Innodata Inc. reported significant financial growth for the three and nine months ended September 30, 2024, compared to the same periods in 2023. Total revenues for Q3 2024 reached $52.2 million, a substantial increase of approximately 136% from $22.2 million in Q3 2023. For the nine-month period, revenues totaled $111.3 million, up 83% from $60.7 million in the prior year. The Digital Data Solutions (DDS) segment was a key driver, generating $44.7 million in Q3 2024, a 178% increase from $16.1 million in Q3 2023, largely due to higher volumes from an existing customer.
The company's profitability also improved markedly. Consolidated net income for Q3 2024 was $17.4 million, compared to just $0.4 million in Q3 2023. For the nine months, net income was $18.4 million, reversing a loss of $2.6 million in the same period last year. This turnaround was attributed to increased revenues, lower operating costs, and a tax benefit of $5.9 million in Q3 2024, compared to a tax provision of $0.4 million in Q3 2023.
In terms of operational costs, direct operating expenses for Q3 2024 were $30.9 million, up from $13.9 million in Q3 2023, reflecting a 122% increase primarily due to increased headcount to support higher volumes. However, direct operating costs as a percentage of total revenues decreased to 59% from 63%, indicating improved efficiency.
The company’s total assets grew to $88.2 million as of September 30, 2024, from $59.4 million at the end of 2023. Cash and cash equivalents also saw a significant increase, rising to $26.4 million from $13.8 million during the same period. Working capital improved to $25.0 million, up from $9.1 million, driven by higher revenues and stock option exercises.
Innodata has also made strategic investments in technology, with capital expenditures for the nine months ending September 30, 2024, totaling $5.5 million, primarily for technology equipment and capitalized software development. The company anticipates approximately $6.0 million in capital expenditures for technology and infrastructure upgrades over the next 12 months.
The company continues to navigate legal challenges, including a class action lawsuit related to its AI technology, but management believes these will not materially affect its financial position. Overall, Innodata's strong performance reflects its strategic focus on AI and data solutions, positioning it well for future growth.
About INNODATA INC
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