Innodata (INOD) 10-Q5 Aug 212021 Q2 Quarterly reportFinancial data

Company Profile

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2021	Aug. 01, 2021
Cover
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2021
Document Transition Report	false
Entity File Number	001-35774
Entity Registrant Name	INNODATA INC
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	13-3475943
Entity Address, Address Line One	55 Challenger Road
Entity Address, City or Town	Ridgefield Park,
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	07660
City Area Code	201
Local Phone Number	371-8000
Title of 12(b) Security	Common Stock
Trading Symbol	INOD
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		26,852,379
Entity Central Index Key	0000903651
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Amendment Flag	false

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 22,059	$ 17,573
Accounts receivable, net of allowance for doubtful accounts of $780 and $670, respectively	9,686	10,048
Prepaid expenses and other current assets	3,971	4,240
Total current assets	35,716	31,861
Property and equipment, net	7,892	7,227
Right-of-use-asset, net	6,146	6,610
Other assets	2,391	2,563
Deferred income taxes, net	2,358	2,187
Intangibles, net	4,247	4,656
Goodwill	2,179	2,150
Total assets	60,929	57,254
Current liabilities:
Accounts payable	2,269	1,435
Accrued expenses and other	7,273	3,490
Accrued salaries, wages and related benefits	5,719	5,719
Income and other taxes	3,678	5,000
Long-term obligations - current portion	1,245	1,712
Operating lease liability - current portion	1,048	990
Total current liabilities	21,232	18,346
Deferred income taxes	129	44
Long-term obligations, net of current portion	5,773	6,282
Operating lease liability, net of current portion	5,796	6,332
Total liabilities	32,930	31,004
Commitments and contingencies
Non-controlling interests	(3,406)	(3,390)
STOCKHOLDERS' EQUITY:
Serial preferred stock; 4,998,000 shares authorized, none outstanding	0	0
Common stock, $.01 par value; 75,000,000 shares authorized; 30,037,000 shares issued and 26,853,000 outstanding at June 30, 2021 and 28,984,000 shares issued and 25,800,000 outstanding at December 31, 2020;	299	289
Additional paid-in capital	33,512	31,921
Retained earnings	5,128	4,833
Accumulated other comprehensive loss	(1,069)	(938)
Stockholders' Equity before Treasury Stock, Total	37,870	36,105
Less: treasury stock, 3,184,000 shares at cost	(6,465)	(6,465)
Total stockholders' equity	31,405	29,640
Total liabilities and stockholders' equity	$ 60,929	$ 57,254

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
CONDENSED CONSOLIDATED BALANCE SHEETS
Accounts receivable, net of allowance for doubtful accounts	$ 780	$ 670
Series preferred stock, shares authorized	4,998,000	4,998,000
Series preferred stock, outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	75,000,000	75,000,000
Common stock, shares issued	30,037,000	28,984,000
Common stock, shares outstanding	26,853,000	25,800,000
Treasury stock, shares	3,184,000	3,184,000

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Revenues	$ 17,049	$ 13,863	$ 33,016	$ 28,393
Operating costs and expenses:
Direct operating costs	10,409	9,682	20,505	19,425
Selling and administrative expenses	6,980	4,461	12,505	9,081
Interest expense, net	4	28	14	70
Total	17,393	14,171	33,024	28,576
Loss from operations	(344)	(308)	(8)	(183)
Gain from loan forgiveness	580	0	580	0
Income (loss) before provision for income taxes	236	(308)	572	(183)
Provision for income taxes	366	169	293	574
Consolidated net income (loss)	(130)	(477)	279	(757)
Income (loss) attributable to non-controlling interests	(27)	7	(16)	18
Net income (loss) attributable to Innodata Inc. and Subsidiaries	$ (103)	$ (484)	$ 295	$ (775)
Income (loss) per share attributable to Innodata Inc. and Subsidiaries:
Basic			$ 0.01	$ (0.03)
Diluted			$ 0.01	$ (0.03)
Basic and diluted	$ 0	$ (0.02)
Weighted average shares outstanding:
Basic	26,522	24,409	26,199	24,405
Diluted	26,522	24,409	29,194	24,405
Basic and diluted	26,522	24,409
Comprehensive income (loss):
Consolidated net income (loss)	$ (130)	$ (477)	$ 279	$ (757)
Pension liability adjustment, net of taxes	11	11	22	25
Foreign currency translation adjustment, net of taxes	135	221	114	(497)
Change in fair value of derivatives, net of taxes	(267)	87	(267)	(84)
Other comprehensive income (loss)	(121)	319	(131)	(556)
Total comprehensive income (loss)	(251)	(158)	148	(1,313)
Less: Comprehensive income (loss) attributable to non-controlling interests	(27)	7	(16)	18
Comprehensive income (loss) attributable to Innodata Inc. and Subsidiaries	$ (224)	$ (165)	$ 164	$ (1,331)

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Cash flows from operating activities:
Consolidated net income (loss)	$ 279	$ (757)
Adjustments to reconcile consolidated net income (loss) to net cash provided by operating activities:
Depreciation and amortization	1,370	1,241
Gain on loan forgiveness	(580)	0
Stock-based compensation	614	468
Deferred income taxes	(61)	(237)
Pension cost	322	396
Changes in operating assets and liabilities:
Accounts receivable	(140)	1,003
Prepaid expenses and other current assets	239	(210)
Other assets	168	(217)
Accounts payable and accrued expenses	4,658	373
Accrued salaries, wages and related benefits	0	630
Income and other taxes	(1,283)	588
Net cash provided by operating activities	5,586	3,278
Cash flows from investing activities:
Capital expenditures	(1,473)	(970)
Net cash used in investing activities	(1,473)	(970)
Cash flows from financing activities:
Proceeds from stock option exercises	1,750	0
Withholding taxes on net settlement of stock-based compensation	(763)	0
Payment of long-term obligations	(574)	(227)
Proceeds from bank loan	0	580
Net cash provided by financing activities	413	353
Effect of exchange rate changes on cash and cash equivalents	(40)	(50)
Net increase in cash and cash equivalents	4,486	2,611
Cash and cash equivalents, beginning of period	17,573	10,874
Cash and cash equivalents, end of period	22,059	13,485
Supplemental disclosures of cash flow information:
Shares withheld for withholding taxes on net settlement for stock-based compensation	763	0
Cash paid for income taxes	724	94
Cash paid for operating leases	860	1,254
Cash paid for interest	$ 17	$ 15

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Treasury Stock	Total
Balance at Dec. 31, 2019	$ 275	$ 28,426	$ 4,993	$ (920)	$ (6,465)	$ 26,309
Balance (in shares) at Dec. 31, 2019	27,643,000
Balance (in shares) at Dec. 31, 2019					3,184,000
Net income (loss) attributable to Innodata Inc. and Subsidiaries	$ 0	0	(291)	0	$ 0	(291)
Stock-based compensation	$ 0	170	0	0	0	170
Stock based compensation (in shares)	0
Pension liability adjustments, net of taxes	$ 0	0	0	14	0	14
Foreign currency translation adjustment, net of taxes	0	0	0	(718)	0	(718)
Change in fair value of derivatives, net of taxes	0	0	0	(171)	0	(171)
Balance at Mar. 31, 2020	$ 275	28,596	4,702	(1,795)	$ (6,465)	25,313
Balance (in shares) at Mar. 31, 2020	27,643,000
Balance (in shares) at Mar. 31, 2020					3,184,000
Balance at Dec. 31, 2019	$ 275	28,426	4,993	(920)	$ (6,465)	26,309
Balance (in shares) at Dec. 31, 2019	27,643,000
Balance (in shares) at Dec. 31, 2019					3,184,000
Net income (loss) attributable to Innodata Inc. and Subsidiaries						(775)
Shares withheld for exercise settlement and taxes						0
Pension liability adjustments, net of taxes						25
Foreign currency translation adjustment, net of taxes						(497)
Change in fair value of derivatives, net of taxes						(84)
Balance at Jun. 30, 2020	$ 275	28,894	4,218	(1,476)	$ (6,465)	25,446
Balance (in shares) at Jun. 30, 2020	27,643,000
Balance (in shares) at Jun. 30, 2020					3,184,000
Balance at Mar. 31, 2020	$ 275	28,596	4,702	(1,795)	$ (6,465)	25,313
Balance (in shares) at Mar. 31, 2020	27,643,000
Balance (in shares) at Mar. 31, 2020					3,184,000
Net income (loss) attributable to Innodata Inc. and Subsidiaries	$ 0	0	(484)	0	$ 0	(484)
Stock-based compensation	0	298	0	0	0	298
Pension liability adjustments, net of taxes	0	0	0	11	0	11
Foreign currency translation adjustment, net of taxes	0	0	0	221	0	221
Change in fair value of derivatives, net of taxes	0	0	0	87	0	87
Balance at Jun. 30, 2020	$ 275	28,894	4,218	(1,476)	$ (6,465)	25,446
Balance (in shares) at Jun. 30, 2020	27,643,000
Balance (in shares) at Jun. 30, 2020					3,184,000
Balance at Dec. 31, 2020	$ 289	31,921	4,833	(938)	$ (6,465)	$ 29,640
Balance (in shares) at Dec. 31, 2020	28,984,000
Balance (in shares) at Dec. 31, 2020					3,184,000	3,184,000
Net income (loss) attributable to Innodata Inc. and Subsidiaries	$ 0	0	398	0	$ 0	$ 398
Stock-based compensation	$ 0	278	0	0	0	278
Stock based compensation (in shares)	0
Exercise of stock options	$ 4	605	0	0	0	609
Exercise of stock options (in shares)	690,000
Shares withheld for exercise settlement and taxes	$ 1	(764)	0	0	0	(763)
Shares withheld for exercise settlement and taxes (in shares)	(193,000)
Pension liability adjustments, net of taxes	$ 0	0	0	11	0	11
Foreign currency translation adjustment, net of taxes	0	0	0	(21)	0	(21)
Balance at Mar. 31, 2021	$ 294	32,040	5,231	(948)	$ (6,465)	30,152
Balance (in shares) at Mar. 31, 2021	29,481,000
Balance (in shares) at Mar. 31, 2021					3,184,000
Balance at Dec. 31, 2020	$ 289	31,921	4,833	(938)	$ (6,465)	$ 29,640
Balance (in shares) at Dec. 31, 2020	28,984,000
Balance (in shares) at Dec. 31, 2020					3,184,000	3,184,000
Net income (loss) attributable to Innodata Inc. and Subsidiaries						$ 295
Shares withheld for exercise settlement and taxes						(763)
Pension liability adjustments, net of taxes						22
Foreign currency translation adjustment, net of taxes						114
Change in fair value of derivatives, net of taxes						(267)
Balance at Jun. 30, 2021	$ 299	33,512	5,128	(1,069)	$ (6,465)	$ 31,405
Balance (in shares) at Jun. 30, 2021	30,037,000
Balance (in shares) at Jun. 30, 2021					3,184,000	3,184,000
Balance at Mar. 31, 2021	$ 294	32,040	5,231	(948)	$ (6,465)	$ 30,152
Balance (in shares) at Mar. 31, 2021	29,481,000
Balance (in shares) at Mar. 31, 2021					3,184,000
Net income (loss) attributable to Innodata Inc. and Subsidiaries	$ 0	0	(103)	0	$ 0	(103)
Stock-based compensation	0	336	0	0	0	336
Exercise of stock options	$ 5	1,136	0	0	0	1,141
Exercise of stock options (in shares)	556,000
Pension liability adjustments, net of taxes	$ 0	0	0	11	0	11
Foreign currency translation adjustment, net of taxes	0	0	0	135	0	135
Change in fair value of derivatives, net of taxes	0	0	0	(267)	0	(267)
Balance at Jun. 30, 2021	$ 299	$ 33,512	$ 5,128	$ (1,069)	$ (6,465)	$ 31,405
Balance (in shares) at Jun. 30, 2021	30,037,000
Balance (in shares) at Jun. 30, 2021					3,184,000	3,184,000

