Innodata Reports Second Quarter 2021 Results
08/05/2021 - 08:30 AM
Revenue up 23 percent from the year-ago quarter AI-based solutions and industry platforms driving growth
NEW YORK, NY / ACCESSWIRE / August 5, 2021 / INNODATA INC. (NASDAQ:INOD) today reported results for the second quarter ended June 30, 2021.
Revenue for the quarter ended June 30, 2021 was $17.0 million , up 23% year over year. Net loss for the quarter ended June 30, 2021 was $0.1 million , or $0.00 per basic and diluted share, versus a net loss of $0.5 million , or $0.02 per basic and diluted share, in the year-ago quarter. Revenue for the first six months of 2021 was $33.0 million , up 16% from the year-ago period. Net income for the first six months of 2021 was $0.3 million , or $0.01 per basic and diluted share, versus a net loss of $0.8 million , or $0.03 per basic and diluted share, in the year-ago period. Cash and cash equivalents were $22.1 million at June 30, 2021, up from $17.6 million at December 31, 2020. Amounts in this press release have been rounded. All percentages have been calculated using unrounded amounts.
Jack Abuhoff, CEO, said, "We're pleased to be reporting a strong growth quarter. As a result of strong first-half bookings and late-stage pipeline opportunities, we anticipate continuing to achieve 20% or more year over year growth in the remaining quarters of the year. Moreover, we expect growth to accelerate in the second half of 2021 over the first half of 2021 with continued acceleration in 2022 driven by expansions in business from new and recently-won customers and pipeline growth as our expanding salesforce becomes fully productive.
"Operationally, we are executing very well. We have reduced structural costs by $6 million since the end of 2019 and this quarter our incremental revenues provided 78% gross margin reflecting the operating leverage in our business, allowing us to aggressively invest internally generated cash flow in short payback sales and marketing as well as product enhancement initiatives that we anticipate will lead to continued growth.
"We believe we are proving to be an indispensable partner to organizations - from Silicon Valley big tech to Fortune 500s to venture-funded AI start-ups - which seek to embrace artificial intelligence to modernize or streamline processes or to deliver fundamentally new experiences. We believe that AI implementations will significantly increase over the next several years, providing us with an exciting strategic path."
Timing of Conference Call with Q&A
Innodata will conduct an earnings conference call, including a question-and-answer period, at 11:00 AM eastern time today. You can participate in this call by dialing the following call-in numbers:
The call-in numbers for the conference call are:
1-888-394-8218 (Domestic)
1-888-203-1112 (Domestic Replay)
Passcode on both: 3117355
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 Innodata
Innodata (NASDAQ:INOD) is a leading data engineering company. Prestigious companies across the globe turn to Innodata for help with their biggest data challenges. By combining advanced machine learning and artificial intelligence (ML/AI) technologies, a global workforce of 3,500 plus subject matter experts, and a high-security infrastructure, we're helping usher in the promise of digital data and ubiquitous AI.
Forward-Looking Statements
This press release may contain 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. Words such as "project," "believe," "expect," "can," "continue," "could," "intend," "may," "should," "will," "anticipate," "indicate," "forecast," "predict," "likely," "goals," "estimate," "plan," "potential," or the negatives thereof and other similar expressions generally identify forward-looking statements, which speak only as of the date hereof.
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, the expected or potential effects of the novel coronavirus (COVID-19) pandemic and the responses of governments, the general global population, our customers, and the Company thereto; that contracts may be terminated by clients; projected or committed volumes of work may not materialize; continuing Digital Data Solutions segment reliance on project-based work and the primarily at-will nature of such contracts and the ability of these clients to reduce, delay or cancel projects; the likelihood of continued development of the markets, particularly new and emerging markets, that our services support; continuing Digital Data Solutions segment revenue concentration in a limited number of clients; potential inability to replace projects that are completed, canceled or reduced; our dependency on content providers in our Agility segment; difficulty in integrating and deriving synergies from acquisitions, joint venture and strategic investments; potential undiscovered liabilities of companies and businesses that we may acquire; potential impairment of the carrying value of goodwill and other acquired intangible assets of companies and businesses that we acquire; changes in our business or growth strategy; a continued downturn in or depressed market conditions, whether as a result of the COVID-19 pandemic or otherwise; changes in external market factors; the ability and willingness of our clients and prospective clients to execute business plans that give rise to requirements for our services; changes in our business or growth strategy; the emergence of new or growth in existing competitors; various other competitive and technological factors; our use of and reliance on information technology systems, including potential security breaches, cyber-attacks, privacy breaches or data breaches that result in the unauthorized disclosure of consumer, client, employee or Company information, or service interruptions; and other risks and uncertainties indicated from time to time in our filings with the Securities and Exchange Commission.
