Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 16, 2024 | Jun. 30, 2023 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
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 Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 294,823,074 | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 28,752,874 | ||
Entity Central Index Key | 0000903651 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Document Financial Statement Error Correction [Flag] | false | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | BDO India LLP | ||
Auditor Firm ID | 6074 | ||
Auditor Location | Mumbai |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 13,806 | $ 9,792 |
Short term investments - other | 14 | 507 |
Accounts receivable, net of allowance for doubtful accounts | 14,288 | 9,528 |
Prepaid expenses and other current assets | 3,969 | 3,858 |
Total current assets | 32,077 | 23,685 |
Property and equipment, net | 2,281 | 2,511 |
Right-of-use-asset, net | 5,054 | 4,309 |
Other assets | 2,445 | 1,498 |
Deferred income taxes, net | 1,741 | 1,475 |
Intangibles, net | 13,758 | 12,526 |
Goodwill | 2,075 | 2,038 |
Total assets | 59,431 | 48,042 |
Current liabilities: | ||
Accounts payable | 2,662 | 2,630 |
Accrued expenses and other | 6,583 | 7,250 |
Accrued salaries, wages and related benefits | 7,799 | 6,136 |
Income and other taxes | 3,848 | 3,230 |
Long-term obligations - current portion | 1,261 | 877 |
Operating lease liability - current portion | 782 | 693 |
Total current liabilities | 22,935 | 20,816 |
Deferred income taxes, net | 22 | 65 |
Long-term obligations, net of current portion | 6,778 | 5,079 |
Operating lease liability, net of current portion | 4,701 | 4,036 |
Total liabilities | 34,436 | 29,996 |
Commitments and contingencies | ||
Non-controlling interests | (708) | (727) |
STOCKHOLDERS' EQUITY: | ||
Serial preferred stock; 4,998,000 shares authorized, none outstanding | ||
Common stock, $.01 par value; 75,000,000 shares authorized; 31,937,000 shares issued and 28,753,000 outstanding at December 31, 2023 and 30,589,000 shares issued and 27,405,000 outstanding at December 31, 2022 | 320 | 306 |
Additional paid-in capital | 43,152 | 35,815 |
Deficit | (9,683) | (8,775) |
Accumulated other comprehensive loss | (1,621) | (2,108) |
Stockholders' Equity before Treasury Stock, Total | 32,168 | 25,238 |
Less: treasury stock, 3,184,000 shares at December 31, 2023 and 2022, at cost | (6,465) | (6,465) |
Total stockholders' equity | 25,703 | 18,773 |
Total liabilities, non-controlling interests and stockholders' equity | $ 59,431 | $ 48,042 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
CONSOLIDATED BALANCE SHEETS | ||
Serial preferred stock, shares authorized | 4,998,000 | 4,998,000 |
Serial 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 | 31,937,000 | 30,589,000 |
Common stock, shares outstanding | 28,753,000 | 27,405,000 |
Treasury stock, shares | 3,184,000 | 3,184,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||
Revenues | $ 86,775 | $ 79,001 |
Operating costs and expenses: | ||
Direct operating costs | 55,482 | 51,533 |
Selling and administrative expenses | 30,975 | 37,940 |
Interest expense, net | 179 | 11 |
Total | 86,636 | 89,484 |
Income (loss) before provision for income taxes | 139 | (10,483) |
Provision for income taxes | 1,028 | 1,522 |
Consolidated net loss | (889) | (12,005) |
Income (loss) attributable to non-controlling interests | 19 | (70) |
Net Loss attributable to Innodata Inc. and Subsidiaries | $ (908) | $ (11,935) |
Loss per share attributable to Innodata Inc. and Subsidiaries: | ||
Basic (in dollars per share) | $ (0.03) | $ (0.44) |
Diluted (in dollars per share) | $ (0.03) | $ (0.44) |
Weighted average shares outstanding: | ||
Basic (in shares) | 28,131 | 27,278 |
Diluted (in shares) | 28,131 | 27,278 |
Comprehensive Loss: | ||
Consolidated net loss | $ (889) | $ (12,005) |
Pension liability adjustment, net of taxes | (326) | 772 |
Foreign currency translation adjustment | 407 | (676) |
Change in fair value of derivatives, net of taxes | 406 | (12) |
Other comprehensive income | 487 | 84 |
Total comprehensive loss | (402) | (11,921) |
Comprehensive income (loss) attributed to non-controlling interest | 19 | (70) |
Comprehensive loss attributable to Innodata Inc. and Subsidiaries | $ (421) | $ (11,851) |
CONSOLIDATED STATEMENTS OF STOC
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 the beginning at Dec. 31, 2021 | $ 303 | $ 35,121 | $ 3,160 | $ (2,192) | $ (6,465) | $ 29,927 |
Balance at the beginning (in shares) at Dec. 31, 2021 | (3,184,000) | |||||
Balance at the beginning (in shares) at Dec. 31, 2021 | 30,347,000 | |||||
Net Income (Loss) | (11,935) | (11,935) | ||||
Stock-based compensation | 3,283 | 3,283 | ||||
Stock option exercises | $ 3 | 329 | 332 | |||
Stock option exercises (in shares) | 249,000 | |||||
Shares withheld for taxes on restricted shares vesting | (53) | (53) | ||||
Shares withheld for taxes on restricted shares vesting (in shares) | (7,000) | |||||
Redemption of non-controlling interest | (2,865) | (2,865) | ||||
Pension liability adjustment, net of taxes | 772 | 772 | ||||
Foreign currency translation adjustment | (676) | (676) | ||||
Change in fair value of derivatives, net of taxes | (12) | (12) | ||||
Balance at the end at Dec. 31, 2022 | $ 306 | 35,815 | (8,775) | (2,108) | $ (6,465) | $ 18,773 |
Balance at the end (in shares) at Dec. 31, 2022 | (3,184,000) | 3,184,000 | ||||
Balance at the end (in shares) at Dec. 31, 2022 | 30,589,000 | |||||
Net Income (Loss) | (908) | $ (908) | ||||
Stock-based compensation | 4,027 | 4,027 | ||||
Stock option exercises | $ 14 | 3,310 | 3,324 | |||
Stock option exercises (in shares) | 1,351,000 | |||||
Shares withheld for exercise net settlement (in shares) | (3,000) | |||||
Pension liability adjustment, net of taxes | (326) | (326) | ||||
Foreign currency translation adjustment | 407 | 407 | ||||
Change in fair value of derivatives, net of taxes | 406 | 406 | ||||
Balance at the end at Dec. 31, 2023 | $ 320 | $ 43,152 | $ (9,683) | $ (1,621) | $ (6,465) | $ 25,703 |
Balance at the end (in shares) at Dec. 31, 2023 | (3,184,000) | 3,184,000 | ||||
Balance at the end (in shares) at Dec. 31, 2023 | 31,937,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities: | ||
Consolidated net loss | $ (889) | $ (12,005) |
Adjustments to reconcile consolidated net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 4,716 | 3,889 |
Stock-based compensation | 4,027 | 3,283 |
Deferred income taxes | (276) | 217 |
Provision for doubtful accounts | 426 | 480 |
Pension cost | 1,046 | 943 |
Loss on lease termination | 125 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (5,116) | 1,303 |
Prepaid expenses and other current assets | 372 | (226) |
Other assets | (171) | 750 |
Accounts payable, accrued expenses and other | (490) | 322 |
Accrued salaries, wages and related benefits | 1,653 | (310) |
Income and other taxes | 605 | 13 |
Net cash provided by (used in) operating activities | 5,903 | (1,216) |
Cash flows from investing activities: | ||
Capital expenditures | (5,564) | (6,526) |
Proceeds from (purchase of) short term investments - others | 493 | (507) |
Net cash used in investing activities | (5,071) | (7,033) |
Cash flows from financing activities: | ||
Proceeds from exercise of stock options | 3,324 | 332 |
Payment of long-term obligations | (452) | (639) |
Net cash provided by (used in) financing activities | 2,872 | (307) |
Effect of exchange rate changes on cash and cash equivalents | 310 | (554) |
Net increase (decrease) in cash and cash equivalents | 4,014 | (9,110) |
Cash and cash equivalents, beginning of year | 9,792 | 18,902 |
Cash and cash equivalents, end of year | 13,806 | 9,792 |
Supplemental disclosures of cash flow information: | ||
Vendor financed software licenses acquired | 1,162 | |
Cash paid for income taxes | 753 | 1,107 |
Cash paid for operating leases | 1,557 | 1,838 |
Cash paid for interest | $ 400 | $ 19 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Estimates and Policies | 12 Months Ended |
Dec. 31, 2023 | |
Description of Business and Summary of Significant Accounting Estimates and Policies | |
Description of Business and Summary of Significant Accounting Estimates and Policies | 1. Description of Business and Summary of Significant Accounting Estimates and Policies Description of Business The Company was founded on a simple idea: engineer the highest quality data so organizations across broad industry segments could make smarter decisions. Today, the Company believes it is delivering the highest quality data for some of the world’s most innovative technology companies to use to train the AI models of the future. AI holds the promise that computers can perceive and understand the world, enabling products and services that would have been previously unimaginable and impossible with traditional coding. AI learns from data, and the highest-performing AI will have learned from the highest-quality data. The Company believes that it can contribute meaningfully by harnessing its capabilities, honed over 30 years, in collecting and annotating data at scale with consistency and high accuracy. The Company is also helping companies deploy and integrate AI into their operations and products and providing innovative AI-enabled industry platforms, helping ensure that its customers’ businesses are prepared for a world in which machines augment human activity in ways previously unimaginable. The Company developed its capabilities and honed its approaches progressively over the last 30 years creating high-quality data for many of the world’s most demanding information companies. Approximately eight years ago, the Company formed Innodata Labs, a research and development center, to research, develop and apply machine learning and emerging AI to its large-scale, human-intensive data operations. In 2019, the Company began packaging the capabilities that emerged from its R&D efforts in order to align with several fast-growing new markets and help companies use AI/ML to drive performance benefits and business insights. The Company’s historical core competency in high-quality data, combined with these R&D efforts in applied AI, created the foundation for the evolution of the Company’s offerings, which include AI Data Preparation, AI Model Deployment and Integration, and AI-Enabled Industry Platforms. AI Data Preparation For several of the world’s large technology companies, the Company supports their efforts at building generative AI foundation models. For these companies, the Company provides or is poised to provide a range of scaled data solutions and services. The Company’s scaled data solutions include providing instruction data sets for fine-tuning LLMs to understand prompts, to accept instruction, to converse, to apparently reason, and to perform the myriad of incredible feats that many of us have now experienced. The Company also provides reinforcement learning and reward modeling, services which are critical to provide the guardrails against toxic, bias and harmful responses, and model evaluation services. For social media companies, robotics companies, financial services companies, and many others, the Company collects or creates training data, annotates training data, and trains AI algorithms for working with images, text, video, audio, code and sensor data. The Company utilizes a variety of leading third-party tools, proprietary tools and customer tools. For text annotation, the Company uses its proprietary data annotation platform that incorporates AI to reduce cost while improving consistency and quality of output. The Company’s proprietary data annotation platform features auto-tagging capabilities that apply to both classical and generative AI tasks. The platform encapsulates many of the innovations the Company has conceived of in the course of its 30-year history of creating high-quality data. In addition, because collecting real-world data is often impracticable (due to data privacy regulations or rarity of cohorts and outliers), the Company creates high-quality synthetic data that maintains all of the statistical properties of real-world data, using a combination of domain specialists and machine technologies that leverage large language models (LLMs). AI Model Deployment and Integration The Company helps businesses leverage the latest AI technologies to achieve their goals. The Company develops custom AI models (where it selects the appropriate algorithms, tunes hyperparameters, trains and validates the models, and updates the models as required). The Company also helps businesses fine-tune their own custom versions of the Company’s proprietary models and third-party foundation models to address domain-specific and customer-specific use cases. For the Company’s customers that provide products and solutions that require intensive text data processing and analytics, in addition to deploying and integrating AI models, the Company often provides a range of data engineering support services including data transformation, data curation, data hygiene, data consolidation, data extraction, data compliance, and master data management. The Company’s customers span a diverse range of industries and a wide range of AI use cases, benefiting from the short time-to-value and high economic returns of the Company’s AI solutions and platforms. AI-Enabled Industry Platforms The Company’s AI-enabled industry platforms address specific, niche market requirements the Company believes it can innovate with AI/ML technologies. The Company deploys these industry platforms as software-as-a-service (SaaS) and as managed services. These platforms benefit from the Company’s technology infrastructure, its industry-specific knowledge, its strong customer relationships and experience merging technology with the business processes of its customers. To date, the Company has built an industry platform for medical records data extraction and transformation (which the Company brands as “Synodex ® The Company’s Synodex industry platform transforms medical records into useable digital data organized in accordance with its proprietary data models or customer data models. The Company’s Agility industry platform 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 (print, web, radio and TV) and social media. The Company’s operations are presently classified and reported in three reporting segments: Digital Data Solutions (DDS), Synodex and Agility. Critical Accounting Policies and Estimates Principles of Consolidation Use of Estimates 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. Revenue from agreements billed on a time-and-materials basis is recognized as services are performed. Revenue from fixed-fee agreements, which is not significant to overall revenues, is 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 the Company’s 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. Revenue from the reseller agreements is recognized at the gross amount received for the goods in accordance with the Company functioning as a principal due to the Company 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. Revenue includes reimbursement of out-of-pocket expenses, with the corresponding out-of-pocket expenses included in direct operating costs. Revenue associated with the services provided in one period and billed in a subsequent period is commonly referred to as unbilled revenues and is included under Accounts receivable. 