CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Dec. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| CONSOLIDATED BALANCE SHEETS | ||
| Serial preferred stock, shares authorized | 4,998,000 | 4,998,000 |
| Serial preferred stock, outstanding | 0 | 0 |
| Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
| Common stock, shares authorized | 75,000,000 | 75,000,000 |
| Common stock, shares issued | 34,484,000 | 31,937,000 |
| Common stock, shares outstanding | 31,300,000 | 28,753,000 |
| Treasury stock, shares | 3,184,000 | 3,184,000 |
Description of Business and Summary of Significant Accounting Estimates and Policies |
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| Description of Business and Summary of Significant Accounting Estimates and Policies | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description of Business and Summary of Significant Accounting Estimates and Policies | 1. Description of Business and Summary of Significant Accounting Estimates and Policies Description of Business - Innodata Inc. (Nasdaq: INOD) (including its subsidiaries, the “Company”, “Innodata”, “we”, “us” or “our”) is a leading data engineering company. The Company’s mission is to help the world’s most prestigious companies deliver the promise of ethical, high-performing artificial intelligence (“AI”), which the Company believes will contribute to a safer and more prosperous world. The Company was founded on a simple idea: engineer the highest quality data so organizations across broad industry segments could make smarter decisions. Today, the Company believes it is delivering the highest quality data for some of the world’s most innovative technology companies to use to train the AI models of the future. AI holds the promise that computers can perceive and understand the world, enabling products and services that would have been previously unimaginable and impossible with traditional coding. AI learns from data, and the highest-performing AI will have learned from the highest-quality data. The Company believes that it can contribute meaningfully by harnessing its capabilities, honed over 35+ years, in collecting and annotating data at scale with consistency and high accuracy. The Company is also helping companies deploy and integrate AI into their operations and products and providing innovative AI-enabled industry platforms, helping ensure that its customers’ businesses are prepared for a world in which machines augment human activity in ways previously unimaginable. The Company developed its capabilities and honed its approaches progressively over the last 35+ years creating high-quality data for many of the world’s most demanding information companies. Approximately nine years ago, the Company formed Innodata Labs, a research and development center, to research, develop and apply machine learning and emerging AI to its large-scale, human-intensive data operations. In 2019, the Company began packaging the capabilities that emerged from its R&D efforts in order to align with several fast-growing new markets and help companies use AI/ML to drive performance benefits and business insights. The Company’s historical core competency in high-quality data, combined with these R&D efforts in applied AI, created the foundation for the evolution of the Company’s offerings, which include AI Data Preparation, AI Model Deployment and Integration, and AI-Enabled Industry Platforms. AI Data Preparation For several of the world’s large technology companies, the Company supports their efforts at building generative AI foundation models. For these companies, the Company provides or is poised to provide a range of scaled data solutions and services. The Company’s scaled data solutions include providing instruction data sets for fine-tuning LLMs to understand prompts, to accept instruction, to converse, to apparently reason, and to perform the myriad of incredible feats that many of us have now experienced. The Company also provides reinforcement learning and reward modeling, services which are critical to provide the guardrails against toxic, bias and harmful responses, and model evaluation services. For social media companies, financial services companies, and many others, the Company collects or creates training data, annotates training data, and trains AI algorithms for working with images, text, video, audio, code and sensor data. The Company utilizes a variety of leading third-party tools, proprietary tools and customer tools. For text annotation, the Company uses its proprietary data annotation platform that incorporates AI to reduce cost while improving consistency and quality of output. The Company’s proprietary data annotation platform features auto-tagging capabilities that apply to both classical and generative AI tasks. The platform encapsulates many of the innovations the Company has conceived of in the course of its 35-year history of creating high-quality data. In addition, because collecting real-world data is often impracticable (due to data privacy regulations or rarity of cohorts and outliers), the Company creates high-quality synthetic data that maintains all of the statistical properties of real-world data, using a combination of domain specialists and machine technologies that leverage large language models (LLMs). AI Model Deployment and Integration The Company helps businesses leverage the latest AI technologies to achieve their goals. The Company develops custom AI models (where it selects the appropriate algorithms, tunes hyperparameters, trains and validates the models, and updates the models as required). The Company also helps businesses fine-tune their own custom versions of the Company’s proprietary models and third-party foundation models to address domain-specific and customer-specific use cases. For the Company’s customers that provide products and solutions that require intensive text data processing and analytics, in addition to deploying and integrating AI models, the Company often provides a range of data engineering support services including data transformation, data curation, data hygiene, data consolidation, data extraction, data compliance, and master data management. The Company’s customers span a diverse range of industries and a wide range of AI use cases, benefiting from the short time-to-value and high economic returns of the Company’s AI solutions and platforms. AI-Enabled Industry Platforms The Company’s AI-enabled industry platforms address specific, niche market requirements the Company believes it can innovate with AI/ML technologies. The Company deploys these industry platforms as software-as-a-service (SaaS) and as managed services. These platforms benefit from the Company’s technology infrastructure, its industry-specific knowledge, its strong customer relationships and experience merging technology with the business processes of its customers. To date, the Company has built an industry platform for medical records data extraction and transformation (which the Company brands as “Synodex®”) and an industry platform for public relations (which the Company brands as “Agility PR Solutions”). The Company is in development with an additional AI-enabled industry platform to serve financial services institutions. The Company’s Synodex industry platform transforms medical records into useable digital data organized in accordance with its proprietary data models or customer data models. The Company’s Agility industry platform provides marketing communications and public relations professionals with the ability to target and distribute content to journalists and social media influencers world-wide and to monitor and analyze global news (print, web, radio and TV) and social media. The Company’s operations are presently classified and reported in three reporting segments: Digital Data Solutions (DDS), Synodex and Agility. Significant Accounting Policies and Estimates Principles of Consolidation - The consolidated financial statements include the accounts of Innodata Inc. and its wholly owned subsidiaries, and Innodata docGenix, LLC, a limited liability company that was majority-owned by the Company during the year ended December 31, 2024. The minority interests of Innodata docGenix, LLC were redeemed by the Company on December 31, 2024. The non-controlling interests in the docGenix limited liability company at December 31, 2023 had call and put options that can be settled in cash or stock. Accordingly, this is presented in temporary equity in accordance with Financial Accounting Standards Board (FASB) non-controlling interest guidance. All intercompany transactions and balances have been eliminated in consolidation. Use of Estimates - In preparing consolidated financial statements in conformity with U.S. GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Management believes that the estimates and assumptions used in the preparation of the consolidated financial statements are reasonable. Actual results could differ from those estimates. Significant estimates include those related to the allowance for credit losses and billing adjustments, useful life of long-lived assets, useful life of intangible assets, impairment of goodwill and intangible assets, valuation of deferred tax assets, valuation of stock-based compensation, pension benefit plan assumptions, litigation accruals and estimated accruals for various tax exposures. Revenue Recognition - The Company’s revenue is recognized when services are rendered or goods are delivered to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those services or goods as per the agreement with the customer. In cases where there are agreements with multiple performance obligations, the Company identifies each performance obligation and evaluates whether the performance obligations are distinct within the context of the agreement at the agreement’s inception. Performance obligations that are not distinct at agreement inception are combined. For agreements with distinct performance obligations, the Company allocates the transaction price to each distinct performance obligation proportionately based on the estimated standalone selling price for each performance obligation, if any, and then evaluates how the services are performed for the customer to determine the timing of revenue recognition. For the Digital Data Solutions (DDS) segment, revenue is recognized primarily based on the quantity delivered or resources utilized in the period in which services are performed and performance conditions are satisfied as per the agreement. Revenue from agreements billed on a time-and-materials basis is recognized as services are performed. Revenue from fixed-fee agreements, which is not significant to overall revenues, is recognized based on the proportional performance method of accounting, as services are performed, or milestones are achieved. For the Synodex segment, revenue is recognized primarily based on the quantity delivered in the period in which services are performed and performance conditions are satisfied as per the agreement. A portion of the Synodex segment revenue is derived from licensing the Company’s functional software and providing access to the Company’s hosted software platform. Revenue from such services is recognized monthly when all parties to the agreement have agreed to the agreement; each party’s rights are identifiable; the payment terms are identifiable; the agreement has commercial substance; access to the service is provided to the end user; and collection is probable. The Agility segment derives its revenue primarily from subscription arrangements and provision of enriched media analysis services. It also derives revenue as a reseller of corporate communication solutions. Revenue from subscriptions