RCS - Innodata Inc. - Innodata Reports Fourth Quarter and Full Year 2025
27/02/2026 08:15
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RNS Number : 6172U Innodata Inc. 26 February 2026
Innodata Reports Fourth Quarter and Full Year 2025 Results
· 48% Full-Year Revenue Growth and Strong Q4 Results
· Anticipates ~35%+ Revenue Growth in 2026 with Expanding Customer
Diversification
· Announces Innovations in Dataset Creation and Evaluations for
LLMs, AI Agents, and Physical AI (Robotics)
NEW YORK CITY, NY / ACCESS Newswire (https://www.accessnewswire.com/) /
February 26, 2026 / INNODATA INC. (Nasdaq:INOD) today reported results for the
fourth quarter and the year ended December 31, 2025.
· Revenue of $72.4 million for the three months ended December 31,
2025, representing 22% year-over-year organic revenue growth.
· Revenue of $251.7 million for the year ended December 31, 2025,
representing 48% year-over-year organic revenue growth.
· Adjusted EBITDA of $15.7 million for the three months ended
December 31, 2025, an increase of $1.6 million, or 11%, from $14.1 million in
the same period last year.*
· Adjusted EBITDA of $57.9 million for the year ended December 31,
2025, an increase of $23.3 million, or 68%, from $34.6 million in the same
period last year.*
· Net income of $8.8 million, or $0.28 per basic share and $0.25
per diluted share, for the three months ended December 31, 2025, compared to
net income of $10.3 million, or $0.34 per basic share and $0.31 per diluted
share, in the same period last year.
· Net income of $32.2 million, or $1.01 per basic share and $0.92
per diluted share, for the year ended December 31, 2025, compared to net
income of $28.7 million, or $0.98 per basic share and $0.89 per diluted share,
in the same period last year.
· Cash, cash equivalents and short-term investments were $82.2
million as of December 31, 2025 and $46.9 million as of December 31, 2024.
* Adjusted EBITDA is defined below.
Jack Abuhoff, CEO, said, "2025 was a defining year for Innodata. We delivered
$72.4 million in fourth-quarter revenue and $251.7 million for the full year -
representing 48% annual growth - while exceeding margin targets and analyst
consensus across key metrics and investing aggressively in innovation to
strengthen our platform, accelerate customer outcomes, and reinforce our
leadership in the generative AI value chain.
"We believe we are entering 2026 with extraordinary momentum. Demand across
frontier model training, agentic AI, and physical AI is accelerating, and we
believe our role is evolving from data supplier to strategic lifecycle partner
for some of the world's most advanced AI initiatives.
"Based on current forecasts, we anticipate approximately 35% or more revenue
growth in 2026, with potential upside as programs scale," Abuhoff said.
In today's earnings conference call (dial-in information below), Abuhoff plans
to discuss Innodata's program of data-centric innovation that is achieving:
· Measurable improvements in model performance through data
efficacy-driven LLM training methodologies;
· Up to 25-point gains in AI agent constraint satisfaction under
real-world complexity;
· Durable resilience against adversarial attacks through scalable,
high-fidelity, data-driven attack simulation systems;
· Enhanced long-context reasoning performance through specialized
structured dataset creation;
· Large-scale, high-quality dataset engineering for physical AI and
robotics, including egocentric and affordance-rich data;
· A 6.45% improvement over prior state-of-the-art benchmarks in
drone and small-object detection; and
· The structural foundation for margin expansion through
automation, synthetic data generation, and evaluation platforms.
Abuhoff concluded, "The future of AI will be shaped not only by larger models,
but by the precision and rigor of the data ecosystems that make them reliable,
adaptable, and production-ready. That is Innodata's domain. We are confident
in our leadership and energized by the scale of the opportunity before us."
Amounts in this press release have been rounded. All percentages have been
calculated using unrounded amounts.
Timing of Conference Call with Q&A
Innodata 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
(+44) 800 279 7040 United Kingdom
(+1) 289 819 1520 International
Participant Access Code 27117#
Replay dial-In
(+1) 888 660 6264 North America
(+1) 289 819 1325 International
Replay Passcode 27117#
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/
(https://pr.report/j3cw) . 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/
(https://pr.report/j3cx) .
About Innodata
Innodata (Nasdaq: INOD) is a global data engineering company. We believe that
data and Artificial Intelligence (AI) are inextricably linked. Our mission is
to enable the responsible advancement of artificial intelligence by providing
the data, evaluation frameworks, and human expertise required to build AI
systems that can be trusted at scale. We provide a range of transferable
solutions, platforms, and services for Generative AI / AI builders and
adopters. In every relationship, we honor our 36+ year legacy delivering the
highest quality data and outstanding outcomes for our customers.
Visit www.innodata.com (https://pr.report/j3cy) to learn more.