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. Contract acquisition costs, which are included in prepaid expenses and other current assets, are amortized over the term of a subscription agreement or contract that normally has a duration of 12 months or less. The Company reviews these prepaid acquisition costs on a periodic basis to determine the need to adjust the carrying values for early terminated contracts. Included in prepaid expenses and other current assets on the accompanying consolidated balance sheets are contract acquisition costs amounting to $0.8 million for each of the years ended December 31, 2023 and 2022. These acquisition costs relate to our Agility segment and are amortized over the term of the subscription agreement which normally has a duration of 12 months or less. Foreign Currency Translation The functional currency for the Company’s subsidiary in Germany is the Euro. The functional currencies for the Company’s Agility subsidiaries in the United Kingdom and Canada are the Pound Sterling and the Canadian dollar, respectively. The financial statements of these subsidiaries are prepared in their 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 consolidated financial statements. Income, expenses, and cash flows are translated at weighted-average exchange rates prevailing during the fiscal period, 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 consolidated statements of operations and comprehensive loss. Derivative Instruments - Cash Equivalents - Short term Investments-other - Concentration of Credit Risk - Accounts Receivable - We record an allowance for credit losses for estimated losses resulting from the failure of our customers to make the required payments and provisions for billing adjustments relating to quality issues on delivered services. The allowance for credit losses is based on a review of specifically identified accounts and an overall aging analysis applied to accounts pooled based on similar risk characteristics. Judgments are made with respect to the collectability of accounts receivable within each pool based on historical experience, current payment practices, and current economic trends based on our expectations over the expected life of the receivables, generally ninety days or less. Actual credit losses could differ from those estimates. Property and Equipment - two ten years Capitalized Developed Software - three Long-lived Assets - Goodwill and Other Intangible Assets - ten Goodwill represents the excess of the cost of an acquired entity over the fair value of the acquired net assets. The Company does not amortize goodwill but evaluates it for impairment at the reporting unit level annually during the third quarter of each fiscal year (as of September 30 of that year) or when an event occurs, or circumstances change, that indicates the carrying value may not be recoverable. The Company performed its annual goodwill assessment for the Agility segment as of September 30, 2023 for impairment. The impairment test involves estimating the fair value based on a combination of income (estimates of future discounted cash flows) and the market approach (market multiples for similar companies) using unobservable inputs (Level 3). The Company concluded that there is no impairment of goodwill for the Agility segment. 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 Synodex and Agility segments cannot be predicted with certainty, the Company maintains a valuation allowance against all the United States, Canadian and European (principally Germany and the United Kingdom) 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 consolidated statements of operations and comprehensive loss. Accounting for Leases The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date and requires an assessment of whether the fulfillment of the arrangement is dependent on the use of a specific asset or assets, or the arrangement conveys a right to use the asset. A reassessment is made after inception of the lease only if one of the following applies: a. there is a change in contractual terms, other than a renewal or extension of the arrangement; b. a renewal option is exercised, or extension granted, unless the term of the renewal or extension was initially included in the lease term; c. there is a change in the determination of whether fulfillment is dependent on a specified asset; or d. there is a substantial change to the asset. Whenever a reassessment is made, lease accounting shall commence or cease from the date when the change in circumstances gave rise to the reassessment for scenarios (a), (c) or (d) and at the date of renewal or extension period for scenario (b). Leases where the lessor retains substantially all the risks and rewards of ownership are classified as operating leases. As of December 31, 2023, all of the Company’s leases are classified under operating leases. Operating lease payments are recognized as an operating expense on a straight-line basis over the lease term. Accounting for Stock-Based Compensation - The stock-based compensation expense related to the Company’s stock plans were allocated as follows (in thousands): Year Ended December 31, 2023 2022 Direct operating costs $ 294 $ 214 Selling and administrative expenses 3,733 3,069 Total stock-based compensation $ 4,027 $ 3,283 Fair Value of Financial Instruments Fair value measurements and disclosures define fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The accounting standard establishes a fair value hierarchy that prioritizes the inputs used to measure fair value into three levels. The three levels are defined as follows: ● Level 1 : Unadjusted quoted price in active market for identical assets and liabilities. ● Level 2: Inputs other than those included in Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability. The Company’s forward contracts are at level 2 in the fair value hierarchy. Income (Loss) per Share Pension - Deferred Revenue The table below provides information about contract liabilities (deferred revenue) and the significant changes in the balance for the years ended December 31, 2023 and 2022, respectively (in thousands): December 31, 2023 2022 Balance at January 1 $ 4,366 $ 4,509 Net deferred revenue in the period 21,619 29,756 Revenue recognized (22,586) (29,618) Currency translations and other adjustments 124 (281) Balance at December 31 $ 3,523 $ 4,366 Recent Accounting Pronouncements - On December 14, 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. The ASU’s effective date is for fiscal years beginning after December 15, 2024. The adoption of the ASU 2023-09 will enhance quantitative and qualitative disclosures related to rate reconciliation of significant components and income tax paid. The Company does not expect any significant impact from the adoption of this standard. |
Short Term Investments - other
Short Term Investments - other | 12 Months Ended |
Dec. 31, 2023 | |
Short Term Investments - other | |
Short Term Investments - other | 2. Short Term Investments - other Short-term investments include investments made by the Company in treasury bills and certificates of deposit which are considered as highly liquid investments having an original maturity period of more than three months but less than one year from the balance sheet date. December 31, 2023 2022 Treasury bills $ - $ 494 Certificates of deposit 14 13 Total $ 14 $ 507 |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2023 | |
Accounts Receivable | |
Accounts Receivable | 3. Accounts Receivable Accounts receivable consists of the following: December 31, 2023 2022 Gross Accounts receivable $ 15,505 $ 10,741 Allowance for doubtful accounts (1,217) (1,213) Accounts receivable, net $ 14,288 $ 9,528 As of January 1, 2023 the Company has adopted ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses”, and based on the Company’s assessment there was no impact on the financial statements or other related disclosures. The basis of allowance for doubtful accounts is further elaborated in Note 1, “Critical Accounting Policies and Estimates” to the consolidated financial statements. Activity in the allowance for the credit losses for the year ended December 31, 2023 was as follows (in thousands): For the Year Ended December 31, 2023 Balance at January 1, 2023 $ 1,213 Additions charged to expense 426 Write-offs against allowance (426) Foreign currency translation adjustment 4 Balance at December 31, 2023 $ 1,217 |
Property and equipment
Property and equipment | 12 Months Ended |
Dec. 31, 2023 | |
Property and equipment | |
Property and equipment | 4. Property and equipment Property and equipment, which include amounts recorded under capital leases, are stated at cost less accumulated depreciation and amortization (in thousands), and consist of the following: December 31, 2023 2022 Equipment $ 11,315 $ 12,391 Computer software 4,465 4,447 Furniture and equipment 1,128 1,163 Leasehold improvements 2,547 2,554 Capital work-in-progress 434 - Total 19,889 20,555 Less: accumulated depreciation and amortization (17,608) (18,044) $ 2,281 $ 2,511 The estimated useful lives of the property and equipment range between two years and ten years. Depreciation and amortization expense of property and equipment were approximately $1.2 million for each of the years ended December 31, 2023 and 2022, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | 5. Goodwill and Intangible Assets The changes in the carrying amount of goodwill for the year ended December 31, 2023 were as follows (in thousands): Balance - January 1, 2023 $ 2,038 Foreign currency translation adjustment 37 Balance - December 31, 2023 $ 2,075 As of September 30, 2023 the Company performed its annual goodwill impairment analysis on the Agility segment. It involved a quantitative goodwill impairment test and estimated the fair value based on a combination of the income approach (estimates of future discounted cash flows) and the market approach (market multiples for similar companies) using unobservable inputs (Level 3). The income approach uses a discounted cash flow (“DCF”) method that utilizes the present value of cash flows to estimate the segment’s fair value. The future cash flows of the segment were projected based on the Company’s estimates of future revenues, operating income, and other factors such as working capital and capital expenditures. As part of the DCF analysis, the Company projected revenue and operating profit and assumed long-term revenue growth rates in the terminal year. The market approach utilizes multiples of revenues and earnings before interest expense, taxes, depreciation, and amortization (“EBITDA”) to estimate the segment’s fair value. The market multiples used for the segment were based on a group of comparable companies’ market multiples applied to the Company’s revenue. The Company concluded that there is no impairment of goodwill. The fair value measurement of goodwill for the Agility segment 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 and the market multiple approaches using comparable entities to further validate the carrying values. 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. The carrying value of Goodwill was $2.1 million and $2.0 million as of December 31, 2023, and 2022, respectively. Information regarding the Company acquired intangible assets and capitalized developed software was as follows (in thousands): December 31, 2023 Foreign Currency Gross Accumulated Translation Net Carrying Value Amortization Adjustment Carrying Value Acquired Intangible Assets Developed technology $ 2,999 $ (2,640) $ 7 $ 366 Customer relationships 2,096 (1,645) 10 461 Trademarks and tradenames 852 (774) 2 80 Patents 43 (40) - 3 Media Contact Database 3,492 (2,621) 16 887 Total Acquired Intangible Assets $ 9,482 $ (7,720) $ 35 $ 1,797 Capitalized Developed Software Capitalized Developed Software $ 15,216 $ (6,862) $ 138 $ 8,492 Capitalized Developed Software - in Progress 3,480 - (11) 3,469 Total Capitalized Developed Software $ 18,696 $ (6,862) $ 127 $ 11,961 Total $ 28,178 $ (14,582) $ 162 $ 13,758 December 31, 2022 Foreign Currency Gross Accumulated Translation Net Carrying Value Amortization Adjustment Carrying Value Acquired Intangible Assets Developed technology $ 3,169 $ (2,468) $ (43) $ 658 Customer relationships 2,228 (1,560) (42) 626 Trademarks and tradenames 880 (740) (8) 132 Patents 45 (38) 1 8 Media Contact Database 3,648 (2,358) (68) 1,222 Total Acquired Intangible Assets $ 9,970 $ (7,164) $ (160) $ 2,646 Capitalized Developed Software Capitalized Developed Software $ 11,845 $ (4,398) $ (348) $ 7,099 Capitalized Developed Software - in Progress 2,787 - (6) 2,781 Total Capitalized Developed Software $ 14,632 $ (4,398) $ (354) $ 9,880 Total $ 24,602 $ (11,562) $ (514) $ 12,526 Amortization expense relating to acquired intangible assets was approximately $0.9 million for each of the years ended December 31, 2023 and 2022, respectively. Amortization expense relating to capitalized developed software was approximately $2.7 million and $1.8 million for the years ended December 31, 2023 and 2022, respectively. Estimated annual amortization expense for intangible assets subsequent to December 31, 2023 is as follows (in thousands): Year Amortization 2024 $ 4,929 2025 3,976 2026 2,704 2027 739 2028 597 Thereafter 813 $ 13,758 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes | |
Income Taxes | 6. Income Taxes The significant components of the provision for income taxes for the years ended December 31, 2023 and 2022 were as follows (in thousands): 2023 2022 Current income tax expense (benefit): Foreign $ 1,181 $ 1,131 Federal 120 144 State and local 3 30 1,304 1,305 Deferred income tax expense (benefit): Foreign (286) 207 Federal 10 10 State and local - - (276) 217 Provision for income taxes $ 1,028 $ 1,522 The reconciliation of the U.S. statutory rate with the Company’s effective tax rate for the years ended December 31, 2023 and 2022 is summarized as follows: 2023 2022 Federal income tax expense (benefit) at statutory rate 21.0 % (21.0) % Effect of: Change in valuation allowance 578.6 36.9 Tax effects of foreign operations 562.6 2.5 Section 162 (m) 452.0 - Return to provision true up 264.4 0.3 Increase in unrecognized tax benefits (ASC 740) 199.6 0.7 Withholding tax 106.6 - Foreign operations permanent differences - foreign exchange gains and losses 76.9 1.1 State income tax net of federal benefit 0.1 0.2 Research and development credit (67.3) - Foreign rate differential (102.5) (4.7) Deemed interest (149.2) (1.9) Tax effect of intercompany settlement (234.0) - Effect of stock-based compensation (961.6) (0.3) Other (7.6) 0.7 Effective tax rate 739.6 % 14.5 % Deferred tax assets and liabilities are classified as non-current. Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2023 and 2022 were as follows (in thousands): December 31, 2023 2022 Deferred income tax assets: Allowances not currently deductible $ 283 $ 301 Depreciation and amortization 58 9 Equity compensation not currently deductible 2,098 1,579 Net operating loss carryforwards 10,514 10,758 Research and development credits 452 362 Expenses not deductible until paid 1,972 1,694 Other 133 (220) Total gross deferred income tax assets before valuation allowance 15,510 14,483 Valuation allowance (13,769) (13,008) Deferred income tax assets, net 1,741 1,475 Deferred income tax liabilities: Other (22) (65) Total deferred income tax liabilities (22) (65) Net deferred income tax assets $ 1,719 $ 1,410 Net deferred income tax assets $ 1,741 $ 1,475 Net deferred income tax liability (22) (65) Net deferred income tax assets $ 1,719 $ 1,410 In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred tax assets will not be realizable. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences are deductible and net operating losses are available. As of December 31, 2023, the Company continues to maintain a valuation allowance on all of the Company’s United States, Canadian, German and United Kingdom subsidiaries’ deferred tax assets. The Company maintained a valuation allowance of approximately $13.8 million and $13.0 million as of December 31, 2023 and 2022, respectively. The valuation allowance relates to the United States, and the Company’s Canadian, German and the United Kingdom subsidiaries’ deferred tax assets. The net change in the total valuation allowance was an increase of $0.8 million and $3.9 million for the years ended December 31, 2023 and December 31, 2022, respectively. Despite the access to the overseas earnings and the resulting toll charge, the Company intends to indefinitely reinvest the foreign earnings in our foreign subsidiaries on account of the foreign jurisdiction withholding tax that the Company has to incur on the actual remittances. Unremitted earnings of foreign subsidiaries amounted to approximately $50.4 million at December 31, 2023. If such earnings are repatriated in the future, or are no longer deemed to be indefinitely reinvested, the Company would have to accrue the applicable amount of foreign jurisdiction withholding taxes associated with such remittances. United States and foreign components of loss before provision for income taxes for each of the years ended December 31, were as follows (in thousands): 2023 2022 United States $ 2,025 $ (4,023) Foreign (1,886) (6,460) Totals $ 139 $ (10,483) At December 31, 2023, the Company had available U.S. federal net operating loss (NOL) carryforwards of approximately $21.2 million and recognized research and development credits of approximately $0.1 million. These NOL carryforwards expire at various times from the year 2032 through the year 2035 and the research and development credit expires in 2043. The potential benefits from these balances have not been recognized for financial statement purposes. Under the CARES Act, the Internal Revenue Code was amended to allow for federal NOL carrybacks for five years to offset previous years’ taxable income or for the NOL to be carried forward indefinitely to offset 80% of taxable income for tax years 2021 and thereafter. As of the date the financial statements were issued, the state NOL carryforwards, if not utilized, will expire beginning in 2032. On December 31, 2023, the Company’s Canadian subsidiaries had available Canadian NOL carryforwards of approximately $27.0 million that will begin to expire in 2036 and research and development credits of approximately $1.4 million that have no expiry. The potential benefits from these balances have not been recognized for financial statement purposes. On December 31, 2023, the Company’s German and the United Kingdom subsidiaries had available NOL carryforwards of approximately $1.7 million. The potential benefits from these balances have not been recognized for financial statement purposes. The Company had reserves for uncertain tax positions of $1.9 million and $1.7 million as of December 31, 2023, and 2022, respectively, where the ultimate tax determination is uncertain due to complexities of tax laws. The increase in unrecognized tax benefits resulted from additional accruals for the current tax year. The Company expects that unrecognized tax benefits as of December 31, 2023 and December 31, 2022, if recognized, would have a material impact on the Company’s effective tax rate. The Company is subject to Federal income tax, as well as income tax in various states and foreign jurisdictions. The Company has open tax years for U.S. Federal and state taxes from 2019 through 2023. Various foreign subsidiaries have open tax years from 2005 through 2022, some of which are under audit by local tax authorities. The Company believes that its accruals for uncertain tax positions as of December 31, 2023 under ASC 740, Income Taxes are adequate to cover the Company’s income tax exposures. The following table represents a roll forward of the Company’s unrecognized tax benefits and associated interest for the years ended (in thousands): Unrecognized Tax Benefits December 31, 2023 2022 Balance at January 1 $ 1,680 $ 1,753 Decrease for prior year tax positions (68) (290) Increase for current year tax positions 247 311 Interest accrual 97 67 Foreign currency remeasurement (14) (161) Balance at December 31 $ 1,942 $ 1,680 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 contested this order in an appeal to the Customs, Excise and Service Tax Appellate Tribunal and in January 2024 the Customs, Excise and Service Tax Appellate Tribunal ruled in the Company’s favor. In the event the Service Tax Department appeals this ruling and 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 revenues of the Company’s Indian subsidiary during this period was approximately $56.0 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 Company’s assessment in consultation with the Company’s tax 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 $121,000 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 $0.8 million recorded as a receivable. Based on the Company’s assessment in consultation with the Company’s tax counsel, the Company has not recorded any tax liability for this case. 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. |
Long-term obligations
Long-term obligations | 12 Months Ended |
Dec. 31, 2023 | |
Long-term obligations | |
Long-term obligations | 7. Long-term obligations Total long-term obligations as of December 31, 2023 and 2022 consisted of the following (in thousands): December 31, 2023 2022 Pension obligations - accrued pension liability $ 7,128 $ 5,906 Settlement agreement - 50 Microsoft licenses (1) 911 - 8,039 5,956 Less: Current portion of long-term obligations 1,261 877 Totals $ 6,778 $ 5,079 (1) |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and contingencies | |
Commitments and Contingencies | 8. 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 $450,000 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. Foreign Currency Indemnifications |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2023 | |
Operating Leases | |
Operating Leases | 9. 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 three The Company recognizes an operating lease liability and right-of-use asset in compliance with current lease accounting standard ASC 842. The amount of right-of use asset is equal to the present value of the remaining lease payments discounted using the incremental borrowing rate of each respective country. Modifications, if any are recalculated and corresponding adjustments are made to the carrying values of both the lease liability and right-of-use assets. A right-of-use asset is measured as the amount of the lease liability adjusted for the amount of deferred straight-line rent, prepaid rent and lease incentive allowances previously recognized. The table below summarizes the amounts recognized in the financial statements related to operating leases for the years presented (in thousands): Year Ended December 31, 2023 December 31, 2022 Rent expense for long-term operating leases $ 1,252 $ 1,336 Rent expense for short-term leases 305 502 Total rent expense $ 1,557 $ 1,838 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 consolidated balance sheet as of December 31, 2023 (in thousands): Year Amount 2024 $ 1,292 2025 1,316 2026 1,348 2027 1,344 2028 965 2029 and thereafter 869 Total lease payments 7,134 Less: Interest (1,651) Net present value of lease liabilities $ 5,483 Current portion $ 782 Long-term portion 4,701 Total $ 5,483 The weighted average remaining lease terms and discount rates for all of our operating leases as of December 31, 2023 were as follows: Weighted-average lease term remaining 63 months Weighted-average discount rate 9.45% |
Pension Benefits
Pension Benefits | 12 Months Ended |
Dec. 31, 2023 | |
Pension Benefits | |
Pension Benefits | 10. Pension Benefits U.S. Defined Contribution Pension Plan - Most of the non-U.S. subsidiaries provide for government-mandated defined pension benefits. For certain of these subsidiaries, vested eligible employees are provided a lump sum payment upon retiring from the Company at a defined age. The lump sum amount is based on the salary and tenure as of retirement date. Other non-U.S. subsidiaries provide for a lump sum payment to vested employees on retirement, death, incapacitation or termination of employment, based upon the salary and tenure as of the date employment ceases. The liability for such defined benefit obligations is determined and provided on the basis of actuarial valuations. As of December 31, 2023, these plans were unfunded. Pension expense for our foreign subsidiaries totaled approximately $1.2 million and $1.1 million for the years ended December 31, 2023 and 2022, respectively. The following tables set out the status of the non-U.S. pension benefits and the amounts recognized in the Company’s consolidated financial statements and the components of pension costs for the years ended December 31, 2023 and 2022 were as follows (in thousands): Benefit Obligations: 2023 2022 Projected benefit obligation at beginning of the year $ 5,906 $ 6,839 Service cost 568 592 Interest cost 478 352 Actuarial loss (gain) 324 (713) Foreign currency exchange rates changes 54 (862) Curtailment - (48) Benefits paid (202) (254) Projected benefit obligation at end of the year $ 7,128 $ 5,906 The Company incurred an actuarial loss of $0.3 million for the year ended December 31, 2023, and an actuarial gain of $0.7 million for the year ended December 31, 2022. This was mainly due to changes in the discount rates used. Actuarial (gains) losses are recorded as part of other comprehensive income and are not reflected as part of net periodic pension cost. Components of Net Periodic Pension Cost: 2023 2022 Service cost $ 568 $ 592 Interest cost 478 352 Curtailment - (16) Actuarial loss recognized 147 210 Net periodic pension cost $ 1,193 $ 1,138 The accumulated benefit obligation, which represents benefits earned to date, was approximately $3.9 million and $3.2 million for each of the years ended December 31, 2023 and 2022. Amounts recognized in the consolidated balance sheets for the years ended December 31, 2023 and 2022 consisted of the following (in thousands): 2023 2022 Current accrued benefit cost $ 880 $ 828 Non-current accrued benefit cost 6,248 5,078 Total amount recognized $ 7,128 $ 5,906 Current accrued benefit cost for pension benefits was included in the current portion of long-term obligations in the consolidated balance sheets. Non-current accrued benefit cost for pension benefits was included in long-term obligations, net of current portion, in the consolidated balance sheets. Actuarial assumptions for all non-U.S. plans are described below. The discount rates are used to measure the year-end benefit obligations and the earnings effects for the subsequent year. The assumptions for the years ended December 31, 2023 and 2022 were as follows: 2023 2022 Discount rate 6.73%-12.8% 5.13%-20% Rate of increase in compensation level 7.5%-14.5% 7.5%-20% Estimated Future Benefit Payments: As of December 31, 2023, the following benefit payments, which reflect expected future service, as appropriate, were expected to be paid (in thousands): Year Amount 2024 $ 889 2025 431 2026 267 2027 749 2028 175 2029 to 2032 5,108 $ 7,619 |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2023 | |
Capital Stock | |
Capital Stock | 11. Capital Stock Common Stock - Preferred Stock - Common Stock Reserved - Treasury Stock - |
Stock Options
Stock Options | 12 Months Ended |
Dec. 31, 2023 | |
Stock Options | |
Stock Options | 12. Stock Options The Innodata Inc. 2013 Stock Plan (as amended, the “2013 Plan”) expired in accordance with its terms on June 3, 2023. Pursuant to the terms of the 2013 Plan, no further awards may be granted under the 2013 Plan following its expiration. As of December 31, 2023, there were 5,567,966 shares of our common stock underlying outstanding options or rights under the 2013 Plan. Outstanding awards made under the 2013 Plan prior to the 2013 Plan’s expiration will remain in effect until such awards have been satisfied or terminated in accordance with the terms of the 2013 Plan and such awards. On June 9, 2022, stockholders of the Company approved amendments to the Innodata Inc. 2021 Equity Compensation Plan (as amended, the “2021 Plan”). The number of shares of common stock of Innodata Inc. that may be delivered, purchased or used for reference purposes (with respect to stock appreciation rights or stock units) for awards granted under the 2021 Plan is 4,000,000 (the “Share Reserve”). Shares subject to an option or stock appreciation right granted under the 2021 Plan count against the Share Reserve as one share for every share granted, and shares subject to any other type of award granted under the 2021 one 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 Years Ended December 31, 2023 2022 Weighted average fair value of options granted $ 2.56 $ 2.67 Risk-free interest rate 4.34 % 1.94% - 4.09 % Expected term (years) 6.0 3 - 6.42 Expected volatility factor 75.35 % 62%-79 % Expected dividends None None The Company estimates the risk-free interest rate using the U.S. Treasury yield curve for periods equal to the expected term of the options in effect at the time of grant. The expected term of options granted is based on a combination of vesting schedules, term of the options and historical experience. Expected volatility is based on the historical volatility of the Company’s common stock. The Company uses an expected dividend yield of zero since it has never declared or paid any dividends on its capital stock. Stock Options 2013 Plan A summary of stock option activity under the Innodata Inc. 2013 Stock Plan, as amended and restated effective June 7, 2016 (the “2013 Plan”) and changes during each of the years ended December 31, 2023 and 2022 are presented below. Weighted-Average Weighted -Average Remaining Number of Exercise Contractual Term Aggregate Options Price (years) Intrinsic Value Outstanding at January 1, 2022 5,536,896 $ 2.66 Granted 1,774,558 4.91 Exercised (248,763) 1.34 Forfeited/Expired (372,201) 6.55 Outstanding at December 31, 2022 6,690,490 $ 3.09 7.19 $ 5,989,709 Granted* 25,000 3.31 Exercised (1,287,462) 2.37 Forfeited/Expired (88,866) 6.27 Outstanding at December 31, 2023 5,339,162 $ 3.22 6.38 $ 28,640,009 Exercisable at December 31, 2023 3,475,780 $ 2.18 6.40 $ 22,237,334 Vested and Expected to Vest at December 31, 2023 5,339,162 $ 3.22 6.38 $ 28,640,009 * Includes 25,000 stock options granted to a non-employee member of the Company’s advisory board. 2021 Plan A summary of option activity under the Innodata Inc. 2021 Equity Compensation Plan, as amended and restated effective as of April 11, 2022 (the “2021 Plan”) and changes during each of the years ended December 31, 2023 and 2022 are presented below. Weighted- Weighted - Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Term (years) Value Outstanding at January 1, 2022 - $ - Granted 1,030,000 3.46 Exercised - - Forfeited/Expired (2,500) 3.41 Outstanding at December 31, 2022 1,027,500 $ 3.46 9.75 $ - Granted 3,000 13.05 Exercised (63,595) 4.59 Forfeited/Expired (43,334) 3.41 Outstanding at December 31, 2023 923,571 $ 3.41 8.76 $ 4,786,252 Exercisable at December 31, 2023 386,209 $ 3.34 8.74 $ 2,023,601 Vested and Expected to Vest at December 31, 2023 923,571 $ 3.41 8.76 $ 4,786,252 Restricted Stock Awards There were no outstanding awards of restricted stock under the 2013 Plan or the 2021 Plan (collectively, the “Equity Plans”) during each of the years ended December 31, 2023 and 2022. Restricted Stock Units Restricted stock unit activity under the Equity Plans during each of the years ended December 31, 2023 and 2022 are presented below: Weighted- Number of Average Restricted Stock Grant Date Units Fair Value Unvested at January 1, 2023 700,000 $ 5.59 Granted 49,756 8.29 Vested - - Forfeited/Expired - - Unvested at December 31, 2023 749,756 $ 5.77 During the year ended December 31, 2023, a total of 49,756 restricted stock units (“RSUs”) were granted. 28,804 RSUs were granted to employees under the 2013 Plan, and 20,952 RSUs were granted to non-employee directors of the Company under the 2021 Plan. Vesting of the RSUs granted to employees is contingent on continuous employment by the employee for a 12-month period from the date of grant, and each fully vested RSU represents the right to receive one share of the Company’s common stock or the fair market value of one share of common stock, at the Company’s discretion, and is classified as an equity award. Vesting of the RSUs granted to the non-employee directors occurs on the earlier of (i) one year from the date of grant; or (ii) the date of the Company’s 2024 annual meeting of stockholders, and each fully vested RSU represents the right to receive one share of the Company’s common stock and is classified as an equity award. The stock-based compensation expense is recognized on a straight-line basis over a period of 12 months. The fair value of restricted stock units is based on the closing price of the stock at the time of the grant. Weighted- Number of Average Restricted Stock Grant Date Units Fair Value Unvested at January 1, 2022 - $ - Granted 700,000 5.59 Vested - - Forfeited/Expired - - Unvested at December 31, 2022 700,000 $ 5.59 During the year ended December 31, 2022, 700,000 performance-based RSUs were granted under the Equity Plans and remain non-vested as of December 31, 2023. Vesting of these RSUs is contingent on the achievement of certain financial performance goals and continuation of employment for a defined period. Each RSU vests pursuant to the vesting schedule found in the respective RSU agreement. The fair value of restricted stock units is estimated on the date of grant using the Binomial option pricing model. The compensation cost related to non-vested stock options not yet recognized as of December 31, 2023 totaled approximately $3.5 million. The weighted-average period over which these costs will be recognized is 15 months. The compensation cost related to non-vested restricted stock units not yet recognized as of December 31, 2023 totaled approximately $3.1 million. The weighted-average period over which these costs will be recognized is 14 months. |