is recognized monthly when access to the service is provided to the end user; all parties to the agreement have agreed to the agreement; each party’s rights are identifiable; the payment terms are identifiable; the agreement has commercial substance; and collection is probable. Revenue from enriched media analysis services is recognized when the services are performed, and performance conditions are satisfied. Revenue from the reseller agreements is recognized at the gross amount received for the goods in accordance with the Company functioning as a principal due to the Company meeting the following criteria: the Company acts as the primary obligor in the sales transaction; assumes the credit risk; sets the price; can select suppliers; and is involved in the execution of the services, including after sales service. Revenue associated with the services provided in one period and billed in a subsequent period is commonly referred to as unbilled revenues and is included under Accounts receivable. The Company considers U.S. GAAP criteria for determining whether to report gross revenue as a principal versus net revenue as an agent. The Company evaluates whether it is in control of the services before the same are transferred to the customer to assess whether it is principal or agent in the arrangement. Contract acquisition costs, which are included in prepaid expenses and other current assets, are amortized over the term of a subscription agreement or contract that normally has a duration of 12 months or less. The Company reviews these prepaid acquisition costs on a periodic basis to determine the need to adjust the carrying values for early terminated contracts. Included in prepaid expenses and other current assets on the accompanying consolidated balance sheets are contract acquisition costs amounting to $1.1 million and $0.8 million for the years ended December 31, 2024 and 2023 , respectively. These acquisition costs relate to our Agility segment and are amortized using the straight-line method over the term of the subscription agreement. Foreign Currency Translation - The functional currency of the Company’s subsidiaries in the Philippines, India, Sri Lanka, Israel, Hong Kong, the U.K. and Canada (other than the Agility subsidiaries) is the U.S. dollar. Transactions denominated in Philippine pesos, Indian and Sri Lankan rupees, Israeli shekels, U.K. pound sterling and Canadian dollars are translated to U.S. dollars at rates which approximate those in effect on the transaction dates. Monetary assets and all liabilities denominated in foreign currencies on December 31, 2024 and December 31, 2023 are translated at the exchange rate in effect as of those dates. Non-monetary assets and stockholders’ equity are translated at the appropriate historical rates. Included in direct operating costs were foreign exchange (gains) losses resulting from such translations of approximately ($0.2) million and $0.4 million for the years ended December 31, 2024 and 2023, respectively. The functional currency for the Company’s subsidiary in Germany is the Euro. The functional currencies for the Company’s Agility subsidiaries in the U.K. and Canada are the Pound Sterling and the Canadian dollar, respectively. The financial statements of these subsidiaries are prepared in their respective currencies. Financial information is translated from the applicable functional currency to the U.S. dollar (the reporting currency) for inclusion in the Company’s consolidated financial statements. Income, expenses, and cash flows are translated at weighted-average exchange rates prevailing during the fiscal period, and assets and liabilities are translated at fiscal period-end exchange rates. Resulting translation adjustments are included as a component of accumulated other comprehensive income loss in stockholders’ equity. Foreign exchange transaction gains or losses are included in direct operating costs in the accompanying consolidated statements of operations and comprehensive income. Derivative Instruments - The Company accounts for derivative transactions in accordance with the FASB’s Accounting Standards Codification (“ASC”) Topic 825, “Financial Instruments”. For derivative instruments that are designated and qualify as cash flow hedges, the entire change in fair value of the hedging instrument is recorded in Other comprehensive income (loss). When the amounts recorded in Other comprehensive income (loss) are reclassified to earnings, they are included as part of Direct operating costs. For derivative instruments that are not designated as hedges, any change in fair value is recorded directly in earnings as part of Direct operating costs. The total notional value of designated outstanding foreign currency forward contracts was $22.5 million and $10.5 million as of December 31, 2024 and 2023, respectively. Cash Equivalents - For financial statement purposes, the Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. Short term Investments-other - For financial statement purposes, the Company considers investments made in time deposits and treasury bills having an original maturity of more than three months but less than one year from the balance sheet date under short term investments. Concentration of Credit Risk - The Company maintains its cash with highly rated financial institutions, located in the United States and in foreign locations where the Company has its operations. At December 31, 2024, the Company had cash and cash equivalents of $46.9 million, of which $17.9 million was held by its foreign subsidiaries and $29.0 million was held in the United States. To the extent that such cash exceeds the maximum insurance levels, the Company is uninsured. The Company has not experienced any losses in such accounts. Accounts Receivable - Accounts receivable is generally recorded at the invoiced amounts, net of an allowance for expected losses. The Company establishes credit terms for new customers based upon management’s review of their credit information and project terms, and performs ongoing credit evaluations of its customers, adjusting credit terms when management believes appropriate based upon payment history and an assessment of the customer’s current creditworthiness. We record an allowance for credit losses for estimated losses resulting from the failure of our customers to make the required payments and provisions for billing adjustments relating to quality issues on delivered services. The allowance for credit losses is based on a review of specifically identified accounts and an overall aging analysis applied to accounts pooled based on similar risk characteristics. Judgments are made with respect to the collectability of accounts receivable within each pool based on historical experience, current payment practices, and current economic trends based on our expectations over the expected life of the receivables, generally ninety days or less. Actual credit losses could differ from those estimates. Property and Equipment - Property and equipment are stated at cost and are depreciated on the straight-line method over the estimated useful lives of the related assets, which is generally to . Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the terms of the leases. Certain assets under capital leases are amortized over the lives of the respective leases or the estimated useful lives of the assets, whichever is shorter. Capitalized Developed Software - The Company incurs development costs related to software it develops for its internal use. Qualifying costs incurred during the application development stage are capitalized. These costs primarily consist of internal labor and third-party development costs and are amortized using the straight-line method over the estimated useful life of the capitalized developed software, which generally ranges from to ten years. All other research and maintenance costs are expensed as incurred. Capitalized developed software in progress as of December 31, 2024 and 2023 were $3.6 million and $3.5 million, respectively. The cumulative completed capitalized developed software as of December 31, 2024 and 2023 was $19.8 million and $15.2 million, respectively. Long-lived Assets - Management assesses the recoverability of its long-lived assets, whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The following factors, if present, may trigger an impairment review: (i) significant underperformance relative to expected historical or projected future operating results; (ii) significant negative industry or economic trends; (iii) significant decline in the Company’s stock price for a sustained period; and (iv) a change in the Company’s market capitalization relative to net book value. If the recoverability of these assets is unlikely because of the existence of one or more of the above-mentioned factors, an impairment analysis is performed, using undiscounted cash flow projections. Management makes assumptions regarding estimated future cash flows and other factors to determine the fair value of these respective assets. An impairment loss will be recognized only if the carrying value of a long-lived asset is not recoverable and exceeds its fair value and is measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value. Goodwill and Other Intangible Assets - The Company performs a valuation of assets acquired and liabilities assumed on each acquisition accounted for as a business combination and allocates the purchase price of each acquired business to its respective net tangible and intangible assets and liabilities. Acquired intangible assets principally consist of technology, customer relationships, backlog and trademarks, having useful lives which range from to twelve years. The Company determines the appropriate useful life by performing an analysis of expected cash flows based on projected financial information of the acquired businesses. Intangible assets are amortized over their estimated useful lives using the straight-line method, which approximates the pattern in which the majority of the economic benefits are expected to be consumed. Intangible assets are amortized into direct operating costs ratably over their expected related revenue streams over their useful lives. Goodwill represents the excess of the cost of an acquired entity over the fair value of the acquired net assets. The Company does not amortize goodwill but evaluates it for impairment at the reporting unit level annually during the third quarter of each fiscal year (as of September 30 of that year) or when an event occurs, or circumstances change, that indicates the carrying value may not be recoverable. The Company performed its annual goodwill assessment for the Agility segment as of September 30, 2024 for impairment. The impairment test involves estimating the fair value based on a combination of income (estimates of future discounted cash flows) and the market approach (market multiples for similar companies) using unobservable inputs (Level 3). The Company concluded that there is no impairment of goodwill for the Agility segment. Income Taxes - Estimated deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities, using enacted tax rates, as well as any net operating loss or tax credit carryforwards expected to reduce taxes payable in future years. A valuation allowance is provided when it is more likely than not that all or some portion of the estimated deferred tax assets will not be realized. While the Company considers future taxable income in assessing the need for the valuation allowance, in the event that the Company anticipates that it will be able to realize the estimated deferred tax assets in the future in excess of its net recorded amount, an adjustment to the provision for deferred tax assets