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
Summary of Significant Accounting Policies	Jun. 30, 2021
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	1. Summary of Significant Accounting Policies Basis of Presentation Certain information and note disclosures normally included in or with financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been condensed or omitted from these condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) Principles of Consolidation Use of Estimates Capitalized Software Development Costs three Deferred Revenue Revenue Recognition For the Digital Data Solutions (“DDS”) segment, revenue is recognized primarily based on the quantity delivered or resources utilized in the period in which services are performed and performance conditions are satisfied as per the agreement. Revenues for agreements billed on a time-and-materials basis are recognized as services are performed. Revenues under fixed-fee agreements, which are not significant to overall revenues, are recognized based on the proportional performance method of accounting, as services are performed, or milestones are achieved. For the Synodex segment, revenue is recognized primarily based on the quantity delivered in the period in which services are performed and performance conditions are satisfied as per the agreement. A portion of the Synodex segment revenue is derived from licensing our functional software and providing access to the Company’s hosted software platform. Revenue from such services is recognized monthly when all parties to the agreement have agreed to the agreement; each party’s rights are identifiable; the payment terms are identifiable; the agreement has commercial substance; access to the service is provided to the end user; and collection is probable. The Agility segment derives its revenue primarily from subscription arrangements and provision of enriched media analysis services. It also derives revenue as a reseller of corporate communication solutions. Revenue from subscriptions is recognized monthly when access to the service is provided to the end user; all parties to the agreement have agreed to the agreement; each party’s rights are identifiable; the payment terms are identifiable; the agreement has commercial substance; and collection is probable. Revenue from enriched media analysis services is recognized when the services are performed, and performance conditions are satisfied. Revenues from the reseller agreements are recognized at the gross amount received for the goods in accordance with our functioning as a principal due to our meeting the following criteria: the Company acts as the primary obligor in the sales transaction; assumes the credit risk; sets the price; can select suppliers; and is involved in the execution of the services, including after sales service. Revenues include reimbursement of out-of-pocket expenses, with the corresponding out-of-pocket expenses included in direct operating costs. The Company considers U.S. GAAP criteria for determining whether to report gross revenue as a principal versus net revenue as an agent. The Company evaluates whether it is in control of the services before the same are transferred to the customer to assess whether it is principal or agent in the arrangement. Revenues are recognized on a gross basis if the Company is in the capacity of principal and on a net basis if it falls in the capacity of an agent. Contract acquisition costs, which are included in prepaid expenses and other current assets, are amortized over the term of a subscription agreement or contract. The Company reviews these prepaid acquisition costs on a periodic basis to determine the need to adjust the carrying values for early-terminated contracts. Foreign Currency The functional currency for the Company’s subsidiaries in Germany, the United Kingdom and Canada are the Euro, the Pound Sterling and the Canadian dollar, respectively. The financial statements of these subsidiaries are prepared in these respective currencies. Financial information is translated from the applicable functional currency to the U.S. dollar (the reporting currency) for inclusion in the Company’s condensed consolidated financial statements. Revenues, expenses and cash flows are translated at weighted average exchange rates prevailing during the fiscal periods, and assets and liabilities are translated at fiscal period-end exchange rates. Resulting translation adjustments are included as a component of accumulated other comprehensive loss in stockholders’ equity. Foreign exchange transaction gains or losses are included in direct operating costs in the accompanying condensed consolidated statements of operations and comprehensive loss. Derivative Instruments - Income Taxes In assessing the realization of deferred tax assets, management considered whether it is more likely than not that all or some portion of the U.S. and Canadian deferred tax assets will not be realizable. As the expectation of future taxable income resulting from the U.S. and Canadian entities cannot be predicted with certainty, the Company maintains a valuation allowance against all the U.S. and Canadian net deferred tax assets. The Company accounts for income taxes regarding uncertain tax positions, and recognizes interest and penalties related to uncertain tax positions in Income tax expense in the condensed consolidated statements of operations and comprehensive income (loss). Recent Accounting Pronouncements - In December 2019, the FASB issued Accounting Standards Update (“ASU”) No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” as part of its initiative to reduce complexity in the accounting standards. The standard eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The standard also clarifies and simplifies other aspects of the accounting for income taxes. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020.The Company adopted the standard on January 1, 2021 and it had no material impact on the Company’s condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Statements” (“ASU 2016-13”). ASU 2016-13 requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation amount that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. In November 2018, the FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses,” which clarifies ASC 326, “Financial Instruments – Credit Losses” and corrects unintended application of the guidance, and in November 2019, the FASB issued ASU No. 2019-11, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses,” which clarifies or addresses specific issues about certain aspects of ASU 2016-13. In March 2020, the FASB issued ASU No. 2020-03, “Codification Improvements to Financial Instruments,” which modifies the measurement of expected credit losses of certain financial instruments. ASU 2016-13 is effective for certain smaller reporting companies for financial statements issued for fiscal years beginning after December 15, 2022 and interim periods within those fiscal years, which will be fiscal 2023 for the Company if it continues to be classified as a smaller reporting company, with early adoption permitted. The Company does not expect that the adoption of the new guidance will have a material impact on the Company’s condensed consolidated financial statements. Correction of Immaterial Errors The errors were not material, either quantitatively or qualitatively, in any of the reported periods. However, the corrections, if recorded in the three month period ended September 30, 2020, would have been material to such period. Accordingly, the June 30, 2020 financial statements included in this Form 10-Q are being corrected by revising such financial statements, as follows: ● A decrease in expenses of $74,000 and $147,000 for the three and six months ended June 30, 2020. ● A decrease of $0.01 on the loss per share for the six months ended June 30, 2020. ● A decrease in liabilities of $101,000 as of June 30, 2020. ● An increase in total assets of $46,000 as of June 30, 2020. ● The impact on cash flows for the six months ended June 30, 2020 was: ● An increase in cash flows provided by operating activities of $94,000. ● An increase in cash flows used in financing activities of $94,000. The Company evaluated the errors under Staff Accounting Bulletins 99 and 108 and concluded that a restatement of the June 30, 2020 condensed consolidated financial statements is not required.

Goodwill and Intangible Assets

Goodwill and Intangible Assets	6 Months Ended
Goodwill and Intangible Assets	Jun. 30, 2021
Goodwill and Intangible Assets
Goodwill and Intangible Assets	2. Goodwill and Intangible Assets The change in the carrying amount of goodwill for the six months ended June 30, 2021 was as follows (in thousands): Balance as of January 1, 2021 $ 2,150 Foreign currency translation adjustment 29 Balance as of June 30, 2021 $ 2,179 The fair value measurement of goodwill was classified within Level 3 of the fair value hierarchy because the Company used the income approach, which utilizes significant inputs that are unobservable in the market. The Company believes it made reasonable estimates and assumptions to calculate the fair value of the reporting unit as of the impairment test measurement date. Information regarding the Company’s acquisition-related intangible assets was as follows (in thousands): Trademarks Media Developed Customer and Contact technology relationships tradenames Patents Database Total Gross carrying amounts: Balance as of January 1, 2021 $ 3,175 $ 2,228 $ 882 $ 45 $ 3,670 $ 10,000 Foreign currency translation 59 54 8 1 22 144 Balance as of June 30, 2021 $ 3,234 $ 2,282 $ 890 $ 46 $ 3,692 $ 10,144 Trademarks Media Developed Customer and Contact technology relationships tradenames Patents Database Total Accumulated amortization: Balance as of January 1, 2021 $ 1,844 $ 1,192 $ 629 $ 29 $ 1,650 $ 5,344 Amortization expense 159 93 28 2 183 465 Foreign currency translation 39 30 5 1 13 88 Balance as of June 30, 2021 $ 2,042 $ 1,315 $ 662 $ 32 $ 1,846 $ 5,897 Net carrying values - June 30, 2021 $ 1,192 $ 967 $ 228 $ 14 $ 1,846 $ 4,247 Amortization expense relating to acquisition-related intangible assets was $0.2 million for the three months ended June 30, 2021 and $0.5 million for the six months ended June 30, 2021 As of June 30, 2021, estimated future amortization expense for intangible assets was as follows (in thousands): Year Amortization 2021 $ 472 2022 945 2023 945 2024 840 2025 691 Thereafter 354 $ 4,247

