Innodata Plunges 18% on $340M Volume Ranked 365th Despite Record Earnings Surge

Innodata (NASDAQ:INOD) closed August 1 with a 18.11% decline, trading on $340 million volume, ranking 365th in market activity. The stock’s sharp drop contrasts with its recent earnings-driven momentum, as Q2 2025 results revealed a 79% year-over-year revenue surge to $58.4 million and a 375% jump in adjusted EBITDA to $13.2 million. CEO Jack Abuhoff highlighted a raised full-year 2025 growth forecast to 45%+ organic revenue growth, citing large-scale project wins and a 43% adjusted gross margin expansion from 33% a year prior.

The company reported $59.8 million in cash as of June 30, 2025, with an undrawn $30 million credit facility providing financial flexibility. Strategic investments of $1.4 million in talent and innovation were made to capitalize on agentic AI and robotics markets, which Abuhoff described as “compounding value over the next decade.” Recent competitive shifts, including Meta’s acquisition of Scale AI, have accelerated market share gains, with $33.9 million in revenue from Innodata’s largest client and $10 million projected from a new big tech customer in H2 2025.

Despite the recent stock decline, management emphasized robust pipeline expansion and near-term growth opportunities. Adjusted EBITDA is expected to exceed 2024 levels despite increased expenses, with a 27%-28% tax rate projected for upcoming quarters. The company’s Digital Data Solutions segment contributed $50.6 million in Q2 revenue, underscoring its dominant position in generative AI data engineering services.

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