would increase income in the period such determination was made. Similarly, in the event that the Company anticipates that it will not be able to realize the estimated deferred tax assets in the future considering future taxable income, an adjustment to the provision for deferred tax assets would decrease income in the period such determination was made. Changes in the valuation allowance from period to period are included in the Company’s tax provision in the period of change. The Company indefinitely reinvests the foreign earnings in its foreign subsidiaries. If such earnings are repatriated in the future, or are no longer deemed to be indefinitely reinvested, the Company would have to accrue as a liability the applicable amount of foreign jurisdiction withholding taxes associated with such remittances. In assessing the realization of deferred tax assets, management considered whether it is more likely than not that all or some portion of the deferred tax assets of entities in the U.S., Canada, Germany and the U.K. will be realizable or not. The Company’s assessment for the U.S. and the U.K. entities during the year ended December 31, 2024 yielded positive evidence enabling the release of the valuation allowance for the U.S. and the U.K. deferred tax assets under “ASC Topic 740-10-30-22 – Accounting for Income Taxes”. As the expectation of future taxable income of the Canadian and German entities cannot be predicted with reasonable accuracy, the Company maintains a valuation allowance against the deferred tax assets of these entities. The Company accounts for income taxes regarding uncertain tax positions, and recognizes interest and penalties related to uncertain tax positions in income tax expense in the consolidated statements of operations and comprehensive income. Accounting for Leases - Accounting Standards for Codifications (ASC 842 “Accounting for Leases”) requires lessees to recognize most leases on their balance sheets as liabilities, with corresponding “right-of-use” assets. The Company recognizes a right-of-use asset and corresponding lease liability for all its operating leases. See Note 8, Operating Leases. The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date and requires an assessment of whether the fulfillment of the arrangement is dependent on the use of a specific asset or assets, or the arrangement conveys a right to use the asset. A reassessment is made after inception of the lease only if one of the following applies:
Whenever a reassessment is made, lease accounting shall commence or cease from the date when the change in circumstances gave rise to the reassessment for scenarios (a), (c) or (d) and at the date of renewal or extension period for scenario (b). Leases where the lessor retains substantially all the risks and rewards of ownership are classified as operating leases. As of December 31, 2024, all of the Company’s leases are classified under operating leases. Operating lease payments are recognized as an operating expense on a straight-line basis over the lease term. Accounting for Stock-Based Compensation - The Company measures and recognizes stock-based compensation expense for all share-based payment awards made to employees and directors based on the estimated fair value at the grant date. The stock-based compensation expense is recognized over the requisite service period. The fair value of stock option grants is determined using the Black-Scholes option-pricing model and the fair value of restricted stock units is determined using the Binomial option pricing model. For restricted stock units which are time vested, the fair value is determined based on the grant date fair value. The stock-based compensation expense related to the Company’s stock plans were allocated as follows (in thousands):
Fair Value of Financial Instruments - The carrying amounts of financial instruments approximated their fair value as of December 31, 2024 and 2023, because of the relatively short maturity of these instruments. See Note 16, Derivatives. Fair value measurements and disclosures define fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The accounting standard establishes a fair value hierarchy that prioritizes the inputs used to measure fair value into three levels. The three levels are defined as follows:
The Company’s forward contracts are at level 2 in the fair value hierarchy. Income (Loss) per Share - Income (loss) per share is computed using the weighted-average number of common shares outstanding during the year. Diluted income (loss) per share is computed by considering the impact of the potential issuance of common shares, using the treasury stock method, on the weighted average number of shares outstanding. For those securities that are not convertible into a class of common stock, the “two class” method of computing income (loss) per share is used. Pension - The Company records annual pension costs based on calculations, which include various actuarial assumptions including discount rates, compensation increases and other assumptions involving demographic factors. The Company reviews its actuarial assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends. The Company believes that the assumptions used in recording its pension obligations are reasonable based on its experience, market conditions and inputs from its actuaries. Deferred Revenue - Deferred revenue represents payments received from customers in advance of providing services and amounts deferred if conditions for revenue recognition have not been met. We expect to recognize substantially all of these performance obligations over the next 12 months. The balance of deferred revenues in the consolidated balance sheets amounted to $8.0 million and $3.5 million as of December 31, 2024 and 2023, respectively. The table below provides information about contract liabilities (deferred revenue) and the significant changes in the balance for the years ended December 31, 2024 and 2023, respectively (in thousands):
Recently Adopted Accounting Pronouncements - On November 27, 2023, the FASB issued Accounting Standards Update (ASU) No. 2023-07, “Improvements to Reportable Segment Disclosures,”. The ASU’s effective date is for fiscal years beginning after December 15, 2023. The adoption of the ASU 2023-07 will enhance expense disclosures in segment reporting and other qualitative disclosures and allows for disclosing multiple measures of segment profit or loss. The Company has adopted this standard and complied with the required disclosures. See Note 14, Segment reporting and concentrations. Recently Issued Accounting Pronouncements Not Yet Adopted - On December 14, 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. The ASU’s effective date is for fiscal years beginning after December 15, 2024 with early adoption permitted. The adoption of the ASU 2023-09 will enhance quantitative and qualitative disclosures related to rate reconciliation of significant components and income tax paid. We are currently evaluating the impact of the ASU on our disclosures within the consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”. ASU No. 2024-03 does not change or remove existing expense disclosure requirements but requires disaggregated disclosures about certain expense categories and captions, including but not limited to, purchases of inventory, employee compensation, depreciation, amortization and selling expenses. ASU No. 2024-03 will become effective for us in fiscal 2027 and in the first quarter of fiscal 2028 for interim reporting. Early adoption is permitted. We are currently evaluating the impact of the ASU on our disclosures within the consolidated financial statements. |
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Accounts Receivable |
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| Accounts Receivable | 2. Accounts Receivable Accounts receivable consists of the following (in thousands):
Activity in the allowance for the credit losses for the years ended December 31, 2024 and 2023 were as follows (in thousands):
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Property and equipment |
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| Property and equipment | 3. Property and equipment Property and equipment, which include amounts recorded under capital leases, are stated at cost less accumulated depreciation and amortization (in thousands), and consist of the following:
The estimated useful lives of the property and equipment range between two years and ten years. Depreciation and amortization expense of property and equipment were approximately $1.5 million and $1.2 million for the years ended December 31, 2024 and 2023, respectively. |
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Goodwill and Intangible Assets |
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| Goodwill and Intangible Assets | 4. Goodwill and Intangible Assets The changes in the carrying amount of goodwill for the year ended December 31, 2024 were as follows (in thousands):
As of September 30, 2024, the Company performed its annual goodwill impairment analysis on its reporting unit with goodwill, the Agility segment. It involved a quantitative goodwill impairment test and estimated the fair value based on a combination of the income approach (estimates of future discounted cash flows) and the market approach (market multiples for similar companies) using unobservable inputs (Level 3). The income approach uses a discounted cash flow (“DCF”) method that utilizes the present value of cash flows to estimate the segment’s fair value. The future cash flows of the segment were projected based on the Company’s estimates of future revenues, operating income, and other factors such as working capital and capital expenditures. As part of the DCF analysis, the Company projected revenue and operating profits and assumed long-term revenue growth rates in the terminal year. The market approach utilizes multiples of revenues and earnings before interest expense, taxes, depreciation, and amortization (“EBITDA”) to estimate the segment’s fair value. The market multiples used for the segment were based on a group of comparable companies’ market multiples applied to the Company’s revenue. The Company concluded that there is no impairment of goodwill. The fair value measurement of goodwill for the Agility segment was classified within Level 3 of the fair value hierarchy because the Company used the income approach, which utilizes significant inputs that are unobservable in the market and the market multiple approach using comparable entities to further validate the carrying values. The Company believes it made reasonable estimates and assumptions to calculate the fair value of the reporting unit as of the impairment test measurement date. The carrying value of goodwill was $2.0 million and $2.1 million as of December 31, 2024, and 2023, respectively. Intangibles Information regarding the Company acquired intangible assets and capitalized developed software was as follows (in thousands):
Amortization expense relating to acquired intangible assets was approximately $0.8 million and $0.9 million for the years ended December 31, 2024 and 2023, respectively. Amortization expense relating to capitalized developed software was approximately $3.5 million and $2.7 million for the years ended December 31, 2024 and 2023, respectively. Estimated annual amortization expense for intangible assets subsequent to December 31, 2024 is as follows (in thousands):
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Income Taxes |
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| Income Taxes | 5. Income Taxes The significant components of the provision for income taxes for the years ended December 31, 2024 and 2023 were as follows (in thousands):
