TLDR: Innodata Inc. reported robust third-quarter 2025 results, with revenue reaching $62.6 million, a 20% year-over-year increase, and diluted EPS of $0.24, significantly surpassing analyst expectations. The data engineering company, deeply involved in AI data preparation and solutions, also announced the formation of Innodata Federal to target U.S. government AI needs, reinforcing its strategic focus on artificial intelligence.
NEW YORK – Innodata Inc. (NASDAQ: INOD), a leading data engineering company, announced impressive financial results for the third quarter ended September 30, 2025, demonstrating significant growth driven by its strategic focus on artificial intelligence. The company reported revenue of $62.6 million, marking a substantial 20% year-over-year organic increase and exceeding analyst estimates of $59.78 million. Diluted earnings per share (EPS) for the quarter stood at $0.24, comfortably beating the Zacks Consensus Estimate of $0.14.
Despite the positive financial performance, the company’s stock experienced a 5.84% dip during regular trading hours, though it saw a modest recovery in after-hours trading, as noted in initial reports.
Key financial highlights for Q3 2025 include an adjusted EBITDA of $16.2 million, representing a 17% increase from $13.9 million in the same period last year. Net income for the quarter was $8.3 million, compared to $17.4 million in the prior year, with the previous year’s EPS benefiting from approximately $0.27 per diluted share due to tax benefits related to net operating loss carryforwards.
For the nine months ended September 30, 2025, Innodata reported revenue of $179.3 million, reflecting a remarkable 61% year-over-year organic growth. Adjusted EBITDA for this period surged to $42.2 million, a 106% increase from the previous year. The company’s cash and short-term investments also strengthened significantly, reaching $73.9 million as of September 30, 2025, up from $46.9 million at the end of 2024.
Jack Abuhoff, CEO of Innodata, expressed confidence in the company’s trajectory, stating, “Our third quarter marked another record-setting performance for Innodata, with revenue, profitability, and cash all at all-time highs.” The company reiterated its 2025 guidance, projecting 45% or more year-over-year organic revenue growth.
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Further underscoring its commitment to the AI sector, Innodata announced the launch of Innodata Federal, a new business unit dedicated to providing artificial intelligence solutions to U.S. government agencies. This unit will focus on defense, intelligence, and civilian agencies, offering AI data engineering, generative AI, and agentic AI capabilities. The company has already secured partnerships with defense technology firms and received a direct award from a defense agency. The announcement coincided with the appointment of retired four-star Army general Richard D. Clarke to Innodata’s board of directors. Innodata’s growth strategy includes expanding its pre-training data capabilities, sovereign AI programs, enterprise AI practice, and model safety initiatives, serving five of the ‘Magnificent Seven’ tech giants and numerous Fortune 1000 enterprises.
