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Innodata Reports Second Quarter 2025 Results with Revenue up 79% Year-Over-Year and Raises Full Year Guidance

1. INOD reported Q2 revenue of $58.4 million, 79% growth year-over-year. 2. Adjusted EBITDA increased to $13.2 million, up by $10.4 million from last year. 3. CEO projects 45% organic growth in 2025, raising previously stated guidance. 4. INOD recognized in Wedbush's AI industry theme, highlighting market positioning. 5. The company received multiple awards for leadership and workplace excellence.

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FAQ

Why Very Bullish?

The significant growth in revenue and EBITDA indicates strong performance. Historical precedents show that consistent revenue growth tends to increase stock prices significantly over time.

How important is it?

The strong financial results and updates on growth targets suggest a loss of revenue future potential. This report is very relevant as it alters market expectations significantly.

Why Short Term?

Immediate performance improvements and positive guidance will likely attract investor interest soon. Companies often see quick price reactions to positive earnings reports.

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Thursday, 31 July 2025 04:15 PM NEW YORK, NY / ACCESS Newswire / July 31, 2025 / INNODATA INC. (Nasdaq:INOD) today reported results for the second quarter ended June 30, 2025.Revenue of $58.4 million, representing 79% year-over-year organic revenue growth.Adjusted EBITDA of $13.2 million, an increase of $10.4 million from $2.8 million in the same period last year.*Net income of $7.2 million, or $0.23 per basic share and $0.20 per diluted share, compared to a de minimis net loss, or $0.00 per basic and diluted share, in the same period last year.Cash, cash equivalents and short-term investments were $59.8 million as of June 30, 2025 and $46.9 million as of December 31, 2024.* Adjusted EBITDA is defined below.Jack Abuhoff, CEO, said, "Q2 was another outstanding quarter. We beat analysts' expectations across the board on key metrics - revenue, Adjusted EBITDA, net income, and fully-diluted EPS. As a result of strong demand and momentum, which includes significant new deal wins across a diversity of new and existing customers, we are increasing our revenue guidance to 45% or more organic revenue growth in 2025, up from 40%. We have a robust pipeline that includes significant dollar values positioning us for a strong second half of the year. Many of these deals are not incorporated in our forecast, leaving room for possible further increases."Our beat-and-raise quarter underscores the critical role we are playing in the generative AI space. We expect to exceed last year's Adjusted EBITDA while investing heavily in capabilities we believe will enable us to continue our growth in the years ahead."In testament to our market outperformance and positioning, we earned a spot on Wedbush's industry note "The AI Revolution Theme; 30 Names to Play in the 4th Industrial Revolution" alongside 30 public AI companies that includes several of our megacap customers. In the quarter, we, through our operating subsidiaries, won prestigious awards including the Asia Best Employer Brand Award for the second consecutive year by the World HRD Congress, Golden Globe Tigers Awards for both AI Transformation Leadership and Innovation Excellence, and the Most Preferred Workplace Award by Team Marksmen."Amounts in this press release have been rounded. All percentages have been calculated using unrounded amounts.Timing of Conference Call with Q&AInnodata will conduct an earnings conference call, including a question-and-answer period, at 5:00 PM eastern time today. You can participate in this call by dialing the following call-in numbers:The call-in numbers for the conference call are:(+1) 800 549 8228 North America(+1) 289 819 1520 InternationalParticipant Access Code 18067#Replay dial-In(+1) 888 660 6264 North America(+1) 289 819 1325 International:Replay Passcode 18067 #It is recommended that participants dial in approximately 10 minutes prior to the start of the call. Investors are also invited to access a live Webcast of the conference call at the Investor Relations section of Innodata's website athttps://investor.innodata.com/events-and-presentations/. Please note that the Webcast feature will be in listen-only mode.Call-in replay will be available for seven days following the conference call, and Webcast replay will be available for 30 days following the conference call, at the Investor Relations section of Innodata's website at https://investor.innodata.com/events-and-presentations/.About InnodataInnodata (Nasdaq: INOD) is a global data engineering company. We believe that data and Artificial Intelligence (AI) are