The reconciliation of the U.S. statutory rate with the Company’s effective tax rate for the years ended December 31, 2024 and 2023 is summarized as follows:
Deferred tax assets and liabilities are classified as non-current. Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2024 and 2023 were as follows (in thousands):
In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred tax assets will not be realizable. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences are deductible and net operating losses are available. As of December 31, 2024, the Company continues to maintain a valuation allowance on all of the Company’s Canadian and German subsidiaries’ deferred tax assets. The Company maintained a valuation allowance of approximately $5.0 million and $13.8 million as of December 31, 2024 and 2023, respectively. The net change in the total valuation allowance was a decrease of $8.8 million and an increase of $0.8 million for the years ended December 31, 2024 and December 31, 2023, respectively. The change is due to the Company’s assessment during the third and fourth quarters of 2024, where the Company determined it was more likely than not that the Company would be able to realize the benefit of the deferred tax assets in the United States and the United Kingdom, respectively, resulting in the release of the valuation allowance. In reaching this determination, the Company considered the growing trend of profitability over the last three years in the United States and the United Kingdom, as well as its expectations regarding the generation of future taxable income. The remaining valuation allowance as of December 31, 2024 relates to the Company’s Canadian and German subsidiaries’ deferred tax assets. Despite the access to the overseas earnings and the resulting toll charge, the Company intends to indefinitely reinvest the foreign earnings in our foreign subsidiaries on account of the foreign jurisdiction withholding tax that the Company has to incur on the actual remittances. Unremitted earnings of foreign subsidiaries amounted to approximately $53.9 million at December 31, 2024. If such earnings are repatriated in the future or are no longer deemed to be indefinitely reinvested, the Company would have to accrue the applicable amount of foreign jurisdiction withholding taxes associated with such remittances. United States and foreign components of income (loss) before provision for income taxes for each of the years ended December 31, were as follows (in thousands):
At December 31, 2024, the Company had available U.S. federal & state net operating loss (NOL) carryforwards of approximately $10.6 million and $6.5M, respectively. The Company had research and development credit carryforwards of approximately $0.1 million. The Federal income tax NOL carryforwards expire at various times from the year 2034 through the year 2035 and the research and development credit expires in 2042. The state income tax NOL carryforwards begin expiring at various times starting in 2025. The deferred tax benefit for these NOL carryforwards and R&D credit carryforwards have been recognized for financial statement purposes. Under the CARES Act, the Internal Revenue Code was amended to allow for federal NOL carrybacks for five years to offset previous years’ taxable income or for the NOL to be carried forward indefinitely to offset 80% of taxable income for tax years 2021 and thereafter. As of the date the financial statements were issued, the state NOL carryforwards, if not utilized, will expire beginning in 2025. On December 31, 2024, the Company’s Agility subsidiary in the U.K. had available NOL carryforwards of approximately $0.4 million. The deferred tax benefit for these NOL carryforwards has been recognized for financial statement purposes. On December 31, 2024, the Company’s Canadian subsidiaries had available Canadian NOL carryforwards of approximately $23.2 million that will begin to expire in 2037 and research and development credits of approximately $1.3 million that have no expiry. The potential benefits from these balances have not been recognized for financial statement purposes. On December 31, 2024, the Company’s German subsidiary had available NOL carryforwards of approximately $0.7 million. The potential benefits from these balances have not been recognized for financial statement purposes. The Company is subject to Federal income tax, as well as income tax in various states and foreign jurisdictions. The Company has open tax years for U.S. Federal and state taxes from 2020 through 2024. Various foreign subsidiaries have open tax years from 2005 through 2024, some of which are under audit by local tax authorities. The Company believes that its accruals for uncertain tax positions as of December 31, 2024 under ASC 740, Income Taxes are adequate to cover the Company’s income tax exposures. The following table represents a roll forward of the Company’s unrecognized tax benefits and associated interest for the years ended (in thousands):
The Company had reserves for uncertain tax positions of $1.0 million and $1.9 million as of December 31, 2024, and 2023, respectively, where the ultimate tax determination is uncertain due to complexities of tax laws. The decrease in unrecognized tax benefits resulted from reversal of accruals of $1.3 million in unrecognized tax benefits for a subsidiary because the examination period for an open tax year had prescribed. The Company expects that unrecognized tax benefits as of December 31, 2024 and December 31, 2023, if recognized, would have a material impact on the Company’s effective tax rate. |
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Long-term obligations |
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| Long-term obligations | 6. Long-term obligations Total long-term obligations as of December 31, 2024 and 2023 consisted of the following (in thousands):
(1) In March 2023, the Company renewed a vendor agreement to acquire certain additional software licenses, receive technical support and future software upgrades on software licenses through February 2026. Pursuant to this agreement, the Company is contractually liable to pay approximately $0.4 million annually over the term of the agreement. |
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Commitments and Contingencies |
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| Commitments and Contingencies | |
| Commitments and Contingencies | 7. Commitments and contingencies Litigation - In 2008, a judgment was rendered in the Philippines against a Philippine subsidiary of the Company that is no longer active and purportedly also against Innodata Inc., in favor of certain former employees of the Philippine subsidiary. The potential payment amount aggregates to approximately $5.6 million, plus legal interest that accrued at 12% per annum from August 13, 2008 to June 30, 2013, and thereafter accrued and continues to accrue at 6% per annum. The potential payment amount as expressed in U.S. dollars varies with the Philippine peso to U.S. dollar exchange rate. In December 2017, a group of 97 of the former employees of the Philippine subsidiary indicated that they proposed to record the judgment as to themselves in New Jersey. In January 2018, in response to an action initiated by Innodata Inc., the United States District Court for the District of New Jersey (“USDC”) entered a preliminary injunction that enjoins these former employees from pursuing or seeking recognition or enforcement of the judgment against Innodata Inc. in the U.S. during the pendency of the action and until further order of the USDC. In June 2018, the USDC entered a consent order administratively closing the action subject to return of the action to the active docket upon the written request of Innodata Inc. or the former employees, with the USDC retaining jurisdiction over the matter and the preliminary injunction remaining in full force and effect. The principal relevant cases in the Philippines are Court of Appeals Case Nos. CA - G.R. SP No. 93295 Innodata Employees Association (IDEA), Eleanor Tolentino, et al. vs. Innodata Philippines, Inc., et al., and CA - G.R. SP No. 90538 Innodata Philippines, Inc. vs. Honorable Acting Secretary Manuel G. Imson, et al. (28 June 2007), the Department of Labor and Employment National Labor Relations Commission, Republic of the Philippines (NLRC - NCR - Case No.07 - 04713 - 2002, et al., Innodata Employees Association (IDEA) and Eleanor A. Tolentino, et al. vs. Innodata Philippines, Inc., et al), and the Department of Labor and Employment Office of the Secretary of Labor and Employment, Republic of the Philippines (Case No. OS - AJ - 0015 - 2001, In Re: Labor Dispute at Innodata Philippines, Inc.). The U.S. District Court action is Civil Action No.: 2:17 - cv - 13268 - SDW - LDW Innodata Inc. v. Myrna C. Augustin - Simon; et al. In February 2024, David D’Agostino filed a putative class action captioned D’Agostino v. Innodata Inc., et al., in the United States District Court for the District of New Jersey against the Company and certain of its current and former officers (the “Securities Class Action”). In October 2024, the presiding judge in the Securities Class Action appointed a lead plaintiff and approved the lead plaintiff’s choice of counsel. In January 2025, an amended Securities Class Action complaint was filed in the Securities Class Action. The complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder, and it alleges, among other things, that the defendants made false and misleading statements regarding the Company’s artificial intelligence (“AI”) technology and services. The plaintiff seeks unspecified damages, fees, interest, and costs. The Company intends to defend itself vigorously, but the Company cannot predict the outcome of the action at this time and can give no assurance that the asserted claims will not have a material adverse effect on its financial position or results of operations. Subsequently, in March 2024, the Company received a letter from the staff of the Securities and Exchange Commission, Division of Enforcement (the “SEC”), requesting the Company preserve certain documents and data; in August 2024 the Company received a grand jury subpoena from the U.S. Department of Justice (“DOJ”) requesting the Company to produce certain documents; and in September 2024 the Company received a subpoena from the SEC requesting certain information. The Company believes that the SEC and DOJ requests are related to the conduct alleged in the Securities Class Action, and is cooperating with these investigations. The Company is unable to predict when these matters will be resolved or what further action, if any, the SEC or DOJ may take in connection with it. The Company is also subject to various other legal proceedings and claims that have arisen in the ordinary course of business. While the Company believes that it has adequate reserves for those losses that it believes are probable and can be reasonably estimated, the ultimate results of legal proceedings and claims cannot be predicted with certainty. While management currently believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company’s consolidated financial position or overall trends in consolidated results of operations, litigation is subject to inherent uncertainties. Substantial recovery against the Company in the above-referenced Philippine action could have a material adverse impact on the Company, and unfavorable rulings or recoveries in the other proceedings could have a material adverse impact on the consolidated operating results in the period in which the ruling or recovery occurs. In addition, the Company’s estimate of the potential impact on the Company’s consolidated