Grid Dynamics Holdings, Inc. (GDYN) saw its stock plummet 5.11% on Friday, despite reporting first-quarter results that exceeded expectations. The company's cautious guidance for the second quarter appears to have overshadowed its strong performance, raising concerns among investors about potential growth deceleration.

During the earnings call, Grid Dynamics reported Q1 revenues of $100.4 million, slightly ahead of its guidance range of $98 million to $100 million, representing a year-over-year growth of 25.8%. The company's non-GAAP EBITDA came in at $14.6 million, outperforming the guidance range of $12.9 million to $13.9 million. However, the company's Q2 revenue guidance of $100 million to $102 million implies only slight sequential growth, which may have disappointed investors expecting stronger momentum.

While Grid Dynamics maintained its full-year revenue outlook of $415 million to $435 million, management acknowledged the uncertainties in the global economic environment. The company also highlighted ongoing investments in AI capabilities and scaling, which could impact near-term margins. These factors, combined with the cautious tone regarding client behavior and economic conditions, likely contributed to the stock's decline despite the positive Q1 results.