Innodata Inc
Q2 2026 Earnings
Market Reaction
Did INOD Beat Earnings? Q2 2026 Results
Innodata delivered a blowout second quarter for fiscal 2026, with revenue of $92.14 million climbing 57.8% year over year and coming in 6.75% above the Wall Street consensus of $86.32 million, while GAAP diluted EPS of $0.41 beat the $0.26 consensus by 57.27%, more than doubling the year-ago figure of $0.20. The single most material driver behind the beat was a favorable mix shift toward off-the-shelf datasets where Innodata retains intellectual property and monetizes assets across multiple customers, alongside high-value pre-training programs, which helped push adjusted gross margin to 49%, nine percentage points above the company's own 40% target. Customer diversification also stood out, as the largest customer fell to 37% of revenue from 56% in the prior quarter while a recently added Big Tech client scaled rapidly to 34%. The company's expanding AI capabilities, including new tools designed to improve the security and reliability of AI-generated code, underscore the depth of its technical positioning. Management reiterated full-year 2026 revenue growth guidance of 40% or more, noting that several large potential programs not yet reflected in that figure could prompt an upward revision once scope and timing are confirmed.
- 58% year-over-year revenue growth driven by scaling Big Tech customer programs
- Adjusted Gross Margin expansion to 49%, driven by off-the-shelf datasets with retained IP and high-value pre-training programs
- Adjusted EBITDA grew 92% year-over-year to $25.4 million, demonstrating operating leverage
- Customer diversification: largest customer declined from 56% to 37% of revenue while second Big Tech customer scaled from 17% to 34%
“Q2 was another record quarter for Innodata - and another across-the-board beat. Revenue, Adjusted Gross Profit, Adjusted EBITDA, and cash all reached new highs, and we exceeded analyst consensus on every key metric. Revenue of $92.1 million grew 58% year-over-year while Adjusted EBITDA grew 92% - operating leverage by definition.”
Innodata CEO, on the earnings call
Forward Guidance & Outlook
Innodata reiterated full-year 2026 revenue growth guidance of 40% or more year-over-year. Management noted there are large potential programs from both new and anticipated customers — described as likely wins — that are not yet factored into the 40% guidance figure. Once scope and timing are finalized, they will be included and guidance updated accordingly. The company expressed confidence that 2026 will be a tremendous year and is excited about opportunities in 2027 and beyond.
INOD YoY Financials
INOD Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.