Innodata Revenue Surges 53% to $95.6 Million, Raises 2026 Growth Outlook to 42%
Key Facts
Innodata reported on November 5 that revenue reached $95.6 million in the third quarter ended September 30, 2026, up 53% year over year and about 15% above analysts’ average estimate. The company said revenue exceeded consensus by about $12.3 million in what Chief Executive Rahul Singhal described as another record quarter. The result marked the company’s 13th consecutive quarter of year-over-year revenue growth. It also reported net income of $10.3 million, up 24% from the same period a year earlier. The figures point to an expanding business, while profitability measures showed a split between earnings growth and margin pressure.
Diluted earnings per share came to $0.29, about 70% above analysts’ expectations, according to the official earnings release. Adjusted earnings before interest, taxes, depreciation and amortization reached $17.7 million, equal to 18.5% of revenue. The measure increased by $1.5 million from the same period a year earlier, when it was $16.2 million. By contrast, adjusted gross margin was 40%, compared with 44% in the third quarter of 2025. Management said program mix affects the margin, putting revenue expansion alongside a decline in that measure in the results.
The company attributed its growth to expansion of existing customer programs and new business wins, and added five customer names in the third quarter, including companies building artificial intelligence models and an enterprise data platform. It said a customer that accounted for less than 5% of revenue a year earlier became its largest customer in the third quarter. It signed an additional program with that customer in the fourth quarter worth about $18 million. Innodata also won five new programs with a large cloud computing services company, after generating about $3.1 million in revenue from that customer over the previous twelve months. The company expects revenue from it to exceed $20 million in 2027, according to the earnings release.
Innodata raised its 2026 revenue growth outlook to 42% or more year over year, from 40% or more previously. Management said the new outlook factors in the completion of a program with a large customer and expects to replace it with new programs in the first quarter of 2027. In the second quarter of 2026, the company reported revenue of $92.1 million, up 58% year over year, and adjusted gross margin of 49%. By comparison, year-over-year revenue growth slowed to 53% in the third quarter, and margin fell to 40%. The comparison provides context for the higher annual outlook while highlighting the effect of program transitions on the pace of growth and profitability.
On expansion, the company launched a motion capture lab in September to train humanoid robots and world models. It said it is conducting initial trials with frontier labs, and that success in one of those trials could generate about $7 million in revenue in 2027. It also reported a verbal win for a federal contract worth $5 million annually for five years, which it expects to sign by the end of the fourth quarter. These opportunities remain contingent on signing the contract or successful trials, according to the conditions announced by the company. The initiatives point to additional business avenues alongside the programs that supported third-quarter results.
Cash and cash equivalents totaled $164 million on September 30, or about $153.7 million excluding customer prepayments tied to pass-through costs. After the earnings announcement, INOD shares closed at $38.62 on November 5, compared with the previous session’s close of $43.30. After-hours trading data showed the shares up 8.04% against the regular-session closing price that day. The earnings call was scheduled for November 5 at 5 p.m. Eastern Time, with a question-and-answer session. The next operational development identified by the company is the expected signing of the federal contract by the end of the fourth quarter, while it expects to replace the completed program with new programs in the first quarter of 2027.