inextricably linked. That's why we're on a mission to help the world's leading technology companies and enterprises drive Generative AI / AI innovation. We provide a range of transferable solutions, platforms, and services for Generative AI / AI builders and adopters. In every relationship, we honor our 35+ year legacy delivering the highest quality data and outstanding outcomes for our customers.Visit www.innodata.com to learn more.Forward-Looking StatementsThis press release may contain certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. These forward-looking statements include, without limitation, statements concerning our operations, economic performance, financial condition, developmental program expansion and position in the generative AI services market. Words such as "project," "forecast," "believe," "expect," "can," "continue," "could," "intend," "may," "should," "will," "anticipate," "indicate," "guide," "predict," "likely," "estimate," "plan," "potential," "possible," "promises," or the negatives thereof, and other similar expressions generally identify forward-looking statements.These forward-looking statements are based on management's current expectations, assumptions and estimates and are subject to a number of risks and uncertainties, including, without limitation, impacts resulting from ongoing geopolitical conflicts, including between India and Pakistan, Russia and Ukraine, Hamas' attack against Israel and the ensuing conflict and unpredictable hostilities between Hezbollah and Israel and Iran and Israel; investments in large language models; that contracts may be terminated by customers; projected or committed volumes of work may not materialize; pipeline opportunities and customer discussions which may not materialize into work or expected volumes of work; the likelihood of continued development of the markets, particularly new and emerging markets, that our services support; the ability and willingness of our customers and prospective customers to execute business plans that give rise to requirements for our services; continuing reliance on project-based work in the Digital Data Solutions ("DDS") segment and the primarily at-will nature of such contracts and the ability of these customers to reduce, delay or cancel projects; potential inability to replace projects that are completed, canceled or reduced; our DDS segment's revenue concentration in a limited number of customers; our dependency on content providers in our Agility segment; our ability to achieve revenue and growth targets; difficulty in integrating and deriving synergies from acquisitions, joint ventures and strategic investments; potential undiscovered liabilities of companies and businesses that we may acquire; potential impairment of the carrying value of goodwill and other acquired intangible assets of companies and businesses that we acquire; a continued downturn in or depressed market conditions; changes in external market factors; the potential effects of U.S. global trading and monetary policy, including the interest rate policies of the Federal Reserve; changes in our business or growth strategy; the emergence of new, or growth in existing competitors; various other competitive and technological factors; our use of and reliance on information technology systems, including potential security breaches, cyber-attacks, privacy breaches or data breaches that result in the unauthorized disclosure of consumer, customer, employee or Company information, or service interruptions; and other risks and uncertainties indicated from time to time in our filings with the Securities and Exchange Commission ("SEC").Our actual results could differ materially from the results referred to in any forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the risks discussed in Part I, Item 1A. "Risk Factors," Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations," and other parts of our Annual Report on Form 10-K, filed with the SEC on February 24, 2025, and in our other filings that we may make with the SEC. In light of these risks and uncertainties, there can be no assurance that the results referred to in any forward-looking statements will occur, and you should not place undue reliance on these forward-looking statements. These forward-looking statements speak only as of the date hereof.We undertake no obligation to update or review any guidance or other forward-looking statements, whether as a result of new information, future developments or otherwise, except as may be required by the U.S. federal securities laws.Company ContactAneesh Pendharkar[email protected](201) 371-8000Non-GAAP Financial MeasuresIn addition to the financial information prepared in conformity with U.S. GAAP ("GAAP"), we provide certain non-GAAP financial information. We believe that these non-GAAP