INNODATA INC
For the period ended Jun 30, 2025. Filed Jul 31, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Jul 31, 2025
INOD$37.03-4.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-09.
0001410578-25-001113
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-07-31.
0001410578-25-001550
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 117 previous paragraphs and 160 current paragraphs.
73 unchanged; 32 reworded; 45 added; 12 removed; 0 previous and 10 current paragraphs rearranged.
Tables are not compared: 9 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (45)
Current report
Total revenues were $58.4 million and $32.6 million for the three months ended June 30, 2025 and 2024, respectively, an increase of $25.8 million or approximately 79%.
Current report
Direct operating costs were $35.4 million and $23.2 million for the three months ended June 30, 2025 and 2024, respectively, an increase of $12.2 million or 53%. The cost increase was primarily due to increased headcount to support higher volumes from an existing customer. The increase in direct operating costs includes $13.9 million from direct and indirect labor related costs primarily on account of new hires, higher incentives, salary increases and severance, an unfavorable impact of foreign exchange rate fluctuations of $0.6 million; higher cloud service subscriptions of $0.5 million; higher depreciation and amortization of capitalized developed software of $0.2 million; and an increase in other direct operating costs of $0.2 million; offset in part by lower recruitment fees of $3.2 million. Direct operating costs as a percentage of total revenues were 61% and 71% for the three months ended June 30, 2025 and 2024, respectively. The decrease in direct operating cost as a percentage of total revenues was primarily due to higher revenues in all segments, offset in part by higher direct operating costs in all segments.
Current report
Direct operating costs for the DDS segment were $31.2 million and $19.3 million for the three months ended June 30, 2025 and 2024, respectively, an increase of $11.9 million or 62%. The cost increase was primarily due to increased headcount to support higher volumes from an existing customer. The increase in direct operating costs includes $13.7 million from direct and indirect labor related costs primarily on account of new hires, higher incentives, salary increases and severance; an unfavorable impact of foreign exchange rate fluctuations of $0.6 million; higher cloud service subscriptions of $0.4 million; higher depreciation and amortization of capitalized developed software of $0.2 million; and an increase in other direct operating costs of $0.2 million; offset in part by lower recruitment fees of $3.2 million. Direct operating costs for the DDS segment as a percentage of DDS segment revenues were 62% and 76% for the three months ended June 30, 2025 and 2024, respectively. The decrease in direct operating costs of the DDS segment as a percentage of DDS segment revenues was primarily attributable to higher revenues, offset in part by higher direct operating costs.
Current report
Direct operating costs for the Synodex segment were $1.6 million and $1.5 million for the three months ended June 30, 2025 and 2024, respectively, an increase of $0.1 million or 7%. The increase in direct operating costs includes $0.1 million from direct and indirect labor related costs and higher cloud service subscriptions of $0.1 million; offset in part by a decrease in other direct operating costs of $0.1 million. Direct operating costs for the Synodex segment as a percentage of Synodex segment revenues were 76% and 75% for the three months ended June 30, 2025 and 2024, respectively. The increase in direct operating costs of the Synodex segment as a percentage of Synodex segment revenues was due to higher direct operating costs offset by higher revenues.
Current report
Gross profit was $23.0 million and $9.3 million for the three months ended June 30, 2025 and 2024, respectively. The $13.7 million increase in gross profit was primarily due to higher revenues in all segments, offset in part by higher direct operating costs in all segments. Gross margin was 39% and 29% for the three months ended June 30, 2025 and 2024, respectively. The increase in gross margin was primarily due to higher revenues in all segments, offset in part by higher direct operating costs in all segments.
Current report
Gross profit for the DDS segment was $19.3 million and $6.1 million for the three months ended June 30, 2025 and 2024, respectively. The $13.2 million increase in gross profit for the DDS segment was primarily due to higher revenues, offset in part by higher direct operating costs. Gross margin for the DDS segment was 38% and 24% for the three months ended June 30, 2025 and 2024, respectively. The increase in gross margin for the DDS segment as a percentage of revenues was primarily due to higher revenues, offset in part by higher direct operating costs.
Current report
Gross profit for the Synodex segment was $0.5 million for each of the three-month periods ended June 30, 2025 and 2024, respectively. Gross margin for the Synodex segment was 24% and 23% for the three months ended June 30, 2025 and 2024, respectively. The increase in gross margin for the Synodex segment as a percentage of revenues was primarily due to higher revenues offset by higher direct operating cost.
Current report
Gross profit for the Agility segment was $3.2 million and $2.8 million for the three months ended June 30, 2025 and 2024, respectively. The $0.4 million increase in gross profit for the Agility segment was primarily due to higher revenues, offset in part by higher direct operating costs. Gross margin for the Agility segment was 55% for each of the three-month periods ended June 30, 2025 and 2024.
Current report
Selling and administrative expenses were $14.1 million and $9.0 million for the three months ended June 30, 2025 and 2024, respectively, an increase of $5.1 million or 57%. The increase in selling and administrative expenses was primarily due to higher expenses associated with the increase in revenues. The increase in selling and administrative expenses includes higher selling and administrative payroll and related expenses of $3.2 million, primarily on account of new hires, salary increases, incentives and bonuses; higher professional fees of $1.6 million; higher subscriptions of $0.3 million; higher expenses for marketing-related activities of $0.1 million; offset in part by a favorable impact of foreign exchange rate fluctuations of $0.1 million. Selling and administrative expenses as a percentage of total revenues were 24% and 28% for the three months ended June 30, 2025 and 2024, respectively. The decrease in selling and administrative expenses as a percentage of total revenues was primarily attributable to higher revenues in all segments, offset in part by higher selling and administrative expenses in the DDS and Agility segments.
Current report
Selling and administrative expenses for the DDS segment were $10.5 million and $6.2 million for the three months ended June 30, 2025 and 2024, respectively, an increase of $4.3 million or 69%. The increase in selling and administrative expenses was primarily due to higher expenses associated with the increase in revenues. The increase in selling and administrative expenses includes higher selling and administrative payroll and related expenses of $2.5 million, primarily on account of new hires, salary increases, incentives and bonuses; higher professional fees of $1.5 million; higher subscriptions of $0.3 million; higher expenses for marketing-related activities of $0.1 million; offset in part by a decrease in other selling and administrative expenses of $0.1 million. Selling and administrative expenses for the DDS segment as a percentage of DDS segment revenues were 21% and 24% for the three months ended June 30, 2025 and 2024, respectively. The decrease in selling and administrative expenses of the DDS segment as a percentage of DDS segment revenues was primarily attributable to higher revenues, offset in part by higher selling and administrative expenses.
