid Dynamics’ financial results for the periods indicated:

(in thousands, except percentages and per share data)

(1) Non-GAAP EBITDA, Non-GAAP net income and Non-GAAP diluted EPS are non-GAAP financial measures. See “Non-GAAP Measures” below for additional information and reconciliations to the most directly comparable GAAP financial measures.

Our key metrics for the year ended December 31, 2025 are:

• Revenues: Total revenues increased 17.5% year-over-year to a record $411.8 million, driven by demand across our core verticals and contributions from our acquisitions.
• Operating loss: Loss from operations narrowed to $1.9 million, compared to a loss of $2.1 million in the prior year. This improvement reflects revenue growth outpacing the increase in operating expenses.
• Net income and EPS: Net income increased to $9.7 million from $4.0 million in the prior year. The increase was largely attributable to a combination of revenue growth and other income. Diluted GAAP EPS was $0.11 per share, compared to $0.05 per share for the year ended December 31, 2024.
• Non-GAAP measures: Non-GAAP EBITDA increased 2.5%, reaching $53.8 million for the year ended December 31, 2025. Diluted Non-GAAP EPS was $0.40 per share, compared to $0.47 per share in the prior year.
• Cash flows: Operating cash flow was $40.6 million up from $30.2 million in 2024.

The operating results in any period are not necessarily indicative of the results that may be expected for any future period.

Business Update Regarding Military Action in Ukraine

In February 2022, Russian forces launched a significant military action against Ukraine, which continues and even worsens. The impact on Ukraine, coupled with the actions taken by other countries, including sanctions imposed by the U.S., Canada, the U.K., the European Union, and other countries, companies and organizations against officials, individuals, regions, and industries in Russia and certain regions of Ukraine, and each country’s potential response to such sanctions, tensions, and military actions could have a material adverse effect on our operations. For example, Russia could attempt to take control of assets in Ukraine belonging to companies registered in the U.S., such as Grid Dynamics. Any such material adverse effect from the conflict and enhanced sanctions activity may disrupt our delivery of services, impair our ability to complete financial or banking transactions, cause us to continue to shift all or portions of our work occurring in the region to other countries, and may restrict our ability to engage in certain projects in the region or involving certain customers in the region.

We continue to actively monitor the security of our personnel and the stability of our infrastructure, including communications and internet availability. We executed our business continuity plan and have adapted to developments as they occur to protect the safety of our people and handle potential impacts to our delivery infrastructure. We continue to actively work with our personnel and with our customers to meet their needs and to ensure smooth delivery of services.

We have no way to predict the progress or outcome of the military action in Ukraine, as the conflict and government responses continue to develop and even worsen and are beyond our control. The prolonged unrest, military activities, expansion of hostilities, or broad-based sanctions could have a material adverse effect on our operations and business outlook. For example, if Russia were to invade other countries, such as Moldova, it could adversely affect our business. In addition, the current geopolitical situations in Armenia and separately in Serbia create additional uncertainty in the region, and could adversely affect our business.

For additional information on the various risks posed by the ongoing fighting in Ukraine and related sanctions and other impacts in the region, as well as other macroeconomic factors affecting our business, please read “Part I. Item 1A. Risk Factors” included in this Annual Report on Form 10-K.

Key Performance Indicators and Other Factors Affecting Performance

Grid Dynamics uses the following key performance indicators and assesses the following other factors to analyze its business performance, to make budgets and financial forecasts and to develop strategic plans:

Employees by Region

Attracting and retaining the right employees in the right regions is critical to the success of Grid Dynamics’ business and is a key factor in Grid Dynamics’ ability to meet customers’ needs and grow its revenue base. Grid Dynamics’ revenue prospects and long-term success depend significantly on its ability to recruit and retain qualified IT professionals. We seek to employ the appropriate professionals globally to support our “Follow-the-Sun” strategy of client service and in locations to optimize our employee costs and expenses. A substantial majority of Grid Dynamics’ personnel is comprised of such IT professionals.

The following table shows the number of Grid Dynamics personnel (including full-time and part-time employees and contractors serving in similar capacities) by region, as of the dates indicated:

(1) Americas includes personnel located in North, Central and South America.

