What changed in this filing

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Item 1. Business

2022-03-03 compared with 2021-03-05 · 183 added, 337 removed, 14 unchanged (97% of the section changed)

March 5, 2020, a wholly-owned subsidiary (“Merger Sub 1”) of ChaSerg Technology Acquisition Corp., a Delaware corporation

(“ChaSerg”), merged with and into Grid Dynamics International, Inc., a California corporation (“GDI”),

with GDI surviving the merger (the “Initial Merger”).

Immediately following the Initial Merger, GDI merged with and

into another wholly-owned subsidiary of ChaSerg (“Merger Sub 2”) with Merger Sub 2 surviving;

Merger Sub 2 was then

renamed “Grid Dynamics International, LLC,” and ChaSerg was then renamed “Grid Dynamics Holdings, Inc.”

(the “Business Combination”).

As of the open of trading on March 6, 2020, the common stock and warrants of Grid Dynamics

Holdings, Inc.

(“Grid Dynamics,” “GDH,” the “Company,” “we,” “us,”

or “our”), formerly those of ChaSerg, began trading on the NASDAQ as “GDYN” and “GDYNW,” respectively.

Dynamics is an emerging leader in enterprise-level digital transformations in Fortune 1000 companies.

For enterprises that create

innovative digital products and experiences, Grid Dynamics offers close collaboration to provide digital transformation initiatives

that span strategy consulting, development of early prototypes and enterprise-scale delivery of new digital platforms.

inception in 2006 in Menlo Park, California, as a grid and cloud consultancy firm, Grid Dynamics has been on the forefront of

digital transformation, working on big ideas like cloud computing, NOSQL, DevOps, microservices, big data and artificial intelligence

(“AI”), and quickly established itself as a provider of choice for technology and digital enterprise companies.

a leading global digital engineering and information technology (“IT”) services provider with its headquarters in

Silicon Valley and engineering centers in the United States and multiple Central and Eastern European countries, Grid Dynamics’

core business is to deliver focused and complex technical consulting, software design, development, testing and internet service

Grid Dynamics also helps organizations become more agile and create innovative digital products and experiences through

its deep expertise in emerging technology, such as AI, data science, cloud computing, big data and DevOps, lean software development

practices and a high-performance product culture.

Grid Dynamics believes that the key to

its success is a business culture that puts products over projects, client success over contract terms and real business results

over pure technical innovation.

By leveraging Grid Dynamics’ proprietary processes optimized for innovation, emphasis on

talent development and technical expertise, Grid Dynamics has been able to achieve significant growth, increasing our revenue from

$91.9 million for the year ended December 31, 2018 to $111.3 million for the year ended December 31, 2020, a 21% increase, although

revenue for 2020 decreased 6% from $118.3 million for the year ended December 31, 2019 mostly due to disruptions caused to our

Retail Vertical which was negatively impacted by the COVID-19 pandemic.

On December 14, 2020,

we acquired Netherland-based Daxx Web Industries B.V.

(“Daxx”) in an all-cash transaction.

Headquartered in Amsterdam,

and with 492 employees, Daxx has engineering centers situated in major tech hubs across Ukraine.

Daxx has over 20 years of experience

in delivering software services to clients across a wide range of industry verticals that include high-tech, digital media, healthcare,

and education.

Some of the key capabilities include consulting services spanning agile process reengineering, lean development,

Daxx serves customers in the Netherlands, Germany, U.K., and U.S., and has strong relationships with high-growth start-ups

and established software companies.

We believe the acquisition of Daxx will enable our company to have a stronger foothold in Europe

and will enable us to continue diversifying our business.

Background and Market Opportunity

transformation is a rapidly expanding market which is still in its early stages.

Enterprises strive to compete in the digital

world, facing the need to transform to survive attacks from the nimbler and more technologically advanced newcomers.

approaches to managing information technology as a mix of vendor solutions and outsourced services often break down in the face

of the imperative to innovate through technology.

Increasingly,

business executives are looking at use of technology as a competitive advantage rather than a way to cut costs.

The rise of AI

signifies a shift from automation of business process to automation of decision making itself.

In an effort to differentiate,

corporations are directing investments towards building digital new products and experiences, instead of buying off-the-shelf

software products.

This drives demand for highly technical software development, creating an opportunity for pure-play software

development service providers such as Grid Dynamics.

As the demand for technical software development

talent continues to grow, the shortage of this talent in the United States and Europe, as well as the inability of non-technology-based

companies to attract and retain such talent, encourages organizations to look to third parties, such as Grid Dynamics, to satisfy

Further, the growing acceptance of the offshore delivery model,

beyond the traditional India-based IT services provider, has created significant opportunities for software development service

providers delivering from CEE.

CEE-based service providers now compete against the largest global IT service providers and are

capable of providing complex technology services.