Current report
Selling and administrative expenses for the Synodex segment were $0.1 million for each of the three-month periods ended June 30, 2025 and 2024. Selling and administrative expenses for the Synodex segment as a percentage of Synodex segment revenues were 5% for each of the three-month periods ended June 30, 2025 and 2024.
Current report
We recorded a provision for income taxes of $2.3 million and $0.3 million for the three months ended June 30, 2025 and 2024, respectively. The provision for the current quarter primarily reflects Federal and State income tax expense on U.S. operations, income tax expense attributable to the Company’s subsidiaries in foreign jurisdictions in accordance with applicable local tax regulations, including the tax impact of IRS section 162(m) adjustments and Global Intangible Low-Taxed Income (“GILTI”) inclusions. The tax provision was partially offset by the favorable effect of stock-based compensation, change in tax rates and the release of valuation allowances on deferred tax assets of the Company’s German subsidiary, resulting from improved expectations of future taxable income in the German jurisdiction, and additional accruals for uncertain tax positions, in accordance with ASC 740.
Current report
Although the Company generated taxable income in the United States during the period, the related current tax liability was partially offset by deferred tax assets arising from the net operating loss carryforwards (“NOLCOs”).
Current report
Adjusted EBITDA was $13.2 million and $2.8 million for the three months ended June 30, 2025 and 2024, respectively. The $10.4 million increase in Adjusted EBITDA was due to higher net income, higher income tax provision, higher stock-based compensation and higher depreciation and amortization, offset in part by higher interest income in the current quarter.
Current report
Adjusted EBITDA for the DDS segment was $12.2 million and $1.3 million for the three months ended June 30, 2025 and 2024, respectively. The $10.9 million increase in Adjusted EBITDA in the DDS Segment was due to higher net income, higher income tax provision, higher stock-based compensation, and higher depreciation and amortization, offset in part by higher interest income in the current quarter.
Current report
Six Months Ended June 30, 2025 and 2024
Current report
Revenues
Current report
Total revenues were $116.7 million and $59.1 million for the six months ended June 30, 2025 and 2024, respectively, an increase of $57.6 million or approximately 97%.
Current report
Revenues from the DDS segment were $101.3 million and $45.1 million for the six months ended June 30, 2025 and 2024, respectively, an increase of $56.2 million or approximately 125%. The increase was primarily attributable to higher volume from an existing customer.
Current report
Revenues from the Synodex segment were $4.1 million and $3.9 million for the six months ended June 30, 2025 and 2024, respectively, an increase of $0.2 million or 5%. The increase was primarily attributable to higher volume from existing customers.
Current report
Direct Operating Costs
Current report
Direct operating costs for the DDS segment were $62.3 million and $32.5 million for the six months ended June 30, 2025 and 2024, respectively, an increase of $29.8 million or 92%. The cost increase was primarily due to increased headcount to support higher volumes from an existing customer. The increase in direct operating costs includes $29.4 million from direct and indirect labor related costs primarily on account of new hires, higher incentives, salary increases and severance; an unfavorable impact of foreign exchange rate fluctuations of $0.8 million; higher cloud service subscriptions of $0.7 million; higher depreciation and amortization of capitalized developed software of $0.6 million and an increase in other direct operating costs of $0.2 million; offset in part by lower recruitment fees of $1.9 million. Direct operating costs for the DDS segment as a percentage of DDS segment revenues were 62% and 72% for the six months ended June 30, 2025 and 2024, respectively. The decrease in direct operating costs of the DDS segment as a percentage of DDS segment revenues was primarily attributable to higher revenues, offset in part by higher direct operating costs.
Current report
Direct operating costs for the Synodex segment were $3.1 million and $3.0 million for the six months ended June 30, 2025 and 2024, respectively, an increase of $0.1 million or 3%. The increase in direct operating costs is due to higher cloud service subscriptions of $0.1 million and an increase in other direct operating costs of $0.1 million; offset in part by lower depreciation and amortization of $0.1 million. Direct operating costs for the Synodex segment as a percentage of Synodex segment revenues were 76% and 77% for the six months ended June 30, 2025 and 2024, respectively. The decrease in direct operating costs of the Synodex segment as a percentage of Synodex segment revenues was due to higher revenues, offset in part by higher direct operating costs.
Current report
Direct operating costs for the Agility segment were $5.1 million and $4.6 million for the six months ended June 30, 2025 and 2024, respectively, an increase of $0.5 million or 11%. The increase in direct operating costs was a result of higher direct labor costs of $0.1 million, higher cloud service subscriptions of $0.2 million, higher content costs of $0.1 million and an increase in other direct operating costs of $0.1 million. Direct operating costs for the Agility segment as a percentage of Agility segment revenues were 45% and 46% for the six months ended June 30, 2025 and 2024. The decrease in direct operating costs of the Agility segment as a percentage of Agility segment revenues was due to higher revenues offset in part by higher direct operating costs.
Current report
Gross Profit and Gross Margin
Current report
Gross profit for the DDS segment was $39.0 million and $12.6 million for the six months ended June 30, 2025 and 2024, respectively. The $26.4 million increase in gross profit for the DDS segment was primarily due to higher revenues, offset in part by higher direct operating costs. Gross margin for the DDS segment was 38% and 28% for the six months ended June 30, 2025 and 2024, respectively. The increase in gross margin for the DDS segment as a percentage of revenues was primarily due to higher revenues, offset in part by higher direct operating costs.
Current report
Gross profit for the Synodex segment was $1.0 million and $0.9 million for the six months ended June 30, 2025 and 2024, respectively. The $0.1 million increase in gross profit for the Synodex segment was primarily due to higher revenues, offset in part by higher direct operating cost. Gross margin for the Synodex segment was 24% and 22% for the six months ended June 30, 2025 and 2024, respectively. The increase in gross margin for the Synodex segment as a percentage of revenues was primarily due to higher revenues, offset in part by higher direct operating costs.
Current report
Selling and Administrative Expenses
Current report
Selling and administrative expenses were $29.1 million and $17.3 million for the six months ended June 30, 2025 and 2024, respectively, an increase of $11.8 million or 68%. The increase in selling and administrative expenses was primarily due to higher expenses associated with the increase in revenues. The increase in selling and administrative expenses includes higher selling and administrative payroll and related expenses of $7.2 million, primarily on account of new hires, salary increases, incentives and bonuses; higher professional fees of $3.9 million; higher subscriptions of $0.5 million; higher expenses for marketing-related activities of $0.4 million; offset in part by a favorable impact of foreign exchange rate fluctuations of $0.1 million and a decrease in other selling and administrative expenses of $0.1 million. Selling and administrative expenses as a percentage of total revenues were 25% and 29% for the six months ended June 30, 2025 and 2024, respectively. The decrease in selling and administrative expenses as a percentage of total revenues was primarily attributable to higher revenues in all segments, offset in part by higher selling and administrative expenses in all segments.