(2) Europe includes personnel located in Western, Central and Eastern Europe.

(3) Rest of the world includes personnel located in India and other countries not included in regions described above.

Attrition

There is competition for IT professionals in the regions in which Grid Dynamics operates, and such competition may adversely impact Grid Dynamics’ business and gross profit margins. Employee retention is one of Grid Dynamics’ main priorities and is a key driver of our operational efficiency. Grid Dynamics seeks to retain top talent by providing the opportunity to work on exciting, cutting-edge projects for high profile clients, a flexible work environment and training and development programs.

Hours and Utilization

As most of Grid Dynamics’ customer projects are performed and invoiced on a time and materials basis, Grid Dynamics’ management tracks and projects billable hours as an indicator of business volume and corresponding resource needs for IT professionals. To maintain its gross profit margins, Grid Dynamics must effectively utilize its IT professionals, which depends on its ability to integrate and train new personnel, to efficiently transition personnel from completed projects to new assignments, to forecast customer demand for services and to attract and deploy personnel in the right regions with appropriate skills and seniority to projects. Grid Dynamics’ management generally tracks utilization with respect to subsets of employees, by location or by project, and calculates the utilization rate for each subset by dividing (x) the aggregate number of billable hours for a period by (y) the aggregate number of total available hours for the same period. Grid Dynamics’ management analyzes and projects utilization to measure the efficiency of its workforce and to inform management’s budget and personnel recruiting decisions.

Customer Concentration

Grid Dynamics’ ability to retain and expand its relationships with existing customers and add new customers are key indicators of its revenue potential. New customers have a direct impact on the Company’s ability to diversify sources of revenue and replace customers that may no longer require its services. At the same time, the Company continuously works towards rationalization of its portfolio of non-strategic customers. This work resulted in a decrease in the total number of customers from 264 in 2024 to 237 in 2025.

Grid Dynamics has a high level of revenue concentration with certain customers, as indicated in the below table, and constantly works toward decreasing those levels. During the years ended December 31, 2025, 2024 and 2023, one customer accounted for 10% or more of our revenues in each of the periods indicated. We expect to continue our focus on maintaining our long-term relationships with customers while seeking to diversify our customer base.

The following table presents revenues concentration by amount and as a percentage of our revenues for the periods indicated:

(in thousands, except percentages)

The following table shows the evolution of Grid Dynamics’ customer base where customers are grouped by revenues recognized for each annual period presented:

Seasonality

Grid Dynamics’ business is subject to seasonal trends that impact its revenues and profitability between quarters. Some of the factors that influence the seasonal trends include the timing of holidays in the countries in which Grid Dynamics operates and the U.S. retail cycle, which drives the behavior of Grid Dynamics’ retail customers.

Critical Accounting Estimates

Management’s discussion and analysis of our financial condition and results of operations is based on the consolidated financial statements, which have been prepared in accordance with the U.S. generally accepted accounting principles (“GAAP”). Preparation of the financial statements requires us to make judgments, estimates and assumptions that impact the reported amount of revenue and expenses, assets and liabilities and the disclosure of contingent assets and liabilities. We consider an accounting judgment, estimate or assumption to be critical when (1) an estimate or assumption is complex in nature or requires a high degree of judgment, and (2) the use of different judgments, estimates and assumptions could have a material impact on our consolidated financial statements. Our significant accounting policies are described in Note 1 in the notes to our consolidated financial statements in this Annual Report on Form 10-K.

Revenues

Determining the amount of revenue to be recognized requires from us significant estimates and judgments, including whether services specified in the agreements are single or distinct performance obligations, whether obligations are satisfied over time or at a point in time and what is the best method to measure our progress to completion.

We derive our revenues through time and materials and fixed fee contracts. Grid Dynamics recognizes revenues for services over time as hours are incurred by Grid Dynamics’ engineering personnel. For all contracts, the customer derives value from the Company providing daily consulting services, and the value derived corresponds to the labor hours expended. Therefore, the Company measures the progress and recognizes revenue using an effort-based input method.

