Innodata Reports Record First Quarter 2024 Results; Raises Guidance to at Least 40% Organic Revenue Growth in 2024
- Revenue was
$26.5 million , up 41% from$18.8 million in the same period last year. -
Net income was
$1.0 million , or$0.03 per basic and diluted share, compared to a net loss of$(2.1) million , or$(0.08) per basic and diluted share, in the same period last year. -
Adjusted EBITDA was
$3.8 million compared to Adjusted EBITDA of$0.8 million in the same period last year.* -
Cash, cash equivalents and short-term investments were
$19.0 million atMarch 31, 2024 and$13.8 million atDecember 31, 2023 . -
New program expansion valued at approximately
$23.5 million in annualized run rate revenue announced today. This is in addition to new programs announced onApril 24, 2024 valued at approximately$20 million in annualized run rate revenue. - Raises guidance to at least 40% organic revenue growth in 2024.
* Adjusted EBITDA is defined below.
Significant Program Expansion
Abuhoff remarked, "This significant customer expansion demonstrates the incredible results we are creating for our customers. One of our large Big Tech customers has stated that the quality of instruction data sets, one of a broad range of services
Two New Big Tech Customer Wins
Abuhoff continued, "We entered the year with agreements in place with five of the Magnificent Seven companies to provide support in LLM data engineering. With these two additional new signings, we now have agreements in place to support seven Big Tech customers on their generative AI initiatives. We look forward to growing these customer relationships throughout 2024."
Strong Balance Sheet
The Company has a healthy balance sheet and remains in a solid financial position. At the end of Q1,
Abuhoff added, "We believe we can drive best-in-class growth over the next several years and maintain our early leadership position in generative AI services. We believe we can accomplish this without the need to raise equity, to incur debt, or to burn cash. This year, based on our current growth forecast, we intend to invest approximately
Raised Guidance
Abuhoff concluded, "We are seeing accelerated business momentum and believe we have an incredible opportunity in front of us. We believe we have the talent, capabilities, and scalability to support the world's leading companies' efforts to build AI models and services and help enterprises advance AI and generative AI technologies."
Amounts in this press release have been rounded. All percentages have been calculated using unrounded amounts.
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It is recommended that participants dial in approximately 10 minutes prior to the start of the call. Investors are also invited to access a live Webcast of the conference call at the Investor Relations section of www.innodata.com. Please note that the Webcast feature will be in listen-only mode.
Call-in or Webcast replay will be available for 30 days following the conference call.
About
Forward-Looking Statements
This press release may contain certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. These forward-looking statements include, without limitation, statements concerning our operations, economic performance, financial condition, developmental program expansion and position in the generative AI services market. Words such as "project," "believe," "expect," "can," "continue," "could," "intend," "may," "should," "will," "anticipate," "indicate," "predict," "likely," "estimate," "plan," "potential," "possible," "promises," or the negatives thereof, and other similar expressions generally identify forward-looking statements.
These forward-looking statements are based on management's current expectations, assumptions and estimates and are subject to a number of risks and uncertainties, including, without limitation, impacts resulting from ongoing geopolitical conflicts, including between
Our actual results could differ materially from the results referred to in any forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the risks discussed in Part I, Item 1A. "Risk Factors," Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations," and other parts of our Annual Report on Form 10-K, filed with the
We undertake no obligation to update or review any guidance or other forward-looking statements, whether as a result of new information, future developments or otherwise, except as may be required by the
Company Contact
Mnovero@innodata.com
(201) 371-8015
Non-GAAP Financial Measures
In addition to the financial information prepared in conformity with
We believe that the presentation of this non-GAAP financial information provides investors with greater transparency by providing investors a more complete understanding of our financial performance, competitive position, and prospects for the future, particularly by providing the same information that management and our Board of Directors use to evaluate our performance and manage the business. However, the non-GAAP financial measures presented in this press release have certain limitations in that they do not reflect all of the costs associated with the operations of our business as determined in accordance with GAAP. Therefore, investors should consider non-GAAP financial measures in addition to, and not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. Further, the non-GAAP financial measures that we present may differ from similar non-GAAP financial measures used by other companies.