Grid Dynamics believes that CEE is increasingly known for the quality of its

software development talent, enabled in part by decades of focus on fundamental STEM disciplines in higher education.

teams and individuals are frequent winners of programming contests such as the ones held by the Association for Computing Machinery,

or ACM, TopCoder and Kaggle.

Dynamics believes that this disparity between the supply and demand for technical talent can be a significant opportunity for

Grid Dynamics.

and Strengths

Dynamics’ objective is to become a global leader in enabling digital transformation at Fortune 1000 companies.

Grid Dynamics’

strategy to achieve such objective is based on leveraging the following core strengths.

Processes Optimized for Innovation

Dynamics recognizes the changing dynamics of IT outsourcing.

Increasingly, corporations expect their service providers to participate

and help shape innovation programs, which are not addressed well by the traditional service models used by outsourcing providers.

Grid Dynamics melds technical consulting, engineering and analytics competencies into unified, cross-functional digital teams

which are designed to respond and adapt to the change in the client’s business.

The effectiveness of such teams is further

increased by a close collaboration with the client’s technology leadership teams and active inquiry into client’s

business priorities on all levels.

Culture-First

Approach to Talent Development

ever-increasing role of digital transformation leads to the emergence of a new kind of business leader that combines a vision

of business transformation with deep understanding of information technology.

Earning the trust of these leaders is one of the

pillars of Grid Dynamics’ success.

Grid Dynamics selects, trains and promotes its technical leadership based on the following

cultural principles.

integration .

Business Combination

On March 5, 2020, a wholly-owned subsidiary (“Merger Sub 1”) of ChaSerg Technology Acquisition Corp., a Delaware corporation (“ChaSerg”), merged with and into Grid Dynamics International, Inc., a California corporation (“GDI”), with GDI surviving the merger (the “Initial Merger”).

Immediately following the Initial Merger, GDI merged with and into another wholly-owned subsidiary of ChaSerg (“Merger Sub 2”) with Merger Sub 2 surviving;

Merger Sub 2 was then renamed “Grid Dynamics International, LLC,” and ChaSerg was then renamed “Grid Dynamics Holdings, Inc.” (the “Business Combination”).

As of the open of trading on March 6, 2020, the common stock and warrants of Grid Dynamics Holdings, Inc.

(“Grid Dynamics,” “GDH,” the “Company,” “we,” “us,” or “our”), formerly those of ChaSerg, began trading on the NASDAQ as “GDYN” and “GDYNW,” respectively.

Business Overview

Grid Dynamics is an emerging leader in enterprise-level digital transformations in Fortune 1000 companies.

For enterprises that create innovative digital products and experiences, Grid Dynamics offers close collaboration to provide digital transformation initiatives that span strategy consulting, development of early prototypes and enterprise-scale delivery of new digital platforms.

Since its inception in 2006 in Menlo Park, California, as a grid and cloud consultancy firm, Grid Dynamics has been on the forefront of digital transformation.

Our specialty is working on big ideas like cloud migrations, DevOps, microservices, big data and artificial intelligence (“AI”).

Grid Dynamics quickly established itself as a provider of choice for technology and digital enterprise companies.

As a leading global digital engineering and information technology (“IT”) services provider with its headquarters in Silicon Valley and engineering centers in the United States, Mexico and multiple European countries, Grid Dynamics’ core business is to deliver focused and complex technical consulting, software design, development, testing and internet service operations.

Grid Dynamics also helps organizations become more agile and create innovative digital products and experiences through its deep expertise in emerging technology, such as AI, data science, cloud computing, big data and DevOps, lean software development practices and a high-performance product culture.

Grid Dynamics believes that the key to its success is a business culture that puts products over projects, client success over contract terms and real business results over pure technical innovation.

By leveraging Grid Dynamics’ proprietary processes optimized for innovation, emphasis on talent development and technical expertise, Grid Dynamics has been able to achieve significant growth.

In December of 2020 and May of 2021 Grid Dynamics acquired Daxx Web Industries B.V.

(“Daxx”) and Tacit Knowledge Inc.

(“Tacit”), respectively.

These two acquisitions diversified our geographical presence, client base, and industry vertical presence.

Industry Background and Market Opportunity

Digital transformation is a rapidly expanding market which is still in its early stages.

Enterprises strive to compete in the digital world, facing the need to transform to survive attacks from the nimbler and more technologically advanced newcomers.

Traditional approaches to managing information technology as a mix of vendor solutions and outsourced services often break down in the face of the imperative to innovate through technology.

Increasingly, business executives are looking at use of technology as a competitive advantage rather than a way to cut costs.

The rise of AI signifies a shift from automation of business process to automation of decision making itself.

In an effort to differentiate, corporations are directing investments towards building digital new products and experiences, instead of buying off-the-shelf software products.

This drives demand for highly technical software development, creating an opportunity for pure-play software development service providers such as Grid Dynamics.