Current report
Selling and administrative expenses for the DDS segment were $22.1 million and $11.9 million for the six months ended June 30, 2025 and 2024, respectively, an increase of $10.2 million or 86%. The increase in selling and administrative expenses includes higher selling and administrative payroll and related expenses of $5.7 million, primarily on account of new hires, salary increases, incentives and bonuses; higher professional fees of $3.6 million; higher subscriptions of $0.5 million; higher expenses for marketing-related activities of $0.4 million. Selling and administrative expenses for the DDS segment as a percentage of DDS segment revenues were 22% and 26% for the six months ended June 30, 2025 and 2024, respectively. The decrease in selling and administrative expenses of the DDS segment as a percentage of DDS segment revenues was primarily attributable to higher revenues, offset in part by higher selling and administrative expenses.
Current report
Selling and administrative expenses for the Agility segment were $6.6 million and $5.1 million for the six months ended June 30, 2025 and 2024, respectively, an increase of $1.5 million or 29%. The increase in selling and administrative expenses includes higher selling and administrative payroll and related expenses of $1.3 million, primarily on account of new hires, salary increases, incentives and bonuses; higher professional fees of $0.3 million; offset in part by a favorable impact of foreign exchange rate fluctuations of $0.1 million. Selling and administrative expenses for the Agility segment as a percentage of Agility segment revenues were 58% and 50% for the six months ended June 30, 2025 and 2024, respectively. The increase in selling and administrative expenses of the Agility segment as a percentage of Agility segment revenues was primarily due to higher selling and administrative expenses, offset in part by higher revenues.
Current report
Income Taxes
Current report
We recorded a provision for income taxes of $2.9 million and $0.7 million for the six months ended June 30, 2025 and 2024, respectively. The provision for the current period primarily reflects Federal and State income tax expense on U.S. operations, income tax expense attributable to the Company’s subsidiaries in foreign jurisdictions in accordance with applicable local tax regulations, including the tax impact of IRS section 162(m) adjustments and Global Intangible Low-Taxed Income (“GILTI”) inclusions. The tax provision was partially offset by the favorable effect of stock-based compensation and the release of valuation allowances on deferred tax assets of the Company’s Canadian and German subsidiaries, resulting from improved expectations of future taxable income in those jurisdictions, and the reversal of previously recorded uncertain tax positions, in accordance with ASC 740.
Current report
Although the Company generated taxable income in the United States during the period, the related current tax liability was partially offset by deferred tax assets arising from the net operating loss carryforwards (“NOLCOs”).
Current report
Net Income
Current report
Net income for the DDS segment was $15.0 million and breakeven for the six months ended June 30, 2025 and 2024, respectively. The $15.0 million increase was primarily attributable to higher revenues and higher interest income, offset in part by higher direct operating costs and selling and administrative expenses, and a higher income tax provision in the current period.
Current report
The Agility segment had a net loss of $0.6 million and a net income of $0.4 million for the six months ended June 30, 2025 and 2024, respectively. The $1.0 million change was due to higher selling and administrative expenses and direct operating costs, offset in part by higher revenues in the current period.
Current report
Adjusted Gross Profit and Margin
Current report
Adjusted gross profit was $50.3 million and $21.8 million for the six months ended June 30, 2025 and 2024, respectively. The $28.5 million increase in adjusted gross profit was primarily due to higher revenues in all segments, offset in part by higher direct operating costs in all segments. Adjusted gross margin was 43% and 37% for the six months ended June 30, 2025 and 2024, respectively. The increase in adjusted gross margin was primarily due to higher revenues in all segments, offset in part by higher direct operating costs in all segments.
Current report
Adjusted gross profit for the DDS segment was $41.4 million and $13.6 million for the six months ended June 30, 2025 and 2024, respectively. The $27.8 million increase in adjusted gross profit for the DDS segment was due to higher revenues, offset in part by higher direct operating costs. Adjusted gross margin for the DDS segment was 41% and 30% for the six months ended June 30, 2025 and 2024, respectively. The increase in the adjusted gross margin for the DDS segment as a percentage of revenues was primarily due to higher revenues, offset in part by higher direct operating costs.
Showing the first 40 of 45 passages. Open the source sections for the rest.
Removed paragraphs (12)
Previous report
Adjusted EBITDA
Previous report
Total revenues were $58.3 million and $26.5 million for the three months ended March 31, 2025 and 2024, respectively, an increase of $31.8 million or approximately 120%.
Previous report
Direct operating costs for the DDS segment were $31.1 million and $13.2 million for the three months ended March 31, 2025 and 2024, respectively, an increase of $17.9 million or 136%. The increase in direct operating costs includes $15.4 million from direct and indirect labor related costs primarily on account of new hires and higher incentives; higher recruitment fees of $1.4 million; higher depreciation and amortization of capitalized developed software of $0.4 million; higher cloud service subscriptions of $0.3 million; an unfavorable impact of foreign exchange rate fluctuations of $0.2 million; and an increase in other direct operating costs of $0.2 million. Direct operating costs for the DDS segment as a percentage of DDS segment revenues were 61% and 67% for the three months ended March 31, 2025 and 2024, respectively. The decrease in direct operating costs of the DDS segment as a percentage of DDS segment revenues was primarily attributable to higher revenues, offset in part by higher direct operating costs.
Previous report
Direct operating costs for the Synodex segment were $1.5 million for each of the three-month periods ended March 31, 2025 and 2024. Direct operating costs for the Synodex segment as a percentage of Synodex segment revenues were 75% and 79% for the three months ended March 31, 2025 and 2024, respectively. The decrease in direct operating costs of the Synodex segment as a percentage of Synodex segment revenues was due to higher revenues.
Previous report
Gross profit for the DDS segment was $19.7 million and $6.6 million for the three months ended March 31, 2025 and 2024, respectively. The $13.1 million increase in gross profit for the DDS segment was primarily due to higher revenues, offset in part by higher direct operating costs. Gross margin for the DDS segment was 39% and 33% for the three months ended March 31, 2025 and 2024, respectively. The increase in gross margin for the DDS segment as a percentage of revenues was primarily due to higher revenues, offset in part by higher direct operating costs.
Previous report
Gross profit for the Synodex segment was $0.5 million and $0.4 million for the three months ended March 31, 2025 and 2024, respectively. The $0.1 million increase in gross profit for the Synodex segment was primarily due to higher revenues. Gross margin for the Synodex segment was 27% and 21% for the three months ended March 31, 2025 and 2024, respectively. The increase in gross margin for the Synodex segment as a percentage of revenues was primarily due to higher revenues.
