We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Innodata's 375% EBITDA Jump Shows Operating Leverage: More to Come?
Read MoreHide Full Article
Key Takeaways
{\"0\":\"Innodata posted Q2 revenues of $58.4M, up 79% year over year, beating estimates by 3.6%.\",\"1\":\"Adjusted EBITDA surged 375% to $13.2M, 23% of revenue versus 9% a year earlier.\",\"2\":\"2025 organic growth outlook raised to at least 45% on strong AI data demand.\"}
Innodata Inc. (INOD - Free Report) delivered another standout quarter in the second quarter of 2025, with results underscoring its strong operating leverage and expanding role in the AI services ecosystem. Revenues surged 79% year over year to $58.4 million, beating estimates by 3.6%. Adjusted EBITDA soared 375% to $13.2 million, representing 23% of revenue, up from just 9% a year ago. Net income reached $7.2 million, marking a sharp turnaround from last year’s minimal loss.
The gains were fueled by expanding engagements with marquee big tech clients. Notably, one customer is projected to generate $10 million in second-half revenue, up from just $200,000 over the prior 12 months. Management also raised its 2025 organic growth guidance to at least 45%, citing a robust pipeline and accelerating demand for high-quality, complex training data essential for generative and agentic AI.
CEO Jack Abuhoff highlighted that Innodata is moving beyond data provision into model evaluation, trust and safety monitoring, and simulation data for robotics — positioning it for emerging AI and automation opportunities. The recent market disruption following Meta’s acquisition of competitor Scale AI could further open doors with large tech buyers seeking alternative partners.
With $59.8 million in cash, no debt drawdown, and a $30 million credit facility, Innodata has financial flexibility to support growth investments. While increased spending in the third quarter will pressure near-term margins, the company’s expanding role in the AI value chain suggests its operating leverage story is far from over. If execution continues, investors may see both revenue scale and profitability rise in tandem.
Innodata’s Competitive Landscape
Innodata competes in the fast-growing AI services market with major players like Palantir Technologies Inc. (PLTR - Free Report) and C3.ai, Inc. (AI - Free Report) . Palantir, recognized for its Gotham and Foundry platforms, has entrenched relationships with government agencies and large enterprises, delivering integrated analytics and AI-driven decision platforms. While Palantir emphasizes full-stack AI solutions, Innodata differentiates itself through its expertise in producing high-quality, complex training data and conducting advanced model evaluation — capabilities increasingly vital for generative and agentic AI.
C3.ai focuses on AI application development across industries such as energy, manufacturing, and defense, offering configurable enterprise AI platforms. While C3.ai excels in scalable deployments, Innodata’s specialization in smart data strategies, trust and safety services, and simulation data for robotics addresses a niche but expanding segment of the AI lifecycle. By securing deep big tech partnerships, Innodata could strengthen its position against both Palantir and C3.ai in next-generation AI markets.
INOD Stock’s Price Performance & Valuation Trend
Shares of this data engineering company have gained 23.7% in the past three months, performing better than the Zacks Computer - Services industry, as you can see below.
INOD Stock’s Price Performance
Image Source: Zacks Investment Research
INOD stock is currently trading at a premium compared with its industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 48.45, as evidenced by the chart below.
AI’s P/E Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
Earnings Estimate Trend of INOD Stock
The Zacks Consensus Estimate for 2025 earnings per share (EPS) has increased to 71 cents from 69 cents in the past seven days.
The consensus estimate for 2025 sales implies growth of 42.8%. The same for the company’s 2025 EPS is expected to decline 20.2% from the year ago.
Image: Bigstock
Innodata's 375% EBITDA Jump Shows Operating Leverage: More to Come?
Key Takeaways
Innodata Inc. (INOD - Free Report) delivered another standout quarter in the second quarter of 2025, with results underscoring its strong operating leverage and expanding role in the AI services ecosystem. Revenues surged 79% year over year to $58.4 million, beating estimates by 3.6%. Adjusted EBITDA soared 375% to $13.2 million, representing 23% of revenue, up from just 9% a year ago. Net income reached $7.2 million, marking a sharp turnaround from last year’s minimal loss.
The gains were fueled by expanding engagements with marquee big tech clients. Notably, one customer is projected to generate $10 million in second-half revenue, up from just $200,000 over the prior 12 months. Management also raised its 2025 organic growth guidance to at least 45%, citing a robust pipeline and accelerating demand for high-quality, complex training data essential for generative and agentic AI.
CEO Jack Abuhoff highlighted that Innodata is moving beyond data provision into model evaluation, trust and safety monitoring, and simulation data for robotics — positioning it for emerging AI and automation opportunities. The recent market disruption following Meta’s acquisition of competitor Scale AI could further open doors with large tech buyers seeking alternative partners.
With $59.8 million in cash, no debt drawdown, and a $30 million credit facility, Innodata has financial flexibility to support growth investments. While increased spending in the third quarter will pressure near-term margins, the company’s expanding role in the AI value chain suggests its operating leverage story is far from over. If execution continues, investors may see both revenue scale and profitability rise in tandem.
Innodata’s Competitive Landscape
Innodata competes in the fast-growing AI services market with major players like Palantir Technologies Inc. (PLTR - Free Report) and C3.ai, Inc. (AI - Free Report) . Palantir, recognized for its Gotham and Foundry platforms, has entrenched relationships with government agencies and large enterprises, delivering integrated analytics and AI-driven decision platforms. While Palantir emphasizes full-stack AI solutions, Innodata differentiates itself through its expertise in producing high-quality, complex training data and conducting advanced model evaluation — capabilities increasingly vital for generative and agentic AI.
C3.ai focuses on AI application development across industries such as energy, manufacturing, and defense, offering configurable enterprise AI platforms. While C3.ai excels in scalable deployments, Innodata’s specialization in smart data strategies, trust and safety services, and simulation data for robotics addresses a niche but expanding segment of the AI lifecycle. By securing deep big tech partnerships, Innodata could strengthen its position against both Palantir and C3.ai in next-generation AI markets.
INOD Stock’s Price Performance & Valuation Trend
Shares of this data engineering company have gained 23.7% in the past three months, performing better than the Zacks Computer - Services industry, as you can see below.
INOD Stock’s Price Performance
Image Source: Zacks Investment Research
INOD stock is currently trading at a premium compared with its industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 48.45, as evidenced by the chart below.
AI’s P/E Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
Earnings Estimate Trend of INOD Stock
The Zacks Consensus Estimate for 2025 earnings per share (EPS) has increased to 71 cents from 69 cents in the past seven days.
The consensus estimate for 2025 sales implies growth of 42.8%. The same for the company’s 2025 EPS is expected to decline 20.2% from the year ago.
Image Source: Zacks Investment Research
INOD’s Zacks Rank
INOD stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.