financial position or overall consolidated results of operations for the above referenced legal proceedings could change in the future. The Company’s legal accruals related to legal proceedings and claims are based on the Company’s determination of whether or not a loss is probable. The Company reviews outstanding proceedings and claims with external counsel to assess probability and estimates of loss. The accruals are adjusted if necessary. While the Company intends to defend these matters vigorously, adverse outcomes that it estimates could reach approximately $450,000 in the aggregate beyond recorded amounts are reasonably possible. If circumstances change, the Company may be required to record adjustments that could be material to its reported consolidated financial condition and results of operations. Foreign Currency - To the extent that the currencies of the Company’s production facilities located in the Philippines, India, Sri Lanka and Israel fluctuate, the Company is subject to risks of changing costs of production after pricing is established for certain customer projects. In addition, the Company is exposed to the risk of foreign currency fluctuation on the non-U.S. dollar denominated revenues, and on the monetary assets and liabilities held by its foreign subsidiaries that are denominated in local currency. Indemnifications - The Company is obligated under certain circumstances to indemnify directors, officers and certain employees against costs and liabilities incurred in actions or threatened actions brought against such individuals because such individuals acted in the capacity of director, officer or fiduciary of the Company. In addition, the Company has contracts with certain customers pursuant to which the Company has agreed to indemnify the customer for certain specified and limited claims under such contract. These indemnification obligations occur in the ordinary course of business and, in many cases, do not include a limit on potential maximum future payments. As of December 31, 2024, the Company has not recorded a liability for any obligations arising as a result of these indemnification obligations. |
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| Operating Leases | 8. Operating Leases The Company has various lease agreements for its offices and service delivery centers. The Company has determined that the risks and benefits related to the leased properties are retained by the lessors. Accordingly, these are accounted for as operating leases. These lease agreements are for terms ranging from to eleven years and, in most cases, provide for rental escalations ranging from 1.75% to 15%. Most of these agreements are renewable at the mutual consent of the parties to the contract. The Company recognizes an operating lease liability and right-of-use asset in compliance with current lease accounting standard ASC 842. The amount of right-of-use asset is equal to the present value of the remaining lease payments discounted using the incremental borrowing rate of each respective country. Modifications, if any are recalculated and corresponding adjustments are made to the carrying values of both the lease liability and right-of-use assets. A right-of-use asset is measured as the amount of the lease liability adjusted for the amount of deferred straight-line rent, prepaid rent and lease incentive allowances previously recognized. The table below summarizes the amounts recognized in the financial statements related to operating leases for the years presented (in thousands):
The following table presents the maturity profile of the Company’s operating lease liabilities based on the contractual undiscounted payments with a reconciliation of these amounts to the remaining net present value of the operating lease liability reported in the consolidated balance sheet as of December 31, 2024 (in thousands):
The weighted average remaining lease terms and discount rates for all of our operating leases as of December 31, 2024 were as follows:
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| Pension Benefits | 9. Pension Benefits U.S. Defined Contribution Pension Plan - The Company has a defined contribution plan qualified under Section 401(k) of the Internal Revenue Code, pursuant to which substantially all of its U.S. employees are eligible to participate after completing six months of service. Participants may elect to contribute a portion of their compensation to the plan. Under the plan, the Company has the discretion to match a portion of participants’ contributions. For the years ended December 31, 2024 and 2023, the Company did not make any matching contributions. Most of the non-U.S. subsidiaries provide for government-mandated defined pension benefits. For certain of these subsidiaries, vested eligible employees are provided a lump sum payment upon retiring from the Company at a defined age. The lump sum amount is based on the salary and tenure as of retirement date. Other non-U.S. subsidiaries provide for a lump sum payment to vested employees on retirement, death, incapacitation or termination of employment, based upon the salary and tenure as of the date employment ceases. The liability for such defined benefit obligations is determined and provided on the basis of actuarial valuations. As of December 31, 2024, these plans were unfunded. Pension expense for our foreign subsidiaries totaled approximately $1.2 million for each of the years ended December 31, 2024 and 2023. The following tables set out the status of the non-U.S. pension benefits and the amounts recognized in the Company’s consolidated financial statements and the components of pension costs for the years ended December 31, 2024 and 2023 were as follows (in thousands): Benefit Obligations:
The Company had an actuarial gain of $0.1 million for the year ended December 31, 2024, and an actuarial loss of $0.3 million for the year ended December 31, 2023. This was mainly due to changes in the salary rate assumption for our Asian subsidiaries. Actuarial (gains) losses are recorded as part of other comprehensive income and are not reflected as part of net periodic pension cost. Components of Net Periodic Pension Cost:
The accumulated benefit obligation, which represents benefits earned to date, was approximately $4.7 million and $3.9 million for each of the years ended December 31, 2024 and 2023. Amounts recognized in the consolidated balance sheets for the years ended December 31, 2024 and 2023 consisted of the following (in thousands):
Current accrued benefit cost for pension benefits was included in the current portion of long-term obligations in the consolidated balance sheets. Non-current accrued benefit cost for pension benefits was included in long-term obligations, net of current portion, in the consolidated balance sheets. Actuarial assumptions for all non-U.S. plans are described below. The discount rates are used to measure the year-end benefit obligations and the earnings effects for the subsequent year. The assumptions for the years ended December 31, 2024 and 2023 were as follows:
Estimated Future Benefit Payments: As of December 31, 2024, the following benefit payments, which reflect expected future service, as appropriate, were expected to be paid (in thousands):
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Capital Stock |
12 Months Ended |
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Dec. 31, 2024 | |
| Capital Stock | |
| Capital Stock | 10. Capital Stock Common Stock - The Company is authorized to issue 75,000,000 shares of common stock. Each share of common stock has one vote. Subject to preferences that may be applicable to any outstanding shares of preferred stock, the holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors. No common stock dividends have been declared to date. Preferred Stock - The Company is authorized to issue 4,998,000 shares of preferred stock. The Board of Directors is authorized to fix the terms, rights, preferences and limitations of the preferred stock and to issue the preferred stock in series that differ as to their relative terms, rights, preferences and limitations. Common Stock Reserved - As of December 31, 2024, the Company had available for future issuance 902,824 shares of common stock pursuant to the Company’s stock option plans. Treasury Stock - In July 2019, the Company’s Board of Directors authorized the repurchase of up to $2.0 million of its common stock in open market or private transactions. There is no expiration date associated with the program. There were no share repurchases in the years ended December 31, 2024 and 2023. As of December 31, 2024, the Company repurchased 1.5 million shares of its common stock under the July 2019 authorization with a value of $1.8 million. |
Stock Options |
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| Stock Options | 11. Stock Options The Innodata Inc. 2013 Stock Plan (as amended, the “2013 Plan”) expired in accordance with its terms on June 3, 2023. Pursuant to the terms of the 2013 Plan, no further awards may be granted under the 2013 Plan following its expiration. As of December 31, 2024, there were 3,365,193 shares of our common stock underlying outstanding options or rights under the 2013 Plan. Outstanding awards made under the 2013 Plan prior to the 2013 Plan’s expiration will remain in effect until such awards have been satisfied or terminated in accordance with the terms of the 2013 Plan and such awards. On June 9, 2023, stockholders of the Company approved amendments to the Innodata Inc. 2021 Equity Compensation Plan (as amended, the “2021 Plan”). The number of shares of common stock of Innodata Inc. that may be delivered, purchased or used for reference purposes (with respect to stock appreciation rights or stock units) for awards granted under the 2021 Plan is 4,000,000 (the “Share Reserve”). Shares subject to an option or stock appreciation right granted under the 2021 Plan count against the Share Reserve as one share for every share granted, and shares subject to any other type of award granted under the Plan count against the Share Reserve as two shares for every share granted for awards granted prior to April 11, 2023, and and a half shares for every share granted for awards granted on or after April 11, 2023. Any shares withheld, tendered or exchanged by a participant in the 2021 Plan as full or partial payment to Innodata of the exercise price under an option under the 2021 Plan, or in satisfaction of a participant’s tax withholding obligations with respect to any award under the 2021 Plan, will not be added back to the Share Reserve. The fair value of stock options is estimated on the date of grant using the Black-Scholes option pricing model. The weighted-average fair value of the options granted, and weighted-average assumptions were as follows:
The Company estimates the risk-free interest rate using the U.S. Treasury yield curve for periods equal to the expected term of the options in effect at the time of grant. The expected term of options granted is based on a combination of vesting schedules, term of the options and historical experience. Expected volatility is based on the historical volatility of the Company’s common stock. The Company uses an expected dividend yield of zero since it has never declared or paid any dividends on its capital stock. Stock Options 2013 Plan A summary of option activity under the 2013 Plan and changes during each of the years ended December 31, 2024 and 2023 are presented below.
* Includes 25,000 stock options granted to a non-employee member of the Company’s advisory board. 2021 Plan A summary of option activity under the 2021 Plan and changes during each of the years ended December 31, 2024 and 2023 are presented below.