Previous report
Selling and administrative expenses were $15.0 million and $8.3 million for the three months ended March 31, 2025 and 2024, respectively, an increase of $6.7 million or 81%. The increase in selling and administrative expenses was primarily due to higher expenses associated with the increase in revenues. The increase in selling and administrative expenses includes higher selling and administrative payroll and related expenses of $3.8 million, primarily on account of new hires, salary increases, incentives and bonuses; higher professional fees of $2.4 million; higher expenses for marketing related activities of $0.3 million; higher subscriptions of $0.3 million; offset in part by a decrease in other selling and administrative expenses of $0.1 million. Selling and administrative expenses as a percentage of total revenues were 26% and 31% for the three months ended March 31, 2025 and 2024, respectively. The decrease in selling and administrative expenses as a percentage of total revenues was primarily attributable to higher revenues in all segments, offset in part by higher selling and administrative expenses in all segments.
Previous report
Selling and administrative expenses for the DDS segment were $11.6 million and $5.8 million for the three months ended March 31, 2025 and 2024, respectively, an increase of $5.8 million or 100%. The increase in selling and administrative expenses was primarily due to higher expenses associated with the increase in revenues. The increase in selling and administrative expenses includes higher selling and administrative payroll and related expenses of $3.1 million, primarily on account of new hires, salary increases, incentives and bonuses; higher professional fees of $2.2 million; higher expenses for marketing related activities of $0.3 million; higher subscriptions of $0.3 million; offset in part by a decrease in other selling and administrative expenses of $0.1 million. Selling and administrative expenses for the DDS segment as a percentage of DDS segment revenues were 23% and 29% for the three months ended March 31, 2025 and 2024, respectively. The decrease in selling and administrative expenses of the DDS segment as a percentage of DDS segment revenues was primarily attributable to higher revenues, offset in part by higher selling and administrative expenses.
Previous report
We recorded a provision for income taxes of $0.6 million and $0.4 million for the three months ended March 31, 2025 and 2024, respectively. (Refer to Note 4 of Notes to Condensed Consolidated Financial Statements for the components of the income tax provision for the three-month periods ended March 31, 2025 and 2024).
Previous report
Adjusted EBITDA
Previous report
Adjusted EBITDA for the DDS segment was $11.5 million and $2.2 million for the three months ended March 31, 2025 and 2024, respectively. The $9.3 million increase in Adjusted EBITDA in the DDS Segment was due to higher net income and higher stock-based compensation and depreciation and amortization, and a higher income tax provision offset in part by lower interest expense in the current quarter.
Previous report
Cash used in financing activities for the three months ended March 31, 2024 was primarily used for payments of long-term obligations amounting to $0.3 million.
Reworded paragraphs (32)
Previous wording
These forward-looking statements are based on management’s current expectations, assumptions and estimates and are subject to a number of risks and uncertainties, including, without limitation, impacts resulting from ongoing geopolitical conflicts, including between India and Pakistan, Russia and Ukraine, Hamas’ attack against Israel and the ensuing conflict and increased hostilities between Hezbollah and Israel and Iran and Israel; investments in large language models; that contracts may be terminated by customers; projected or committed volumes of work may not materialize; pipeline opportunities and customer discussions which may not materialize into work or expected volumes of work; the likelihood of continued development of the markets, particularly new and emerging markets, that our services support; the ability and willingness of our customers and prospective customers to execute business plans that give rise to requirements for our services; continuing reliance on project-based work in the Digital Data Solutions (“DDS”) segment and the primarily at-will nature of such contracts and the ability of these customers to reduce, delay or cancel projects; potential inability to replace projects that are completed, canceled or reduced; our DDS segment’s revenue concentration in a limited number of customers; our dependency on content providers in our Agility segment; our ability to achieve revenue and growth targets; difficulty in integrating and deriving synergies from acquisitions, joint ventures and strategic investments; potential undiscovered liabilities of companies and businesses that we may acquire; potential impairment of the carrying value of goodwill and other acquired intangible assets of companies and businesses that we acquire; a continued downturn in or depressed market conditions; changes in external market factors; the potential effects of U.S. global trading and monetary policy, including the interest rate policies of the Federal Reserve; changes in our business or growth strategy; the emergence of new, or growth in existing competitors; various other competitive and technological factors; our use of and reliance on information technology systems, including potential security breaches, cyber-attacks, privacy breaches or data breaches that result in the unauthorized disclosure of consumer, customer, employee or Company information, or service interruptions; and other risks and uncertainties indicated from time to time in our filings with the Securities and Exchange Commission.
Current wording
These forward-looking statements are based on management’s current expectations, assumptions and estimates and are subject to a number of risks and uncertainties, including, without limitation, impacts resulting from ongoing geopolitical conflicts, including between India and Pakistan, Russia and Ukraine, Hamas’ attack against Israel and the ensuing conflict and unpredictable hostilities between Hezbollah and Israel and Iran and Israel; investments in large language models; that contracts may be terminated by customers; projected or committed volumes of work may not materialize; pipeline opportunities and customer discussions which may not materialize into work or expected volumes of work; the likelihood of continued development of the markets, particularly new and emerging markets, that our services support; the ability and willingness of our customers and prospective customers to execute business plans that give rise to requirements for our services; continuing reliance on project-based work in the Digital Data Solutions (“DDS”) segment and the primarily at-will nature of such contracts and the ability of these customers to reduce, delay or cancel projects; potential inability to replace projects that are completed, canceled or reduced; our DDS segment’s revenue concentration in a limited number of customers; our dependency on content providers in our Agility segment; our ability to achieve revenue and growth targets; difficulty in integrating and deriving synergies from acquisitions, joint ventures and strategic investments; potential undiscovered liabilities of companies and businesses that we may acquire; potential impairment of the carrying value of goodwill and other acquired intangible assets of companies and businesses that we acquire; a continued downturn in or depressed market conditions; changes in external market factors; the potential effects of U.S. global trading and monetary policy, including the interest rate policies of the Federal Reserve; changes in our business or growth strategy; the emergence of new, or growth in existing competitors; various other competitive and technological factors; our use of and reliance on information technology systems, including potential security breaches, cyber-attacks, privacy breaches or data breaches that result in the unauthorized disclosure of consumer, customer, employee or Company information, or service interruptions; and other risks and uncertainties indicated from time to time in our filings with the Securities and Exchange Commission (“SEC”).
