Q2 2026 Innodata Inc Earnings Call Transcript
Key Points
- Revenue grew 58% year-over-year to $92.1 million, marking the 12th consecutive quarter of growth and beating analyst consensus by 7%.
- Adjusted EBITDA surged 92% year-over-year to $25.4 million, exceeding consensus by 50%, with adjusted gross margin at 49%, well above the 40% target.
- Customer diversification improved, with the largest customer dropping to 37% of revenue (from 56% in Q1) and a new big-tech customer scaling to 34% of revenue.
- Research and innovation are driving growth, with new capabilities in agentic reinforcement learning, benchmarks, and AI cyber training, opening opportunities in enterprise and federal markets.
- Strong balance sheet with $134 million in cash (net of customer prepayments) and no debt, plus a new ATM program for strategic flexibility.
- Revenue growth slowed sequentially to just 2% from Q1, indicating potential quarter-to-quarter volatility.
- The largest customer's revenue declined in Q2 due to changes in program structure and service mix, though growth is still expected for the full year.
- Management acknowledged that gross margins could decline if they win large, lower-margin projects, which may pressure profitability.
- The company has not factored several large potential engagements into guidance, creating uncertainty about future revenue visibility.
- The effective tax rate was lower than the long-term target due to one-time benefits, which may not be sustainable.
Thank you for standing by. At this time, I would like to welcome everyone to the InnoData second quarter 2026 earnings call. All lines have been placed on mute to prevent any background noise.
After the speaker's remarks, there will be a question-and-answer session.
If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad.
If you would like to withdraw your question, press star when again.
Thank you.
I would now like to turn the call over to Amy Akers. You may begin.
Thank you. Good afternoon, everyone.
Thank you for joining us today. Our speakers today are Jack Abouhoff, Chairman and CEO of InnoData Rahul Singhal, President and Chief Revenue Officer and Jayant Chauhan, Chief Financial Officer. Also on the call today is Miriz Espinelli, Chief Accounting Officer and Anish Pantarkar. Vice President, Finance and Corporate Development. We'll hear from Jack and Rahul first, who will
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