Innodata's Growth Accelerates to 58% as Cash Pile Triples
Innodata (INOD) posted second-quarter revenue of $92.1 million, up 58% from a year earlier, its fastest growth rate in at least a year.
Innodata (INOD) reported second-quarter revenue of $92.1 million, up 58% year over year. The result extended a run of accelerating growth that has now built for four consecutive quarters.
The reacceleration stands out because it has been building steadily rather than arriving as a single spike. Revenue growth moved from 20% year over year in the third quarter of 2025 to 22% in the fourth quarter, then jumped to 54% in the first quarter of 2026 before reaching 58% in the second quarter. Sequential revenue also picked up, rising from $90.1 million in the first quarter to $92.1 million, after a $72.4 million fourth-quarter total.
Profitability expanded alongside the top line. Adjusted EBITDA reached $25.4 million, up 92% from $13.2 million a year earlier, and held roughly steady from $25.0 million in the first quarter, well above the $15.7 million and $16.2 million posted in the fourth and third quarters of 2025, respectively. Net income rose to $14.4 million, or $0.41 a diluted share, from $7.2 million, or $0.20 a diluted share, a year earlier, and was roughly flat against the first quarter's $14.9 million, or $0.42 a diluted share. Direct operating costs climbed to $49.7 million from $35.4 million and SG&A rose to $26.6 million from $14.1 million, but both grew more slowly than revenue.
Adjusted gross margin expanded to 49% from 47% in the first quarter and 43% in the prior-year period, nine points above the company's own 40% target. The mix shift was in part due to changes in its customer base: its largest customer fell to 37% of second-quarter revenue from 56% in the first quarter, while a newly ramped Big Tech customer grew to 34% of revenue from 17%. The company began reporting as a single operating segment starting in the first quarter of 2026, replacing its prior three-segment breakout, and did not reinstate segment-level disclosure in the anchor release.
Cash, cash equivalents and short-term investments reached $250.4 million as of June 30, up $168.2 million from $82.2 million at the end of 2025 and a sharp acceleration from the $35.1 million increase reported in the first quarter. Roughly $134 million of that balance sits net of customer pass-through prepayments.
Innodata held its full-year 2026 revenue growth guidance at roughly 40% or more, unchanged from reaffirmations on May 7 and June 17, 2026, and up from the approximately 35% or more guided in the fourth-quarter release on February 26, 2026.
The anchor release also disclosed a leadership transition: Rahul Singhal will become president and chief executive effective September 30, 2026, with current CEO Jack Abuhoff moving to executive chairman. Jayant Chauhan, announced as incoming chief financial officer on June 17, has joined in that role, with Marissa Espineli moving to chief accounting officer.