Innodata Q3 2026: Revenue Up 53%, Guidance Raised Again

Innodata reported Q3 2026 revenue of $95.6 million, a 53% jump from the same quarter a year earlier and beating expectations, with GAAP earnings per share of $0.29 also topping consensus. It was the company's 13th consecutive quarter of year-over-year revenue growth, and the first earnings report delivered under incoming CEO Rahul Singhal.

A client that accounted for less than 5% of revenue just a year ago became Innodata's single largest customer in Q3, giving the company two customers of comparable scale and undercutting the bear case built on revenue concentration risk. Management has already signed an additional program with that same customer for Q4, valued at roughly $18 million.

Despite absorbing the wind-down of a program at a separate large client, management raised full-year 2026 revenue growth guidance to 42% or more, up from 40% or more. The ramp-down had been a source of investor concern, but the guidance increase signals confidence that new programs will fill the gap by Q1.

Looking further out, Innodata is making moves in physical AI. The company launched a motion capture lab in September for humanoid robot and world model training and is running pilots with leading frontier and robotics labs. CEO Singhal noted that just one of those pilots, if successful, is expected to yield roughly $7 million in revenue in 2027, with more than $20 million forecast from a large hyperscaler customer that same year.

Gross margin compressed to 37% from 41% in the prior-year quarter as selling and administrative expenses climbed, and pre-tax income declined despite the revenue beat, meaning the bottom-line result owed a meaningful portion of its strength to the tax line. Many of the forward-looking items, including a verbal federal contract win and the robotics pilots, have yet to convert to signed, recurring revenue.