Comprehensive loss
Comprehensive loss | 12 Months Ended |
Dec. 31, 2023 | |
Comprehensive loss | |
Comprehensive loss | 13. Comprehensive loss Accumulated other comprehensive loss, as reflected in the consolidated balance sheets, consists of pension liability adjustments, net of taxes, foreign currency translation adjustment and changes in fair value of derivatives, net of taxes. The components of accumulated other comprehensive loss as of December 31, 2023 and 2022, and reclassifications out of accumulated other comprehensive loss for the years then ended, are presented below (in thousands): Foreign Currency Accumulated Other Pension Liability Fair Value of Translation Comprehensive Adjustment Derivatives Adjustment Loss Balance at January 1, 2023 $ (86) $ (365) $ (1,657) $ (2,108) Other comprehensive income (loss) before reclassifications, net of taxes (322) 185 407 270 Total other comprehensive loss before reclassifications, net of taxes (408) (180) (1,250) (1,838) Net amount reclassified to earnings (4) 221 - 217 Balance at December 31, 2023 $ (412) $ 41 $ (1,250) $ (1,621) Foreign Currency Accumulated Other Pension Liability Fair Value of Translation Comprehensive Adjustment Derivatives Adjustment Loss Balance at January 1, 2022 $ (858) $ (353) $ (981) $ (2,192) Other comprehensive income (loss) before reclassifications, net of taxes 561 (1,118) (676) (1,233) Total other comprehensive loss before reclassifications, net of taxes (297) (1,471) (1,657) (3,425) Net amount reclassified to earnings 211 1,106 - 1,317 Balance at December 31, 2022 $ (86) $ (365) $ (1,657) $ (2,108) Taxes related to each component of other comprehensive loss were not material for the fiscal years presented and therefore not disclosed separately. All reclassifications out of accumulated other comprehensive loss had an impact on direct operating costs in the consolidated statements of operations and comprehensive loss. |
Segment reporting and concentra
Segment reporting and concentrations | 12 Months Ended |
Dec. 31, 2023 | |
Segment reporting and concentrations | |
Segment reporting and concentrations | 14. 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 AI data preparation services, collecting or creating training data, annotating training data, and training AI algorithms for its customers, and AI model deployment and integration. The DDS segment also provides a range of data engineering support services including data transformation, data curation, data hygiene, data consolidation, data extraction, data compliance, and master data management. The Synodex segment provides an industry platform that transforms medical records into useable digital data organized in accordance with its proprietary data models or customer data models. The Agility segment provides an industry 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 is generated from its locations in the Philippines, India, Sri Lanka, Canada, Germany, Israel, United States and the United Kingdom. Revenues from external customers, segment operating profit (loss), and other reportable segment information are as follows (in thousands): For The Years Ended December 31, 2023 2022 Revenues: DDS $ 61,576 $ 56,523 Synodex 7,511 7,105 Agility 17,688 15,373 Total Consolidated $ 86,775 $ 79,001 Income (loss) before provision for income taxes (1) DDS $ 1,823 $ 1,393 Synodex (299) (3,213) Agility (1,385) (8,663) Total Consolidated $ 139 $ (10,483) Income (loss) before provision for income taxes (2) DDS $ 1,260 $ 716 Synodex 219 (2,599) Agility (1,340) (8,600) Total Consolidated $ 139 $ (10,483) December 31, 2023 December 31, 2022 Total assets: DDS $ 37,232 $ 25,758 Synodex 3,379 3,270 Agility 18,820 19,014 Total Consolidated $ 59,431 $ 48,042 December 31, 2023 December 31, 2022 Goodwill: Agility $ 2,075 $ 2,038 Total $ 2,075 $ 2,038 (1) Before elimination of any inter-segment profits (2) After elimination of any inter-segment profits Long-lived assets as of December 31, 2023 and 2022 by geographic region were comprised of (in thousands): 2023 2022 United States $ 9,101 $ 7,205 Foreign countries: Canada 7,328 7,675 United Kingdom 1,028 1,198 Philippines 3,484 3,682 India 1,791 1,195 Sri Lanka 423 426 Israel 13 3 Total foreign 14,067 14,179 Totals $ 23,168 $ 21,384 Long-lived assets include the unamortized balance of right-of-use assets amounting to $5.1 million and $4.3 million as of December 31, 2023 and December 31, 2022, respectively. One customer in the DDS segment generated approximately 10% of the Company’s total revenues in the fiscal year ended December 31, 2023. Another customer in the DDS segment generated approximately 11% of the Company’s total revenues in the fiscal year ended December 31, 2022. No other customer accounted for 10% or more of total revenues during these periods. Further, in the years ended December 31, 2023 and 2022, revenues from non-U.S. customers accounted for 37% and 38%, respectively, of the Company’s revenues. Revenues for each of the two years in the period ended December 31, 2023 and 2022 by geographic region (determined based upon customer domicile), were as follows (in thousands): 2023 2022 United States $ 54,430 $ 48,724 United Kingdom 10,766 10,901 The Netherlands 7,291 6,829 Canada 7,156 5,508 Others - principally Europe 7,132 7,039 Totals $ 86,775 $ 79,001 As of December 31, 2023, approximately 31% of the Company’s accounts receivable was due from foreign (principally European) customers and 53% of accounts receivable was due from three customers. As of December 31, 2022, approximately 44% of the Company’s accounts receivable was due from foreign (principally European) customers and 45% of accounts receivable was due from four customers. No other customer accounted for 10% or more of the accounts receivable as of December 31, 2023 and 2022. |
Loss per Share
Loss per Share | 12 Months Ended |
Dec. 31, 2023 | |
Loss per Share | |
Loss per Share | 15. Loss per Share For the Years Ended December 31, 2023 2022 Net loss attributable to Innodata Inc. and Subsidiaries $ 908 $ 11,935 Weighted average common shares outstanding 28,131 27,278 Dilutive effect of outstanding options - - Adjusted for dilutive computation 28,131 27,278 Basic 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 6.3 million shares of common stock for the year ended December 31, 2023 were outstanding but not included in the computation of diluted loss per share because the effect would be antidilutive. Options to purchase 5.3 million shares of common stock for the year ended December 31, 2022 were outstanding but not included in the computation of diluted loss per share because the exercise price of the options were greater than the average market price of the common shares and therefore have not been considered as potential equity shares. |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2023 | |
Derivatives | |
Derivatives | 16. 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 revenues 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. For derivative instruments that are not designated as hedges, any change in fair value is recorded directly in earnings 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 was $10.5 million and $14.2 million as of December 31, 2023 and 2022, respectively. The following table presents the fair value of derivative instruments included within the consolidated balance sheets as of December 31, 2023 and 2022 (in thousands): Balance Sheet Location Fair Value 2023 2022 Derivatives designated as hedging instruments: Foreign currency forward contracts Accrued expenses $ - $ 365 Foreign currency forward contracts Prepaid expenses and other current assets $ 41 $ - The effect of foreign currency forward contracts designated as cash flow hedges on the consolidated statements of operations for the years ended December 31, 2023 and 2022 were as follows (in thousands): 2023 2022 Net gain (loss) recognized in OCI (1) $ 185 $ (1,118) Net loss reclassified from accumulated OCI into income (2) $ (221) $ (1,106) 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 . |
Line of Credit
Line of Credit | 12 Months Ended |
Dec. 31, 2023 | |
Line of Credit | |
Line of Credit | 17. Line of Credit On April 4, 2023, the Company entered into a Credit Agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association, as lender, and Innodata Inc., Innodata Synodex, LLC, Innodata docGenix, LLC and Agility PR Solutions LLC as co-borrowers. On July 21, 2023, Innodata Services LLC signed a Joinder Agreement to join the Credit Agreement as a co-borrower. The Credit Agreement provides for a secured revolving line of credit (the “Revolving Credit Facility”) up to an amount equal to the lesser of the borrowing base and $10.0 million with a maturity date of April 4, 2026. The Revolving Credit Facility’s borrowing base is calculated in accordance with the terms of the Credit Agreement and on the basis of 85% of eligible accounts, 85% of eligible foreign accounts up to $2.0 million and certain other reserves and adjustments. As of December 31, 2023, such borrowing base calculation equaled approximately $10.0 million. The Credit Agreement contains a financial covenant that requires the Borrowers, on a consolidated basis, to maintain a fixed charge coverage ratio of not less than 1.10 to 1.00 by December 31, 2023. Except as set forth in the Credit Agreement, borrowings under the Revolving Credit Facility bear interest at a rate equal to the daily simple secured overnight financing rate (“SOFR”) plus 2.25%. The Company has not utilized the Revolving Credit Facility during the year ended December 31, 2023 and through the date of filing of this Report. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Event | |
Subsequent Event | 18. Subsequent Event On February 21, 2024, a putative class action lawsuit was filed in the U.S. District Court for the District of New Jersey against the Company and certain of its current and former officers (D’Agostino v. Innodata Inc., et al., Case Number 2:24-CV-00971 (the “D’Agostino Complaint”). The D’Agostino Complaint asserts claims against all defendants for alleged violations of Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder and Section 20(a) of the Exchange Act. The D’Agostino Complaint alleges that defendants made materially false and misleading statements related to its AI business and development and related financial results, growth, and prospects. The D’Agostino Complaint seeks unspecified compensatory and punitive damages, costs, attorneys’ fees, and other unspecified relief. The Company intends to defend against the D’Agostino Complaint vigorously. |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Estimates and Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Description of Business and Summary of Significant Accounting Estimates and Policies | |
Description of Business | Description of Business The Company was founded on a simple idea: engineer the highest quality data so organizations across broad industry segments could make smarter decisions. Today, the Company believes it is delivering the highest quality data for some of the world’s most innovative technology companies to use to train the AI models of the future. AI holds the promise that computers can perceive and understand the world, enabling products and services that would have been previously unimaginable and impossible with traditional coding. AI learns from data, and the highest-performing AI will have learned from the highest-quality data. The Company believes that it can contribute meaningfully by harnessing its capabilities, honed over 30 years, in collecting and annotating data at scale with consistency and high accuracy. The Company is also helping companies deploy and integrate AI into their operations and products and providing innovative AI-enabled industry platforms, helping ensure that its customers’ businesses are prepared for a world in which machines augment human activity in ways previously unimaginable. The Company developed its capabilities and honed its approaches progressively over the last 30 years creating high-quality data for many of the world’s most demanding information companies. Approximately eight years ago, the Company formed Innodata Labs, a research and development center, to research, develop and apply machine learning and emerging AI to its large-scale, human-intensive data operations. In 2019, the Company began packaging the capabilities that emerged from its R&D efforts in order to align with several fast-growing new markets and help companies use AI/ML to drive performance benefits and business insights. The Company’s historical core competency in high-quality data, combined with these R&D efforts in applied AI, created the foundation for the evolution of the Company’s offerings, which include AI Data Preparation, AI Model Deployment and Integration, and AI-Enabled Industry Platforms. AI Data Preparation For several of the world’s large technology companies, the Company supports their efforts at building generative AI foundation models. For these companies, the Company provides or is poised to provide a range of scaled data solutions and services. The Company’s scaled data solutions include providing instruction data sets for fine-tuning LLMs to understand prompts, to accept instruction, to converse, to apparently reason, and to perform the myriad of incredible feats that many of us have now experienced. The Company also provides reinforcement learning and reward modeling, services which are critical to provide the guardrails against toxic, bias and harmful responses, and model evaluation services. For social media companies, robotics companies, financial services companies, and many others, the Company collects or creates training data, annotates training data, and trains AI algorithms for working with images, text, video, audio, code and sensor data. The Company utilizes a variety of leading third-party tools, proprietary tools and customer tools. For text annotation, the Company uses its proprietary data annotation platform that incorporates AI to reduce cost while improving consistency and quality of output. The Company’s proprietary data annotation platform features auto-tagging capabilities that apply to both classical and generative AI tasks. The platform encapsulates many of the innovations the Company has conceived of in the course of its 30-year history of creating high-quality data. In addition, because collecting real-world data is often impracticable (due to data privacy regulations or rarity of cohorts and outliers), the Company creates high-quality synthetic data that maintains all of the statistical properties of real-world data, using a combination of domain specialists and machine technologies that leverage large language models (LLMs). AI Model Deployment and Integration The Company helps businesses leverage the latest AI technologies to achieve their goals. The Company develops custom AI models (where it selects the appropriate algorithms, tunes hyperparameters, trains and validates the models, and updates the models as required). The Company also helps businesses fine-tune their own custom versions of the Company’s proprietary models and third-party foundation models to address domain-specific and customer-specific use cases. For the Company’s customers that provide products and solutions that require intensive text data processing and analytics, in addition to deploying and integrating AI models, the Company often provides a range of data engineering support services including data transformation, data curation, data hygiene, data consolidation, data extraction, data compliance, and master data management. The Company’s customers span a diverse range of industries and a wide range of AI use cases, benefiting from the short time-to-value and high economic returns of the Company’s AI solutions and platforms. AI-Enabled Industry Platforms The Company’s AI-enabled industry platforms address specific, niche market requirements the Company believes it can innovate with AI/ML technologies. The Company deploys these industry platforms as software-as-a-service (SaaS) and as managed services. These platforms benefit from the Company’s technology infrastructure, its industry-specific knowledge, its strong customer relationships and experience merging technology with the business processes of its customers. To date, the Company has built an industry platform for medical records data extraction and transformation (which the Company brands as “Synodex ® The Company’s Synodex industry platform transforms medical records into useable digital data organized in accordance with its proprietary data models or customer data models. The Company’s Agility industry platform 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 (print, web, radio and TV) and social media. The Company’s operations are presently classified and reported in three reporting segments: Digital Data Solutions (DDS), Synodex and Agility. |
