📊 INOD Key Takeaways
Is Innodata Inc. (INOD) a Good Investment?
INNODATA demonstrates exceptional fundamental strength with 47.6% revenue growth, robust 38.7% free cash flow margin, and a fortress balance sheet carrying minimal debt and substantial cash reserves. However, the anomalous 110.4% gross margin warrants immediate clarification, as this suggests potential accounting complexities or data quality issues that could mask underlying operational realities.
Innodata shows strong fundamental momentum, with revenue up 47.6% year over year, solid double-digit operating and net margins, and healthy free cash flow generation. The balance sheet is very strong, with high liquidity, minimal leverage, and substantial cash, which supports resilience and reinvestment capacity. The main constraint on a more aggressive view is that net income was flat despite rapid top-line growth, so sustained earnings conversion still needs to be proven.
Innodata Inc. Key Strengths (INOD)
- Exceptional revenue growth of 47.6% YoY with strong operating leverage producing 19.2% operating margin
- Fortress balance sheet with $117.4M cash, only $6M long-term debt, and 0.05x debt/equity ratio providing substantial financial flexibility
- High-quality earnings conversion with $34.8M free cash flow on $90.1M revenue (38.7% FCF margin) and minimal capex requirements
- Rapid revenue growth paired with solid 39.5% gross margin indicates strong demand and scalable service economics
- Excellent financial health with $82.23M cash, low long-term debt, 2.68x current ratio, and very low 0.06x debt-to-equity
- Strong profitability and cash generation, including 15.8% operating margin, 30.0% ROE, and 14.2% free cash flow margin
INOD Stock Risks: Innodata Inc. Investment Risks
- Gross margin of 110.4% is mathematically impossible under standard accounting and indicates either data quality issues, non-standard revenue recognition, or aggressive accounting that requires immediate clarification
- Rapid growth trajectory (47.6%) may not be sustainable; requires validation that organic drivers support this rate without reliance on acquisitions or one-time items
- Zero insider Form 4 activity in past 90 days suggests management lacks conviction despite strong reported metrics, or insider trading windows are restricted
- Net income was flat year over year despite strong revenue growth, which may signal rising operating costs or lower earnings conversion
- As a computer processing and data preparation company, growth may depend heavily on a concentrated set of large clients or project cycles
- Maintaining current margins could become harder if expansion requires heavier hiring, infrastructure, or pricing concessions
Key Metrics to Watch
- Gross margin trend and underlying accounting treatment to validate the 110.4% reported figure
- Operating cash flow to net income conversion ratio to assess earnings quality and sustainability
- Year-over-year revenue growth deceleration trajectory to identify inflection points in growth trajectory
- Operating margin and net margin trend as revenue scales
- Free cash flow conversion relative to net income and revenue growth
Innodata Inc. (INOD) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The 38.7% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments. Strong liquidity with a 2.49x current ratio provides a solid financial cushion.
INOD Profit Margin, ROE & Profitability Analysis
INOD vs Technology Sector: How Innodata Inc. Compares
How Innodata Inc. compares to Technology sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Innodata Inc. Stock Overvalued? INOD Valuation Analysis 2026
Based on fundamental analysis, Innodata Inc. has mixed fundamental signals relative to the Technology sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Innodata Inc. Balance Sheet: INOD Debt, Cash & Liquidity
INOD Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Innodata Inc.'s revenue has grown significantly by 48% over the 5-year period, indicating strong business expansion. The most recent EPS of $0.89 reflects profitable operations.
INOD Revenue Growth, EPS Growth & YoY Performance
INOD Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $58.3M | $7.8M | $0.22 |
| Q3 2025 | $52.2M | -$14.0K | $0.24 |
| Q2 2025 | $32.6M | -$14.0K | $0.00 |
| Q1 2025 | $26.5M | $989.0K | $0.03 |
| Q3 2024 | $22.2M | -$14.0K | $0.01 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Innodata Inc. Dividends, Buybacks & Capital Allocation
INOD SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Innodata Inc. (CIK: 0000903651)
📋 Recent SEC Filings
❓ Frequently Asked Questions about INOD
What is the AI rating for INOD?
Innodata Inc. (INOD) has a Combined AI Grade of A from Claude (A) and ChatGPT (A) with 77% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are INOD's key strengths?
Claude: Exceptional revenue growth of 47.6% YoY with strong operating leverage producing 19.2% operating margin. Fortress balance sheet with $117.4M cash, only $6M long-term debt, and 0.05x debt/equity ratio providing substantial financial flexibility. ChatGPT: Rapid revenue growth paired with solid 39.5% gross margin indicates strong demand and scalable service economics. Excellent financial health with $82.23M cash, low long-term debt, 2.68x current ratio, and very low 0.06x debt-to-equity.
What are the risks of investing in INOD?
Claude: Gross margin of 110.4% is mathematically impossible under standard accounting and indicates either data quality issues, non-standard revenue recognition, or aggressive accounting that requires immediate clarification. Rapid growth trajectory (47.6%) may not be sustainable; requires validation that organic drivers support this rate without reliance on acquisitions or one-time items. ChatGPT: Net income was flat year over year despite strong revenue growth, which may signal rising operating costs or lower earnings conversion. As a computer processing and data preparation company, growth may depend heavily on a concentrated set of large clients or project cycles.
What is INOD's revenue and growth?
Innodata Inc. reported revenue of $90.1M.
Does INOD pay dividends?
Innodata Inc. does not currently pay dividends.
Where can I find INOD SEC filings?
Official SEC filings for Innodata Inc. (CIK: 0000903651) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is INOD's EPS?
Innodata Inc. has a diluted EPS of $0.42.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is INOD's fundamental grade?
Based on our AI fundamental analysis in June 2026, Innodata Inc. has a A grade with 77% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is INOD stock overvalued or undervalued?
Valuation metrics for INOD: ROE of 11.6% (sector avg: 22%), net margin of 16.5% (sector avg: 18%). Compare these metrics with sector averages to assess valuation.
What is INOD's AI grade for 2026?
Our dual AI analysis gives Innodata Inc. a combined A grade for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is INOD's free cash flow?
Innodata Inc.'s operating cash flow is $37.3M, with capital expenditures of $2.4M. FCF margin is 38.7%.
How does INOD compare to other Technology stocks?
Vs Technology sector averages: Net margin 16.5% (avg: 18%), ROE 11.6% (avg: 22%), current ratio 2.49 (avg: 2.5).