Previous wording
Our actual results could differ materially from the results referred to in forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the risks discussed in Part I, Item 1A. “Risk Factors,” Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and other parts of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 24, 2025 and in our other filings that we may make with the Securities and Exchange Commission.
Current wording
Our actual results could differ materially from the results referred to in any forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the risks discussed in Part I, Item 1A. “Risk Factors,” Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and other parts of our Annual Report on Form 10-K, filed with the SEC on February 24, 2025 and in our other filings that we may make with the SEC.
Previous wording
In light of these risks and uncertainties, there can be no assurance that the results referred to in the forward-looking statements will occur, and you should not place undue reliance on these forward-looking statements. These forward-looking statements speak only as of the date hereof.
Current wording
In light of these risks and uncertainties, there can be no assurance that the results referred to in any forward-looking statements will occur, and you should not place undue reliance on these forward-looking statements. These forward-looking statements speak only as of the date hereof.
Previous wording
Our operations are presently classified and reported in three reporting segments: Digital Data Solutions (DDS), Synodex and Agility.
Current wording
Our operations are presently classified and reported in three reporting segments: Digital Data Solutions, Synodex and Agility.
Previous wording
The following table contains a reconciliation of Gross Profit and Gross Margin in accordance with the U.S. GAAP attributable to Innodata Inc. and its subsidiaries to Adjusted Gross Profit and Adjusted Gross Margin for the three-month periods ended March 31, 2025 and 2024 (in thousands).
Current wording
The following table contains a reconciliation of Gross Profit and Gross Margin in accordance with the U.S. GAAP attributable to Innodata Inc. and its subsidiaries to Adjusted Gross Profit and Adjusted Gross Margin for the three and six-month periods ended June 30, 2025 and 2024 (in thousands).
Previous wording
The following table contains a reconciliation of U.S. GAAP net income (loss) attributable to Innodata Inc. and its subsidiaries to Adjusted EBITDA for the three -month periods ended March 31, 2025 and 2024 (in thousands).
Current wording
The following table contains a reconciliation of U.S. GAAP net income (loss) attributable to Innodata Inc. and its subsidiaries to Adjusted EBITDA for the three and six-month periods ended June 30, 2025 and 2024 (in thousands).
Previous wording
Revenues from the DDS segment were $50.8 million and $19.7 million for the three months ended March 31, 2025 and 2024, respectively, an increase of $31.1 million or approximately 158%. The increase was primarily attributable to higher volume from an existing customer.
Current wording
Revenues from the DDS segment were $50.5 million and $25.4 million for the three months ended June 30, 2025 and 2024, respectively, an increase of $25.1 million or approximately 99%. The increase was primarily attributable to higher volume from an existing customer.
Previous wording
Revenues from the Synodex segment were $2.0 million and $1.9 million for the three months ended March 31, 2025 and 2024, respectively, an increase of $0.1 million or 5%. The increase was primarily attributable to higher volume from existing customers.
Current wording
Revenues from the Synodex segment were $2.1 million and $2.0 million for the three months ended June 30, 2025 and 2024, respectively, an increase of $0.1 million or 5%. The increase was primarily attributable to higher volume from existing customers.
Previous wording
Revenues from the Agility segment were $5.5 million and $4.9 million for the three months ended March 31, 2025 and 2024, respectively, an increase of $0.6 million or approximately 12%. The increase was principally attributable to higher volumes from subscriptions to our Agility AI-enabled industry platform.
Current wording
Revenues from the Agility segment were $5.8 million and $5.2 million for the three months ended June 30, 2025 and 2024, respectively, an increase of $0.6 million or approximately 12%. The increase was principally attributable to higher volumes from subscriptions to our Agility AI-enabled industry platform.
Previous wording
One customer in the DDS segment generated approximately 61% and 24% of the Company’s total revenues for the three months ended March 31, 2025 and 2024, respectively. No other customer accounted for 10% or more of total revenues during these periods. Further, revenues from non-U.S. customers accounted for 16% and 33% of the Company’s total revenues for the three months ended March 31, 2025 and 2024, respectively.
Current wording
One customer in the DDS segment generated approximately 58% and 38% of the Company’s total revenues for the three months ended June 30, 2025 and 2024, respectively. No other customer accounted for 10% or more of total revenues during these periods. Further, revenues from non-U.S. customers accounted for 17% and 27% of the Company’s total revenues for the three months ended June 30, 2025 and 2024, respectively.
Previous wording
Direct operating costs for the Agility segment were $2.5 million and $2.2 million for the three months ended March 31, 2025 and 2024, respectively, an increase of $0.3 million or 14%. The increase in direct operating costs was a result of higher content costs of $0.1 million and an increase in other direct operating costs of $0.2 million. Direct operating costs for the Agility segment as a percentage of Agility segment revenues were 45% for the each of the three-month periods ended March 31, 2025 and 2024.
Current wording
Direct operating costs for the Agility segment were $2.6 million and $2.3 million for the three months ended June 30, 2025 and 2024, respectively, an increase of $0.3 million or 13%. The increase in direct operating costs was a result of higher labor costs of $0.1 million and an increase in other direct operating costs of $0.2 million. Direct operating costs for the Agility segment as a percentage of Agility segment revenues were 45% and 44% for the three months ended June 30, 2025 and 2024. The increase in direct operating costs of the Agility segment as a percentage of Agility segment revenues was due to higher revenues offset by higher direct operating costs.
Previous wording
Selling and administrative expenses for the Agility segment were $3.1 million and $2.4 million for the three months ended March 31, 2025 and 2024, respectively, an increase of $0.7 million or 29%. The increase in selling and administrative expenses includes selling and administrative labor and related expenses of $0.6 million, primarily on account of new hires, salary increases, incentives and bonuses awarded; higher professional fees of $0.2 million offset in part by a decrease in other selling and administrative expenses of $0.1 million. Selling and administrative expenses for the Agility segment as a percentage of Agility segment revenues were 56% and 49% for the three months ended March 31, 2025 and 2024, respectively. The increase in selling and administrative expenses of the Agility segment as a percentage of Agility segment revenues was primarily due to higher selling and administrative expenses, offset in part by higher revenues.
Current wording
Selling and administrative expenses for the Agility segment were $3.5 million and $2.7 million for the three months ended June 30, 2025 and 2024, respectively, an increase of $0.8 million or 30%. The increase in selling and administrative expenses includes selling and administrative labor and related expenses of $0.7 million, primarily on account of new hires, salary increases, incentives and bonuses; higher professional fees of $0.1 million and an increase in other selling and administrative expenses of $0.1 million; offset in part by a favorable impact of foreign exchange rate fluctuations of $0.1 million. Selling and administrative expenses for the Agility segment as a percentage of Agility segment revenues were 60% and 52% for the three months ended June 30, 2025 and 2024, respectively. The increase in selling and administrative expenses of the Agility segment as a percentage of Agility segment revenues was primarily due to higher selling and administrative expenses, offset in part by higher revenues.
