Innodata Inc. · NASDAQ:INOD
Innodata — Q1 2024 Earnings Presentation
25 slides from Innodata's earnings presentation, May 2024
Slide 1: Global Data Engineering Specialist Focused on Generative AI
Global Data Engineering Specialist Focused on Generative AI Q1’24 | May 2024 | NASDAQ: INOD
Slide 2: Disclaimers
DISCLAIMERS Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 21E of the Our actual results could differ materially from the results referred to in any forward-looking statements. Securities Exchange Act of 1934, as amended, and Section 27
Slide 3: Executive Summary
EXECUTIVE SUMMARY We’re a global data engineeering specialist focused on generative AI. We’re helping leading companies build and integrate Q1 2024 Highlights large language models (LLMs) and other AI. 41% +2 New YoY organic revenue growth Big Tech customers (in addition to five of “Magnificent 7” w
Slide 4: INOD at a Glance
INOD AT A GLANCE We have executed a multi-phase strategy culminating in our ability to service the world’s leading enterprises on generative AI. Applied AI and Classical AI for Generative AI for Data Engineering Machine Learning Leading Tech Leading Tech at Scale (ML) Companies Companies Focused on
Slide 5: Our win momentum accelerated significantly in 2023 and Q1 2024
INOD AT A GLANCE Recent Q1 Customer Wins Include Our win momentum accelerated significantly in 2023 and Q1 2024. Two Big Tech Companies. This is on top of five of the Innodata Announces “Magnificent 7” Global Technology Another Big Five Tech Companies that started LLM data New Customer Win engineeri
Slide 6: Our service offerings support both builders and adopters of generative AI and LLMs
WHAT WE DO Our service offerings support both builders and adopters of generative AI and LLMs. AI Scaled Data Solutions • Data Curation Builders • Data Transformation (Large Tech) • LLM Instruction Datasets (Multilingual) (supervised fine-tuning, RLHF, DPO) • Data Annotation (Across Modalities) • Tr
Slide 7: Data engineering services are at the core of generative AI and LLMs
WHAT WE DO Data engineering services are at the core of generative AI and LLMs. Pretraining Supervised Fine-tuning Reward Modeling Reinforcement Learning Evaluation Raw Internet Demonstrations Comparisons Prompts Evaluation & Red Trillions of words (low- Ideal LLM prompts & (highest quality/ large (
Slide 8: Our proprietary, best-in-class platforms help accelerate enterprise AI enablement
WHAT WE DO Our proprietary, best-in-class platforms help accelerate enterprise AI enablement. Vertical Platforms Enterprise Platforms AI-Enabled Regulatory Change Management Platform Annotation (AI/LLM) Platform Integrated workflow application enabling legal and compliance Workflow application with
Slide 9: Our recipe for success has been to leverage our legacy to propel us into the future
COMPETITIVE POSITIONING Our recipe for success has been to leverage our legacy to propel us into the future. We Leverage: • 30+ years providing quality data to the world’s leading data-centric information services businesses • Early investments in applied AI (beginning 2016) We Bring: One of our lar
Slide 10: We operate globally, supporting specialized domains in over 40 languages
COMPETITIVE POSITIONING We operate globally, supporting specialized domains in over 40 languages. 4,000+ 20+ Resources across 20+ Global Delivery Locations Global Experts Delivery Locations Wide range of subject Global infrastructure matter expertise across finance, supporting customers across healt
Slide 11: We span multiple AI services subsegments
COMPETITIVE POSITIONING We span multiple AI services subsegments Scaled Data Solutions Competitors AI Scaled Data Solutions Builders (Large Tech) Managed Services Competitors AI Managed Services Industry Specific Platform Adopters Competitors (Enterprises) AI–Enabled Industry & Enterprise Platforms
Slide 12: Our execution is guided by four strategic pillars & defined actions
COMMERCIAL STRATEGY Our execution is guided by four strategic pillars & defined actions. Our Vision: To Be the Leading Global AI Technology Company Serving Both AI Builders and AI Adopters Four Strategic Pillars Land Expand Innovate Optimize New Customers and Grow Engagement with Existing New Capabi
Slide 13: We believe we have opportunities for continued growth & expansion
COMMERCIAL STRATEGY We believe we have opportunites for continued growth & expansion. Magnificent Seven Global Tech Companies Enterprise LLMs (direct distribution and & Other Large Technology Companies via white label) Building Foundation Models Billions of dollars committed to LLM strategies A deca
