Innodata (INOD) Q1 2026 earnings summary

Executive summary

• Achieved record Q1 2026 results with revenue of $90.1 million, up 54% year-over-year, and Adjusted EBITDA of $25.0 million, up 96% year-over-year, driven by higher volumes in AI-related data services and expanded customer engagements.

• Raised full-year 2026 revenue growth guidance to approximately 40% or more, up from prior 35%, citing strong visibility and new large customer engagements.

• Customer base diversification accelerated, with a new Big Tech customer expected to generate $51 million in revenue and become the second-largest customer.

• Transitioned to single operating segment reporting, reflecting a strategic shift and integrated service delivery.

• Launched Agent Observability platform, securing a $1 million engagement and 15 active evaluations.

Financial highlights

• Revenue reached $90.1 million, up from $58.3 million in Q1 2025 (54% year-over-year growth), surpassing analyst consensus by 18%.

• Adjusted gross profit was $42.6 million (47% margin), up from $25.2 million (43% margin) in Q1 2025.

• Adjusted EBITDA was $25.0 million (28% of revenue), exceeding consensus by 139% and growing 96% year-over-year.

• Net income for Q1 was $14.9 million; fully diluted EPS was $0.42, compared to $0.08 consensus and $0.22 in Q1 2025.

• Ended Q1 with $117.4 million in cash, up from $82.2 million at year-end 2025, with no debt drawn on a $50 million credit facility.

Outlook and guidance

• 2026 revenue growth guidance raised to approximately 40% or more, with potential upside from unforecasted large programs.

• Customer diversification expected to continue, with the largest customer representing a decreasing percentage of total revenue despite absolute growth.

• Management expects sufficient liquidity for at least the next 12 months, supported by strong cash flows and a $50 million revolving credit facility.

• Capital expenditures for the next 12 months are anticipated to be approximately $12.1 million, focused on technology and infrastructure upgrades.

• Anticipates continued growth in 2027 and beyond, driven by innovation labs, federal, and enterprise AI markets.