Income Taxes

Income Taxes	6 Months Ended
Income Taxes	Jun. 30, 2021
Income Taxes
Income Taxes	3. Income Taxes Taxes primarily consist of a provision for foreign taxes recorded by the Company’s foreign subsidiaries in accordance with local tax regulations. Effective income tax rates are disproportionate due to the losses incurred by the Company’s U.S. and Canadian subsidiaries and a valuation allowance recorded on deferred taxes of these entities and tax effects of foreign operations, including foreign exchange gains and losses. The reconciliations of the U.S. statutory rate with the Company’s effective tax rate for the six-month periods ended June 30, 2021 and 2020 are summarized in the table below: For the Three Months Ended June 30, 2021 2020 Federal income tax expense at statutory rate 21.0 % 21.0 % Effect of: Change in valuation allowance 101.1 (78.5) Tax effects of foreign operations 35.4 242.7 Change in tax rates 20.6 - Foreign operations permanent difference - foreign exchange gains and losses 9.1 144.3 Return to provision true up 3.2 (50.6) State income tax net of federal benefit 1.5 16.2 Withholding tax - 9.3 Foreign rate differential (19.6) (34.7) Effect of stock-based compensation (62.1) - Increase (decrease) in unrecognized tax benefits (ASC 740) (64.4) 67.1 Other 5.4 (23.1) Effective tax rate 51.2 % 313.7 % The following table presents a roll-forward of the Company’s unrecognized tax benefits and associated interest for the six months ended June 30, 2021 (in thousands): Unrecognized tax benefits Balance - January 1, 2021 $ 3,231 Tax settlement matters – prior periods (1,476) Change in tax position (174) Interest accrual 57 Foreign currency remeasurement (27) Balance - June 30, 2021 $ 1,611 The Company expects that unrecognized tax benefits as of June 30, 2021 if recognized, would have a material impact on the Company’s effective tax rate. Tax Assessments In September 2015, the Company’s Indian subsidiary was subject to an inquiry by the Service Tax Department in India regarding the classification of services provided by this subsidiary, asserting that the services provided by this subsidiary fall under the category of online information and database access or retrieval services (OID Services), and not under the category of business support services (BS Services) that are exempt from service tax as historically indicated in the subsidiary’s service tax filings. The Company disagrees with the Service Tax Department’s position. In November 2019, the Commissioner of Central Tax, GST & Central Excise issued an order confirming the Service Tax Department's position. The Company is contesting this order in an appeal to the Customs, Excise and Service Tax Appellate Tribunal. In the event the Service Tax Department is ultimately successful in proving that the services fall under the category of OID Services, the revenues earned by the Company’s Indian subsidiary for the period July 2012 through November 2016 would be subject to a service tax of between 12.36% and 15%, and this subsidiary may also be liable for interest and penalties. The revenue of the Company’s Indian subsidiary during this period was approximately $64.0 million. In accordance with new rules promulgated by the Service Tax Department, as of December 1, 2016 service tax is no longer applicable to OID or BS Services. Based on the assessment of the Company’s counsel, the Company has not recorded any tax liability for this case. In a separate action relating to service tax refunds, in October 2016, the Company’s Indian subsidiary received notices from the Indian Service Tax Department in India seeking to reverse service tax refunds of approximately $160,000 previously granted to the Company’s Indian subsidiary for three quarters in 2014, asserting that the services provided by this subsidiary fall under the category of OID Services and not BS Services. The appeal was determined in favor of the Service Tax Department. The Company disagrees with the basis of this decision and is contesting it. The Company expects delays in its Indian subsidiary receiving further service tax refunds until this matter is adjudicated with finality, and currently has service tax credits of approximately $1.0 million recorded as a receivable. Based on the assessment of the Company’s counsel, the Company has not recorded any tax liability or allowance Substantial recovery against the Company in the above referenced 2015 Service Tax Department case could have a material adverse impact on the Company, and unfavorable rulings or recoveries in other tax proceedings could have a material adverse impact on the consolidated operating results of the period (and subsequent periods) in which the rulings or recovery occurs.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Jun. 30, 2021
Commitments and Contingencies
Commitments and Contingencies	4. Commitments and Contingencies Litigation – The Company is also subject to various other legal proceedings and claims that have arisen in the ordinary course of business. While management currently believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company’s consolidated financial position or overall trends in consolidated results of operations, litigation is subject to inherent uncertainties. Substantial recovery against the Company in the above-referenced Philippine action could have a material adverse impact on the Company, and unfavorable rulings or recoveries in the other proceedings could have a material adverse impact on the consolidated operating results in the period in which the ruling or recovery occurs. In addition, the Company’s estimate of the potential impact on the Company’s consolidated financial position or overall consolidated results of operations for the above referenced legal proceedings could change in the future. The Company’s legal accruals related to legal proceedings and claims are based on the Company’s determination of whether or not a loss is probable. The Company reviews outstanding proceedings and claims with external counsel to assess probability and estimates of loss. The accruals are adjusted if necessary. While the Company intends to defend these matters vigorously, adverse outcomes that it estimates could reach approximately $350,000 in the aggregate beyond recorded amounts are reasonably possible. If circumstances change, the Company may be required to record adjustments that could be material to its reported consolidated financial condition and results of operations.

Stock Options and Restricted Sh

Stock Options and Restricted Shares	6 Months Ended
Stock Options and Restricted Shares	Jun. 30, 2021
Stock Options and Restricted Shares
Stock Options and Restricted Shares	5. Stock Options and Restricted Shares A summary of stock option activity under the Innodata Inc. 2013 Stock Plan, as amended and restated effective June 7, 2016 (the Plan), as of June 30, 2021, and changes during the six months then ended, are presented below: Weighted - Weighted-Average Number of Average Exercise Remaining Contractual Aggregate Options Price Term (years) Intrinsic Value Outstanding at January 1, 2021 5,906,884 $ 1.61 Granted 360,000 6.40 Exercised (1,245,182) 2.12 Forfeited/Expired (20,000) 1.38 Outstanding at June 30, 2021 5,001,702 $ 1.83 7.60 $ 25,837,675 Exercisable at June 30, 2021 3,425,983 $ 1.62 7.12 $ 18,426,406 Vested and Expected to Vest at June 30, 2021 5,001,702 $ 1.83 7.60 $ 25,837,675 During the six months ended June 30, 2021, a total of 1,245,182 options were exercised at an average price of $2.12 for net proceeds of $1.8 million The fair value of stock options is estimated on the date of grant using the Black-Scholes option pricing model. The weighted-average fair value of the options granted, and weighted-average assumptions were as follows: For the Six Months Ended June 30, 2021 2020 Weighted average fair value of options granted $ 3.33 $ 0.61 Risk-free interest rate 0.22%-0.82 % 0.47% - 0.56 % Expected term (years) 3 - 6 5 - 6 Expected volatility factor 59.62 % 46.75% - 50.01 % Expected dividends None None A summary of outstanding restricted shares issued under the Plan as of June 30, 2021 are presented below: Weighted-Average Grant Number of Shares Date Fair Value Unvested at December 31, 2020 50,000 - Granted - - Vested (25,000) - Forfeited/Expired - - Unvested at June 30, 2021 25,000 $ 1.38 The compensation cost related to non-vested stock options and restricted stock awards not yet recognized as of June 30, 2021 totaled approximately $1.7 million. The weighted-average period over which these costs will be recognized is 24 months. The stock-based compensation expense related to the Company’s various stock awards was allocated as follows (in thousands): For the Three Months Ended For the Six Months Ended June 30, June 30, 2021 2020 2021 2020 Direct operating costs $ 37 $ 39 $ 75 $ 79 Selling and administrative expenses 299 259 539 389 Total stock-based compensation $ 336 $ 298 $ 614 $ 468

Operating Leases

Operating Leases	6 Months Ended
Operating Leases	Jun. 30, 2021
Operating Leases
Operating Leases	6. Operating Leases The Company has various lease agreements for its offices and service delivery centers. The Company has determined that the risks and benefits related to the leased properties are retained by the lessors. Accordingly, these are accounted for as operating leases. These lease agreements are for terms ranging from two The table below summarizes the amounts recognized in the condensed consolidated financial statements related to operating leases for the periods presented (in thousands): For the Three Months Ended For the Six Months Ended June 30, June 30, 2021 2020 2021 2020 Rent expense for long-term operating leases $ 388 $ 421 $ 776 $ 865 Rent expense for short-term leases 34 218 84 389 Total rent expense $ 422 $ 639 $ 860 $ 1,254 The following table presents the maturity profile of the Company’s operating lease liabilities based on the contractual undiscounted payments with a reconciliation of these amounts to the remaining net present value of the operating lease liability reported in the condensed consolidated balance sheet as of June 30, 2021 (in thousands): Year Amount 2021 $ 781 2022 1,523 2023 1,262 2024 1,033 2025 1,048 2026 and thereafter 3,495 Total lease payments 9,142 Less: Interest 2,298 Net present value of lease liabilities $ 6,844 Current portion $ 1,048 Long-term portion 5,796 Total $ 6,844 The weighted average remaining lease terms and discount rates for all of the Company’s operating leases as of June 30, 2021 were as follows: Weighted-average lease term remaining 59 months Weighted-average discount rate 8.68 %

Long-term obligations

Long-term obligations	6 Months Ended
Long-term obligations	Jun. 30, 2021
Long-term obligations
Long-term obligations	7. Long-term obligations Total long-term obligations as of June 30, 2021 and December 31, 2020 consisted of the following (in thousands): June 30, December 31, 2021 2020 Pension obligations - accrued pension liability $ 6,166 $ 5,940 Settlement agreement (1) 398 518 Capital lease obligations - 209 Microsoft licenses (2) 454 747 Bank loans payable (3) - 580 7,018 7,994 Less: Current portion of long-term obligations 1,245 1,712 Totals $ 5,773 $ 6,282 (1) Represents payment to be made pursuant to a settlement agreement entered in December 2018 between a subsidiary of the Company and 19 former employees of such subsidiary. The balance is payable in monthly installments through March 2023. (2) In April 2020, the Company renewed a vendor agreement to acquire certain additional software licenses and to receive support and subsequent software upgrades on these and other currently owned software licenses through February 2023. Pursuant to this agreement, the Company is obligated to pay approximately $0.4 million annually over the term of the agreement. (3) On May 4, 2020, the Company received loan proceeds of $579,700 under the Paycheck Protection Program (“PPP”) which was established as part of the Coronavirus Aid, Relief and Economic Security Act of 2020, as amended. On May 21, 2021, the Small Business Administration (SBA) approved the Company’s loan forgiveness application for 100% of the loan proceeds.

Comprehensive loss

Comprehensive loss	6 Months Ended
Comprehensive loss	Jun. 30, 2021
Comprehensive loss
Comprehensive loss	8. Comprehensive loss Accumulated other comprehensive loss, as reflected in the condensed consolidated balance sheets, consists of pension liability adjustments, net of taxes, foreign currency translation adjustment, net of taxes and changes in fair value of derivatives, net of taxes. The components of accumulated other comprehensive loss as of June 30, 2021 and 2020, and reclassifications out of accumulated other comprehensive loss for the three and six months then ended, are presented below (in thousands): Foreign Currency Pension Liability Fair Value of Translation Accumulated Other Adjustment Derivatives Adjustment Comprehensive Loss Balance at April 1, 2021 $ (433) $ - $ (515) $ (948) Other comprehensive loss before reclassifications, net of taxes - (301) 135 (166) Total other comprehensive loss before reclassifications, net of taxes (433) (301) (380) (1,114) Net amount reclassified to earnings 11 34 - 45 Balance at June 30, 2021 $ (422) $ (267) $ (380) $ (1,069) Foreign Currency Pension Liability Fair Value of Translation Accumulated Other Adjustment Derivatives Adjustment Comprehensive Loss Balance at January 1, 2021 $ (444) $ - $ (494) $ (938) Other comprehensive loss before reclassifications, net of taxes - (301) 114 (187) Total other comprehensive loss before reclassifications, net of taxes (444) (301) (380) (1,125) Net amount reclassified to earnings 22 34 - 56 Balance at June 30, 2021 $ (422) $ (267) $ (380) $ (1,069) Foreign Currency Pension Liability Fair Value of Translation Accumulated Other Adjustment Derivatives Adjustment Comprehensive Loss Balance at April 1, 2020 $ (39) $ (138) $ (1,618) $ (1,795) Other comprehensive income before reclassifications, net of taxes - - 221 221 Total other comprehensive loss before reclassifications, net of taxes (39) (138) (1,397) (1,574) Net amount reclassified to earnings 11 87 - 98 Balance at June 30, 2020 $ (28) $ (51) $ (1,397) $ (1,476) Foreign Currency Pension Liability Fair Value of Translation Accumulated Other Adjustment Derivatives Adjustment Comprehensive Loss Balance at January 1, 2020 $ (53) $ 33 $ (900) $ (920) Other comprehensive loss before reclassifications, net of taxes - (166) (497) (663) Total other comprehensive loss before reclassifications, net of taxes (53) (133) (1,397) (1,583) Net amount reclassified to earnings 25 82 - 107 Balance at June 30, 2020 $ (28) $ (51) $ (1,397) $ (1,476) All reclassifications out of accumulated other comprehensive loss had an impact on direct operating costs in the condensed consolidated statements of operations and comprehensive income (loss).

