INOD

Innodata is firing on the fundamentals. Revenue compounded from $86.8M (FY2023) to $170M (FY2024) to $252M (FY2025) — a +47.6% YoY clip — as its Digital Data Solutions segment (the engine: $85.4M segment gross profit, 39% margin) rides the AI training-data wave. This is real, cash-generative growth, not accrual fiction: operating income rose +63.8% to $39.9M, operating cash flow hit $46.8M, and ROE is a standout 30.0%. The balance sheet is pristine — $82.2M cash (+75.3%), liabilities/equity of just 0.57x, retained earnings swinging positive to $51.2M after years of losses. By quality, this is an A.

The catch is price, and it's a big one. At $76.64 the stock trades at 83.3x FY diluted EPS of $0.92 and 9.9x sales — a multiple that demands the hypergrowth continue uninterrupted. Note the tension the headline hides: net income grew only +12.3% and diluted EPS just +3.4%, badly lagging the +47.6% revenue and +63.8% operating-income growth. The gap is a tax-line normalization — the provision flipped from a $4.2M benefit in 2024 to a $9.2M expense in 2025 — plus a +4.2% rise in shares. So the per-share earning power that the 83x multiple is priced against grew far slower than the business. The MD&A also leans heavily on non-GAAP framing (Adjusted Gross Margin of 43%, Adjusted EBITDA), a tell that GAAP economics are thinner than the story.