Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2024 | Aug. 01, 2024 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-35774 | |
Entity Registrant Name | INNODATA INC | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 13-3475943 | |
Entity Address, Address Line One | 55 Challenger Road | |
Entity Address, City or Town | Ridgefield Park | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 07660 | |
City Area Code | 201 | |
Local Phone Number | 371-8000 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | INOD | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 28,988,841 | |
Entity Central Index Key | 0000903651 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 16,509 | $ 13,806 |
Short term investments - other | 14 | 14 |
Accounts receivable, net of allowance for credit losses | 18,162 | 14,288 |
Prepaid expenses and other current assets | 3,652 | 3,969 |
Total current assets | 38,337 | 32,077 |
Property and equipment, net | 3,271 | 2,281 |
Right-of-use-asset, net | 4,627 | 5,054 |
Other assets | 2,048 | 2,445 |
Deferred income taxes, net | 1,736 | 1,741 |
Intangibles, net | 13,910 | 13,758 |
Goodwill | 2,044 | 2,075 |
Total assets | 65,973 | 59,431 |
Current liabilities: | ||
Accounts payable | 3,725 | 2,662 |
Accrued expenses | 5,354 | 3,060 |
Accrued salaries, wages and related benefits | 6,642 | 7,799 |
Deferred revenues | 4,770 | 3,523 |
Income and other taxes | 3,906 | 3,848 |
Long-term obligations - current portion | 1,149 | 1,261 |
Operating lease liability - current portion | 828 | 782 |
Total current liabilities | 26,374 | 22,935 |
Deferred income taxes, net | 86 | 22 |
Long-term obligations, net of current portion | 6,995 | 6,778 |
Operating lease liability, net of current portion | 4,247 | 4,701 |
Total liabilities | 37,702 | 34,436 |
Commitments and contingencies | ||
Non-controlling interests | (702) | (708) |
STOCKHOLDERS' EQUITY: | ||
Serial preferred stock; 4,998,000 shares authorized, none outstanding | ||
Common stock, $.01 par value; 75,000,000 shares authorized; 32,172,000 shares issued and 28,988,000 outstanding at June 30, 2024 and 31,937,000 shares issued and 28,753,000 outstanding at December 31, 2023 | 322 | 320 |
Additional paid-in capital | 45,862 | 43,152 |
Deficit | (8,708) | (9,683) |
Accumulated other comprehensive loss | (2,038) | (1,621) |
Stockholders' Equity before Treasury Stock, Total | 35,438 | 32,168 |
Less: treasury stock, 3,184,000 shares at June 30, 2024 and December 31, 2023, at cost | (6,465) | (6,465) |
Total stockholders' equity | 28,973 | 25,703 |
Total liabilities, non-controlling interests and stockholders' equity | $ 65,973 | $ 59,431 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2024 | Dec. 31, 2023 |
CONDENSED 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 | 32,172,000 | 31,937,000 |
Common stock, shares outstanding | 28,988,000 | 28,753,000 |
Treasury stock, shares | 3,184,000 | 3,184,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||||
Revenues | $ 32,553 | $ 19,655 | $ 59,057 | $ 38,494 |
Operating costs and expenses: | ||||
Direct operating costs | 23,202 | 12,715 | 40,071 | 25,589 |
Selling and administrative expenses | 9,020 | 7,574 | 17,325 | 15,371 |
Interest (income) expense, net | 55 | (7) | (29) | 56 |
Total | 32,277 | 20,282 | 57,367 | 41,016 |
Income (loss) before provision for income taxes | 276 | (627) | 1,690 | (2,522) |
Provision for income taxes | 285 | 188 | 709 | 406 |
Consolidated net loss | (9) | (815) | 981 | (2,928) |
Income attributable to non-controlling interests | 5 | 6 | 3 | |
Net loss attributable to Innodata Inc. and Subsidiaries | $ (14) | $ (815) | $ 975 | $ (2,931) |
Loss per share attributable to Innodata Inc. and Subsidiaries: | ||||
Basic (in dollars per share) | $ 0 | $ (0.03) | $ 0.03 | $ (0.11) |
Diluted (in dollars per share) | $ 0 | $ (0.03) | $ 0.03 | $ (0.11) |
Weighted average shares outstanding: | ||||
Basic (in shares) | 28,878 | 27,860 | 28,819 | 27,661 |
Diluted (in shares) | 28,878 | 27,860 | 32,691 | 27,661 |
Comprehensive Loss: | ||||
Consolidated net loss | $ (9) | $ (815) | $ 981 | $ (2,928) |
Pension liability adjustment, net of taxes | (4) | (1) | (9) | |
Foreign currency translation adjustment | (78) | 67 | (208) | 127 |
Change in fair value of derivatives, net of taxes | (174) | 108 | (208) | 531 |
Other comprehensive income (loss) | (252) | 171 | (417) | 649 |
Total comprehensive loss | (261) | (644) | 564 | (2,279) |
Comprehensive income attributed to non-controlling interest | 5 | 6 | 3 | |
Comprehensive loss attributable to Innodata Inc. and Subsidiaries | $ (266) | $ (644) | $ 558 | $ (2,282) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Cash flows from operating activities: | ||
Consolidated net income (loss) | $ 981 | $ (2,928) |
Adjustments to reconcile consolidated net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 2,684 | 2,242 |
Stock-based compensation | 2,026 | 1,981 |
Deferred income taxes | 41 | (142) |
Pension cost | 395 | 538 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (3,976) | 1,270 |
Prepaid expenses and other current assets | 246 | 634 |
Other assets | 396 | 45 |
Accounts payable and accrued expenses | 3,348 | (526) |
Deferred revenues | 1,247 | (1,330) |
Accrued salaries, wages and related benefits | (1,149) | 658 |
Income and other taxes | 74 | 1,741 |
Net cash provided by operating activities | 6,313 | 4,183 |
Cash flows from investing activities: | ||
Capital expenditures | (4,067) | (3,012) |
Proceeds from sale of short term investments - others | 493 | |
Net cash used in investing activities | (4,067) | (2,519) |
Cash flows from financing activities: | ||
Proceeds from exercise of stock options | 783 | 2,179 |
Withholding taxes on net settlement of restricted stock units | (97) | |
Payment of long-term obligations | (294) | (192) |
Net cash provided by financing activities | 392 | 1,987 |
Effect of exchange rate changes on cash and cash equivalents | 65 | 209 |
Net increase in cash and cash equivalents | 2,703 | 3,860 |
Cash and cash equivalents, beginning of period | 13,806 | 9,792 |
Cash and cash equivalents, end of period | 16,509 | 13,652 |
Supplemental disclosures of cash flow information: | ||
Shares withheld for withholding taxes on net settlement for restricted stock | 97 | |
Cash paid for income taxes | 459 | 380 |
Cash paid for operating leases | 719 | 799 |
Cash paid for interest | $ 169 | $ 132 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Total |
Balance at the beginning at Dec. 31, 2022 | $ 306 | $ 35,815 | $ (8,775) | $ (2,108) | $ (6,465) | $ 18,773 |
Balance at the beginning (in shares) at Dec. 31, 2022 | (3,184,000) | |||||
Balance at the beginning (in shares) at Dec. 31, 2022 | 30,589,000 | |||||
Net Income (Loss) | (2,116) | (2,116) | ||||
Stock-based compensation | 962 | 962 | ||||
Stock option exercises | $ 1 | 320 | 321 | |||
Stock option exercises (in shares) | 148,000 | |||||
Shares withheld for exercise net settlement (in shares) | (3,000) | |||||
Pension liability adjustments, net of taxes | (5) | (5) | ||||
Foreign currency translation adjustment | 60 | 60 | ||||
Change in fair value of derivatives, net of taxes | 423 | 423 | ||||
Balance at the end at Mar. 31, 2023 | $ 307 | 37,097 | (10,891) | (1,630) | $ (6,465) | 18,418 |
Balance at the end (in shares) at Mar. 31, 2023 | (3,184,000) | |||||
Balance at the end (in shares) at Mar. 31, 2023 | 30,734,000 | |||||
Balance at the beginning at Dec. 31, 2022 | $ 306 | 35,815 | (8,775) | (2,108) | $ (6,465) | 18,773 |
Balance at the beginning (in shares) at Dec. 31, 2022 | (3,184,000) | |||||
Balance at the beginning (in shares) at Dec. 31, 2022 | 30,589,000 | |||||
Pension liability adjustments, net of taxes | (9) | |||||
Foreign currency translation adjustment | 127 | |||||
Change in fair value of derivatives, net of taxes | 531 | |||||
Balance at the end at Jun. 30, 2023 | $ 315 | 39,966 | (11,706) | (1,459) | $ (6,465) | 20,651 |
Balance at the end (in shares) at Jun. 30, 2023 | (3,184,000) | |||||
Balance at the end (in shares) at Jun. 30, 2023 | 31,483,000 | |||||
Balance at the beginning at Mar. 31, 2023 | $ 307 | 37,097 | (10,891) | (1,630) | $ (6,465) | 18,418 |
Balance at the beginning (in shares) at Mar. 31, 2023 | (3,184,000) | |||||
Balance at the beginning (in shares) at Mar. 31, 2023 | 30,734,000 | |||||
Net Income (Loss) | (815) | (815) | ||||
Stock-based compensation | 1,019 | 1,019 | ||||
Stock option exercises | $ 8 | 1,850 | 1,858 | |||
Stock option exercises (in shares) | 749,000 | |||||
Pension liability adjustments, net of taxes | (4) | (4) | ||||
Foreign currency translation adjustment | 67 | 67 | ||||
Change in fair value of derivatives, net of taxes | 108 | 108 | ||||
Balance at the end at Jun. 30, 2023 | $ 315 | 39,966 | (11,706) | (1,459) | $ (6,465) | 20,651 |
Balance at the end (in shares) at Jun. 30, 2023 | (3,184,000) | |||||
Balance at the end (in shares) at Jun. 30, 2023 | 31,483,000 | |||||
Balance at the beginning at Dec. 31, 2023 | $ 320 | 43,152 | (9,683) | (1,621) | $ (6,465) | $ 25,703 |
Balance at the beginning (in shares) at Dec. 31, 2023 | (3,184,000) | 3,184,000 | ||||
Balance at the beginning (in shares) at Dec. 31, 2023 | 31,937,000 | |||||
Net Income (Loss) | 989 | $ 989 | ||||
Stock-based compensation | 1,034 | 1,034 | ||||
Pension liability adjustments, net of taxes | (1) | (1) | ||||
Foreign currency translation adjustment | (130) | (130) | ||||
Change in fair value of derivatives, net of taxes | (34) | (34) | ||||
Balance at the end at Mar. 31, 2024 | $ 320 | 44,186 | (8,694) | (1,786) | $ (6,465) | 27,561 |
Balance at the end (in shares) at Mar. 31, 2024 | (3,184,000) | |||||
Balance at the end (in shares) at Mar. 31, 2024 | 31,937,000 | |||||
Balance at the beginning at Dec. 31, 2023 | $ 320 | 43,152 | (9,683) | (1,621) | $ (6,465) | $ 25,703 |
Balance at the beginning (in shares) at Dec. 31, 2023 | (3,184,000) | 3,184,000 | ||||
Balance at the beginning (in shares) at Dec. 31, 2023 | 31,937,000 | |||||
Stock option exercises (in shares) | 202,329 | |||||
Pension liability adjustments, net of taxes | $ (1) | |||||
Foreign currency translation adjustment | (208) | |||||
Change in fair value of derivatives, net of taxes | (208) | |||||
Balance at the end at Jun. 30, 2024 | $ 322 | 45,862 | (8,708) | (2,038) | $ (6,465) | $ 28,973 |
Balance at the end (in shares) at Jun. 30, 2024 | (3,184,000) | 3,184,000 | ||||
Balance at the end (in shares) at Jun. 30, 2024 | 32,172,000 | |||||
Balance at the beginning at Mar. 31, 2024 | $ 320 | 44,186 | (8,694) | (1,786) | $ (6,465) | $ 27,561 |
Balance at the beginning (in shares) at Mar. 31, 2024 | (3,184,000) | |||||
Balance at the beginning (in shares) at Mar. 31, 2024 | 31,937,000 | |||||
Net Income (Loss) | (14) | (14) | ||||
Stock-based compensation | 992 | 992 | ||||
Stock option exercises | $ 2 | 781 | 783 | |||
Stock option exercises (in shares) | 235,000 | |||||
Shares withheld for restricted stock unit net settlement | (97) | (97) | ||||
Foreign currency translation adjustment | (78) | (78) | ||||
Change in fair value of derivatives, net of taxes | (174) | (174) | ||||
Balance at the end at Jun. 30, 2024 | $ 322 | $ 45,862 | $ (8,708) | $ (2,038) | $ (6,465) | $ 28,973 |
Balance at the end (in shares) at Jun. 30, 2024 | (3,184,000) | 3,184,000 | ||||
