Innodata posted record first-quarter 2026 results and raised its full-year revenue growth outlook after a surge in AI-related work sent revenue to $90.1 million, up 54% from a year earlier and 24% from the fourth quarter. The company also said it now expects 2026 growth of approximately 40% or more, above its prior target of 35% or more.
The numbers were well ahead of Wall Street’s expectations. Revenue topped analyst consensus of $76.5 million by about $13.6 million, while adjusted gross profit reached $42.6 million with a 47% margin, six percentage points higher than the same period a year ago. Adjusted EBITDA came in at $25.0 million, equal to 28% of revenue, and net income was $14.9 million, or $0.42 a share.
Jack Abuhoff called the quarter a “step change” for the company, saying visibility had improved “with one quarter behind us and progressively increasing visibility.” He said Innodata now has new engagements with “one of the world’s leading big tech companies” that management believes could generate about $51 million in revenue this year. A year ago, that customer produced zero revenue for the company, and Abuhoff said it is expected to become Innodata’s second-largest customer in 2026.
The work spans pre-training, mid-training, post-training activities and evaluation, a mix that underscores how closely the company is tied to the AI buildout. Abuhoff also said there are active conversations about additional work not included in the $51 million estimate, and that Innodata expects its largest customer to account for a smaller share of total revenue this year as the business broadens.
That diversification is already showing up elsewhere in the quarter. Revenue from Innodata’s other big tech customers in the aggregate rose 453% year over year, a sign that demand is not limited to a single client. Marissa Espineli said the company’s $35.1 million sequential increase in cash reflected “continued strong profitability, disciplined working capital management, and customer prepayments related to our pre-training programs.”
Innodata ended the quarter with $117.4 million in cash and no debt drawn on its credit facility. During the period, it also renewed and expanded its Wells Fargo credit facility from $30 million to $50 million on a three-year term, a move that gives the company more room to fund a business that is growing fast and still adding new programs.
For investors watching inod stock, the immediate question is whether the company can keep turning new AI contracts into sustained revenue at the pace implied by management’s updated outlook. The answer now depends less on whether demand exists and more on how many of those “several potentially large programs” actually convert into billings in the months ahead.