Revenues related to fixed fee contracts are recorded as work is performed based upon actual labor hours incurred and level of effort expended throughout the duration of the contract. The accuracy of revenues recognized for these contracts during the reporting period largely depends on our ability to correctly estimate the total expected efforts required to fulfill the performance obligation. We constantly evaluate our estimates of total efforts required based on available information and experience.

Some of our contracts give rise to variable considerations, including volume discounts. Volume discounts apply once the customer reaches certain contractual spend thresholds. If the consideration promised in a contract includes a variable amount, we include estimated amounts of consideration in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.

Income Taxes

The determination of the provision for income taxes requires significant judgment, the use of estimates and the interpretation and application of complex tax laws. The provision for income taxes reflects a combination of income earned and taxed in the various U.S. federal and state and non-U.S. jurisdictions. Changes in tax law, increases or decreases in permanent differences between book and tax items, accruals or adjustments of accruals for tax contingencies or valuation allowances, and the change in the mix of earnings across taxing jurisdictions all affect the overall effective tax rate.

In assessing the realizability of deferred tax assets, we consider whether it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. Management considers all available evidence, both positive and negative, in determining whether a valuation allowance is required, including prior earnings history, the scheduled reversal of deferred tax liabilities, projected future taxable income, carryback and carryforward periods of tax attributes, and tax planning strategies that could potentially enhance the likelihood of realization of a deferred tax asset in making this assessment. The weight given to the positive and negative evidence is commensurate with the extent to which the evidence may be objectively verified.

We are subject to tax payments and filing of tax returns in various tax jurisdictions. Our tax returns are routinely examined by tax authorities in various countries. Such inspections may result in future tax expenses, interest and penalties. We evaluate for such uncertain tax positions at each balance sheet date. When it is more likely than not that a position will be sustained upon examination by a tax authority that has full knowledge of all relevant information, we measure the amount of tax benefit from the position and record the largest amount of tax benefit that is greater than 50% likely to be realized after settlement with a tax authority. We believe our estimates for uncertain tax positions are appropriate and sufficient. We recognize both accrued interest and penalties related to unrecognized tax benefits in income tax expense.

Business Combinations

We account for business combinations under the acquisition method of accounting, which requires recognition of any assets acquired and liabilities assumed based on their respective fair values. Any excess of the fair value of purchase consideration over the fair value of the assets acquired less liabilities assumed is recorded as goodwill. We use significant management estimates and assumptions as well as available industry data to arrive at the acquisition date fair values of assets acquired and liabilities assumed, especially with respect to intangible assets and contingent consideration granted, if any.

Significant estimates used in the valuation of intangible assets may include, but are not limited to, revenue projections, expected economic life of customer relations and trade names, royalty rates, useful lives and discount rates. The fair value of any contingent consideration is determined using the Monte Carlo model which involves a simulation of future revenues and earnings during the earn-out period using projected financial results adjusted to market risk assumptions, discount rates and probability assumptions with respect to the likelihood of achieving the various earn-out criteria.

We consider our assumptions and estimates used to determine fair values to be reasonable, but any changes due to inherent uncertainty and unpredictability may result in significant differences between actual and estimated results.

Recently Adopted and Issued Accounting Pronouncements

Recently issued and adopted accounting pronouncements are described in Note 1 in the notes to our consolidated financial statements in this Annual Report on Form 10-K.

Results of Operations

Year Ended December 31, 2025 compared to Year Ended December 31, 2024

The following table sets forth a summary of Grid Dynamics’ consolidated results of operations for the periods indicated, and the changes between periods:

(in thousands, except percentages)

Revenues

During the year ended December 31, 2025, we generated record revenues of $411.8 million, an increase of 17.5% from the previous year. The growth reflected the continued growth across most of our verticals, including the benefit of strategic acquisitions completed during 2024.

Revenues by Vertical. We assign our customers into one of the main vertical markets or a group of various industries, labeled as “verticals.” In the first quarter of 2024, we disaggregated Healthcare and Pharma as a separate vertical due to their growing importance to the Company. The following table presents our revenues by vertical and revenues as a percentage of total revenues by vertical for the periods indicated:

(in thousands, except percentages of revenues)

Retail remained our largest vertical, representing 29.3% of total revenues for the year ended December 31, 2025. Revenues in this vertical increased $6.6 million, or 5.7%, compared to the prior year, primarily driven by expanded demand across our specialty retail, grocery and apparel customer base.