Previous wording
Net income was $7.8 million and $1.0 million for the three months ended March 31, 2025 and 2024, respectively. The $6.8 million increase was a result of higher revenue in all segments, offset in part by higher direct operating costs in the DDS and Agility segments and higher selling and administrative expenses in all segments, and a higher income tax provision in the current quarter.
Current wording
Net income was $7.2 million and breakeven for the three months ended June 30, 2025 and 2024, respectively. The $7.2 million increase was a result of higher revenue in all segments and higher interest income, offset in part by higher direct operating costs in all segments, higher selling and administrative expenses in the DDS and Agility segments, and a higher income tax provision in the current quarter.
Previous wording
Net income for the DDS segment was $7.7 million and $0.4 million for the three months ended March 31, 2025 and 2024, respectively. The $7.3 million increase was primarily attributable to higher revenues, offset in part by higher direct operating costs and selling and administrative expenses, and a higher income tax provision in the current quarter.
Current wording
Net income for the DDS segment was $7.3 million and a net loss of $0.5 million for the three months ended June 30, 2025 and 2024, respectively. The $7.8 million increase was primarily attributable to higher revenues and higher interest income, offset in part by higher direct operating costs and selling and administrative expenses, and a higher income tax provision in the current quarter.
Previous wording
The Agility segment had a net loss of $0.2 million and a net income of $0.3 million for the three months ended March 31, 2025 and 2024, respectively. The $0.5 million change was due to higher direct operating costs, and higher selling and administrative expenses offset in part by higher revenues in the current quarter.
Current wording
The Agility segment had a net loss of $0.4 million and a net income of $0.1 million for the three months ended June 30, 2025 and 2024, respectively. The $0.5 million change was due to higher selling and administrative expenses and higher direct operating costs, offset in part by higher revenues in the current quarter.
Previous wording
Adjusted gross profit was $25.2 million and $11.0 million for the three months ended March 31, 2025 and 2024, respectively. The $14.2 million increase in adjusted gross profit was primarily due to higher revenues in all segments, offset in part by higher direct operating costs in the DDS and Agility segments. Adjusted gross margin was 43% and 41% for the three months ended March 31, 2025 and 2024, respectively. The increase in adjusted gross margin was primarily due to higher revenues in all segments, offset in part by higher direct operating costs in the DDS and Agility segments.
Current wording
Adjusted gross profit was $25.0 million and $10.8 million for the three months ended June 30, 2025 and 2024, respectively. The $14.2 million increase in adjusted gross profit was primarily due to higher revenues in all segments, offset in part by higher direct operating costs in all segments. Adjusted gross margin was 43% and 33% for the three months ended June 30, 2025 and 2024, respectively. The increase in adjusted gross margin was primarily due to higher revenues in all segments, offset in part by higher direct operating costs in all segments.
Previous wording
Adjusted gross profit for the DDS segment was $20.9 million and $7.0 million for the three months ended March 31, 2025 and 2024, respectively. The $13.9 million increase in adjusted gross profit for the DDS segment was due to higher revenues, offset in part by higher direct operating costs. Adjusted gross margin for the DDS segment was 41% and 35% for the three months ended March 31, 2025 and 2024, respectively. The increase in the adjusted gross margin for the DDS segment as a percentage of revenues was primarily due to higher revenues, offset in part by higher direct operating costs.
Current wording
Adjusted gross profit for the DDS segment was $20.5 million and $6.6 million for the three months ended June 30, 2025 and 2024, respectively. The $13.9 million increase in adjusted gross profit for the DDS segment was due to higher revenues, offset in part by higher direct operating costs. Adjusted gross margin for the DDS segment was 41% and 26% for the three months ended June 30, 2025 and 2024, respectively. The increase in the adjusted gross margin for the DDS segment as a percentage of revenues was primarily due to higher revenues, offset in part by higher direct operating costs.
Previous wording
Adjusted gross profit for the Synodex segment was $0.6 million and $0.5 million for the three months ended March 31, 2025 and 2024, respectively. The $0.1 million increase in adjusted gross profit in the Synodex segment was due to higher revenues. Adjusted gross margin for the Synodex segment was 32% and 29% for the three months ended March 31, 2025 and 2024, respectively. The increase in the adjusted gross margin for the Synodex segment as a percentage of revenues was primarily due to higher revenues.
Current wording
Adjusted gross profit for the Synodex segment was $0.5 million and $0.6 million for the three months ended June 30, 2025 and 2024, respectively. The $0.1 million decrease in adjusted gross profit in the Synodex segment was due to higher direct operating costs offset by higher revenues. Adjusted gross margin for the Synodex segment was 26% and 31% for the three months ended June 30, 2025 and 2024, respectively. The decrease in the adjusted gross margin for the Synodex segment as a percentage of revenues was primarily due to higher direct operating costs, offset by higher revenues.
Previous wording
Adjusted gross profit for the Agility segment was $3.7 million and $3.5 million for the three months ended March 31, 2025 and 2024, respectively. The $0.2 million increase in adjusted gross profit for the Agility segment was due to higher revenues, offset in part by higher direct operating costs. Adjusted gross margin for the Agility segment was 68% and 70% for the three months ended March 31, 2025 and 2024, respectively. The decrease in the adjusted gross margin for the Agility segment as a percentage of revenues was primarily due to higher revenues, offset in part by higher direct operating costs.
Current wording
Adjusted gross profit for the Agility segment was $4.0 million and $3.6 million for the three months ended June 30, 2025 and 2024, respectively. The $0.4 million increase in adjusted gross profit for the Agility segment was due to higher revenues, offset in part by higher direct operating costs. Adjusted gross margin for the Agility segment was 69% and 70% for the three months ended June 30, 2025 and 2024, respectively. The decrease in the adjusted gross margin for the Agility segment as a percentage of revenues was primarily due to higher revenues, offset in part by higher direct operating costs.
Previous wording
Adjusted EBITDA for the Agility segment was $0.7 million and $1.1 million for the three months ended March 31, 2025 and 2024, respectively. The $0.4 million decrease in Adjusted EBITDA in the Agility segment was due to lower net income in the current quarter.
Current wording
Adjusted EBITDA for the Agility segment was $0.6 million and $1.0 million for the three months ended June 30, 2025 and 2024, respectively. The $0.4 million decrease in Adjusted EBITDA in the Agility segment was due to the higher net loss in the current quarter.
