A data engineering company that powers the full AI lifecycle — training data, model evaluation, and safety — for frontier labs and Big Tech, including five of the "Magnificent Seven." It runs AI-enabled platforms like Synodex (which transforms messy medical records) and Agility PR Solutions (media intelligence), and launched a Federal Practice in 2025 for secure U.S. government work. Founded in 1988 in New York, it briefly traded as "Innodata Isogen" after buying Isogen International in 2001, a name that reads like a lab experiment.
A second large customer emerged at 34% of revenue, cutting the top customer's share from 58% to 37% in one year.
The customer concentration that defined Innodata for two years is unwinding. rose 58% to $92.1 million and widened to 46% as a second customer grew to 34% of the total, nearly matching the top customer's 37% share. The business is no longer dependent on a single relationship, but two customers now account for 71% of revenue.
Key takeaways
A second customer contributed 34% of Q2 , up from an undisclosed level a year ago, while the top customer's share fell to 37% from 58% — the first time in two years the top customer represented less than half of total revenue.
rose 58% to $92.1 million, driven by higher volumes of AI data engineering services from existing customer programs.
widened to 46% from 39% a year ago, as the 58% increase outpaced a 40% rise in direct operating costs tied to headcount additions to support the volume expansion.
Section summaries
Management's Discussion and Analysis
Q2 FY2026 revenue rose 58% to $92.1M driven by higher AI data engineering volumes from existing customers, with gross margin expanding to 46%.
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Total revenues increased 58% to $92.1M, primarily from higher volumes of AI data engineering services for existing customer programs.
improved to 46% from 39% a year ago, as growth outpaced the 40% rise in direct operating costs.
rose 85% to $17.6 million and widened to 19.1% from 16.2%, even as selling and administrative expenses rose 89% to $26.6 million on investments in sales, marketing, and capability-building headcount.
reached $124.3 million for the quarter, up from $2.5 million a year ago, driven by $117.9 million in inflows over the six-month period that lifted cash and equivalents to $240.3 million.
rose to $14.4 million from $7.2 million, and increased to $0.41 from $0.20, with no non-recurring tax items affecting the comparison.
What changed
The single-customer risk flagged in every prior filing has begun to ease: the top DDS customer fell to 37% of from 58% a year ago, and a second customer emerged at 34%, though combined they still represent 71% of total revenue.
The sequential growth plateau that defined Q1 and Q2 of FY2025 has given way to sustained expansion: revenue rose 2.3% sequentially in Q2 FY2026 after a 24.5% sequential increase in Q1, and the growth rate accelerated to 58% from 54% last quarter.
continued to improve, reaching 46% in Q2 FY2026 — up from 39% a year ago and 44% last quarter — as the that earlier filings flagged as uncertain now appears to be compounding with scale.
The Federal Practice launched in FY2025 has not yet been cited as a material contributor, and the Agility and Synodex segments remain absent from the narrative, meaning diversification is coming from a second large DDS customer rather than from new business lines.
What to watch
Whether the second large customer's 34% share is sustained or expands in Q3 FY2026, and whether the top customer's share continues to decline or stabilizes around the current 37% level.
Whether the $117.9 million in inflows that drove to $124.3 million represents a timing benefit that reverses in future quarters, or reflects a structural improvement in cash conversion.
Whether the 89% increase in selling and administrative expenses — the fastest growth rate in the quarterly series — moderates or continues to outpace growth, and what that means for going forward.
The outcome of the Philippine labor judgment and the securities class action lawsuit, and whether any settlement or judgment begins to affect the $240.3 million cash position.
Selling and administrative expenses surged 89% to $26.6M, reflecting investments in sales, marketing, and capability-building headcount.
rose to $14.4M from $7.2M, and increased to $0.41 from $0.20, driven by higher and .
Cash and equivalents jumped to $240.3M, with of $164.4M for the six months, boosted by $117.9M in inflows.
Customer concentration remained high: one customer contributed 37% of Q2 , down from 58% a year ago, while a second customer contributed 34%.
See Note 10, Commitments and Contingencies of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q, which is incorporated by reference herein.
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See Note 10, Commitments and Contingencies of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q, which is incorporated by reference herein.
As of the date of this filing, there have been no material changes to the risk factors associated with our business previously disclosed. For information regarding Risk Factors, please refer to Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended…
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As of the date of this filing, there have been no material changes to the risk factors associated with our business previously disclosed. For information regarding Risk Factors, please refer to Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.