A total of 268,500 options were granted during the year ended December 31, 2024. During the year ended December 31, 2024, a total of 2,506,232 options were exercised at an average exercise price of $2.66. Restricted Stock Awards There were no outstanding awards of restricted stock under the 2013 Plan or the 2021 Plan (collectively, the “Equity Plans”) during each of the years ended December 31, 2024 and 2023. Restricted Stock Units Restricted stock unit activity under the Equity Plans during each of the years ended December 31, 2024 and 2023 are presented below:
There were a total of 34,246 stock units granted to non-employees and non-employee directors during the year ended December 31, 2024. As of December 31, 2024, there were 200,000 and 1,049,079 outstanding restricted stock unit awards under the 2013 Plan and 2021 Plan, respectively. The stock-based compensation expense is recognized on a straight-line basis over a period of 36 months. The fair value of restricted stock units is based on the closing price of the stock at the time of the grant. The compensation cost related to non-vested stock options not yet recognized as of December 31, 2024 totaled approximately $9.1 million. The weighted-average period over which these costs will be recognized is 34 months. The compensation cost related to non-vested restricted stock units not yet recognized as of December 31, 2024 totaled approximately $21.9 million. The weighted-average period over which these costs will be recognized is 16 months. |
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Redemption of non-controlling interest |
12 Months Ended |
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Dec. 31, 2024 | |
| Redemption of non-controlling interest | |
| Redemption of non-controlling interest | 12. Redemption of non-controlling interest On December 31, 2024, the Company redeemed the 6.1% non-controlling interest in Innodata DocGenix, LLC; Innodata DocGenix, LLC, is now a wholly owned subsidiary. The Company accounted for the transaction in accordance with ASC Topic 810, “Consolidation”, which discusses the proper accounting treatment of the carrying value for the non-controlling interest. Under the standard, any change in ownership that does not result in a loss of control is to be accounted for as an equity transaction. To comply with the standard, the Company reclassified the remaining carrying value of the Non-controlling interest attributed to the DocGenix subsidiary amounting to $0.6 million from Non-controlling interest to Additional paid-in capital in the Consolidated Balance Sheets as of December 31, 2024. |
Comprehensive loss |
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| Comprehensive loss | 13. Comprehensive loss Accumulated other comprehensive loss, as reflected in the consolidated balance sheets, consists of pension liability adjustments, net of taxes, foreign currency translation adjustment and changes in fair value of derivatives, net of taxes. The components of accumulated other comprehensive loss as of December 31, 2024 and 2023, and reclassifications out of accumulated other comprehensive loss for the years then ended, are presented below (in thousands):
Taxes related to each component of other comprehensive loss were not material for the fiscal years presented and therefore not disclosed separately. All reclassifications out of accumulated other comprehensive loss had an impact on direct operating costs in the consolidated statements of operations and comprehensive loss. |
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| Segment reporting and concentrations | 14. Segment reporting and concentrations The Company’s operations are classified in three reporting segments: Digital Data Solutions (DDS), Synodex and Agility. The DDS segment provides AI data preparation services, collecting or creating training data, annotating training data, and training AI algorithms for its customers, and AI model deployment and integration. The DDS segment also provides a range of data engineering support services including data transformation, data curation, data hygiene, data consolidation, data extraction, data compliance, and master data management. The Synodex segment provides an industry platform that transforms medical records into useable digital data organized in accordance with its proprietary data models or customer data models. The Agility segment provides an industry platform that provides marketing communications and public relations professionals with the ability to target and distribute content to journalists and social media influencers world-wide and to monitor and analyze global news channels (print, web, radio and TV) and social media channels. A significant portion of the Company’s revenues is generated from its locations in the Philippines, India, Sri Lanka, Canada, Germany, Israel, United States and the United Kingdom. The Company’s chief operating decision maker (CODM) is the senior executive committee that includes the chief executive officer, chief operating officer, and the chief financial officer (interim). The U.S. GAAP measures used by the Company’s CODM to evaluate segment performance and allocate resources—such as employees, property, and financial or capital resources during the annual budgeting and forecasting process, are Revenues, Gross Profit and Income before provision for income taxes. Performance results are monitored, reviewed, and measured monthly and quarterly by comparing budget and forecast to actual results for profit measures, assessing returns on investment, compensation decisions and changing strategies, if required. The accounting policies used by the DDS, Synodex and Agility segments are the same as those described in the summary of significant accounting policies. The measure of segment assets is reported on the balance sheet as total consolidated assets shown in the table below (in thousands):
(1)Agility assets include goodwill of $2.0 million and $2.1 million as of December 31, 2024 and 2023, respectively (2)Segment assets consist of cash, receivables, prepaid and other current assets, property and equipment, and intangibles. The table below shows segment information for other significant income statement items (in thousands):
(4)Includes non-cash expenses which consist mainly of stock-based compensation expense. Long-lived assets as of December 31, 2024 and 2023 by geographic region were comprised of (in thousands):
Long-lived assets include the unamortized balance of right-of-use assets amounting to $4.2 million and $5.1 million as of December 31, 2024 and December 31, 2023, respectively. One customer in the DDS segment generated approximately 48% of the Company’s total revenues in the fiscal year ended December 31, 2024. Another customer in the DDS segment generated approximately 10% of the Company’s total revenues in the fiscal year ended December 31, 2023. No other customer accounted for 10% or more of total revenues during these periods. Further, in the years ended December 31, 2024 and 2023, revenues from non-U.S. customers accounted for 21% and 37%, respectively, of the Company’s revenues. Revenues for each of the two years in the period ended December 31, 2024 and 2023 by geographic region (determined based upon customer domicile), were as follows (in thousands):
As of December 31, 2024, approximately 16% of the Company’s accounts receivable was due from foreign (principally European) customers and 61% of accounts receivable was due from two customers. As of December 31, 2023, approximately 31% of the Company’s accounts receivable was due from foreign (principally European) customers and 53% of accounts receivable was due from three customers. No other customer accounted for 10% or more of the accounts receivable as of December 31, 2024 and 2023. |
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Income (loss) per Share |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Income (loss) per Share | 15. Income (loss) per Share
Basic income (loss) per share is computed using the weighted-average number of common shares outstanding during the year. Diluted income per share is computed by considering the impact of the potential issuance of common shares, using the treasury stock method, on the weighted average number of shares outstanding. For those securities that are not convertible into a class of common stock, the two-class method of computing loss per share is used. Options to purchase 4.0 million shares of common stock for the year ended December 31, 2024 were outstanding. Of these options, 3.7 million were included in the computation of diluted income per share while the remaining 0.3 million were not included in the computation of diluted income per share because the exercise price of the options were greater than the average market price of the common shares and therefore have not been considered as potential equity shares. Also included in the computation of dilutive income per share are 513,455 restricted stock units using the treasury stock method to determine the dilutive effect of restricted stock units outstanding as of December 31, 2024. Options to purchase 6.3 million shares of common stock for the year ended December 31, 2023 were outstanding but not included in the computation of diluted loss per share because the effect would have been anti-dilutive. |
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Derivatives |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Derivatives | 16. Derivatives The Company conducts a large portion of its operations in international markets which subject it to foreign currency fluctuations. The most significant foreign currency exposures occur when revenue and associated accounts receivable are collected in one currency and expenses to generate revenues are incurred in another currency. The Company is also subject to wage inflation and other government mandated increases and operating expenses in Asian countries where the Company has the majority of its operations. The Company’s primary inflation and exchange rate exposure relates to payroll, other payroll costs and operating expenses in the Philippines, India, Sri Lanka and Israel. In addition, although most of the Company’s revenue is denominated in U.S. dollars, a significant portion of total revenues is denominated in Canadian dollars, Pound Sterling and Euros. The Company’s policy is to enter derivative instrument contracts with terms that coincide with the underlying exposure being hedged for a period up to 12 months. As such, the Company’s derivative instruments are expected to be highly effective. For derivative instruments that are designated and qualify as cash flow hedges, the entire change in fair value of the hedging instrument is recorded to Other comprehensive income (loss). Upon settlement of these contracts, the change in the fair value recorded in Other comprehensive income (loss) are reclassified to earnings and included as part of Direct operating costs. For derivative instruments that are not designated as hedges, any change in fair value is recorded directly in earnings as part of Direct operating costs. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking hedge transactions. The Company does not hold or issue derivatives for trading purposes. All derivatives are recognized at their fair value and classified based on the instrument’s maturity date. The total notional amount for outstanding derivatives designated as hedges was $22.5 million and $10.5 million as of December 31, 2024 and 2023, respectively. The following table presents the fair value of derivative instruments included within the consolidated balance sheets as of December 31, 2024 and 2023 (in thousands):
The effect of foreign currency forward contracts designated as cash flow hedges on the consolidated statements of operations for the years ended December 31, 2024 and 2023 were as follows (in thousands):
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Line of Credit |
12 Months Ended |
|---|---|
Dec. 31, 2024 | |
| Line of Credit | |
| Line of Credit | 17. Line of Credit On April 4, 2023, the Company entered into a Credit Agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association, as lender, and Innodata Inc., Innodata Synodex, LLC, Innodata docGenix, LLC and Agility PR Solutions LLC as co-borrowers. On July 21, 2023, Innodata Services, LLC signed a Joinder Agreement to join the Credit Agreement as a co-borrower. On August 5, 2024, the Company entered into a second amendment to the Credit Agreement (together with the Credit Agreement, the “Amended Credit Agreement”). The Amended Credit Agreement provides for a secured revolving line of credit (the “Revolving Credit Facility”) up to an amount equal to the lesser of the borrowing base and $30.0 million (the “Maximum Credit”) and provides that a Borrower may request an increase to the Revolving Credit Facility’s Maximum Credit of up to, but not to exceed $50.0 million, subject to the approval of the Lender. The Revolving Credit Facility’s borrowing base is calculated on the basis of (i) 85% of eligible accounts (other than eligible foreign accounts and unbilled accounts), plus (ii) the lesser of (a) 80% of eligible accounts that are unbilled accounts and (b) 30% of all eligible accounts, plus (iii) the lesser of (a) 85% of eligible foreign accounts, (b) 20% of all eligible accounts and (c) $4.0 million, minus (iv) certain other reserves and adjustments. As of December 31, 2024, such borrowing base calculation equaled approximately $22.3 million. The Credit Agreement contains a financial covenant that requires the Borrowers, on a consolidated basis, to maintain a fixed charge coverage ratio of not less than 1.10 to 1.00. Except as set forth in the Credit Agreement, borrowings under the Revolving Credit Facility bear interest at a rate equal to the daily simple secured overnight financing rate (“”) plus 2.25%. The Company did not utilize the Revolving Credit Facility during the year ended December 31, 2024 or during the subsequent period through the filing date of this Report.