Balance at the end (in shares) at Jun. 30, 2024 | 32,172,000 |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Estimates | 6 Months Ended |
Jun. 30, 2024 | |
Summary of Significant Accounting Policies and Estimates | |
Summary of Significant Accounting Policies and Estimates | 1. Summary of Significant Accounting Policies and Estimates Basis of Presentation Certain information and note disclosures normally included in or with financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been condensed or omitted from these condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and, accordingly, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. Unless otherwise noted, the accounting policies used in preparing these condensed consolidated financial statements are the same as those described in the notes to the consolidated financial statements for the year ended December 31, 2023. Principles of Consolidation Use of Estimates 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. 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 condensed consolidated balance sheets are contract acquisition costs amounting to $0.8 million as of June 30, 2024 and December 31, 2023. 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 condensed 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 income or loss in stockholders’ equity. Foreign exchange transaction gains or losses are included in direct operating costs in the accompanying condensed consolidated statements of operations and comprehensive loss. Derivative Instruments - Capitalized Developed Software - The Company incurs development costs related to software it develops for its internal use. Qualifying costs incurred during the application development stage are capitalized. These costs primarily consist of internal labor and third-party development costs and are amortized using the straight-line method over the estimated useful life of the capitalized developed software, which generally ranges from three to ten years . All other research and maintenance costs are expensed as incurred. Capitalized developed software in progress as of June 30, 2024 and December 31, 2023 were $2.8 million and $3.5 million, respectively. The cumulative completed capitalized developed software as of June 30, 2024 and December 31, 2023 were $18.5 million and $15.2 million, respectively. 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 condensed consolidated statements of operations and comprehensive income (loss). Deferred Revenue - The table below provides information about contract liabilities (deferred revenue) and the significant changes in the balances for the three and six months ended as of June 30, 2024 and 2023 were as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 Balance at the beginning of period $ 6,668 $ 4,189 $ 3,523 $ 4,366 Net deferred revenue in the period 580 5,474 15,328 8,059 Revenue recognized (2,467) (6,756) (13,990) (9,500) Currency translations and other adjustments (11) 129 (91) 111 Balance at the end of period $ 4,770 $ 3,036 $ 4,770 $ 3,036 Recent Accounting Pronouncements On December 14, 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). The effective date of ASU 2023-09 is for fiscal years beginning after December 15, 2024. The adoption of 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 | 6 Months Ended |
Jun. 30, 2024 | |
Short Term Investments - other | |
Short Term Investments - other | 2. Short-term investments include investments made by the Company in 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 (in thousands). June 30, December 31, 2024 2023 Certificates of deposit $ 14 $ 14 Total $ 14 $ 14 |
Accounts Receivable
Accounts Receivable | 6 Months Ended |
Jun. 30, 2024 | |
Accounts Receivable | |
Accounts Receivable | 3. Accounts receivable consists of the following (in thousands): June 30, December 31, 2024 2023 Gross Accounts receivable $ 19,595 $ 15,505 Allowance for credit losses (1,433) (1,217) Accounts receivable, net $ 18,162 $ 14,288 Activity in the allowance for the credit losses for the three and six months ended June 30, 2024 and 2023 was as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 Balance at beginning of period $ 1,225 $ 1,166 $ 1,217 $ 1,213 Additions charged to expense 219 152 234 332 Write-offs against allowance (10) (101) (17) (331) Foreign currency translation adjustment (1) 3 (1) 6 Balance at end of period $ 1,433 $ 1,220 $ 1,433 $ 1,220 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | 4. The change in the carrying amount of goodwill for the six months ended June 30, 2024 was as follows (in thousands): Balance - January 1, 2024 $ 2,075 Foreign currency translation adjustment (31) Balance - June 30, 2024 $ 2,044 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 approach 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 $2.0 million and $2.1 million as of June 30, 2024 and December 31, 2023, respectively. Information regarding the Company acquired intangible assets and capitalized developed software was as follows (in thousands): June 30, 2024 Foreign Gross Currency Net Carrying Accumulated Translation Carrying Value Amortization Adjustment Value Acquired Intangible Assets Developed technology $ 3,060 $ (2,845) $ (3) $ 212 Customer relationships 2,144 (1,770) (16) 358 Trademarks and tradenames 862 (809) - 53 Patents 44 (43) - 1 Media Contact Database 3,546 (2,837) - 709 Total Acquired Intangible Assets $ 9,656 $ (8,304) $ (19) $ 1,333 Capitalized Developed Software Capitalized Developed Software $ 18,504 $ (8,557) $ (206) $ 9,741 Capitalized Developed Software - in Progress 2,840 - (4) 2,836 Total Capitalized Developed Software $ 21,344 $ (8,557) $ (210) $ 12,577 Total $ 31,000 $ (16,861) $ (229) $ 13,910 December 31, 2023 Foreign Gross Currency Net Carrying Accumulated Translation Carrying Value Amortization Adjustment 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 Amortization expense relating to acquired intangible assets was $0.2 million for each of the three-month periods ended June 30, 2024 and 2023. Amortization expense relating to acquired intangible assets was $0.4 million for each of the six-month periods ended June 30, 2024 and 2023. Amortization expense relating to capitalized developed software was $0.8 million and $0.6 million for the three-month periods ended June 30, 2024 and 2023. Amortization expense relating to capitalized developed software was $1.6 million and $1.2 million for the six-month periods ended June 30, 2024 and 2023. As of June 30, 2024, estimated future amortization expense for intangible assets was as follows (in thousands): Year Amortization 2024 $ 3,222 2025 4,714 2026 3,446 2027 1,168 2028 688 Thereafter 672 $ 13,910 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2024 | |
Income Taxes | |
Income Taxes | 5. Income taxes primarily consist of a provision for foreign taxes recorded by the Company’s foreign subsidiaries in accordance with local tax regulations. The estimated annual effective tax rate applied to the six-month period ended June 30, 2024, differs from the U.S. federal statutory rate of 21% principally due to income earned outside the United States which is subject to the U.S. tax on global intangible low taxed income (“GILTI”), tax effects of foreign operations, changes in valuation allowance, provision on uncertain tax positions, and other net increases; offset in part by a reduction in foreign exchange gains and losses, deemed interest and true up adjustment on prior year tax provision. The reconciliations of the U.S. federal statutory rate with the Company’s effective tax rate for the six months ended June 30, 2024 and 2023, respectively, are summarized in the table below: For the Six Months Ended June 30, 2024 2023 Federal income tax expense (benefit) at statutory rate 21.0 % (21.0) % Effect of: GILTI provisions 17.6 - Tax effects of foreign operations 7.1 3.8 Change in valuation allowance 6.4 51.3 Increase in unrecognized tax benefits (ASC 740) 5.5 2.6 State income tax net of federal benefit 0.8 0.4 Foreign rate differential (1.4) (1.5) Effect of stock - based compensation (2.9) (22.7) Return to provision true up (3.2) (0.6) Deemed interest (5.2) (7.1) Foreign operations permanent differences - foreign exchange gains and losses (7.9) 4.7 Other 4.2 6.2 Effective tax rate 42.0 % 16.1 % The following table presents a roll-forward of the Company’s unrecognized tax benefits and associated interest for the six months ended June 30, 2024 (in thousands): Unrecognized Tax Benefits Balance at January 1, 2024 $ 1,942 Increase for current period tax positions 115 Decrease for prior year tax positions (81) Interest accrual 59 Foreign currency remeasurement (22) Balance at June 30, 2024 $ 2,013 The Company expects that unrecognized tax benefits as of June 30, 2024, if recognized, would have a material impact on the Company’s effective tax rate. |
Operating Leases
Operating Leases | 6 Months Ended |
Jun. 30, 2024 | |
Operating Leases | |
Operating Leases | 6. The Company has various lease agreements for its offices and service delivery centers and has determined that the risks and benefits related to these leased properties are retained by the lessors. Accordingly, these are accounted for as operating leases. Lease agreements with a term of less than one year are treated as short-term leases and are accounted for separately as shown in the table below. Most of these lease agreements are renewable at the mutual consent of the parties to the contract. These lease agreements are for terms ranging from three to eleven years and, in most cases, provide for rent escalations ranging from 1.75% to 15% . The table below summarizes the amounts recognized in the condensed consolidated financial statements related to operating leases for the periods presented (in thousands): For the Three Months Ended For the Six Months Ended June 30, June 30, 2024 2023 2024 2023 Rent expense for long-term operating leases $ 314 $ 312 $ 628 $ 621 Rent expense for short-term leases 44 83 91 178 Total rent expense $ 358 $ 395 $ 719 $ 799 The following table presents the maturity profile of the Company’s operating lease liabilities based on the contractual undiscounted payments with a reconciliation of these amounts to the remaining net present value of the operating lease liability reported in the condensed consolidated balance sheet as of June 30, 2024 (in thousands): Year Amount 2024 $ 644 2025 1,305 2026 1,336 2027 1,334 2028 964 2029 and thereafter 870 Total lease payments 6,453 Less: Interest (1,378) Net present value of lease liabilities $ 5,075 Current portion $ 828 Long-term portion 4,247 Total $ 5,075 The weighted average remaining lease terms and discount rates for all of the Company’s operating leases as of June 30, 2024 were as follows: Weighted-average lease term remaining 57 months Weighted-average discount rate 9.39 % |
Long-term obligations
Long-term obligations | 6 Months Ended |
Jun. 30, 2024 | |
Long-term obligations | |
Long-term obligations | 7. Total long-term obligations as of June 30, 2024 and December 31, 2023 consisted of the following (in thousands): June 30, December 31, 2024 2023 Pension obligations - accrued pension liability $ 7,412 $ 7,128 Microsoft licenses (1) 732 911 8,144 8,039 Less: Current portion of long-term obligations 1,149 1,261 Totals $ 6,995 $ 6,778 (1) |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies | |
Commitments and Contingencies | 8. Litigation – In 2008, a judgment was rendered in the Philippines against a Philippine subsidiary of the Company that is no longer active and purportedly also against Innodata Inc., in favor of certain former employees of the Philippine subsidiary. The potential payment amount aggregates to approximately $5.6 million, 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 . The potential payment amount as expressed in U.S. dollars varies with the Philippine peso to U.S. dollar exchange rate. In December 2017, a group of 97 of the former employees of the Philippine subsidiary indicated that they proposed to record the judgment as to themselves in New Jersey. In January 2018, in response to an action initiated by Innodata Inc., the United States District Court for the District of New Jersey (“USDC”) entered a preliminary injunction that enjoins these former employees from pursuing or seeking recognition or enforcement of the judgment against Innodata Inc. in the United States during the pendency of the action and until further order of the USDC. In June 2018, the USDC entered a consent order administratively closing the action subject to return of the action to the active docket upon the written request of Innodata Inc. or the former employees, with the USDC retaining jurisdiction over the matter and the preliminary injunction remaining in full force and effect. On February 21, 2024, David D’Agostino filed a putative class action captioned D’Agostino v. Innodata Inc., et al. 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. |
Stock Options and Restricted St
Stock Options and Restricted Stock Units | 6 Months Ended |
Jun. 30, 2024 | |
Stock Options and Restricted Stock Units | |
Stock Options and Restricted Stock Units | 9. The stock-based compensation expense related to the Innodata Inc. 2013 Stock Plan, as amended and restated effective June 7, 2016 (the “2013 Plan”) and the Innodata Inc. 2021 Equity Compensation Plan, as amended and restated effective as of April 11, 2022 (the “2021 Plan”, and together with the 2013 Plan, collectively, the “Equity Plans”) were allocated as follows (in thousands): For the Three Months Ended For the Six Months Ended June 30, June 30, 2024 2023 2024 2023 Direct operating costs $ 73 $ 62 $ 157 $ 126 Selling and administrative expenses 919 957 1,869 1,855 Total stock-based compensation $ 992 $ 1,019 $ 2,026 $ 1,981 Stock Options 2013 Plan A summary of option activity under 2013 Plan and changes during each of the six-month periods ended June 30, 2024 and 2023 are presented below: Weighted-Average Number of Weighted - Average Remaining Contractual Aggregate Options Exercise Price Term (years) Intrinsic Value Outstanding at January 1, 2024 5,339,162 $ 3.22 6.38 $ 28,640,009 Granted - - - - Exercised (155,899) 4.00 - - Forfeited/Expired (4,001) 6.96 - - Outstanding at June 30, 2024 5,179,262 $ 3.19 5.87 $ 60,291,271 Exercisable at June 30, 2024 3,402,382 $ 2.20 4.92 $ 42,967,259 Vested and Expected to Vest at June 30, 2024 5,179,262 $ 3.19 5.87 $ 60,291,271 Weighted-Average Number of Weighted - Average Remaining Contractual Aggregate Options Exercise Price Term (years) Intrinsic Value Outstanding at January 1, 2023 6,690,490 $ 3.09 7.19 $ 5,989,709 Granted* 25,000 3.31 - - Exercised (871,884) 2.34 - - Forfeited/Expired (75,766) 6.96 - - Outstanding at June 30, 2023 5,767,840 $ 3.16 6.84 $ 47,137,674 Exercisable at June 30, 2023 3,600,261 $ 1.91 5.73 $ 33,897,858 Vested and Expected to Vest at June 30, 2023 5,767,840 $ 3.16 6.84 $ 47,137,674 * Granted to a non-employee member of the Company’s advisory board. 2021 Plan A summary of option activity under the 2021 Plan and changes during the six-month periods ended June 30, 2024 and 2023 are presented below. Weighted-Average Number of Weighted - Average Remaining Contractual Aggregate Options Exercise Price Term (years) Intrinsic Value Outstanding at January 1, 2024 923,571 $ 3.41 8.76 $ 4,786,252 Granted - - - - Exercised (46,430) 3.41 - - Forfeited/Expired (7,668) 3.41 - - Outstanding at June 30, 2024 869,473 $ 3.41 8.27 $ 9,927,362 Exercisable at June 30, 2024 339,779 $ 3.33 8.24 $ 3,907,176 Vested and Expected to Vest at June 30, 2024 869,473 $ 3.41 8.27 $ 9,927,362 Weighted-Average Number of Weighted - Average Remaining Contractual Aggregate Options Exercise Price Term (years) Intrinsic Value Outstanding at January 1, 2023 1,027,500 $ 3.46 9.75 $ - Granted - - - - Exercised (25,000) 6.40 - - Forfeited/Expired (42,000) 3.41 - - Outstanding at June 30, 2023 960,500 $ 3.38 9.27 $ 7,634,060 Exercisable at June 30, 2023 18,750 $ 3.39 9.21 $ 148,875 Vested and Expected to Vest at June 30, 2023 960,500 $ 3.38 9.27 $ 7,634,060 There were no options granted during the six months ended June 30, 2024. During the six months ended June 30, 2024, a total of 202,329 options were exercised at an average exercise price of $3.87. The fair value of stock options is estimated on the date of grant using the Black-Scholes option pricing model. The weighted-average fair value of the options granted, and weighted-average assumptions were as follows: For the Six Months Ended June 30, 2024 2023 Weighted average fair value of options granted $ - $ 1.79 Risk-free interest rate - 3.88 % Expected term (years) - 3.0 Expected volatility factor - 79.95 % Expected dividends - - The compensation cost related to non-vested stock options not yet recognized as of June 30, 2024 totaled approximately $1.9 million. The weighted-average period over which these costs will be recognized is 11 months . Restricted Stock Awards There were no outstanding awards of restricted stock under the Equity Plans during each of the six-month periods ended June 30, 2024 and 2023. Restricted Stock Units Restricted stock unit activity under the Equity Plans during each of the six-month periods ended June 30, 2024 and 2023 are presented below: Number of Weighted-Average Restricted Stock Grant Date Units Fair Value Unvested at January 1, 2024 749,756 $ 5.77 Granted 28,973 15.10 Vested (48,761) 8.42 Forfeited/Expired (995) 8.29 Unvested at June 30, 2024 728,973 $ 5.96 Number of Weighted-Average Restricted Stock Grant Date Units Fair Value Unvested at January 1, 2023 700,000 $ 5.59 Granted 28,804 8.29 Vested - - Forfeited/Expired - - Unvested at June 30, 2023 728,804 $ 5.70 There were a total of 28,973 restricted stock units granted to non-employee directors during the six months ended June 30, 2024. There were 200,000 and 528,973 outstanding restricted stock unit awards under the 2013 Plan and 2021 Plan, respectively, as of June 30, 2024. The compensation cost related to non-vested restricted stock units not yet recognized as of June 30, 2024 totaled approximately $2.8 million. The weighted-average period over which these costs will be recognized is 8 months . |
Comprehensive income (loss)
Comprehensive income (loss) | 6 Months Ended |
Jun. 30, 2024 | |
Comprehensive income (loss) | |
Comprehensive income (loss) | 10. Comprehensive income (loss) Accumulated other comprehensive loss, as reflected in the condensed consolidated balance sheets, consists of pension liability adjustments, net of taxes, foreign currency translation adjustment and changes in fair value of derivatives, net of taxes. The components of accumulated other comprehensive loss as of June 30, 2024 and 2023, and reclassifications from accumulated other comprehensive loss for the three and six-month periods, are presented below (in thousands): Foreign Currency Pension Liability Fair Value of Translation Accumulated Other Adjustment Derivatives Adjustment Comprehensive Loss Balance at April 1, 2024 $ (413) $ 7 $ (1,380) $ (1,786) Other comprehensive loss before reclassifications, net of taxes - (193) (78) (271) Total other comprehensive loss before reclassifications, net of taxes (413) (186) (1,458) (2,057) Net amount reclassified to earnings - 19 - 19 Balance at June 30, 2024 $ (413) $ (167) $ (1,458) $ (2,038) Foreign Currency Pension Liability Fair Value of Translation Accumulated Other Adjustment Derivatives Adjustment Comprehensive Loss Balance at January 1, 2024 $ (412) $ 41 $ (1,250) $ (1,621) Other comprehensive loss before reclassifications, net of taxes - (206) (208) (414) Total other comprehensive loss before reclassifications, net of taxes (412) (165) (1,458) (2,035) Net amount reclassified to earnings (1) (2) - (3) Balance at June 30, 2024 $ (413) $ (167) $ (1,458) $ (2,038) Foreign Currency Pension Liability Fair Value of Translation Accumulated Other Adjustment Derivatives Adjustment Comprehensive Loss Balance at April 1, 2023 $ (91) $ 58 $ (1,597) $ (1,630) Other comprehensive income before reclassifications, net of taxes - 2 67 69 Total other comprehensive income (loss) before reclassifications, net of taxes (91) 60 (1,530) (1,561) Net amount reclassified to earnings (4) 106 - 102 Balance at June 30, 2023 $ (95) $ 166 $ (1,530) $ (1,459) Foreign Currency Pension Liability Fair Value of Translation Accumulated Other Adjustment Derivatives Adjustment Comprehensive Loss Balance at January 1, 2023 $ (86) $ (365) $ (1,657) $ (2,108) Other comprehensive income before reclassifications, net of taxes - 244 127 371 Total other comprehensive loss before reclassifications, net of taxes (86) (121) (1,530) (1,737) Net amount reclassified to earnings (9) 287 - 278 Balance at June 30, 2023 $ (95) $ 166 $ (1,530) $ (1,459) Taxes related to each component of other comprehensive loss were not material for each of the three and six-month periods presented and therefore not disclosed separately. All reclassifications from accumulated other comprehensive income (loss) had an impact on direct operating costs in the condensed consolidated statements of operations and comprehensive income (loss). |
Segment reporting and concentra
Segment reporting and concentrations | 6 Months Ended |
Jun. 30, 2024 | |
Segment reporting and concentrations | |