Technology, Media and Telecom (“TMT”) revenues increased $12.4 million, or 13.0%, compared to the prior year, contributing 20.2% to the total year-over-year consolidated revenues growth. The growth was largely driven by our top technology customers. Our TMT vertical represented 26.1% of total revenues for the year ended December 31, 2025.

Finance revenues increased $40.2 million, or 66.9%, to $100.4 million for the year ended December 31, 2025, compared to $60.2 million for the year ended December 31, 2024. This vertical was the largest contributor to the overall consolidated revenues growth for the period. The increase was attributable to robust demand from fintech and banking customers, including contributions from our 2024 acquisitions.

CPG and Manufacturing revenues increased $2.6 million, or 6.4%, to $43.1 million for the year ended December 31, 2025, from $40.5 million in the prior year.

Healthcare and Pharma vertical decreased to $10.2 million for the year ended December 31, 2025, compared to $11.1 million in the prior year, representing 2.5% and 3.2% of total revenues, respectively.

Lastly, our Other vertical increased 1.4% year-over-year driven by demand from both new and existing customers. The Other vertical represented 7.2% of total revenues during the year ended December 31, 2025, compared to 8.5% in the prior year.

Cost of Revenues and Gross Margin

Our cost of revenues consists primarily of salaries and employee benefits, including performance bonuses and stock-based compensation, and project-related travel expenses of client-serving professionals. Cost of revenues also includes depreciation and amortization expense related to client-serving activities.

Our cost of revenues increased by $45.9 million, or 20.5%, to $269.5 million, for the year ended December 31, 2025, from $223.6 million for the year ended December 31, 2024. The increase in cost of revenues was primarily driven by the operational and delivery expenses to support revenue growth.

Our gross profit increased by $15.3 million to $142.3 million in the year ended December 31, 2025, compared to $127.0 million in the prior year. Expressed as a percentage of revenues, our gross margin decreased by 160 basis points to 34.6% in 2025, from 36.2% in 2024. Although gross profit grew in absolute terms due to increased revenues, the decline in gross margin was driven by a higher cost basis in key delivery geographies and foreign exchange fluctuations.

Engineering, Research and Development

The principal components of engineering, research and development expenses are salaries and employee benefits including performance bonuses and stock-based compensation for personnel engaged in the design and development of solutions, as well as depreciation and amortization expenses related to engineering, research and development activities.

Our engineering, research, and development expenses increased by $5.3 million, or 29.0%, to $23.7 million for the year ended December 31, 2025, from $18.3 million in the previous year. The increase primarily reflected our continued investments in customer delivery capabilities and internally developed solutions. This includes the integration of AI technologies designed to enhance our scalability, operational efficiency and long-term competitiveness.

Sales and Marketing

Sales and marketing expenses represent spending associated with promoting and selling of our services. These expenses are comprised of personnel costs, including performance bonuses and stock-based compensation, marketing events, travel expenses, as well as depreciation and amortization related to such activities.

Our sales and marketing expenses were $30.0 million for the year ended December 31, 2025, compared to $28.6 million in 2024. While expenses increased $1.4 million in absolute terms, they decreased as a percentage of revenues to 7.3% compared to 8.2% in the prior year. This decrease reflects improved operating leverage, as revenue growth outpaced increases in sales-related costs, supported by optimization initiatives across sales and business-development functions.

General and Administrative

General and administrative expenses include costs to support the business and consist primarily of administrative personnel and officers’ salaries, employee benefits including performance bonuses, stock-based compensation, legal and audit expenses, insurance, operating lease expenses of office premises and other facility costs, workforce global mobility initiatives, restructuring and employee relocations cost not directly related to customer projects, and depreciation and amortization expenses related to such activities. General and administrative expenses include a substantial majority of Grid Dynamics’ stock-based compensation costs for the financial periods discussed herein.

General and administrative expenses increased by $8.4 million, or 10.2%, to $90.5 million for the year ended December 31, 2025, from $82.1 million for the year ended December 31, 2024. The increase was primarily attributable to the full-year impact of acquisitions completed in 2024, which resulted in higher personnel-related costs and depreciation and amortization expenses.