As the demand for technical software development talent continues to grow, the shortage of this talent in the United States and Europe, as well as the inability of non-technology-based companies to attract and retain such talent, encourages organizations to look to third parties, such as Grid Dynamics, to satisfy the demand.

Further, the growing acceptance of the offshore delivery model, beyond the traditional India-based IT services provider, has created significant opportunities for software development service providers delivering from Central and Eastern Europe (“CEE”) as well as Mexico.

CEE-based service providers now compete against the largest global IT service providers and are capable of providing complex technology services.

Grid Dynamics believes that CEE is increasingly known for the quality of its software development talent, enabled in part by decades of focus on fundamental STEM disciplines in higher education.

CEE-based teams and individuals are frequent winners of programming contests such as the ones held by the Association for Computing Machinery, or ACM, TopCoder and Kaggle.

Grid Dynamics believes that this disparity between the supply and demand for technical talent can be a significant opportunity for Grid Dynamics.

Strategies and Strengths

Grid Dynamics’ objective is to become a global leader in enabling digital transformation at Fortune 1000 companies.

Grid Dynamics’ strategy to achieve such objective is based on leveraging the following core strengths.

Proprietary Processes Optimized for Innovation

Grid Dynamics recognizes the changing dynamics of IT outsourcing.

Increasingly, corporations expect their service providers to participate and help shape innovation programs, which are not addressed well by the traditional service models used by outsourcing providers.

Grid Dynamics melds technical consulting, engineering and analytics competencies into unified, cross-functional digital teams which are designed to respond and adapt to the change in the client’s business.

The effectiveness of such teams is further increased by a close collaboration with the client’s technology leadership teams and active inquiry into client’s business priorities on all levels.

Culture-First Approach to Talent Development

The ever-increasing role of digital transformation leads to the emergence of a new kind of business leader that combines a vision of business transformation with deep understanding of information technology.

Earning the trust of these leaders is one of the pillars of Grid Dynamics’ success.

Grid Dynamics selects, trains and promotes its technical leadership based on the following cultural principles.

• Global integration .

Demands of modern businesses transcend cultural, political and language boundaries.

Dynamics builds teams which are transparently distributed across countries, time zones and reporting lines.

Decisions on hiring,

staffing and promotion are all managed centrally from Grid Dynamics’ U.S.

offices, allowing Grid Dynamics to optimize for

quality rather than convenience.

● Partnership

with client .

Grid Dynamics demands accountability and ownership of the client’s success, whether

or not such success is a contractual matter.

Understanding Grid Dynamics clients’ goals and ability to manage such goals

across reporting lines is a must for any leadership role within Grid Dynamics.

Therefore, Grid Dynamics places a significant proportion

of its IT personnel at client sites and offers team members temporary assignments to client locations through fellowships.

● Technological

Understanding digital transformation and successfully delivering IT programs is impossible

without a strong understanding of emerging technology.

Deep knowledge of how new technology, such as cloud, big data and AI, transforms

the way corporations develop their businesses is a pre-requisite for leadership roles in Grid Dynamics.

Grid Dynamics builds teams which are transparently distributed across countries, time zones and reporting lines.

Decisions on hiring, staffing and promotion are all managed centrally from Grid Dynamics’ U.S.

offices, allowing Grid Dynamics to optimize for quality rather than convenience.

• Partnership with client .

Grid Dynamics demands accountability and ownership of the client’s success, whether or not such success is a contractual matter.

Understanding Grid Dynamics clients’ goals and ability to manage such goals across reporting lines is a must for any leadership role within Grid Dynamics.

• Technological innovation .

Understanding digital transformation and successfully delivering IT programs is impossible without a strong understanding of emerging technology.

Deep knowledge of how new technology, such as cloud, big data and AI, transforms the way corporations develop their businesses is a pre-requisite for leadership roles in Grid Dynamics.

• Education .

Grid Dynamics believes that technology changes rapidly, and it is critical for Grid Dynamics ‘employees to adapt even

more rapidly.

Grid Dynamics offers many formal and informal training programs, such as Grid University, an online education

platform with thousands of hours of training videos, to ensure that professionals can expand and enhance their

capabilities.

Technical Expertise

and Scalable Engineering

Dynamics believes in strong infrastructure underpinning mission-critical services.

From its inception, Grid Dynamics has

been focusing on developing and using its expertise in the latest technologies, such as AI and conversational systems, cloud engineering

solutions, data platform, data science and analytical data platforms, DevOps, MLOps, microservices, mobile, QA automation, search

and user interfaces.

By making such emerging technologies accessible to clients through the use of proprietary skill development

programs, industry experience and solution accelerators, Grid Dynamics seeks to strengthen its position as a technical leader

with its established clients and attract new clients.

and Solutions

the rapidly evolving market of engineering and IT services, customers are increasingly looking for service providers that can

be a co-innovation partner rather than a cost saving measure.

Grid Dynamics addresses this need by focusing on high value, high

impact services.