Our actual results could differ materially from the results referred to in forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, uncertainty around the COVID-19 pandemic and the effects of the global response thereto and 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 Securities and Exchange Commission on March 15, 2021, as updated or amended by our other filings with the Securities and Exchange Commission. In light of these risks and uncertainties, there can be no assurance that the results referred to in the forward-looking statements will occur, and you should not place undue reliance on these forward-looking statements. 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 Federal securities laws.
Company Contact mnovero@innodata.com
INNODATA INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per-share amounts)
Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020 Revenues:
Services and Solutions
$ 13,883 $ 11,059 $ 26,665 $ 22,750 SaaS Platforms
3,166 2,804 6,351 5,643 Total
17,049 13,863 33,016 28,393 Direct operating costs
10,424 9,438 20,660 19,109 Foreign exchange (gain) loss
(15 ) 244 (155 ) 316
10,409 9,682 20,505 19,425 Gross Profit
6,640 4,181 12,511 8,968 Operating expenses:
Research and development
323 357 604 669 Selling and marketing
3,531 1,768 6,180 3,922 General and administrative
3,126 2,336 5,721 4,490 Interest expense
4 28 14 70
6,984 4,489 12,519 9,151 Loss from operations
(344 ) (308 ) (8 ) (183 ) Gain from loan forgiveness
580 - 580 - Income (loss) before provision for income taxes
236 (308 ) 572 (183 ) Provision for income taxes
366 169 293 574 Consolidated net income (loss)
(130 ) (477 ) 279 (757 ) Income (loss) attributable to non-controlling interests
(27 ) 7 (16 ) 18 Net income (loss) attributable to Innodata Inc. and Subsidiaries
$ (103 ) $ (484 ) $ 295 $ (775 )
Income (loss) per share attributable to Innodata Inc. and Subsidiaries:
Basic
$ (0.00 ) $ (0.02 ) $ 0.01 $ (0.03 ) Diluted
$ (0.00 ) $ (0.02 ) $ 0.01 $ (0.03 ) Weighted average shares outstanding:
Basic
26,522 24,409 26,199 24,405 Diluted
26,522 24,409 29,194 24,405
INNODATA INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands)
June 30, December 31,
2021 2020 ASSETS
Current assets:
Cash and cash equivalents
$ 22,059 $ 17,573 Accounts receivable, net
9,686 10,048 Prepaid expenses and other current assets
3,971 4,240 Total current assets
35,716 31,861 Property and equipment, net
7,892 7,227 Right-of-use asset, net
6,146 6,610 Other assets
2,391 2,563 Deferred income taxes, net
2,358 2,187 Intangibles, net
4,247 4,656 Goodwill
2,179 2,150 Total assets
$ 60,929 $ 57,254
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, accrued expenses and other
$ 9,542 $ 4,925 Accrued salaries, wages and related benefits
5,719 5,719 Income and other taxes
3,678 5,000 Long-term obligations - current portion
1,245 1,712 Operating lease liability - current portion
1,048 990 Total current liabilities
21,232 18,346 Deferred income taxes
129 44 Long-term obligations, net of current portion
5,773 6,282 Operating lease liability, net of current portion
5,796 6,332 Total liabilities
32,930 31,004 Non-controlling interests
(3,406 ) (3,390 ) STOCKHOLDERS' EQUITY
31,405 29,640 Total liabilities and stockholders' equity
$ 60,929 $ 57,254
INNODATA INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED CASH FLOW INFORMATION (Unaudited) (In thousands)
Six Months Ended June 30,
2021 2020 Cash flows from operating activities:
Net income (loss)
$ 279 $ (757 ) Non-cash expenses:
Depreciation and amortization
1,370 1,241 Gain on loan forgiveness
(580 ) - Stock-based compensation
614 468 Deferred income tax
(61 ) (237 ) Pension amortization
322 396 Total
1,665 1,868 Changes in assets and liabilities
3,642 2,167 Cash flows from operating activities
$ 5,586 $ 3,278 Cash flows from investing activities
$ (1,473 ) $ (970 ) Cash flows from financing activities
$ 413 $ 353
INNODATA INC. AND SUBSIDIARIES CONSOLIDATED REVENUE (Unaudited) (In thousands)
Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
DDS
$ 12,997 $ 9,858 $ 24,760 $ 20,267 Synodex
886 1,201 1,905 2,483 Agility
3,166 2,804 6,351 5,642 Total Revenue
$ 17,049 $ 13,863 $ 33,016 $ 28,393
SOURCE: Innodata Inc.
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