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Innodata Inc. (INOD)
:INOD
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Innodata (INOD) AI Stock Analysis

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INOD

Innodata

(NASDAQ:INOD)

Rating:73Outperform
Price Target:
$50.00
▲(12.41% Upside)
Innodata's overall stock score reflects its strong earnings call performance and sound financial health, which are the most significant factors. Positive corporate events also contribute positively. However, the stock's high valuation and mixed technical indicators present some risks, balancing the overall score.
Positive Factors
AI and Technology Demand
With spending on AI rising, INOD is expected to continue benefiting from the success it has had with large technology customers.
Financial Performance
Innodata reported results with revenue and EBITDA topping estimates and consensus, with revenue increasing 79% organically year-over-year.
Revenue Guidance
Management raised 2025 organic revenue growth guidance to 45% or more, implying revenue of $247.2M or more, and reiterated expectations for increasing adjusted EBITDA.
Negative Factors
Competitive Pressure
There has been investor anxiety from the news reports of Meta Platforms (META) investing in Scale AI and the impact to Innodata (INOD).
Investor Concerns
INOD only reiterating guidance has drawn ire from speculators while the fundamentals of the business have improved.
Market Competition
META taking a large position in Scale AI could draw other customers to look for alternatives.

Innodata (INOD) vs. SPDR S&P 500 ETF (SPY)

Innodata Business Overview & Revenue Model

Company DescriptionInnodata Inc. operates as a global data engineering company in the United States, the United Kingdom, the Netherlands, Canada, and internationally. The company operates through three segments: Digital Data Solutions (DDS), Synodex, and Agility. The DDS segment offers AI-enabled software platforms and managed services to companies that require data for training AI and machine learning (ML) algorithms, and AI digital transformation solutions to help companies apply AI/ML for problems relating to analyzing and deriving insights from documents. This segment provides a range of data engineering support services, including data annotation, data transformation, data transformation, data curation, data hygiene, data consolidation, data compliance, and master data management. The Synodex segment offers an industry platform that transforms medical records into useable digital data with its proprietary data models or client data models. The Agility segment provides an industry platform that provides marketing communications and public relations professionals to target and distribute content to journalists and social media influencers; and to monitor and analyze global news channels, such as print, web, radio, and TV, as well as social media channels. It serves banking, insurance, financial services, technology, digital retailing, and information/media sectors through its professional staff, senior management, and direct sales personnel. The company was formerly known as Innodata Isogen, Inc. and changed its name to Innodata Inc. in June 2012. Innodata Inc. was incorporated in 1988 and is headquartered in Ridgefield Park, New Jersey.
How the Company Makes MoneyInnodata generates revenue primarily through its comprehensive suite of data solutions and services. The company's key revenue streams include contracts for data annotation and enrichment services, which are often utilized by enterprises seeking to improve their AI and machine learning models. Additionally, Innodata earns from knowledge process outsourcing where clients outsource complex data management tasks to Innodata's skilled workforce. Significant partnerships with technology firms and enterprises in need of robust data solutions also contribute to its earnings by providing recurring and project-based revenue opportunities.

Innodata Key Performance Indicators (KPIs)

Any
Any
Adjusted EBITDA by Segment
Adjusted EBITDA by Segment
Provides a view of operating performance by segment, excluding non-cash items and one-time charges, to assess underlying profitability and cash flow potential.
Chart InsightsInnodata's DDS segment has shown a remarkable turnaround, with a dramatic increase in adjusted EBITDA, driven by strategic growth in AI solutions and new customer wins. The Synodex segment, while improving, remains volatile. Agility has shifted from losses to consistent gains. The recent earnings call highlights a 236% year-over-year EBITDA increase, underpinned by AI-driven initiatives. However, potential revenue volatility and margin impacts from strategic investments could pose short-term challenges. The company's confidence in achieving robust revenue growth through innovation and market expansion remains strong.
Data provided by:Main Street Data