Segment Reporting and Concentra

Segment Reporting and Concentrations	6 Months Ended
Segment Reporting and Concentrations	Jun. 30, 2021
Segment Reporting and Concentrations
Segment Reporting and Concentrations	9. Segment Reporting and Concentrations The Company’s operations are classified in three reporting segments: Digital Data Solutions (“DDS”), Synodex and Agility. The DDS segment provides a range of solutions and platforms for solving complex data challenges that companies face when they seek to obtain the benefits of artificial intelligence (“AI”) systems and analytics platforms. These include data annotation, data transformation, data curation and intelligent automation. The DDS segment also provides a variety of services for clients in the information industry that relate to content operations and product development. The Synodex segment provides an intelligent data platform that transforms medical records into useable digital data organized in accordance with the Company’s proprietary data models or client data models. The Agility segment provides an intelligent data platform that provides marketing communications and public relations professionals with the ability to target and distribute content to journalists and social media influencers world-wide and to monitor and analyze global news channels (print, web, radio and TV) and social media channels. A significant portion of the Company’s revenues are generated from its facilities in the Philippines, India, Sri Lanka, Canada, Germany, the United Kingdom and Israel. Revenues from external clients and segment operating profit (loss), and other reportable segment information for the periods presented were as follows (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 Revenues: DDS $ 12,997 $ 9,858 $ 24,760 $ 20,267 Synodex 886 1,201 1,905 2,483 Agility 3,166 2,804 6,351 5,643 Total Consolidated $ 17,049 $ 13,863 $ 33,016 $ 28,393 Income (loss) before provision for income taxes (1) : DDS $ 1,726 $ 17 $ 2,379 $ 220 Synodex (329) 81 (221) 277 Agility (1,161) (406) (1,586) (680) Total Consolidated $ 236 $ (308) $ 572 $ (183) Income (loss) before provision for income taxes (2) : DDS $ 1,646 $ (53) $ 2,230 $ 80 Synodex (278) 125 (126) 366 Agility (1,132) (380) (1,532) (629) Total Consolidated $ 236 $ (308) $ 572 $ (183) June 30, 2021 December 31, 2020 Total assets: DDS $ 32,039 $ 27,767 Synodex 132 457 Agility 28,758 29,030 Total Consolidated $ 60,929 $ 57,254 June 30, 2021 December 31, 2020 Goodwill: Agility $ 2,179 $ 2,150 Total $ 2,179 $ 2,150 (1) Before elimination of any inter-segment profits (2) After elimination of any inter-segment profits The following table summarizes revenues by geographic region (determined and based upon customer’s domicile) (in thousands): For the Three Months Ended For the Six Months Ended June 30, June 30, 2021 2020 2021 2020 United States $ 9,074 $ 6,258 $ 17,294 $ 12,948 United Kingdom 2,995 2,681 5,797 5,452 The Netherlands 1,608 1,659 3,262 3,299 Canada 1,492 1,325 3,087 2,870 Others - principally Europe 1,880 1,940 3,576 3,824 Totals $ 17,049 $ 13,863 $ 33,016 $ 28,393 Long-lived assets as of June 30, 2021 and December 31, 2020 by geographic region were comprised of (in thousands): June 30, December 31, 2021 2020 United States $ 3,935 $ 4,045 Foreign countries: Canada 9,402 9,044 United Kingdom 1,675 1,759 Philippines 4,238 4,545 India 980 930 Sri Lanka 234 319 Israel - 1 Total foreign 16,529 16,598 Totals $ 20,464 $ 20,643 Long-lived assets include the unamortized balance of right-of-use assets amounting to $6.1 million and $6.6 million as of June 30, 2021 and December 31, 2020, respectively. One client in the DDS segment generated approximately 11% and 16% of the Company’s total revenues for the three months ended June 30, 2021 and 2020, respectively. Another client in the DDS segment accounted for 11% One client in the DDS segment generated approximately 12% and 15% of the Company’s total revenues for the six months ended June 30, 2021 and 2020 , respectively. Another client in the DDS segment accounted for 10% Apriyas of June 30, 2021, approximately 46% of the Company’s accounts receivable was from foreign (principally European) clients and 36% of the Company’s accounts receivable was due from three clients. As of December 31, 2020, approximately 55% of the Company’s accounts receivable was from foreign (principally European) clients and 36% of the Company’s accounts receivable was due from three clients.

Income (Loss) per Share

Income (Loss) per Share	6 Months Ended
Income (Loss) per Share	Jun. 30, 2021
Income (Loss) Per Share
Income (Loss) Per Share	10. Income (Loss) Per Share For the Three Months Ended For the Six Months Ended June 30, June 30, 2021 2020 2021 2020 (in thousands) (in thousands) Net loss attributable to Innodata Inc. and Subsidiaries $ (103) $ (484) $ 295 $ (775) Weighted average common shares outstanding 26,522 24,409 26,199 24,405 Dilutive effect of outstanding options - - 2,995 - Adjusted for dilutive computation 26,522 24,409 29,194 24,405 Basic income (loss) per share is computed using the weighted-average number of common shares outstanding during the year. Diluted income per share is computed by considering the impact of the potential issuance of common shares, using the treasury stock method, on the weighted average number of shares outstanding. For those securities that are not convertible into a class of common stock, the two-class method of computing loss per share is used. Options to purchase 5.0 million and 5.2 million shares of common stock for the three months ended June 30, 2021 and 2020, respectively, were outstanding but not included in the computation of diluted loss per share because the effect would have been anti-dilutive. All options outstanding for the six months ended June 30, 2021 were included in the computation of diluted income per share. Options to purchase 5.2 million shares of common stock for the six months ended June 30, 2020, were outstanding but not included in the computation of diluted income per share because the effect would have been anti-dilutive.