financial measures assist investors in making comparisons of period-to-period operating results. In some respects, management believes non-GAAP financial measures are more indicative of our ongoing core operating performance than their GAAP equivalents by making adjustments that management believes are reflective of the ongoing performance of the business.We believe that the presentation of this non-GAAP financial information provides investors with greater transparency by providing investors a more complete understanding of our financial performance, competitive position, and prospects for the future, particularly by providing the same information that management and our Board of Directors use to evaluate our performance and manage the business. However, the non-GAAP financial measures presented in this press release have certain limitations in that they do not reflect all of the costs associated with the operations of our business as determined in accordance with GAAP. Therefore, investors should consider non-GAAP financial measures in addition to, and not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. Further, the non-GAAP financial measures that we present may differ from similar non-GAAP financial measures used by other companies.Adjusted Gross Profit and Adjusted Gross MarginWe define Adjusted Gross Profit as revenues less direct operating costs attributable to Innodata Inc. and its subsidiaries in accordance with U.S. GAAP, plus depreciation and amortization of intangible assets, stock-based compensation, non-recurring severance and other one-time costs included within direct operating cost.We define Adjusted Gross Margin by dividing Adjusted Gross Profit over total U.S. GAAP revenues.We use Adjusted Gross Profit and Adjusted Gross Margin to evaluate results of operations and trends between fiscal periods and believe that these measures are important components of our internal performance measurement process.A reconciliation of Adjusted Gross Profit and Adjusted Gross Margin to the most directly comparable GAAP measure is included in the tables that accompany this release.Adjusted EBITDAWe define Adjusted EBITDA as net income (loss) attributable to Innodata Inc. and its subsidiaries in accordance with U.S. GAAP before interest expense, income taxes, depreciation and amortization of intangible assets (which derives EBITDA), plus additional adjustments for loss on impairment of intangible assets and goodwill, stock-based compensation, income (loss) attributable to non-controlling interests, non-recurring severance, and other one-time costs.We use Adjusted EBITDA to evaluate core results of operations and trends between fiscal periods and believe that these measures are important components of our internal performance measurement process.A reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure is included in the tables that accompany this release.INNODATA INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)(In thousands, except per-share amounts)Three Months EndedSix Months EndedJune 30,June 30,2025202420252024Revenues$58,393$32,553$116,737$59,057Operating costs and expenses:Direct operating costs35,37023,20270,46240,071Selling and administrative expenses14,1129,02029,09217,325Interest (income) expense, net(577)55(704)(29)48,90532,27798,85057,367Income before provision for income taxes9,48827617,8871,690Provision for income taxes2,2692852,881709Consolidated net income (loss)7,219(9)15,006981Income attributable to non-controlling interests-5-6Net income (loss) attributable to Innodata Inc. and Subsidiaries$7,219$(14)$15,006$975Income (loss) per share attributable to Innodata Inc. and Subsidiaries:Basic$0.23$(0.00)$0.47$0.03Diluted$0.20$(0.00)$0.43$0.03Weighted average shares outstanding:Basic31,78528,87831,60928,819Diluted35,30128,87835,12032,691INNODATA INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited)(In thousands)June 30,2025December 31, 2024ASSETSCurrent assets:Cash and cash equivalents$59,792$46,897Accounts receivable, net34,12428,013Prepaid expenses and other current assets6,7736,090Total current assets100,68981,000Property and equipment, net4,7104,101Right-of-use asset, net3,8304,238Other assets1,3421,267Deferred income taxes, net6,0367,492Intangibles, net13,93013,353Goodwill2,0861,998Total assets$132,623$113,449LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable, accrued expenses and other$16,120$17,455Accrued salaries, wages and related benefits12,37713,836Income and other taxes4,2205,695Long-term obligations - current portion1,4771,643Operating lease liability - current portion928877Total current liabilities35,12239,506Deferred income taxes, net7132Long-term obligations, net of current portion7,4936,744Operating lease liability, net of current portion3,2953,778Total liabilities45,98150,060STOCKHOLDERS' EQUITY86,64263,389Total