Innodata Reports First Quarter 2018 Results

INNODATA Inc (NASDAQ:INOD) reported results for the first quarter ended March 31, 2018.

The company said that the total revenue was $14.1 million in the first quarter of 2018, a 10 percent decline from $15.7 million in the fourth quarter of 2017 and a 6 percent decline from 15 million in the first quarter of 2017.

As quoted in the press release:

• Net loss was $268,000 in the first quarter of 2018, or $(0.01) per diluted share, compared to a $2.1 million net loss, or $(0.08) per diluted share, in the fourth quarter of 2017, and a $1.7 million net loss, or $(0.07) per diluted share, in the first quarter of 2017.

• Adjusted EBITDA (as defined below) was $1.3 million in the first quarter of 2018, compared to $(1.7) million in the fourth quarter of 2017 which included a $1.1 million restructuring charge and $1.2 million loss contingency reserve. Adjusted EBITDA was $(0.2) million in the first quarter of 2017.

• Cash, cash equivalents and investments were $12.2 million at March 31, 2018 compared to $11.4 million at December 31, 2017.

The tables that accompany this release set out results by segment. Commencing with the first quarter of 2018, the segment previously referred to as “Media Intelligence Solutions”, or “MIS”, which consists of the Company’s Agility PR Solutions business, will be referred to as the “Agility” segment; the segment previously referred to as “Innodata Advanced Data Solutions”, or “IADS”, which consisted of the Company’s Synodex and docGenix businesses, will consist only of the Synodex business and will be referred to as the “Synodex” segment; and the Company’s docGenix business will be subsumed in its Digital Data Solutions, or “DDS”, segment.

Jack Abuhoff, Chairman and CEO, said, “Our total revenue in the first quarter of 2018 was in line with the high end of our guidance. Adjusted EBITDA was $1.3 million, benefitting by cost reductions we made in late 2017 that are expected to reduce overall 2018 costs by approximately $3.5 million and a $0.1 million positive contribution by our Agility business. In our DDS segment, we completed a one-time project in the fourth quarter of 2017 and experienced seasonal light volume on an ongoing engagement in the first quarter of 2018, resulting in 2018 first quarter revenue of $10.5 million (which includes $132,000 of docGenix revenue), as compared to $12.0 million in revenue in the fourth quarter of 2017 (which does not include $244,000 of docGenix revenue). Our 2018 business plan calls for additional operating efficiencies, largely through continued technology innovation, as well as continued development of AI-based solutions.

“Our Synodex segment transforms and enhances medical data for business use. Synodex revenue in the first quarter of 2018 was $980,000 compared to revenue in the fourth quarter of 2017 of $1.34 million which included $244,000 of docGenix revenue. docGenix revenue is now subsumed in our DDS segment. The Synodex business declined in the first quarter by $116,000 as a result of volume seasonality. We onboarded a new client engagement in the first quarter and expect near-term growth from two existing clients. From a revenue perspective, this new engagement is expected to substitute for a client engagement that ended in the first quarter of 2018.

“Our Agility segment, which empowers PR and communications professionals with a powerful, yet easy-to-use, SaaS-based media database, monitoring, and analytics platform, increased revenue in the first quarter of 2018 to $2.7 million, a 14% improvement over revenue in the fourth quarter of 2017. The increase primarily reflects one-time additional revenue from a reseller and seasonal revenue from our annual Bulldog awards program. In the first quarter of 2018, we saw continued improvement in product engagement, customer retention, and marketing metrics. Agility’s plan for 2018 calls for double-digit revenue growth and EBITDA break-even.”

Abuhoff continued, “In April, after an extensive search by our board’s nominating committee, we added three new directors to our board – the former CEO of one of the largest U.S.-based life reinsurers, the chief marketing officer of a fast-growing software company, and the former CEO of an innovative digital business information/media company. Each of these directors has significant experience directly relevant to one or more of our business segments and has expressed enthusiasm about contributing to our growth. The special committee of the board, the formation of which we announced in December 2017, continues to assess our segments and evaluate strategies for shareholder value creation.”

Abuhoff concluded, “We anticipate second quarter revenue to be in the range of $13.1 – $13.5 million, consisting of DDS revenue in the range of $9.9 – $10.1 million, Synodex revenue in the range of $0.9 million – $1.0 million, and Agility revenue in the range of $2.3 – $2.4 million.”

Click here for the full text release.