Innodata Inc. INOD is slated to release second-quarter 2026 results on Aug. 6, after the closing bell. The upcoming results are expected to reflect continued strength in demand for the company's artificial intelligence (AI) data engineering, model evaluation and trust-and-safety services, supported by expanding engagements with large technology customers and increasing adoption of agentic AI applications.
In the last reported quarter, Innodata delivered exceptional numbers. Adjusted earnings and revenues topped the Zacks Consensus Estimate by 223.1% and 17.8%, while growing 90.9% and 54.4% year over year, respectively. Adjusted EBITDA was $25 million, or 28% of revenues, compared with $12.7 million in the prior-year quarter. The 96% increase in adjusted EBITDA outpaced revenue growth, demonstrating meaningful operating leverage despite continued investments in data science, engineering and customer-facing capabilities.
INOD’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 98.9%, as shown in the chart below.
Image Source: Zacks Investment Research
How Are Estimates Placed for Innodata Stock?
The Zacks Consensus Estimate for the second-quarter EPS has increased to 21 cents from 18 cents over the past 30 days. The estimated figure indicates 5% growth from the year-ago reported EPS of 20 cents. The consensus mark for revenues is pegged at $86.3 million, suggesting 47.8% year-over-year growth.
For 2026, Innodata is expected to register a 17.4% increase from a year ago in revenues. Its EPS is expected to witness 41.9% growth year over year. Below is what to expect for INOD stock.
INOD EPS Estimate
Image Source: Zacks Investment Research
INOD Revenue Estimate
Image Source: Zacks Investment Research
What the Zacks Model Unveils for INOD Stock
Our proven model predicts a likely earnings beat for INOD for the quarter to be reported. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) for this to happen. This is exactly the case here, as you will see below.
Earnings ESP: INOD has an Earnings ESP of +17.65%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #1.
Key Factors Likely to Influence Innodata’s Q2 Results
Expanding AI Programs to Drive Revenues: The second quarter is likely to have benefited from continued ramp-up of recently secured customer engagements, particularly with large technology companies. During the first-quarter 2026 earnings call, management highlighted that new programs span the entire AI development lifecycle, including pre-training, post-training, evaluation, trust and safety, and agent improvement. Growing customer diversification, deeper relationships with existing hyperscaler clients and increasing demand for enterprise AI solutions are also expected to have supported revenue growth during the quarter. The company further noted that several sizeable opportunities remain under discussion, suggesting growth potential beyond its current outlook.
AI Platform Adoption and Business Expansion: Management expects continued momentum from higher-value offerings such as evaluation infrastructure, synthetic data, trust and safety services and its recently launched agent observability platform. The company also anticipates increasing opportunities in physical AI, federal AI programs and enterprise agent deployments as customers expand the use of autonomous AI systems across more applications.
Proprietary Solutions to Support Margins: Second-quarter profitability is expected to benefit from a richer mix of proprietary data assets and software-enabled solutions. Management indicated that reusable data sets, AI platforms and operating leverage should continue supporting margins while ongoing investments in research, product development and commercial expansion position the business for long-term growth.
During the first-quarter earnings call, Innodata raised its full-year 2026 revenue growth outlook to approximately 40% or more, indicating improved visibility into customer demand. The company also stated that multiple large programs have not yet been included in its forecast because their timing and scope are still being finalized, suggesting potential upside if those engagements materialize.
Price Performance & Valuation of INOD Stock
INOD stock has gained 24.1% year to date, lagging the Zacks Engineering - R and D Services industry but performing better than its industry peers.
Innodata competes with EXLService Holdings, Inc. EXLS, Cognizant Technology Solutions Corporation CTSH and EPAM Systems, Inc. EPAM in AI-enabled digital engineering, data management and enterprise AI services. So far this year, EXLService has been the best performer in the group despite declining 19.3%, reflecting investors' confidence in its AI-driven analytics and digital operations business. Cognizant has fallen 33.5%, while EPAM has declined 47.7% amid a slower recovery in enterprise IT spending. Innodata differentiates itself through its specialized focus on AI data engineering, foundation model training, evaluation, trust and safety, and agentic AI solutions for hyperscalers and frontier AI developers. As demand for generative AI infrastructure continues to expand, the company's execution across these high-value AI workflows will remain a key differentiator relative to its broader digital services peers.
INOD Price Performance (YTD)
Image Source: Zacks Investment Research
In terms of the forward 12-month price/earnings (P/E), INOD stock is currently trading at a premium to its industry at 44.49X.
INOD’s P/E Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
Innodata shares are currently trading at a forward 12-month P/E ratio of 44.49X, well above both its industry average and those of its closest peers, reflecting investors' expectations for sustained AI-driven growth. By comparison, EXLService, Cognizant and EPAM trade at forward P/E multiples of 14.14X, 9.15X and 7.83X, respectively. While Innodata commands a significantly higher valuation, the premium underscores the market's confidence in its specialized AI data engineering capabilities and long-term growth prospects.
Why INOD Stock Is a Buy for Now?
Despite its premium valuation, Innodata appears well positioned ahead of its second-quarter results. Strong demand for AI data engineering, model evaluation and trust-and-safety services, expanding relationships with hyperscalers, growing adoption of higher-value AI platforms and improving operating leverage provide a solid foundation for continued growth. The company also has a strong history of earnings beats and rising earnings estimates, all of which point to the potential for another solid quarterly performance. These factors make INOD an attractive stock to buy before its second-quarter earnings release.
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