Innodata Inc.

Thank you for standing by. At this time, I would like to welcome everyone to the InnoData second quarter 2026 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Amy Agress. You may begin.

Thank you. Good afternoon, everyone. Thank you for joining us today. Our speakers today are Jack Abuhoff, Chairman and CEO of InnoData, Rahul Singhal, President and Chief Revenue Officer, and Jayant Chauhan, Chief Financial Officer. Also on the call today is Marissa Espineli, Chief Accounting Officer, and Amish Pantarkar, Senior Vice President, Finance and Corporate Development. We'll hear from Jack and Rahul first, who will provide perspective about the business and then Jayant will provide a review of our results for the second quarter. We'll then take questions from analysts. Before we get started, I'd like to remind everyone that during this call, we will be making forward-looking statements, which are predictions, projections or other statements about future events. These statements are based on current expectations, assumptions and estimates and are subject to risks and uncertainties. Actual results could differ materially from those contemplated by these forward-looking statements. Factors that could cause these results to differ materially are set forth in today's earnings press release in the risk factor section of our Form 10-K, Form 10-Q, and other reports and filings with the Securities and Exchange Commission. We undertake no obligation to update forward-looking information. In addition, during this call, we may discuss certain non-GAAP financial measures. In our earnings release filed with the SEC today, as well as in our other SEC filings, which are posted on our website, you will find additional disclosures regarding these non-GAAP financial measures, including reconciliations of these measures with comparable GAAP measures. Thank you. I will now turn the call over to Jack.

Thank you, Amy, and good afternoon, everyone. Q2 is another record quarter for InnoData. Revenue, adjusted gross profit, adjusted EBITDA, and cash all reached new highs, and we exceeded analyst consensus on all key metrics. Revenue is 92.1 million, up 58% year-over-year, exceeding analyst consensus by approximately 5.8 million, or 7%, and making Q2 are 12th consecutive quarter of year-over-year growth. To put that in perspective, in Q2, as in Q1, our quarterly revenue exceeded our annual revenue of just three years ago. Our adjusted gross margin, meanwhile, was 49%, up two points sequentially and nine points above our 40% publicly stated target. Adjusted EBITDA was 25.4 million, up 92% year-over-year, exceeding analyst consensus by approximately 8.5 million, or 50%. Fully diluted earnings per share were 41 cents per share, nearly double analyst consensus, 21 cents per share. Again this quarter, we delivered growth, margin expansion, and cash generation together. while investing in innovation that converts to revenue within quarters, not years. That is the business model working as designed. Last quarter, we told you to expect our largest customer to represent a smaller percentage of total revenue. In Q2, our largest customer represented 37% of revenue, down from 56% of revenue in Q1, while the big tech customer we announced last quarter scaled from 17% of revenue to 34% of revenue, becoming our second-largest customer. While our largest customer contributed less revenue in Q2 than in Q1 as a result of a change in the quarter to program structure and service mix, we continue to expect it to grow year over year for the full year. We also landed an important new customer in the quarter, one of the fastest-failing frontier labs. The upshot is our base continues to broaden in both customers and customer programs. Now, before turning to guidance, I want to share an important announcement about InnoData's leadership. Effective September 30, Rahul Singhal will become president and chief executive officer of InnoData and will join our board. And I will transition into the role of executive chairman. This is a planned transition made from a position of strength and for me, it is also a personal one. Many of you know Rahul from these calls, from investor conferences and from the work he has led over the past several years as a principal architect of metadata transformation and for strategic partner to the world's leading AI builders. He knows our customers, he knows our technology and he knows our people. Rahul has been central to every element of the strategy behind the results you've seen quarter after quarter. The board and I didn't have to look far for the right leader. Rahul earned this role, taking on expanding responsibility year after year and delivering every time. This is how we build this company. We grow our capabilities and we promote our own people. As executive chairman, I will remain deeply engaged, focused on partnering with Rahul to build capabilities enabled by our research team. Bringing these capabilities to the federal government and to the enterprise, I believe, is where I can best contribute to creating significant shareholder value. And as one of the company's largest shareholders, that is exactly what I want to be doing. Our work with the MAG7 and leading AI labs is on a firm path to greater heights and greater diversification. Our enterprise AI and federal strategy built on the differentiated technology we developed for the Frontier Labs represent opportunities for potentially driving high-quality recurring revenue that results in significant value creation. We are building InnoData to be a generational company. And with that same aspiration in mind, we were pleased to have announced recently that Jayant Chauhan joined InnoData as Chief Financial Officer. Jant's abilities round out an already strong finance team with Marissa Espineli stepping into the role of Chief Accounting Officer. Beyond the traditional CFO mandate, Jant will work strategically on capital allocation and capital markets, customer partnerships, M&A that can accelerate our strategy, and investor communications while scaling the financial infrastructure of the company we are becoming. Before I turn the call over to Rahul, let me address guidance. We are reiterating our guidance of 40% or more year-over-year revenue growth. We have some large new potential engagements in our pipeline with both existing and new customers that we believe are likely wins, but we have not yet factored them at all into our forecast at this point. As a matter of prudence, we will only factor them into our forecast when we know they're 100% won and we can forecast the timing of revenue recognition. I will now turn the call over to Rahul to discuss the market, our strategy, and the execution milestones that we believe prove the strategy is winning.