Principles of Consolidation | Principles of Consolidation |
Use of Estimates | Use of Estimates |
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. Revenue from agreements billed on a time-and-materials basis is recognized as services are performed. Revenue from fixed-fee agreements, which is not significant to overall revenues, is 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 the Company’s 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. Revenue from the reseller agreements is recognized at the gross amount received for the goods in accordance with the Company functioning as a principal due to the Company 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. Revenue includes reimbursement of out-of-pocket expenses, with the corresponding out-of-pocket expenses included in direct operating costs. Revenue associated with the services provided in one period and billed in a subsequent period is commonly referred to as unbilled revenues and is included under Accounts receivable. 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. Contract acquisition costs, which are included in prepaid expenses and other current assets, are amortized over the term of a subscription agreement or contract that normally has a duration of 12 months or less. The Company reviews these prepaid acquisition costs on a periodic basis to determine the need to adjust the carrying values for early terminated contracts. Included in prepaid expenses and other current assets on the accompanying consolidated balance sheets are contract acquisition costs amounting to $0.8 million for each of the years ended December 31, 2023 and 2022. These acquisition costs relate to our Agility segment and are amortized over the term of the subscription agreement which normally has a duration of 12 months or less. |
Foreign Currency Translation | Foreign Currency Translation The functional currency for the Company’s subsidiary in Germany is the Euro. The functional currencies for the Company’s Agility subsidiaries in the United Kingdom and Canada are the Pound Sterling and the Canadian dollar, respectively. The financial statements of these subsidiaries are prepared in their 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 consolidated financial statements. Income, expenses, and cash flows are translated at weighted-average exchange rates prevailing during the fiscal period, 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 consolidated statements of operations and comprehensive loss. |
Derivative Instruments | Derivative Instruments - |
Cash Equivalents | Cash Equivalents - |
Short term Investments-other | Short term Investments-other - |
Concentration of Credit Risk | Concentration of Credit Risk - |
Accounts Receivable | Accounts Receivable - We record an allowance for credit losses for estimated losses resulting from the failure of our customers to make the required payments and provisions for billing adjustments relating to quality issues on delivered services. The allowance for credit losses is based on a review of specifically identified accounts and an overall aging analysis applied to accounts pooled based on similar risk characteristics. Judgments are made with respect to the collectability of accounts receivable within each pool based on historical experience, current payment practices, and current economic trends based on our expectations over the expected life of the receivables, generally ninety days or less. Actual credit losses could differ from those estimates. |
Property and Equipment | Property and Equipment - two ten years |
Capitalized Developed Software | Capitalized Developed Software - three |
Long-lived Assets | Long-lived Assets - |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets - ten Goodwill represents the excess of the cost of an acquired entity over the fair value of the acquired net assets. The Company does not amortize goodwill but evaluates it for impairment at the reporting unit level annually during the third quarter of each fiscal year (as of September 30 of that year) or when an event occurs, or circumstances change, that indicates the carrying value may not be recoverable. The Company performed its annual goodwill assessment for the Agility segment as of September 30, 2023 for impairment. The impairment test involves estimating the fair value based on a combination of income (estimates of future discounted cash flows) and the market approach (market multiples for similar companies) using unobservable inputs (Level 3). The Company concluded that there is no impairment of goodwill for the Agility segment. |
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 Synodex and Agility segments cannot be predicted with certainty, the Company maintains a valuation allowance against all the United States, Canadian and European (principally Germany and the United Kingdom) 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 consolidated statements of operations and comprehensive loss. |
Accounting for Leases | Accounting for Leases The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date and requires an assessment of whether the fulfillment of the arrangement is dependent on the use of a specific asset or assets, or the arrangement conveys a right to use the asset. A reassessment is made after inception of the lease only if one of the following applies: a. there is a change in contractual terms, other than a renewal or extension of the arrangement; b. a renewal option is exercised, or extension granted, unless the term of the renewal or extension was initially included in the lease term; c. there is a change in the determination of whether fulfillment is dependent on a specified asset; or d. there is a substantial change to the asset. Whenever a reassessment is made, lease accounting shall commence or cease from the date when the change in circumstances gave rise to the reassessment for scenarios (a), (c) or (d) and at the date of renewal or extension period for scenario (b). Leases where the lessor retains substantially all the risks and rewards of ownership are classified as operating leases. As of December 31, 2023, all of the Company’s leases are classified under operating leases. Operating lease payments are recognized as an operating expense on a straight-line basis over the lease term. |
Accounting for Stock-Based Compensation | Accounting for Stock-Based Compensation - The stock-based compensation expense related to the Company’s stock plans were allocated as follows (in thousands): Year Ended December 31, 2023 2022 Direct operating costs $ 294 $ 214 Selling and administrative expenses 3,733 3,069 Total stock-based compensation $ 4,027 $ 3,283 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value measurements and disclosures define fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The accounting standard establishes a fair value hierarchy that prioritizes the inputs used to measure fair value into three levels. The three levels are defined as follows: ● Level 1 : Unadjusted quoted price in active market for identical assets and liabilities. ● Level 2: Inputs other than those included in Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability. The Company’s forward contracts are at level 2 in the fair value hierarchy. |
Income (Loss) per Share | Income (Loss) per Share |
Pension | Pension - |
Deferred Revenue | Deferred Revenue The table below provides information about contract liabilities (deferred revenue) and the significant changes in the balance for the years ended December 31, 2023 and 2022, respectively (in thousands): December 31, 2023 2022 Balance at January 1 $ 4,366 $ 4,509 Net deferred revenue in the period 21,619 29,756 Revenue recognized (22,586) (29,618) Currency translations and other adjustments 124 (281) Balance at December 31 $ 3,523 $ 4,366 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements - On December 14, 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. The ASU’s effective date is for fiscal years beginning after December 15, 2024. The adoption of the ASU 2023-09 will enhance quantitative and qualitative disclosures related to rate reconciliation of significant components and income tax paid. The Company does not expect any significant impact from the adoption of this standard. |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Estimates and Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Description of Business and Summary of Significant Accounting Estimates and Policies | |
Schedule of stock-based compensation expense | The stock-based compensation expense related to the Company’s stock plans were allocated as follows (in thousands): Year Ended December 31, 2023 2022 Direct operating costs $ 294 $ 214 Selling and administrative expenses 3,733 3,069 Total stock-based compensation $ 4,027 $ 3,283 |
Schedule of information about contract liabilities (deferred revenue) | The table below provides information about contract liabilities (deferred revenue) and the significant changes in the balance for the years ended December 31, 2023 and 2022, respectively (in thousands): December 31, 2023 2022 Balance at January 1 $ 4,366 $ 4,509 Net deferred revenue in the period 21,619 29,756 Revenue recognized (22,586) (29,618) Currency translations and other adjustments 124 (281) Balance at December 31 $ 3,523 $ 4,366 |
Short Term Investments - other
Short Term Investments - other (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Short Term Investments - other | |
Schedule of other short term investments | December 31, 2023 2022 Treasury bills $ - $ 494 Certificates of deposit 14 13 Total $ 14 $ 507 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounts Receivable | |
Schedule of accounts receivable | December 31, 2023 2022 Gross Accounts receivable $ 15,505 $ 10,741 Allowance for doubtful accounts (1,217) (1,213) Accounts receivable, net $ 14,288 $ 9,528 |
Schedule of activity in allowance for credit losses | Activity in the allowance for the credit losses for the year ended December 31, 2023 was as follows (in thousands): For the Year Ended December 31, 2023 Balance at January 1, 2023 $ 1,213 Additions charged to expense 426 Write-offs against allowance (426) Foreign currency translation adjustment 4 Balance at December 31, 2023 $ 1,217 |
Property and equipment (Tables)
Property and equipment (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property and equipment | |
Schedule of property and equipment, which include amounts recorded under capital leases | Property and equipment, which include amounts recorded under capital leases, are stated at cost less accumulated depreciation and amortization (in thousands), and consist of the following: December 31, 2023 2022 Equipment $ 11,315 $ 12,391 Computer software 4,465 4,447 Furniture and equipment 1,128 1,163 Leasehold improvements 2,547 2,554 Capital work-in-progress 434 - Total 19,889 20,555 Less: accumulated depreciation and amortization (17,608) (18,044) $ 2,281 $ 2,511 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets | |
Schedule of changes in carrying amount of goodwill | The changes in the carrying amount of goodwill for the year ended December 31, 2023 were as follows (in thousands): Balance - January 1, 2023 $ 2,038 Foreign currency translation adjustment 37 Balance - December 31, 2023 $ 2,075 |
Schedule of Company's acquired intangible assets and capitalized developed software | Information regarding the Company acquired intangible assets and capitalized developed software was as follows (in thousands): December 31, 2023 Foreign Currency Gross Accumulated Translation Net Carrying Value Amortization Adjustment Carrying Value Acquired Intangible Assets Developed technology $ 2,999 $ (2,640) $ 7 $ 366 Customer relationships 2,096 (1,645) 10 461 Trademarks and tradenames 852 (774) 2 80 Patents 43 (40) - 3 Media Contact Database 3,492 (2,621) 16 887 Total Acquired Intangible Assets $ 9,482 $ (7,720) $ 35 $ 1,797 Capitalized Developed Software Capitalized Developed Software $ 15,216 $ (6,862) $ 138 $ 8,492 Capitalized Developed Software - in Progress 3,480 - (11) 3,469 Total Capitalized Developed Software $ 18,696 $ (6,862) $ 127 $ 11,961 Total $ 28,178 $ (14,582) $ 162 $ 13,758 December 31, 2022 Foreign Currency Gross Accumulated Translation Net Carrying Value Amortization Adjustment Carrying Value Acquired Intangible Assets Developed technology $ 3,169 $ (2,468) $ (43) $ 658 Customer relationships 2,228 (1,560) (42) 626 Trademarks and tradenames 880 (740) (8) 132 Patents 45 (38) 1 8 Media Contact Database 3,648 (2,358) (68) 1,222 Total Acquired Intangible Assets $ 9,970 $ (7,164) $ (160) $ 2,646 Capitalized Developed Software Capitalized Developed Software $ 11,845 $ (4,398) $ (348) $ 7,099 Capitalized Developed Software - in Progress 2,787 - (6) 2,781 Total Capitalized Developed Software $ 14,632 $ (4,398) $ (354) $ 9,880 Total $ 24,602 $ (11,562) $ (514) $ 12,526 |
Schedule of estimated amortization expense for intangible assets | Estimated annual amortization expense for intangible assets subsequent to December 31, 2023 is as follows (in thousands): Year Amortization 2024 $ 4,929 2025 3,976 2026 2,704 2027 739 2028 597 Thereafter 813 $ 13,758 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes | |
Schedule of components of provision for income taxes | The significant components of the provision for income taxes for the years ended December 31, 2023 and 2022 were as follows (in thousands): 2023 2022 Current income tax expense (benefit): Foreign $ 1,181 $ 1,131 Federal 120 144 State and local 3 30 1,304 1,305 Deferred income tax expense (benefit): Foreign (286) 207 Federal 10 10 State and local - - (276) 217 Provision for income taxes $ 1,028 $ 1,522 |