Segment reporting and concentrations | 11. 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 Three Months Ended June 30, For the Six Months Ended June 30, 2024 2023 2024 2023 Revenues: DDS $ 25,410 $ 13,180 $ 45,116 $ 25,927 Synodex 1,986 2,112 3,857 3,976 Agility 5,157 4,363 10,084 8,591 Total Consolidated $ 32,553 $ 19,655 $ 59,057 $ 38,494 Income (loss) before provision for income taxes (1) DDS $ (27) $ (216) $ 972 $ (497) Synodex 195 (22) 345 (133) Agility 108 (389) 373 (1,892) Total Consolidated $ 276 $ (627) $ 1,690 $ (2,522) Income (loss) before provision for income taxes (2) DDS $ (172) $ (368) $ 676 $ (792) Synodex 316 121 592 135 Agility 132 (380) 422 (1,865) Total Consolidated $ 276 $ (627) $ 1,690 $ (2,522) June 30, 2024 December 31, 2023 Total assets: DDS $ 42,925 $ 37,232 Synodex 3,759 3,379 Agility 19,289 18,820 Total Consolidated $ 65,973 $ 59,431 June 30, 2024 December 31, 2023 Goodwill: Agility $ 2,044 $ 2,075 Total $ 2,044 $ 2,075 (1) Before elimination of any inter-segment profits (2) After elimination of any inter-segment profits Revenues for the three and six-month periods ended June 30, 2024, and 2023 by geographic region (determined based upon customer’s domicile), were as follows (in thousands): Revenues by geographic region For the Three Months Ended For the Six Months Ended June 30, June 30, 2024 2023 2024 2023 United States $ 23,804 $ 10,960 $ 41,673 $ 22,196 United Kingdom 2,364 2,898 4,614 5,453 Canada 2,284 1,762 4,510 3,485 The Netherlands 2,005 2,193 4,044 3,805 Others - principally other European countries 2,096 1,842 4,216 3,555 Totals $ 32,553 $ 19,655 $ 59,057 $ 38,494 Long-lived assets as of June 30, 2024 and December 31, 2023 by geographic region were comprised of (in thousands): June 30, December 31, 2024 2023 United States $ 10,222 $ 9,101 Foreign countries: Canada 6,806 7,328 United Kingdom 922 1,028 Philippines 3,591 3,484 India 1,717 1,791 Sri Lanka 548 423 Israel 46 13 Total foreign 13,630 14,067 Totals $ 23,852 $ 23,168 Long-lived assets include the unamortized balance of right-of-use assets amounting to $4.6 million and $5.1 million as of June 30, 2024 and December 31, 2023, respectively. One customer in the DDS segment generated approximately 38% of the Company’s total revenues for the three months ended June 30, 2024. Another customer in the DDS segment generated approximately 10% of the Company’s total revenues for the three months ended June 30, 2023. No other customer accounted for 10% or more of total revenues during these periods. Further, for the three months ended June 30, 2024 and 2023, revenues from non-U.S. customers accounted for 27% and 44% respectively, of the Company’s total revenues. One customer in the DDS segment generated approximately 31% of the Company’s total revenues for the six months ended June 30, 2024. Two other customers in the DDS segment generated approximately 10.7% and 10.6% of the Company’s total revenues for the six months ended June 30, 2023, respectively. No other customer accounted for 10% or more of total revenues during these periods. Further, revenues from non-U.S. customers accounted for 29% and 42% of the Company’s total revenues for the six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, approximately 22% of the Company’s accounts receivable was due from foreign (principally European) customers and 47% of the Company’s accounts receivable was due from two customers. As of December 31, 2023, approximately 31% of the Company’s accounts receivable was due from foreign (principally European) customers and 53% of the Company’s accounts receivable was due from three customers. No other customer accounted for 10% or more of the accounts receivable as of June 30, 2024 and December 31, 2023. |
Income (Loss) Per Share
Income (Loss) Per Share | 6 Months Ended |
Jun. 30, 2024 | |
Income (Loss) Per Share | |
Income (Loss) Per Share | 12. The calculation of the dilutive effect of outstanding options is shown in the table below (in thousands): For the Three Months Ended For the Six Months Ended June 30, June 30, 2024 2023 2024 2023 Net income (loss) attributable to Innodata Inc. and Subsidiaries $ (14) $ (815) $ 975 $ (2,931) Weighted average common shares outstanding 28,878 27,860 28,819 27,661 Dilutive effect of outstanding options - - 3,872 - Adjusted for dilutive computation 28,878 27,860 32,691 27,661 Basic income (loss) per share is computed using the weighted-average number of common shares outstanding during the year. Diluted income (loss) 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 income (loss) per share is used. Options to purchase 6.0 million shares of common stock for the three months ended June 30, 2024 were outstanding but not included in the computation of diluted loss per share because the effect would have been anti-dilutive. Options to purchase 3,000 shares of common stock for the six months ended June 30, 2024 were outstanding but not included in the computation of diluted income per share because the exercise price of the options was greater than the average market price of the common shares. Options to purchase 6.7 million shares of common stock for each of the three and six-month periods ended June 30, 2023, were outstanding but not included in the computation of diluted loss per share because the effect would have been anti-dilutive. |
Derivatives
Derivatives | 6 Months Ended |
Jun. 30, 2024 | |
Derivatives | |
Derivatives | 13. The Company conducts a large portion of its operations in international markets, which subjects it to foreign currency fluctuations. The most significant foreign currency exposures occur when revenue and associated accounts receivable are collected in one currency and expenses to generate that revenue are incurred in another currency. The Company is also subject to wage inflation and other government mandated increases and operating expenses in Asian countries where the Company has the majority of its operations. The Company’s primary inflation and exchange rate exposure relates to payroll, other payroll costs and operating expenses in the Philippines, India, Sri Lanka and Israel. In addition, although most of the Company’s revenue is denominated in U.S. dollars, a significant portion of total revenues is denominated in Canadian dollars, Pound Sterling and Euros. The Company’s policy is to enter derivative instrument contracts with terms that coincide with the underlying exposure being hedged for a period of 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) is 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 $10.2 million and $10.5 million as of June 30, 2024 and December 31, 2023, respectively. The following table presents the fair value of derivative instruments included within the condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023 (in thousands): Balance Sheet Location Fair Value June 30, December 31, 2024 2023 Derivatives designated as hedging instruments: Foreign currency forward contracts Accrued expenses $ 167 $ - 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 condensed consolidated statements of operations for the three and six months ended June 30, 2024 and 2023 were as follows (in thousands): For the Three Months Ended For the Six Months Ended June 30, June 30, 2024 2023 2024 2023 Net gain (loss) recognized in OCI (1) $ (193) $ 2 $ (206) $ 244 Net (gain) loss reclassified from accumulated OCI into income (2) $ 19 $ 106 $ (2) $ 287 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 | 6 Months Ended |
Jun. 30, 2024 | |
Line of Credit | |
Line of Credit | 14. 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 June 30, 2024, 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, 2024. 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 six months ended June 30, 2024 and through the date of filing of this Report. |
Subsequent Event
Subsequent Event | 6 Months Ended |
Jun. 30, 2024 | |
Subsequent Event | |
Subsequent Event | 15. Subsequent Event On August 5, 2024 the Company entered into a second amendment (the “Amended Credit Agreement”) to the Credit Agreement. The Amended Credit Agreement provides for an increased Revolving Credit Facility up to an amount equal to the lesser of the borrowing base and $30.0 million (the “Maximum Credit”) and provides that a Borrower may request an increase to the Revolving Credit Facility’s Maximum Credit of up to, but not to exceed $50.0 million, subject to the approval of the Lender. The Revolving Credit Facility’s borrowing base is calculated in accordance with the terms of the Amended Credit Agreement and on the basis of (i) 85% of eligible accounts (other than eligible foreign accounts and unbilled accounts), plus (ii) the lesser of (a) 80% of eligible accounts that are unbilled accounts and (b) 30% of all eligible accounts, plus (iii) the lesser of (a) 85% of eligible foreign accounts, (b) 20% of all eligible accounts and (c) $4.0 million, minus (iv) certain other reserves and adjustments. As of June 30, 2024, such borrowing base calculation would equal approximately $12.4 million. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ (14) | $ 989 | $ (815) | $ (2,116) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2024 | |
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 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies and Estimates (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Summary of Significant Accounting Policies and Estimates | |
Basis of Presentation | Basis of Presentation Certain information and note disclosures normally included in or with financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been condensed or omitted from these condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and, accordingly, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. Unless otherwise noted, the accounting policies used in preparing these condensed consolidated financial statements are the same as those described in the notes to the consolidated financial statements for the year ended December 31, 2023. |
Principles of Consolidation | Principles of Consolidation |
Use of Estimates | Use of Estimates |
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. |
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 condensed consolidated balance sheets are contract acquisition costs amounting to $0.8 million as of June 30, 2024 and December 31, 2023. 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 condensed 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 income or loss in stockholders’ equity. Foreign exchange transaction gains or losses are included in direct operating costs in the accompanying condensed consolidated statements of operations and comprehensive loss. |
Derivative Instruments | Derivative Instruments - |
Capitalized Developed Software | Capitalized Developed Software - The Company incurs development costs related to software it develops for its internal use. Qualifying costs incurred during the application development stage are capitalized. These costs primarily consist of internal labor and third-party development costs and are amortized using the straight-line method over the estimated useful life of the capitalized developed software, which generally ranges from three to ten years . All other research and maintenance costs are expensed as incurred. Capitalized developed software in progress as of June 30, 2024 and December 31, 2023 were $2.8 million and $3.5 million, respectively. The cumulative completed capitalized developed software as of June 30, 2024 and December 31, 2023 were $18.5 million and $15.2 million, respectively. |
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 condensed consolidated statements of operations and comprehensive income (loss). |
Deferred Revenue | Deferred Revenue - The table below provides information about contract liabilities (deferred revenue) and the significant changes in the balances for the three and six months ended as of June 30, 2024 and 2023 were as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 Balance at the beginning of period $ 6,668 $ 4,189 $ 3,523 $ 4,366 Net deferred revenue in the period 580 5,474 15,328 8,059 Revenue recognized (2,467) (6,756) (13,990) (9,500) Currency translations and other adjustments (11) 129 (91) 111 Balance at the end of period $ 4,770 $ 3,036 $ 4,770 $ 3,036 |
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” (“ASU 2023-09”). The effective date of ASU 2023-09 is for fiscal years beginning after December 15, 2024. The adoption of 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. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies and Estimates (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Summary of Significant Accounting Policies and Estimates | |
