Innodata Inc. Reports 120% Revenue Growth to $58.3 Million in Latest Quarter

Innodata Inc. reported significant financial growth in its latest quarterly results, with total revenues reaching $58.3 million for the three months ended March 31, 2025, compared to $26.5 million in the same period last year, marking an increase of approximately 120%. The company's net income also saw a substantial rise, climbing to $7.8 million from $1.0 million year-over-year. This growth was primarily driven by a 158% increase in revenues from the Digital Data Solutions (DDS) segment, which generated $50.8 million, largely due to higher volumes from an existing customer.

The company's direct operating costs increased to $35.1 million from $16.9 million, reflecting a rise of 108%. This increase was attributed to higher labor costs associated with new hires and increased incentives, as well as higher recruitment fees and cloud service subscriptions. Despite the rise in costs, the gross profit improved to $23.2 million, resulting in a gross margin of 40%, up from 36% in the prior year. The DDS segment's gross margin also improved to 39% from 33%, indicating enhanced operational efficiency.

Innodata has made strategic advancements, including the continued development of its AI-enabled industry platforms, such as Synodex and Agility PR Solutions. The company is focused on leveraging its capabilities in data engineering to support the growing demand for AI and machine learning solutions. As of March 31, 2025, the company reported cash and cash equivalents of $56.6 million, an increase from $46.9 million at the end of 2024, which provides a solid liquidity position for future investments and operational needs.

Operationally, the company has seen a notable increase in customer engagement, with one customer in the DDS segment accounting for 61% of total revenues in the latest quarter, up from 24% in the previous year. This concentration highlights the importance of key client relationships in driving revenue growth. Additionally, revenues from non-U.S. customers accounted for 16% of total revenues, down from 33% in the prior year, indicating a shift in geographic revenue distribution.

Looking ahead, Innodata's management expressed confidence in the company's ability to sustain its growth trajectory, supported by its strong cash position and ongoing investments in technology and talent. The company plans to continue focusing on expanding its service offerings and enhancing its operational capabilities to meet the evolving needs of its clients in the AI and data engineering sectors.