Grid Dynamics believes that technology changes rapidly, and it is critical for Grid Dynamics' employees to adapt even more rapidly.

Grid Dynamics offers many formal and informal training programs, such as Grid University, an online education platform with thousands of hours of training videos, to ensure that professionals can expand and enhance their capabilities.

Technical Expertise and Scalable Engineering

Grid Dynamics believes in strong infrastructure underpinning mission-critical services.

From its inception, Grid Dynamics has been focusing on developing and using its expertise in the latest technologies, such as AI and conversational systems, cloud engineering solutions, data platform, data science and analytical data platforms, DevOps, MLOps, microservices, mobile, QA automation, search and user interfaces.

By making such emerging technologies accessible to clients through the use of proprietary skill development programs, industry experience and solution accelerators, Grid Dynamics seeks to strengthen its position as a technical leader with its established clients and attract new clients.

Services and Solutions

In the rapidly evolving market of engineering and IT services, customers are increasingly looking for service providers that can be a co-innovation partner rather than a cost saving measure.

Grid Dynamics addresses this need by focusing on high value, high impact services.

The key service and solutions offerings are the following:

Dynamics provides technical consulting services to help executives in charge of digital transformation define an ambitious, yet

achievable roadmap, quantify business value attained through new technology, select the right technology stack, develop reference

architecture and guide the transformational journey every step of the way.

Dynamics helps enterprises prototype and test new ideas.

This includes both proof-of-concept implementations, which can be rapidly

put in front of the end users to verify business assumptions, as well as sophisticated, long-running labs that cross organizational

walls to establish feasibility and de-risk large transformational programs.

Self-sufficient teams move quickly, use the latest

technologies and aim to solve the business use case to demonstrate measurable value to the business stakeholders.

Dynamics helps corporations transform from automation of business processes to automation of decision making.

To this end, Grid

Dynamics deploys data science approaches to analyze client challenges and arrive at a strategy which produces measurable outcomes.

This continuous “analyze-assess-decide-measure” cycle becomes the foundation of AI programs, leveraging the latest

technologies to constantly react to real-time changes in consumer behavior.

Dynamics believes in strong infrastructure underpinning mission-critical services.

From inception, Grid Dynamics engineers pushed

the boundaries of IT performance, developing a strong expertise in distributed systems.

Grid Dynamics’ experience in cloud,

NoSQL, big data, grid computing and performance engineering helps its clients go beyond the capabilities provided by off-the-shelf

Dynamics helps clients to contain and rearchitect legacy platforms as a part of the digital transformation journey.

A significant

factor in the success of legacy transformation is the robustness of the process of breaking down and reassembling monolithic systems

into smaller, more manageable pieces.

Grid Dynamics has a deep expertise in building agile teams, which are adept at realizing

incremental value through a cycle of continuous delivery enabled by automated quality and security assurance.

Grid Dynamics offers

its clients services that help enable continuous integration, continuous delivery and DevOps at enterprise scale.

Dynamics helps clients achieve higher rates of conversion and end user satisfaction by improving the service experience across

engagement channels.

This includes transformation of the web user interfaces to a responsive/adaptive model, design and development

of next-gen mobile applications as well as leveraging new channels of engagement such as conversational interfaces.

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:

Retail, Technology, Consumer Packaged goods (CPG)/manufacturing, and Finance.

Grid Dynamics has a strong presence in the digital technology

sector, particularly among analytics, SaaS and platform vendors which are driven by a constant need for innovation.

Grid Dynamics’

long-lasting expertise in complex open-source technology and in building massively scalable distributed systems, the company-wide

culture of agile co-creation as well as a deep understanding of digital commerce have enabled Grid Dynamics to build strong business

relationships with the leading players in this sector.

For example, Grid Dynamics has been providing software engineering, continuous

delivery and deployment automation, machine learning, internal tool development and quality engineering services to one of the

largest cloud services providers, becoming one of their key technological services partners.

utilizing Grid Dynamics’ deep expertise in the digital retail space and providing a mix of consulting and engineering services,

Grid Dynamics enables its clients to win market share, shorten time to market and reduce costs of digital operations.

Grid Dynamics has worked closely with a large U.S.

retail company over a span of many years to develop a strategic omnichannel

transformation program and became a key contributor to the development of a new omnichannel platform including consumer experience,

product discovery, analytics and inventory optimization.

Technical Consulting

Grid Dynamics provides technical consulting services to help executives in charge of digital transformation define an ambitious, yet achievable roadmap, quantify business value attained through new technology, select the right technology stack, develop reference architecture and guide the transformational journey every step of the way.

Lean Prototypes

Grid Dynamics helps enterprises prototype and test new ideas.

This includes both proof-of-concept implementations, which can be rapidly put in front of the end users to verify business assumptions, as well as sophisticated, long-running labs that cross organizational walls to establish feasibility and de-risk large transformational programs.