Adjusted EBITDA
We define Adjusted EBITDA as net income (loss) attributable to
We use Adjusted EBITDA to evaluate core results of operations and trends between fiscal periods and believe that these measures are important components of our internal performance measurement process.
A reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure is included in the tables that accompany this release.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per-share amounts)
Three Months Ended | ||||||||
2024 | 2023 | |||||||
Revenues | $ | 26,504 | $ | 18,839 | ||||
Direct operating costs | 16,869 | 12,874 | ||||||
Selling and administrative expenses | 8,305 | 7,797 | ||||||
Interest (income) expense, net | (84 | ) | 63 | |||||
25,090 | 20,734 | |||||||
Income (loss) before provision for income taxes | 1,414 | (1,895 | ) | |||||
Provision for income taxes | 424 | 218 | ||||||
Consolidated net income (loss) | 990 | (2,113 | ) | |||||
Income attributable to non-controlling interests | 1 | 3 | ||||||
Net Income (loss) attributable to | $ | 989 | $ | (2,116 | ) | |||
Income (loss) per share attributable to | ||||||||
Basic | $ | 0.03 | $ | (0.08 | ) | |||
Diluted | $ | 0.03 | $ | (0.08 | ) | |||
Weighted average shares outstanding: | ||||||||
Basic | 28,753 | 27,460 | ||||||
Diluted | 32,239 | 27,460 |
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
2024 | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 18,975 | $ | 13,806 | ||||
Short term investments - other | 14 | 14 | ||||||
Accounts receivable, net | 14,064 | 14,288 | ||||||
Prepaid expenses and other current assets | 3,820 | 3,969 | ||||||
Total current assets | 36,873 | 32,077 | ||||||
Property and equipment, net | 2,137 | 2,281 | ||||||
Right-of-use-asset, net | 4,815 | 5,054 | ||||||
Other assets | 2,018 | 2,445 | ||||||
Deferred income taxes, net | 1,848 | 1,741 | ||||||
Intangibles, net | 13,825 | 13,758 | ||||||
2,056 | 2,075 | |||||||
Total assets | $ | 63,572 | $ | 59,431 | ||||
LIABILITIES, NON-CONTROLLING INTERESTS AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 5,276 | $ | 5,722 | ||||
Accrued salaries, wages and related benefits | 7,302 | 7,799 | ||||||
Deferred revenues | 6,668 | 3,523 | ||||||
Income and other taxes | 4,056 | 3,848 | ||||||
Long-term obligations - current portion | 1,160 | 1,261 | ||||||
Operating lease liability - current portion | 804 | 782 | ||||||
Total current liabilities | 25,266 | 22,935 | ||||||
Deferred income taxes, net | 84 | 22 | ||||||
Long-term obligations, net of current portion | 6,899 | 6,778 | ||||||
Operating lease liability, net of current portion | 4,469 | 4,701 | ||||||
Total liabilities | 36,718 | 34,436 | ||||||
Non-controlling interests | (707 | ) | (708 | ) | ||||
STOCKHOLDERS' EQUITY: | 27,561 | 25,703 | ||||||
Total liabilities, non-controlling interests and stockholders' equity | $ | 63,572 | $ | 59,431 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Three Months Ended | ||||||||
2024 | 2023 | |||||||
Cash flows from operating activities: | ||||||||
Consolidated net income (loss) | $ | 990 | $ | (2,113 | ) | |||
Adjustments to reconcile consolidated net income (loss) to net cash | ||||||||
provided by operating activities: | ||||||||
Depreciation and amortization | 1,266 | 1,091 | ||||||
Stock-based compensation | 1,034 | 962 | ||||||
Deferred income taxes | (54 | ) | (94 | ) | ||||
