Innodata (NASDAQ:INOD) Announces Quarterly Earnings Results

Key Points

• Innodata reported record quarterly revenue of $95.62 million, up 52.8% year over year, and EPS of $0.29, beating analyst estimates of $83.32 million and $0.17, respectively.
• Management raised its 2026 growth outlook to at least 42% and highlighted new customer programs, including a $29 million pre-training program and an approximately $18 million program.
• A program with the company’s largest historical customer is ending, which is expected to reduce Q4 revenue by about $12 million; replacement programs may offset the loss by Q1, but timing is uncertain.

Innodata (NASDAQ:INOD - Get Free Report) released its earnings results on Thursday. The technology company reported $0.29 EPS for the quarter, beating the consensus estimate of $0.17 by $0.12, FiscalAI reports. The firm had revenue of $95.62 million for the quarter, compared to analysts' expectations of $83.32 million. Innodata had a return on equity of 36.84% and a net margin of 13.84%. The business's quarterly revenue was up 52.8% compared to the same quarter last year. During the same quarter in the previous year, the business posted $0.24 EPS.

Here are the key takeaways from Innodata's conference call:

• Innodata reported record Q3 revenue of $95.6 million, up 53% year over year, marking its 13th consecutive quarter of growth. Adjusted EBITDA was $17.7 million, adjusted gross margin reached its 40% target, and diluted EPS of $0.29 exceeded consensus.
• The company raised its 2026 growth outlook to 42% or more. New business included a $29 million pre-training program and an additional approximately $18 million program with a major customer, plus five programs at another hyperscaler that Innodata expects could contribute more than $20 million in 2027.
• A program with Innodata’s historically largest customer is ending, which management expects will reduce Q4 revenue by about $12 million. The company expects new programs to help replace the revenue by Q1, but said timing is not certain and did not provide project-level margin details.
• Management sees potential growth in physical AI, agent-training environments, trust and safety, specialized training data, enterprise AI, and federal work. These are developing opportunities: several remain in pilots, discussions, or staged government awards, rather than established revenue streams.
• Innodata ended the quarter with approximately $154 million in cash, net of customer prepayments, and no debt, generating $19.3 million in underlying cash during the quarter. Management said organic investment is its capital-allocation priority, with selective M&A also under consideration.

Innodata Stock Performance

Shares of INOD stock traded down $1.59 on Friday, reaching $37.03. The stock had a trading volume of 3,423,361 shares, compared to its average volume of 1,790,425. Innodata has a 12 month low of $34.23 and a 12 month high of $125.14. The firm has a market capitalization of $1.27 billion, a price-to-earnings ratio of 27.03 and a beta of 3.11. The firm's 50-day moving average is $56.96 and its two-hundred day moving average is $61.06. The company has a quick ratio of 1.73, a current ratio of 1.73 and a debt-to-equity ratio of 0.06.

Insider Buying and Selling

In other Innodata news, Director Louise Forlenza sold 10,000 shares of the business's stock in a transaction that occurred on Monday, September 14th. The stock was sold at an average price of $53.54, for a total transaction of $535,400.00. Following the transaction, the director owned 5,424 shares of the company's stock, valued at $290,400.96. The trade was a 64.83% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Insiders own 11.80% of the company's stock.

Analysts Set New Price Targets

A number of research firms recently issued reports on INOD. Zacks Research downgraded Innodata from a "strong-buy" rating to a "hold" rating in a research report on Tuesday, August 11th. Yorkville Ives assumed coverage on Innodata in a research report on Monday, October 5th. They set an "outperform" rating and a $90.00 price target for the company. BWS Financial restated a "top pick" rating and issued a $140.00 price target on shares of Innodata in a research note on Friday, September 18th. Finally, Weiss Ratings reaffirmed a "hold (c+)" rating on shares of Innodata in a research report on Thursday, October 29th. One equities research analyst has rated the stock with a Strong Buy rating, two have assigned a Buy rating and two have assigned a Hold rating to the company's stock. According to data from MarketBeat, the company presently has an average rating of "Moderate Buy" and a consensus target price of $116.67.

Innodata News Summary

Here are the key news stories impacting Innodata this week:

• Positive Sentiment: Third-quarter revenue rose 52.8% year over year to $95.62 million, beating estimates of $83.32 million. Earnings of $0.29 per share also topped expectations, while strong AI-data demand and new customer programs supported higher growth guidance. Article: Innodata Q3 Earnings & Revenues Top Estimates on Strong AI Data Demand
• Positive Sentiment: BWS Financial maintained its Buy rating and $140 price target, citing the strong quarter and broader customer base. Article: Innodata’s Strong Q3 and Broader Customer Base Support Buy Rating
• Negative Sentiment: Innodata’s 2026 revenue guidance of $357.4 million was slightly below the $359.7 million consensus estimate. Although the company raised its growth outlook, reported margin pressure may have tempered enthusiasm after the earnings beat.

About Innodata

Innodata Inc NASDAQ: INOD is a global data engineering and technology company that helps organizations prepare, manage and use information for digital transformation and artificial intelligence initiatives. Its services are designed to support the development, training, evaluation and deployment of AI and machine-learning systems.

The company provides data annotation and labeling, data collection and preparation, content transformation, document processing, natural-language services, and generative AI support.

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