Slide 14: Generative AI is anticipated to be the next-generation computation platform
COMMERCIAL STRATEGY Generative AI is anticipated to be the next-generation computation platform. We believe the generative AI market opportunity will rival the internet and mobile in significance Enormous generative AI addressable market opportunity4 $ in billions $1,304 • Magnificent Seven AI arms
Slide 15: Case Study 1: We're helping a global hyperscaler build world-class foundation models
CASE STUDY 1: Big 5 Tech Company | AI Scaled Data Solutions We’re helping a global hyperscaler build world-class foundation models. The Challenge: Once Large Language Models (such as ChatGPT) are pretrained with raw internet content, they require supervised finetuning with demonstration data. This i
Slide 16: Case Study 2: We're helping align LLM foundation models with human values
CASE STUDY 2: Leading Hyperscaler | AI Managed Services We’re helping align LLM foundation models with human values. The Challenge: One of the world’s leading hyperscaler cloud providers and Big 5 Tech company sought to create a broad ecosystem of LLM Foundation Models in alignment with Responsible
Slide 17: Case Study 3: We're helping integrate LLMs within critical business processes
CASE STUDY 3: Major Information Company | AI Managed Services We’re helping integrate LLMs within critical business processes. The Challenge: A $5B information company wanted to reengineer its data transformation workflows to provide improved scalability and economics across data operations spanning
Slide 18: Case Study 4: We're helping reimagine regulatory change management
CASE STUDY 4: Top-3 Global Bank | Generative AI-Enabled Industry Platforms We’re helping reimagine regulatory change management. The Challenge: One of the most critical analytical functions in financial services institutions (and other highly-regulated entities) involves tracking changes in regulati
Slide 19: Case Study 5: We're leveraging AI for media monitoring, targeting and analytics
CASE STUDY 5: Preeminent Social Media Video Sharing Platform | Generative AI-Enabled Industry Platforms We’re leveraging AI for media monitoring, targeting and analytics. The Challenge: A preeminent social media video sharing platform needed to monitor their brand and reputation as reflected across
Slide 20: Q1-2024 was a record revenue quarter, capping four consecutive quarters of growth
FINANCIAL OVERVIEW Q1-2024 was a record revenue quarter, capping four consecutive quarters of growth $26.5 $26.1 $22.2 $21.2 $20.0 $19.7 $19.3 $19.4 $18.8 $18.4 $17.0 $17.5 $16.0 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Remaining Revenue Terminated Social Media C
Slide 21: We have demonstrated strong operating leverage from growth and cost control
FINANCIAL OVERVIEW We have demonstrated strong operating leverage from growth and cost control Q1-2024 YoY Revenue Adj. Gross Profit1 Adj. EBITDA1 $3.8 $11.0 +41% +48% $26.5 +372% $7.4 14.3% 43.9% $18.8 41.3% 39.9% 39.4% $0.8 4.3% Q1'23 Q1'24 Q1'23 Q1'24 Q1'23 Q1'24 Historical 2022 through Q1-2024 $
Slide 22: We doubled our revenue growth guidance as the result of strong business momentum
FINANCIAL OVERVIEW We doubled our revenue growth guidance as the result of strong business momentum. May 7, 2024 INOD Press Release: $121.5 Innodata raises guidance to at least 40% +40% $86.8 organic revenue growth in 2024 (from 20%) 2023 2024 Projected 22
Slide 23: We have a healthy balance sheet with high net cash
FINANCIAL OVERVIEW We have a healthy balance sheet with high net cash. • Cash and short-term investments o $19.0M of cash and short-term investments as of Mar’24 • No external debt o Clean balance sheet with no external debt/borrowings • Access to a $10m line of credit with Wells Fargo (subject to a
Slide 24: Reconciliation of Non-GAAP Measures
FINANCIAL OVERVIEW Reconciliation of Non-GAAP Measures $ in Millions FY'22 FY'23 Q1'24 Consolidated Net Income (Loss) -$11.9 -$0.9 $1.0 Tax Provision $1.5 $1.0 $0.4 Interest Expense $0.0 $0.4 $0.1 Depreciation and Amortization $3.9 $4.7 $1.3 Severance $0.0 $0.6 $0.0 Stock-based compensation $3.3 $4.
Slide 25: Delivering the Promise of AI
Delivering the Promise of AI Innodata is a global data engineering company delivering the promise of AI to many of the world’s most prestigious companies. We provide AI-enabled software platforms and managed services for AI data collection/annotation, AI digital transformation, and industry-specific