Innodata Earnings Call Summary

Earnings Call Date:Jul 31, 2025
(Q2-2025)
|
% Change Since: -18.98%|
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong positive sentiment driven by significant revenue and EBITDA growth, increased guidance, and a robust pipeline of opportunities. However, increased operating expenses and a higher future tax rate were noted as potential concerns. Overall, the positive aspects significantly outweigh the lowlights.
Q2-2025 Updates
Positive Updates
Outstanding Revenue Growth
Revenue grew 79% year-over-year to $58.4 million, significantly surpassing analysts' expectations.
Remarkable EBITDA Growth
Adjusted EBITDA increased by 375% to $13.2 million, reflecting strong operational leverage.
Increased Full Year Revenue Guidance
The company raised its full year 2025 revenue growth guidance to 45% or more organic revenue growth, up from the previous 40%.
Strong Cash Position
Cash increased from $56.6 million at the end of Q1 to $59.8 million at the end of Q2, with an additional $8 million collected shortly after quarter-end.
Significant New Deals and Pipeline
Several new projects were secured with the largest customer, and a robust pipeline of significant dollar value deals positions the company for a strong second half of the year.
Negative Updates
Increased Operating Expenses
The company incurred approximately $1.4 million of operating expenses viewed as investments, which could impact short-term profitability.
Future Tax Rate Increase
Looking ahead, the company expects a tax rate of approximately 27% to 28%, which could affect net income.
Company Guidance
During the Q2 2025 earnings call, Innodata reported impressive financial results, surpassing analysts' expectations in key areas such as revenue, adjusted EBITDA, net income, and fully diluted EPS. Revenue soared 79% year-over-year, reaching $58.4 million, while adjusted EBITDA increased by 375% to $13.2 million, highlighting the operating leverage within the company's model. The cash position improved to $59.8 million by the end of Q2, with an additional $8 million collected shortly after the quarter's end. The company raised its full-year 2025 revenue growth guidance to at least 45% organic growth, up from the previous 40%, driven by significant new deals and a robust pipeline indicating strong demand for their services. They emphasized ongoing investments, with $1.4 million of operating expenses in Q2 allocated towards growth initiatives, including new hires and product innovation. As they continue to focus on generative AI and Agentic AI, Innodata aims to align closely with market demands, positioning itself for sustained growth in the coming years.

Innodata Financial Statement Overview

Summary
Innodata has demonstrated strong financial health with impressive revenue and profit growth, effective cost management, and a solid balance sheet. The company's cash flow generation is robust, supporting future growth and investments. Despite some potential risks related to liabilities, the overall financial performance indicates a positive growth trajectory.
Income Statement
85
Very Positive
Innodata has demonstrated strong revenue growth, with a TTM revenue increase to $202.3M, marking a significant jump from the previous year. Gross Profit Margin stands at 39.9%, and the Net Profit Margin is 17.5%, indicating effective cost management and profitability. The company has also improved its EBIT and EBITDA Margins to 15.5% and 18.5%, respectively, showcasing operational efficiency. These metrics highlight a positive trajectory in profitability and growth.
Balance Sheet
78
Positive
The balance sheet reflects a solid financial position with a Debt-to-Equity Ratio of 0.17, suggesting low leverage and financial risk. The Return on Equity (ROE) is 47.0%, indicating strong profitability relative to shareholder investment. The Equity Ratio is 60.2%, showcasing a strong asset base funded by equity. The financial stability is robust, though the company should continue monitoring its liabilities and asset management.
Cash Flow
80
Positive
Innodata's cash flow performance is commendable, with a Free Cash Flow Growth Rate of 11.3% in the TTM period, reflecting efficient cash generation. The Operating Cash Flow to Net Income Ratio is 1.10, indicating strong cash conversion. The Free Cash Flow to Net Income Ratio is 0.86, showing a healthy cash flow profile. These figures demonstrate the company's ability to generate and manage cash effectively, supporting future growth and investments.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue228.14M170.46M86.78M79.00M69.75M58.24M
Gross Profit94.58M67.07M31.29M27.47M25.73M19.89M
EBITDA46.71M30.13M5.03M-6.59M1.22M3.54M
Net Income42.69M28.66M-908.00K-12.01M-1.80M617.00K
Balance Sheet
Total Assets132.62M113.45M59.43M48.04M59.22M57.25M
Cash, Cash Equivalents and Short-Term Investments59.79M46.90M13.82M10.30M18.90M17.57M
Total Debt4.22M4.66M5.48M4.73M6.31M7.32M
Total Liabilities45.98M50.06M34.44M30.00M32.81M31.00M
Stockholders Equity86.72M63.47M25.70M18.77M29.93M29.64M
Cash Flow
Free Cash Flow36.07M27.27M339.00K-7.74M783.00K4.25M
Operating Cash Flow43.80M35.02M5.90M-1.22M5.15M5.66M
Investing Cash Flow-7.73M-7.74M-5.07M-7.03M-4.37M-1.38M
Financing Cash Flow6.91M6.06M2.87M-307.00K773.00K2.31M