Self-sufficient teams move quickly, use the latest technologies and aim to solve the business use case to demonstrate measurable value to the business stakeholders.

Digital Intelligence

Grid Dynamics helps corporations transform from automation of business processes to automation of decision making.

To this end, Grid Dynamics deploys data science approaches to analyze client challenges and arrive at a strategy which produces measurable outcomes.

This continuous “analyze-assess-decide-measure” cycle becomes the foundation of AI programs, leveraging the latest technologies to constantly react to real-time changes in consumer behavior.

Scalable Engineering

Grid Dynamics believes in strong infrastructure underpinning mission-critical services.

From inception, Grid Dynamics' engineers pushed the boundaries of IT performance, developing a strong expertise in distributed systems.

Grid Dynamics’ experience in cloud, NoSQL, big data, grid computing and performance engineering helps its clients go beyond the capabilities provided by off-the-shelf products.

Development Culture

Grid Dynamics helps clients to contain and rearchitect legacy platforms as a part of the digital transformation journey.

A significant factor in the success of legacy transformation is the robustness of the process of breaking down and reassembling monolithic systems into smaller, more manageable pieces.

Grid Dynamics has a deep expertise in building agile teams, which are adept at realizing incremental value through a cycle of continuous delivery enabled by automated quality and security assurance.

Grid Dynamics offers its clients services that help enable continuous integration, continuous delivery and DevOps at enterprise scale.

Experience Design

Grid Dynamics helps clients achieve higher rates of conversion and end user satisfaction by improving the service experience across engagement channels.

This includes transformation of the web user interfaces to a responsive/adaptive model, design and development of next-gen mobile applications as well as leveraging new channels of engagement such as conversational interfaces.

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:

Tech, Media and Telecom, Retail, Finance and Consumer Packaged goods (CPG)/manufacturing.

Tech, Media and Telecom

Grid Dynamics has a strong presence in the digital technology sector, particularly among analytics, SaaS and platform vendors which are driven by a constant need for innovation.

Grid Dynamics’ long-lasting expertise in complex open-source technology and in building massively scalable distributed systems, the company-wide culture of agile co-creation as well as a deep understanding of digital commerce have enabled Grid Dynamics to build strong business relationships with the leading players in this sector.

For example, Grid Dynamics has been providing software engineering, continuous delivery and deployment automation, machine learning, internal tool development and quality engineering services to one of the largest cloud services providers, becoming one of their key technological services partners.

By utilizing Grid Dynamics’ deep expertise in the digital retail space and providing a mix of consulting and engineering services, Grid Dynamics enables its clients to win market share, shorten time to market and reduce costs of digital operations.

For example, Grid Dynamics has worked closely with a large U.S.

retail company over a span of many years to develop a strategic omnichannel transformation program and became a key contributor to the development of a new omnichannel platform including consumer experience, product discovery, analytics and inventory optimization.

CPG/Manufacturing

Dynamics helps its manufacturing customers to harness digital transformation by applying novel approaches to engage the consumers

directly and optimize the back-end supply chain.

For example, Grid Dynamics accelerated digital transformation in a global CPG

company by building direct-to-consumer capabilities, modernizing an omnichannel pricing engine, and optimizing operational efficiency

with modern data analytics and AI.

the early days of Grid Dynamics, the financial sector recognized it for the ability to tackle high-end technology programs, such

as moving from the batch to real-time fraud detection.

Today, Grid Dynamics has evolved from a niche provider to a proven partner

able to enable agility and time to market in the most challenging regulatory environments.

For example, a major commercial bank

chose Grid Dynamics to solve the challenge of evolving its security frameworks to realize benefits from cloud and DevOps.

following table presents our revenues by vertical and revenues as a percentage of total revenues by vertical for the periods indicated:

Year ended December 31,

(dollars in thousands, except per share data)

Grid Dynamics helps its manufacturing customers to harness digital transformation by applying novel approaches to engage the consumers directly and optimize the back-end supply chain.

For example, Grid Dynamics accelerated digital transformation in a global CPG company by building direct-to-consumer capabilities, modernizing an omnichannel pricing engine, and optimizing operational efficiency with modern data analytics and AI.

In the early days of Grid Dynamics, the financial sector recognized it for the ability to tackle high-end technology programs, such as moving from the batch to real-time fraud detection.

Today, Grid Dynamics has evolved from a niche provider to a proven partner able to enable agility and time to market in the most challenging regulatory environments.

For example, a major commercial bank chose Grid Dynamics to solve the challenge of evolving its security frameworks to realize benefits from cloud and DevOps.

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

For the year ended December 31,

2021 2020 2019

(in thousands, except % of revenue)

Tech, Media and Telecom $ 67,689 32.0 % $ 45,362 40.8 % $ 32,337 27.3 %

Retail 61,717 29.2 % 33,975 30.5 % 67,367 56.9 %

Finance 17,515 8.3 % 13,589 12.2 % 12,479 10.6 %

CPG/Manufacturing 43,461 20.6 % 14,202 12.8 % 4,850 4.1 %

Model and Operating Structure

Our service delivery model involves using

an efficient mix of on-site, off-site and offshore staffing.