Schedule of information about contract liabilities (deferred revenue) | The table below provides information about contract liabilities (deferred revenue) and the significant changes in the balances for the three and six months ended as of June 30, 2024 and 2023 were as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 Balance at the beginning of period $ 6,668 $ 4,189 $ 3,523 $ 4,366 Net deferred revenue in the period 580 5,474 15,328 8,059 Revenue recognized (2,467) (6,756) (13,990) (9,500) Currency translations and other adjustments (11) 129 (91) 111 Balance at the end of period $ 4,770 $ 3,036 $ 4,770 $ 3,036 |
Short Term Investments - other
Short Term Investments - other (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Short Term Investments - other | |
Schedule of other short term investments | Short-term investments include investments made by the Company in 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 (in thousands). June 30, December 31, 2024 2023 Certificates of deposit $ 14 $ 14 Total $ 14 $ 14 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Accounts Receivable | |
Schedule of accounts receivable | Accounts receivable consists of the following (in thousands): June 30, December 31, 2024 2023 Gross Accounts receivable $ 19,595 $ 15,505 Allowance for credit losses (1,433) (1,217) Accounts receivable, net $ 18,162 $ 14,288 |
Schedule of activity in allowance for credit losses | Activity in the allowance for the credit losses for the three and six months ended June 30, 2024 and 2023 was as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 Balance at beginning of period $ 1,225 $ 1,166 $ 1,217 $ 1,213 Additions charged to expense 219 152 234 332 Write-offs against allowance (10) (101) (17) (331) Foreign currency translation adjustment (1) 3 (1) 6 Balance at end of period $ 1,433 $ 1,220 $ 1,433 $ 1,220 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets | |
Schedule of changes in carrying amount of goodwill | The change in the carrying amount of goodwill for the six months ended June 30, 2024 was as follows (in thousands): Balance - January 1, 2024 $ 2,075 Foreign currency translation adjustment (31) Balance - June 30, 2024 $ 2,044 |
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): June 30, 2024 Foreign Gross Currency Net Carrying Accumulated Translation Carrying Value Amortization Adjustment Value Acquired Intangible Assets Developed technology $ 3,060 $ (2,845) $ (3) $ 212 Customer relationships 2,144 (1,770) (16) 358 Trademarks and tradenames 862 (809) - 53 Patents 44 (43) - 1 Media Contact Database 3,546 (2,837) - 709 Total Acquired Intangible Assets $ 9,656 $ (8,304) $ (19) $ 1,333 Capitalized Developed Software Capitalized Developed Software $ 18,504 $ (8,557) $ (206) $ 9,741 Capitalized Developed Software - in Progress 2,840 - (4) 2,836 Total Capitalized Developed Software $ 21,344 $ (8,557) $ (210) $ 12,577 Total $ 31,000 $ (16,861) $ (229) $ 13,910 December 31, 2023 Foreign Gross Currency Net Carrying Accumulated Translation Carrying Value Amortization Adjustment 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 |
Schedule of estimated amortization expense for intangible assets | As of June 30, 2024, estimated future amortization expense for intangible assets was as follows (in thousands): Year Amortization 2024 $ 3,222 2025 4,714 2026 3,446 2027 1,168 2028 688 Thereafter 672 $ 13,910 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Income Taxes | |
Schedule of reconciliation of U.S. statutory rate with Company's effective tax rate | For the Six Months Ended June 30, 2024 2023 Federal income tax expense (benefit) at statutory rate 21.0 % (21.0) % Effect of: GILTI provisions 17.6 - Tax effects of foreign operations 7.1 3.8 Change in valuation allowance 6.4 51.3 Increase in unrecognized tax benefits (ASC 740) 5.5 2.6 State income tax net of federal benefit 0.8 0.4 Foreign rate differential (1.4) (1.5) Effect of stock - based compensation (2.9) (22.7) Return to provision true up (3.2) (0.6) Deemed interest (5.2) (7.1) Foreign operations permanent differences - foreign exchange gains and losses (7.9) 4.7 Other 4.2 6.2 Effective tax rate 42.0 % 16.1 % |
Schedule of roll forward of the Company's unrecognized tax benefits and associated interest | The following table presents a roll-forward of the Company’s unrecognized tax benefits and associated interest for the six months ended June 30, 2024 (in thousands): Unrecognized Tax Benefits Balance at January 1, 2024 $ 1,942 Increase for current period tax positions 115 Decrease for prior year tax positions (81) Interest accrual 59 Foreign currency remeasurement (22) Balance at June 30, 2024 $ 2,013 |
Operating Leases (Tables)
Operating Leases (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Operating Leases | |
Schedule of operating lease expense recognized in financial statements | The table below summarizes the amounts recognized in the condensed consolidated financial statements related to operating leases for the periods presented (in thousands): For the Three Months Ended For the Six Months Ended June 30, June 30, 2024 2023 2024 2023 Rent expense for long-term operating leases $ 314 $ 312 $ 628 $ 621 Rent expense for short-term leases 44 83 91 178 Total rent expense $ 358 $ 395 $ 719 $ 799 |
Schedule of net present value of operating lease liability | The following table presents the maturity profile of the Company’s operating lease liabilities based on the contractual undiscounted payments with a reconciliation of these amounts to the remaining net present value of the operating lease liability reported in the condensed consolidated balance sheet as of June 30, 2024 (in thousands): Year Amount 2024 $ 644 2025 1,305 2026 1,336 2027 1,334 2028 964 2029 and thereafter 870 Total lease payments 6,453 Less: Interest (1,378) Net present value of lease liabilities $ 5,075 Current portion $ 828 Long-term portion 4,247 Total $ 5,075 |
Schedule of weighted average remaining lease terms and discount rates | The weighted average remaining lease terms and discount rates for all of the Company’s operating leases as of June 30, 2024 were as follows: Weighted-average lease term remaining 57 months Weighted-average discount rate 9.39 % |
Long-term obligations (Tables)
Long-term obligations (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Long-term obligations | |
Schedule of total long-term obligations | Total long-term obligations as of June 30, 2024 and December 31, 2023 consisted of the following (in thousands): June 30, December 31, 2024 2023 Pension obligations - accrued pension liability $ 7,412 $ 7,128 Microsoft licenses (1) 732 911 8,144 8,039 Less: Current portion of long-term obligations 1,149 1,261 Totals $ 6,995 $ 6,778 (1) |
Stock Options and Restricted _2
Stock Options and Restricted Stock Units (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Stock Options and Restricted Stock Units | |
Schedule of stock-based compensation expense | For the Three Months Ended For the Six Months Ended June 30, June 30, 2024 2023 2024 2023 Direct operating costs $ 73 $ 62 $ 157 $ 126 Selling and administrative expenses 919 957 1,869 1,855 Total stock-based compensation $ 992 $ 1,019 $ 2,026 $ 1,981 |
Schedule of weighted-average fair value of the options granted, and weighted-average assumptions | For the Six Months Ended June 30, 2024 2023 Weighted average fair value of options granted $ - $ 1.79 Risk-free interest rate - 3.88 % Expected term (years) - 3.0 Expected volatility factor - 79.95 % Expected dividends - - |
Equity Plans | |
Stock Options and Restricted Stock Units | |
Schedule of stock option activity | Weighted-Average Number of Weighted - Average Remaining Contractual Aggregate Options Exercise Price Term (years) Intrinsic Value Outstanding at January 1, 2024 5,339,162 $ 3.22 6.38 $ 28,640,009 Granted - - - - Exercised (155,899) 4.00 - - Forfeited/Expired (4,001) 6.96 - - Outstanding at June 30, 2024 5,179,262 $ 3.19 5.87 $ 60,291,271 Exercisable at June 30, 2024 3,402,382 $ 2.20 4.92 $ 42,967,259 Vested and Expected to Vest at June 30, 2024 5,179,262 $ 3.19 5.87 $ 60,291,271 Weighted-Average Number of Weighted - Average Remaining Contractual Aggregate Options Exercise Price Term (years) Intrinsic Value Outstanding at January 1, 2023 6,690,490 $ 3.09 7.19 $ 5,989,709 Granted* 25,000 3.31 - - Exercised (871,884) 2.34 - - Forfeited/Expired (75,766) 6.96 - - Outstanding at June 30, 2023 5,767,840 $ 3.16 6.84 $ 47,137,674 Exercisable at June 30, 2023 3,600,261 $ 1.91 5.73 $ 33,897,858 Vested and Expected to Vest at June 30, 2023 5,767,840 $ 3.16 6.84 $ 47,137,674 * Granted to a non-employee member of the Company’s advisory board. Weighted-Average Number of Weighted - Average Remaining Contractual Aggregate Options Exercise Price Term (years) Intrinsic Value Outstanding at January 1, 2024 923,571 $ 3.41 8.76 $ 4,786,252 Granted - - - - Exercised (46,430) 3.41 - - Forfeited/Expired (7,668) 3.41 - - Outstanding at June 30, 2024 869,473 $ 3.41 8.27 $ 9,927,362 Exercisable at June 30, 2024 339,779 $ 3.33 8.24 $ 3,907,176 Vested and Expected to Vest at June 30, 2024 869,473 $ 3.41 8.27 $ 9,927,362 Weighted-Average Number of Weighted - Average Remaining Contractual Aggregate Options Exercise Price Term (years) Intrinsic Value Outstanding at January 1, 2023 1,027,500 $ 3.46 9.75 $ - Granted - - - - Exercised (25,000) 6.40 - - Forfeited/Expired (42,000) 3.41 - - Outstanding at June 30, 2023 960,500 $ 3.38 9.27 $ 7,634,060 Exercisable at June 30, 2023 18,750 $ 3.39 9.21 $ 148,875 Vested and Expected to Vest at June 30, 2023 960,500 $ 3.38 9.27 $ 7,634,060 |
Restricted Stock Units | |
Stock Options and Restricted Stock Units | |
Summary of restricted stock under the company's plan | Number of Weighted-Average Restricted Stock Grant Date Units Fair Value Unvested at January 1, 2024 749,756 $ 5.77 Granted 28,973 15.10 Vested (48,761) 8.42 Forfeited/Expired (995) 8.29 Unvested at June 30, 2024 728,973 $ 5.96 Number of Weighted-Average Restricted Stock Grant Date Units Fair Value Unvested at January 1, 2023 700,000 $ 5.59 Granted 28,804 8.29 Vested - - Forfeited/Expired - - Unvested at June 30, 2023 728,804 $ 5.70 |
Comprehensive income (loss) (Ta
Comprehensive income (loss) (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Comprehensive income (loss) | |
