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1. Company Snapshot

1.a. Company Description

Innodata 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.

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1.b. Last Insights on INOD

Innodata Inc.'s recent performance was driven by strong Q1 earnings and revenue beat, with a 120% revenue growth. The company's partnerships with Big Tech players are expanding, positioning it as a foundational player in generative AI infrastructure. Additionally, Innodata's trusted relationships with enterprise adopters are fueling its growth in the AI space.

1.c. Company Highlights

2. Innodata's Q3 2025 Earnings: A Record-Breaking Quarter

Innodata reported a record $62.6 million in revenue for Q3 2025, representing a 20% year-over-year growth and a 7% sequential quarterly growth. The company's adjusted gross margin was 44%, and adjusted EBITDA margin was 26%. Earnings per share (EPS) came in at $0.24, beating analyst estimates of $0.14. The strong financial performance was driven by the company's existing strategic vectors, including its big tech customers, and new initiatives such as Innodata Federal and the emerging sovereign AI market.

Publication Date: Nov -25

📋 Highlights
  • Revenue Growth:: Achieved $62.6 million revenue, up 20% YoY and 7% sequentially.
  • Adjusted EBITDA Expansion:: $16.2 million adjusted EBITDA (26% of revenue), 23% sequential growth.
  • Cash Position Strength:: Cash reserves rose to $73.9 million, up $27 million since year-end 2024.
  • New Revenue Potential:: $68 million in pretraining data opportunities and $100 million in potential 2026 contracts.
  • 2025 Guidance:: Maintained 45%+ YoY growth target, with transformative growth expected in 2026.

Revenue Growth and Profitability

The revenue growth was driven by the company's diversified customer base, including its big tech customers, who are expected to allocate hundreds of millions of dollars annually to generative AI data and evaluation. The company's adjusted EBITDA was $16.2 million, up 23% sequentially, and its cash position increased to $73.9 million. The strong profitability is a testament to the company's ability to execute on its strategic initiatives and drive growth.

Valuation and Growth Prospects

With a P/E Ratio of 53.89 and an EV/EBITDA of 51.61, the market is pricing in significant growth prospects for Innodata. Analysts estimate next year's revenue growth at 25.9%, which is in line with the company's guidance of transformative growth in 2026. The company's return on equity (ROE) is 41.67%, indicating a strong ability to generate returns for shareholders. The current valuation multiples suggest that the market is expecting continued strong growth and profitability from Innodata.

New Initiatives and Growth Drivers

Innodata has made significant investments in new initiatives, including Innodata Federal, which is expected to be a material revenue generator in 2026 and beyond. The company has also created capabilities to create high-quality pretraining data, which has already generated $68 million in potential revenue. The emerging sovereign AI market is also a significant growth driver, with several countries expressing interest in Innodata's services.

Operational Highlights

The company has strengthened its leadership bench and operational foundation, with the appointment of Rahul Singhal as President and Chief Revenue Officer and two new Board members. Rahul Singhal noted that the services market is expected to be 10 times the model builder market, driven by the integration of frontier models into workflows, which is a significant opportunity for Innodata.

3. NewsRoom

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.14%)

6. Segments

Digital Data Solutions

Expected Growth: 12%

Innodata Inc.'s Digital Data Solutions segment growth of 12% is driven by increasing demand for AI-powered data annotation, expansion into new markets, and growing adoption of cloud-based solutions. Additionally, the company's strategic partnerships and investments in emerging technologies such as natural language processing and machine learning are contributing to its growth momentum.

Agility

Expected Growth: 10%

Innodata's Agility segment growth is driven by increasing demand for digital transformation, artificial intelligence, and machine learning solutions. The 10% growth rate is attributed to the company's strategic expansion into new markets, innovative product offerings, and strong partnerships with leading enterprises, resulting in increased revenue and market share.

Synodex

Expected Growth: 18%

Synodex's 18% growth is driven by increasing demand for AI-powered content services, expansion into new markets, and strategic partnerships. Additionally, Innodata's expertise in data annotation and machine learning model training enables Synodex to improve its accuracy and efficiency, leading to higher adoption rates among clients.

7. Detailed Products

Artificial Intelligence (AI) Solutions

Innodata's AI solutions enable businesses to automate processes, gain insights, and make data-driven decisions. The company's AI capabilities include natural language processing, machine learning, and computer vision.

Digital Data Annotation

Innodata provides high-quality training data annotation services, enabling businesses to develop accurate AI and machine learning models.

Content Services

Innodata offers content creation, editing, and localization services, helping businesses develop engaging content that resonates with their target audience.

Digital Transformation Services

Innodata's digital transformation services help businesses modernize their operations, leveraging technologies like cloud, blockchain, and IoT.

Data Enrichment and Analytics

Innodata's data enrichment and analytics services provide businesses with actionable insights, enabling them to make informed decisions.

8. Innodata Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Innodata Inc. operates in a niche market, providing digital transformation services, which reduces the threat of substitutes. However, the company's reliance on a few large clients increases the threat of substitutes.

Bargaining Power Of Customers

Innodata Inc.'s customers have significant bargaining power due to their large size and negotiating power. This could lead to pressure on prices and margins.

Bargaining Power Of Suppliers

Innodata Inc. has a diverse supplier base, which reduces the bargaining power of suppliers. The company's scale and negotiating power also mitigate the risk of supplier concentration.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the digital transformation services market. Innodata Inc.'s established brand and expertise also create a high barrier to entry.

Intensity Of Rivalry

The intensity of rivalry in the digital transformation services market is moderate, with several established players competing for market share. However, Innodata Inc.'s niche focus and expertise help to differentiate it from competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 17.58%
Debt Cost 3.95%
Equity Weight 82.42%
Equity Cost 14.03%
WACC 12.26%
Leverage 21.33%

11. Quality Control: Innodata Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Innodata

A-Score: 4.7/10

Value: 0.0

Growth: 9.3

Quality: 8.1

Yield: 0.0

Momentum: 10.0

Volatility: 0.7

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BigBear.ai

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Quality: 3.6

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Thoughtworks

A-Score: 3.6/10

Value: 7.6

Growth: 3.2

Quality: 4.7

Yield: 0.0

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FiscalNote Holdings

A-Score: 3.6/10

Value: 9.6

Growth: 6.8

Quality: 4.3

Yield: 0.0

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Digimarc

A-Score: 2.8/10

Value: 6.8

Growth: 3.8

Quality: 4.5

Yield: 0.0

Momentum: 0.0

Volatility: 1.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

57.78$

Current Price

57.78$

Potential

-0.00%

Expected Cash-Flows