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
12 Months Ended | |
|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
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| Pay vs Performance Disclosure | ||
| Net Income (Loss) | $ 28,660 | $ (908) |
Insider Trading Arrangements |
3 Months Ended |
|---|---|
Dec. 31, 2024 | |
| Trading Arrangements, by Individual | |
| Rule 10b5-1 Arrangement Adopted | false |
| Non-Rule 10b5-1 Arrangement Adopted | false |
| Rule 10b5-1 Arrangement Terminated | false |
| Non-Rule 10b5-1 Arrangement Terminated | false |
Cybersecurity Risk Management and Strategy Disclosure |
12 Months Ended |
|---|---|
Dec. 31, 2024 | |
| Cybersecurity Risk Management, Strategy, and Governance [Line Items] | |
| Cybersecurity Risk Management Processes for Assessing, Identifying, and Managing Threats [Text Block] | Cybersecurity Risk Management and Strategy We recognize the importance of developing, implementing and maintaining a firm cybersecurity posture to safeguard our information systems, protect the confidentiality, integrity and availability of our data and mitigate risks associated with cyber threats and attacks. We are ISO/IEC 27001:2022 certified and the ISO Information Security Risk Management Standard is used as a reference guide for our risk management approach. We have a designated Chief Information Security Officer (CISO) who has primary responsibility for managing our cybersecurity risks. Our CISO has more than 28 years of experience in Information Security and holds a master’s degree in Information Technology. His in-depth knowledge and experience are instrumental in developing and executing our cybersecurity strategies. Our CISO is assisted by a team of Information Security Officers (ISOs) and a third-party consultant who has expertise in cybersecurity, information security risk management, and information systems audit and holds various certifications including, CISA, CISM, HITRUST Certified Common Security Framework Practitioner, QSA, and CSP. Recognizing the inherent cybersecurity risks common to any organization, encompassing concerns such as unauthorized access to sensitive data, potential disruptions to business operations from cyber incidents, and the associated financial and reputational impacts arising from a cybersecurity breach, we have implemented comprehensive policies covering various aspects of cybersecurity and information management, including, without limitation, cyber risk management, information security practices, roles and responsibilities, access controls, cryptography, information classification, asset disposal, and vendor management. We periodically review and modify these policies to align with industry practice, trends and evolving threat landscapes. Compliance with these policies is expected from all employees and contractors. We perform periodic assessments for identifying threats and vulnerabilities, covering relevant operational facets, and focusing on identifying, analyzing, evaluating, and treating cyber risks across business functions. Our risk assessment guidelines define risk measurement and prioritization, and consider factors such as likelihood, impact, and potential harm. Mitigation strategies are planned, covering technical and procedural measures, including incident response plans. Incident Response We maintain a comprehensive incident response plan. Key components include regular updates to ensure effectiveness, employee training programs, and establishing communication channels and relevant systems for proper incident reporting and logging procedures. Communication and notification protocols are defined for notifying third parties such as regulatory bodies, customers, and partners. Recovery strategies are developed for restoring normal operations, and post-incident analysis is conducted to identify lessons learned and improvements for future incident response efforts. The incident response plan also outlines procedures for prompt detection, response, and remediation efforts to minimize the impact of incidents. Incident materiality is assessed through a collaborative process involving key personnel within our organization. Responsibility for conducting a materiality assessment lies with our management team, in consultation with advice from our third-party cybersecurity consultant, as appropriate. The materiality assessment considers various factors, including financial impact, reputational risk, regulatory implications, and potential harm to third parties. Upon completion of the materiality assessment, the disclosure of incidents, including those related to contractual, regulatory, or technology/security aspects, is handled by designated members of our senior management team. We consult with outside counsel or experts as appropriate, including on materiality analysis and disclosure matters. As of the fiscal year ending December 31, 2024, there have been no identified cybersecurity incidents that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition. Engagement of Third Parties Recognizing the complexity and evolving nature of cybersecurity threats, we have engaged a third-party consultant to assist with evaluating and testing our risk management approach. This enables us to leverage specialized knowledge and insights in connection with our cybersecurity strategies and processes. Strategy To enhance our current cybersecurity posture, we continue to invest in advanced threat detection technologies, provide cybersecurity training based on the latest trends and guidance to the employees, collaborate with industry partners and regulatory bodies to stay informed about emerging threats, reinforce our cybersecurity incident response plan to align with industry-specific regulations and legal obligations, integrate threat intelligence feeds for automatic detection of any misconfigurations, security threats, and foster a collaborative, cross-functional, and accelerated approach to incident response. |
| Cybersecurity Risk Management Processes Integrated [Flag] | true |
| Cybersecurity Risk Management Processes Integrated [Text Block] | The governance framework is closely integrated via a structured compliance reporting framework operating across various governance levels. This framework also operates across geographic locations, with location specific compliance meetings conducted at a local management level and led by the CISO with assistance from the ISO team. This structured compliance reporting is intended to ensure that the highest levels of management are kept abreast of potential cybersecurity risks facing the Company, with the escalation of significant cybersecurity matters to the Audit Committee and ultimately to the Board of Directors, as appropriate. |
| Cybersecurity Risk Management Third Party Engaged [Flag] | true |
| Cybersecurity Risk Third Party Oversight and Identification Processes [Flag] | true |
| Cybersecurity Risk Materially Affected or Reasonably Likely to Materially Affect Registrant [Flag] | false |
| Cybersecurity Risk Board of Directors Oversight [Text Block] | Our Board of Directors is aware of the critical nature of managing the risks associated with cybersecurity threats. The Board of Directors has established oversight mechanisms to ensure effective governance in managing these risks. Board of Director Oversight Our Audit Committee has primary responsibility for overseeing risk management, including with respect to cybersecurity. The Audit Committee monitors management’s compliance, and reports to the Board of Directors. The CISO, who is responsible for developing our cybersecurity strategy and managing our cybersecurity risks, reports directly to the Audit Committee on these matters. |
| Cybersecurity Risk Board Committee or Subcommittee Responsible for Oversight [Text Block] | Audit Committee |
| Cybersecurity Risk Process for Informing Board Committee or Subcommittee Responsible for Oversight [Text Block] | Our Audit Committee has primary responsibility for overseeing risk management, including with respect to cybersecurity. The Audit Committee monitors management’s compliance, and reports to the Board of Directors. |
| Cybersecurity Risk Role of Management [Text Block] | Management’s Role Our cybersecurity governance framework incorporates policies, procedures, regular meetings, and controls to manage and mitigate cybersecurity risks. Aligned with industry standards and regulatory requirements, the framework is overseen and regularly evaluated by our leadership team responsible for implementation. Regular risk assessments are conducted to identify and assess potential cybersecurity risks, informing the development of proactive risk mitigation strategies within the governance framework. The governance framework is closely integrated via a structured compliance reporting framework operating across various governance levels. This framework also operates across geographic locations, with location specific compliance meetings conducted at a local management level and led by the CISO with assistance from the ISO team. This structured compliance reporting is intended to ensure that the highest levels of management are kept abreast of potential cybersecurity risks facing the Company, with the escalation of significant cybersecurity matters to the Audit Committee and ultimately to the Board of Directors, as appropriate. |
| Cybersecurity Risk Management Positions or Committees Responsible [Flag] | true |
| Cybersecurity Risk Management Positions or Committees Responsible [Text Block] | Chief Information Security Officer (CISO) |
| Cybersecurity Risk Management Expertise of Management Responsible [Text Block] | Our CISO has more than 28 years of experience in Information Security and holds a master’s degree in Information Technology. His in-depth knowledge and experience are instrumental in developing and executing our cybersecurity strategies. |
| Cybersecurity Risk Process for Informing Management or Committees Responsible [Text Block] | We have a designated Chief Information Security Officer (CISO) who has primary responsibility for managing our cybersecurity risks. Our CISO has more than 28 years of experience in Information Security and holds a master’s degree in Information Technology. His in-depth knowledge and experience are instrumental in developing and executing our cybersecurity strategies. Our CISO is assisted by a team of Information Security Officers (ISOs) and a third-party consultant who has expertise in cybersecurity, information security risk management, and information systems audit and holds various certifications including, CISA, CISM, HITRUST Certified Common Security Framework Practitioner, QSA, and CSP.The CISO, who is responsible for developing our cybersecurity strategy and managing our cybersecurity risks, reports directly to the Audit Committee on these matters. |
| Cybersecurity Risk Management Positions or Committees Responsible Report to Board [Flag] | true |
Description of Business and Summary of Significant Accounting Estimates and Policies (Policies) |
