Innodata(INOD) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Financial Highlights & Business Outlook Innodata reported outstanding Q2 2025 results, beating analyst expectations with 79% year-over-year revenue growth to $58.4 million and a significant increase in Adjusted EBITDA to $13.2 million Q2 2025 Key Financial Metrics (YoY Comparison) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $58.4 million | $32.6 million | +79% | | Adjusted EBITDA | $13.2 million | $2.8 million | +$10.4 million | | Net Income | $7.2 million | ($0.014) million | Significant Improvement | | Diluted EPS | $0.20 | $0.00 | +$0.20 | | Cash & Equivalents (as of) | $59.8 million | - | - | - Raised full-year 2025 organic revenue growth guidance to 45% or more, up from 40%, due to strong demand, momentum, and a robust deal pipeline with significant dollar values[2] - The company's performance and positioning in the AI sector were recognized by its inclusion in Wedbush's "The AI Revolution Theme; 30 Names to Play in the 4th Industrial Revolution" industry note[4] Consolidated Financial Statements (Unaudited) This section presents the unaudited condensed consolidated statements of operations, balance sheets, and cash flows for the three and six-month periods ended June 30, 2025, and 2024, detailing the company's financial performance and position Condensed Consolidated Statements of Operations For Q2 2025, revenue surged 79% YoY to $58.4 million, transforming a prior-year net loss of $14 thousand into a net income of $7.2 million Consolidated Statements of Operations (in thousands, except per-share amounts) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :---: | :---: | :---: | :---: | | | 2025 | 2024 | 2025 | 2024 | | Revenues | $58,393 | $32,553 | $116,737 | $59,057 | | Income before income taxes | $9,488 | $276 | $17,887 | $1,690 | | Net income (loss) attributable to Innodata | $7,219 | ($14) | $15,006 | $975 | | Basic EPS | $0.23 | ($0.00) | $0.47 | $0.03 | | Diluted EPS | $0.20 | ($0.00) | $0.43 | $0.03 | Condensed Consolidated Balance Sheets As of June 30, 2025, the company's financial position strengthened significantly compared to December 31, 2024, with cash and cash equivalents increasing by $12.9 million to $59.8 million Key Balance Sheet Items (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $59,792 | $46,897 | | Total current assets | $100,689 | $81,000 | | Total assets | $132,623 | $113,449 | | Total current liabilities | $35,122 | $39,506 | | Total liabilities | $45,981 | $50,060 | | Stockholders' equity | $86,642 | $63,389 | Condensed Consolidated Statements of Cash Flows For the first six months of 2025, net cash from operating activities was $15.1 million, a more than twofold increase from $6.3 million in the same period of 2024, driven by higher consolidated net income Cash Flow Summary - Six Months Ended June 30 (in thousands) | | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $15,102 | $6,313 | | Net cash used in investing activities | ($4,058) | ($4,067) | | Net cash provided by financing activities | $1,239 | $392 | | Net increase in cash and cash equivalents | $12,895 | $2,703 | | Cash and cash equivalents, end of period | $59,792 | $16,509 | Segment Performance The Digital Data Solutions (DDS) segment was the primary engine of growth, with its Q2 revenue nearly doubling year-over-year to $50.6 million and its Adjusted EBITDA increasing almost tenfold to $12.2 million Consolidated Revenue by Segment (in thousands) | Segment | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | DDS | $50,576 | $25,410 | +99.0% | | Synodex | $2,065 | $1,986 | +4.0% | | Agility | $5,752 | $5,157 | +11.5% | | Total | $58,393 | $32,553 | +79.4% | Adjusted EBITDA by Segment - Q2 (in thousands) | Segment | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | DDS | $12,215 | $1,275 | | Synodex | $461 | $522 | | Agility | $558 | $990 | Reconciliation of GAAP to Non-GAAP Financial Measures This section provides the bridge from GAAP to non-GAAP metrics, including Adjusted Gross Profit and Adjusted EBITDA, which management believes offer greater transparency into core operating performance - The company provides non-GAAP financial measures to assist investors in period-to-period comparisons and to reflect the ongoing performance of the business, consistent with how management evaluates performance[14][15] Adjusted Gross Profit Reconciliation Consolidated Adjusted Gross Profit for Q2 2025 was $25.0 million, yielding an Adjusted Gross Margin of 43%, a significant improvement from 33% in Q2 2024, driven by the DDS segment Consolidated Gross Profit Reconciliation - Q2 (in thousands) | | 2025 | 2024 | | :--- | :--- | :--- | | Gross Profit (GAAP) | $23,023 | $9,351 | | Depreciation and amortization | $1,583 | $1,394 | | Stock-based compensation | $441 | $73 | | Adjusted Gross Profit (Non-GAAP) | $25,047 | $10,818 | | Gross Margin (GAAP) | 39% | 29% | | Adjusted Gross Margin (Non-GAAP) | 43% | 33% | Adjusted EBITDA Reconciliation Consolidated Adjusted EBITDA for Q2 2025 was $13.2 million, a nearly fivefold increase from $2.8 million in Q2 2024, with reconciliation from Net Income including adjustments for taxes, interest, depreciation & amortization, and stock-based compensation Consolidated Adjusted EBITDA Reconciliation - Q2 (in thousands) | | 2025 | 2024 | | :--- | :--- | :--- | | Net income (loss) attributable to Innodata | $7,219 | ($14) | | Provision for income taxes | $2,269 | $285 | | Interest (income) expense, net | ($577) | $101 | | Depreciation and amortization | $1,602 | $1,418 | | Stock-based compensation | $2,721 | $992 | | Adjusted EBITDA - Consolidated | $13,234 | $2,787 | About Innodata & Forward-Looking Statements This section provides a corporate overview of Innodata as a global data engineering company focused on AI innovation, along with standard legal disclaimers regarding forward-looking statements - Innodata defines itself as a global data engineering company on a mission to help leading technology companies and enterprises drive Generative AI innovation[8] - The report contains forward-looking statements concerning operations, performance, and market position, which are subject to numerous risks and uncertainties, meaning actual results could differ materially from expectations[10][11][12]