RCS - Innodata Inc. - Innodata Reports Q4 and Full Year 2024 Results
21/02/2025 08:15
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RNS Number : 9439X Innodata Inc. 20 February 2025
Innodata Reports Fourth Quarter and Full Year 2024 Results
· Record 127% Q4 Growth and Significant New Wins
· Industry Innovation Fueling Strong 2025 Outlook
NEW YORK, NY / ACCESS Newswire (https://www.accessnewswire.com/) / February
20, 2025 / INNODATA INC. (NASDAQ:INOD) today reported results for the fourth
quarter and the year ended December 31, 2024.
· Revenue for the fourth quarter was $59.2 million, up 127% from
revenue of $26.1 million in the same period last year.
· Revenue for the year was $170.5 million, up 96% from revenue of
$86.8 million in 2023.
· Adjusted EBITDA was $14.1 million in the fourth quarter, compared
to Adjusted EBITDA of $4.3 million in the same period last year.*
· Adjusted EBITDA was $34.6 million in 2024, compared to Adjusted
EBITDA of $9.9 million in 2023.*
· Net income for the fourth quarter was $10.3 million, or $0.34 per
basic share and $0.31 per diluted share, compared to a net income of $1.7
million, or $0.06 per basic share and $0.05 per diluted share, in the same
period last year.
· Net income for the year was $28.7 million, or $0.98 per basic
share and $0.89 per diluted share, compared to a net loss of $0.9 million, or
$0.03 per basic and diluted share, in 2023.
· Cash, cash equivalents and short-term investments were $46.9
million as of December 31, 2024 and $13.8 million as of December 31, 2023.
* Adjusted EBITDA is defined below.
Jack Abuhoff, CEO, said, "Q4 was a record quarter and 2024 was a record year.
Our Q4 revenues of $59.2 million were well above the high end of our Q4
revenue guidance of $52-$55 million. In Q4, we experienced accelerating
business momentum across key strategic imperatives that we believe will serve
our medium and long-term growth plans. The momentum we're achieving gives us
the confidence to forecast 2025 as another year of strong growth.
Specifically, we draw investors' attention to several important factors that
we believe demonstrate the accelerating growth in our business:
· Expanding Relationship with Largest Customer. In Q4 and January,
we were awarded additional programs and expansions with our largest customer
valued at approximately $24 million of annualized run rate revenue. These
recent awards expand our total annualized run rate revenue with this customer
to approximately $135 million.
· Expanding Relationships with Seven Other Big Tech Customers. We
grew aggregate revenues from our seven other Big Tech customers (i.e.,
excluding our largest customer) by 159% in Q4 over Q3 of 2024. We believe this
increased growth by our other Big Tech customers, which we hope will continue
in 2025, serves as validation of our land and expand strategy, and we expect
it will continue to diversify our revenue base. We are currently running
several pilots with these customers that hold the promise of seven- or even
eight-figure revenue opportunities, if won.
· Industry Trends Creating Tailwinds. We believe we are positioned
to benefit from recently announced AI-driven capex spending among the
Magnificent Seven as well as innovation in hardware optimization, as most
recently exemplified by Chinese AI research lab DeepSeek, that we expect will
lower the cost of compute required for training and inferencing.
· Investment. In 2025, we plan to re-invest a portion of our cash
from operations back into the business to position ourselves for continued,
multi-year growth while still guiding to growing our Adjusted EBITDA in 2025
over 2024.
· Strong Balance Sheet. Our balance sheet is strong with $46.9
million in cash at year end and an undrawn $30 million credit facility giving
us flexibility to execute our strategy.
· 2025 Guidance. We are forecasting 40% or more revenue growth in
2025 based primarily on won deals and near-in, forecastable business. We
anticipate updating this guidance through the course of the year, much as we
did in 2024."
Abuhoff concluded, "I look forward to growing our business in 2025 as we
position Innodata to become one of the greatest AI services companies and
deliver superior returns for our shareholders."
Amounts in this press release have been rounded. All percentages have been
calculated using unrounded amounts.
Timing of Conference Call with Q&A
Innodata will conduct an earnings conference call, including a
question-and-answer period, at 5:00 PM eastern time today. You can participate
in this call by dialing the following call-in numbers:
The call-in numbers for the conference call are:
+1-800-549-8228 (North America)
+1 289-819-1520 (International)
Participant Access Code 83378
+1-888-660-6264 (North America Replay)
+1 289-819-1325 (International Replay)
Replay Passcode 83378
It is recommended that participants dial in approximately 10 minutes prior to
the start of the call. Investors are also invited to access a live Webcast of
the conference call at the Investor Relations section of Innodata's website at
https://investor.innodata.com/events-and-presentations/
(https://pr.report/7gbm) . Please note that the Webcast feature will be in
listen-only mode.