Derivatives

Derivatives	6 Months Ended
Derivatives	Jun. 30, 2021
Derivatives
Derivatives	11. Derivatives The Company conducts a large portion of its operations in international markets, which subject it to foreign currency fluctuations. The most significant foreign currency exposures occur when revenue and associated accounts receivable are collected in one currency and expenses to generate that revenue are incurred in another currency. The Company is also subject to wage inflation and other government mandated increases and operating expenses in Asian countries where the Company has the majority of its operations. The Company’s primary inflation and exchange rate exposure relates to payroll, other payroll costs and operating expenses in the Philippines, India, Sri Lanka and Israel. In addition, although most of the Company’s revenue is denominated in U.S. dollars, a significant portion of total revenues is denominated in Canadian dollars, Pound Sterling and Euros. The Company's policy is to enter derivative instrument contracts with terms that coincide with the underlying exposure being hedged for a period up to 12 months. As such, the Company's derivative instruments are expected to be highly effective. For derivative instruments that are designated and qualify as cash flow hedges, the entire change in fair value of the hedging instrument is recorded to Other comprehensive income (loss). Upon settlement of these contracts, the change in the fair value recorded in other comprehensive income (loss) are reclassified to earnings and included as part of direct operating costs The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking hedge transactions. The Company does not hold or issue derivatives for trading purposes. All derivatives are recognized at their fair value and classified based on the instrument’s maturity date. The total notional amount for outstanding derivatives designated as hedges The total notional amount for outstanding derivatives not designated as hedges was $2.3 million as of June 30, 2021 and $7.0 million as of December 31, 2020. The following table presents the fair value of derivative instruments included within the condensed consolidated balance sheets as of June 30, 2021 and December 31, 2020 (in thousands): Balance Sheet Location Fair Value 2021 2020 Derivatives designated as hedging instruments: Foreign currency forward contracts Accrued expenses $ 338 $ - Derivatives not designated as hedging instruments: Foreign currency forward contracts Accrued expenses $ 13 $ - Prepaid expenses and other current assets $ - $ 48 The effect of foreign currency forward contracts designated as cash flow hedges on the condensed consolidated statements of operations for the For the Three Months Ended For the Six Months Ended June 30, June 30, 2021 2020 2021 2020 Net loss recognized in OCI (1) $ (301) $ - $ (301) $ (166) Net loss reclassified from accumulated OCI into income (2) $ 34 $ 87 $ 34 $ 82 Net gain recognized in income (3) $ - $ - $ - $ - (1) Net change in fair value of the effective portion classified into other comprehensive income ("OCI") (2) Effective portion classified within direct operating costs (3) There were no ineffective portions for the period presented.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	6 Months Ended
Summary of Significant Accounting Policies (Policies)	Jun. 30, 2021
Summary of Significant Accounting Policies
Basis of Presentation	Basis of Presentation Certain information and note disclosures normally included in or with financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been condensed or omitted from these condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”)
Principles of Consolidation	Principles of Consolidation
Use of Estimates	Use of Estimates
Capitalized Software Development Costs	Capitalized Software Development Costs three
Deferred Revenue	Deferred Revenue
Revenue Recognition	Revenue Recognition For the Digital Data Solutions (“DDS”) segment, revenue is recognized primarily based on the quantity delivered or resources utilized in the period in which services are performed and performance conditions are satisfied as per the agreement. Revenues for agreements billed on a time-and-materials basis are recognized as services are performed. Revenues under fixed-fee agreements, which are not significant to overall revenues, are recognized based on the proportional performance method of accounting, as services are performed, or milestones are achieved. For the Synodex segment, revenue is recognized primarily based on the quantity delivered in the period in which services are performed and performance conditions are satisfied as per the agreement. A portion of the Synodex segment revenue is derived from licensing our functional software and providing access to the Company’s hosted software platform. Revenue from such services is recognized monthly when all parties to the agreement have agreed to the agreement; each party’s rights are identifiable; the payment terms are identifiable; the agreement has commercial substance; access to the service is provided to the end user; and collection is probable. The Agility segment derives its revenue primarily from subscription arrangements and provision of enriched media analysis services. It also derives revenue as a reseller of corporate communication solutions. Revenue from subscriptions is recognized monthly when access to the service is provided to the end user; all parties to the agreement have agreed to the agreement; each party’s rights are identifiable; the payment terms are identifiable; the agreement has commercial substance; and collection is probable. Revenue from enriched media analysis services is recognized when the services are performed, and performance conditions are satisfied. Revenues from the reseller agreements are recognized at the gross amount received for the goods in accordance with our functioning as a principal due to our meeting the following criteria: the Company acts as the primary obligor in the sales transaction; assumes the credit risk; sets the price; can select suppliers; and is involved in the execution of the services, including after sales service. Revenues include reimbursement of out-of-pocket expenses, with the corresponding out-of-pocket expenses included in direct operating costs. The Company considers U.S. GAAP criteria for determining whether to report gross revenue as a principal versus net revenue as an agent. The Company evaluates whether it is in control of the services before the same are transferred to the customer to assess whether it is principal or agent in the arrangement. Revenues are recognized on a gross basis if the Company is in the capacity of principal and on a net basis if it falls in the capacity of an agent. Contract acquisition costs, which are included in prepaid expenses and other current assets, are amortized over the term of a subscription agreement or contract. The Company reviews these prepaid acquisition costs on a periodic basis to determine the need to adjust the carrying values for early-terminated contracts.
Foreign Currency	Foreign Currency The functional currency for the Company’s subsidiaries in Germany, the United Kingdom and Canada are the Euro, the Pound Sterling and the Canadian dollar, respectively. The financial statements of these subsidiaries are prepared in these respective currencies. Financial information is translated from the applicable functional currency to the U.S. dollar (the reporting currency) for inclusion in the Company’s condensed consolidated financial statements. Revenues, expenses and cash flows are translated at weighted average exchange rates prevailing during the fiscal periods, and assets and liabilities are translated at fiscal period-end exchange rates. Resulting translation adjustments are included as a component of accumulated other comprehensive loss in stockholders’ equity. Foreign exchange transaction gains or losses are included in direct operating costs in the accompanying condensed consolidated statements of operations and comprehensive loss.
Derivative Instruments	Derivative Instruments -
Income Taxes	Income Taxes In assessing the realization of deferred tax assets, management considered whether it is more likely than not that all or some portion of the U.S. and Canadian deferred tax assets will not be realizable. As the expectation of future taxable income resulting from the U.S. and Canadian entities cannot be predicted with certainty, the Company maintains a valuation allowance against all the U.S. and Canadian net deferred tax assets. The Company accounts for income taxes regarding uncertain tax positions, and recognizes interest and penalties related to uncertain tax positions in Income tax expense in the condensed consolidated statements of operations and comprehensive income (loss).
Recent Accounting Pronouncements	Recent Accounting Pronouncements - In December 2019, the FASB issued Accounting Standards Update (“ASU”) No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” as part of its initiative to reduce complexity in the accounting standards. The standard eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The standard also clarifies and simplifies other aspects of the accounting for income taxes. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020.The Company adopted the standard on January 1, 2021 and it had no material impact on the Company’s condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Statements” (“ASU 2016-13”). ASU 2016-13 requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation amount that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. In November 2018, the FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses,” which clarifies ASC 326, “Financial Instruments – Credit Losses” and corrects unintended application of the guidance, and in November 2019, the FASB issued ASU No. 2019-11, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses,” which clarifies or addresses specific issues about certain aspects of ASU 2016-13. In March 2020, the FASB issued ASU No. 2020-03, “Codification Improvements to Financial Instruments,” which modifies the measurement of expected credit losses of certain financial instruments. ASU 2016-13 is effective for certain smaller reporting companies for financial statements issued for fiscal years beginning after December 15, 2022 and interim periods within those fiscal years, which will be fiscal 2023 for the Company if it continues to be classified as a smaller reporting company, with early adoption permitted. The Company does not expect that the adoption of the new guidance will have a material impact on the Company’s condensed consolidated financial statements.
Correction of Immaterial Errors	Correction of Immaterial Errors The errors were not material, either quantitatively or qualitatively, in any of the reported periods. However, the corrections, if recorded in the three month period ended September 30, 2020, would have been material to such period. Accordingly, the June 30, 2020 financial statements included in this Form 10-Q are being corrected by revising such financial statements, as follows: ● A decrease in expenses of $74,000 and $147,000 for the three and six months ended June 30, 2020. ● A decrease of $0.01 on the loss per share for the six months ended June 30, 2020. ● A decrease in liabilities of $101,000 as of June 30, 2020. ● An increase in total assets of $46,000 as of June 30, 2020. ● The impact on cash flows for the six months ended June 30, 2020 was: ● An increase in cash flows provided by operating activities of $94,000. ● An increase in cash flows used in financing activities of $94,000. The Company evaluated the errors under Staff Accounting Bulletins 99 and 108 and concluded that a restatement of the June 30, 2020 condensed consolidated financial statements is not required.

Goodwill and Intangible Assets

Goodwill and Intangible Assets (Tables)	6 Months Ended
Goodwill and Intangible Assets (Tables)	Jun. 30, 2021
Goodwill and Intangible Assets
Schedule of Carrying Amount of Goodwill	The change in the carrying amount of goodwill for the six months ended June 30, 2021 was as follows (in thousands): Balance as of January 1, 2021 $ 2,150 Foreign currency translation adjustment 29 Balance as of June 30, 2021 $ 2,179
Schedule of company's acquisition-related intangible assets	Information regarding the Company’s acquisition-related intangible assets was as follows (in thousands): Trademarks Media Developed Customer and Contact technology relationships tradenames Patents Database Total Gross carrying amounts: Balance as of January 1, 2021 $ 3,175 $ 2,228 $ 882 $ 45 $ 3,670 $ 10,000 Foreign currency translation 59 54 8 1 22 144 Balance as of June 30, 2021 $ 3,234 $ 2,282 $ 890 $ 46 $ 3,692 $ 10,144 Trademarks Media Developed Customer and Contact technology relationships tradenames Patents Database Total Accumulated amortization: Balance as of January 1, 2021 $ 1,844 $ 1,192 $ 629 $ 29 $ 1,650 $ 5,344 Amortization expense 159 93 28 2 183 465 Foreign currency translation 39 30 5 1 13 88 Balance as of June 30, 2021 $ 2,042 $ 1,315 $ 662 $ 32 $ 1,846 $ 5,897 Net carrying values - June 30, 2021 $ 1,192 $ 967 $ 228 $ 14 $ 1,846 $ 4,247
Schedule of estimated amortization expense for intangible assets	As of June 30, 2021, estimated future amortization expense for intangible assets was as follows (in thousands): Year Amortization 2021 $ 472 2022 945 2023 945 2024 840 2025 691 Thereafter 354 $ 4,247

Income Taxes (Tables)

Income Taxes (Tables)	6 Months Ended
Income Taxes (Tables)	Jun. 30, 2021
Income Taxes
Schedule of Effective Income Tax Rate Reconciliation	The reconciliations of the U.S. statutory rate with the Company’s effective tax rate for the six-month periods ended June 30, 2021 and 2020 are summarized in the table below: For the Three Months Ended June 30, 2021 2020 Federal income tax expense at statutory rate 21.0 % 21.0 % Effect of: Change in valuation allowance 101.1 (78.5) Tax effects of foreign operations 35.4 242.7 Change in tax rates 20.6 - Foreign operations permanent difference - foreign exchange gains and losses 9.1 144.3 Return to provision true up 3.2 (50.6) State income tax net of federal benefit 1.5 16.2 Withholding tax - 9.3 Foreign rate differential (19.6) (34.7) Effect of stock-based compensation (62.1) - Increase (decrease) in unrecognized tax benefits (ASC 740) (64.4) 67.1 Other 5.4 (23.1) Effective tax rate 51.2 % 313.7 %
Schedule Of unrecognized Tax Benefits	The following table presents a roll-forward of the Company’s unrecognized tax benefits and associated interest for the six months ended June 30, 2021 (in thousands): Unrecognized tax benefits Balance - January 1, 2021 $ 3,231 Tax settlement matters – prior periods (1,476) Change in tax position (174) Interest accrual 57 Foreign currency remeasurement (27) Balance - June 30, 2021 $ 1,611

Stock Options and Restricted _2

Stock Options and Restricted Shares (Tables)	6 Months Ended
Stock Options and Restricted Shares (Tables)	Jun. 30, 2021
Stock Options and Restricted Shares
Schedule of Stock Option Activity	A summary of stock option activity under the Innodata Inc. 2013 Stock Plan, as amended and restated effective June 7, 2016 (the Plan), as of June 30, 2021, and changes during the six months then ended, are presented below: Weighted - Weighted-Average Number of Average Exercise Remaining Contractual Aggregate Options Price Term (years) Intrinsic Value Outstanding at January 1, 2021 5,906,884 $ 1.61 Granted 360,000 6.40 Exercised (1,245,182) 2.12 Forfeited/Expired (20,000) 1.38 Outstanding at June 30, 2021 5,001,702 $ 1.83 7.60 $ 25,837,675 Exercisable at June 30, 2021 3,425,983 $ 1.62 7.12 $ 18,426,406 Vested and Expected to Vest at June 30, 2021 5,001,702 $ 1.83 7.60 $ 25,837,675
Schedule of weighted average assumptions	The fair value of stock options is estimated on the date of grant using the Black-Scholes option pricing model. The weighted-average fair value of the options granted, and weighted-average assumptions were as follows: For the Six Months Ended June 30, 2021 2020 Weighted average fair value of options granted $ 3.33 $ 0.61 Risk-free interest rate 0.22%-0.82 % 0.47% - 0.56 % Expected term (years) 3 - 6 5 - 6 Expected volatility factor 59.62 % 46.75% - 50.01 % Expected dividends None None
Summary of restricted shares under the Company's Plan	A summary of outstanding restricted shares issued under the Plan as of June 30, 2021 are presented below: Weighted-Average Grant Number of Shares Date Fair Value Unvested at December 31, 2020 50,000 - Granted - - Vested (25,000) - Forfeited/Expired - - Unvested at June 30, 2021 25,000 $ 1.38
Schedule of Stock-Based Compensation Expense	The stock-based compensation expense related to the Company’s various stock awards was allocated as follows (in thousands): For the Three Months Ended For the Six Months Ended June 30, June 30, 2021 2020 2021 2020 Direct operating costs $ 37 $ 39 $ 75 $ 79 Selling and administrative expenses 299 259 539 389 Total stock-based compensation $ 336 $ 298 $ 614 $ 468