Schedule of reconciliation of U.S. statutory rate with Company's effective tax rate | The reconciliation of the U.S. statutory rate with the Company’s effective tax rate for the years ended December 31, 2023 and 2022 is summarized as follows: 2023 2022 Federal income tax expense (benefit) at statutory rate 21.0 % (21.0) % Effect of: Change in valuation allowance 578.6 36.9 Tax effects of foreign operations 562.6 2.5 Section 162 (m) 452.0 - Return to provision true up 264.4 0.3 Increase in unrecognized tax benefits (ASC 740) 199.6 0.7 Withholding tax 106.6 - Foreign operations permanent differences - foreign exchange gains and losses 76.9 1.1 State income tax net of federal benefit 0.1 0.2 Research and development credit (67.3) - Foreign rate differential (102.5) (4.7) Deemed interest (149.2) (1.9) Tax effect of intercompany settlement (234.0) - Effect of stock-based compensation (961.6) (0.3) Other (7.6) 0.7 Effective tax rate 739.6 % 14.5 % |
Schedule of deferred tax assets and liabilities | Deferred tax assets and liabilities are classified as non-current. Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2023 and 2022 were as follows (in thousands): December 31, 2023 2022 Deferred income tax assets: Allowances not currently deductible $ 283 $ 301 Depreciation and amortization 58 9 Equity compensation not currently deductible 2,098 1,579 Net operating loss carryforwards 10,514 10,758 Research and development credits 452 362 Expenses not deductible until paid 1,972 1,694 Other 133 (220) Total gross deferred income tax assets before valuation allowance 15,510 14,483 Valuation allowance (13,769) (13,008) Deferred income tax assets, net 1,741 1,475 Deferred income tax liabilities: Other (22) (65) Total deferred income tax liabilities (22) (65) Net deferred income tax assets $ 1,719 $ 1,410 Net deferred income tax assets $ 1,741 $ 1,475 Net deferred income tax liability (22) (65) Net deferred income tax assets $ 1,719 $ 1,410 |
Schedule of United States and foreign components of loss before provision for income taxes | United States and foreign components of loss before provision for income taxes for each of the years ended December 31, were as follows (in thousands): 2023 2022 United States $ 2,025 $ (4,023) Foreign (1,886) (6,460) Totals $ 139 $ (10,483) |
Schedule of roll forward of the Company's unrecognized tax benefits and associated interest | The following table represents a roll forward of the Company’s unrecognized tax benefits and associated interest for the years ended (in thousands): Unrecognized Tax Benefits December 31, 2023 2022 Balance at January 1 $ 1,680 $ 1,753 Decrease for prior year tax positions (68) (290) Increase for current year tax positions 247 311 Interest accrual 97 67 Foreign currency remeasurement (14) (161) Balance at December 31 $ 1,942 $ 1,680 |
Long-term obligations (Tables)
Long-term obligations (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Long-term obligations | |
Schedule of total long-term obligations | Total long-term obligations as of December 31, 2023 and 2022 consisted of the following (in thousands): December 31, 2023 2022 Pension obligations - accrued pension liability $ 7,128 $ 5,906 Settlement agreement - 50 Microsoft licenses (1) 911 - 8,039 5,956 Less: Current portion of long-term obligations 1,261 877 Totals $ 6,778 $ 5,079 (1) |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Operating Leases | |
Schedule of operating lease expense recognized in financial statements | The table below summarizes the amounts recognized in the financial statements related to operating leases for the years presented (in thousands): Year Ended December 31, 2023 December 31, 2022 Rent expense for long-term operating leases $ 1,252 $ 1,336 Rent expense for short-term leases 305 502 Total rent expense $ 1,557 $ 1,838 |
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 consolidated balance sheet as of December 31, 2023 (in thousands): Year Amount 2024 $ 1,292 2025 1,316 2026 1,348 2027 1,344 2028 965 2029 and thereafter 869 Total lease payments 7,134 Less: Interest (1,651) Net present value of lease liabilities $ 5,483 Current portion $ 782 Long-term portion 4,701 Total $ 5,483 |
Schedule of weighted average remaining lease terms and discount rates | The weighted average remaining lease terms and discount rates for all of our operating leases as of December 31, 2023 were as follows: Weighted-average lease term remaining 63 months Weighted-average discount rate 9.45% |
Pension Benefits (Tables)
Pension Benefits (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Pension Benefits | |
Schedule of status of the non-U.S. pension benefits pertaining to benefit obligations | The following tables set out the status of the non-U.S. pension benefits and the amounts recognized in the Company’s consolidated financial statements and the components of pension costs for the years ended December 31, 2023 and 2022 were as follows (in thousands): Benefit Obligations: 2023 2022 Projected benefit obligation at beginning of the year $ 5,906 $ 6,839 Service cost 568 592 Interest cost 478 352 Actuarial loss (gain) 324 (713) Foreign currency exchange rates changes 54 (862) Curtailment - (48) Benefits paid (202) (254) Projected benefit obligation at end of the year $ 7,128 $ 5,906 |
Schedule of status of the non-U.S. pension benefits pertaining to components of net periodic pension cost | 2023 2022 Service cost $ 568 $ 592 Interest cost 478 352 Curtailment - (16) Actuarial loss recognized 147 210 Net periodic pension cost $ 1,193 $ 1,138 |
Schedule of accumulated benefit obligation | Amounts recognized in the consolidated balance sheets for the years ended December 31, 2023 and 2022 consisted of the following (in thousands): 2023 2022 Current accrued benefit cost $ 880 $ 828 Non-current accrued benefit cost 6,248 5,078 Total amount recognized $ 7,128 $ 5,906 |
Schedule of actuarial assumptions for all non-U.S. plans | 2023 2022 Discount rate 6.73%-12.8% 5.13%-20% Rate of increase in compensation level 7.5%-14.5% 7.5%-20% |
Schedule of estimated future benefit payments | As of December 31, 2023, the following benefit payments, which reflect expected future service, as appropriate, were expected to be paid (in thousands): Year Amount 2024 $ 889 2025 431 2026 267 2027 749 2028 175 2029 to 2032 5,108 $ 7,619 |
Stock Options (Tables)
Stock Options (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Stock Options and Restricted Stock Units | |
Schedule of weighted-average fair value of the options granted, and weighted-average assumptions | For the Years Ended December 31, 2023 2022 Weighted average fair value of options granted $ 2.56 $ 2.67 Risk-free interest rate 4.34 % 1.94% - 4.09 % Expected term (years) 6.0 3 - 6.42 Expected volatility factor 75.35 % 62%-79 % Expected dividends None None |
Equity Plans | |
Stock Options and Restricted Stock Units | |
Schedule of stock option activity | Weighted-Average Weighted -Average Remaining Number of Exercise Contractual Term Aggregate Options Price (years) Intrinsic Value Outstanding at January 1, 2022 5,536,896 $ 2.66 Granted 1,774,558 4.91 Exercised (248,763) 1.34 Forfeited/Expired (372,201) 6.55 Outstanding at December 31, 2022 6,690,490 $ 3.09 7.19 $ 5,989,709 Granted* 25,000 3.31 Exercised (1,287,462) 2.37 Forfeited/Expired (88,866) 6.27 Outstanding at December 31, 2023 5,339,162 $ 3.22 6.38 $ 28,640,009 Exercisable at December 31, 2023 3,475,780 $ 2.18 6.40 $ 22,237,334 Vested and Expected to Vest at December 31, 2023 5,339,162 $ 3.22 6.38 $ 28,640,009 * Includes 25,000 stock options granted to a non-employee member of the Company’s advisory board. Weighted- Weighted - Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Term (years) Value Outstanding at January 1, 2022 - $ - Granted 1,030,000 3.46 Exercised - - Forfeited/Expired (2,500) 3.41 Outstanding at December 31, 2022 1,027,500 $ 3.46 9.75 $ - Granted 3,000 13.05 Exercised (63,595) 4.59 Forfeited/Expired (43,334) 3.41 Outstanding at December 31, 2023 923,571 $ 3.41 8.76 $ 4,786,252 Exercisable at December 31, 2023 386,209 $ 3.34 8.74 $ 2,023,601 Vested and Expected to Vest at December 31, 2023 923,571 $ 3.41 8.76 $ 4,786,252 |
Restricted Stock Units | |
Stock Options and Restricted Stock Units | |
Summary of restricted stock under the company's plan | Weighted- Number of Average Restricted Stock Grant Date Units Fair Value Unvested at January 1, 2023 700,000 $ 5.59 Granted 49,756 8.29 Vested - - Forfeited/Expired - - Unvested at December 31, 2023 749,756 $ 5.77 Weighted- Number of Average Restricted Stock Grant Date Units Fair Value Unvested at January 1, 2022 - $ - Granted 700,000 5.59 Vested - - Forfeited/Expired - - Unvested at December 31, 2022 700,000 $ 5.59 |
Comprehensive loss (Tables)
Comprehensive loss (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Comprehensive loss | |
Schedule of components of accumulated other comprehensive loss and reclassifications from accumulated other comprehensive loss | The components of accumulated other comprehensive loss as of December 31, 2023 and 2022, and reclassifications out of accumulated other comprehensive loss for the years then ended, are presented below (in thousands): Foreign Currency Accumulated Other Pension Liability Fair Value of Translation Comprehensive Adjustment Derivatives Adjustment Loss Balance at January 1, 2023 $ (86) $ (365) $ (1,657) $ (2,108) Other comprehensive income (loss) before reclassifications, net of taxes (322) 185 407 270 Total other comprehensive loss before reclassifications, net of taxes (408) (180) (1,250) (1,838) Net amount reclassified to earnings (4) 221 - 217 Balance at December 31, 2023 $ (412) $ 41 $ (1,250) $ (1,621) Foreign Currency Accumulated Other Pension Liability Fair Value of Translation Comprehensive Adjustment Derivatives Adjustment Loss Balance at January 1, 2022 $ (858) $ (353) $ (981) $ (2,192) Other comprehensive income (loss) before reclassifications, net of taxes 561 (1,118) (676) (1,233) Total other comprehensive loss before reclassifications, net of taxes (297) (1,471) (1,657) (3,425) Net amount reclassified to earnings 211 1,106 - 1,317 Balance at December 31, 2022 $ (86) $ (365) $ (1,657) $ (2,108) |
Segment reporting and concent_2
Segment reporting and concentrations (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment reporting and concentrations | |
Schedule of segment reporting information, by segment | Revenues from external customers, segment operating profit (loss), and other reportable segment information are as follows (in thousands): For The Years Ended December 31, 2023 2022 Revenues: DDS $ 61,576 $ 56,523 Synodex 7,511 7,105 Agility 17,688 15,373 Total Consolidated $ 86,775 $ 79,001 Income (loss) before provision for income taxes (1) DDS $ 1,823 $ 1,393 Synodex (299) (3,213) Agility (1,385) (8,663) Total Consolidated $ 139 $ (10,483) Income (loss) before provision for income taxes (2) DDS $ 1,260 $ 716 Synodex 219 (2,599) Agility (1,340) (8,600) Total Consolidated $ 139 $ (10,483) December 31, 2023 December 31, 2022 Total assets: DDS $ 37,232 $ 25,758 Synodex 3,379 3,270 Agility 18,820 19,014 Total Consolidated $ 59,431 $ 48,042 December 31, 2023 December 31, 2022 Goodwill: Agility $ 2,075 $ 2,038 Total $ 2,075 $ 2,038 (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 | Long-lived assets as of December 31, 2023 and 2022 by geographic region were comprised of (in thousands): 2023 2022 United States $ 9,101 $ 7,205 Foreign countries: Canada 7,328 7,675 United Kingdom 1,028 1,198 Philippines 3,484 3,682 India 1,791 1,195 Sri Lanka 423 426 Israel 13 3 Total foreign 14,067 14,179 Totals $ 23,168 $ 21,384 |
Schedule of revenue from external customers based on client domicile | Revenues for each of the two years in the period ended December 31, 2023 and 2022 by geographic region (determined based upon customer domicile), were as follows (in thousands): 2023 2022 United States $ 54,430 $ 48,724 United Kingdom 10,766 10,901 The Netherlands 7,291 6,829 Canada 7,156 5,508 Others - principally Europe 7,132 7,039 Totals $ 86,775 $ 79,001 |
Loss per Share (Tables)
Loss per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Loss per Share | |
Schedule of loss per share, basic and diluted | For the Years Ended December 31, 2023 2022 Net loss attributable to Innodata Inc. and Subsidiaries $ 908 $ 11,935 Weighted average common shares outstanding 28,131 27,278 Dilutive effect of outstanding options - - Adjusted for dilutive computation 28,131 27,278 |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Derivatives | |
Schedule of fair value of derivative instruments included within the condensed consolidated balance sheets | The following table presents the fair value of derivative instruments included within the consolidated balance sheets as of December 31, 2023 and 2022 (in thousands): Balance Sheet Location Fair Value 2023 2022 Derivatives designated as hedging instruments: Foreign currency forward contracts Accrued expenses $ - $ 365 Foreign currency forward contracts Prepaid expenses and other current assets $ 41 $ - |
Schedule of effect of foreign currency forward contracts designated as cash flow hedges on condensed consolidated statements of operations | The effect of foreign currency forward contracts designated as cash flow hedges on the consolidated statements of operations for the years ended December 31, 2023 and 2022 were as follows (in thousands): 2023 2022 Net gain (loss) recognized in OCI (1) $ 185 $ (1,118) Net loss reclassified from accumulated OCI into income (2) $ (221) $ (1,106) 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 . |
Description of Business and S_4
Description of Business and Summary of Significant Accounting Estimates and Policies (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 USD ($) segment | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Description of Business and Summary of Significant Accounting Estimates and Policies | |||
Number of reporting segments | segment | 3 | ||
Amortization period | 12 months | ||
Prepaid expenses and other current assets on contract acquisition costs | $ 800 | $ 800 | |
Foreign exchange losses (gains) | 400 | (1,300) | |
Outstanding foreign currency forward contracts | 10,500 | 14,200 | |
Cash and cash equivalents | 13,806 | 9,792 | |
Cost | 19,889 | 20,555 | |
Deferred revenue | 3,523 | 4,366 | $ 4,509 |
Capitalized software development | |||
Description of Business and Summary of Significant Accounting Estimates and Policies | |||
Cost | 15,200 | 11,800 | |
In process research and development | |||
Description of Business and Summary of Significant Accounting Estimates and Policies | |||
Cost | $ 3,500 | $ 2,800 | |
Minimum | |||
Description of Business and Summary of Significant Accounting Estimates and Policies | |||
Estimated useful life of intangibles | 10 years | ||
Property and equipment useful lives | 2 years | ||
Minimum | Capitalized software development | |||
Description of Business and Summary of Significant Accounting Estimates and Policies | |||
Estimated useful life of intangibles | 3 years | ||
Maximum | |||
Description of Business and Summary of Significant Accounting Estimates and Policies | |||
Estimated useful life of intangibles | 12 years | ||
Property and equipment useful lives | 10 years | ||
Maximum | Capitalized software development | |||
Description of Business and Summary of Significant Accounting Estimates and Policies | |||
Estimated useful life of intangibles | 10 years | ||
Asia | |||
Description of Business and Summary of Significant Accounting Estimates and Policies | |||
Cash and cash equivalents | $ 6,500 | ||
United States | |||
Description of Business and Summary of Significant Accounting Estimates and Policies | |||
Cash and cash equivalents | $ 7,300 |
Description of Business and S_5
Description of Business and Summary of Significant Accounting Estimates and Policies - Stock-based compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Description of Business and Summary of Significant Accounting Estimates and Policies | ||
Direct operating costs | $ 294 | $ 214 |
Selling and administrative expenses | 3,733 | 3,069 |
Total stock-based compensation | $ 4,027 | $ 3,283 |
Description of Business and S_6
Description of Business and Summary of Significant Accounting Estimates and Policies - Deferred revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Description of Business and Summary of Significant Accounting Estimates and Policies | ||