Schedule of components of accumulated other comprehensive loss and reclassifications from accumulated other comprehensive loss | Accumulated other comprehensive loss, as reflected in the condensed consolidated balance sheets, consists of pension liability adjustments, net of taxes, foreign currency translation adjustment and changes in fair value of derivatives, net of taxes. The components of accumulated other comprehensive loss as of June 30, 2024 and 2023, and reclassifications from accumulated other comprehensive loss for the three and six-month periods, are presented below (in thousands): Foreign Currency Pension Liability Fair Value of Translation Accumulated Other Adjustment Derivatives Adjustment Comprehensive Loss Balance at April 1, 2024 $ (413) $ 7 $ (1,380) $ (1,786) Other comprehensive loss before reclassifications, net of taxes - (193) (78) (271) Total other comprehensive loss before reclassifications, net of taxes (413) (186) (1,458) (2,057) Net amount reclassified to earnings - 19 - 19 Balance at June 30, 2024 $ (413) $ (167) $ (1,458) $ (2,038) Foreign Currency Pension Liability Fair Value of Translation Accumulated Other Adjustment Derivatives Adjustment Comprehensive Loss Balance at January 1, 2024 $ (412) $ 41 $ (1,250) $ (1,621) Other comprehensive loss before reclassifications, net of taxes - (206) (208) (414) Total other comprehensive loss before reclassifications, net of taxes (412) (165) (1,458) (2,035) Net amount reclassified to earnings (1) (2) - (3) Balance at June 30, 2024 $ (413) $ (167) $ (1,458) $ (2,038) Foreign Currency Pension Liability Fair Value of Translation Accumulated Other Adjustment Derivatives Adjustment Comprehensive Loss Balance at April 1, 2023 $ (91) $ 58 $ (1,597) $ (1,630) Other comprehensive income before reclassifications, net of taxes - 2 67 69 Total other comprehensive income (loss) before reclassifications, net of taxes (91) 60 (1,530) (1,561) Net amount reclassified to earnings (4) 106 - 102 Balance at June 30, 2023 $ (95) $ 166 $ (1,530) $ (1,459) Foreign Currency Pension Liability Fair Value of Translation Accumulated Other Adjustment Derivatives Adjustment Comprehensive Loss Balance at January 1, 2023 $ (86) $ (365) $ (1,657) $ (2,108) Other comprehensive income before reclassifications, net of taxes - 244 127 371 Total other comprehensive loss before reclassifications, net of taxes (86) (121) (1,530) (1,737) Net amount reclassified to earnings (9) 287 - 278 Balance at June 30, 2023 $ (95) $ 166 $ (1,530) $ (1,459) |
Segment reporting and concent_2
Segment reporting and concentrations (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 Three Months Ended June 30, For the Six Months Ended June 30, 2024 2023 2024 2023 Revenues: DDS $ 25,410 $ 13,180 $ 45,116 $ 25,927 Synodex 1,986 2,112 3,857 3,976 Agility 5,157 4,363 10,084 8,591 Total Consolidated $ 32,553 $ 19,655 $ 59,057 $ 38,494 Income (loss) before provision for income taxes (1) DDS $ (27) $ (216) $ 972 $ (497) Synodex 195 (22) 345 (133) Agility 108 (389) 373 (1,892) Total Consolidated $ 276 $ (627) $ 1,690 $ (2,522) Income (loss) before provision for income taxes (2) DDS $ (172) $ (368) $ 676 $ (792) Synodex 316 121 592 135 Agility 132 (380) 422 (1,865) Total Consolidated $ 276 $ (627) $ 1,690 $ (2,522) June 30, 2024 December 31, 2023 Total assets: DDS $ 42,925 $ 37,232 Synodex 3,759 3,379 Agility 19,289 18,820 Total Consolidated $ 65,973 $ 59,431 June 30, 2024 December 31, 2023 Goodwill: Agility $ 2,044 $ 2,075 Total $ 2,044 $ 2,075 (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 | Revenues for the three and six-month periods ended June 30, 2024, and 2023 by geographic region (determined based upon customer’s domicile), were as follows (in thousands): Revenues by geographic region For the Three Months Ended For the Six Months Ended June 30, June 30, 2024 2023 2024 2023 United States $ 23,804 $ 10,960 $ 41,673 $ 22,196 United Kingdom 2,364 2,898 4,614 5,453 Canada 2,284 1,762 4,510 3,485 The Netherlands 2,005 2,193 4,044 3,805 Others - principally other European countries 2,096 1,842 4,216 3,555 Totals $ 32,553 $ 19,655 $ 59,057 $ 38,494 |
Schedule of revenue from external customers based on client domicile | Long-lived assets as of June 30, 2024 and December 31, 2023 by geographic region were comprised of (in thousands): June 30, December 31, 2024 2023 United States $ 10,222 $ 9,101 Foreign countries: Canada 6,806 7,328 United Kingdom 922 1,028 Philippines 3,591 3,484 India 1,717 1,791 Sri Lanka 548 423 Israel 46 13 Total foreign 13,630 14,067 Totals $ 23,852 $ 23,168 |
Income (Loss) Per Share (Tables
Income (Loss) Per Share (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Income (Loss) Per Share | |
Schedule of loss per share, basic and diluted | The calculation of the dilutive effect of outstanding options is shown in the table below (in thousands): For the Three Months Ended For the Six Months Ended June 30, June 30, 2024 2023 2024 2023 Net income (loss) attributable to Innodata Inc. and Subsidiaries $ (14) $ (815) $ 975 $ (2,931) Weighted average common shares outstanding 28,878 27,860 28,819 27,661 Dilutive effect of outstanding options - - 3,872 - Adjusted for dilutive computation 28,878 27,860 32,691 27,661 |
Derivatives (Tables)
Derivatives (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023 (in thousands): Balance Sheet Location Fair Value June 30, December 31, 2024 2023 Derivatives designated as hedging instruments: Foreign currency forward contracts Accrued expenses $ 167 $ - 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 condensed consolidated statements of operations for the three and six months ended June 30, 2024 and 2023 were as follows (in thousands): For the Three Months Ended For the Six Months Ended June 30, June 30, 2024 2023 2024 2023 Net gain (loss) recognized in OCI (1) $ (193) $ 2 $ (206) $ 244 Net (gain) loss reclassified from accumulated OCI into income (2) $ 19 $ 106 $ (2) $ 287 Net gain recognized in income (3) $ - $ - $ - $ - (1) Net change in fair value of the effective portion classified into other comprehensive income (“OCI”). (2) Effective portion classified within direct operating costs. (3) There were no ineffective portions for the period presented. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies and Estimates (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | |
Description of Business and Summary of Significant Accounting Estimates and Policies | ||||||||
Amortization period | 12 months | 12 months | ||||||
Prepaid expenses and other current assets on contract acquisition costs | $ 800 | $ 800 | $ 800 | |||||
Foreign exchange (gains) losses | (389,000) | $ 18,000 | (329,000) | $ 327,000 | ||||
Deferred revenue | 4,770 | $ 3,036 | 4,770 | $ 3,036 | $ 6,668 | 3,523 | $ 4,189 | $ 4,366 |
Capitalized software development | ||||||||
Description of Business and Summary of Significant Accounting Estimates and Policies | ||||||||
Cost | 18,500 | 18,500 | 15,200 | |||||
In process research and development | ||||||||
Description of Business and Summary of Significant Accounting Estimates and Policies | ||||||||
Cost | $ 2,800 | $ 2,800 | $ 3,500 | |||||
Minimum | Capitalized software development | ||||||||
Description of Business and Summary of Significant Accounting Estimates and Policies | ||||||||
Estimated useful life of intangibles | 3 years | 3 years | ||||||
Maximum | Capitalized software development | ||||||||
Description of Business and Summary of Significant Accounting Estimates and Policies | ||||||||
Estimated useful life of intangibles | 10 years | 10 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies and Estimates - Deferred revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Summary of Significant Accounting Policies and Estimates | ||||
Balance at the beginning of period | $ 6,668 | $ 4,189 | $ 3,523 | $ 4,366 |
Net deferred revenue in the period | 580 | 5,474 | 15,328 | 8,059 |
Revenue recognized | (2,467) | (6,756) | (13,990) | (9,500) |
Currency translations and other adjustments | (11) | 129 | (91) | 111 |
Balance at the end of period | $ 4,770 | $ 3,036 | $ 4,770 | $ 3,036 |
Short Term Investments - othe_2
Short Term Investments - other (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Short Term Investments - other | ||
Certificates of deposit | $ 14 | $ 14 |
Total | $ 14 | $ 14 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Mar. 31, 2024 | Dec. 31, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Accounts Receivable | ||||||
Gross Accounts receivable | $ 19,595 | $ 15,505 | ||||
Allowance for credit losses | (1,433) | $ (1,225) | (1,217) | $ (1,220) | $ (1,166) | $ (1,213) |
Accounts receivable, net | $ 18,162 | $ 14,288 |
Accounts Receivable - Activity
Accounts Receivable - Activity in allowance for credit losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Accounts Receivable | ||||
Balance at beginning of period | $ 1,225 | $ 1,166 | $ 1,217 | $ 1,213 |
Additions charged to expense | 219 | 152 | 234 | 332 |
Write-offs against allowance | (10) | (101) | (17) | (331) |
Foreign currency translation adjustment | (1) | 3 | (1) | 6 |
Balance at beginning of period | $ 1,433 | $ 1,220 | $ 1,433 | $ 1,220 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Changes in carrying amount of goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Goodwill and Intangible Assets | |
Balance - January 1, 2024 | $ 2,075 |
Foreign currency translation adjustment | (31) |
Balance - June 30, 2024 | $ 2,044 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Acquisition-related intangible assets (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Goodwill and Intangible Assets | ||
Gross Carrying Value | $ 31,000 | $ 28,178 |
Accumulated Amortization | (16,861) | (14,582) |
Foreign Currency Translation Adjustment | (229) | 162 |
Net Carrying Value | 13,910 | 13,758 |
Acquired Intangible Assets | ||
Goodwill and Intangible Assets | ||
Gross Carrying Value | 9,656 | 9,482 |
Accumulated Amortization | (8,304) | (7,720) |
Foreign Currency Translation Adjustment | (19) | 35 |
Net Carrying Value | 1,333 | 1,797 |
Developed technology | ||
Goodwill and Intangible Assets | ||
Gross Carrying Value | 3,060 | 2,999 |
Accumulated Amortization | (2,845) | (2,640) |
Foreign Currency Translation Adjustment | (3) | 7 |
Net Carrying Value | 212 | 366 |
Customer relationships | ||
Goodwill and Intangible Assets | ||
Gross Carrying Value | 2,144 | 2,096 |
Accumulated Amortization | (1,770) | (1,645) |
Foreign Currency Translation Adjustment | (16) | 10 |
Net Carrying Value | 358 | 461 |
Trademarks and tradenames | ||
Goodwill and Intangible Assets | ||
Gross Carrying Value | 862 | 852 |
Accumulated Amortization | (809) | (774) |
Foreign Currency Translation Adjustment | 2 | |
Net Carrying Value | 53 | 80 |
Patents | ||
Goodwill and Intangible Assets | ||
Gross Carrying Value | 44 | 43 |
Accumulated Amortization | (43) | (40) |
Net Carrying Value | 1 | 3 |
Media Contact Database | ||
Goodwill and Intangible Assets | ||
Gross Carrying Value | 3,546 | 3,492 |
Accumulated Amortization | (2,837) | (2,621) |
Foreign Currency Translation Adjustment | 16 | |
Net Carrying Value | 709 | 887 |
Capitalized Developed Software | ||
Goodwill and Intangible Assets | ||
Gross Carrying Value | 21,344 | 18,696 |
Accumulated Amortization | (8,557) | (6,862) |
Foreign Currency Translation Adjustment | (210) | 127 |
Net Carrying Value | 12,577 | 11,961 |
Capitalized Developed Software | ||
Goodwill and Intangible Assets | ||
Gross Carrying Value | 18,504 | 15,216 |
Accumulated Amortization | (8,557) | (6,862) |
Foreign Currency Translation Adjustment | (206) | 138 |
Net Carrying Value | 9,741 | 8,492 |
Capitalized Developed Software - in Progress | ||
Goodwill and Intangible Assets | ||
Gross Carrying Value | 2,840 | 3,480 |
Foreign Currency Translation Adjustment | (4) | (11) |
Net Carrying Value | $ 2,836 | $ 3,469 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Estimated amortization expense (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Goodwill and Intangible Assets | ||
2024 | $ 3,222 | |
2025 | 4,714 | |