Operating Leases (Tables)

Operating Leases (Tables)	6 Months Ended
Operating Leases (Tables)	Jun. 30, 2021
Operating Leases
Schedule of Operating Lease Expense Recognized in Financial Statements	The table below summarizes the amounts recognized in the condensed consolidated financial statements related to operating leases for the periods presented (in thousands): For the Three Months Ended For the Six Months Ended June 30, June 30, 2021 2020 2021 2020 Rent expense for long-term operating leases $ 388 $ 421 $ 776 $ 865 Rent expense for short-term leases 34 218 84 389 Total rent expense $ 422 $ 639 $ 860 $ 1,254
Schedule of Net Present Value of Operating Lease Liability	The following table presents the maturity profile of the Company’s operating lease liabilities based on the contractual undiscounted payments with a reconciliation of these amounts to the remaining net present value of the operating lease liability reported in the condensed consolidated balance sheet as of June 30, 2021 (in thousands): Year Amount 2021 $ 781 2022 1,523 2023 1,262 2024 1,033 2025 1,048 2026 and thereafter 3,495 Total lease payments 9,142 Less: Interest 2,298 Net present value of lease liabilities $ 6,844 Current portion $ 1,048 Long-term portion 5,796 Total $ 6,844
Schedule of Weighted Average Remaining Lease Terms and Discount Rates	The weighted average remaining lease terms and discount rates for all of the Company’s operating leases as of June 30, 2021 were as follows: Weighted-average lease term remaining 59 months Weighted-average discount rate 8.68 %

Long-term obligations (Tables)

Long-term obligations (Tables)	6 Months Ended
Long-term obligations (Tables)	Jun. 30, 2021
Long-term obligations
Schedule of Total Long-Term Obligations	Total long-term obligations as of June 30, 2021 and December 31, 2020 consisted of the following (in thousands): June 30, December 31, 2021 2020 Pension obligations - accrued pension liability $ 6,166 $ 5,940 Settlement agreement (1) 398 518 Capital lease obligations - 209 Microsoft licenses (2) 454 747 Bank loans payable (3) - 580 7,018 7,994 Less: Current portion of long-term obligations 1,245 1,712 Totals $ 5,773 $ 6,282 (1) Represents payment to be made pursuant to a settlement agreement entered in December 2018 between a subsidiary of the Company and 19 former employees of such subsidiary. The balance is payable in monthly installments through March 2023. (2) In April 2020, the Company renewed a vendor agreement to acquire certain additional software licenses and to receive support and subsequent software upgrades on these and other currently owned software licenses through February 2023. Pursuant to this agreement, the Company is obligated to pay approximately $0.4 million annually over the term of the agreement. (3) On May 4, 2020, the Company received loan proceeds of $579,700 under the Paycheck Protection Program (“PPP”) which was established as part of the Coronavirus Aid, Relief and Economic Security Act of 2020, as amended. On May 21, 2021, the Small Business Administration (SBA) approved the Company’s loan forgiveness application for 100% of the loan proceeds.

Comprehensive loss (Tables)

Comprehensive loss (Tables)	6 Months Ended
Comprehensive loss (Tables)	Jun. 30, 2021
Comprehensive loss
Schedule of Accumulated Other Comprehensive Loss	The components of accumulated other comprehensive loss as of June 30, 2021 and 2020, and reclassifications out of accumulated other comprehensive loss for the three and six months then ended, are presented below (in thousands): Foreign Currency Pension Liability Fair Value of Translation Accumulated Other Adjustment Derivatives Adjustment Comprehensive Loss Balance at April 1, 2021 $ (433) $ - $ (515) $ (948) Other comprehensive loss before reclassifications, net of taxes - (301) 135 (166) Total other comprehensive loss before reclassifications, net of taxes (433) (301) (380) (1,114) Net amount reclassified to earnings 11 34 - 45 Balance at June 30, 2021 $ (422) $ (267) $ (380) $ (1,069) Foreign Currency Pension Liability Fair Value of Translation Accumulated Other Adjustment Derivatives Adjustment Comprehensive Loss Balance at January 1, 2021 $ (444) $ - $ (494) $ (938) Other comprehensive loss before reclassifications, net of taxes - (301) 114 (187) Total other comprehensive loss before reclassifications, net of taxes (444) (301) (380) (1,125) Net amount reclassified to earnings 22 34 - 56 Balance at June 30, 2021 $ (422) $ (267) $ (380) $ (1,069) Foreign Currency Pension Liability Fair Value of Translation Accumulated Other Adjustment Derivatives Adjustment Comprehensive Loss Balance at April 1, 2020 $ (39) $ (138) $ (1,618) $ (1,795) Other comprehensive income before reclassifications, net of taxes - - 221 221 Total other comprehensive loss before reclassifications, net of taxes (39) (138) (1,397) (1,574) Net amount reclassified to earnings 11 87 - 98 Balance at June 30, 2020 $ (28) $ (51) $ (1,397) $ (1,476) Foreign Currency Pension Liability Fair Value of Translation Accumulated Other Adjustment Derivatives Adjustment Comprehensive Loss Balance at January 1, 2020 $ (53) $ 33 $ (900) $ (920) Other comprehensive loss before reclassifications, net of taxes - (166) (497) (663) Total other comprehensive loss before reclassifications, net of taxes (53) (133) (1,397) (1,583) Net amount reclassified to earnings 25 82 - 107 Balance at June 30, 2020 $ (28) $ (51) $ (1,397) $ (1,476)

Segment Reporting and Concent_2

Segment Reporting and Concentrations (Tables)	6 Months Ended
Segment Reporting and Concentrations (Tables)	Jun. 30, 2021
Segment Reporting and Concentrations
Schedule of Segment Reporting Information, by Segment	Revenues from external clients and segment operating profit (loss), and other reportable segment information for the periods presented were as follows (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 Revenues: DDS $ 12,997 $ 9,858 $ 24,760 $ 20,267 Synodex 886 1,201 1,905 2,483 Agility 3,166 2,804 6,351 5,643 Total Consolidated $ 17,049 $ 13,863 $ 33,016 $ 28,393 Income (loss) before provision for income taxes (1) : DDS $ 1,726 $ 17 $ 2,379 $ 220 Synodex (329) 81 (221) 277 Agility (1,161) (406) (1,586) (680) Total Consolidated $ 236 $ (308) $ 572 $ (183) Income (loss) before provision for income taxes (2) : DDS $ 1,646 $ (53) $ 2,230 $ 80 Synodex (278) 125 (126) 366 Agility (1,132) (380) (1,532) (629) Total Consolidated $ 236 $ (308) $ 572 $ (183) June 30, 2021 December 31, 2020 Total assets: DDS $ 32,039 $ 27,767 Synodex 132 457 Agility 28,758 29,030 Total Consolidated $ 60,929 $ 57,254 June 30, 2021 December 31, 2020 Goodwill: Agility $ 2,179 $ 2,150 Total $ 2,179 $ 2,150 (1) Before elimination of any inter-segment profits (2) After elimination of any inter-segment profits
Schedule of Revenue from External Customers and Long-Lived Assets	The following table summarizes revenues by geographic region (determined and based upon customer’s domicile) (in thousands): For the Three Months Ended For the Six Months Ended June 30, June 30, 2021 2020 2021 2020 United States $ 9,074 $ 6,258 $ 17,294 $ 12,948 United Kingdom 2,995 2,681 5,797 5,452 The Netherlands 1,608 1,659 3,262 3,299 Canada 1,492 1,325 3,087 2,870 Others - principally Europe 1,880 1,940 3,576 3,824 Totals $ 17,049 $ 13,863 $ 33,016 $ 28,393
Schedule of Revenue from External Customers based on Client domicile	Long-lived assets as of June 30, 2021 and December 31, 2020 by geographic region were comprised of (in thousands): June 30, December 31, 2021 2020 United States $ 3,935 $ 4,045 Foreign countries: Canada 9,402 9,044 United Kingdom 1,675 1,759 Philippines 4,238 4,545 India 980 930 Sri Lanka 234 319 Israel - 1 Total foreign 16,529 16,598 Totals $ 20,464 $ 20,643

Income (Loss) Per Share (Tables

Income (Loss) Per Share (Tables)	6 Months Ended
Income (Loss) Per Share (Tables)	Jun. 30, 2021
Income (Loss) Per Share
Schedule of Earnings Per Share, Basic and Diluted	For the Three Months Ended For the Six Months Ended June 30, June 30, 2021 2020 2021 2020 (in thousands) (in thousands) Net loss attributable to Innodata Inc. and Subsidiaries $ (103) $ (484) $ 295 $ (775) Weighted average common shares outstanding 26,522 24,409 26,199 24,405 Dilutive effect of outstanding options - - 2,995 - Adjusted for dilutive computation 26,522 24,409 29,194 24,405

Derivatives (Tables)

Derivatives (Tables)	6 Months Ended
Derivatives (Tables)	Jun. 30, 2021
Derivatives
Schedule of fair value of derivative instruments	The following table presents the fair value of derivative instruments included within the condensed consolidated balance sheets as of June 30, 2021 and December 31, 2020 (in thousands): Balance Sheet Location Fair Value 2021 2020 Derivatives designated as hedging instruments: Foreign currency forward contracts Accrued expenses $ 338 $ - Derivatives not designated as hedging instruments: Foreign currency forward contracts Accrued expenses $ 13 $ - Prepaid expenses and other current assets $ - $ 48
Schedule of effects of foreign currency forward contracts designated as cash flow hedges	The effect of foreign currency forward contracts designated as cash flow hedges on the condensed consolidated statements of operations for the For the Three Months Ended For the Six Months Ended June 30, June 30, 2021 2020 2021 2020 Net loss recognized in OCI (1) $ (301) $ - $ (301) $ (166) Net loss reclassified from accumulated OCI into income (2) $ 34 $ 87 $ 34 $ 82 Net gain recognized in income (3) $ - $ - $ - $ - (1) Net change in fair value of the effective portion classified into other comprehensive income ("OCI") (2) Effective portion classified within direct operating costs (3) There were no ineffective portions for the period presented.