Previous wording
Direct operating costs were $35.1 million and $16.9 million for the three months ended March 31, 2025 and 2024, respectively, an increase of $18.2 million or 108%. The cost increase was primarily due to increased headcount to support higher volumes from an existing customer. The increase in direct operating costs includes $15.4 million from direct and indirect labor related costs primarily on account of new hires and higher incentives; higher recruitment fees of $1.4 million; higher cloud service subscriptions of $0.4 million; higher depreciation and amortization of capitalized developed software of $0.3 million; an unfavorable impact of foreign exchange rate fluctuations of $0.2 million; higher content costs of $0.1 million and an increase in other direct operating costs of $0.4 million. Direct operating costs as a percentage of total revenues were 60% and 64% for the three months ended March 31, 2025 and 2024, respectively. The decrease in direct operating cost as a percentage of total revenues was primarily due to higher revenues in all segments, offset in part by higher direct operating costs in the DDS and Agility segments.
Current wording
Direct operating costs were $70.5 million and $40.1 million for the six months ended June 30, 2025 and 2024, respectively, an increase of $30.4 million or 76%. The cost increase was primarily due to increased headcount to support higher volumes from an existing customer. The increase in direct operating costs includes $29.5 million from direct and indirect labor related costs primarily on account of new hires, higher incentives, salary increases and severance; higher cloud service subscriptions of $1.0 million; an unfavorable impact of foreign exchange rate fluctuations of $0.8 million; higher depreciation and amortization of capitalized developed software of $0.5 million; higher content costs of $0.1 million and an increase in other direct operating costs of $0.4 million; offset in part by lower recruitment fees of $1.9 million. Direct operating costs as a percentage of total revenues were 60% and 68% for the six months ended June 30, 2025 and 2024, respectively. The decrease in direct operating cost as a percentage of total revenues was primarily due to higher revenues in all segments, offset in part by higher direct operating costs in all segments.
Previous wording
Gross profit was $23.2 million and $9.6 million for the three months ended March 31, 2025 and 2024, respectively. The $13.6 million increase in gross profit was primarily due to higher revenues in all segments, offset in part by higher direct operating costs in the DDS and Agility segments. Gross margin was 40% and 36% for the three months ended March 31, 2025 and 2024, respectively. The increase in gross margin was primarily due to higher revenues in all segments, offset in part by higher direct operating costs in the DDS and Agility segments.
Current wording
Gross profit was $46.2 million and $19.0 million for the six months ended June 30, 2025 and 2024, respectively. The $27.2 million increase in gross profit was primarily due to higher revenues in all segments, offset in part by higher direct operating costs in all segments. Gross margin was 40% and 32% for the six months ended June 30, 2025 and 2024, respectively. The increase in gross margin was primarily due to higher revenues in all segments, offset in part by higher direct operating costs in all segments.
Previous wording
Gross profit for the Agility segment was $3.0 million and $2.7 million for the three months ended March 31, 2025 and 2024, respectively. The $0.3 million increase in gross profit for the Agility segment was primarily due to higher revenues, offset in part by higher direct operating costs. Gross margin for the Agility segment was 55% and 54% for the three months ended March 31, 2025 and 2024, respectively. The increase in gross margin for the Agility segment as a percentage of revenues was primarily due to higher revenues, offset in part by higher direct operating costs.
Current wording
Gross profit for the Agility segment was $6.1 million and $5.5 million for the six months ended June 30, 2025 and 2024, respectively. The $0.6 million increase in gross profit for the Agility segment was primarily due to higher revenues, offset in part by higher direct operating costs. Gross margin for the Agility segment was 55% and 54% for the six months ended June 30, 2025 and 2024, respectively. The increase in gross margin for the Agility segment as a percentage of revenues was primarily due to higher revenues, offset in part by higher direct operating costs.
Previous wording
Selling and administrative expenses for the Synodex segment were $0.3 million and $0.1 million for the three months ended March 31, 2025 and 2024, respectively, an increase of $0.2 million or 200%. The increase in selling and administrative expenses includes selling and administrative labor and related expenses of $0.1 million, primarily on account of incentives and bonuses awarded and an increase in other selling and administrative expenses of $0.1 million. Selling and administrative expenses for the Synodex segment as a percentage of Synodex segment revenues were 15% and 5% for the three months ended March 31, 2025 and 2024, respectively. The increase in selling and administrative expenses of the Synodex segment as a percentage of Synodex segment revenues was primarily attributable due to higher selling and administrative expenses offset in part by higher revenues.
Current wording
Selling and administrative expenses for the Synodex segment were $0.4 million and $0.3 million for the six months ended June 30, 2025 and 2024, respectively, an increase of $0.1 million or 33%. The increase in selling and administrative expenses includes selling and administrative labor and related expenses of $0.2 million, primarily on account of incentives and bonuses, offset in part by a decrease in other selling and administrative expenses of $0.1 million. Selling and administrative expenses for the Synodex segment as a percentage of Synodex segment revenues were 10% and 8% for the six months ended June 30, 2025 and 2024, respectively. The increase in selling and administrative expenses of the Synodex segment as a percentage of Synodex segment revenues was primarily attributable due to higher selling and administrative expenses offset in part by higher revenues.
Previous wording
Adjusted EBITDA was $12.7 million and $3.8 million for the three months ended March 31, 2025 and 2024, respectively. The $8.9 million increase in Adjusted EBITDA was due to higher net income and higher stock-based compensation and depreciation and amortization, and a higher income tax provision offset in part by lower interest expense in the current quarter.
Current wording
Adjusted EBITDA was $25.9 million and $6.6 million for the six months ended June 30, 2025 and 2024, respectively. The $19.3 million increase in Adjusted EBITDA was due to higher net income and higher stock-based compensation, higher income tax provision, and higher depreciation and amortization, offset in part by higher interest income in the current period.
Previous wording
Adjusted EBITDA for the Synodex segment was $0.4 million and $0.5 million for the three months ended March 31, 2025 and 2024, respectively. The $0.1 million decrease in Adjusted EBITDA in the Synodex segment was due to lower depreciation and amortization in the current quarter.
Current wording
Adjusted EBITDA for the Synodex segment was $0.9 million and $1.0 million for the six months ended June 30, 2025 and 2024, respectively. The $0.1 million decrease in Adjusted EBITDA in the Synodex segment was due to lower depreciation and amortization in the current period.
Previous wording
On March 31, 2025, we had cash and cash equivalents of $56.6 million, of which $17.3 million was held by our foreign subsidiaries, and $39.3 million was held in the United States. Despite the passage of the new tax law under which we may repatriate funds from overseas after paying the toll charge, it is our intent, as of March 31, 2025, to indefinitely reinvest the overseas funds in our foreign subsidiaries.