Balance at January 1 | $ 4,366 | $ 4,509 |
Net deferred revenue in the period | 21,619 | 29,756 |
Revenue recognized | (22,586) | (29,618) |
Currency translations and other adjustments | 124 | (281) |
Balance at December 31 | $ 3,523 | $ 4,366 |
Short Term Investments - othe_2
Short Term Investments - other (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Short Term Investments - other | ||
Treasury bills | $ 494 | |
Certificates of deposit | $ 14 | 13 |
Total | $ 14 | $ 507 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Accounts Receivable | ||
Gross Accounts receivable | $ 15,505 | $ 10,741 |
Allowance for doubtful accounts | (1,217) | (1,213) |
Accounts receivable, net | $ 14,288 | $ 9,528 |
Accounts Receivable - Activity
Accounts Receivable - Activity in allowance for credit losses (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Accounts Receivable | |
Balance at January 1, 2023 | $ 1,213 |
Additions charged to expense | 426 |
Write-offs against allowance | (426) |
Foreign currency translation adjustment | 4 |
Balance at December 31, 2023 | $ 1,217 |
Property and equipment - Proper
Property and equipment - Property and equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property and equipment | ||
Property and equipment, stated at cost | $ 19,889 | $ 20,555 |
Less: accumulated depreciation and amortization | (17,608) | (18,044) |
Net | 2,281 | 2,511 |
Equipment | ||
Property and equipment | ||
Property and equipment, stated at cost | 11,315 | 12,391 |
Computer software | ||
Property and equipment | ||
Property and equipment, stated at cost | 4,465 | 4,447 |
Furniture and equipment | ||
Property and equipment | ||
Property and equipment, stated at cost | 1,128 | 1,163 |
Leasehold improvements | ||
Property and equipment | ||
Property and equipment, stated at cost | 2,547 | $ 2,554 |
Capital work-in-progress | ||
Property and equipment | ||
Property and equipment, stated at cost | $ 434 |
Property and equipment - Additi
Property and equipment - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property and equipment | ||
Depreciation expense | $ 4,716 | $ 3,889 |
Minimum | ||
Property and equipment | ||
Estimated useful lives | 2 years | |
Maximum | ||
Property and equipment | ||
Estimated useful lives | 10 years | |
Property and equipment | ||
Property and equipment | ||
Depreciation expense | $ 1,200 | $ 1,200 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Changes in carrying amount of goodwill (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Goodwill and Intangible Assets | |
Balance - January 1, 2023 | $ 2,038 |
Foreign currency translation adjustment | (37) |
Balance - December 31, 2023 | $ 2,075 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill and Intangible Assets | ||
Goodwill impairment | $ 0 | |
Goodwill | 2,075 | $ 2,038 |
Acquired Intangible Assets | ||
Goodwill and Intangible Assets | ||
Amortization expense | 900 | 900 |
Capitalized Developed Software | ||
Goodwill and Intangible Assets | ||
Amortization expense | $ 2,700 | $ 1,800 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Acquisition-related intangible assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets | ||
Gross Carrying Value | $ 28,178 | $ 24,602 |
Accumulated Amortization | (14,582) | (11,562) |
Foreign Currency Translation Adjustment | 162 | 514 |
Net Carrying Value | 13,758 | 12,526 |
Acquired Intangible Assets | ||
Goodwill and Intangible Assets | ||
Gross Carrying Value | 9,482 | 9,970 |
Accumulated Amortization | (7,720) | (7,164) |
Foreign Currency Translation Adjustment | 35 | 160 |
Net Carrying Value | 1,797 | 2,646 |
Developed technology | ||
Goodwill and Intangible Assets | ||
Gross Carrying Value | 2,999 | 3,169 |
Accumulated Amortization | (2,640) | (2,468) |
Foreign Currency Translation Adjustment | 7 | 43 |
Net Carrying Value | 366 | 658 |
Customer relationships | ||
Goodwill and Intangible Assets | ||
Gross Carrying Value | 2,096 | 2,228 |
Accumulated Amortization | (1,645) | (1,560) |
Foreign Currency Translation Adjustment | 10 | 42 |
Net Carrying Value | 461 | 626 |
Trademarks and tradenames | ||
Goodwill and Intangible Assets | ||
Gross Carrying Value | 852 | 880 |
Accumulated Amortization | (774) | (740) |
Foreign Currency Translation Adjustment | 2 | 8 |
Net Carrying Value | 80 | 132 |
Patents | ||
Goodwill and Intangible Assets | ||
Gross Carrying Value | 43 | 45 |
Accumulated Amortization | (40) | (38) |
Foreign Currency Translation Adjustment | 1 | |
Net Carrying Value | 3 | 8 |
Media Contact Database | ||
Goodwill and Intangible Assets | ||
Gross Carrying Value | 3,492 | 3,648 |
Accumulated Amortization | (2,621) | (2,358) |
Foreign Currency Translation Adjustment | 16 | 68 |
Net Carrying Value | 887 | 1,222 |
Capitalized Developed Software | ||
Goodwill and Intangible Assets | ||
Gross Carrying Value | 18,696 | 14,632 |
Accumulated Amortization | (6,862) | (4,398) |
Foreign Currency Translation Adjustment | 127 | 354 |
Net Carrying Value | 11,961 | 9,880 |
Capitalized Developed Software | ||
Goodwill and Intangible Assets | ||
Gross Carrying Value | 15,216 | 11,845 |
Accumulated Amortization | (6,862) | (4,398) |
Foreign Currency Translation Adjustment | 138 | 348 |
Net Carrying Value | 8,492 | 7,099 |
Capitalized Developed Software - in Progress | ||
Goodwill and Intangible Assets | ||
Gross Carrying Value | 3,480 | 2,787 |
Foreign Currency Translation Adjustment | 11 | 6 |
Net Carrying Value | $ 3,469 | $ 2,781 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Estimated amortization expense (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets | ||
2024 | $ 4,929 | |
2025 | 3,976 | |
2026 | 2,704 | |
2027 | 739 | |
2028 | 597 | |
Thereafter | 813 | |
Net Carrying Value | $ 13,758 | $ 12,526 |
Income Taxes - Components of pr
Income Taxes - Components of provision for income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Current income tax expense (benefit): | ||
Foreign | $ 1,181 | $ 1,131 |
Federal | 120 | 144 |
State and local | 3 | 30 |
Current income tax expense (benefit) | 1,304 | 1,305 |
Deferred income tax expense (benefit): | ||
Foreign | (286) | 207 |
Federal | 10 | 10 |
Deferred income tax expense (benefit) | (276) | 217 |
Provision for income taxes | $ 1,028 | $ 1,522 |
Income Taxes - Tax rate reconci
Income Taxes - Tax rate reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Taxes | ||
Federal income tax expense (benefit) at statutory rate | 21% | (21.00%) |
Effect of: | ||
Change in valuation allowance | 578.60% | 36.90% |
Tax effects of foreign operations | 562.60% | 2.50% |
Section 162 (m) | 452% | |
Return to provision true up | 264.40% | 0.30% |
Increase in unrecognized tax benefits (ASC 740) | 199.60% | 0.70% |
Withholding tax | 106.60% | |
Foreign operations permanent differences - foreign exchange gains and losses | 76.90% | 1.10% |
State income tax net of federal benefit | 0.10% | 0.20% |
Research and development credit | (67.30%) | |
Foreign rate differential | (102.50%) | (4.70%) |
Deemed interest | (149.20%) | (1.90%) |
Tax effect of intercompany settlement | (234.00%) | |
Effect of stock-based compensation | (961.60%) | (0.30%) |
Other | (7.60%) | 0.70% |
Effective tax rate | 739.60% | 14.50% |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax assets and liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred income tax assets: | ||
Allowances not currently deductible | $ 283 | $ 301 |
Depreciation and amortization | 58 | 9 |
Equity compensation not currently deductible | 2,098 | 1,579 |
Net operating loss carryforwards | 10,514 | 10,758 |
Research and development credits | 452 | 362 |
Expenses not deductible until paid | 1,972 | 1,694 |
Other | 133 | (220) |
Total gross deferred income tax assets before valuation allowance | 15,510 | 14,483 |
Valuation allowance | (13,769) | (13,008) |
Deferred income tax assets, net | 1,741 | 1,475 |
Deferred income tax liabilities: | ||
Other | (22) | (65) |
Total deferred income tax liabilities | (22) | (65) |
Net deferred income tax assets | 1,719 | 1,410 |
Net deferred income tax assets | 1,741 | 1,475 |
Net deferred income tax liability | (22) | (65) |
Net deferred income tax assets | $ 1,719 | $ 1,410 |
Income Taxes - United States an
Income Taxes - United States and foreign components of income (loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Taxes | ||
United States | $ 2,025 | $ (4,023) |
Foreign | (1,886) | (6,460) |
Income (loss) before provision for income taxes | $ 139 | $ (10,483) |
Income Taxes - Unrecognized tax
Income Taxes - Unrecognized tax benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Taxes | ||
Balance at January 1 | $ 1,680 | $ 1,753 |
Decrease for prior year tax positions | (68) | (290) |
Increase for current year tax positions | 247 | 311 |
Interest accrual | 97 | 67 |
Foreign currency remeasurement | (14) | (161) |
Balance at December 31 | $ 1,942 | $ 1,680 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Oct. 31, 2016 | Sep. 30, 2015 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes | |||||
Valuation allowance | $ 13,769,000 | $ 13,008,000 | |||
Increase in total valuation allowance | 800,000 | 3,900,000 | |||
Research and development credits | 452,000 | 362,000 | |||
Foreign subsidiaries amount | 50,400,000 | ||||
Indian subsidiary revenues | $ 56,000,000 | ||||
Reversal of service tax refund | $ 121,000 | ||||
Service tax credit receivable | $ 800,000 | ||||
Reserves for uncertain tax positions | 1,942,000 | $ 1,680,000 | $ 1,753,000 | ||
Canadian subsidiaries | |||||
Income Taxes | |||||
NOL carryforwards subject to expiration | 27,000,000 | ||||
Research and development credits not subject to expiration | 1,400,000 | ||||
German and United Kingdom subsidiaries | |||||
Income Taxes | |||||
Operating loss carryforwards | 1,700,000 | ||||
U.S. federal | |||||
Income Taxes | |||||
Operating loss carryforwards | 21,200,000 | ||||
Research and development credits | $ 100,000 | ||||
Maximum | |||||
Income Taxes | |||||
Percentage for subsidiary service tax | 15% | ||||
Minimum | |||||
Income Taxes | |||||
Percentage for subsidiary service tax | 12.36% |
Long-term obligations (Details)
Long-term obligations (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Long-term obligations | ||
Pension obligations - accrued pension liability | $ 7,128 | $ 5,906 |
Settlement agreement | 50 | |
Microsoft licenses | 911 | |
Total long-term obligations | 8,039 | 5,956 |
Less: Current portion of long-term obligations | 1,261 | 877 |
Totals | 6,778 | $ 5,079 |
Microsoft licenses, Amount payable annually over the term of the agreement | $ 400 |
Commitments and contingencies (
Commitments and contingencies (Details) | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Commitments and contingencies | |
Estimated litigation liability | $ 5,900,000 |
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 | $ 450,000 |
Operating Leases (Details)
Operating Leases (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Minimum | |
Operating Leases | |
Lease agreements term | 3 years |
Percentage of rental escalations | 1.75% |
Maximum | |
Operating Leases | |
Lease agreements term | 11 years |
Percentage of rental escalations | 15% |
Operating Leases - Financial st
Operating Leases - Financial statements related to operating leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating Leases | ||
Total rent expense | $ 1,557 | $ 1,838 |
Long-term operating leases | ||
Operating Leases | ||
Total rent expense | 1,252 | 1,336 |
Short-term operating leases | ||
Operating Leases | ||
Total rent expense | $ 305 | $ 502 |
Operating Leases - Net present
Operating Leases - Net present value of the operating lease liability (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Operating Leases | ||
2024 | $ 1,292 | |
2025 | 1,316 | |
2026 | 1,348 | |
2027 | 1,344 | |
2028 | 965 | |
2029 and thereafter | 869 | |
Total lease payments | 7,134 | |
Less: Interest | (1,651) | |
Net present value of lease liabilities | 5,483 | |
Current portion | 782 | $ 693 |
Long-term portion | 4,701 | $ 4,036 |
Total | $ 5,483 |
Operating Leases - Weighted ave
Operating Leases - Weighted average remaining lease terms (Details) | Dec. 31, 2023 |
Operating Leases | |
Weighted-average lease term remaining (in months) | 63 months |
Weighted-average discount rate | 9.45% |
Pension Benefits - Benefit Obli
Pension Benefits - Benefit Obligations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pension Benefits | ||
Projected benefit obligation at beginning of the year | $ 5,906 | $ 6,839 |
Service cost | 568 | 592 |
Interest cost | $ 478 | $ 352 |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest Income (Expense), Nonoperating, Net | Interest Income (Expense), Nonoperating, Net |
Actuarial loss (gain) | $ 324 | $ (713) |
Foreign currency exchange rates changes | 54 | (862) |
Curtailment | (48) | |
Benefits paid | (202) | (254) |
Projected benefit obligation at end of the year | $ 7,128 | $ 5,906 |
Pension Benefits - Components o
Pension Benefits - Components of Net Periodic Pension Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pension Benefits | ||
Service cost | $ 568 | $ 592 |
Interest cost | 478 | 352 |
Curtailment | (16) | |
Actuarial loss recognized | $ 147 | $ 210 |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Immediate Recognition of Actuarial Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Adjustment, Net Of Tax | Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Adjustment, Net Of Tax |
Net periodic pension cost | $ 1,193 | $ 1,138 |
Pension Benefits - Recognized i
Pension Benefits - Recognized in balance sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Pension Benefits | ||
Current accrued benefit cost | $ 880 | $ 828 |
Non-current accrued benefit cost | 6,248 | 5,078 |
Total amount recognized | $ 7,128 | $ 5,906 |
Pension Benefits - Actuarial as
Pension Benefits - Actuarial assumptions (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
Minimum | ||
Pension Benefits | ||
Discount rate | 6.73% | 5.13% |
Rate of increase in compensation level | 7.50% | 7.50% |
Maximum | ||
Pension Benefits | ||
Discount rate | 12.80% | 20% |
Rate of increase in compensation level | 14.50% | 20% |
Pension Benefits - Estimated fu
Pension Benefits - Estimated future benefit payments (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Pension Benefits | |
2024 | $ 889 |
2025 | 431 |
2026 | 267 |
2027 | 749 |
2028 | 175 |
2029 to 2032 | 5,108 |
Total | $ 7,619 |
Pension Benefits - Additional I
Pension Benefits - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pension Benefits | ||
Period of service to become eligible | 6 months | |
Accumulated benefit obligation | $ 3.9 | $ 3.2 |
Subsidiaries | ||
Pension Benefits | ||
Pension expense | $ 1.2 | $ 1.1 |
Capital Stock (Details)
Capital Stock (Details) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 USD ($) Vote / shares $ / shares shares | Dec. 31, 2022 shares | Jul. 31, 2019 USD ($) | |
Capital Stock | |||
Common stock, shares authorized | 75,000,000 | 75,000,000 | |
Number of votes per share | Vote / shares | 1 | ||
Dividends declared (in dollars per share) | $ / shares | $ 0 | ||
Preferred Stock, Shares Authorized | 4,998,000 | 4,998,000 | |
Common stock reserved available for future issuance | 1,981,406 | ||
Treasury Stock | |||
Capital Stock | |||
Shares authorized to repurchase | $ | $ 2 | ||
Purchase of treasury stock (in shares) | 0 | 0 | |
Treasury Stock, common value | $ | $ 1.8 | ||
Treasury Stock | July 2019 | |||
Capital Stock | |||
Shares authorized to repurchase | $ | $ 1.5 |
Stock Options - Weighted Averag
Stock Options - Weighted Average Fair Values and Assumptions (Details) - Employee Stock Option - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Stock Options | ||
Weighted average fair value of options granted (in dollars per share) | $ 2.56 | $ 2.67 |
Risk-free interest rate | 4.34% | |
Expected term (years) | 6 years | |
Expected volatility factor | 75.35% | |
Expected dividends | 0% | 0% |
Minimum | ||
Stock Options | ||
Risk-free interest rate | 1.94% | |