Call-in replay will be available for seven days following the conference call,
and Webcast replay will be available for 30 days following the conference
call, at the Investor Relations section of Innodata's website at
https://investor.innodata.com/events-and-presentations/
(https://pr.report/7gbn) .
About Innodata
Innodata (Nasdaq: INOD) is a global data engineering company. We believe that
data and Artificial Intelligence (AI) are inextricably linked. That's why
we're on a mission to help the world's leading technology companies and
enterprises drive Generative AI / AI innovation. We provide a range of
transferable solutions, platforms, and services for Generative AI / AI
builders and adopters. In every relationship, we honor our 35+ year legacy
delivering the highest quality data and outstanding outcomes for our
customers.
Visit www.innodata.com (https://pr.report/7gbo) to learn more.
Forward-Looking Statements
This press release may contain certain forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and
Section 27A of the Securities Act of 1933, as amended. These forward-looking
statements include, without limitation, statements concerning our operations,
economic performance, financial condition, developmental program expansion and
position in the generative AI services market. Words such as "project,"
"forecast," "believe," "expect," "can," "continue," "could," "intend," "may,"
"should," "will," "anticipate," "indicate," "guide," "predict," "likely,"
"estimate," "plan," "potential," "possible," "promises," or the negatives
thereof, and other similar expressions generally identify forward-looking
statements.
These forward-looking statements are based on management's current
expectations, assumptions and estimates and are subject to a number of risks
and uncertainties, including, without limitation, impacts resulting from
ongoing geopolitical conflicts, including between Russia and Ukraine, Hamas'
attack against Israel and the ensuing conflict and increased hostilities
between Hezbollah and Israel and Iran and Israel; investments in large
language models; that contracts may be terminated by customers; projected or
committed volumes of work may not materialize; pipeline opportunities and
customer discussions which may not materialize into work or expected volumes
of work; the likelihood of continued development of the markets, particularly
new and emerging markets, that our services support; the ability and
willingness of our customers and prospective customers to execute business
plans that give rise to requirements for our services; continuing reliance on
project-based work in the Digital Data Solutions (DDS) segment and the
primarily at-will nature of such contracts and the ability of these customers
to reduce, delay or cancel projects; potential inability to replace projects
that are completed, canceled or reduced; our DDS segment's revenue
concentration in a limited number of customers; our dependency on content
providers in our Agility segment; the Company's ability to achieve revenue and
growth targets; difficulty in integrating and deriving synergies from
acquisitions, joint ventures and strategic investments; potential undiscovered
liabilities of companies and businesses that we may acquire; potential
impairment of the carrying value of goodwill and other acquired intangible
assets of companies and businesses that we acquire; a continued downturn in or
depressed market conditions; changes in external market factors; the potential
effects of U.S. monetary policy, including the interest rate policies of the
Federal Reserve; changes in our business or growth strategy; the emergence of
new, or growth in existing competitors; various other competitive and
technological factors; our use of and reliance on information technology
systems, including potential security breaches, cyber-attacks, privacy
breaches or data breaches that result in the unauthorized disclosure of
consumer, customer, employee or Company information, or service interruptions;
and other risks and uncertainties indicated from time to time in our filings
with the Securities and Exchange Commission.
Our actual results could differ materially from the results referred to in any
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, the risks discussed in Part I,
Item 1A. "Risk Factors," Part II, Item 7. "Management's Discussion and
Analysis of Financial Condition and Results of Operations," and other parts of
our Annual Report on Form 10-K, filed with the Securities and Exchange
Commission on March 4, 2024, as updated or amended by our other filings that
we may make with the Securities and Exchange Commission. In light of these
risks and uncertainties, there can be no assurance that the results referred
to in the forward-looking statements will occur, and you should not place
undue reliance on these forward-looking statements. These forward-looking
statements speak only as of the date hereof.
We undertake no obligation to update or review any guidance or other
forward-looking statements, whether as a result of new information, future
developments or otherwise, except as may be required by the U.S. federal
securities laws.
