Innodata Inc. · NASDAQ:INOD
Innodata — Q2 2024 Earnings Presentation
29 slides from Innodata's earnings presentation, August 2024
Slide 1: Q2 2024 Investor Presentation
Q2 2024 Investor Presentation AUGUST 2024 | NASDAQ: INOD 1 1
Slide 2: Disclaimers
Disclaimers Forward-Looking Statements Securities and Exchange Commission. This presentation contains forward-looking statements within the meaning of Section 21E of the Securities Our actual results could differ materially from the results referred to in any forward-looking statements. Factors Exch
Slide 3: About Innodata
About Innodata 3
Slide 4: Why Invest in Innodata
ABOUT INNODATA Why Invest in Innodata The technology Enormous total Supporting Big Tech Innodata is uniquely positioned as a partner-of-choice for addressable market builders and enterprise "picks and shovels" beneficiary of data quality, scale, and (TAM) opportunity for adopters of language the Gen
Slide 5: Innodata provides technology, tools, and platforms supported by domain data specialists
ABOUT INNODATA Innodata provides technology, tools, and platforms supported by domain data specialists, technologists, data scientists, and testers across the globe 20+ Delivery Locations 5,000+ Global Experts 85+ Languages Global infrastructure supporting Wide range of subject matter expertise acro
Slide 6: Our competitive advantage
ABOUT INNODATA Our competitive advantage supports multiple AI services subsegments BUILDERS (LARGE TECH) ADOPTERS (ENTERPRISES)* AI Scaled Data • Data Curation AI Services and • Consulting Solutions • Data Transformation Platforms • AI Services (AIOps, CoPilots, Model Trust, Safety & Evaluation) • L
Slide 7: Our technology platforms support both Big Tech and enterprise AI use cases
ABOUT INNODATA Our technology platforms support both Big Tech and enterprise AI use cases Vertical Platforms — Niche Industry Workflows Horizontal Platforms — AI Data Pipelines Regulatory Change Management LLM Annotation Platform Foundational Platform ML Annotation Platform Goldengate Platform2 Inte
Slide 8: Well Positioned in Growing Market
Well Positioned in Growing Market 8
Slide 9: We have evolved our model to service leading enterprises on generative AI
WELL-POSITIONED IN GROWING MARKET We have evolved our model to expertly service the world’s leading enterprises on generative AI Applied AI and Machine Classical AI for Leading Generative AI for Leading Learning (ML) Tech Companies Tech Companies Launched Innodata Labs Rapidly scaled two Big Tech Si
Slide 10: We believe we have opportunities for continued growth & expansion
WELL-POSITIONED IN GROWING MARKET We believe we have opportunities for continued growth & expansion Magnificent Seven Global Tech Enterprise AI Services and Companies & Other Large Technology Platforms (Direct Distribution and via Companies Building Foundation Models White Label) Billions of dollars
Slide 11: Generative AI is anticipated to be the next-generation computation platform
WELL-POSITIONED IN GROWING MARKET Generative AI is anticipated to be the Enormous generative AI next-generation computation platform addressable market opportunity4 $ in billions We believe the generative AI market opportunity will rival the internet $1,304 and mobile in significance • “Magnificent
Slide 12: Strategy to Lead Global AI Technology Company Serving Both AI Builders and AI Adopters
WELL-POSITIONED IN GROWING MARKET Strategy to Lead Global AI Technology Company Serving Both AI Builders and AI Adopters Our Vision: To Be the Leading Global AI Technology Company Serving Both AI Builders and AI Adopters Land Expand Innovate Optimize New Customers & Engagement with New Capabilities
Slide 13: Q2 2024 Highlights and Financial Overview
Q2 2024 Highlights and Financial Overview 13
Slide 14: Q2 2024 Key Highlights
Q2 2024 HIGHLIGHTS AND FINANCIAL OVERVIEW Q2 2024 Key Highlights 66% +2 $87.5M3 60% or more YoY organic New Big Tech customers won YTD 2024 Program expansions with Big Tech customer organic revenue growth anticipated revenue growth (Five of “Magnificent 7” won in 2023) (bringing value of customer re
Slide 15: Q2 2024 and Historical Results
