Innodata (INOD) delivered Q4 2025 revenue of $72.4 million (+22% YoY) and full-year revenue of $251.7 million (+48% YoY). Diluted EPS came in at $0.25, beating the Zacks consensus estimate of $0.21 by 19.1%. Revenue also topped the $69.5M consensus by 4.2%. Shares dropped 3.6% in after-hours trading on February 26 and fell 7.2% during the following trading session on February 27, closing at $44.17.
About Innodata
Innodata Inc. (Nasdaq: INOD) is a global data engineering and artificial intelligence services company headquartered in Ridgefield Park, New Jersey. Founded in 1988, the company went public on the Nasdaq in 1992. Innodata provides a range of solutions spanning AI model training data, data annotation, content enrichment, and evaluation frameworks for generative AI, agentic AI, and physical AI (robotics).
The company operates three business segments: Digital Data Solutions (DDS), which generates the vast majority of revenue; Synodex, focused on medical data transformation; and Agility, an AI-enabled industry intelligence platform. As of February 2026, Innodata carries a market capitalization of approximately $1.41 billion, a trailing P/E ratio of about 48, and a forward P/E of 38.3. The company employs approximately 6,648 people globally and maintains a beta of 2.42, reflecting high volatility relative to the broader market. Innodata does not pay a dividend.
Top Financial Highlights
- Q4 2025 revenue reached $72.4 million, reflecting a 22% year over year increase and a 15.7% sequential rise from $62.6 million in Q3, indicating sustained quarterly momentum.
- Full year 2025 revenue totaled $251.7 million, representing 48% year over year organic growth compared to $170.5 million in 2024, demonstrating strong underlying demand.
- Q4 net income was $8.8 million, equivalent to $0.28 basic EPS and $0.25 diluted EPS, compared to $10.3 million or $0.34 basic and $0.31 diluted in Q4 2024.
- Full year net income increased to $32.2 million, translating into $1.01 basic EPS and $0.92 diluted EPS, up from $28.7 million or $0.98 basic and $0.89 diluted in 2024.
- Q4 adjusted EBITDA reached $15.7 million, representing 22% of revenue, exceeding analyst consensus by $1.2 million and rising 11% from $14.1 million in the prior year quarter.
- Full year adjusted EBITDA totaled $57.9 million, up 68% from $34.6 million in 2024, reflecting improved operating leverage.
- Q4 adjusted gross profit stood at $30.1 million, delivering an adjusted gross margin of 42%, above the company’s 40% target threshold.
- Full year adjusted gross profit reached $108.0 million, with an adjusted gross margin of 43%, indicating consistent margin expansion.
- Cash and short term investments increased to $82.2 million as of December 31, 2025, compared to $46.9 million a year earlier, strengthening liquidity.
- Full year operating cash flow amounted to $46.8 million, rising from $34.9 million in 2024, supporting internal funding capacity.
- Q4 segment revenue was led by the DDS segment at $64.6 million, followed by Agility at $6.1 million and Synodex at $1.6 million.
- For the full year, DDS generated $221.0 million, Agility contributed $23.5 million, and Synodex delivered $7.1 million, reflecting segment level diversification.
- 2026 revenue guidance indicates expected growth of 35% or more year over year, implying projected revenue of approximately $340 million or higher.
- The company reported no drawdown under its $30 million Wells Fargo credit facility, with long term obligations totaling approximately $7.6 million, indicating a conservative capital structure.
Beat or Miss?
| Metric | Reported | Consensus Estimate | Difference |
| Adjusted EPS (Q4) | $0.25 | $0.21 | +$0.04 (+19.1%) |
| Revenue (Q4) | $72.4M | $69.5M | +$2.9M (+4.2%) |
| Adjusted EBITDA (Q4) | $15.7M | ~$14.5M (est.) | +$1.2M above consensus |
| Full-Year Adjusted EPS | $0.92 | N/A | +3.4% vs. $0.89 in FY2024 |
What Leadership Is Saying?
