Innodata (NASDAQ:INOD) Posts Earnings Results, Beats Expectations By $0.04 EPS

Innodata (NASDAQ:INOD) announced its quarterly earnings data on Thursday. The technology company reported $0.25 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.21 by $0.04, Zacks reports. Innodata had a net margin of 12.79% and a return on equity of 37.21%. The company had revenue of $72.38 million during the quarter, compared to analysts’ expectations of $69.47 million. During the same quarter in the prior year, the company earned $0.34 EPS. The firm’s revenue was up 22.3% on a year-over-year basis.

Here are the key takeaways from Innodata’s conference call:

• Strong financial results: Q4 revenue was $72.4M (+22% YoY) and FY2025 revenue was $251.7M (+48% YoY), with a 42% adjusted gross margin, $15.7M adjusted EBITDA (22% of revenue), and $82.2M cash on hand.
• Ambitious 2026 growth guide: Management is guiding to approximately 35% year‑over‑year revenue growth for 2026 (with potential upside) based on active programs, recent wins, late‑stage evaluations, and expected increased spend from its largest customer plus faster growth across other customers.
• Product and data‑engineering innovations: The company emphasized advances across generative AI training, agentic AI (evaluation/observability platform, managed optimization pipeline, adversarial simulation), and physical AI (egocentric/affordance datasets and a drone detection model +6.45% vs. prior SOTA) that management says position Innodata as a lifecycle partner for model reliability and safety.
• Reinvestment and margin roadmap: Innodata is investing in COGS and SG&A (engineers, data scientists, account leaders) to capture demand, expects early‑2026 adjusted gross margins of 35–40% with normalization to ≥40% as programs scale, and says it will remain profitable despite ongoing reinvestment.

Innodata Trading Down 7.2%

Shares of NASDAQ:INOD opened at $44.17 on Friday. The stock has a market capitalization of $1.41 billion, a price-to-earnings ratio of 48.54 and a beta of 2.42. The company has a debt-to-equity ratio of 0.08, a quick ratio of 2.69 and a current ratio of 2.69. Innodata has a 52-week low of $26.41 and a 52-week high of $93.85. The stock’s 50-day simple moving average is $53.47 and its two-hundred day simple moving average is $58.43.

Innodata News Summary

Here are the key news stories impacting Innodata this week:

• Positive Sentiment: Company raised FY-2026 revenue guidance sharply (company is targeting roughly $339.7M vs. street ~$287.5M) and expects ~35%+ revenue growth next year — this reinforces the AI/data demand story and signals meaningful top‑line acceleration. Innodata Reports Fourth Quarter and Full Year 2025 Results
• Positive Sentiment: An analyst from BWS Financial reiterated a Buy and left a $110 price target, citing sustained AI-driven revenue momentum and justifying strategic investment — this provides a bullish institutional voice supporting upside. Innodata: Sustained AI-Driven Revenue Momentum Justifies Strategic Investment and Buy Rating
• Neutral Sentiment: Q4 results beat consensus: adjusted EPS $0.25 vs. $0.21 estimate and revenue $72.38M vs. $69.47M; revenue grew ~22% y/y — a solid execution signal, though not uniformly reflected in profitability. Innodata Inc (INOD) Q4 Earnings and Revenues Beat Estimates
• Negative Sentiment: Gross margin and bottom-line metrics disappointed: gross margin fell year‑over‑year and EPS declined versus the prior-year quarter (0.25 vs. 0.34), which likely explains short‑term selling pressure despite the revenue beat. Innodata Q4 Earnings & Revenues Top, Gross Margin Down Y/Y, Stock Down
• Neutral Sentiment: Management reiterated its AI/data innovation roadmap (new dataset creation and LLM/AI agent support), which supports longer-term positioning but will require continued execution to translate into profitability. Innodata anticipates 35%+ revenue growth in 2026 while advancing data innovation for AI

Institutional Investors Weigh In On Innodata

A number of hedge funds have recently made changes to their positions in the company. Invesco Ltd. increased its stake in Innodata by 10.8% in the 4th quarter. Invesco Ltd. now owns 34,657 shares of the technology company’s stock worth $1,766,000 after acquiring an additional 3,379 shares during the last quarter. NewEdge Advisors LLC increased its position in Innodata by 15.7% in the fourth quarter. NewEdge Advisors LLC now owns 13,269 shares of the technology company’s stock worth $676,000 after purchasing an additional 1,802 shares during the last quarter. XTX Topco Ltd purchased a new stake in Innodata during the fourth quarter valued at $483,000. Uniplan Investment Counsel Inc. lifted its position in Innodata by 15.2% during the fourth quarter. Uniplan Investment Counsel Inc. now owns 75,783 shares of the technology company’s stock valued at $3,861,000 after purchasing an additional 10,008 shares during the last quarter. Finally, VARCOV Co. bought a new position in Innodata during the fourth quarter valued at $474,000. 30.75% of the stock is currently owned by hedge funds and other institutional investors.

Analyst Upgrades and Downgrades

A number of analysts have recently weighed in on the company. Wedbush reissued an “outperform” rating and set a $90.00 price objective on shares of Innodata in a research note on Friday, January 30th. BWS Financial reaffirmed a “top pick” rating and issued a $110.00 target price on shares of Innodata in a research report on Friday, January 30th. Weiss Ratings lowered shares of Innodata from a “buy (b-)” rating to a “hold (c+)” rating in a research note on Monday, January 12th. Finally, Zacks Research cut shares of Innodata from a “strong-buy” rating to a “hold” rating in a research report on Tuesday, December 9th. One analyst has rated the stock with a Strong Buy rating, one has issued a Buy rating and two have issued a Hold rating to the company’s stock. According to data from MarketBeat, the stock currently has a consensus rating of “Moderate Buy” and a consensus price target of $100.00.

About Innodata

Innodata Inc (NASDAQ: INOD) is a digital services and technology company that specializes in data engineering and artificial intelligence solutions. Founded in 1988 and headquartered in East Brunswick, New Jersey, the company provides structured content and digital transformation services to publishers, media companies, legal and compliance organizations, and other information-intensive industries. Innodata’s platform enables clients to convert unstructured text, images and multimedia into high‐quality, machine‐readable formats that support search, analytics and AI model training.

The firm’s offerings include content enrichment, metadata management, taxonomy development, digital asset management and data annotation services.