2026 | 3,446 | |
2027 | 1,168 | |
2028 | 688 | |
Thereafter | 672 | |
Net Carrying Value | $ 13,910 | $ 13,758 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Goodwill and Intangible Assets | |||||
Goodwill | $ 2,044 | $ 2,044 | $ 2,075 | ||
Acquired Intangible Assets | |||||
Goodwill and Intangible Assets | |||||
Amortization expense | 200 | $ 200 | 400 | $ 400 | |
Capitalized Developed Software | |||||
Goodwill and Intangible Assets | |||||
Amortization expense | $ 800 | $ 600 | $ 1,600 | $ 1,200 |
Income Taxes - Tax rate reconci
Income Taxes - Tax rate reconciliation (Details) | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Income Taxes | ||
Federal income tax expense (benefit) at statutory rate | 21% | (21.00%) |
Effect of: | ||
GILTI provisions | 17.60% | |
Tax effects of foreign operations | 7.10% | 3.80% |
Change in valuation allowance | 6.40% | 51.30% |
Increase in unrecognized tax benefits (ASC 740) | 5.50% | 2.60% |
State income tax net of federal benefit | 0.80% | 0.40% |
Foreign rate differential | (1.40%) | (1.50%) |
Effect of stock-based compensation | (2.90%) | (22.70%) |
Return to provision true up | (3.20%) | (0.60%) |
Deemed interest | (5.20%) | (7.10%) |
Foreign operations permanent differences - foreign exchange gains and losses | (7.90%) | 4.70% |
Other | 4.20% | 6.20% |
Effective tax rate | 42% | 16.10% |
U.S. federal | ||
Income Taxes | ||
Federal income tax expense (benefit) at statutory rate | 21% |
Income Taxes - Unrecognized tax
Income Taxes - Unrecognized tax benefits (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Income Taxes | |
Balance at January 1, 2024 | $ 1,942 |
Increase for current period tax positions | 115 |
Decrease for prior year tax positions | (81) |
Interest accrual | 59 |
Foreign currency remeasurement | (22) |
Balance at June 30, 2024 | $ 2,013 |
Operating Leases (Details)
Operating Leases (Details) | 6 Months Ended |
Jun. 30, 2024 | |
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 | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Operating Leases | ||||
Total rent expense | $ 358 | $ 395 | $ 719 | $ 799 |
Long-term operating leases | ||||
Operating Leases | ||||
Total rent expense | 314 | 312 | 628 | 621 |
Short-term operating leases | ||||
Operating Leases | ||||
Total rent expense | $ 44 | $ 83 | $ 91 | $ 178 |
Operating Leases - Net present
Operating Leases - Net present value of the operating lease liability (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Operating Leases | ||
2024 | $ 644 | |
2025 | 1,305 | |
2026 | 1,336 | |
2027 | 1,334 | |
2028 | 964 | |
2029 and thereafter | 870 | |
Total lease payments | 6,453 | |
Less: Interest | (1,378) | |
Net present value of lease liabilities | 5,075 | |
Current portion | 828 | $ 782 |
Long-term portion | 4,247 | $ 4,701 |
Total | $ 5,075 |
Operating Leases - Weighted ave
Operating Leases - Weighted average remaining lease terms (Details) | Jun. 30, 2024 |
Operating Leases | |
Weighted-average lease term remaining (in months) | 57 months |
Weighted-average discount rate | 9.39% |
Long-term obligations (Details)
Long-term obligations (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Long-term obligations | ||
Pension obligations - accrued pension liability | $ 7,412 | $ 7,128 |
Microsoft licenses | 732 | 911 |
Total long-term obligations | 8,144 | 8,039 |
Less: Current portion of long-term obligations | 1,149 | 1,261 |
Totals | 6,995 | $ 6,778 |
Microsoft licenses, Amount payable annually over the term of the agreement | $ 400 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Commitments and Contingencies | |
Estimated litigation liability | $ 5,600,000 |
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 |
Stock Options and Restricted _3
Stock Options and Restricted Stock Units - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Derivatives, Fair Value | ||||
Total stock-based compensation | $ 2,026 | $ 1,981 | ||
Equity Plans | ||||
Derivatives, Fair Value | ||||
Direct operating costs | $ 73 | $ 62 | 157 | 126 |
Selling and administrative expenses | 919 | 957 | 1,869 | 1,855 |
Total stock-based compensation | $ 992 | $ 1,019 | $ 2,026 | $ 1,981 |
Stock Options and Restricted _4
Stock Options and Restricted Stock Units - Summary of Stock Option Activity (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Stock Options | ||||
Number of Options, Granted (in shares) | 0 | |||
Number of Options, Exercised (in shares) | (202,329) | |||
Weighted Average Exercise Price Exercised (in dollars per shares) | $ 3.87 | |||
Employee Stock Option | 2013 Stock Plan | ||||
Stock Options | ||||
Number of Options, Outstanding - Beginning balance (in shares) | 5,339,162 | 6,690,490 | 6,690,490 | |
Number of Options, Granted (in shares) | 25,000 | |||
Number of Options, Exercised (in shares) | (155,899) | (871,884) | ||
Number of Options, Forfeited/Expired (in shares) | (4,001) | (75,766) | ||
Number of Options, Outstanding - Ending balance (in shares) | 5,179,262 | 5,767,840 | 5,339,162 | 6,690,490 |
Number of Options Exercisable (in shares) | 3,402,382 | 3,600,261 | ||
Number of Options, Vested and Expected to Vest (in shares) | 5,179,262 | 5,767,840 | ||
Weighted Average Exercise Price Outstanding beginning balance (in dollars per shares) | $ 3.22 | $ 3.09 | $ 3.09 | |
Weighted Average Exercise Price Granted (in dollars per shares) | 3.31 | |||
Weighted Average Exercise Price Exercised (in dollars per shares) | 4 | 2.34 | ||
Weighted Average Exercise Price Forfeited/Expired (in dollars per shares) | 6.96 | 6.96 | ||
Weighted Average Exercise Price Outstanding Ending balance (in dollars per shares) | 3.19 | 3.16 | $ 3.22 | $ 3.09 |
Weighted Average Exercise Price Exercisable (in dollars per shares) | 2.20 | 1.91 | ||
Weighted Average Exercise Price Vested and Expected to Vest (in dollars per shares) | $ 3.19 | $ 3.16 | ||
Weighted Average Remaining Contractual Term Outstanding (in years) | 5 years 10 months 13 days | 6 years 10 months 2 days | 6 years 4 months 17 days | 7 years 2 months 8 days |
Weighted Average Remaining Contractual Term Exercisable (in years) | 4 years 11 months 1 day | 5 years 8 months 23 days | ||
Weighted Average Remaining Contractual Term Vested and Expected to Vest (in years) | 5 years 10 months 13 days | 6 years 10 months 2 days | ||
Aggregate Intrinsic Value, Outstanding | $ 60,291,271 | $ 47,137,674 | $ 28,640,009 | $ 5,989,709 |
Aggregate Intrinsic Value, Exercisable | 42,967,259 | 33,897,858 | ||
Aggregate Intrinsic Value, Vested and Expected to Vest | $ 60,291,271 | $ 47,137,674 | ||
Employee Stock Option | 2021 Stock Plan | ||||
Stock Options | ||||
Number of Options, Outstanding - Beginning balance (in shares) | 923,571 | 1,027,500 | 1,027,500 | |
Number of Options, Exercised (in shares) | (46,430) | (25,000) | ||
Number of Options, Forfeited/Expired (in shares) | (7,668) | (42,000) | ||
Number of Options, Outstanding - Ending balance (in shares) | 869,473 | 960,500 | 923,571 | 1,027,500 |
Number of Options Exercisable (in shares) | 339,779 | 18,750 | ||
Number of Options, Vested and Expected to Vest (in shares) | 869,473 | 960,500 | ||
Weighted Average Exercise Price Outstanding beginning balance (in dollars per shares) | $ 3.41 | $ 3.46 | $ 3.46 | |
Weighted Average Exercise Price Exercised (in dollars per shares) | 3.41 | 6.40 | ||
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 | 3.38 | $ 3.41 | $ 3.46 |
Weighted Average Exercise Price Exercisable (in dollars per shares) | 3.33 | 3.39 | ||
Weighted Average Exercise Price Vested and Expected to Vest (in dollars per shares) | $ 3.41 | $ 3.38 | ||
Weighted Average Remaining Contractual Term Outstanding (in years) | 8 years 3 months 7 days | 9 years 3 months 7 days | 8 years 9 months 3 days | 9 years 9 months |
Weighted Average Remaining Contractual Term Exercisable (in years) | 8 years 2 months 26 days | 9 years 2 months 15 days | ||
Weighted Average Remaining Contractual Term Vested and Expected to Vest (in years) | 8 years 3 months 7 days | 9 years 3 months 7 days | ||
Aggregate Intrinsic Value, Outstanding | $ 9,927,362 | $ 7,634,060 | $ 4,786,252 | |
Aggregate Intrinsic Value, Exercisable | 3,907,176 | 148,875 | ||
Aggregate Intrinsic Value, Vested and Expected to Vest | $ 9,927,362 | $ 7,634,060 |
Stock Options and Restricted _5
Stock Options and Restricted Stock Units - Weighted Average Fair Values and Assumptions (Details) - Employee Stock Option - $ / shares | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Stock Options | ||
Weighted average fair value of options granted (in dollars per share) | $ 1.79 | |
Risk-free interest rate | 3.88% | |
Expected term (years) | 0 years | 3 years |
Expected volatility factor | 79.95% |
Stock Options and Restricted _6
Stock Options and Restricted Stock Units - Summary of stock option and Restricted Stock option activity (Details) - Restricted Stock Units - Equity Plans - $ / shares | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Stock Options | ||
Number of Restricted Stock Units, Unvested at Beginning of the year | 749,756 | 700,000 |
Number of Restricted Stock Units, Granted | 28,973 | 28,804 |
Number of Restricted Stock Units, Vested | (48,761) | |
Number of Restricted Stock Units, Forfeited/Expired | (995) | |
Number of Restricted Stock Units, Unvested at End of the year | 728,973 | 728,804 |
Weighted-Average Grant Date Fair Value, Outstanding at Beginning of the year | $ 5.77 | $ 5.59 |
Weighted-Average Grant Date Fair Value, Granted | 15.10 | 8.29 |
Weighted-Average Grant Date Fair Value, Vested | 8.42 | |
Weighted-Average Grant Date Fair Value, Forfeited/Expired | 8.29 | |
Weighted-Average Grant Date Fair Value, Outstanding at End of the year | $ 5.96 | $ 5.70 |
Stock Options and Restricted _7
Stock Options and Restricted Stock Units - Additional Information (Details) - USD ($) $ in Millions | 6 Months Ended | |||
Jun. 30, 2024 | Dec. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | |
Restricted Stock Units | ||||
Stock Options | ||||
Compensation cost related to non-vested stock options and restricted stock awards not yet recognized | $ 2.8 | |||
Weighted-average period over which compensation cost recognized | 8 months | |||
Employee Stock Option | ||||
Stock Options | ||||
Compensation cost related to non-vested stock options and restricted stock awards not yet recognized | $ 1.9 | |||
Weighted-average period over which compensation cost recognized | 11 months | |||
2013 Stock Plan | Restricted Stock Units | ||||
Stock Options | ||||
Number of Options, Outstanding | 200,000 | |||
2013 Stock Plan | Employee Stock Option | ||||
Stock Options | ||||
Number of Options, Outstanding | 5,179,262 | 5,339,162 | 5,767,840 | 6,690,490 |
2021 Stock Plan | Restricted Stock Units | ||||
Stock Options | ||||
Number of Options, Outstanding | 528,973 | |||
2021 Stock Plan | Employee Stock Option | ||||
Stock Options | ||||
Number of Options, Outstanding | 869,473 | 923,571 | 960,500 | 1,027,500 |
Comprehensive income (loss) - R
Comprehensive income (loss) - Reclassifications from accumulated other comprehensive loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Comprehensive loss | ||||
Balance at the beginning | $ 27,561 | $ 18,418 | $ 25,703 | $ 18,773 |
Balance at the end | 28,973 | 20,651 | 28,973 | 20,651 |
Pension Liability Adjustment | ||||