We believe that the combination of our delivery model optimized for

co-innovation and the placement of our technology leaders at clients’ premises creates a key competitive advantage that enables

us to better understand and meet a client’s diverse needs.

The majority of Grid Dynamics’ engineering personnel is

located within Grid Dynamics’ engineering centers in the United States and CEE.

As of December 31, 2020, Grid Dynamics had

1,894 full-time and part-time personnel and delivered services from 12 engineering centers in the following locations:

Ramon, California, United States - Global Headquarters

Texas, United States

Petersburg, Russia

Dynamics also places a significant proportion of its IT professionals at client premises and promotes temporary assignments to

client locations.

and Process Management

Grid Dynamics enforces stringent security standards and has

maintained a continuous ISO 27001:2013 certification since August 2014.

All key company locations, departments and teams are within

the scope of the deployed information security management system.

Grid Dynamics policies, standards and procedures are reviewed

annually during both internal and external certification audits.

Grid Dynamics has successfully passed seven ISO 27001:2013 audits,

as well as over a dozen exhaustive audits from top financial services customers.

and Marketing

Grid Dynamics’ sales and marketing

strategy focuses on increasing revenues from new and existing clients through a “land and expand” strategy.

Grid Dynamics’

technology leaders deployed at clients’ premises play an integral role in identifying, developing and expanding potential

business opportunities.

This strategy has been effective both in deepening relationships with existing clients and increasing the

number of Grid Dynamics’ clients.

Grid Dynamics has an “85/10/5”

strategy where 85% of projected revenue is expected from clients with whom we have worked for over two years, 10% from clients

with whom we have worked for one to two years and 5% from clients with whom we have worked for less than a year.

Grid Dynamics focuses its business development

efforts in the North American market.

We believe the acquisition of Daxx will

enable our company to have a stronger foothold in Europe and to continue diversifying our business.

Grid Dynamics also maintains a dedicated

sales force as well as a marketing team, which coordinates corporate-level branding efforts that range from sponsorship of programming

competitions to participation in and hosting of industry conferences and events.

Grid Dynamics’ client base primarily consists of Fortune

1000 corporations based in North America.

With the acquisition of Daxx in December 2020, we have gained customers

in the Netherlands, Germany, U.K., as well as the U.S.

Grid Dynamics has a high level of revenue concentration with

certain clients.

In the year ended December 31, 2020 Grid Dynamics top two customers each accounted for 10% or more of Grid Dynamics

In the year ended December 31, 2019 Grid Dynamics top three customers each accounted for 10% or more of Grid Dynamics’

Dynamics typically enters into a master services agreement with its clients, which provides a framework for services that is then

supplemented by statements of work, which specify the particulars of each individual engagement.

Dynamics faces competition from both global IT services providers as well as those based in CEE.

Grid Dynamics believes that the

principal competitive factors in its business include technical expertise and industry knowledge, culture, reputation and track

record for high-quality and on-time delivery of work, effective employee recruiting, training and retention, responsiveness to

clients’ business needs and financial stability.

Dynamics faces competition primarily from:

Other 20,898 9.9 % 4,155 3.7 % 1,293 1.1 %

Total $ 211,280 100.0 % $ 111,283 100.0 % $ 118,326 100.0 %

Delivery Model and Operating Structure

Our service delivery model involves using an efficient mix of on-site, off-site and offshore staffing.

We believe that the combination of our delivery model optimized for co-innovation and the placement of our technology leaders at clients’ premises creates a key competitive advantage that enables us to better understand and meet a client’s diverse needs.

The majority of Grid Dynamics’ engineering personnel is located within Grid Dynamics’ engineering centers in the United States and CEE.

As of December 31, 2021, Grid Dynamics had 3,274 full-time and part-time personnel and delivered services from engineering centers located in the following countries:

• United States;

• Netherlands;

• United Kingdom.

Grid Dynamics also places its IT professionals at client premises and promotes temporary assignments at client locations.

Quality and Process Management

Grid Dynamics enforces stringent security standards and has maintained a continuous ISO 27001:2013 certification since August 2014.

All key company locations, departments and teams are within the scope of the deployed information security management system.

Grid Dynamics policies, standards and procedures are reviewed annually during both internal and external certification audits.

Grid Dynamics has successfully passed seven ISO 27001:2013 audits, as well as over a dozen exhaustive audits from top financial services customers.

Sales and Marketing

Grid Dynamics’ sales and marketing strategy focuses on increasing revenues from new and existing clients through a “land and expand” strategy.

Grid Dynamics’ technology leaders deployed at clients’ premises play an integral role in identifying, developing and expanding potential business opportunities.