CEO Jack Abuhoff on Strategy and Vision: “2025 was a defining year for Innodata. We delivered $72.4 million in revenue for the fourth quarter and $251.7 million for the entire year, which translates to a 48% annual growth. We surpassed margin targets and analyst expectations across key indicators while heavily investing in innovation to enhance our platform, expedite customer results, and solidify our leadership within the generative AI value chain.”
Interim CFO Marissa Espineli on Financial Performance:“Revenue for Q4 2025 reached $72.4 million, up 22% year-over-year. Sequentially, revenue increased 15.7% from Q3’s $62.6 million. Adjusted gross profit for Q4 2025 was $30.1 million, an increase of 6% year-over-year and 9% sequentially, with an adjusted gross margin of 42%. Adjusted EBITDA was $15.7 million or 22% of revenue, and net income for the quarter was $8.8 million. We ended the quarter with $82.2 million in cash, up from $73.9 million at the end of the prior quarter and $46.9 million at year-end 2024.”
Historical Performance
Innodata YoY Comparison
| Category | Q4 2025 | Q4 2024 | Change (%) |
| Revenue | $72.4M | $59.2M | 22.30% |
| Net Income | $8.8M | $10.3M | -14.60% |
| Diluted EPS | $0.25 | $0.31 | -19.40% |
| Adjusted EBITDA | $15.7M | $14.1M | 11.30% |
| Adjusted Gross Profit | $30.1M | $28.4M | 6.00% |
| Adjusted Gross Margin | 42% | 48% | -6 ppt |
| Direct Operating Costs | $44.7M | $32.4M | 37.80% |
| Selling & Admin Expenses | $16.8M | $15.5M | 8.20% |
| Cash & Short-Term Investments | $82.2M | $46.9M | 75.30% |
| Category | FY 2025 | FY 2024 | Change (%) |
| Revenue | $251.7M | $170.5M | 47.60% |
| Net Income | $32.2M | $28.7M | 12.20% |
| Diluted EPS | $0.92 | $0.89 | 3.40% |
| Adjusted EBITDA | $57.9M | $34.6M | 67.60% |
| Adjusted Gross Profit | $108.0M | $73.1M | 47.80% |
| Operating Cash Flow | $46.8M | $34.9M | 34.10% |
Competitor Comparison
Q4 2025 Performance
| Category | Innodata (INOD) Q4 2025 | Innodata Q4 2024 | Genpact (G) Q4 2025 | Genpact Q4 2024 | ExlService (EXLS) Q4 2025 | ExlService Q4 2024 |
| Revenue | $72.4M | $59.2M (+22.3%) | $1.32B | $1.24B (+6.5%) | $542.6M | $481.4M (+12.7%) |
| Net Income | $8.8M | $10.3M (-14.6%) | $143M | $142M (+0.8%) | N/A | $50.7M |
| EPS (Adj.) | $0.25 | $0.31 | $0.97 | N/A | $0.50 | $0.44 (+15.0%) |
| FY Revenue | $251.7M (+48%) | $170.5M | $5.08B (+6.6%) | $4.77B | $2.09B (+13.6%) | $1.84B |
Innodata operates at a much smaller scale than Genpact and ExlService but is growing at a significantly faster rate. Innodata’s 48% full-year revenue growth outpaces Genpact’s 6.6% and ExlService’s 13.6%. However, Innodata’s Q4 net income declined 14.6% YoY due to rising operating costs tied to aggressive investment in capacity and innovation, while larger competitors posted steadier profitability growth.
How the Market Reacted?
Despite beating consensus estimates on both EPS and revenue, Innodata’s stock declined following the earnings release. Shares fell 3.6% in after-hours trading on February 26, the day of the announcement, dropping from the $47.58 regular-session close. The next trading session on February 27 saw further selling pressure, with INOD trading between $42.80 and $48.53 before closing at $44.17, a 7.2% decline on elevated volume of 2.7 million shares (more than double the daily average of 1.14 million).
The negative reaction likely reflects investor concerns about declining Q4 net income and a compressed gross margin despite top-line beats, as well as caution around the stock’s broader pullback from its 52-week high of $93.85. Analyst consensus remains broadly positive, with a “Strong Buy” rating and an average price target of $91.67, suggesting roughly 96% upside from the February 27 close.
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