Innodata Inc. reported significant financial growth in its latest quarterly results, with total revenues reaching $58.4 million for the three months ended June 30, 2025, compared to $32.6 million for the same period in 2024, marking an increase of approximately 79%. For the first half of 2025, revenues totaled $116.7 million, nearly doubling from $59.1 million in the prior year. The company's net income also saw a substantial rise, reaching $7.2 million for the second quarter and $15.0 million for the first half, compared to a net loss of $0.014 million and a profit of $0.975 million, respectively, in 2024.
The growth in revenue was primarily driven by the Digital Data Solutions (DDS) segment, which generated $50.5 million in the second quarter, up from $25.4 million a year earlier, largely due to increased volume from an existing customer. The Synodex segment reported a modest increase in revenue to $2.1 million, while the Agility segment grew to $5.8 million, reflecting higher subscription volumes. Notably, one customer in the DDS segment accounted for 58% of total revenues in the latest quarter, underscoring the company's reliance on key clients.
In terms of operational metrics, direct operating costs increased to $35.4 million in the second quarter, up from $23.2 million, primarily due to higher labor costs associated with increased headcount to support the growing business. Despite this rise in costs, the company's gross profit improved significantly to $23.0 million, resulting in a gross margin of 39%, up from 29% in the previous year. The increase in gross margin was attributed to higher revenues across all segments, which helped offset the rise in direct operating costs.
Innodata's balance sheet also showed improvement, with cash and cash equivalents increasing to $59.8 million as of June 30, 2025, compared to $46.9 million at the end of 2024. The company reported working capital of approximately $65.6 million, up from $41.5 million, reflecting better cash collections and proceeds from stock option exercises. The company continues to invest in technology and operational capacity, with capital expenditures for the first half of 2025 amounting to $4.1 million.
Looking ahead, Innodata remains optimistic about its growth trajectory, particularly in the AI and data engineering sectors. The company plans to leverage its existing cash reserves and operational capabilities to expand its service offerings and customer base. However, management acknowledged potential risks, including geopolitical tensions and market conditions that could impact future performance. The company is committed to maintaining its focus on delivering high-quality data solutions to support the evolving needs of its clients in the AI landscape.
About INNODATA INC
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