Pension cost | 309 | 253 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 137 | 1,149 | ||||||
Prepaid expenses and other current assets | 86 | 158 | ||||||
Other assets | 426 | 21 | ||||||
Accounts payable and accrued expenses | (307 | ) | (431 | ) | ||||
Deferred revenues | 3,145 | (177 | ) | |||||
Accrued salaries, wages and related benefits | (490 | ) | 627 | |||||
Income and other taxes | 225 | 338 | ||||||
Net cash provided by operating activities | 6,767 | 1,784 | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (1,339 | ) | (1,702 | ) | ||||
Purchase of short term investments - others | - | (5 | ) | |||||
Net cash used in investing activities | (1,339 | ) | (1,707 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from exercise of stock options | - | 321 | ||||||
Payment of long-term obligations | (291 | ) | (70 | ) | ||||
Net cash provided by (used in) financing activities | (291 | ) | 251 | |||||
Effect of exchange rate changes on cash and cash equivalents | 32 | 210 | ||||||
Net increase in cash and cash equivalents | 5,169 | 538 | ||||||
Cash and cash equivalents, beginning of period | 13,806 | 9,792 | ||||||
Cash and cash equivalents, end of period | $ | 18,975 | $ | 10,330 | ||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited)
(In thousands)
Three Months Ended | ||||||||
Consolidated | 2024 | 2023 | ||||||
Net income (loss) attributable to | $ | 989 | $ | (2,116 | ) | |||
Provision for income taxes | 424 | 218 | ||||||
Interest expense | 68 | 63 | ||||||
Depreciation and amortization | 1,266 | 1,091 | ||||||
Severance** | - | 580 | ||||||
Stock-based compensation | 1,034 | 962 | ||||||
Non-controlling interests | 1 | 3 | ||||||
Adjusted EBITDA - Consolidated | $ | 3,782 | $ | 801 |
Three Months Ended | ||||||||
DDS Segment | 2024 | 2023 | ||||||
Net income (loss) attributable to DDS Segment | $ | 426 | $ | (641 | ) | |||
Provision for income taxes | 421 | 215 | ||||||
Interest expense | 67 | 62 | ||||||
Depreciation and amortization | 364 | 225 | ||||||
Severance** | - | 33 | ||||||
Stock-based compensation | 895 | 806 | ||||||
Non-controlling interests | 1 | 3 | ||||||
Adjusted EBITDA - DDS Segment | $ | 2,174 | $ | 703 |
Three Months Ended | ||||||||
Synodex Segment | 2024 | 2023 | ||||||
Net income attributable to Synodex Segment | $ | 276 | $ | 14 | ||||
Depreciation and amortization | 137 | 162 | ||||||
Severance** | - | 6 | ||||||
Stock-based compensation | 49 | 58 | ||||||
Adjusted EBITDA - Synodex Segment | $ | 462 | $ | 240 |
Three Months Ended | ||||||||
Agility Segment | 2024 | 2023 | ||||||
Net income (loss) attributable to Agility Segment | $ | 287 | $ | (1,489 | ) | |||
Provision for income taxes | 3 | 3 | ||||||
Interest expense | 1 | 1 | ||||||
Depreciation and amortization | 765 | 704 | ||||||
Severance** | - | 541 | ||||||
Stock-based compensation | 90 | 98 | ||||||
Adjusted EBITDA (loss) - Agility Segment | $ | 1,146 | $ | (142 | ) |
**Represents non-recurring severance incurred for a reduction in headcount in connection with the re-alignment of the Company's cost structure.
CONSOLIDATED REVENUE BY SEGMENT
(Unaudited)
(In thousands)
Three Months Ended | ||||||||
2024 | 2023 | |||||||
Revenues: | ||||||||
DDS | $ | 19,705 | $ | 12,746 | ||||
Synodex | 1,871 | 1,865 | ||||||
Agility | 4,928 | 4,228 | ||||||
Total Consolidated | $ | 26,504 | $ | 18,839 |
SOURCE:
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