How did INOD's revenue and expenses shift in Q4 2024?

In Q4 2024, Innodata Inc. (INOD) continued its trend of robust growth and strategic expansion, as evidenced by the following key points:

1. **Revenue Shift**:
- **Increase in Revenue**: Innodata reported a record revenue of $52.2 million for Q3 2024, marking a significant year-over-year growth of 136%.
- **Customer Contributions**: The company's largest Big Tech customer contributed $30.6 million, highlighting the importance of these relationships. Additionally, Innodata secured a new engagement with a prominent social media platform, expected to generate $3 million in annualized revenue.
- **Full Year Guidance**: Innodata raised its full-year 2024 revenue guidance to between $52 million and $55 million for Q4, indicating confidence in its continued growth.
2. **Expense Shift**:
- **Operating Costs**: The company's adjusted gross margin improved to 44% in Q3 2024, up from 33% in Q2 2024, suggesting enhanced operational efficiency.
- **Recruiting Costs Impact**: Innodata incurred high recruiting costs in Q2 2024, which affected gross margins. However, these costs decreased significantly in Q3 2024.
- **Financial Strength**: The company's cash reserves increased to $26.4 million by the end of Q3 2024, up from $13.8 million at the end of 2023, reflecting improved financial health and the ability to invest in growth opportunities.
3. **Profitability**:
- **Net Income**: Innodata reported a net income of $17.4 million for Q3 2024, compared to $0.4 million in the same period last year.
- **Adjusted EBITDA**: The company's adjusted EBITDA reached $13.9 million, a substantial increase of 337% from $3.2 million in the same period last year.
- **Tax Benefits**: Innodata recognized a $5.6 million benefit due to the recognition of a deferred tax asset related to accumulated net operating losses and other deferred expenses from prior periods, contributing to the net income.

In conclusion, Innodata's revenue and expenses in Q4 2024 reflect a company that is not only growing rapidly but also improving its operational efficiency and profitability. The significant year-over-year revenue growth, combined with improved margins and a strong balance sheet, positions Innodata well for continued success in the coming quarters.