Grid Dynamics Holdings, Inc. · NASDAQ:GDYN
Grid Dynamics — Investor Presentation (March 2020)
26 slides from Grid Dynamics's investor presentation, Mar 9, 2020
Slide 1: Grid Dynamics Investor Presentation March 2020
Grid Dynamics Investor Presentation (Ticker: GDYN) March 2020 NASDAQ: GDYN © Copyright 2020 Grid Dynamics. All Rights Reserved
Slide 2: Forward-Looking Statements
2 Forward - Looking Statements This communication contains “forward - looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Sec tion 21E of the Securities Exchange Act of 1934 that are not historical facts, and involve risks and uncertainties that could cause actual
Slide 3: Seasoned Executive and Board Leadership
Seasoned Executive and Board Leadership 3 20+ years of senior management experience in the high - tech industry and a serial entrepreneur ▪ Founder and CEO of Luxera, an LED solutions company ▪ VP, Sales for LedEngin (acquired by Osram Opto Semiconductors) ▪ Leadership positions at Philips, HP, Vist
Slide 4: Emerging leader in enterprise-level digital transformation in the Fortune 1000
4 Grid Dynamics is the emerging leader in driving enterprise - level digital transformation in the Fortune 1000. The Forrester Wave™ Midsize Agile Software Development Service Providers Q2 2019 NASDAQ: GDYN © Copyright 2020 Grid Dynamics. All Rights Reserved
Slide 5: Grid Dynamics at a Glance
5 Grid Dynamics at a Glance Vast, rapidly - growing market opportunity Unique model to attract, train and retain people High value, high impact services Substantial growth opportunities/platform for acquisitions Strong and capable management team, combined with visionary ChaSerg leadership Stable an
Slide 6: Grid Dynamics by the Numbers
6 Grid Dynamics by the Numbers ▪ Software - like net revenue retention metrics ▪ Operating in a rapidly growing $100B market ▪ Average revenue per customer of over $3.5mm $84 $90 $93 $ 93 2016 2017 2018 2019 Superior Revenue per Employee ($’000) Grid Dynamics NASDAQ: GDYN © Copyright 2020 Grid Dynam
Slide 7: Grid Dynamics Operates in a $100B Market
7 Source: Forrester Research, The Economist $45B $60B $80B $100B $120B 2016 2017 2018 2019 2020 Digital Services Grid Dynamics Operates in a $100B Market… 47% 10% …That is Still in the Early Stages Fully Digital Not Embarked Upon Started Partly or Not at All Digital Most businesses are either just b
Slide 8: Ahead of the Curve in Custom Application Development
8 Grid Dynamics is Ahead of the Curve in Custom Application Development " The research shows that many organizations already favor a new kind of "build" that does not include out - of - the - box solutions , but instead a combination of application components that are innovative, software packaged w
Slide 9: Capturing the High Value Services Budget
Capturing the High Value Services Budget 9 Revenue driving Cost saving Technical complexity Tier 1 outsourcers Pure - play digital services Low High NASDAQ: GDYN © Copyright 2020 Grid Dynamics. All Rights Reserved
Slide 10: High Value, High Impact Services
High Value, High Impact Services 10 Big Data & Fast Data Cloud Computing Performance Engineering Digital Innovation Technical Consulting Lean Prototypes Digital Intelligence Scalable Engineering Development Culture Experience Design Proof - of - Concept Feasibility Lab Data Science Artificial Intell
Slide 11: Radical rethinking of the delivery model
11 Delivering digital innovation requires radical rethinking of the delivery model Proprietary Delivery Model Distributed by design Globally optimized skills Client co - innovation Lean culture Mapping between skills and demand is optimized across locations and accounts, enabled by proprietary softw
Slide 12: Attract, Train, Retain Outstanding People
12 Average of 6 qualified candidates in pipeline for every hire Fully internal recruiting process with no dependence on agencies Source graduate hires only from top - ranked technical universities . "We don't need to interview new people because we trust [ Grid Dynamics ] to assign the right type of
Slide 13: Attract, Train, Retain: Competitive Advantage in US
13 Attract, Train, Retain: Competitive Advantage in US Other client offices Grid Dynamics technical staff Plano, TX (201 8 ) Forth largest metro and the fastest growing in the US Destination of choice for technical talent San Ramon, CA (2006) Headquarters and the center of operations for SF Bay Area