Expressed as a percentage of revenues, our general and administrative expenses decreased by 1.3 percentage points to 22.1% in 2025, compared to 23.4% in the prior year, reflecting effective cost optimization across various corporate functions.

Interest and Other Income, Net

Interest and other income, net represents interest earned on our cash and cash equivalents, including money market funds, interest expense related to our borrowings, foreign exchange gains and losses as well as changes in the fair value of contingent considerations and marketable equity securities.

Interest and other income, net was $17.6 million for the year ended December 31, 2025, compared to $13.2 million for the year ended December 31, 2024. The $4.4 million increase was primarily driven by fair value adjustments related to acquisition-related contingent consideration. These gains were partially offset by unfavorable foreign currency exchange rate fluctuations.

Provision for Income Taxes

Grid Dynamics follows the asset and liability method of accounting for income taxes. The provision for income taxes reflects income earned and taxed in the various U.S. federal and state and non-U.S. jurisdictions. Jurisdictional tax law changes, increases or decreases in permanent differences between book and tax items, accruals or adjustments of accruals for tax contingencies or valuation allowances, and the change in the mix of earnings from these taxing jurisdictions all affect the overall effective tax rate.

Provision for income taxes was $6.0 million in the year ended December 31, 2025 compared to $7.0 million in the year ended December 31, 2024. The effective tax rate decreased between the periods from 63.4% in 2024 to 38.4% in 2025. The difference in the tax provision was mainly attributable to an increase in pre-tax book income due to the change in fair value of contingent consideration payable that is not taxable.

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

Our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 includes a discussion and analysis of our financial condition and results of operations between the years ended December 31, 2024 and 2023 in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which is hereby incorporated herein by reference.

Non-GAAP Measures

To supplement our consolidated financial data presented on a basis consistent with U.S. GAAP, this Annual Report contains certain non-GAAP financial measures, including Non-GAAP EBITDA, Non-GAAP net income and Non-GAAP diluted earnings per share, or Non-GAAP diluted EPS. We have included these non-GAAP financial measures because they are financial measures used by our management to evaluate the Company’s core operating performance and trends, to make strategic decisions regarding the allocation of capital and new investments and are among the factors analyzed in making performance-based compensation decisions for key personnel. These measures exclude certain expenses that are required under U.S. GAAP. We exclude these items because they are not part of core operations or, in the case of stock-based compensation, non-cash expenses that are determined based in part on our underlying performance.

We believe these supplemental performance measurements are useful in evaluating operating performance, as they are similar to measures reported by our public industry peers and those regularly used by security analysts, investors and other interested parties in analyzing operating performance and prospects. These non-GAAP financial measures are not intended to be a substitute for any GAAP financial measures and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry.

There are significant limitations associated with the use of non-GAAP financial measures. Further, these measures may differ from the non-GAAP information, even where similarly titled, used by other companies and therefore should not be used to compare our performance to that of other companies. We compensate for these limitations by providing investors and other users of our financial information a reconciliation of non-GAAP measures to the related GAAP financial measures. We encourage investors and others to review the financial information in its entirety, not to rely on any single financial measure and to view our non-GAAP measures in conjunction with GAAP financial measures.

We define and calculate non-GAAP financial measures as follows:

• Non-GAAP EBITDA: Net income/(loss) before interest income/(expense), provision for income taxes and depreciation and amortization, and further adjusted for the impact of stock-based compensation expense, transaction-

related costs (which include, when applicable, professional fees, retention bonuses, and consulting, legal and advisory costs related to Grid Dynamics’ merger and acquisition and capital-raising activities), impairment of long-lived assets, restructuring costs, one-time charges, and non-operating income/(expenses), net (which includes mainly foreign currency transaction gains and losses, fair value adjustments and other miscellaneous expenses).