Forward-Looking Statements
This 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 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; 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 trade 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 Contact
Aneesh Pendharkar
investor@innodata.com
(201) 371-8000
Non-GAAP Financial Measures
In 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 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 Margin
We define Adjusted Gross Profit as revenues less direct operating costs
attributable to Innodata Inc. and its subsidiaries in accordance with 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
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 EBITDA
We define Adjusted EBITDA as net income (loss) attributable to Innodata Inc.
and its subsidiaries in accordance with 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 SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per-share amounts)
Three Months Ended Year Ended
December 31, December 31,
2025 2024 2025 2024
Revenues $ 72,376 $ 59,180 $ 251,663 $ 170,461
Operating costs and expenses:
Direct operating costs 44,676 32,423 152,184 103,387
Selling and administrative expenses 16,769 15,503 59,606 42,738
Interest income, net (428 ) (94 ) (1,552 ) (149 )
61,017 47,832 210,238 145,976
Income before provision for income taxes 11,359 11,348 41,425 24,485
Provision for income taxes 2,526 1,045 9,244 (4,190 )
Consolidated net income 8,833 10,303 32,181 28,675
Income attributable to non-controlling interests - 7 - 15
Net income attributable to Innodata Inc. and Subsidiaries $ 8,833 $ 10,296 $ 32,181 $ 28,660
Income per share attributable to Innodata Inc. and Subsidiaries:
Basic $ 0.28 $ 0.34 $ 1.01 $ 0.98
Diluted $ 0.25 $ 0.31 $ 0.92 $ 0.89
Weighted average shares outstanding:
Basic 32,080 30,027 31,807 29,163
Diluted 35,468 33,625 35,025 32,177
INNODATA INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
December 31, 2025 December 31, 2024
ASSETS
Current assets:
Cash and cash equivalents $ 82,230 $ 46,897
Accounts receivable, net 46,510 28,013
Prepaid expenses and other current assets 6,654 6,090
Total current assets 135,394 81,000
Property and equipment, net 7,966 4,101
Right-of-use asset, net 4,094 4,238
Other assets 1,648 1,267
Deferred income taxes, net 3,429 7,492
Intangibles, net 13,983 13,353
Goodwill 2,079 1,998
Total assets $ 168,593 $ 113,449
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, accrued expenses and other $ 26,720 $ 17,455
Accrued salaries, wages and related benefits 16,480 13,836
Income and other taxes 4,471 5,695
Long-term obligations - current portion 1,659 1,643
Operating lease liability - current portion 1,202 877
Total current liabilities 50,532 39,506
Deferred income taxes, net 146 32
Long-term obligations, net of current portion 7,625 6,744
Operating lease liability, net of current portion 3,228 3,778
Total liabilities 61,531 50,060
STOCKHOLDERS' EQUITY 107,062 63,389
Total liabilities and stockholders' equity $ 168,593 $ 113,449
INNODATA INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Year Ended
December 31,
2025 2024
Cash flows from operating activities:
Consolidated net income $ 32,181 $ 28,675
Adjustments to reconcile consolidated net income to net cash
provided by operating activities:
Depreciation and amortization 6,889 5,796
Stock-based compensation 11,144 3,998
Deferred income taxes 4,101 (5,609 )
Provision for credit losses 108 527
Pension cost 1,343 1,237
Changes in operating assets and liabilities:
Accounts receivable (18,350 ) (14,411 )
Prepaid expenses and other current assets (480 ) (2,233 )
Other assets (375 ) 1,177
Accounts payable, accrued expenses and other 8,984 7,916
Accrued salaries, wages and related benefits 2,619 6,063
Income and other taxes (1,263 ) 1,879
Pension benefit payments (149 ) (151 )
Net cash provided by operating activities 46,752 34,864
Cash flows from investing activities:
Capital expenditures (11,104 ) (7,741 )
Net cash used in investing activities (11,104 ) (7,741 )
Cash flows from financing activities:
Proceeds from exercise of stock options 3,331 6,668
Withholding taxes on net settlement of restricted stock units (3,337 ) (97 )