This strategy has been effective both in deepening relationships with existing clients and increasing the number of Grid Dynamics’ clients.

Grid Dynamics also maintains a dedicated sales force as well as a marketing team, which coordinates corporate-level branding efforts that range from sponsorship of programming competitions to participation in and hosting of industry conferences and events.

Grid Dynamics’ client base primarily consists of Fortune 1000 corporations based in North America.

With the acquisition of Daxx in December 2020 and Tacit in May 2021, we have gained customers in U.K., North America, as well as Continental Europe and Asia.

Grid Dynamics has a high level of revenue concentration with certain clients.

In the years ended December 31, 2021 and 2020 Grid Dynamics top two customers each accounted for 10% or more of Grid Dynamics revenue.

In the year ended December 31, 2019 Grid Dynamics top three customers each accounted for 10% or more of Grid Dynamics’ revenue.

Grid Dynamics typically enters into a master services agreement with its clients, which provides a framework for services that is then supplemented by statements of work, which specify the particulars of each individual engagement.

Grid Dynamics faces competition from both global IT services providers as well as those based in CEE.

Grid Dynamics believes that the principal competitive factors in its business include technical expertise and industry knowledge, culture, reputation and track record for high-quality and on-time delivery of work, effective employee recruiting, training and retention, responsiveness to clients’ business needs and financial stability.

Grid Dynamics faces competition primarily from:

• emerging mid-cap digital services companies, such as Globant and Endava;

2 unchanged sentences

• in-house IT departments of Grid Dynamics’ clients and potential clients.

Daxx primary competitors are Andersen Lab, Ciklum, and SoftServe, Inc., with respect to our Daxx business

Grid Dynamics’ focus on complex digital transformation programs, technical employee base and the development and continuous

improvement in new software technology, Grid Dynamics believes that it is well positioned to compete effectively in the future.

Capital and Employees

are critical to the success of Grid Dynamics.

Accordingly, attracting and retaining employees is a key factor in Grid Dynamics’

ability to grow revenues and meet its clients’ needs.

As of December 31, 2020, Grid Dynamics had 1,894 personnel across

six countries (the U.S., the Netherlands, Poland, Serbia, Russia and Ukraine).

and Retention

Grid Dynamics hires both for technical

skills and cultural fit.

The reality of the changing technological landscape demands that our engineering personnel are able to

continuously acquire new proficiencies and skills.

Grid Dynamics’ hiring program is driven by demand within

current and projected clients.

Projections of client demand are constantly reviewed to ensure that we maintain a proper recruiting

and training pipeline.

Given Grid Dynamics’ focus on complex digital transformation programs, technical employee base and the development and continuous improvement in new software technology, Grid Dynamics believes that it is well positioned to compete effectively in the future.

Human Capital and Employees

People are critical to the success of Grid Dynamics.

Accordingly, attracting and retaining personnel is a key factor in Grid Dynamics’ ability to grow revenues and meet its clients’ needs.

As of December 31, 2021, Grid Dynamics had 3,274 personnel across nine countries (the U.S., Mexico, the Netherlands, U.K., Poland, Serbia, Moldova, Russia and Ukraine).

Recruitment and Retention

Grid Dynamics hires both for technical skills and cultural fit.

The reality of the changing technological landscape demands that our engineering personnel are able to continuously acquire new proficiencies and skills.

Grid Dynamics’ hiring program is driven by demand within current and projected clients.

Projections of client demand are constantly reviewed to ensure that we maintain a proper recruiting and training pipeline.

The geographical spread helps Grid Dynamics to shorten the time to identify and recruit top technical talent.

Grid Dynamics targets the top of technical talent from top technical universities.

Nearly 100% of Grid Dynamics’ engineering

personnel have advanced degrees in computer science.

attract, retain and motivate IT professionals, Grid Dynamics seeks to provide an environment and culture that rewards entrepreneurial

initiative and performance.

In addition, Grid Dynamics offers a challenging work environment, ongoing skills development initiatives

and attractive career advancement and promotion opportunities.

Dynamics believes that it maintains a good working relationship with its employees and has not experienced any labor disputes.

Majority of Grid Dynamics’ engineering personnel have bachelor or advanced degrees in computer science.

To attract, retain and motivate IT professionals, Grid Dynamics seeks to provide an environment and culture that rewards entrepreneurial initiative and performance.

In addition, Grid Dynamics offers a challenging work environment, ongoing skills development initiatives and attractive career advancement and promotion opportunities.

Grid Dynamics believes that it maintains a good working relationship with its employees and has not experienced any labor disputes.

Grid Dynamics’ employees have not entered into any collective bargaining agreements.

and Development

Dynamics dedicates significant resources to the training and development of its technical leaders.