• Non-GAAP net income: Net income/(loss) adjusted for the impact of stock-based compensation expense, transaction-related costs (which include, when applicable, professional fees, retention bonuses, and consulting, legal and advisory costs related to Grid Dynamics’ merger and acquisition and capital-raising activities), impairment of long-lived assets, restructuring costs, one-time charges, and non-operating income/(expenses), net (which includes mainly foreign currency transaction gains and losses, fair value adjustments and other miscellaneous expenses), and the tax impacts of these adjustments.
• Non-GAAP diluted EPS: Non-GAAP net income, divided by the diluted weighted-average number of diluted shares outstanding for the period.

The following table presents the reconciliation of Non-GAAP EBITDA to consolidated net income/(loss), the most directly comparable GAAP measure, for the periods indicated:

(in thousands)

(1) Geographic reorganization includes expenses connected with military actions of Russia against Ukraine and the exit plan announced by the Company and includes travel and relocation-related expenses of employees from the aforementioned countries, severance payments, allowances as well as legal and professional fees related to geographic repositioning in various locations. These expenses are incremental to those expenses incurred prior to the crisis, clearly separable from normal operations, and not expected to recur once the crisis has subsided and operations return to normal.

(2) Transaction and transformation-related costs include, when applicable, external deal costs, transaction-related professional fees, transaction-related retention bonuses, which are allocated proportionally across cost of revenues, engineering, research and development, sales and marketing and general and administrative expenses as well as other transaction-related costs including integration expenses consisting of outside professional and consulting services.

(3) Our restructuring costs comprised of severance charges and respective taxes and are included in General and administrative expenses in the Company’s consolidated statements of income/(loss).

(4) Interest and other income, net consist primarily of gains and losses on foreign currency transactions, fair value adjustments, interest on cash held at banks and returns on investments in money-market funds, and other miscellaneous non-operating expenses.

The following table presents a reconciliation of Non-GAAP diluted EPS and Non-GAAP net income to consolidated net income/(loss) for the periods indicated:

(in thousands, except per share data)

(1) Geographic reorganization includes expenses connected with military actions of Russia against Ukraine and the exit plan announced by the Company and includes travel and relocation-related expenses of employees from the aforementioned countries, severance payments, allowances as well as legal and professional fees related to geographic repositioning in various locations. These expenses are incremental to those expenses incurred prior to the crisis, clearly separable from normal operations, and not expected to recur once the crisis has subsided and operations return to normal.

(2) Transaction and transformation-related costs include, when applicable, external deal costs, transaction-related professional fees, transaction-related retention bonuses, which are allocated proportionally across cost of revenues, engineering, research and development, sales and marketing and general and administrative expenses as well as other transaction-related costs including integration expenses consisting of outside professional and consulting services.

(3) Our restructuring costs comprised of severance charges and respective taxes and are included in general and administrative expenses in the Company’s consolidated statements of income/(loss).

(4) Other (income)/expense, net consist primarily of gains and losses on foreign currency transactions, fair value adjustments, and other miscellaneous non-operating income and expense. During the year ended December 31, 2024, the Company started to include interest (income)/expense, net in its calculation of non-GAAP net income. As a result, the Company has adjusted previously reported Other (income)/expense, net adjustment to include interest income, net of $9.3 million for the year ended December 31, 2023.

(5) Reflects the estimated tax impact of the non-GAAP adjustments presented in the table.

Liquidity and Capital Resources

We measure liquidity in terms of our ability to fund the cash requirements for business operations, including working capital needs, capital expenditures, contractual obligations and other commitments with cash flows from operations and other sources of funding. Our current liquidity needs relate mainly to compensation and benefits of our employees and contractors and capital investments to support our growth and geographical expansion. Our ability to expand and grow our business will depend on many factors including capital expenditure needs and financing sources and our operating cash flows. We may need more cash resources due to changing business conditions or other developments, including investments or acquisitions.

Our principal source of liquidity continues to be cash generated from our operations. From time to time, we seek additional financing by means of follow-on public offerings of our common stock. The latest offering closed on November 14, 2024 and resulted in $107.6 million of net proceeds, after deducting underwriting discounts and commissions. Additionally, we entered into an agreement establishing a revolving credit facility with JPMorgan Chase Bank, N.A., as an administrative agent for the lenders. The revolving credit facility provides us with $30.0 million of available borrowing capacity. On May 20, 2025, the maturity of this facility was extended to March 15, 2028.