Comprehensive loss | ||||
Balance at the beginning | (413) | (91) | (412) | (86) |
Total other comprehensive income (loss) before reclassifications, net of taxes | (413) | (91) | (412) | (86) |
Net amount reclassified to earnings | (4) | (1) | (9) | |
Balance at the end | (413) | (95) | (413) | (95) |
Fair Value of Derivatives | ||||
Comprehensive loss | ||||
Balance at the beginning | 7 | 58 | 41 | (365) |
Other comprehensive income (loss) before reclassifications, net of taxes | (193) | 2 | (206) | 244 |
Total other comprehensive income (loss) before reclassifications, net of taxes | (186) | 60 | (165) | (121) |
Net amount reclassified to earnings | 19 | 106 | (2) | 287 |
Balance at the end | (167) | 166 | (167) | 166 |
Foreign Currency Translation Adjustment | ||||
Comprehensive loss | ||||
Balance at the beginning | (1,380) | (1,597) | (1,250) | (1,657) |
Other comprehensive income (loss) before reclassifications, net of taxes | (78) | 67 | (208) | 127 |
Total other comprehensive income (loss) before reclassifications, net of taxes | (1,458) | (1,530) | (1,458) | (1,530) |
Balance at the end | (1,458) | (1,530) | (1,458) | (1,530) |
Accumulated Other Comprehensive Loss | ||||
Comprehensive loss | ||||
Balance at the beginning | (1,786) | (1,630) | (1,621) | (2,108) |
Other comprehensive income (loss) before reclassifications, net of taxes | (271) | 69 | (414) | 371 |
Total other comprehensive income (loss) before reclassifications, net of taxes | (2,057) | (1,561) | (2,035) | (1,737) |
Net amount reclassified to earnings | 19 | 102 | (3) | 278 |
Balance at the end | $ (2,038) | $ (1,459) | $ (2,038) | $ (1,459) |
Segment reporting and concent_3
Segment reporting and concentrations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Segment reporting and concentrations | |||||
Revenues | $ 32,553 | $ 19,655 | $ 59,057 | $ 38,494 | |
Income (loss) before provision for income taxes | 276 | (627) | 1,690 | (2,522) | |
Total assets | 65,973 | 65,973 | $ 59,431 | ||
Goodwill | 2,044 | 2,044 | 2,075 | ||
Before intersegment eliminations | |||||
Segment reporting and concentrations | |||||
Income (loss) before provision for income taxes | 276 | (627) | 1,690 | (2,522) | |
After intersegment eliminations | |||||
Segment reporting and concentrations | |||||
Income (loss) before provision for income taxes | 276 | (627) | 1,690 | (2,522) | |
DDS | |||||
Segment reporting and concentrations | |||||
Total assets | 42,925 | 42,925 | 37,232 | ||
DDS | Operating Segments | |||||
Segment reporting and concentrations | |||||
Revenues | 25,410 | 13,180 | 45,116 | 25,927 | |
DDS | Before intersegment eliminations | |||||
Segment reporting and concentrations | |||||
Income (loss) before provision for income taxes | (27) | (216) | 972 | (497) | |
DDS | After intersegment eliminations | |||||
Segment reporting and concentrations | |||||
Income (loss) before provision for income taxes | (172) | (368) | 676 | (792) | |
Synodex | |||||
Segment reporting and concentrations | |||||
Total assets | 3,759 | 3,759 | 3,379 | ||
Synodex | Operating Segments | |||||
Segment reporting and concentrations | |||||
Revenues | 1,986 | 2,112 | 3,857 | 3,976 | |
Synodex | Before intersegment eliminations | |||||
Segment reporting and concentrations | |||||
Income (loss) before provision for income taxes | 195 | (22) | 345 | (133) | |
Synodex | After intersegment eliminations | |||||
Segment reporting and concentrations | |||||
Income (loss) before provision for income taxes | 316 | 121 | 592 | 135 | |
Agility | |||||
Segment reporting and concentrations | |||||
Total assets | 19,289 | 19,289 | 18,820 | ||
Goodwill | 2,044 | 2,044 | $ 2,075 | ||
Agility | Operating Segments | |||||
Segment reporting and concentrations | |||||
Revenues | 5,157 | 4,363 | 10,084 | 8,591 | |
Agility | Before intersegment eliminations | |||||
Segment reporting and concentrations | |||||
Income (loss) before provision for income taxes | 108 | (389) | 373 | (1,892) | |
Agility | After intersegment eliminations | |||||
Segment reporting and concentrations | |||||
Income (loss) before provision for income taxes | $ 132 | $ (380) | $ 422 | $ (1,865) |
Segment reporting and concent_4
Segment reporting and concentrations - Long-lived assets (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Segment reporting and concentrations | ||
Long - lived assets | $ 23,852 | $ 23,168 |
United States | ||
Segment reporting and concentrations | ||
Long - lived assets | 10,222 | 9,101 |
Canada | ||
Segment reporting and concentrations | ||
Long - lived assets | 6,806 | 7,328 |
United Kingdom | ||
Segment reporting and concentrations | ||
Long - lived assets | 922 | 1,028 |
Philippines | ||
Segment reporting and concentrations | ||
Long - lived assets | 3,591 | 3,484 |
India | ||
Segment reporting and concentrations | ||
Long - lived assets | 1,717 | 1,791 |
Sri Lanka | ||
Segment reporting and concentrations | ||
Long - lived assets | 548 | 423 |
Israel | ||
Segment reporting and concentrations | ||
Long - lived assets | 46 | 13 |
Total foreign | ||
Segment reporting and concentrations | ||
Long - lived assets | $ 13,630 | $ 14,067 |
Segment reporting and concent_5
Segment reporting and concentrations - Revenues by geographic region (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Segment reporting and concentrations | ||||
Revenues | $ 32,553 | $ 19,655 | $ 59,057 | $ 38,494 |
United States | ||||
Segment reporting and concentrations | ||||
Revenues | 23,804 | 10,960 | 41,673 | 22,196 |
United Kingdom | ||||
Segment reporting and concentrations | ||||
Revenues | 2,364 | 2,898 | 4,614 | 5,453 |
Canada | ||||
Segment reporting and concentrations | ||||
Revenues | 2,284 | 1,762 | 4,510 | 3,485 |
The Netherlands | ||||
Segment reporting and concentrations | ||||
Revenues | 2,005 | 2,193 | 4,044 | 3,805 |
Others - principally other European countries | ||||
Segment reporting and concentrations | ||||
Revenues | $ 2,096 | $ 1,842 | $ 4,216 | $ 3,555 |
Segment reporting and concent_6
Segment reporting and concentrations - Additional information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2024 USD ($) customer | Jun. 30, 2023 | Jun. 30, 2024 USD ($) customer segment | Jun. 30, 2023 customer | Dec. 31, 2023 USD ($) customer | |
Segment reporting and concentrations | |||||
Number of reporting segments | segment | 3 | ||||
Right-of-use-asset, net | $ | $ 4,627 | $ 4,627 | $ 5,054 | ||
Sales revenue, net | Customer concentration risk | Non-US | |||||
Segment reporting and concentrations | |||||
Concentration risk, percentage | 27% | 44% | 29% | 42% | |
Foreign customer | Accounts receivable | Customer concentration risk | |||||
Segment reporting and concentrations | |||||
Concentration risk, percentage | 22% | 31% | |||
One customer | Sales revenue, net | Customer concentration risk | |||||
Segment reporting and concentrations | |||||
Number of clients | 1 | 1 | |||
Concentration risk, percentage | 38% | 10% | 31% | ||
Two customer | Sales revenue, net | Customer concentration risk | |||||
Segment reporting and concentrations | |||||
Number of clients | 2 | ||||
Concentration risk, percentage | 10.70% | ||||
Other customer | Sales revenue, net | Customer concentration risk | |||||
Segment reporting and concentrations | |||||
Concentration risk, percentage | 10.60% | ||||
Three customer | Accounts receivable | Customer concentration risk | |||||
Segment reporting and concentrations | |||||
Number of clients | 2 | ||||
Concentration risk, percentage | 47% | ||||
Four customer | Accounts receivable | Customer concentration risk | |||||
Segment reporting and concentrations | |||||
Number of clients | 3 | ||||
Concentration risk, percentage | 53% | ||||
Customer | Customer concentration risk | United States | |||||
Segment reporting and concentrations | |||||
Number of clients | 0 | 0 | |||
Customer | Accounts receivable | Customer concentration risk | |||||
Segment reporting and concentrations | |||||
Number of clients | 0 | ||||
Customer | Minimum | Sales revenue, net | Customer concentration risk | |||||
Segment reporting and concentrations | |||||
Concentration risk, percentage | 10% | 10% | |||
Customer | Minimum | Accounts receivable | Customer concentration risk | |||||
Segment reporting and concentrations | |||||
Concentration risk, percentage | 10% |
Income (Loss) Per Share (Detail
Income (Loss) Per Share (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income (Loss) Per Share | ||||
Net loss attributable to Innodata Inc. and Subsidiaries | $ (14) | $ (815) | $ 975 | $ (2,931) |
Weighted average common shares outstanding | 28,878 | 27,860 | 28,819 | 27,661 |
Dilutive effect of outstanding options | 3,872 | |||
Adjusted for dilutive computation | 28,878 | 27,860 | 32,691 | 27,661 |
Income (Loss) Per Share - Addit
Income (Loss) Per Share - Additional information (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Employee Stock Option | ||||
Antidilutive securities excluded from computation of earnings per share | ||||
Computation of diluted loss per share | 6,000,000 | 6,700,000 | 3,000 | 6,700,000 |
Derivatives - Additional Inform
Derivatives - Additional Information (Details) - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Derivatives | ||
Derivative notional amount | $ 10.2 | $ 10.5 |
Derivatives - Fair value of der
Derivatives - Fair value of derivative instruments (Details) - Foreign currency forward contracts - Designated as hedging instrument - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Accrued expenses and other | ||
Derivatives, Fair Value | ||
Derivatives designated as hedging instruments | $ 167 | |
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 | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Derivatives | ||||
Net gain (loss) recognized in OCI | $ (193) | $ 2 | $ (206) | $ 244 |
Net loss reclassified from accumulated OCI into income | $ 19 | $ 106 | $ (2) | $ 287 |
Line Of Credit (Details)
Line Of Credit (Details) - Revolving Credit Facility $ in Millions | Apr. 04, 2023 USD ($) | Jun. 30, 2024 USD ($) |
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 | |
Interest rate | 2.25% | |
Debt Instrument, Variable Interest Rate, Type [Extensible Enumeration] | us-gaap:SecuredOvernightFinancingRateSofrMember |
Subsequent Event - (Details)
Subsequent Event - (Details) - Revolving Credit Facility - USD ($) $ in Millions | Aug. 05, 2024 | Jun. 30, 2024 | Apr. 04, 2023 |
Subsequent Event | |||
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% | ||
Line of credit facility, borrowing base | $ 12.4 | ||
Subsequent event | |||
Subsequent Event | |||
Maximum borrowing capacity | $ 30 | ||
Maximum borrowing capacity subject to approval of the lender | $ 50 | ||
Percentage of eligible accounts considered for determination of borrowing base | 85% | ||
Percentage of eligible unbilled accounts considered for determination of borrowing base | 80% | ||
Percentage of all eligible unbilled accounts considered for determination of borrowing base | 30% | ||
Percentage of eligible foreign accounts considered for determination of borrowing base | 85% | ||
Percentage of all eligible foreign accounts considered for determination of borrowing base | 20% | ||
Amount of all eligible foreign accounts considered for determination of borrowing base | $ 4 |