Innodata Reports Second Quarter 2024 Results

Innodata, a global data engineering company, has released its financial results for the second quarter of 2024, ending June 30. The company reported significant growth and several strategic developments, reflecting its strong position in the AI and data engineering market.

Financial Highlights

Innodata reported a revenue of $32.6 million for the second quarter of 2024, marking a 66% increase year-over-year. The earnings per share (EPS) were $0.00, which includes the impact of $3.6 million in recruitment costs. This compares to a net loss of $(0.8) million, or $(0.03) per share, in the same period last year. Adjusted EBITDA rose by 76% year-over-year to $2.8 million.

Business and Operational Highlights

The company secured new Large Language Model (LLM) development programs and expansions for a Big Tech customer, valued at approximately $87.5 million in annualized run rate revenue. Additionally, Innodata won several new customer engagements, including a prominent social media platform and a clinical provider in the healthcare market. The company also expanded its services to a federal government agency, leveraging its Agility platform's new generative AI capabilities.

Strategic Initiatives and Corporate Developments

Innodata increased its receivables-based credit facility with Wells Fargo from $10 million to $30 million, with an option to expand up to $50 million. The company also filed a registration statement with the SEC to establish a universal shelf, allowing it to sell up to $50 million of securities in registered offerings. As of June 30, 2024, Innodata's cash balances were $16.5 million, up from $13.8 million at the end of 2023.

Management's Perspective

Jack Abuhoff, CEO of Innodata, highlighted the company's record revenue growth and expanded partnerships with Big Tech customers. He emphasized the company's strong foundation in delivering reliable, complex generative AI training data and its unique position to capture market opportunities. Abuhoff also noted that recruiting costs are expected to decrease significantly in the third quarter, which, combined with expected operating leverage from growth, should result in Adjusted EBITDA approximately tripling in Q3 compared to Q2.

Future Outlook

Innodata has raised its full-year revenue growth guidance for 2024 to 60% or more, reflecting strong organic growth and new customer wins. The company aims to replicate its success with Big Tech customers across other major tech firms and expand its presence in the public sector.

SEC Filing: INNODATA INC [ INOD ] - 8-K - Aug. 08, 2024