Summary of Significant Accoun_3

Summary of Significant Accounting Policies - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Description of Business and Summary of Significant Accounting Policies [Line Items]
Foreign Currency Transaction Gain (Loss), before Tax	$ (16,000)	$ 157,000	$ (155,000)	$ 234,000
Deferred Revenue	4,700,000		4,700,000		$ 1,200,000
Capitalized software development costs
Description of Business and Summary of Significant Accounting Policies [Line Items]
Cost	7,400,000		7,400,000		5,500,000
Capitalized software development cost - work in progress
Description of Business and Summary of Significant Accounting Policies [Line Items]
Cost	$ 500,000		$ 500,000		$ 1,400,000
Minimum \| Capitalized software development costs
Description of Business and Summary of Significant Accounting Policies [Line Items]
Estimated useful lives			P3Y
Maximum \| Capitalized software development costs
Description of Business and Summary of Significant Accounting Policies [Line Items]
Estimated useful lives			P10Y
Error corrections
Description of Business and Summary of Significant Accounting Policies [Line Items]
Decrease in expenses		$ 74,000		$ 147,000
Decrease in the loss per share				$ 0.01
Decrease in liabilities				$ 101,000
Increase in total assets				46,000
Increase in cash flow from operating activities				94,000
Increase in cash flow from financing activities				$ 94,000

Goodwill and Intangible Asset_2

Goodwill and Intangible Assets - Carrying Amount of Goodwill (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2021USD ($)
Goodwill and Intangible Assets
Balance	$ 2,150
Foreign currency translation	29
Balance	$ 2,179

Goodwill and Intangible Asset_3

Goodwill and Intangible Assets - Acquisition-Related Intangible Assets (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2021USD ($)	Dec. 31, 2020USD ($)
Gross carrying amounts:
Balance	$ 10,000
Foreign currency translation	144
Balance	10,144
Accumulated amortization:
Balance	5,344
Amortization expense	465
Foreign currency translation	88
Balance	5,897
Net carrying values	4,247	$ 4,656
Developed technology [Member]
Gross carrying amounts:
Balance	3,175
Foreign currency translation	59
Balance	3,234
Accumulated amortization:
Balance	1,844
Amortization expense	159
Foreign currency translation	39
Balance	2,042
Net carrying values	1,192
Customer relationships [Member]
Gross carrying amounts:
Balance	2,228
Foreign currency translation	54
Balance	2,282
Accumulated amortization:
Balance	1,192
Amortization expense	93
Foreign currency translation	30
Balance	1,315
Net carrying values	967
Trademarks and trade names [Member]
Gross carrying amounts:
Balance	882
Foreign currency translation	8
Balance	890
Accumulated amortization:
Balance	629
Amortization expense	28
Foreign currency translation	5
Balance	662
Net carrying values	228
Patents [Member]
Gross carrying amounts:
Balance	45
Foreign currency translation	1
Balance	46
Accumulated amortization:
Balance	29
Amortization expense	2
Foreign currency translation	1
Balance	32
Net carrying values	14
Media Contact Database [Member]
Gross carrying amounts:
Balance	3,670
Foreign currency translation	22
Balance	3,692
Accumulated amortization:
Balance	1,650
Amortization expense	183
Foreign currency translation	13
Balance	1,846
Net carrying values	$ 1,846

Goodwill and Intangible Asset_4

Goodwill and Intangible Assets - Estimated Amortization Expense (Details) $ in Thousands	Jun. 30, 2021USD ($)
Goodwill and Intangible Assets
2021	$ 472
2022	945
2023	945
2024	840
2025	691
Thereafter	354
Finite-Lived Intangible Assets, Net	$ 4,247

Goodwill and Intangible Asset_5

Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2021
Goodwill and Intangible Assets
Amortization expense		$ 465
Intangible Assets, Amortization Period [Member]
Goodwill and Intangible Assets
Amortization expense	$ 200	$ 500

Income Taxes - Tax Rate Reconci

Income Taxes - Tax Rate Reconciliation (Details)	3 Months Ended		6 Months Ended
Income Taxes - Tax Rate Reconciliation (Details)	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Income Taxes
Federal income tax expense at statutory rate		21.00%	21.00%
Effect of:
Change in valuation allowance	101.10%	(78.50%)
Tax effects of foreign operations			35.40%	242.70%
Change in rates			20.60%	0.00%
Foreign operations permanent difference - foreign exchange gains and losses			9.10%	144.30%
Return to provision true up			3.20%	(50.60%)
State income tax net of federal benefit			1.50%	16.20%
Withholding tax			0.00%	9.30%
Foreign rate differential			(19.60%)	(34.70%)
Effect of stock based compensation			(62.10%)	0.00%
Increase (decrease) in unrecognized tax benefits (ASC 740)			(64.40%)	67.10%
Other			5.40%	(23.10%)
Effective tax rate			51.20%	313.70%

Income Taxes - Unrecognized Tax

Income Taxes - Unrecognized Tax Benefits (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2021USD ($)
Income Taxes
Balance - January 1, 2021	$ 3,231
Tax settlement matters - prior periods	(1,476)
Change in tax position	(174)
Interest accrual	57
Foreign currency remeasurement	(27)
Balance - June 30, 2021	$ 1,611

Income Taxes - Additional Infor

Income Taxes - Additional Information (Details) - USD ($)	1 Months Ended
Income Taxes - Additional Information (Details) - USD ($)	Oct. 31, 2016	Sep. 30, 2015
Income Taxes [Line Items]
Subsidiary Revenue		$ 64,000,000
Reversal of Service Tax Refund	$ 160,000
Service Tax Credit Receivable	$ 1,000,000
Maximum
Income Taxes [Line Items]
Percentage for Subsidiary Service Tax		15.00%
Minimum
Income Taxes [Line Items]
Percentage for Subsidiary Service Tax		12.36%

Commitments and Contingencies (

Commitments and Contingencies (Details)	6 Months Ended
Commitments and Contingencies (Details)	Jun. 30, 2021USD ($)
Commitments and Contingencies
Estimated Litigation Liability	$ 6,800,000
Interest Rate Description Litigation	plus legal interest that accrued at 12% per annum from August 13, 2008 to June 30, 2013, and thereafter accrued and continues to accrue at 6% per annum
Litigation Settlement, Expense	$ 350,000,000

Stock Options and Restricted _3

Stock Options and Restricted Shares - Summary of Stock Option Activity (Details) - Employee Stock Option [Member] - USD ($)	6 Months Ended
	Jun. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Options, Outstanding at January 1, 2021, (in shares)	5,906,884
Number of Options, Granted (in shares)	360,000
Number of Options, Exercised (in shares)	(1,245,182)
Number of Options, Forfeited/Expired (in shares)	(20,000)
Number of Options, Outstanding at June 30, 2021, (in shares)	5,001,702
Number of Options Exercisable at June 30, 2021 (in shares)	3,425,983
Number of Options, Vested and Expected to Vest at June 30, 2021 (in shares)	5,001,702
Weighted Average Exercise Price Outstanding (in dollars per shares)	$ 1.61
Weighted Average Exercise Price Granted (in dollars per shares)	6.40
Weighted Average Exercise Price Exercised (in dollars per shares)	2.12
Weighted Average Exercise Price Forfeited/Expired (in dollars per shares)	1.38
Weighted Average Exercise Price Outstanding (in dollars per shares)	1.83
Weighted Average Exercise Price Exercisable at June 30, 2021 (in dollars per shares)	1.62
Weighted Average Exercise Price Vested and Expected to Vest at June 30, 2021 (in dollars per shares)	$ 1.83
Weighted Average Remaining Contractual Term Outstanding (in years)	7 years 7 months 6 days
Weighted Average Remaining Contractual Term Exercisable at June 30, 2021 (in years)	7 years 1 month 13 days
Weighted Average Remaining Contractual Term Vested and Expected to Vest at June 30, 2021 (in years)	7 years 7 months 6 days
Aggregate Intrinsic Value, Outstanding at June 31, 2021	$ 25,837,675
Aggregate Intrinsic Value, Exercisable at June 30, 2021	18,426,406
Aggregate Intrinsic Value, Vested and Expected to Vest at December 31, 2020	$ 25,837,675

Stock Options and Restricted _4

Stock Options and Restricted Shares - Weighted Average Fair Values and Assumptions (Details) - $ / shares	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average fair value of options granted (in dollars per share)	$ 3.33	$ 0.61
Expected volatility factor	59.62%
Expected dividends	0.00%	0.00%
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	0.22%	0.47%
Expected term (years)	3 years	5 years
Expected volatility factor		46.75%
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	0.82%	0.56%
Expected term (years)	6 years	6 years
Expected volatility factor		50.01%

Stock Options and Restricted _5

Stock Options and Restricted Shares - Summary of Restricted Shares (Details)	6 Months Ended
	Jun. 30, 2021$ / sharesshares
Stock Options and Restricted Shares
Number of Shares, Unvested at December 31, 2020 \| shares	50,000
Number of Shares, Granted \| shares	0
Number of Shares, Vested \| shares	(25,000)
Number of Shares, Forfeited/Expired \| shares	0
Number of Shares, Unvested at June 30, 2021 \| shares	25,000
Weighted-Average Grant Date Fair Value, Outstanding \| $ / shares	$ 0
Weighted-Average Grant Date Fair Value, Granted \| $ / shares	0
Weighted-Average Grant Date Fair Value, Vested \| $ / shares	0
Weighted-Average Grant Date Fair Value, Forfeited/Expired \| $ / shares	0
Weighted-Average Grant Date Fair Value, Outstanding \| $ / shares	$ 1.38

Stock Options and Restricted _6

Stock Options and Restricted Shares - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Stock Options and Restricted Shares
Direct operating costs	$ 37	$ 39	$ 75	$ 79
Selling and administrative expenses	299	259	539	389
Total stock-based compensation	$ 336	$ 298	$ 614	$ 468

Stock Options and Restricted _7

Stock Options and Restricted Shares - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate value of options exercised	$ 1,141	$ 609
Employee Service Share-Based Compensation, Nonvested Awards, Total Compensation Cost Not Yet Recognized	$ 1,700		$ 1,700
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			24 months
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate value of options exercised			$ 1,800

Operating Leases - Operating Le

Operating Leases - Operating Leases Amount Recognized (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Operating Leases, Rent Expense	$ 422	$ 639	$ 860	$ 1,254
Long Term Operating Lease [Member]
Operating Leases, Rent Expense	388	421	776	865
Short Term Operating Lease [Member]
Operating Leases, Rent Expense	$ 34	$ 218	$ 84	$ 389

Operating Leases - Net Present

Operating Leases - Net Present Value of Operating Lease Liability (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Operating Leases
2021	$ 781
2022	1,523
2023	1,262
2024	1,033
2025	1,048
2026 and thereafter	3,495
Total lease payments	9,142
Less: Interest	2,298
Net present value of lease liabilities	6,844
Current portion	1,048	$ 990
Long- term portion	5,796	$ 6,332
Total	$ 6,844

Operating Leases - Weighted Ave

Operating Leases - Weighted Average Remaining Lease Terms (Details)	Jun. 30, 2021
Operating Leases
Weighted-average lease term remaining	59 months
Weighted-average discount rate	8.68%