Innodata Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price44.48
Price Trends
50DMA
46.75
Negative
100DMA
42.20
Positive
200DMA
40.73
Positive
Market Momentum
MACD
-0.18
Positive
RSI
44.19
Neutral
STOCH
19.02
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For INOD, the sentiment is Neutral. The current price of 44.48 is below the 20-day moving average (MA) of 48.73, below the 50-day MA of 46.75, and above the 200-day MA of 40.73, indicating a neutral trend. The MACD of -0.18 indicates Positive momentum. The RSI at 44.19 is Neutral, neither overbought nor oversold. The STOCH value of 19.02 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for INOD.

Innodata Risk Analysis

Innodata disclosed 14 risk factors in its most recent earnings report. Innodata reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Innodata Peers Comparison

Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
81
Outperform
$1.53B28.5811.35%14.05%17.90%
73
Outperform
$1.42B35.0173.80%112.54%1256.46%
71
Outperform
$1.26B294.890.86%22.20%
66
Neutral
$677.36M39.163.69%22.27%
57
Neutral
HK$14.02B9.47-2.83%4.86%9.29%-48.65%
51
Neutral
$1.82B-19.49%-50.48%-15.75%
49
Neutral
$2.05B-126.64%9.40%13.55%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
INOD
Innodata
44.48
28.10
171.55%
VYX
NCR Voyix
13.22
1.91
16.89%
GDYN
Grid Dynamics Holdings
8.00
-5.29
-39.80%
BBAI
BigBearai Holdings
7.04
5.81
472.36%
FLYW
Flywire
10.38
-8.33
-44.52%
TASK
TaskUs
17.05
1.48
9.51%

Innodata Corporate Events

Legal Proceedings
Innodata Cleared by DOJ and SEC in Probes
Positive
Jun 18, 2025

Innodata Inc. announced that both the U.S. Department of Justice and the Securities and Exchange Commission have closed their investigations into the company without recommending any enforcement actions. These investigations were related to a class action lawsuit concerning Innodata’s previous public statements about its artificial intelligence capabilities. The company sees this as a favorable outcome and plans to continue defending itself in the ongoing Securities Class Action lawsuit, for which a motion to dismiss was filed on March 7, 2025.

The most recent analyst rating on (INOD) stock is a Buy with a $23.00 price target. To see the full list of analyst forecasts on Innodata stock, see the INOD Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Innodata Holds Annual Meeting, Elects Directors
Neutral
Jun 6, 2025

On June 5, 2025, Innodata Inc. held its Annual Meeting of Stockholders where key decisions were made. The stockholders elected all four nominees for director, approved BDO India LLP as the independent auditors for the fiscal year ending December 31, 2025, and approved the compensation of the company’s named executive officers on a non-binding, advisory basis.

The most recent analyst rating on (INOD) stock is a Buy with a $58.00 price target. To see the full list of analyst forecasts on Innodata stock, see the INOD Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 02, 2025