Core Insights - Innodata Inc. (INOD) reported better-than-expected fourth-quarter 2025 results, with adjusted earnings per share (EPS) and revenues exceeding the Zacks Consensus Estimate, although the bottom line saw a decline year over year [1][9] - The stock experienced a decline of 3.6% in after-market trading following the earnings report [1] Financial Performance - The company achieved an adjusted EPS of 25 cents, surpassing the Zacks Consensus Estimate of 21 cents by 19.1%, but down from 31 cents in the same quarter last year [3] - Revenues reached $72.4 million, exceeding the consensus mark of $69 million by 4.2% and reflecting a year-over-year growth of 22.3% [4] - Adjusted gross profit increased by 6% year over year to $30.1 million, while the adjusted gross margin contracted by 600 basis points to 42% [4] Segment Performance - **DDS Segment**: Revenues increased to $64.6 million from $51.3 million year over year, with adjusted gross profit rising by 8.9% to $25.5 million, although the adjusted gross margin contracted by 700 basis points to 39% [5] - **Synodex Segment**: Revenues declined to $1.6 million from $2.1 million due to a contract termination, with adjusted gross profit falling by 56.4% to $0.4 million and the adjusted gross margin contracting by 1,800 basis points to 24% [6] - **Agility Segment**: Revenues increased to $6.1 million from $5.8 million year over year, with adjusted gross profit rising by 1.9% to $4.2 million, while the adjusted gross margin declined by 300 basis points to 67% [7] Annual Highlights - For the full year 2025, Innodata's revenues increased by 48% year over year to $251.7 million, with adjusted gross profit rising to $108 million from $73.1 million, maintaining an adjusted gross margin of 43% [8] - Adjusted EPS for 2025 was 92 cents, up 3.4% from 89 cents in 2024 [8] Future Outlook - Innodata anticipates 35% organic revenue growth for 2026, driven by strong demand for AI and customer diversification [9][11] - The company aims to evolve from a data supplier to a strategic lifecycle partner for advanced AI initiatives [3]