liabilities and stockholders' equity$132,623$113,449INNODATA INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)(In thousands)Six Months EndedJune 30,20252024Cash flows from operating activities:Consolidated net income$15,006$981Adjustments to reconcile consolidated net income to net cashprovided by operating activities:Stock-based compensation5,6022,026Depreciation and amortization3,1642,684Deferred income taxes1,35541Pension cost672395Changes in operating assets and liabilities:Accounts receivable(5,716)(3,976)Prepaid expenses and other current assets(387)246Other assets(76)396Accounts payable, accrued expenses and other(1,499)4,595Accrued salaries, wages and related benefits(1,490)(1,149)Income and other taxes(1,529)74Net cash provided by operating activities15,1026,313Cash flows from investing activities:Capital expenditures(4,058)(4,067)Net cash used in investing activities(4,058)(4,067)Cash flows from financing activities:Proceeds from exercise of stock options1,468783Withholding taxes on net settlement of restricted stock units-(97)Payment of long-term obligations(229)(294)Net cash provided by financing activities1,239392Effect of exchange rate changes on cash and cash equivalents61265Net increase in cash and cash equivalents12,8952,703Cash and cash equivalents, beginning of period46,89713,806Cash and cash equivalents, end of period$59,792$16,509INNODATA INC. AND SUBSIDIARIESRECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES(Unaudited)(In thousands)Adjusted Gross Profit and Adjusted Gross MarginThree Months Ended June 30,Six Months Ended June 30,Consolidated2025202420252024Gross Profit attributable to Innodata Inc. and Subsidiaries$23,023$9,351$46,275$18,986Depreciation and amortization1,5831,3943,1272,634Stock-based compensation44173868157Adjusted Gross Profit$25,047$10,818$50,270$21,777Gross Margin39%29%40%32%Adjusted Gross Margin43%33%43%37%Three Months Ended June 30,Six Months Ended June 30,DDS Segment2025202420252024Gross Profit attributable to DDS Segment$19,399$6,079$39,127$12,637Depreciation and amortization7114551,426793Stock-based compensation43064845138Adjusted Gross Profit$20,540$6,598$41,398$13,568Gross Margin38%24%38%28%Adjusted Gross Margin41%26%41%30%Three Months Ended June 30,Six Months Ended June 30,Synodex Segment2025202420252024Gross Profit attributable to Synodex Segment$447$456$1,000$855Depreciation and amortization89157175294Stock-based compensation--1-Adjusted Gross Profit$536$613$1,176$1,149Gross Margin24%23%24%22%Adjusted Gross Margin26%31%29%30%Three Months Ended June 30,Six Months Ended June 30,Agility Segment2025202420252024Gross Profit attributable to Agility Segment$3,177$2,816$6,148$5,494Depreciation and amortization7837821,5261,547Stock-based compensation1192219Adjusted Gross Profit$3,971$3,607$7,696$7,060Gross Margin55%55%55%54%Adjusted Gross Margin69%70%68%70%INNODATA INC. AND SUBSIDIARIESRECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES(Unaudited)(In thousands)Adjusted EBITDAThree Months Ended June 30,Six Months Ended June 30,Consolidated2025202420252024Net income (loss) attributable to Innodata Inc. and Subsidiaries$7,219$(14)$15,006$975Provision for income taxes2,2692852,881709Interest (income) expense, net(577)101(704)169Depreciation and amortization1,6021,4183,1642,684Stock-based compensation2,7219925,6022,026Non-controlling interests-5-6Adjusted EBITDA - Consolidated$13,234$2,787$25,949$6,569Three Months Ended June 30,Six Months Ended June 30,DDS Segment2025202420252024Net income (loss) attributable to DDS Segment$7,333$(460)$15,007$(34)Provision for income taxes2,2132832,800704Interest (income) expense, net(577)100(705)167Depreciation and amortization7304791,463843Stock-based compensation2,5168685,1931,763Non-controlling interests-5-6Adjusted EBITDA - DDS Segment$12,215$1,275$23,758$3,449Three Months Ended June 30,Six Months Ended June 30,Synodex Segment2025202420252024Net income attributable to Synodex Segment$307$316$573$592Depreciation and amortization89157175294Stock-based compensation654912998Adjusted EBITDA - Synodex Segment$461$522$877$984Three Months Ended June 30,Six Months Ended June 30,Agility Segment2025202420252024Net income (loss) attributable to Agility Segment$(421)$130$(574)$417Provision for income taxes562815Interest expense-112Depreciation and amortization7837821,5261,547Stock-based compensation14075280165Adjusted EBITDA - Agility Segment$558$990$1,314$2,136INNODATA INC. AND SUBSIDIARIESCONSOLIDATED REVENUE BY SEGMENT(Unaudited)(In thousands)Three Months Ended June 30,For the Six Months Ended June 30,2025202420252024Revenues:DDS$50,576$25,410$101,406$45,116Synodex2,0651,9864,0793,857Agility5,7525,15711,25210,084Total Consolidated$58,393$32,553$116,737$59,057SOURCE: Innodata Inc.

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