Innodata stock surges on record revenue growth, Big Tech client news
Innodata, a U.S. provider of IT services and enterprise software, saw its stock surge more than 21% in premarket trading on Friday, August 9. The gains followed the announcement of record revenue growth of 66% in the second quarter, as well as upgraded guidance for the year.
Details
On Friday, Innodata stock jumped over 21% in premarket trading. It has now gained more than 100% so far this year and soared about 1,312% over the last five years.
On Thursday, after the markets closed, Innodata released second-quarter earnings showing record 66% year-over-year growth in revenue, which hit $32.6 million. Adjusted EBITDA, meanwhile, climbed 76% to $2.8 million.
In the period, the company secured a contract to develop and expand large language model (LLM) programs for one of its Big Tech clients, which is expected to generate approximately $87.5 million in annualized run rate revenue. Note that Innodata does business with every Magnificent Seven company.
It secured several other major contracts, including one with a company it did not disclose but described as “one of the most valuable companies in the world and one of the companies most often talked about in connection with generative AI.”
Other new Innodata clients include a provider of clinical data in the healthcare market and a federal government agency that will use the company’s generative AI for news briefings and media monitoring. Innodata aims to expand into the public sector, considering it a “strategic win.”
Against this backdrop, Innodata raised its revenue growth guidance for the full year to “at least” 60% from 40% or higher.
Other company news
Innodata also announced that it had filed a registration statement with the U.S. SEC, which, once effective, would allow the company to sell shares worth up to $50 million. This will maintain the flexibility to raise capital if needed, though the company noted that there are currently no specific plans for raising funds or their intended use.
Analyst insights
According to MarketWatch, two analysts cover Innodata, and both have a buy recommendation, with an average target price of $27 per share. The stock has recently caught the attention of analysts. For example, Yiannis Zourmpanos, an InvestorPlace contributor and the founder of the stock-market research platform Yiazou Capital Research, recently recommended Innodata for investors seeking promising companies beyond the usual AI heavyweights. Additionally, the Motley Fool spotlighted Innodata as one of three AI stocks “ready for a bull run.”