Slide 14: Attract, Train, Retain: Sourcing from Central and Eastern Europe
Poland 14 Attract, Train, Retain: Sourcing from Central and Eastern Europe Universities in the top 20 programming championship ( Source: ACM ICPC Rankings) Grid Dynamics offices St Petersburg (2009) Largest IT labor market in Russia (80K IT specialists) Consistent world programming champions Krakow
Slide 15: Attract, Train, Retain: Professional Development Programs
Attract, Train, Retain: Professional Development Programs 15 Digital innovation requires a culture of ownership, agility , and constant learning Skills - oriented promotions ▪ Grid Dynamics U offers 250+ technical and non - technical courses to skill up ▪ Employees evaluated and promoted based on tr
Slide 16: Stable, Blue-Chip Customer Base
16 Stable, Blue - Chip Customer Base Building significant long - term relationships with Large Global Enterprises ▪ 90%+ of revenue in 2019 came from Fortune 1000 customers ▪ 2019 revenue per customer is $3.9mm ▪ Six of Grid Dynamics’ top 10 accounts in 2019 have been clients for the past five years
Slide 17: Case Studies
Case Studies 17 Reduced time - to - recover of a major ecommerce system from hours to 2.5 minutes Reduced Black Friday preparation time for a leading luxury retailer from six months to four weeks Increased sales 23% immediately after rolling out new customer experience NASDAQ: GDYN © Copyright 2020
Slide 18: Demonstrated Track Record of Land and Expand
Demonstrated Track Record of Land and Expand 18 Proven ability to upsell solutions in top accounts $mm Average Spend of Top 10 Clients # of Clients > $1mm Proven track record of adding $1mm+ accounts $3.0 $3.9 $5.1 $6.6 $8.7 $10.1 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 2014 2015 2016 2017 2018 2019P 5
Slide 19: Stable and Predictable Business Model
Stable and Predictable Business Model 19 % of Revenue by Client Cohort Mature: 85% New: 5% 126% 127% 122% 127% 121% 100% 105% 110% 115% 120% 125% 130% 2015 2016 2017 2018 2019 % Net Revenue Retention ($ amount) Superior net retention compared to software companies Net Retention Average Software Net
Slide 20: Platform Built For Sustained Growth
Platform Built For Sustained Growth 20 Highly fragmented market provides a target rich environment for Grid Dynamics to leverage our vertical expertise to make tuck - in acquisitions at highly accretive valuations Integrated global delivery model provides expertise necessary to successfully execute
Slide 21: Industry-Leading Financial Profile
$0 $5 $10 $15 $20 $25 $30 $35 2015 2016 2017 2018 2019 2020P $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 2015 2016 2017 2018 2019P 2020P Industry - Leading Financial Profile 21 $mm $118.2 Revenue $146 - $153 $92 $71 $55 $40 NASDAQ: GDYN © Copyright 2020 Grid Dynamics. All Rights Reserved $mm $23.7 A
Slide 22: Historical Adjusted EBITDA Reconciliation
($ in mm) 2015A 2016A 2017A 2018A 2019A Income from Operations 9.2 10.6 13.1 13.8 15.6 Depreciation & Amortization 0.4 0.6 0.7 1.3 2.3 EBITDA 9.6 11.3 13.8 15.1 17.9 Stock-based Compensation Expense 0.4 0.4 0.8 1.8 2.4 Transaction Expenses – 0.9 1.9 2.5 3.3 Adjusted EBITDA 10.0 12.6 16.4 19.4 23.7 H
Slide 23: Appendix
Appendix 23 NASDAQ: GDYN © Copyright 2020 Grid Dynamics, Inc. All Rights Reserved
Slide 24: Management Team
▪ Over 20 years of technology and program management leadership ▪ President, Aculocity ▪ Leadership roles at GMSA and GVW Group Vadim Kozyrkov SVP, Engineering ▪ Over 15 years of industry experience ▪ Over 10 years in leadership roles ▪ Founder and CTO, Tonomi ▪ Principal product architect for eBay,
Slide 25: Management Team (continued)
25 ▪ Over 15 years of leading engineering teams, delivering complex programs, and developing engineering talent ▪ Director, Global Delivery at Grid Dynamics ▪ Built & led cross - functional teams in Telecom, Finance and e - Commerce Igor Yagovoy VP, Engineering Management ▪ Successfully led large re
Slide 26: Board Members
▪ Member of Audit Committee at Grid Dynamics ▪ Over 25 years of corporate leadership ▪ SVP and CIO of Netapp ▪ VP and CIO of Palm, Inc. Marina Levinson Board Member ▪ President of ASL ▪ Executive Director of ASL since Sept 2015 ▪ Previous leadership roles include CFO and Board Secretary of Guangzhou
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