Operating Leases - Additional I

Operating Leases - Additional Information (Details)	6 Months Ended
Operating Leases - Additional Information (Details)	Jun. 30, 2021
Minimum
Lessee, Operating Lease, Term of Contract	2 years
Percentage of Rental Escalations	1.75%
Maximum
Lessee, Operating Lease, Term of Contract	11 years
Percentage of Rental Escalations	10.00%

Long-term obligations (Details)

Long-term obligations (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Pension obligations
Pension obligations - accrued pension liability	$ 6,166	$ 5,940
Settlement agreement	398	518
Capital lease obligations	0	209
Microsoft licenses	454	747
Bank loans payable	0	580
Long-term Debt	7,018	7,994
Less: Current portion of long-term obligations	1,245	1,712
Totals	$ 5,773	$ 6,282

Long-term obligations - Additio

Long-term obligations - Additional Information (Details)	May 04, 2021USD ($)	Dec. 31, 2018employee	Jun. 30, 2021USD ($)	May 21, 2021
Debt Instrument [Line Items]
Number of former employees \| employee		19
Vendor Agreement [Member]
Debt Instrument [Line Items]
Cost of Goods and Services Sold			$ 400,000
Paycheck Protection Program Loan [Member]
Debt Instrument [Line Items]
Proceeds from Issuance of Debt	$ 579,700
Debt Instrument, Interest Rate, Stated Percentage				100.00%

Comprehensive loss - Reclassifi

Comprehensive loss - Reclassifications out of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	$ 30,152	$ 25,313	$ 29,640	$ 26,309
Balance	31,405	25,446	31,405	25,446
Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	(948)	(1,795)	(938)	(920)
Other comprehensive income (loss) before reclassifications, net of taxes	(166)	221	(187)	(663)
Total other comprehensive loss before reclassifications, net of taxes	(1,114)	(1,574)	(1,125)	(1,583)
Net amount reclassified to earnings	45	98	56	107
Balance	(1,069)	(1,476)	(1,069)	(1,476)
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	(433)	(39)	(444)	(53)
Total other comprehensive loss before reclassifications, net of taxes	(433)	(39)	(444)	(53)
Net amount reclassified to earnings	11	11	22	25
Balance	(422)	(28)	(422)	(28)
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance		(138)		33
Other comprehensive income (loss) before reclassifications, net of taxes	(301)		(301)	(166)
Total other comprehensive loss before reclassifications, net of taxes	(301)	(138)	(301)	(133)
Net amount reclassified to earnings	34	87	34	82
Balance	(267)	(51)	(267)	(51)
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	(515)	(1,618)	(494)	(900)
Other comprehensive income (loss) before reclassifications, net of taxes	135	221	114	(497)
Total other comprehensive loss before reclassifications, net of taxes	(380)	(1,397)	(380)	(1,397)
Balance	$ (380)	$ (1,397)	$ (380)	$ (1,397)

Segment Reporting and Concent_3

Segment Reporting and Concentrations (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Segment reporting information
Revenues	$ 17,049	$ 13,863	$ 33,016	$ 28,393
Income (loss) before provision for income taxes	236	(308)	572	(183)
Total assets	60,929		60,929		$ 57,254
Goodwill	2,179		2,179		2,150
Before Intersegment Eliminations [Member]
Segment reporting information
Income (loss) before provision for income taxes	236	(308)	572	(183)
After Intersegment Eliminations [Member]
Segment reporting information
Income (loss) before provision for income taxes	236	(308)	572	(183)
DDS [Member]
Segment reporting information
Revenues	12,997	9,858	24,760	20,267
Total assets	32,039		32,039		27,767
DDS [Member] \| Before Intersegment Eliminations [Member]
Segment reporting information
Income (loss) before provision for income taxes	1,726	17	2,379	220
DDS [Member] \| After Intersegment Eliminations [Member]
Segment reporting information
Income (loss) before provision for income taxes	1,646	(53)	2,230	80
Synodex [Member]
Segment reporting information
Revenues	886	1,201	1,905	2,483
Total assets	132		132		457
Synodex [Member] \| Before Intersegment Eliminations [Member]
Segment reporting information
Income (loss) before provision for income taxes	(329)	81	(221)	277
Synodex [Member] \| After Intersegment Eliminations [Member]
Segment reporting information
Income (loss) before provision for income taxes	(278)	125	(126)	366
Agility [Member]
Segment reporting information
Revenues	3,166	2,804	6,351	5,643
Total assets	28,758		28,758		29,030
Goodwill	2,179		2,179		$ 2,150
Agility [Member] \| Before Intersegment Eliminations [Member]
Segment reporting information
Income (loss) before provision for income taxes	(1,161)	(406)	(1,586)	(680)
Agility [Member] \| After Intersegment Eliminations [Member]
Segment reporting information
Income (loss) before provision for income taxes	$ (1,132)	$ (380)	$ (1,532)	$ (629)

Segment Reporting and Concent_4

Segment Reporting and Concentrations - Revenues by geographic region (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Segment Reporting Information [Line Items]
Revenues	$ 17,049	$ 13,863	$ 33,016	$ 28,393
Other - principally Europe
Segment Reporting Information [Line Items]
Revenues	1,880	1,940	3,576	3,824
United States
Segment Reporting Information [Line Items]
Revenues	9,074	6,258	17,294	12,948
United Kingdom
Segment Reporting Information [Line Items]
Revenues	2,995	2,681	5,797	5,452
The Netherlands
Segment Reporting Information [Line Items]
Revenues	1,608	1,659	3,262	3,299
Canada
Segment Reporting Information [Line Items]
Revenues	$ 1,492	$ 1,325	$ 3,087	$ 2,870

Segment Reporting and Concent_5

Segment Reporting and Concentrations - Long-lived assets (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Revenues from External Customers and Long-Lived Assets [Line Items]
Long - lived assets	$ 20,464	$ 20,643
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Long - lived assets	3,935	4,045
Canada
Revenues from External Customers and Long-Lived Assets [Line Items]
Long - lived assets	9,402	9,044
United Kingdom
Revenues from External Customers and Long-Lived Assets [Line Items]
Long - lived assets	1,675	1,759
Philippines
Revenues from External Customers and Long-Lived Assets [Line Items]
Long - lived assets	4,238	4,545
India
Revenues from External Customers and Long-Lived Assets [Line Items]
Long - lived assets	980	930
Sri Lanka
Revenues from External Customers and Long-Lived Assets [Line Items]
Long - lived assets	234	319
Israel
Revenues from External Customers and Long-Lived Assets [Line Items]
Long - lived assets		1
Total Foreign
Revenues from External Customers and Long-Lived Assets [Line Items]
Long - lived assets	$ 16,529	$ 16,598

Segment Reporting and Concent_6

Segment Reporting and Concentrations - Additional information (Details)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2021client	Jun. 30, 2020client	Jun. 30, 2021clientsegment	Jun. 30, 2020client	Dec. 31, 2020client
Segment Reporting Information [Line Items]
Number of Reportable Segments \| segment			3
Foreign Customer [Member] \| Sales Revenue, Net [Member] \| Customer Concentration Risk
Segment Reporting Information [Line Items]
Concentration Risk, Percentage	47.00%	55.00%	48.00%	54.00%
Foreign Customer [Member] \| Accounts receivable \| Customer Concentration Risk
Segment Reporting Information [Line Items]
Concentration Risk, Percentage			46.00%		55.00%
One Client [Member] \| Sales Revenue, Net [Member] \| Customer Concentration Risk
Segment Reporting Information [Line Items]
Number of clients	1	1	1	1
Concentration Risk, Percentage	11.00%	16.00%	12.00%	15.00%
Another client [Member] \| Sales Revenue, Net [Member] \| Customer Concentration Risk
Segment Reporting Information [Line Items]
Concentration Risk, Percentage	11.00%		10.00%
Three Clients [Member] \| Accounts receivable
Segment Reporting Information [Line Items]
Number of clients			3		3
Three Clients [Member] \| Accounts receivable \| Customer Concentration Risk
Segment Reporting Information [Line Items]
Concentration Risk, Percentage			36.00%		36.00%
Client [Member] \| Sales Revenue, Net [Member] \| Customer Concentration Risk
Segment Reporting Information [Line Items]
Number of clients	0	0	0	0
Concentration Risk, Percentage	10.00%	10.00%	10.00%	10.00%

Income (Loss) Per Share (Detail

Income (Loss) Per Share (Details) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2021	Jun. 30, 2020
Income (Loss) Per Share
Net loss attributable to Innodata Inc. and Subsidiaries	$ (103)	$ 398	$ (484)	$ (291)	$ 295	$ (775)
Weighted average common shares outstanding	26,522		24,409		26,199	24,405
Dilutive effect of outstanding options	0		0		2,995	0
Adjusted for dilutive computation	26,522		24,409		29,194	24,405

Income (Loss) Per Share - Addit

Income (Loss) Per Share - Additional information (Details) - shares shares in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2020
Employee Stock Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded From Computation Of Earnings Per Share, Amount	5	5.2	5.2

Derivatives - Additional Inform

Derivatives - Additional Information (Details) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Designated as Hedging Instrument
Derivative [Line Items]
Derivative notional amount	$ 19.3
Not Designated as Hedging Instrument
Derivative [Line Items]
Derivative notional amount	$ 2.3	$ 7

Derivatives - fair value of der

Derivatives - fair value of derivative instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Accrued expenses \| Foreign currency forward contracts \| Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Derivatives designated as hedging instruments	$ 338
Accrued expenses \| Foreign currency forward contracts \| Not Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Derivative Instruments and Hedges, Assets	$ 13
Prepaid expenses and other current assets \| Not Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Derivative Instruments and Hedges, Assets		$ 48

Derivatives - Contracts designa

Derivatives - Contracts designated as cash flow hedges (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Derivatives
Net loss recognized in OCI	$ (301)		$ (301)	$ (166)
Net loss reclassified from accumulated OCI into income	$ 34	$ 87	$ 34	$ 82

Stock Options and Restricted Shares - Summary of Restricted Shares (Details)	6 Months Ended
	Jun. 30, 2021$ / sharesshares
Stock Options and Restricted Shares
Number of Shares, Unvested at December 31, 2020 \| shares	50,000
Number of Shares, Granted \| shares	0
Number of Shares, Vested \| shares	(25,000)
Number of Shares, Forfeited/Expired \| shares	0
Number of Shares, Unvested at June 30, 2021 \| shares	25,000
Weighted-Average Grant Date Fair Value, Outstanding \| $ / shares	$ 0
Weighted-Average Grant Date Fair Value, Granted \| $ / shares	0
Weighted-Average Grant Date Fair Value, Vested \| $ / shares	0
Weighted-Average Grant Date Fair Value, Forfeited/Expired \| $ / shares	0
Weighted-Average Grant Date Fair Value, Outstanding \| $ / shares	$ 1.38