See consolidated statement of changes in stockholders’ equity and Note 7 “Debt” in the notes to our consolidated financial statements in this Annual Report on Form 10-K regarding our follow-on offering and debt details.

As of December 31, 2025, Grid Dynamics had cash and cash equivalents of $342.1 million compared to $334.7 million as of December 31, 2024. Of these amounts, $48.4 million and $38.6 million, respectively, were held in countries outside the U.S, and included, among others, Switzerland, the U.K., India, Mexico, Ukraine, Argentina, the Netherlands, Poland and other countries. We did not have any debt outstanding under the revolving credit facility at any balance sheet date presented. We believe that our cash and cash equivalents balance, cash generated from operating activities and proceeds from our recent public offering will be sufficient to fund currently expected levels of operating, investing and financing expenditures for a period of twelve months from the date of this filing. However, if our resources are insufficient to satisfy our cash requirements, we may need to seek additional equity or debt financing, which may be subject to conditions outside of our control and may not be available on terms acceptable to our management or at all.

See Note 7 “Debt”, Note 8 “Leases” and Note 14 “Commitments and contingencies” in the notes to our consolidated financial statements in this Annual Report on Form 10-K for detailed information on our contractual obligations and commitments.

Cash Flows

The following table summarizes Grid Dynamics’ cash flows for the annual periods indicated:

(in thousands)

Operating Activities. Net cash provided by operating activities was $40.6 million for the year ended December 31, 2025, compared to $30.2 million in the prior year. The $10.4 million increase was primarily driven by favorable changes in working capital, specifically regarding the timing of payments to vendors and settlement of employee-related liabilities.

Investing Activities. Net cash used in investing activities decreased by $36.2 million to $15.1 million for the year ended December 31, 2025, from $51.3 million in the prior year. This decrease was driven by significant cash outflows in 2024 related to the acquisitions of JUXT and Mobile Computing, net of cash acquired.

Financing Activities. Net cash used in financing activities was $19.9 million for the year ended December 31, 2025 driven by the settlement of employee tax withholding obligations associated with the vesting of equity awards. In the prior year, financing activities generated $101.2 million, primarily reflecting net proceeds from an equity offering, partially offset by similar employee tax withholding obligations.

Our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 includes a discussion and analysis of our cash flows between the years ended December 31, 2024 and 2023 in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Off-Balance Sheet Arrangements and Commitments

We do not have any material off-balance sheet commitments or contractual arrangements other than those disclosed in Note 8 “Leases” and Note 14 “Commitments and contingencies” in the notes to our consolidated financial statements in this Annual Report on Form 10-K.

As a result of analysis related to Grid Dynamics’ functional control of its subcontractors one was determined to be a variable interest entity (“VIE”) and is therefore consolidated in Grid Dynamics’ financial statements. The assets and liabilities of this VIE consist primarily of intercompany balances and transactions, all of which have been eliminated in consolidation.

We have in the past and may in the future be exposed to certain market and credit risks in the ordinary course of business, including exposure related to fluctuations in foreign currency rates, and on occasion and to a lesser extent, changes in interest rates and concentration of credit risk. In addition, our international operations are subject to risks related to differing economic conditions, changes in political climate, differing tax structures, and other regulations and restrictions. See Item 1A, “Risk Factors” in this Annual Report on Form 10-K for additional information.

Foreign Currency Exchange Rate Risk

Grid Dynamics is exposed to foreign currency exchange transaction risk related to funding its non-US operations and to foreign currency translation risk related to certain of its subsidiaries’ cash balances that are denominated in currencies other than the U.S. dollar. In addition, Grid Dynamics’ profit margins are subject to volatility as a result of changes in foreign exchange rates. Grid Dynamics’ material functional currencies apart from the U.S. dollar includes Euro, British pounds, Mexican pesos, Polish zlotys, and Indian rupees. When and where possible, Grid Dynamics seeks to match expenses of each entity to currencies in which revenues are generated creating natural hedges. In future periods, Grid Dynamics may also become materially exposed to changes in the value of Argentinian pesos and Serbian dinars against the U.S. dollar, due to the recent acquisitions and continuous expansion of operations.