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Dec. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description of Business and Summary of Significant Accounting Estimates and Policies | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description of Business | Description of Business - Innodata Inc. (Nasdaq: INOD) (including its subsidiaries, the “Company”, “Innodata”, “we”, “us” or “our”) is a leading data engineering company. The Company’s mission is to help the world’s most prestigious companies deliver the promise of ethical, high-performing artificial intelligence (“AI”), which the Company believes will contribute to a safer and more prosperous world. The Company was founded on a simple idea: engineer the highest quality data so organizations across broad industry segments could make smarter decisions. Today, the Company believes it is delivering the highest quality data for some of the world’s most innovative technology companies to use to train the AI models of the future. AI holds the promise that computers can perceive and understand the world, enabling products and services that would have been previously unimaginable and impossible with traditional coding. AI learns from data, and the highest-performing AI will have learned from the highest-quality data. The Company believes that it can contribute meaningfully by harnessing its capabilities, honed over 35+ years, in collecting and annotating data at scale with consistency and high accuracy. The Company is also helping companies deploy and integrate AI into their operations and products and providing innovative AI-enabled industry platforms, helping ensure that its customers’ businesses are prepared for a world in which machines augment human activity in ways previously unimaginable. The Company developed its capabilities and honed its approaches progressively over the last 35+ years creating high-quality data for many of the world’s most demanding information companies. Approximately nine years ago, the Company formed Innodata Labs, a research and development center, to research, develop and apply machine learning and emerging AI to its large-scale, human-intensive data operations. In 2019, the Company began packaging the capabilities that emerged from its R&D efforts in order to align with several fast-growing new markets and help companies use AI/ML to drive performance benefits and business insights. The Company’s historical core competency in high-quality data, combined with these R&D efforts in applied AI, created the foundation for the evolution of the Company’s offerings, which include AI Data Preparation, AI Model Deployment and Integration, and AI-Enabled Industry Platforms. AI Data Preparation For several of the world’s large technology companies, the Company supports their efforts at building generative AI foundation models. For these companies, the Company provides or is poised to provide a range of scaled data solutions and services. The Company’s scaled data solutions include providing instruction data sets for fine-tuning LLMs to understand prompts, to accept instruction, to converse, to apparently reason, and to perform the myriad of incredible feats that many of us have now experienced. The Company also provides reinforcement learning and reward modeling, services which are critical to provide the guardrails against toxic, bias and harmful responses, and model evaluation services. For social media companies, financial services companies, and many others, the Company collects or creates training data, annotates training data, and trains AI algorithms for working with images, text, video, audio, code and sensor data. The Company utilizes a variety of leading third-party tools, proprietary tools and customer tools. For text annotation, the Company uses its proprietary data annotation platform that incorporates AI to reduce cost while improving consistency and quality of output. The Company’s proprietary data annotation platform features auto-tagging capabilities that apply to both classical and generative AI tasks. The platform encapsulates many of the innovations the Company has conceived of in the course of its 35-year history of creating high-quality data. In addition, because collecting real-world data is often impracticable (due to data privacy regulations or rarity of cohorts and outliers), the Company creates high-quality synthetic data that maintains all of the statistical properties of real-world data, using a combination of domain specialists and machine technologies that leverage large language models (LLMs). AI Model Deployment and Integration The Company helps businesses leverage the latest AI technologies to achieve their goals. The Company develops custom AI models (where it selects the appropriate algorithms, tunes hyperparameters, trains and validates the models, and updates the models as required). The Company also helps businesses fine-tune their own custom versions of the Company’s proprietary models and third-party foundation models to address domain-specific and customer-specific use cases. For the Company’s customers that provide products and solutions that require intensive text data processing and analytics, in addition to deploying and integrating AI models, the Company often provides a range of data engineering support services including data transformation, data curation, data hygiene, data consolidation, data extraction, data compliance, and master data management. The Company’s customers span a diverse range of industries and a wide range of AI use cases, benefiting from the short time-to-value and high economic returns of the Company’s AI solutions and platforms. AI-Enabled Industry Platforms The Company’s AI-enabled industry platforms address specific, niche market requirements the Company believes it can innovate with AI/ML technologies. The Company deploys these industry platforms as software-as-a-service (SaaS) and as managed services. These platforms benefit from the Company’s technology infrastructure, its industry-specific knowledge, its strong customer relationships and experience merging technology with the business processes of its customers. To date, the Company has built an industry platform for medical records data extraction and transformation (which the Company brands as “Synodex®”) and an industry platform for public relations (which the Company brands as “Agility PR Solutions”). The Company is in development with an additional AI-enabled industry platform to serve financial services institutions. The Company’s Synodex industry platform transforms medical records into useable digital data organized in accordance with its proprietary data models or customer data models. The Company’s Agility industry platform provides marketing communications and public relations professionals with the ability to target and distribute content to journalists and social media influencers world-wide and to monitor and analyze global news (print, web, radio and TV) and social media. The Company’s operations are presently classified and reported in three reporting segments: Digital Data Solutions (DDS), Synodex and Agility. |
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| Principles of Consolidation | Principles of Consolidation - The consolidated financial statements include the accounts of Innodata Inc. and its wholly owned subsidiaries, and Innodata docGenix, LLC, a limited liability company that was majority-owned by the Company during the year ended December 31, 2024. The minority interests of Innodata docGenix, LLC were redeemed by the Company on December 31, 2024. The non-controlling interests in the docGenix limited liability company at December 31, 2023 had call and put options that can be settled in cash or stock. Accordingly, this is presented in temporary equity in accordance with Financial Accounting Standards Board (FASB) non-controlling interest guidance. All intercompany transactions and balances have been eliminated in consolidation. |
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| Use of Estimates | Use of Estimates - In preparing consolidated financial statements in conformity with U.S. GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Management believes that the estimates and assumptions used in the preparation of the consolidated financial statements are reasonable. Actual results could differ from those estimates. Significant estimates include those related to the allowance for credit losses and billing adjustments, useful life of long-lived assets, useful life of intangible assets, impairment of goodwill and intangible assets, valuation of deferred tax assets, valuation of stock-based compensation, pension benefit plan assumptions, litigation accruals and estimated accruals for various tax exposures. |
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| Revenue Recognition | Revenue Recognition - The Company’s revenue is recognized when services are rendered or goods are delivered to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those services or goods as per the agreement with the customer. In cases where there are agreements with multiple performance obligations, the Company identifies each performance obligation and evaluates whether the performance obligations are distinct within the context of the agreement at the agreement’s inception. Performance obligations that are not distinct at agreement inception are combined. For agreements with distinct performance obligations, the Company allocates the transaction price to each distinct performance obligation proportionately based on the estimated standalone selling price for each performance obligation, if any, and then evaluates how the services are performed for the customer to determine the timing of revenue recognition. For the Digital Data Solutions (DDS) segment, revenue is recognized primarily based on the quantity delivered or resources utilized in the period in which services are performed and performance conditions are satisfied as per the agreement. Revenue from agreements billed on a time-and-materials basis is recognized as services are performed. Revenue from fixed-fee agreements, which is not significant to overall revenues, is recognized based on the proportional performance method of accounting, as services are performed, or milestones are achieved. For the Synodex segment, revenue is recognized primarily based on the quantity delivered in the period in which services are performed and performance conditions are satisfied as per the agreement. A portion of the Synodex segment revenue is derived from licensing the Company’s functional software and providing access to the Company’s hosted software platform. Revenue from such services is recognized monthly when all parties to the agreement have agreed to the agreement; each party’s rights are identifiable; the payment terms are identifiable; the agreement has commercial substance; access to the service is provided to the end user; and collection is probable. The Agility segment derives its revenue primarily from subscription arrangements and provision of enriched media analysis services. It also derives revenue as a reseller of corporate communication solutions. Revenue from subscriptions is recognized monthly when access to the service is provided to the end user; all parties to the agreement have agreed to the agreement; each party’s rights are identifiable; the payment terms are identifiable; the agreement has commercial substance; and collection is probable. Revenue from enriched media analysis services is recognized when the services are performed, and performance conditions are satisfied. Revenue from the reseller agreements is recognized at the gross amount received for the goods in accordance with the Company functioning as a principal due to the Company meeting the following criteria: the Company acts as the primary obligor in the sales transaction; assumes the credit risk; sets the price; can select suppliers; and is involved in the execution of the services, including after sales service. Revenue associated with the services provided in one period and billed in a subsequent period is commonly referred to as unbilled revenues and is included under Accounts receivable. The Company considers U.S. GAAP criteria for determining whether to report gross revenue as a principal versus net revenue as an agent. The Company evaluates whether it is in control of the services before the same are transferred to the customer to assess whether it is principal or agent in the arrangement. Contract acquisition costs, which are included in prepaid expenses and other current assets, are amortized over the term of a subscription agreement or contract that normally has a duration of 12 months or less. The Company reviews these prepaid acquisition costs on a periodic basis to determine the need to adjust the carrying values for early terminated contracts. Included in prepaid expenses and other current assets on the accompanying consolidated balance sheets are contract acquisition costs amounting to $1.1 million and $0.8 million for the years ended December 31, 2024 and 2023 , respectively. These acquisition costs relate to our Agility segment and are amortized using the straight-line method over the term of the subscription agreement. |
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| Foreign Currency Translation | Foreign Currency Translation - The functional currency of the Company’s subsidiaries in the Philippines, India, Sri Lanka, Israel, Hong Kong, the U.K. and Canada (other than the Agility subsidiaries) is the U.S. dollar. Transactions denominated in Philippine pesos, Indian and Sri Lankan rupees, Israeli shekels, U.K. pound sterling and Canadian dollars are translated to U.S. dollars at rates which approximate those in effect on the transaction dates. Monetary assets and all liabilities denominated in foreign currencies on December 31, 2024 and December 31, 2023 are translated at the exchange rate in effect as of those dates. Non-monetary assets and stockholders’ equity are translated at the appropriate historical rates. Included in direct operating costs were foreign exchange (gains) losses resulting from such translations of approximately ($0.2) million and $0.4 million for the years ended December 31, 2024 and 2023, respectively. The functional currency for the Company’s subsidiary in Germany is the Euro. The functional currencies for the Company’s Agility subsidiaries in the U.K. and Canada are the Pound Sterling and the Canadian dollar, respectively. The financial statements of these subsidiaries are prepared in their respective currencies. Financial information is translated from the applicable functional currency to the U.S. dollar (the reporting currency) for inclusion in the Company’s consolidated financial statements. