Grid Dynamics Holdings Inc (GDYN) 2024 Q1 法說會逐字稿

Good afternoon, everyone. Welcome to Grid Dynamics' First Quarter 2024 Earnings Conference Call. I'm Cary Savas, Director of Branding and Communications. At this time, our participants are in listen-only mode.

大家下午好。歡迎參加 Grid Dynamics 2024 年第一季財報電話會議。我是品牌和傳播總監卡里·薩瓦斯 (Cary Savas)。此時，我們的參與者處於僅聽模式。

Joining us on the call today are CEO, Leonard Livschitz; and CFO, Anil Doradla. Following their prepared remarks, we will open the call to your questions. Please note that today's conference is being recorded.

今天加入我們電話會議的是執行長 Leonard Livschitz；和財務長阿尼爾·多拉德拉。在他們準備好的發言之後，我們將開始回答您的問題。請注意，今天的會議正在錄製中。

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

在開始之前，我想提醒大家，今天的討論將包含前瞻性陳述。這包括我們的業務和財務前景，以及您的一些問題的答案。此類聲明受到公司收益報告和向 SEC 提交的其他文件中所述的風險和不確定性的影響。

During this call, we will discuss certain non-GAAP measures of our performance. GAAP to non-GAAP financial reconciliations and supplemental financial information are provided in the earnings press release and the 8-K filed with the SEC. You can find all the information I just described in the Investor Relations section of our website.

在本次電話會議中，我們將討論某些非公認會計原則的績效衡量指標。獲利新聞稿和向 SEC 提交的 8-K 中提供了 GAAP 與非 GAAP 財務調節表和補充財務資訊。您可以在我們網站的投資者關係部分找到我剛才描述的所有資訊。

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

我現在將電話轉給我們的執行長倫納德。

Thank you, Cary. Good afternoon, everyone and thank you for joining us today. As you have seen from our published results, Grid Dynamics' first quarter revenues were above our guidance range, and we exceeded Wall Street expectations both on revenue and non-GAAP EBITDA. It was another quarter of solid execution. Our results clearly show that our focus is steadily paying off and we continue to move forward our stated goals of revenue growth and profitability.

謝謝你，卡里。大家下午好，感謝您今天加入我們。正如您從我們發布的業績中看到的，Grid Dynamics 第一季的收入高於我們的指導範圍，並且我們在收入和非 GAAP EBITDA 方面都超出了華爾街的預期。這又是一個執行力紮實的季度。我們的結果清楚地表明，我們的重點正在穩步取得回報，並且我們將繼續推進我們既定的收入成長和獲利能力目標。

During the first quarter, we witnessed improving demand trends across the majority of our customers. While the demand environment is not back to support growth level that we and digital transformation industry have seen, science point out to the right direction. Customers are increasingly willing to engage with us on their crucial and time sensitive programs and share their outlooks and roadmaps.

在第一季度，我們看到大多數客戶的需求趨勢有所改善。雖然需求環境尚未恢復到支持我們和數位轉型產業所看到的成長水平，但科學指出了正確的方向。客戶越來越願意與我們就他們的關鍵且時間敏感的項目進行互動，並分享他們的前景和路線圖。

In the first quarter, we witnessed a significant milestone. We've reached the highest number of billable engineers in the company's history. And this is also reflected in the revenue outlook for the second quarter. During the first quarter, we also secured two multi-million dollar deals with enterprise customers, one of them a market leader in the specialty retail vertical and the other one is in insurance vertical, a key focus area of our GigaCube strategy.

第一季度，我們見證了一個重要的里程碑。我們的計費工程師數量已達到公司歷史上最高水準。這也反映在第二季的營收前景。在第一季度，我們還與企業客戶達成了兩項數百萬美元的交易，其中一項是專業零售垂直領域的市場領導者，另一項是保險垂直領域，這是我們GigaCube 策略的關鍵重點領域。

We continue to make progress in our joint go-to-market efforts with our partners. Partnership's contribution is at an all-time high. And it has increased by more than 20% in comparison to the fourth quarter of 2023. We continue to be very positive on our partnerships and expect continued contribution.

我們與合作夥伴共同努力進入市場，不斷取得進展。合作夥伴的貢獻達到歷史最高水準。與2023年第四季相比成長了20%以上。我們仍然對我們的合作夥伴關係非常積極，並期望繼續做出貢獻。

I'm also happy to announce that we were recognized by the Everest Group as a leader in its Inaugural Google Cloud Services Specialists, which is PEAK Matrix Assessments report. This achievement validates our capabilities as a specialist in Google Cloud Services, an area of expertise for several years. This is a clear recognition of the differentiated capabilities we offer our clients to drive their digital transformation agenda. In the course of time, I'm confident that more independent third parties will recognize our strengths across other capabilities and service offerings.

我還很高興地宣布，我們被 Everest Group 評為其首屆 Google 雲端服務專家（即 PEAK Matrix 評估報告）中的領導者。這項成就驗證了我們作為 Google 雲端服務專家的能力，該領域已深耕多年。這是對我們為客戶提供的差異化能力的明確認可，以推動他們的數位轉型議程。隨著時間的推移，我相信更多的獨立第三方將認識到我們在其他能力和服務產品方面的優勢。

Coming to AI. Customers are increasingly incorporating AI in their projects and requirements. Additionally, some of our customer in GenAI projects have become meaningful engagements. At a large financial institution, our GenAI project has been successfully completed and we expect that platform to go live in the second quarter. At the same time, we're not only using AI technologies with the clients, but also within our internal systems. Last week, with soft launch, our website that incorporates AI features. Our users visiting Grid Dynamics' website will now be able to use natural language queries to find company related information. This includes Grid Dynamics' capability work would perform at our clients, case studies, and others.

來到人工智慧。客戶越來越多地將人工智慧納入他們的專案和需求中。此外，我們的 GenAI 專案中的一些客戶已經成為有意義的合作夥伴。在一家大型金融機構，我們的GenAI專案已經成功完成，我們預計該平台將在第二季上線。同時，我們不僅在客戶中使用人工智慧技術，還在我們的內部系統中使用人工智慧技術。上週，我們的網站結合了人工智慧功能，進行了試運行。造訪 Grid Dynamics 網站的使用者現在將能夠使用自然語言查詢來尋找公司相關資訊。這包括 Grid Dynamics 將在我們的客戶、案例研究等方面進行的能力工作。

Now let me make some more detailed comments about the demand environment. For many, our reported results and commentary over the past couple of quarters may appear more positive than many of our peers. There are some key reasons for that. And in my opinion, that is what makes Grid Dynamics unique across the IT industry.

現在讓我對需求環境做一些更詳細的評論。對於許多人來說，我們過去幾個季度報告的業績和評論可能比許多同行更為積極。這有一些關鍵原因。在我看來，這就是 Grid Dynamics 在 IT 產業中獨一無二的原因。

First, in the current economic cycle, spending is under heightened scrutiny. This in turn has resulted in many clients consolidating their IT partners and tightly coupling their investors with corporate performance goals. Grid Dynamics' strengths and reputation for technology leadership, engineering prowess, and delivery excellence positions us as a trusted partner, often leading us to gain business at the expense of the competition.

首先，在當前的經濟週期中，支出受到嚴格審查。這反過來又導致許多客戶整合他們的 IT 合作夥伴，並將他們的投資者與公司績效目標緊密結合起來。Grid Dynamics 在技術領先、工程實力和卓越交付方面的優勢和聲譽使我們成為值得信賴的合作夥伴，這往往使我們以犧牲競爭為代價來贏得業務。

As an example, in 2024, at two of Fortune 1000 retailers, Grid Dynamics was selected as one of the two partners for all digital engineering programs. Additionally, at a large Fortune 500 Telecom company, after evaluating dozens of existing suppliers, they choose Grid Dynamics for all their customer facing applications. One of the key applications that we're rolling out at scale includes a mobile app for new customer self-installations and provisioning.

例如，2024 年，兩家財富 1000 強零售商選擇 Grid Dynamics 作為所有數位工程專案的兩個合作夥伴之一。此外，在一家大型財富 500 強電信公司，在評估了數十家現有供應商後，他們選擇 Grid Dynamics 來用於其所有面向客戶的應用程式。我們大規模推出的關鍵應用程式之一包括用於新客戶自行安裝和配置的行動應用程式。

Second, in a rapidly evolving world, a company's ability to adapt and integrate new technologies define its relevance and competitive edge. With the relentless progression of disruptive technologies, business must innovate or risk obsolescence. Moreover, in a landscape marked by rising capital costs, the efficiency and speed on which innovative solutions are brought to the market are crucial. Grid Dynamics has been at the forefront of helping enterprises scale their operations through numerous technological advancements over the past two decades. The deep knowledge and robust capabilities position us not just to adapt to the change, but to drive it forward.

其次，在快速發展的世界中，公司適應和整合新技術的能力決定了其相關性和競爭優勢。隨著顛覆性技術的不斷發展，企業必須創新，否則就會有被淘汰的風險。此外，在資本成本不斷上升的情況下，將創新解決方案推向市場的效率和速度至關重要。過去二十年來，Grid Dynamics 一直處於透過許多技術進步幫助企業擴大營運規模的前沿。深厚的知識和強大的能力使我們不僅能夠適應變革，而且能夠推動變革向前發展。

As an example, at a large financial institution that I mentioned before, the AI assistant for financial advisors that we implemented is poised to dramatically enhance both customer experience and the efficiency of financial advisors. We anticipate that this capability, when industrialized, could save the wealth management industry billions of dollars. Notably, at this financial institution were one of the few selected partners after vendor consolidation exercised in 2023, further underscoring our pivotal role in their crucial and strategic programs.

舉個例子，在我之前提到的一家大型金融機構，我們實施的財務顧問人工智慧助理將大大提高客戶體驗和財務顧問的效率。我們預計，這種能力一旦產業化，將為財富管理業節省數十億美元。值得注意的是，這家金融機構是 2023 年供應商整合後為數不多的選定合作夥伴之一，這進一步凸顯了我們在其關鍵策略計畫中的關鍵作用。

Now coming to the second quarter. Positive trends that I highlighted regarding the first quarter extend into the second quarter. Our customer activity is picking up. Engineering billable headcount continues to grow. Customers have heightened AI interest. We believe these factors formulate the basis for our continued positive outlook as we look into the second quarter and remainder of 2024.

現在進入第二季。我強調的第一季的正向趨勢延續到了第二季。我們的客戶活動正在增加。工程計費人員數量持續成長。客戶對人工智慧的興趣日益濃厚。我們相信，在展望 2024 年第二季和剩餘時間時，這些因素為我們持續樂觀的前景奠定了基礎。

On CTO front, Grid Labs, our internal innovation center, completed multiple projects and initiatives. Our researchers and architects are engaged across the spectrum innovation that includes AI, data, machine learning, and commerce solutions. Like previous quarters, our architects and CTO team were instrumental in opening new accounts with new clients. As a reminder, Grid Dynamics' AI engagements are based on more than seven years of internal research and successful implementation. With our Generative AI offering, we partner with customers to employ large language models and prompt guided image generation to the applications in product design, visualization, knowledge retrieval, wealth management, and customer service.

在 CTO 方面，我們的內部創新中心 Grid Labs 完成了多個專案和計劃。我們的研究人員和架構師致力於跨領域創新，包括人工智慧、數據、機器學習和商業解決方案。與前幾季一樣，我們的架構師和技術長團隊在與新客戶開設新帳戶方面發揮了重要作用。需要提醒的是，Grid Dynamics 的人工智慧專案是基於七年多的內部研究和成功實施。透過我們的生成式人工智慧產品，我們與客戶合作，採用大型語言模型，並提示引導圖像生成到產品設計、視覺化、知識檢索、財富管理和客戶服務中的應用程式。

In the quarter, there were several trends and I want to share with you some of the notable ones. Logo momentum. Building up on our success in 2023, in the first quarter, we signed five large new enterprise customers. Of the new enterprise customers we signed in the quarter, one is a leading North American pet company. One is an American high end sport apparel and accessory company. One is a global consumer goods company focused on personal care and health products and energy manufacturing and service company and one is a large multinational confectionery manufacturer. I believe each of these logos have the potential to become large top accounts, and I'm looking forward to seeing these initiatives to scale.

本季有幾個趨勢，我想與大家分享一些值得注意的趨勢。標誌勢頭。在2023年成功的基礎上，第一季我們簽了五家大型新企業客戶。在我們本季簽約的新創企業客戶中，有一家是北美領先的寵物公司。其中之一是一家美國高端運動服裝和配件公司。一是專注於個人護理和健康產品以及能源製造和服務的全球消費品公司，一是大型跨國糖果製造商。我相信這些徽標中的每一個都有潛力成為大型頂級帳戶，並且我期待看到這些舉措得以擴展。

Delivery location support. Grid Dynamics Follow-the-Sun strategy, provides the framework of scaling our global locations. India, one of the key locations has been growing at a rapid pace and is in top three countries in terms of the headcount. Last quarter, I highlighted the opening of the third office in India. This location in Bangalore is quickly becoming popular with our clients. In the first quarter, we had multiple visits from our US based clients across all our key offshore locations. We continue to attract high quality talent out of universities and our activities with internships, hackathons and dynamic talks are paying off.

送貨地點支援。Grid Dynamics 的「追隨太陽」策略提供了擴展我們全球分支機構的框架。作為關鍵地點之一的印度一直在快速增長，就員工數量而言，其在國家中名列前三名。上個季度，我強調了在印度開設第三個辦事處的情況。班加羅爾的這個地點很快就受到我們客戶的歡迎。第一季度，我們的美國客戶多次造訪我們所有的主要離岸地點。我們繼續從大學吸引高素質人才，我們的實習、黑客馬拉松和動態演講等活動正在發揮作用。

Additionally, we brought on an industry veteran to lead our India operations and with his addition, I'm confident of many positive things happening in India. In Europe, Poland continues to be our anchor point. And in Latin America, Mexico remains the key location to support our clients seeking nearshore capabilities.

此外，我們聘請了一位行業資深人士來領導我們的印度業務，隨著他的加入，我對印度發生的許多積極事情充滿信心。在歐洲，波蘭仍然是我們的錨點。在拉丁美洲，墨西哥仍然是支持我們尋求近岸能力的客戶的關鍵地點。

European business. Our European business is steadily diversifying beyond traditional areas of strengths such as retail and CPG. Additionally, the pipeline of the business is more distributed with clients spread over mainland Europe. For a global auto parts company, we're rolling out their composable commerce modernization platform across several brands within Europe, supporting them by establishing a multi-location global team structure. In Q1, we successfully delivered an ESG initiative for a large clean energy company. At many clients, GenAI continues to be a door open.

歐洲業務。我們的歐洲業務正在穩步多元化，超越零售和消費品等傳統優勢領域。此外，該業務的管道更加分散，客戶遍布歐洲大陸。對於一家全球汽車零件公司，我們正在歐洲的多個品牌推出其可組合的商業現代化平台，並透過建立多地點的全球團隊結構來為他們提供支援。第一季度，我們成功為一家大型清潔能源公司交付了 ESG 計畫。對於許多客戶來說，GenAI 仍然敞開大門。

Additionally, several of our customers have transitioned from exploratory and proof-of-concepts to commercial build outs. For example, at a leading legal and tech service company, we're building a flagship platform for their new markets. For a global international medical device company, we continue working on multiple initiatives to improve sales efficiency.

此外，我們的一些客戶已經從探索性和概念驗證過渡到商業建設。例如，在一家領先的法律和技術服務公司，我們正在為其新市場建立一個旗艦平台。對於一家全球性的國際醫療器材公司，我們持續致力於多項措施來提高銷售效率。

Partnerships. In 2023, partnerships contributed to 13% of our overall revenue and we aim to increase that share to at least 16% in 2024. Partnerships with hyperscalers and leading software vendors is a key part of our GigaCube strategy. In the first quarter, we made progress with our go-to-market efforts with our partners and upgraded our status with the major hyperscalers. At AWS, we achieved the AWS Well-Architected Partner status. The program enables Grid Dynamics to provide its client with an audit of their platform architecture, ensuring they're configured correctly, in accordance with the best practices.

夥伴關係。2023 年，合作夥伴關係貢獻了我們總收入的 13%，我們的目標是到 2024 年將該份額提高到至少 16%。與超大規模企業和領先軟體供應商的合作是我們 GigaCube 策略的關鍵部分。第一季度，我們與合作夥伴的市場推廣工作取得了進展，並提升了我們在主要超大規模供應商中的地位。在 AWS，我們獲得了 AWS 架構完善的合作夥伴地位。該計劃使 Grid Dynamics 能夠為其客戶提供平台架構審核，確保根據最佳實踐正確配置平台架構。

With NVIDIA, we're exploring go-to-market initiatives for the first time. During the quarter, Grid Dynamics delivered some notable projects. For a leading global technology company, we created a test automation toolkit that improved the efficiency and effectiveness of the testing processes. Featuring a collection of independent module, each with unified interface, the client was able to streamline the testing process and enjoy greater visibility into testing outcomes. This project enabled the client issue resolutions taken from days down to minutes, leading to faster time to market and ultimately enhancing the quality of the final product.

我們正在與 NVIDIA 合作，首次探索市場推廣計劃。在本季度，Grid Dynamics 交付了一些值得注意的項目。我們為一家全球領先的科技公司創建了一個測試自動化工具包，可以提高測試流程的效率和效能。擁有一系列獨立模組，每個模組都具有統一的介面，客戶能夠簡化測試過程並更好地了解測試結果。該專案使客戶問題的解決時間從幾天縮短到幾分鐘，從而加快了上市時間，並最終提高了最終產品的品質。

For a leading internet and cloud company, we streamlined the release preparation process for high priority apps in its app store. We developed tools that enable the client to submit releases that foster better communication between departments. These tools help accelerate the app release process, which enabled the client to better predict release timing, monitor updates and improve the overall user experience.

對於一家領先的互聯網和雲端公司，我們簡化了其應用程式商店中高優先級應用程式的發布準備流程。我們開發了工具，使客戶能夠提交版本，以促進部門之間更好的溝通。這些工具有助於加速應用程式發布流程，使客戶能夠更好地預測發佈時間、監控更新並改善整體使用者體驗。

For a major CPG brand, we implemented an omnichannel warehouse automation platform. This platform unifies several software interfaces, which dramatically lowers the cost of integrating new distribution centers and their client network, while also supporting the unique fulfillment requirements of wholesale, retail, and digital channels.

對於一個主要的消費品品牌，我們實施了全通路倉庫自動化平台。該平台統一了多個軟體介面，大大降低了整合新配送中心及其客戶網路的成本，同時也支援批發、零售和數位通路的獨特履行要求。

In addition, we implemented a wholesale order platform that lowers the cost of serving new wholesale clients. Both of these platforms are expected to be expanded to multiple geographies in upcoming months. For a global automotive manufacturer, we began a project aimed at improving interactions with dealers through the use of micro front ends and AI enabled personalized experiences. This project will enable dealers to deliver more comprehensive sales and services to their end customers.

此外，我們也實施了批發訂單平台，降低了服務新批發客戶的成本。預計這兩個平台將在未來幾個月內擴展到多個地區。對於一家全球汽車製造商，我們啟動了一個項目，旨在透過使用微前端和人工智慧支援的個人化體驗來改善與經銷商的互動。該項目將使經銷商能夠為其最終客戶提供更全面的銷售和服務。

With that, let me turn the call over to Anil who will discuss Q1 results in more details. Anil?

接下來，讓我將電話轉給阿尼爾，他將更詳細地討論第一季的結果。阿尼爾？

Thanks, Leonard. Good afternoon, everyone. Our first quarter revenue of 79.8 million was ahead of our guidance range of 77 million to 79 million and exceeded Wall Street expectations. On a sequential basis, our revenue grew 2.2% and remained flat on a year-over-year basis. While we witnessed growth from multiple customers across every industry vertical, our finance and other verticals were the strongest, both on a year-over-year basis and sequential growth basis.

謝謝，倫納德。大家下午好。我們第一季的營收為 7,980 萬美元，高於我們 7,700 萬至 7,900 萬美元的指導範圍，也超出了華爾街的預期。我們的營收季增 2.2%，與去年同期持平。雖然我們見證了每個垂直行業的多個客戶的成長，但無論是同比還是環比增長，我們的金融和其他垂直行業都是最強勁的。

During the first quarter, our retail and TMT were the two largest verticals at 30.9% and 30.1% of our revenues respectively. Our retail vertical remained flat on a sequential basis and decreased by 3% on a year-over-year basis. On a sequential basis, we witnessed growth from specialty retail. TMT remained flat on a sequential basis and decreased by 10.4% on a year-over-year basis.

第一季度，我們的零售和TMT是最大的兩個垂直行業，分別占我們收入的30.9%和30.1%。我們的零售垂直業務環比持平，年減 3%。從環比來看，我們見證了專業零售的成長。TMT 環比持平，年減 10.4%。

Coming to our largest customer in our TMT vertical, it grew both on a sequential and year-over-year basis. Here are the details of the revenue mix of other verticals. Our CPG and manufacturing represented 12% of our revenue in the first quarter, a decrease of 1.2% on a sequential basis and 24.4% on a year-over-year basis. On a sequential basis, our largest CPG customer grew in the quarter, and this was offset by decrease in other customers. The financial vertical represented 12.8% of revenue, an increase of 23.7% on a sequential basis, and 57.2% on a year-over-year basis.

對於我們 TMT 垂直領域最大的客戶來說，它的環比和同比都在成長。以下是其他垂直行業收入組合的詳細資訊。我們的消費品和製造業佔第一季營收的 12%，季減 1.2%，年減 24.4%。以環比計算，我們最大的 CPG 客戶在本季度有所成長，但被其他客戶的減少所抵消。金融垂直領域佔營收的12.8%，季增23.7%，年增57.2%。

During the quarter, we witnessed growth across most of our customers that range from financial, technology, banking and insurance. Our newly disaggregated healthcare and pharma represented 3.8% of our revenue, showed a decline of 10.5% on a sequential basis and 4.5% decrease on a year-over-year basis. And finally, the other vertical represented 10.4% of our first quarter revenue and was up 4.5% on a sequential basis, and 50.1% on a year-over-year basis. The sequential growth was driven by strength across multiple customers, some of them in the clean energy and legal space.

在本季度，我們見證了金融、科技、銀行和保險等大多數客戶的成長。我們新分類的醫療保健和製藥業務占我們收入的 3.8%，環比下降 10.5%，年減 4.5%。最後，其他垂直領域占我們第一季營收的 10.4%，季增 4.5%，年增 50.1%。連續成長是由多個客戶的實力推動的，其中一些客戶來自清潔能源和法律領域。

We ended the first quarter with a total headcount of 3,892, down from 3,920 employees in the fourth quarter of 2023 and up from 3,744 in the first quarter of 2023. In comparison to the fourth quarter, we exited our first quarter with the higher billable headcount due to improving demand. At the end of the first quarter of 2024, our total US headcount was 332 or 8.5% of our company's total headcount versus 8.1% in the year ago quarter. Our non-US headcount located in Europe, Americas and Indias was 3,560 or 91.5%. In the first quarter, revenues from our top five and top 10 customers were 39.6% and 55.3%, respectively, versus 40.8% and 60.4% in the same period a year ago, respectively.

截至第一季末，我們的員工總數為 3,892 人，低於 2023 年第四季的 3,920 人，高於 2023 年第一季的 3,744 人。與第四季度相比，由於需求改善，我們在第一季結束時的計費員工人數增加。截至 2024 年第一季末，我們的美國員工總數為 332 人，占公司總員工數的 8.5%，而去年同期為 8.1%。我們位於歐洲、美洲和印度的非美國員工人數為 3,560 人，即 91.5%。第一季度，前五名和前十名客戶的收入分別為39.6%和55.3%，而去年同期分別為40.8%和60.4%。

During the first quarter, we had a total of 210 customers, down from 218 in the fourth quarter of 2023 and 220 in the year ago quarter. During the quarter, we added several customers, some of which Leonard referred to in his prepared remarks. The quarterly decline in the number of customers was primarily driven by our continued efforts to rationalize our portfolio of non-strategic customers.

第一季度，我們共有 210 名客戶，低於 2023 年第四季的 218 名和去年同期的 220 名。在本季度，我們增加了幾位客戶，倫納德在他準備好的演講中提到了其中一些客戶。客戶數量的季度下降主要是由於我們不斷努力合理化非策略性客戶組合。

Moving to the income statement. Our GAAP gross profit during the quarter was 27.7 million or 34.7% compared to 28.1 million or 36% in the fourth quarter of 2023 and down from 28.6 million or 35.7% in the year ago quarter. On a non-GAAP basis, our gross profit was 28.1 million or 35.3%, down from 28.6 million or 36.6% in the fourth quarter of 2023 and down from 29 million or 36.3% in the year ago quarter. The decrease in gross margin as a percentage on a sequential basis was driven by a combination of first quarter seasonal increase in employee related costs and FX headwinds.

轉到損益表。我們本季的 GAAP 毛利為 2,770 萬美元，即 34.7%，而 2023 年第四季為 2,810 萬美元，即 36%，也低於去年同期的 2,860 萬美元，即 35.7%。以非公認會計原則計算，我們的毛利為 2,810 萬美元，即 35.3%，低於 2023 年第四季的 2,860 萬美元，即 36.6%，也低於去年同期的 2,900 萬美元，即 36.3%。毛利率季減是由第一季員工相關成本季節性成長和外匯不利因素共同推動的。

Non-GAAP EBITDA during the first quarter that excluded stock-based compensation, depreciation and amortization, restructuring and expenses related to the geographic reorganization, transaction and other related costs was 10.3 million or 12.9% of sales versus 10.7 million or 13.7% of sales in the fourth quarter of 2023 and down from 10.8 million or 13.5% in the year ago quarter. The decline in non-GAAP EBITDA was largely due to decrease in gross margins.

第一季的非公認會計準則EBITDA（不包括股票薪資、折舊和攤提、重組以及與地理重組相關的費用、交易和其他相關成本）為1,030 萬美元，佔銷售額的12.9%，而2017 年為1,070 萬美元，佔銷售額的13.7%。非公認會計準則 EBITDA 的下降主要是由於毛利率下降。

Our GAAP net loss in the first quarter was 3.9 million or a loss of 0.05 based on basic share count of 76.2 million shares compared to the fourth quarter income of 2.9 million or 0.04, based on a basic share count of 75.7 million and a loss of 8 million or 0.11 per share based on 74.5 million basic shares in the year ago quarter. The year-over-year decrease in GAAP net loss was largely due to lower levels of stock-based compensation and decrease in provision of income taxes partially offset by depreciation and amortization.

我們第一季的GAAP 淨虧損為390 萬股，以基本股數7,620 萬股計算，虧損0.05 倍；而第四季的營收為290 萬股，以基本股數計算，虧損0.04 股，以基本股數7,570 萬股計算，虧損0.05%。公認會計準則淨虧損年減主要是因為股票薪資水準較低以及所得稅撥備減少（部分被折舊和攤提抵銷）。

On a non-GAAP basis, in the first quarter, our non-GAAP net income was 5.2 million or 0.07 per share based on 78.4 million diluted shares compared to the fourth quarter non-GAAP net income of 5.7 million or 0.07 per share based on 78 million diluted shares and 6.5 million or 0.08 per share based on 77 million shares in the year ago quarter. On March 31, 2024, our cash and cash equivalents totaled 249.4 million, down from 257.2 million in the fourth quarter of 2023.

以非GAAP 計算，第一季度，我們的非GAAP 淨利潤為520 萬美元，即每股0.07 美元（基於7840 萬股稀釋股票），而第四季度非GAAP 淨利潤為570 萬美元，即每股0.07 美元（基於稀釋後股票計算）。截至2024年3月31日，我們的現金及現金等價物總計2.494億，低於2023年第四季的2.572億。

Coming to our second quarter guidance. We expect revenues to be in the range of 80 million to 82 million. We expect our non-GAAP EBITDA in the second quarter to be in the range of 10.5 million to 11.5 million. For the second quarter of 2024, we expect our basic share count to be in the range of 77 million to 78 million and our diluted share count to be in the range of 79 million to 80 million.

接下來是我們的第二季指引。我們預計收入將在 8,000 萬至 8,200 萬之間。我們預計第二季的非 GAAP EBITDA 將在 1,050 萬至 1,150 萬之間。2024年第二季度，我們預期基本股數將在7,700萬至7,800萬股之間，稀釋後股數將在7,900萬股至8,000萬股之間。

That concludes my prepared remarks. We are now ready to take questions.

我準備好的發言就到此結束。我們現在準備好回答問題。

(Operator Instructions) Puneet Jain, JPMorgan.

（操作員指令）Puneet Jain，摩根大通。

Hi, thanks for taking my question. And a really nice set of results here. So let me ask what drove the upside relative to the guidance you grew sequentially in first quarter, and then expect growth in the second quarter as well? What drove those positive trends given many data points such as the continued sluggishness in the spending environment in this industry?

您好，感謝您提出我的問題。這裡有一組非常好的結果。那麼，讓我問一下，相對於第一季連續成長的指導，是什麼推動了上行，然後預計第二季也會成長？鑑於許多數據點（例如該行業支出環境持續低迷），是什麼推動了這些積極趨勢？

Let me put it. Good to having you on our call. Well, it didn't come as a surprise to us. As you recall, at the end of the report last time when we talked about the results of 2023, I kind of hinted that the continued growth is going to happen. So I'm still bullish not only on guidance for Q2, but subsequent growth as we go forward. We'll be happy to discuss some of those subtleties. But ultimately, what Grid Dynamics really sees is that despite continuous scrutiny around the budgets from the major global companies, there is a demand for institutionalize the additional technology spendings.

讓我說一下。很高興您接聽我們的電話。嗯，這對我們來說並不意外。大家還記得，上次我們在報告最後談到 2023 年的業績時，我有點暗示將會持續成長。因此，我不僅看好第二季的指導，而且看好我們未來的後續成長。我們很樂意討論其中的一些微妙之處。但最終，Grid Dynamics 真正看到的是，儘管對全球主要公司的預算進行持續審查，但仍需要將額外的技術支出製度化。

So if you look at the last 18 months, a lot of companies clamped down all the spendings. Now we see the opening comes to basically innovate and generate more competitive advantages by stepping up into the unique area relates to the data management, machine learning, obviously, some AI modules. But more important, this whole comprehensive question, how to tie the business value with a predictable nature of the digital side of the business. So that's why we see kind of notable examples of the clients who started with us in 2023 or even more stable clients who've been with us for a longer time now have projection of the budgets for extended period of time with Grid Dynamics as part of their journey.

因此，如果你看看過去 18 個月，你會發現很多公司都削減了所有支出。現在我們看到，透過進入與資料管理、機器學習、顯然還有一些人工智慧模組相關的獨特領域，基本上可以實現創新並產生更多競爭優勢。但更重要的是，這個全面的問題是如何將業務價值與業務數字方面的可預測性質連結起來。因此，我們看到一些值得注意的例子，即 2023 年開始與我們合作的客戶，或者與我們合作時間較長的更穩定的客戶，現在已經將 Grid Dynamics 作為長期預算的一部分進行了預測。旅程。

The other thing which we mentioned in the remarks that we see that some of the reduction of the preferred suppliers started paying some dividends to Grid Dynamics, staying on the kind of a cutting edge of work with the clients, relentlessly pushing the proposals of tying technology and business goals. And again, they're paying off because we are being awarded with a longer-term business to come.

我們在評論中提到的另一件事是，我們看到一些首選供應商的減少開始向 Grid Dynamics 支付一些股息，保持與客戶合作的前沿，不懈地推動捆綁技術的建議和業務目標。再一次，他們得到了回報，因為我們將獲得長期的業務。

And Puneet, building up on your comment on where did all the upside come, I think the way we could characterize this, when we met you guys in late February, we have a certain outlook. And as the time evolved and as the business evolved, we see improvements across. So while I would say that we saw it more widespread relative to what our expectations were. Obviously, that has showed up in the results.

普尼特（Puneet），根據您對所有好處來自何處的評論，我認為我們可以描述這一點的方式，當我們在二月底見到你們時，我們有一定的前景。隨著時間的推移和業務的發展，我們看到了各個方面的改進。因此，雖然我想說，相對於我們的預期，我們看到它更為廣泛。顯然，這已經在結果中體現出來了。

Yes. No, it's great. Like it's just -- like I was just curious because the upside or the positive trend seemed different from many other companies that have reported in this results. Let me ask longer term, like so beyond this years, we get a lot of questions from investors about AI headwinds, like that AI creates opportunities to be more productive in coding efforts. How should we think about new normal growth for the sector given increasing AI adoption?

是的。不，這太棒了。就像我只是很好奇，因為上行或積極趨勢似乎與許多其他在此結果中報告的公司不同。讓我問更長遠的問題，就像今年之後，我們從投資者那裡得到了很多關於人工智慧逆風的問題，例如人工智慧創造了提高編碼工作效率的機會。鑑於人工智慧採用率不斷提高，我們該如何看待該產業的新常態成長？

Well, obviously, this question comes back every time we discuss not only with investors, but more notably with the clients, right? At this moment, the choice of the models, platforms, copilots, still remain at very broad. And as we have been engaging in as you know, well, Grid Dynamics in open source solutions, together with the more traditional models, we explore multiple venues. We work with the clients who understand and appreciate Microsoft stack or for that matter, the AWS. We -- obviously, we retied with our partnership with Google in multiple fronts.

嗯，顯然，每次我們不僅與投資者討論，更重要的是與客戶討論時，這個問題都會出現，對嗎？目前，車型、平台、副駕駛的選擇仍然非常廣泛。如您所知，我們一直致力於開源解決方案中的網格動力學以及更傳統的模型，我們探索了多個地點。我們與了解並欣賞 Microsoft 堆疊或 AWS 的客戶合作。顯然，我們在多個方面與谷歌保持了合作關係。

But even the others, like, for example, the Meta version of the open source product like Llama, we applied our general broader knowledge of what we believe is the right for the customer, including their own capabilities, their own models, the trainability of those models, the specialization of domains and basically verticalize the proposals where we test those models and expand across the technical capabilities on a horizontal slice.

但即使是其他產品，例如像 Llama 這樣的開源產品的 Meta 版本，我們也應用了我們認為適合客戶的一般更廣泛的知識，包括他們自己的能力、他們自己的模型、這些模型、領域的專業化以及基本上垂直化的提案，我們在其中測試這些模型並在水平切片上擴展技術能力。

So it's a disruptive world. And one of the good things for Grid Dynamics, if you look at our 18 years of history, we strive in a disruption time. This is where we're talking about not just peers; we're talking about this world of innovation. Everybody talks about it, but when it comes to the clients, they just -- they don't want to just clarity. They want to arise. And that goes way beyond the white papers and hypotheses. You need to work with them diligently to see how their attempts to build in systems actually convert into the proven results, because the variances are still large.

所以這是一個顛覆性的世界。對 Grid Dynamics 來說，一件好事是，如果你回顧我們 18 年的歷史，你會發現我們在顛覆時期努力奮鬥。這就是我們談論的不僅僅是同齡人；我們正在談論這個創新的世界。每個人都在談論它，但當涉及到客戶時，他們只是——他們不想只是澄清。他們想要出現。這遠遠超出了白皮書和假設的範圍。您需要與他們努力合作，看看他們建立系統的嘗試如何實際轉化為經過驗證的結果，因為差異仍然很大。

So I would believe that we are at the forefront of those innovations, not mentioning the partnership. We have the key players, not only the hyperscalers, but actually the leaders in AI space including the hardware.

因此，我相信我們處於這些創新的前沿，更不用說合作夥伴關係了。我們擁有關鍵參與者，不僅是超大規模企業，而且實際上是人工智慧領域（包括硬體）的領導者。

Thank you.

謝謝。

Thank you, Puneet.

謝謝你，普尼特。

Thank you.

謝謝。

Mayank Tandon at Needham.

Mayank Tandon 在尼達姆。

Great. Hi, Leonard. Hi, Anil. How are you?

偉大的。嗨，倫納德。嗨，阿尼爾。你好嗎？

Good.

好的。

Let me start with a question on the guidance. So Anil, if I take the top end of the guidance, that assumes a nice acceleration sequentially. Just building off that, should we expect further acceleration in the back half? I know you're not giving formal guidance, but just maybe anecdotally or qualitatively, any color on what you're hearing from clients? Is this sustained acceleration or are we still sort of in this uneven climate where it's a little bit hard to predict?

讓我先問一個關於指導的問題。因此，阿尼爾，如果我採用引導的頂端，則假設連續有一個很好的加速。在此基礎上，我們是否應該期待後半段進一步加速？我知道你沒有提供正式的指導，但可能只是軼事或定性的，你從客戶那裡聽到的有什麼看法嗎？這是持續的加速還是我們仍然處於這種難以預測的不平衡氣候中？

So Mayank, let me give the official answer and Leonard will jump into more qualitative. Look, we do one quarter at a time, right? In Leonard's prepared remarks, he made some comments, right? And again, if you look at the trends over the last couple of quarters, it's very consistent with what we are doing. I don't want to say anything beyond our guidance in Q2. But fair to say we are positive for 2024. But Leonard, I'll let you talk about maybe a little bit more.

那麼，Mayank，讓我給出官方答案，倫納德將進入更多定性的答案。看，我們一次做四分之一，對吧？在倫納德準備好的發言中，他發表了一些評論，對嗎？再說一次，如果你看看過去幾季的趨勢，你會發現它與我們正在做的事情非常一致。我不想說任何超出我們第二季度指導的內容。但公平地說，我們對 2024 年持樂觀態度。但是倫納德，我會讓你再多談一點。

So Mayank, it's always the weight is on my shoulders. So I'll -- let me tell you this. We continue to hire and expand. The headcount you see right now doesn't fully reflect the growth because we were able to optimize the headcount toward -- gearing toward new demand. So if you look at the number of billable headcount, which is constantly growing and growing week after week. I just got new results of April, right? So it all looks good. We are basically applying some of the productivity tools internally to make sure we can reach to a broader audience of engineers to reach the goals internal capabilities, and that includes all three main facets. The internship program, Grid University and Grid Lab.

所以 Mayank，我肩上的擔子始終是重擔。所以我會——讓我告訴你這一點。我們繼續招募和擴大規模。您現在看到的員工數量並不能完全反映成長情況，因為我們能夠優化員工數量以適應新的需求。因此，如果你看看可計費員工數量，你會發現它每週都在不斷增長。我剛收到四月的新結果，對嗎？所以一切看起來都不錯。我們基本上在內部應用一些生產力工具，以確保我們能夠接觸到更廣泛的工程師受眾，以實現內部能力的目標，這包括所有三個主要方面。實習計劃，網格大學和網格實驗室。

So on a supply side, we're fully prepared for growth. On the demand side, look, I'm bullish beyond Q2. That's very clear. Now when I gave a guidance in February that it's going to be the record quarter, that kind of fills in the range. So without speaking, you may get some conclusions where we're going to be. Again, we're only in the first month. So we are comfortable with our guidance, right? And if we go further, I believe we will crush the market from our capabilities. Now whether we're going to crush the market from the numbers, that would take a little time. But some people were questioning why I was not smiling last couple of quarters. Now you got my smile off. So that's probably the best indication where our technology capability is geared towards to our business.

因此，在供給方面，我們已為成長做好了充分準備。在需求方面，我看好第二季之後的情況。這非常清楚。現在，當我在二月份給出指導時，這將是創紀錄的季度，這填補了這個範圍。因此，無需說話，您就可以得出我們將要達到的一些結論。再說一次，我們才剛進入第一個月。所以我們對我們的指導感到滿意，對嗎？如果我們走得更遠，我相信我們將用我們的能力壓垮市場。現在，無論我們是否要從數字上壓垮市場，都需要一些時間。但有些人質疑為什麼我過去幾季沒有微笑。現在你讓我的笑容消失了。因此，這可能是我們的技術能力適合我們業務的最佳指示。

That's very helpful. Thank you for that. Then I have a quick follow-up. Anil, I wanted to ask you about margins. If I look at gross margins, this is probably the lowest that we've seen in recent history. Could you sort of square that with where utilization is, pricing conversations? What's driving that? And if demand does start to improve, should we expect margins to follow suit? Thank you

這非常有幫助。謝謝你。然後我會進行快速跟進。阿尼爾，我想問你關於利潤的問題。如果我看一下毛利率，這可能是我們近年來所見過的最低水準。您能否將其與使用率、定價對話連結起來？是什麼推動了這一點？如果需求確實開始改善，我們是否應該預期利潤率也會隨之改善？謝謝

So coming to your second part, the answer is yes, right? There is leverage in the model. Now without going through all the numbers and finer details, there are many moving parts to it. There's an FX impact also as we have some of these costs that was a headwind. And you know over the last 12 months what is going on across the industry, right, across our evolution. That has had some impacts, and you're seeing that. And more importantly, Q1 tends to be seasonally a quarter where you have some of the payroll-related issues, employee-related taxes hit us.

那麼來到第二部分，答案是肯定的，對吧？模型中存在槓桿作用。現在，無需查看所有數字和更詳細的細節，其中還有許多活動部件。匯率也有影響，因為其中一些成本是不利的。你知道過去 12 個月整個產業、我們的發展過程中發生了什麼。這已經產生了一些影響，你也看到了。更重要的是，第一季往往是季節性的一個季度，我們會遇到一些與薪資相關的問題，與員工相關的稅收。

So every year, you see that, obviously, with the revenue trends being the way they are, you see a little bit more, I would say, a little bit more on the margin front pressures in Q1. But again, as the year evolves and you can see this even with our guidance, we will move in the right direction. Again, from a long-term, our model has not changed, but we'll just have to work through it over the next couple of quarters

因此，每年，你都會看到，顯然，隨著收入趨勢的發展，你會看到更多一點，我想說，第一季的利潤率壓力更大。但同樣，隨著時間的推移，即使在我們的指導下，你也可以看到這一點，我們將朝著正確的方向前進。再說一遍，從長遠來看，我們的模式沒有改變，但我們只需要在接下來的幾個季度內解決它

Got it.

知道了。

Mayank, do you want more details or you're okay with the answer? So if you do want more details, the thing is Central Europe is more expensive than Eastern Europe. Everybody knows it. It's well known secret. So as we grow our position in Poland and other countries around the region, obviously, there was a penalty associated with the incremental cost. We added the variance in the Mexico. We had inflated Peso situation. But the key resolution for our business, obviously, with the growth of India, that's where we believe our marginality is evidently improving.

Mayank，您想要更多詳細資訊還是您對答案滿意？因此，如果您確實想了解更多詳細信息，事實是中歐比東歐更貴。每個人都知道。這是眾所周知的秘密。因此，隨著我們在波蘭和該地區其他國家的地位不斷增強，顯然，增量成本會帶來懲罰。我們添加了墨西哥的差異。我們遇到了比索膨脹的情況。但顯然，隨著印度的成長，我們業務的關鍵解決方案是，我們相信我們的邊緣性正在明顯改善。

But there is another thing, it's we're actually striving right now for a significant improvement of the marginality in Europe as well. Now we have a broader country with more stable workforce. Sadly, now, the war in Ukraine continues to ravage, but we are reducing our dependency and we'll continue to invest into the more, what I call stable territories. So I would say that seasonality, which Anil told you about reflects our current status quo. I believe, in Q2, we will see some pick up. But also, to me, this 2040 model, even though it seems quite remote right now, the revenue will need to demonstrate our catch-up on the margin, not adversely planted. We are not intending to buy the business, because technology is so critical, then the value of what we do has to propagate to the results, right? So as revenue grows, I see the margin improvements.

但還有一件事，我們現在實際上也在努力顯著改善歐洲的邊緣性。現在我們擁有更廣闊的國家和更穩定的勞動力。可悲的是，現在烏克蘭的戰爭繼續肆虐，但我們正在減少我們的依賴，我們將繼續投資更多的、我稱之為穩定的地區。所以我想說，阿尼爾告訴你的季節性反映了我們目前的現狀。我相信，在第二季度，我們會看到一些回升。而且，對我來說，這個 2040 年的模式，儘管現在看起來相當遙遠，但收入需要證明我們在邊際上的追趕，而不是不利的種植。我們不打算收購這家公司，因為技術非常重要，那麼我們所做的事情的價值就必須傳播到結果上，對嗎？因此，隨著收入的成長，我看到利潤率有所提高。

The other part of this, not only in the margin or EBITDA side, we have not lowered our technology investment, which, again, it's a trade-off. You need to persevere the flatness, which was quite long. So we're bullish, but the numbers will tell you the true story.

另一方面，不僅在利潤率或 EBITDA 方面，我們沒有降低技術投資，這也是一種權衡。你需要堅持平坦度，這是相當長的。所以我們很樂觀，但數字會告訴你真實的故事。

Perfect. Very helpful. Thank you so much. Great job on the quarter.

完美的。很有幫助。太感謝了。本季的工作非常出色。

Thank you, Mayank.

謝謝你，瑪雅克。

Bryan Bergin, Cowen

布萊恩·伯金，考恩

Hey, thanks. Good afternoon. Zack Ajzenman on for Bryan. First question on demand. Are you comfortable that historic large clients that have caused pressure in the recent past are at least stable here, offering that foundation for growth reacceleration as new enterprise logos, one over the next last 12 months continue to scale?

嘿，謝謝。午安.扎克·阿傑曼 (Zack Ajzenman) 替補布萊恩 (Bryan)。根據要求提出第一個問題。您是否感到滿意的是，最近造成壓力的歷史性大客戶至少在這裡保持穩定，為新的企業標誌（未來 12 個月內將繼續擴大規模）提供重新加速成長的基礎？

All right. Let me take the first part. I think Anil will go through. There is no evidence today of any large customer declining with Grid Dynamics. We're in April, we kind of understand the trend of this year. Knock on the wood and things do happen. But it's stable to positive. So we'll continue to generate the new enterprise clients. Well, if you noticed, we did reduce a bit of those smaller clients in the commercial side because there is a dichotomy that goes on, survival of the fittest.

好的。讓我來看第一部分。我認為阿尼爾會撐過去的。目前沒有證據顯示任何大客戶拒絕使用 Grid Dynamics。進入四月了，我們對今年的趨勢有了一些了解。敲開木頭，事情就會發生。但穩定為正值。因此，我們將繼續開發新的企業客戶。好吧，如果你注意到的話，我們確實減少了商業方面的一些小客戶，因為存在二分法，適者生存。

So some of the small guys are actually struggling with their innovation and funding. But nevertheless, we expand the market, too. So if you look at our growth, it goes not just traditionally with the CPG and retail, but it's also expanding quite a bit into the fintech part of the BSFI player are gaining momentum in the life science supply chain. We got our first good step into the insurance business, and it happens on a stable to positive foundation of our major lead clients.

因此，一些小公司實際上正在為創新和資金而苦苦掙扎。但儘管如此，我們也擴大了市場。因此，如果你看看我們的成長，你會發現它不僅與傳統的消費品和零售業有關，而且還向金融科技領域擴張，BSFI 參與者在生命科學供應鏈中獲得了動力。我們在保險業務上邁出了良好的第一步，這是在我們主要主要客戶的穩定和積極的基礎上發生的。

So Zack, building upon that, I'll just reiterate it slightly different. Your observation is astute and right on. If you look at our second quarter guidance, we're reverting to year-over-year growth right after that trend has reversed after a couple of quarters. And the underlying trends point that out very well, both in terms of existing and new ones. New clients were always good for us, right? The existing clients moved the needle for us, and that is changing now.

因此，扎克，在此基礎上，我將重申略有不同的內容。你的觀察很敏銳，也很正確。如果你看我們第二季度的指導，你會發現在幾個季度後這一趨勢逆轉之後，我們就恢復了同比增長。無論是現有趨勢還是新趨勢，基本趨勢都很好地表明了這一點。新客戶總是對我們有好處，對嗎？現有的客戶為我們帶來了改變，現在這種情況正在改變。

Yes, very helpful. And then the follow-up on GenAI. Obviously, interest here continues to swell. We've also heard anecdotes that it has impacted the pace of client decision-making as customers try to figure out what to do with the technology. If you're seeing this, what do you think needs to happen for this trend to loosen up?

是的，非常有幫助。然後是 GenAI 的後續。顯然，人們對這裡的興趣持續增長。我們也聽說，當客戶試圖弄清楚如何使用該技術時，它影響了客戶決策的速度。如果您看到這一點，您認為需要發生什麼才能使這種趨勢放鬆？

Very loaded question. I can get you entertained with having this distinguished CFO answering. Fun for me to watch. So I mentioned in the first remarks when we talked with Puneet that Grid Dynamics goes very broad. And the benefits, sometimes are not trivial from the purely direct savings. So we have one of the very large legal customer. And when they're doing a lot of simplification of the work. Time will tell how good the savings will be. We implemented a big portion of the work with the financial wealth management plan, but they're a enterprise type of solution.

非常有負擔的問題。這位傑出的財務長的回答會讓您感到高興。我看很有趣。因此，當我們與 Puneet 交談時，我在第一句話中提到網格動力學的範圍非常廣泛。有時，純粹直接節省帶來的好處並非微不足道。所以我們有一個非常大的合法客戶。當他們對工作進行大量簡化時。時間會證明節省的效果有多大。我們透過金融財富管理計劃實施了很大一部分工作，但它們是企業類型的解決方案。

When it comes to purely Generative AI, it's almost anecdotal right now, which projects will combine some of the work from the communicational part, right? So there are many things Grid Dynamics has done in the past. We did natural language process vector search. We're doing all kind of features now enabled by AI. So I would say that to be very precise, the scale of the result with the model has been more solidified with the bespoke custom solutions are becoming more evident. But if you use a generic model without proper understanding of the ways, then people may not see all the results right away.

當談到純粹的生成式人工智慧時，現在幾乎都是軼事，哪些項目將結合通訊部分的一些工作，對吧？因此，Grid Dynamics 過去做了很多事情。我們進行了自然語言處理向量搜尋。我們正在做現在由人工智慧支援的各種功能。所以我想說，確切地說，隨著客製化解決方案變得越來越明顯，模型的結果規模已經更加鞏固。但是，如果您在沒有正確理解方法的情況下使用通用模型，那麼人們可能無法立即看到所有結果。

It's very helpful. Thanks.

這非常有幫助。謝謝。

Of course.

當然。

Josh Siegler, Cantor Fitzgerald

喬許·西格勒，坎托·菲茨傑拉德

Yes, hi guys. Thanks for taking my question today. I appreciate it. First and foremost, congratulations on the strong results here. I was wondering if you could dive a little bit deeper into new geographies that you're particularly excited about as you progress through the year from a demand perspective?

是的，大家好。感謝您今天回答我的問題。我很感激。首先也是最重要的，恭喜我們所取得的優異成績。我想知道您是否可以更深入地了解您在這一年中從需求角度取得進展時特別興奮的新地區？

Well, as a demand, US market remains to be the most critical for us. So there's no question about it. If you look even at centers or gravitas, we are actually scaling our technical competence centers beyond Bay area. We're zeroed in on Dallas for a while. We're getting our office and capabilities in Atlanta area. We are very strongly present in Jersey, Boston expansion. And of course, in the Midwest as well as not only the California, but also Arizona following the trend of the expansion of some of our clients as well as the trend of the stacks on the software side driven by the major hardware companies.

那麼，作為需求，美國市場對我們來說仍然是最關鍵的。所以這是毫無疑問的。如果你看看中心或莊嚴，我們實際上正在將我們的技術能力中心擴展到灣區之外。我們暫時將注意力集中在達拉斯。我們正在亞特蘭大地區建立我們的辦公室和能力。我們在澤西島和波士頓的擴張非常活躍。當然，在中西部地區，不僅是加利福尼亞州，還有亞利桑那州，跟隨我們一些客戶的擴張趨勢以及主要硬體公司推動的軟體方面的堆疊趨勢。

So it's a revolutionized technology in US where we are stronger. So that's very clear. Saying that Europe is starting to pay some dividends. It's a bit below my ambitions yet in terms of the growth in Europe, but we see that the traction in Europe and the first wins come outside of our traditional retail sense. And I'm not talking about small deals. I'm talking about consistent growth. And we see that pick up in manufacturing. We see that pick up in growing and approaching automotive industrial part.

因此，這是美國的革命性技術，我們的實力更強。所以這非常清楚。說歐洲開始支付一些紅利。就歐洲的成長而言，這有點低於我的雄心，但我們看到歐洲的吸引力和第一批勝利超出了我們傳統的零售意義。我不是說小額交易。我說的是持續成長。我們看到製造業的回升。我們看到汽車工業零件的成長和接近正在加速。

And outside of these two regions, we have, I would say, the first, I would say discussions; it's not tangible yet. But the big part of our growth engagement happened with our clients, both United States and European captive centers in India. So India has become our revenue growth through the influence of the local innovative technology centers, which are part of the global companies. We just announced hiring of our Head of India as well. So I would say there's a brushstrokes; that's how I see the demand environment regionally.

在這兩個地區之外，我想說的是，我們進行了第一個討論；目前還沒有具體化。但我們的成長合作的很大一部分發生在我們的客戶身上，包括位於印度的美國和歐洲自保中心。所以印度透過當地創新技術中心的影響力成為我們的收入成長點，這些中心是全球公司的一部分。我們剛剛也宣布聘請印度主管。所以我會說有筆觸；這就是我對區域需求環境的看法。

Great. That's really helpful, Leonard. Appreciate that. And then I was also curious, I probably ask this far too often, but would love to get a better understanding for how you're thinking about M&A currently? If there's been any shift in terms of your perspective on inorganic growth since last we talked.

偉大的。這真的很有幫助，倫納德。感謝。然後我也很好奇，我可能經常問這個問題，但很想更了解您目前對併購的看法？自上次我們談話以來，您對無機成長的看法是否有任何轉變？

Okay. Anil?

好的。阿尼爾？

Well, you see M&A at the end of the day is when we announced, we announced that the proof is in the pudding when we have. If you look at the pipeline, if you look at the activity, it continues to be a robust. If I look back at the last call seven, eight months, and we did a little bit of analysis what is going on in our M&A. We would have liked to announce a couple of deals before. We see certain trends, whether it is through some of non-strategics who are willing to maybe be a little bit more aggressive. We see -- in many cases, we're very -- our standards are very high which means that unless we really feel that there's a strategic fit, capability fit, we're just not going to do it.

好吧，你看，併購最終就是我們宣布的時候，我們宣布證據就在布丁裡。如果你看看管道，如果你看看活動，它仍然是穩健的。如果我回顧一下七、八個月的最後一次電話會議，我們對併購中發生的情況做了一些分析。我們本來想在此之前宣布幾筆交易。我們看到了某些趨勢，無論是透過一些願意更具侵略性的非策略性人士。我們看到——在很多情況下，我們的標準非常高，這意味著除非我們真的覺得有策略契合、能力契合，否則我們不會這樣做。

And more importantly, in the last 12 months, as Leonard pointed out, we did not buy revenues. So we're not going to be using that as an excuse. We really want to ensure that we get the fit. At this stage, as I said, the pipeline is there. We will announce when we have to announce. But as I said, the proof is in the pudding when these things come.

更重要的是，正如 Leonard 指出的那樣，在過去 12 個月裡，我們沒有購買收入。所以我們不會以此為藉口。我們真的很想確保我們合身。在這個階段，正如我所說，管道已經存在。當我們必須宣布的時候我們會宣布。但正如我所說，當這些事情發生時，證據就在布丁中。

Yes, understood. Thanks, Anil.

是的，明白了。謝謝，阿尼爾。

Thank you, Josh.

謝謝你，喬許。

Ryan Potter, Citigroup. .

瑞安‧波特，花旗集團。。

Hey, thanks for taking my question. You mentioned in your prepared remarks some of the successes you've had with some of your larger enterprise lines in terms of earning wallet share. What do you believe are some of the drivers of this success? Do you believe it's solely based on your capability that you're continuing to take share or do you believe since clients are also turning to be more because of your more global delivery model with your Follow-the-Sun approach?

嘿，謝謝你回答我的問題。您在準備好的發言中提到了您在一些較大的企業系列中在賺取錢包份額方面取得的一些成功。您認為這項成功的驅動因素是什麼？您是否認為您繼續獲得份額完全取決於您的能力，還是您認為客戶也會因為您的「追隨太陽」方法而更加全球化的交付模式而變得更加強大？

It's a bit of both. We definitely see the turnaround in the customers, as I mentioned earlier, in one of those Q&A discussion that our clients need to invest in innovation. So that's kind of a demand driven from that. But on the other hand, is those smaller projects on the technology side, AI, still digital, some of the migration partnerships, enhancing their features, their implementation parts have been proven successfully. So when it comes to the budgeting innovation, it's very hard. At the same time, if nothing else, that's Q1 is for. Remember, in the old time, it was a Q4 deal, right?

兩者兼而有之。正如我之前提到的，在一次問答討論中，我們確實看到了客戶的轉變，我們的客戶需要投資於創新。這就是由此驅動的需求。但另一方面，技術方面的那些較小的項目，人工智慧，仍然是數位化的，一些遷移合作夥伴，增強了它們的功能，它們的實施部分已經被證明是成功的。所以說到預算創新，這是非常困難的。同時，如果不出意外的話，這就是 Q1 的用途。還記得嗎，在過去，這是第四季的交易，對吧？

People kind of start defining their budgets in Q4. Now it's happening more in Q1 time frame, which has kind of worked with kind of tail of some of the proof-of-concepts and the small innovation project from us, because those models and the expansion of the tools related technology actually works very well. And I would say that at least six or seven clients, they actually created this demand for innovation. And then you have to be, in some cases, a bit more proactive. In some cases, you participate in the bids. But more important than not, the technical leaders of the clients look at us from the history of the recent engagements to understand what we suggest. So things are converting.

人們在第四季開始確定預算。現在，這種情況在第一季的時間範圍內發生得更多，這與我們的一些概念驗證和小型創新項目的尾部起到了一定的作用，因為這些模型和工具相關技術的擴展實際上效果很好。我想說，至少有六、七個客戶實際上創造了這種創新需求。然後，在某些情況下，你必須更加積極主動。在某些情況下，您參與投標。但更重要的是，客戶的技術領導者會根據最近的合作歷史來了解我們的建議。所以事情正在轉變。

And this may not be a very straight answer to the question you asked, but just to summarize it, it's both, client wants more and we offer more. And that combination helps us to stay on a growth trajectory.

這可能不是對您提出的問題的一個非常直接的答案，但總結一下，兩者都是，客戶想要更多，我們提供更多。這種結合有助於我們保持成長軌跡。

Got it. That makes sense. And you touched a couple of times on the finance vertical? In particular, you saw pretty strong growth there in the quarter. So obviously, could you comment on some of the drivers of the success you're seeing there? Is it with certain types of clients, certain types of projects and then kind of the opportunity you see in that vertical going forward?

知道了。這就說得通了。您曾多次接觸過金融垂直領域嗎？特別是，您在本季看到了相當強勁的成長。顯然，您能否評論一下您所看到的成功的一些驅動因素？是針對某些類型的客戶、某些類型的項目，以及您在該垂直領域未來看到的機會嗎？

Yes. So it's a fintech to the larger size of the growth. And as you know, Grid Dynamics still has a certain scope of the strategic clients. So they are not infinite. So -- but they're very formidable. So and a few of them, we see that continued growth and actually, to some extent, exponential growth. Now we're reaching, I would say, critical mass. And why? We're not like -- we're not creating a new fintech models, right? We just work on the projects and we combine the open source capability with a partnership, which will continue to expand on their specialized tools, which based on our internal development allows us to offer the PODs. So the teams of people who are basically driving not just innovation, but given ROI successes. And that actually turns as a result in a scalable revenue. So the fintech is by far is the biggest impact, and it will continue for the foreseeable future.

是的。所以這是金融科技規模更大的成長。如您所知，Grid Dynamics仍然擁有一定範圍的策略客戶。所以它們不是無限的。所以——但他們非常強大。因此，我們看到其中一些持續增長，實際上在某種程度上是指數增長。我想說，現在我們已經達到臨界質量了。為什麼？我們不會創造新的金融科技模式，對嗎？我們只致力於項目，並將開源功能與合作夥伴結合，這將繼續擴展他們的專業工具，這些工具基於我們的內部開發，使我們能夠提供 POD。因此，這些團隊基本上不僅推動創新，而且推動投資報酬率的成功。這實際上會帶來可擴展的收入。因此，金融科技是迄今為止最大的影響，並且在可預見的未來仍將持續。

The other area, which I like, again, it's less evident from the numbers, but it start creeping up. It's a wealth management and a broader sales. In the broader sales, because, as you know, the more and more people are kind of putting money into the various investments and technology drives its automation beyond belief, right? So many, many things go beyond the advisers who have only so much capacity. So as a whole industry, it's going through the breakthrough innovation. It's a little bit too early to talk about insurance or our contribution to insurance, but it's another lag of the growth we see. So fintech, wealth management, insurances.

我再次喜歡的另一個領域，從數字來看不太明顯，但它開始緩慢上升。這是財富管理和更廣泛的銷售。在更廣泛的銷售中，因為如您所知，越來越多的人將資金投入各種投資，而技術推動其自動化程度令人難以置信，對嗎？太多太多的事情超出了那些能力有限的顧問的能力範圍。所以作為整個產業，它正在經歷突破性的創新。現在談論保險或我們對保險的貢獻還為時過早，但這是我們看到的成長的另一個滯後。所以金融科技、財富管理、保險。

Got it. Thanks again.

知道了。再次感謝。

Thank you, Ryan.

謝謝你，瑞安。

Thank you.

謝謝。

Maggie Nolan.

瑪吉·諾蘭。

Hi, thank you.

嗨，謝謝你。

Hi, Maggie.

嗨，瑪吉。

You continue to have nice new logo additions. I was curious about the pace of conversion to revenue? Are there any patterns in either delays in the conversion or a pick up in the conversion time for new logos or any bookings across your client base?

您繼續添加漂亮的新徽標。我很好奇轉化為收入的速度？新徽標或客戶群的任何預訂的轉換延遲或轉換時間加快是否存在任何模式？

So in Q1, there was a pick up. Every quarter, we're talking about trade-offs between acquiring new clients, and then potentially may be tightening the budget with existing clients, right? When we have more stable platform of the existing clients, the pickups are more honorable because we can actually double down on a work with these guys without firefighting on an existing logo front. Now it doesn't mean we reduce an eye on the existing clients. It's just because it's more predictable process. So we have more capabilities on the technology side.

所以在第一季度，出現了回升。每個季度，我們都會討論獲取新客戶之間的權衡，然後可能會收緊現有客戶的預算，對吧？當我們擁有更穩定的現有客戶平台時，拾取者會更加光榮，因為我們實際上可以加倍努力與這些人合作，而無需在現有徽標方面進行救火。現在這並不意味著我們減少對現有客戶的關注。只是因為它是更可預測的過程。所以我們在技術方面有更多的能力。

We have a better approach again, with our own AI tools for the hiring. So that we are bringing people on board and train them much faster pace than ever and retain, by the way, as well. And we also -- so we can scale more. And we also have the reputation, which helps us with some of the new clients through obviously, referrals. That's always the big thing. The other one through the -- our marketing, I would say, technical marketing. And the third one through our partnerships. So if you look at the scale, rate of growth, and of course, in each of those channels, it's a bit different propagation.

我們再次有了更好的方法，使用我們自己的人工智慧招募工具。因此，我們正在以比以往更快的速度招募人員並培訓他們，順便說一句，也保留了他們。我們也——這樣我們就可以擴大規模。我們也擁有聲譽，這可以幫助我們透過推薦來吸引一些新客戶。這始終是一件大事。另一種是透過我們的行銷，我想說，技術行銷。第三個是透過我們的合作關係。因此，如果你看看規模、成長率，當然還有每個管道的傳播情況，都會有所不同。

But the traditional land-and-expand model are going from innovation projects to the scalable business, a bit improved and now some of those projects scale virtually from the get go.

但傳統的土地擴張模式正在從創新項目轉向可擴展的業務，並且有所改進，現在其中一些項目實際上從一開始就實現了規模化。

And Maggie, adding one point, if you recall in Leonard's prepared remarks, he talked about some large deals, right? And some of this was even with new logos that helped us.

瑪姬補充一點，如果你還記得倫納德在準備好的演講中，他談到了一些大交易，對嗎？其中一些甚至是新徽標對我們有所幫助。

And then it seemed like to me, the theme of the quarter is maybe stabilization and even slight improvement. So I wanted to double click on the CPG and manufacturing vertical to better understand the dynamic there on one of maybe the more of the pain points and whether or not you expect that trend to continue from here?

然後在我看來，本季的主題可能是穩定甚至略有改善。因此，我想雙擊 CPG 和製造業垂直領域，以便更好地了解其中一個可能是更多痛點的動態，以及您是否期望這種趨勢從這裡繼續下去？

So as you know, over the last couple of quarters, CPG vertical had a certain cadence of growth driven by some of our larger CPG. What we are seeing there is there are many moving parts, but the good news is that, number one, one of our largest CPG has not only stabilized, but has reverted in growth in the quarter. And obviously, that has -- aiding to that, we've had a couple of other logos. How it plays out every 90 days, every vertical, as you know, Maggie, it depends right? I mean -- but it's fair to say CPG, manufacturing, like the rest of the industry, things have stabilized and we are more positive.

如您所知，在過去的幾個季度中，在我們一些較大的 CPG 的推動下，CPG 垂直行業出現了一定的成長節奏。我們看到有很多變化，但好消息是，第一，我們最大的消費品之一不僅穩定了，而且在本季度恢復了成長。顯然，為了實現這一點，我們還有其他幾個徽標。如你所知，瑪吉，每 90 天、每個垂直領域的情況如何，這取決於情況，對吧？我的意思是——但可以公平地說，消費品、製造業和其他行業一樣，情況已經穩定下來，我們更加積極。

Yes. I don't know why both guys use the word stabilization and some of the numbers go up and down, but it's a tremendous upside. I mean the logos we just acquired, for example, from that particular field, they not only go from get-go, but the tasks are extremely ambitious. So I think if you look at, for example, January, February, they may kind of a bit mask the dynamics. But I see that this whole spectrum of the CPG clients are expanding.

是的。我不知道為什麼兩個人都用「穩定」這個詞，有些數字會上下波動，但這是一個巨大的優勢。我的意思是，我們剛剛獲得的徽標，例如，來自該特定領域的徽標，它們不僅從一開始就完成，而且任務非常雄心勃勃。所以我認為，如果你看看一月、二月，它們可能有點掩蓋了動態。但我發現消費品客戶的整個範圍正在擴大。

Now manufacturing, I agree with you. We're not stable yet. So I would actually separate those two things. So CPG, shutting up quite a bit and some of those big industrial guys. Manufacturing, I think we have work to do for Q2 and more. So I'm very, very bullish on CPGs and manufacturing, we have work to do.

現在製造業，我同意你的觀點。我們還不穩定。所以我實際上會把這兩件事分開。所以 CPG 和一些大型工業公司都閉嘴了。製造業，我認為我們在第二季及更多方面還有工作要做。所以我非常非常看好快速消費品和製造業，我們還有很多工作要做。

Very helpful. Thank you.

很有幫助。謝謝。

Thank you, Maggie.

謝謝你，瑪吉。

Thank you.

謝謝。

Ladies and gentlemen, this concludes the Q&A session for today's call. I will now pass the call back to Leonard, our CEO, for closing comments.

女士們先生們，今天電話會議的問答環節到此結束。現在我將把電話轉給我們的執行長 Leonard，以徵求結束意見。

Thank you, everybody, for joining us on today's call. Our first quarter results continue the theme we highlighted in the past, steady improvement in our business. While the current economic uncertainties cannot be overlooked, we're highly focused on execution and wallet share at our new and existing customers. The rise of AI and the paradigm shift in the way enterprises use technology to leapfrog from their current levels requires to work with a competent partner.

謝謝大家參加今天的電話會議。我們第一季的業績延續了我們過去強調的主題，即業務穩步改善。雖然當前的經濟不確定性不容忽視，但我們高度關注新客戶和現有客戶的執行力和錢包份額。人工智慧的興起以及企業利用技術方式跨越當前水準的典範轉移需要與有能力的合作夥伴合作。

Our capabilities, history of solving complex business problems with technology and our track record of making positive effects to our customers positions Grid Dynamics well. Our future looks bright, and I look forward to share all the exciting news in the next earnings call. Thank you.

我們的能力、利用技術解決複雜業務問題的歷史以及為客戶帶來積極影響的記錄使 Grid Dynamics 處於有利地位。我們的未來看起來很光明，我期待在下一次財報電話會議上分享所有令人興奮的消息。謝謝。