Q2 2024 HIGHLIGHTS AND FINANCIAL OVERVIEW Q2 2024 In millions US$ Q2-2024 YoY Revenue Adjusted Gross Profit 1 Adjusted EBITDA 1 $2.8 $10.8 +66% $8.1 +76% $32.6 +33% $1.6 33% 9% $19.7 41% 43.9% 14.3% 41.3% 8% 39.9% 4.3% Q2'23 Q2'24 Q2'23 Q2'24 Q2'23 Q2'24 $32.6 33.0In millions US$ Historical 2022 thr
Slide 16: 1H 2024
Q2 2024 HIGHLIGHTS AND FINANCIAL OVERVIEW 1H 2024 In millions US$ June 2024 YTD $6.6 $21.8 Revenue Adjusted Gross Profit 1 Adjusted EBITDA 1 +53% $15.5 +40% 11% 37% $2.4 +172% $59.1 $38.5 40% 43.9% 14.3% 41.3% 6% 39.9% 4.3% Jun'23 YTD Jun'24 YTD Jun'23 YTD Jun'24 YTD Jun'23 YTD Jun'24 YTD $3.6m of a
Slide 17: Revenue Growth
Q2 2024 HIGHLIGHTS AND FINANCIAL OVERVIEW Revenue Growth Q2-2024 was a record revenue quarter, capping five consecutive quarters of growth $32.6 In millions US$ $26.1 $26.5 $22.2 $21.2 $19.3 $20.0 $19.4 $19.7 $18.4 $18.8 $17.0 $17.5 $16.0 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q
Slide 18: We increased our FY24 revenue guidance to 60% or more
Q2 2024 HIGHLIGHTS AND FINANCIAL OVERVIEW We increased our FY24 revenue guidance to 60% or more as a result of strong momentum in our business In millions US$ +60% $138.8 $86.8 2023 2024 Projected 18
Slide 19: We are forecasting to triple our Adjusted EBITDA from Q2'24 to Q3'24
Q2 2024 HIGHLIGHTS AND FINANCIAL OVERVIEW We are forecasting to triple our Adjusted EBITDA1 from $2.8m in Q2’24 to $8.4m in Q3’24, demonstrating strong operating leverage in our business In millions US$ +200% $8.4 $2.8 Q2'24 Q3'24 1 Non-GAAP measure. Please see “Reconciliation of Non-GAAP Measures”
Slide 20: We have a healthy balance sheet with high net cash
Q2 2024 HIGHLIGHTS AND FINANCIAL OVERVIEW We have a healthy balance sheet with high net cash Cash and short-term Balance sheet Available credit facility investments $16.5M Clean $30M of cash and short-term balance sheet with no external line of credit with Wells Fargo, no investments as of Jun’24 de
Slide 21: Reconciliation of Non-GAAP Measures
Q2 2024 HIGHLIGHTS AND FINANCIAL OVERVIEW Reconciliation of Non-GAAP Measures 21
Slide 22: Appendix
Appendix 22
Slide 23: 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 Supervised Reward Reinforcement Pretraining Fine-tuning Modeling Learning Evaluation Raw Internet Demonstrations Comparisons Prompts Evaluation & Red Trillions of words (low- Ideal LLM prompts & (highest quality/ large (h
Slide 24: We're helping align LLM foundation models with human values
CASE STUDY 1: Leading Hyperscaler | AI Managed Services We’re helping align LLM foundation models with human values The Challenge What We Provide One of the world’s leading • Provide Red Teaming, AutoTesting, prompt generation/evaluation, and hyperscaler cloud providers and benchmarking as part of a
Slide 25: We helped a global hyperscaler build world-class foundation models
CASE STUDY 2: Big 5 Tech Company | AI Scaled Data Solutions We helped a global hyperscaler build world-class foundation models The Challenge What We Provide Once Large Language Models (such as We provide large, high-quality and diverse datasets across a broad range of ChatGPT) are pretrained with ra
Slide 26: 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 What We Provide A $5B information company wanted Innodata provided consulting and implementation services. We started with a vision workshop to reengineer its d
Slide 27: 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 What We Provide One of the most critical analytical functions in financial services Innodata automated the monitoring and aggregation of institutions (and oth
Slide 28: 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 What We Provide A preeminent social media video sharing Innodata’s Agility PR platform was the first end-to-end PR
Slide 29: Driving Generative AI Innovation
Driving Generative AI Innovation Innodata is a global data engineering company. We believe that data and AI are inextricably linked. That’s why we’re on a mission to help the world’s leading technology companies and enterprises drive Generative AI / AI innovation. We provide a range of transferable