The company believes in the

importance of supporting educational initiatives and sponsors employees’ participation in internal and external training

and certifications.

year Grid Dynamics delivers hundreds of courses in emerging technologies to its engineers using the Grid University online education

Employees can also take advantage of educational and certification programs offered by the technology leaders both in

open-source as well as in proprietary spaces.

through Grid Dynamics, deep relationships with top local universities, forged over years of collaboration, and specialized recruiting

programs, Grid Dynamics can scale the hiring and staffing of new engineering teams to support complex technical programs.

Dynamics also provides ongoing English language training at all of its delivery centers to maintain and enhance the English language

skills of its IT professionals.

Training Programs

Dynamics offers support, training and mentoring programs to managers through the Grid Dynamics Manager Training School.

courses in project management and leadership skills help managers build strong teams through positive work environment, group

inspiration and individual motivation.

Dynamics has a long-standing tradition of running internship programs for students and junior engineers.

The company opens its

doors to young, promising engineers who are ready for a life-changing career of working on complex projects in big data, machine

learning, AI and other emerging technologies.

intern works with a mentor who helps them adapt, shares knowledge and supports them in developing the necessary skills.

of intellectual property rights is paramount to Grid Dynamics and its clients.

Grid Dynamics relies on a combination of trade

secret, patent, copyright and trademark laws as well as confidentiality procedures and contractual provisions to protect its intellectual

Grid Dynamics requires its employees, independent contractors, vendors and clients to enter into written confidentiality

agreements upon the 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.

Dynamics customarily enters into non-disclosure agreements with its clients with respect to the use of their software systems

and platforms.

Grid Dynamics’ clients usually own the intellectual property in the software or systems Grid Dynamics develops

Furthermore, Grid Dynamics usually grants a perpetual, worldwide, royalty-free, nonexclusive, transferable and non-revocable

license to its clients to use its preexisting intellectual property to the extent necessary in order to use the software or systems

Grid Dynamics developed for them.

Dynamics and its clients often use open-source software to improve quality and reduce time-to-market.

Grid Dynamics works with

the compliance departments of its clients to comply with the client’s open-source licensing policies.

to the industry and geographic diversity of Grid Dynamics’ operations and services, Grid Dynamics’ operations are

subject to a variety of laws and regulations in the United States, Russia, Ukraine and other CEE countries.

See Item 1A, “ Risk

Factors—Risks Related to Government Regulations ”.

Training and Development

Grid Dynamics dedicates significant resources to the training and development of its technical leaders.

The company believes in the importance of supporting educational initiatives and sponsors employees’ participation in internal and external training and certifications.

Every year Grid Dynamics delivers hundreds of courses in emerging technologies to its engineers using the Grid University online education platform.

Employees can also take advantage of educational and certification programs offered by the technology leaders both in open-source as well as in proprietary spaces.

Furthermore, through Grid Dynamics, deep relationships with top local universities, forged over years of collaboration, and specialized recruiting programs, Grid Dynamics can scale the hiring and staffing of new engineering teams to support complex technical programs.

Grid Dynamics also provides ongoing English language training at all of its delivery centers to maintain and enhance the English language skills of its IT professionals.

Management Training Programs

Grid Dynamics offers support, training and mentoring programs to managers through the Grid Dynamics Manager Training School.

Various courses in project management and leadership skills help managers build strong teams through positive work environment, group inspiration and individual motivation.

Grid Dynamics has a long-standing tradition of running internship programs for students and junior engineers.

The company opens its doors to young, promising engineers who are ready for a life-changing career of working on complex projects in big data, machine learning, AI and other emerging technologies.

Each intern works with a mentor who helps them adapt, shares knowledge and supports them in developing the necessary skills.

Intellectual Property

Protection of intellectual property rights is paramount to Grid Dynamics and its clients.

Grid Dynamics relies on a combination of trade secret, patent, copyright and trademark laws as well as confidentiality procedures and contractual provisions to protect its intellectual property.

Grid Dynamics requires its employees, independent contractors, vendors and clients to enter into written confidentiality agreements upon the 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.

Grid Dynamics customarily enters into non-disclosure agreements with its clients with respect to the use of their software systems and platforms.

Grid Dynamics’ clients usually own the intellectual property in the software or systems Grid Dynamics develops for them.

Furthermore, Grid Dynamics usually grants a perpetual, worldwide, royalty-free, nonexclusive, transferable

and non-revocable license to its clients to use its preexisting intellectual property to the extent necessary in order to use the software or systems Grid Dynamics developed for them.

Grid Dynamics and its clients often use open-source software to improve quality and reduce time-to-market.

Grid Dynamics works with the compliance departments of its clients to comply with the client’s open-source licensing policies.

Due to the industry and geographic diversity of Grid Dynamics’ operations and services, Grid Dynamics’ operations are subject to a variety of laws and regulations in the United States, Mexico, Russia, Ukraine and other European countries.

See Item 1A, “ Risk Factors—Risks Related to Government Regulations ”.

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, 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.

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.

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, 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.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business