Company Contact
Jelena Sutovic
Innodata Inc.
investor@innodata.com
(201) 371-8024
Non-GAAP Financial Measures
In addition to the financial information prepared in conformity with U.S. GAAP
("GAAP"), we provide certain non-GAAP financial information. We believe that
these non-GAAP financial measures assist investors in making comparisons of
period-to-period operating results. In some respects, management believes
non-GAAP financial measures are more indicative of our ongoing core operating
performance than their GAAP equivalents by making adjustments that management
believes are reflective of the ongoing performance of the business.
We believe that the presentation of this non-GAAP financial information
provides investors with greater transparency by providing investors a more
complete understanding of our financial performance, competitive position, and
prospects for the future, particularly by providing the same information that
management and our Board of Directors use to evaluate our performance and
manage the business. However, the non-GAAP financial measures presented in
this press release have certain limitations in that they do not reflect all of
the costs associated with the operations of our business as determined in
accordance with GAAP. Therefore, investors should consider non-GAAP financial
measures in addition to, and not as a substitute for, or as superior to,
measures of financial performance prepared in accordance with GAAP. Further,
the non-GAAP financial measures that we present may differ from similar
non-GAAP financial measures used by other companies.
Adjusted EBITDA
We define Adjusted EBITDA as net income (loss) attributable to Innodata Inc.
and its subsidiaries in accordance with U.S. GAAP before interest expense,
income taxes, depreciation and amortization of intangible assets (which
derives EBITDA), plus additional adjustments for loss on impairment of
intangible assets and goodwill, stock-based compensation, income (loss)
attributable to non-controlling interests, non-recurring severance, and other
one-time costs.
We use Adjusted EBITDA to evaluate core results of operations and trends
between fiscal periods and believe that these measures are important
components of our internal performance measurement process.
A reconciliation of Adjusted EBITDA to the most directly comparable GAAP
measure is included in the tables that accompany this release.
INNODATA INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per-share amounts)
Three Months Ended Year Ended
December 31 December 31
2024 2023 2024 2023
Revenues $ 59,180 $ 26,112 $ 170,461 $ 86,775
Operating costs and expenses:
Direct operating costs 32,423 15,948 103,387 55,482
Selling and administrative expenses 15,503 8,203 42,738 30,975
Interest (income) expense, net (94 ) 57 (149 ) 179
47,832 24,208 145,976 86,636
Income before provision for income taxes 11,348 1,904 24,485 139
Provision for income taxes 1,045 248 (4,190 ) 1,028
Consolidated net income (loss) 10,303 1,656 28,675 (889 )
Income attributable to non-controlling interests 7 4 15 19
Net income (loss) attributable to Innodata Inc. and Subsidiaries $ 10,296 $ 1,652 $ 28,660 $ (908 )
Income (loss) per share attributable to Innodata Inc. and Subsidiaries:
Basic $ 0.34 $ 0.06 $ 0.98 $ (0.03 )
Diluted $ 0.31 $ 0.05 $ 0.89 $ (0.03 )
Weighted average shares outstanding:
Basic 30,027 28,728 29,163 28,131
Diluted 33,625 31,983 32,177 28,131
Tax provision for the twelve months ending December 31, 2024 includes a net
tax benefit of $5.4 million resulting from the recognition of deferred tax
asset of the company's accumulated net loss carry forward (NOLCO) and other
deferred expenses for our US and UK entities.
INNODATA INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
December 31, 2024 December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents $ 46,883 $ 13,806
Short term investments - other 14 14
Accounts receivable, net 28,013 14,288
Prepaid expenses and other current assets 6,090 3,969
Total current assets 81,000 32,077
Property and equipment, net 4,101 2,281
Right-of-use asset, net 4,238 5,054
Other assets 1,267 2,445
Deferred income taxes, net 7,492 1,741
Intangibles, net 13,353 13,758
Goodwill 1,998 2,075
Total assets $ 113,449 $ 59,431
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, accrued expenses and other $ 17,455 $ 9,245
Accrued salaries, wages and related benefits 13,836 7,799
Income and other taxes 5,695 3,848
Long-term obligations - current portion 1,643 1,261
Operating lease liability - current portion 877 782
Total current liabilities 39,506 22,935
Deferred income taxes, net 32 22
Long-term obligations, net of current portion 6,744 6,778
Operating lease liability, net of current portion 3,778 4,701
Total liabilities 50,060 34,436
Non-controlling interests (83 ) (708 )
STOCKHOLDERS' EQUITY 63,472 25,703
Total liabilities and stockholders' equity $ 113,449 $ 59,431
The company's Deferred Tax Assets as of December 31, 2024 include deferred tax
assets related to the company's accumulated net loss carry forward (NOLCO) and
other deferred expenses previously with a full valuation allowance.