Payment of long-term obligations (420 ) (362 )
Net cash provided by (used in) financing activities (426 ) 6,209
Effect of exchange rate changes on cash and cash equivalents 111 (255 )
Net increase in cash and cash equivalents 35,333 33,077
Cash and cash equivalents, beginning of year 46,897 13,820
Cash and cash equivalents, end of year $ 82,230 $ 46,897
INNODATA INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited)
(In thousands)
Three Months Ended December 31, Year Ended December 31,
Consolidated 2025 2024 2025 2024
Gross Profit attributable to Innodata Inc. and Subsidiaries $ 27,700 $ 26,757 $ 99,479 $ 67,074
Depreciation and amortization 1,956 1,558 6,812 5,705
Stock-based compensation 429 81 1,741 281
Adjusted Gross Profit $ 30,085 $ 28,396 $ 108,032 $ 73,060
Gross Margin 38 % 45 % 40 % 39 %
Adjusted Gross Margin 42 % 48 % 43 % 43 %
Three Months Ended December 31, Year Ended December 31,
DDS Segment 2025 2024 2025 2024
Gross Profit attributable to DDS Segment $ 24,124 $ 22,665 $ 85,404 $ 52,912
Depreciation and amortization 985 692 3,210 2,133
Stock-based compensation 420 76 1,699 252
Adjusted Gross Profit $ 25,529 $ 23,433 $ 90,313 $ 55,297
Gross Margin 37 % 44 % 39 % 37 %
Adjusted Gross Margin 39 % 46 % 41 % 39 %
Three Months Ended December 31, Year Ended December 31,
Synodex Segment 2025 2024 2025 2024
Gross Profit attributable to Synodex Segment $ 209 $ 763 $ 1,325 $ 2,101
Depreciation and amortization 165 97 455 503
Stock-based compensation 1 1 1 2
Adjusted Gross Profit $ 375 $ 861 $ 1,781 $ 2,606
Gross Margin 13 % 37 % 18 % 27 %
Adjusted Gross Margin 24 % 42 % 24 % 33 %
Three Months Ended December 31, Year Ended December 31,
Agility Segment 2025 2024 2025 2024
Gross Profit attributable to Agility Segment $ 3,367 $ 3,329 $ 12,750 $ 12,061
Depreciation and amortization 806 769 3,147 3,069
Stock-based compensation 8 4 41 27
Adjusted Gross Profit $ 4,181 $ 4,102 $ 15,938 $ 15,157
Gross Margin 54 % 57 % 54 % 56 %
Adjusted Gross Margin 67 % 70 % 68 % 71 %
INNODATA INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited)
(In thousands)
Adjusted EBITDA
Three Months Ended December 31, Year Ended December 31,
Consolidated 2025 2024 2025 2024
Net income attributable to Innodata Inc. and Subsidiaries $ 8,833 $ 10,296 $ 32,181 $ 28,660
Provision for income taxes 2,526 1,045 9,244 (4,190 )
Interest (income) expense, net (428 ) 97 (1,552 ) 287
Depreciation and amortization 1,976 1,577 6,889 5,796
Stock-based compensation 2,835 1,117 11,144 3,998
Non-controlling interests - 7 - 15
Adjusted EBITDA - Consolidated $ 15,742 $ 14,139 $ 57,906 $ 34,566
Three Months Ended December 31, Year Ended December 31,
DDS Segment 2025 2024 2025 2024
Net income attributable to DDS Segment $ 8,356 $ 8,954 $ 31,822 $ 25,446
Provision for income taxes 2,465 1,102 9,133 (4,081 )
Interest (income) expense, net (429 ) 96 (1,553 ) 283
Depreciation and amortization 1,005 711 3,287 2,224
Stock-based compensation 2,678 1,373 10,370 3,896
Non-controlling interests - 7 - 15
Adjusted EBITDA - DDS Segment $ 14,075 $ 12,243 $ 53,059 $ 27,783
Three Months Ended December 31, Year Ended December 31,
Synodex Segment 2025 2024 2025 2024
Net income attributable to Synodex Segment $ 97 $ 935 $ 626 $ 1,908
Depreciation and amortization 165 97 455 503
Stock-based compensation 59 (235 ) 254 (99 )
Adjusted EBITDA - Synodex Segment $ 321 $ 797 $ 1,335 $ 2,312
Three Months Ended December 31, Year Ended December 31,
Agility Segment 2025 2024 2025 2024
Net income (loss) attributable to Agility Segment $ 380 $ 407 $ (267 ) $ 1,306
Provision for income taxes 61 (57 ) 111 (109 )
Interest expense 1 1 1 4
Depreciation and amortization 806 769 3,147 3,069
Stock-based compensation 98 (21 ) 520 201
Adjusted EBITDA - Agility Segment $ 1,346 $ 1,099 $ 3,512 $ 4,471
INNODATA INC. AND SUBSIDIARIES
CONSOLIDATED REVENUE BY SEGMENT
(Unaudited)
(In thousands)
Revenue by segment
Three Months Ended December 31, Year Ended December 31,
2025 2024 2025 2024
Revenues:
DDS $ 64,640 $ 51,289 $ 220,825 $ 141,098
Synodex 1,590 2,070 7,322 7,864
Agility 6,146 5,821 23,516 21,499
Total Consolidated $ 72,376 $ 59,180 $ 251,663 $ 170,461
SOURCE: Innodata Inc.
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