Current wording
On June 30, 2025, we had cash and cash equivalents of $59.8 million, of which $16.4 million was held by our foreign subsidiaries, and $43.4 million was held in the United States. Despite the passage of the new tax law under which we may repatriate funds from overseas after paying the toll charge, it is our intent, as of June 30, 2025, to indefinitely reinvest the overseas funds in our foreign subsidiaries.
Previous wording
We have used, and plan to use, our cash and cash equivalents for (i) capital investments; (ii) the expansion of our operations; (iii) technology innovation; (iv) product management and strategic marketing; (v) general corporate purposes, including working capital; and (vi) possible business acquisitions. As of March 31, 2025, we had working capital of approximately $53.2 million, as compared to working capital of approximately $41.5 million as of December 31, 2024. The increase in working capital is due to increased collections from higher revenues and proceeds from stock option exercises in the period, offset by capital expenditures during the period to build future capacity.
Current wording
We have used, and plan to use, our cash and cash equivalents for (i) capital investments; (ii) the expansion of our operations; (iii) technology innovation; (iv) product management and strategic marketing; (v) general corporate purposes, including working capital; and (vi) possible business acquisitions. As of June 30, 2025, we had working capital of approximately $65.6 million, as compared to working capital of approximately $41.5 million as of December 31, 2024. The increase in working capital is due to increased collections from higher revenues and proceeds from stock option exercises in the period, offset by capital expenditures during the period to build future capacity.
Previous wording
Cash provided by our operating activities for the three months ended March 31, 2025 was $10.9 million resulting from net income of $7.8 million, adjusted for non-cash expenses of $5.0 million and a decrease in working capital of $1.9 million. Refer to the Condensed Consolidated Statements of Cash Flows for further details.
Current wording
Cash provided by our operating activities for the six months ended June 30, 2025 was $15.1 million resulting from net income of $15.0 million, adjusted for non-cash expenses of $10.8 million and a decrease in working capital of $10.7 million. Refer to the Condensed Consolidated Statements of Cash Flows for further details.
Previous wording
Cash provided by our operating activities for the three months ended March 31, 2024 was $6.8 million resulting from our net income of $1.0 million, adjusted for non-cash expenses of $2.6 million and an increase in working capital of $3.2 million. Refer to the Condensed Consolidated Statements of Cash Flows for further details.
Current wording
Cash provided by our operating activities for the six months ended June 30, 2024 was $6.3 million resulting from net income of $1.0 million, adjusted for non-cash expenses of $5.1 million and an increase in working capital of $0.2 million. Refer to the Condensed Consolidated Statements of Cash Flows for further details.
Previous wording
For the three months ended March 31, 2025 and 2024, cash used in our investing activities was $2.4 million and $1.3 million, respectively. These capital expenditures were principally for the purchase of technology equipment including servers, network infrastructure and workstations, and expenditures for capitalized developed software. Capital expenditures for the three months ended March 31, 2025 amounting to $2.4 million consisted of $1.5 million for the DDS segment, $0.6 million for the Agility segment and $0.3 million for the Synodex segment.
Current wording
Cash used in our investing activities was $4.1 million for each of the six-month periods ended June 30, 2025 and 2024, respectively. These capital expenditures were principally for the purchase of technology equipment including servers, network infrastructure and workstations, and expenditures for capitalized developed software. Capital expenditures for the six months ended June 30, 2025 amounting to $4.1 million consisted of $2.3 million for the DDS segment, $1.2 million for the Agility segment and $0.6 million for the Synodex segment.
Previous wording
Cash provided by financing activities for the three months ended March 31, 2025 was $0.9 million primarily from proceeds of stock option exercises of $1.0 million, offset in part by payment of long-term obligations of $0.1 million.
Current wording
Cash provided by financing activities for the six months ended June 30, 2025 was $1.2 million primarily from proceeds of stock option exercises of $1.5 million, offset in part by payment of long-term obligations of $0.3 million.
Rearranged current paragraphs (10)
Current report — wording carried from elsewhere
Adjusted EBITDA for the Synodex segment was $0.5 million for each of the three-month periods ended June 30, 2025 and 2024.
Current report — wording carried from elsewhere
Revenues from the Agility segment were $11.3 million and $10.1 million for the six months ended June 30, 2025 and 2024, respectively, an increase of $1.2 million or approximately 12%. The increase was principally attributable to higher volumes from subscriptions to our Agility AI-enabled industry platform.
Current report — wording carried from elsewhere
One customer in the DDS segment generated approximately 59% and 31% of the Company’s total revenues for the six months ended June 30, 2025 and 2024, respectively. No other customer accounted for 10% or more of total revenues during these periods. Further, revenues from non-U.S. customers accounted for 17% and 29% of the Company’s total revenues for the six months ended June 30, 2025 and 2024, respectively.
Current report — wording carried from elsewhere
Direct operating costs consist of direct and indirect labor costs, occupancy costs, data center hosting fees, cloud services, content acquisition costs, depreciation and amortization, travel, telecommunications, computer services and supplies, realized (gain) loss on forward contracts, foreign currency revaluation (gain) loss, recruitment costs and other direct expenses that are incurred in providing services to our customers.
Current report — wording carried from elsewhere
Gross profit is derived by revenues less direct operating costs, while the Gross margin percentage is derived by dividing gross profit over revenues.
Current report — wording carried from elsewhere
Selling and administrative expenses consist of payroll and related costs including commissions, bonuses, and stock-based compensation; marketing, advertising, trade conferences and related expenses; new services research and related software development expenses; software subscriptions; professional and consultant fees; provision for credit losses; and other administrative overhead expenses.
Current report — wording carried from elsewhere
Net income was $15.0 million and $1.0 million for the six months ended June 30, 2025 and 2024, respectively. The $14.0 million increase was a result of higher revenue in all segments and higher interest income, offset in part by higher direct operating costs and higher selling and administrative expenses in all segments, and a higher income tax provision in the current period.
Current report — wording carried from elsewhere
Net income for the Synodex segment was $0.6 million for each of the six-month periods ended June 30, 2025 and 2024.
Current report — wording carried from elsewhere
Adjusted Gross Profit and Adjusted Gross Margin are non-GAAP financial measures. For a reconciliation of Adjusted Gross Profit and Adjusted Gross Margin to the most directly comparable GAAP measure, please see the description of “Non-GAAP Financial Measures – Adjusted Gross Profit and Adjusted Gross Margin” above.
Current report — wording carried from elsewhere
Adjusted EBITDA is a non-GAAP financial measure. For a reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure, please see the description of “Non-GAAP Financial Measures – Adjusted EBITDA” above.