Innodata(INOD -18.11%) reported Q2 2025 results on July 31, 2025, delivering 79% year-over-year revenue growth to $58.4 million and a 375% year-over-year surge in adjusted EBITDA to $13.2 million.
The company raised its full-year 2025 organic revenue growth forecast from 40% to at least 45%, citing large-scale project wins, robust pipeline expansion, and a significant increase in demand from both its largest and new big tech customers.
Adjusted margin rises as Innodata grows revenue
Adjusted gross margin rose to 43% from 33% a year earlier. Net income reached $7.2 million, up from a loss of $14,000 in the same period last year. Cash grew sequentially to $59.8 million, with an additional $8 million collected post-quarter (early July, after quarter close), and its $30 million credit facility remains undrawn.
"An $8 million payment that typically would have been received by June 30 (Q2 2025). Our $30 million credit facility remains undrawn, giving us flexibility to support future growth. Our business momentum continues to accelerate. As a result, we are raising our full-year 2025 revenue growth guidance to 45% or more organic revenue growth, up from the 40% we communicated last quarter."
-- Jack Abuhoff, CEO
This performance demonstrates that adjusted, high-margin organic growth is translating directly into cash flow and operational flexibility, while the raised full-year 2025 outlook reflects the company’s expanding industry leadership in generative AI data engineering and services.
Customer wins drive Innodata market share gains
Revenue from the company's largest customer reached $33.9 million, while a new big tech customer is expected to generate $10 million in revenue in the second half of 2025 due to recently awarded projects. The recent acquisition of competitor Scale AI by Meta (META -2.99%) has disrupted the competitive landscape.
"We congratulate Scale for having delivered a great success for their shareholders. And we believe their success and their valuation is a proof point of the key role that data plays [unclear audio]. Before this, we were and continue to very aggressively outreach to market participants and to market our capabilities. You know, we have, in light of this, stepped up that effort with certain companies. And there are certain conversations that are going on, and are now planned to be happening over the next couple of months that I think, you know, could be very exciting for us."
-- Jack Abuhoff, CEO
The sudden disruption in customer relationships due to competitive shifts is creating near-term growth acceleration and market share opportunities for Innodata, particularly with large technology clients who require reliable, high-quality data partners.
Strategic investments position INOD for AI growth
The company invested $1.4 million in new hires for delivery, product innovation, go-to-market, and talent acquisition. Management highlighted opportunities in agentic AI -- autonomous enterprise AI systems -- and sees the market for simulation data services and AI evaluation in robotics potentially surpassing current LLM (large language model) post-training markets.
"We intend to invest in ways that we believe will enable us to continue our growth path over the next several years. These include short-cycle high-return growth initiatives like custom annotation pipelines, verticalized agent development, and expanded global delivery. Strategic platform development, especially for LLM testing, safety, and real-world deployment. Also, advisory and integration services for enterprises building AI-native systems. Expansion into new domains such as multi-agent and robotics, and expansion into new markets. We believe now is the time to lean in, investing in capabilities that can compound value over the next decade."
-- Jack Abuhoff, CEO
This deliberate acceleration of investment signals management’s intention to entrench the company across both frontier and enterprise AI segments, as the AI ecosystem evolves beyond large language models into agentic and robotics domains.
Looking Ahead
Management raised full-year 2025 organic revenue growth guidance to at least 45%, emphasizing a robust and expanding deal pipeline, including significant new wins and deals likely to close soon, while the company forecasts adjusted EBITDA (non-GAAP) above 2024 levels, despite the step-up in expenses. The expected tax rate for the coming quarters is projected at 27%-28%.