INNODATA INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Year Ended
December 31,
2024 2023
Cash flows from operating activities:
Consolidated net income (loss) $ 28,675 $ (889 )
Adjustments to reconcile consolidated net income (loss) to net cash
provided by operating activities:
Depreciation and amortization 5,796 4,716
Stock-based compensation 3,998 4,027
Deferred income taxes (5,609 ) (276 )
Provision for doubtful accounts 804 426
Pension cost 1,237 1,046
Loss on lease termination
Changes in operating assets and liabilities:
Accounts receivable (14,688 ) (5,116 )
Prepaid expenses and other current assets (2,233 ) 372
Other assets 1,177 (171 )
Accounts payable, accrued expenses and other 7,916 (490 )
Accrued salaries, wages and related benefits 6,063 1,653
Income and other taxes 1,879 605
Net cash provided by operating activities 35,015 5,903
Cash flows from investing activities:
Capital expenditures (7,741 ) (5,564 )
Proceeds from short term investments - others - 493
Net cash used in investing activities (7,741 ) (5,071 )
Cash flows from financing activities:
Proceeds from exercise of stock options 6,668 3,324
Withholding taxes on net settlement of restricted stock units (97 ) -
Payment of long-term obligations (513 ) (452 )
Net cash provided by financing activities 6,058 2,872
Effect of exchange rate changes on cash and cash equivalents (255 ) 310
Net increase in cash and cash equivalents 33,077 4,014
Cash and cash equivalents, beginning of year 13,806 9,792
Cash and cash equivalents, end of year $ 46,883 $ 13,806
INNODATA INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited)
(In thousands)
Three Months Ended December 31, Year Ended December 31,
Consolidated 2024 2023 2024 2023
Net income (loss) attributable to Innodata Inc. and Subsidiaries $ 10,296 $ 1,652 $ 28,660 $ (908 )
Provision for income taxes 1,045 248 (4,190 ) 1,028
Interest expense 97 105 287 400
Depreciation and amortization 1,577 1,237 5,796 4,716
Severance** - - - 580
Stock-based compensation 1,117 1,029 3,998 4,027
Non-controlling interests 7 4 15 19
Adjusted EBITDA - Consolidated $ 14,139 $ 4,275 $ 34,566 $ 9,862
Three Months Ended December 31, Year Ended December 31,
DDS Segment 2024 2023 2024 2023
Net income attributable to DDS Segment $ 8,954 $ 974 $ 25,446 $ 223
Provision for income taxes 1,102 246 (4,081 ) 1,018
Interest expense 96 104 283 395
Depreciation and amortization 711 351 2,224 1,161
Severance** - - - 33
Stock-based compensation 1,373 986 3,896 3,511
Non-controlling interests 7 4 15 19
Adjusted EBITDA - DDS Segment $ 12,243 $ 2,665 $ 27,783 $ 6,360
Three Months Ended December 31, Year Ended December 31,
Synodex Segment 2024 2023 2024 2023
Net income attributable to Synodex Segment $ 935 $ 238 $ 1,908 $ 219
Depreciation and amortization 97 144 503 623
Severance** - - - 6
Stock-based compensation (235 ) (10 ) (99 ) 167
Adjusted EBITDA - Synodex Segment $ 797 $ 372 $ 2,312 $ 1,015
Three Months Ended December 31, Year Ended December 31,
Agility Segment 2024 2023 2024 2023
Net income (loss) attributable to Agility Segment $ 407 $ 440 $ 1,306 $ (1,350 )
Provision for income taxes (57 ) 2 (109 ) 10
Interest expense 1 1 4 5
Depreciation and amortization 769 742 3,069 2,932
Severance** - - - 541
Stock-based compensation* (21 ) 53 201 349
Adjusted EBITDA - Agility Segment $ 1,099 $ 1,238 $ 4,471 $ 2,487
**Represents non-recurring severance incurred for a reduction in headcount in
connection with the re-alignment of the Company's cost structure.
INNODATA INC. AND SUBSIDIARIES
CONSOLIDATED REVENUE BY SEGMENT
(Unaudited)
(In thousands)
Three Months Ended December 31, Year Ended December 31,
2024 2023 2024 2023
Revenues:
DDS $ 51,289 $ 19,646 $ 141,098 $ 61,576
Synodex 2,070 1,807 7,864 7,511
Agility 5,821 4,659 21,499 17,688
Total Consolidated $ 59,180 $ 26,112 $ 170,461 $ 86,775
SOURCE: Innodata Inc.
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