For the year ended December 31, 2025, approximately 49.7% of Grid Dynamics’ $413.7 million of combined cost of revenue and total operating expenses were denominated in currencies other than the U.S. dollar. Comparatively, approximately 43.2% of Grid Dynamics’ $352.7 million of combined cost of revenue and total operating expenses were denominated in currencies other than the U.S. dollar in the year ended December 31, 2024.

We use sensitivity analysis to determine the effects that foreign currency exchange rate fluctuations may have on our income from operations of our foreign subsidiaries. This sensitivity analysis represents the hypothetical changes in our consolidated income from operations and does not reflect our actual or expected results of operations.

In the year ended December 31, 2025:

• a 10% decrease in the value of the Polish zloty against the U.S. dollar would have resulted in a $5.1 million increase in Grid Dynamics’ income from operations, while a 10% increase in the zloty’s value would have resulted in a $6.3 million decrease in income from operations.
• a 10% decrease in the value of the Indian rupees against the U.S. dollar would have resulted in a $2.1 million increase in Grid Dynamics’ income from operations, while a 10% increase in the rupee’s value would have resulted in a $2.5 million decrease in income from operations
• a 10% decrease in the value of the Mexican pesos against the U.S. dollar would have resulted in a $1.2 million increase in Grid Dynamics’ income from operations, while a 10% increase in the pesos’ value would have resulted in a $1.5 million decrease in income from operations.
• a 10% decrease in the value of the Euro against the U.S. dollar would have resulted in a $0.9 million increase in Grid Dynamics’ income from operations, while a 10% increase in the Euro’s value would have resulted in a $1.1 million decrease in income from operations.

In the year ended December 31, 2024:

• a 10% decrease in the value of the Polish zloty against the U.S. dollar would have resulted in a $5.5 million increase in Grid Dynamics’ income from operations, while a 10% increase in the zloty’s value would have resulted in a $6.7 million decrease in income from operations.
• a 10% decrease in the value of the Indian rupees against the U.S. dollar would have resulted in a $1.4 million increase in Grid Dynamics’ income from operations, while a 10% increase in the rupee’s value would have resulted in a $1.8 million decrease in income from operations
• a 10% decrease in the value of the Mexican pesos against the U.S. dollar would have resulted in a $1.3 million increase in Grid Dynamics’ income from operations, while a 10% increase in the pesos’ value would have resulted in a $1.6 million decrease in income from operations.
• a 10% decrease in the value of the Euro against the U.S. dollar would have resulted in a $1.0 million increase in Grid Dynamics’ income from operations, while a 10% increase in the Euro’s value would have resulted in a $1.2 million decrease in income from operations.

We analyze sensitivity to the zloty, rupees, euro, and pesos separately because, in management’s experience, fluctuations in the value of these currencies against the U.S. dollar are frequently driven by distinct macroeconomic and geopolitical factors and have the largest effect on our results during the year ended December 31, 2025.

Grid Dynamics started to manage its exposure to foreign currency fluctuations by implementing a hedging program under which the Company enters into short-term foreign exchange forward contracts designed as cash flow hedges of forecasted transactions denominated in Polish zloty. These contracts generally mature during six months or less. As of December 31, 2025, all foreign exchange forward contracts are qualified for hedge accounting, with no collateral required to be posted.

Management's report on internal control over financial reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

An evaluation was conducted under the supervision and with the participation of management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of our internal control over financial reporting based on the Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

Based on the results of this evaluation, our management concluded that our internal control over financial reporting was effective at the end of fiscal 2025. The effectiveness of our internal control over financial reporting as of December 31, 2025 has been audited by Grant Thornton LLP, an independent registered public accounting firm, as stated in their report included herein.

Evaluation of disclosure controls and procedures

An evaluation was conducted under the supervision and with the participation of management, including our CEO and CFO, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and Exchange Act Rules 15d-15(e)) as of December 31, 2025. Based on that evaluation, the CEO and CFO concluded that our disclosure controls and procedures were effective as of such date.

Internal control over financial reporting

Our management, including the CEO and CFO, confirmed there were no changes in our internal control over financial reporting during the three months ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent limitations on effectiveness of controls

Our management, including our CEO and CFO, do not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.