Expected term (years) | 3 years | |
Expected volatility factor | 62% | |
Maximum | ||
Stock Options | ||
Risk-free interest rate | 4.09% | |
Expected term (years) | 6 years 5 months 1 day | |
Expected volatility factor | 79% |
Stock Options - Summary of Stoc
Stock Options - Summary of Stock Option Activity (Details) - Employee Stock Option - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
2013 Stock Plan | ||
Stock Options | ||
Number of Options, Outstanding - Beginning balance (in shares) | 6,690,490 | 5,536,896 |
Number of Options, Granted (in shares) | 25,000 | 1,774,558 |
Number of Options, Exercised (in shares) | (1,287,462) | (248,763) |
Number of Options, Forfeited/Expired (in shares) | (88,866) | (372,201) |
Number of Options, Outstanding - Ending balance (in shares) | 5,339,162 | 6,690,490 |
Number of Options Exercisable (in shares) | 3,475,780 | |
Number of Options, Vested and Expected to Vest (in shares) | 5,339,162 | |
Weighted Average Exercise Price Outstanding beginning balance (in dollars per shares) | $ 3.09 | $ 2.66 |
Weighted Average Exercise Price Granted (in dollars per shares) | 3.31 | 4.91 |
Weighted Average Exercise Price Exercised (in dollars per shares) | 2.37 | 1.34 |
Weighted Average Exercise Price Forfeited/Expired (in dollars per shares) | 6.27 | 6.55 |
Weighted Average Exercise Price Outstanding Ending balance (in dollars per shares) | 3.22 | $ 3.09 |
Weighted Average Exercise Price Exercisable (in dollars per shares) | 2.18 | |
Weighted Average Exercise Price Vested and Expected to Vest (in dollars per shares) | $ 3.22 | |
Weighted Average Remaining Contractual Term Outstanding (in years) | 6 years 4 months 17 days | 7 years 2 months 8 days |
Weighted Average Remaining Contractual Term Exercisable (in years) | 6 years 4 months 24 days | |
Weighted Average Remaining Contractual Term Vested and Expected to Vest (in years) | 6 years 4 months 17 days | |
Aggregate Intrinsic Value, Outstanding | $ 28,640,009 | $ 5,989,709 |
Aggregate Intrinsic Value, Exercisable | 22,237,334 | |
Aggregate Intrinsic Value, Vested and Expected to Vest | $ 28,640,009 | |
2021 Stock Plan | ||
Stock Options | ||
Number of Options, Outstanding - Beginning balance (in shares) | 1,027,500 | |
Number of Options, Granted (in shares) | 3,000 | 1,030,000 |
Number of Options, Exercised (in shares) | (63,595) | |
Number of Options, Forfeited/Expired (in shares) | (43,334) | (2,500) |
Number of Options, Outstanding - Ending balance (in shares) | 923,571 | 1,027,500 |
Number of Options Exercisable (in shares) | 386,209 | |
Number of Options, Vested and Expected to Vest (in shares) | 923,571 | |
Weighted Average Exercise Price Outstanding beginning balance (in dollars per shares) | $ 3.46 | |
Weighted Average Exercise Price Granted (in dollars per shares) | 13.05 | $ 3.46 |
Weighted Average Exercise Price Exercised (in dollars per shares) | 4.59 | |
Weighted Average Exercise Price Forfeited/Expired (in dollars per shares) | 3.41 | 3.41 |
Weighted Average Exercise Price Outstanding Ending balance (in dollars per shares) | 3.41 | $ 3.46 |
Weighted Average Exercise Price Exercisable (in dollars per shares) | 3.34 | |
Weighted Average Exercise Price Vested and Expected to Vest (in dollars per shares) | $ 3.41 | |
Weighted Average Remaining Contractual Term Outstanding (in years) | 8 years 9 months 3 days | 9 years 9 months |
Weighted Average Remaining Contractual Term Exercisable (in years) | 8 years 8 months 26 days | |
Weighted Average Remaining Contractual Term Vested and Expected to Vest (in years) | 8 years 9 months 3 days | |
Aggregate Intrinsic Value, Outstanding | $ 4,786,252 | |
Aggregate Intrinsic Value, Exercisable | 2,023,601 | |
Aggregate Intrinsic Value, Vested and Expected to Vest | $ 4,786,252 | |
Non employee director | 2013 Stock Plan | ||
Stock Options | ||
Number of Options, Granted (in shares) | 25,000 |
Stock Options - Summary of st_2
Stock Options - Summary of stock option and Restricted Stock option activity (Details) - Restricted Stock Units - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
2013 Stock Plan | ||
Stock Options | ||
Number of Restricted Stock Units, Granted | 28,804 | |
2021 Stock Plan | ||
Stock Options | ||
Number of Restricted Stock Units, Granted | 20,952 | |
Equity Plans | ||
Stock Options | ||
Number of Restricted Stock Units, Unvested at Beginning of the year | 700,000 | |
Number of Restricted Stock Units, Granted | 49,756 | 700,000 |
Number of Restricted Stock Units, Unvested at End of the year | 749,756 | 700,000 |
Weighted-Average Grant Date Fair Value, Outstanding at Beginning of the year | $ 5.59 | |
Weighted-Average Grant Date Fair Value, Granted | 8.29 | $ 5.59 |
Weighted-Average Grant Date Fair Value, Outstanding at End of the year | $ 5.77 | $ 5.59 |
Stock Options - Additional Info
Stock Options - Additional Information (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 USD ($) shares | Jun. 09, 2022 shares | |
Restricted Stock Units | ||
Stock Options | ||
Number of shares eligible to receive for each fully vested RSU | 1 | |
Compensation cost related to non-vested stock options and restricted stock awards not yet recognized | $ | $ 3.1 | |
Weighted-average period over which compensation cost recognized | 14 months | |
Employee Stock Option | ||
Stock Options | ||
Compensation cost related to non-vested stock options and restricted stock awards not yet recognized | $ | $ 3.5 | |
Weighted-average period over which compensation cost recognized | 15 months | |
2013 Stock Plan | ||
Stock Options | ||
Shares of common stock underlying outstanding options or rights | 5,567,966 | |
2021 Stock Plan | ||
Stock Options | ||
Share-based compensation arrangement by share-based payment award, number of shares authorized | 4,000,000 | |
Share reserve ratio | 1 | |
Other type of award | ||
Stock Options | ||
Share reserve ratio | 1 | |
Awards granted prior to April 11, 2022 | ||
Stock Options | ||
Share reserve ratio | 2 | |
Awards granted on or after April 11, 2022 | ||
Stock Options | ||
Share reserve ratio | 1.5 | |
Equity Plans | Restricted Stock Units | ||
Stock Options | ||
Stock options vesting period | 12 months |
Comprehensive loss - Reclassifi
Comprehensive loss - Reclassifications from accumulated other comprehensive loss (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Comprehensive loss | ||
Balance at the beginning | $ 18,773 | $ 29,927 |
Balance at the end | 25,703 | 18,773 |
Pension Liability Adjustment | ||
Comprehensive loss | ||
Balance at the beginning | (86) | (858) |
Other comprehensive income (loss) before reclassifications, net of taxes | (322) | 561 |
Total other comprehensive loss before reclassifications, net of taxes | (408) | (297) |
Net amount reclassified to earnings | (4) | 211 |
Balance at the end | (412) | (86) |
Fair Value of Derivatives | ||
Comprehensive loss | ||
Balance at the beginning | (365) | (353) |
Other comprehensive income (loss) before reclassifications, net of taxes | 185 | (1,118) |
Total other comprehensive loss before reclassifications, net of taxes | (180) | (1,471) |
Net amount reclassified to earnings | 221 | 1,106 |
Balance at the end | 41 | (365) |
Foreign Currency Translation Adjustment | ||
Comprehensive loss | ||
Balance at the beginning | (1,657) | (981) |
Other comprehensive income (loss) before reclassifications, net of taxes | 407 | (676) |
Total other comprehensive loss before reclassifications, net of taxes | (1,250) | (1,657) |
Balance at the end | (1,250) | (1,657) |
Accumulated Other Comprehensive Loss | ||
Comprehensive loss | ||
Balance at the beginning | (2,108) | (2,192) |
Other comprehensive income (loss) before reclassifications, net of taxes | 270 | (1,233) |
Total other comprehensive loss before reclassifications, net of taxes | (1,838) | (3,425) |
Net amount reclassified to earnings | 217 | 1,317 |
Balance at the end | $ (1,621) | $ (2,108) |
Segment reporting and concent_3
Segment reporting and concentrations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Segment reporting and concentrations | ||
Revenues | $ 86,775 | $ 79,001 |
Income (loss) before provision for income taxes | 139 | (10,483) |
Total assets | 59,431 | 48,042 |
Goodwill | 2,075 | 2,038 |
Before intersegment eliminations | ||
Segment reporting and concentrations | ||
Income (loss) before provision for income taxes | 139 | (10,483) |
After intersegment eliminations | ||
Segment reporting and concentrations | ||
Income (loss) before provision for income taxes | 139 | (10,483) |
DDS | ||
Segment reporting and concentrations | ||
Total assets | 37,232 | 25,758 |
DDS | Operating Segments | ||
Segment reporting and concentrations | ||
Revenues | 61,576 | 56,523 |
DDS | Before intersegment eliminations | ||
Segment reporting and concentrations | ||
Income (loss) before provision for income taxes | 1,823 | 1,393 |
DDS | After intersegment eliminations | ||
Segment reporting and concentrations | ||
Income (loss) before provision for income taxes | 1,260 | 716 |
Synodex | ||
Segment reporting and concentrations | ||
Total assets | 3,379 | 3,270 |
Synodex | Operating Segments | ||
Segment reporting and concentrations | ||
Revenues | 7,511 | 7,105 |
Synodex | Before intersegment eliminations | ||
Segment reporting and concentrations | ||
Income (loss) before provision for income taxes | (299) | (3,213) |
Synodex | After intersegment eliminations | ||
Segment reporting and concentrations | ||
Income (loss) before provision for income taxes | 219 | (2,599) |
Agility | ||
Segment reporting and concentrations | ||
Total assets | 18,820 | 19,014 |
Goodwill | 2,075 | 2,038 |
Agility | Operating Segments | ||
Segment reporting and concentrations | ||
Revenues | 17,688 | 15,373 |
Agility | Before intersegment eliminations | ||
Segment reporting and concentrations | ||
Income (loss) before provision for income taxes | (1,385) | (8,663) |
Agility | After intersegment eliminations | ||
Segment reporting and concentrations | ||
Income (loss) before provision for income taxes | $ (1,340) | $ (8,600) |
Segment reporting and concent_4
Segment reporting and concentrations - Long-lived assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Segment reporting and concentrations | ||
Long - lived assets | $ 23,168 | $ 21,384 |
United States | ||
Segment reporting and concentrations | ||
Long - lived assets | 9,101 | 7,205 |
Canada | ||
Segment reporting and concentrations | ||
Long - lived assets | 7,328 | 7,675 |
United Kingdom | ||
Segment reporting and concentrations | ||
Long - lived assets | 1,028 | 1,198 |
Philippines | ||
Segment reporting and concentrations | ||
Long - lived assets | 3,484 | 3,682 |
India | ||
Segment reporting and concentrations | ||
Long - lived assets | 1,791 | 1,195 |
Sri Lanka | ||
Segment reporting and concentrations | ||
Long - lived assets | 423 | 426 |
Israel | ||
Segment reporting and concentrations | ||
Long - lived assets | 13 | 3 |
Total foreign | ||
Segment reporting and concentrations | ||
Long - lived assets | $ 14,067 | $ 14,179 |
Segment reporting and concent_5
Segment reporting and concentrations - Revenues by geographic region (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Segment reporting and concentrations | ||
Revenues | $ 86,775 | $ 79,001 |
United States | ||
Segment reporting and concentrations | ||
Revenues | 54,430 | 48,724 |
United Kingdom | ||
Segment reporting and concentrations | ||
Revenues | 10,766 | 10,901 |
The Netherlands | ||
Segment reporting and concentrations | ||
Revenues | 7,291 | 6,829 |
Canada | ||
Segment reporting and concentrations | ||
Revenues | 7,156 | 5,508 |
Others - principally Europe | ||
Segment reporting and concentrations | ||
Revenues | $ 7,132 | $ 7,039 |
Segment reporting and concent_6
Segment reporting and concentrations - Additional information (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 USD ($) customer segment | Dec. 31, 2022 USD ($) customer client | |
Segment reporting and concentrations | ||
Number of reporting segments | segment | 3 | |
Right-of-use-asset, net | $ | $ 5,054 | $ 4,309 |
Sales revenue, net | Customer concentration risk | Non-US | ||
Segment reporting and concentrations | ||
Concentration risk, percentage | 37% | 38% |
Foreign customer | Accounts receivable | Customer concentration risk | ||
Segment reporting and concentrations | ||
Concentration risk, percentage | 31% | 44% |
One customer | Sales revenue, net | Customer concentration risk | ||
Segment reporting and concentrations | ||
Number of clients | 1 | |
Concentration risk, percentage | 10% | |
Two customer | Sales revenue, net | Customer concentration risk | ||
Segment reporting and concentrations | ||
Concentration risk, percentage | 11% | |
Three customer | Accounts receivable | Customer concentration risk | ||
Segment reporting and concentrations | ||
Number of clients | 3 | |
Concentration risk, percentage | 53% | |
Four customer | Accounts receivable | Customer concentration risk | ||
Segment reporting and concentrations | ||
Number of clients | client | 4 | |
Concentration risk, percentage | 45% | |
Customer | Sales revenue, net | Customer concentration risk | United States | ||
Segment reporting and concentrations | ||
Number of clients | 0 | |
Customer | Accounts receivable | Customer concentration risk | ||
Segment reporting and concentrations | ||
Number of clients | 0 | 0 |
Customer | Minimum | Sales revenue, net | Customer concentration risk | ||
Segment reporting and concentrations | ||
Concentration risk, percentage | 10% | |
Customer | Minimum | Accounts receivable | Customer concentration risk | ||
Segment reporting and concentrations | ||
Concentration risk, percentage | 10% | 10% |
Loss per Share (Details)
Loss per Share (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Loss per Share | ||
Net loss attributable to Innodata Inc. and Subsidiaries | $ (908) | $ (11,935) |
Weighted average common shares outstanding | 28,131 | 27,278 |
Adjusted for dilutive computation | 28,131 | 27,278 |
Loss per Share - Additional inf
Loss per Share - Additional information (Details) - shares shares in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Employee Stock Option | ||
Antidilutive securities excluded from computation of earnings per share | ||
Computation of diluted loss per share | 6.3 | 5.3 |
Derivatives - Additional Inform
Derivatives - Additional Information (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Derivatives | ||
Derivative notional amount | $ 10.5 | $ 14.2 |
Derivatives - Fair value of der
Derivatives - Fair value of derivative instruments (Details) - Foreign currency forward contracts - Designated as hedging instrument - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Accrued expenses and other | ||
Derivatives, Fair Value | ||
Derivatives designated as hedging instruments | $ 365 | |
Prepaid expenses and other current assets | ||
Derivatives, Fair Value | ||
Derivatives designated as hedging instruments | $ 41 |
Derivatives - Contracts designa
Derivatives - Contracts designated as cash flow hedges (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Derivatives | ||
Net gain (loss) recognized in OCI | $ 185 | $ (1,118) |
Net loss reclassified from accumulated OCI into income | $ (221) | $ (1,106) |
Line Of Credit (Details)
Line Of Credit (Details) - Revolving Credit Facility $ in Millions | 12 Months Ended | |
Dec. 31, 2023 USD ($) | Apr. 04, 2023 USD ($) | |
Line of Credit | ||
Maximum borrowing capacity | $ 10 | |
Percentage of eligible accounts considered for determination of borrowing base | 85% | |
Percentage of eligible foreign accounts considered for determination of borrowing base | 85% | |
Maximum amount of eligible foreign accounts considered for determination of borrowing base | $ 2 | |
Borrowing base calculation | $ 10 | |
Threshold minimum fixed charge coverage ratio required to be maintained by December 31, 2023 | 1.10 | |
SOFR | ||
Line of Credit | ||
Interest rate | 2.25% |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (908) | $ (11,935) |
Insider Trading Arrangements
Insider Trading Arrangements | 12 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |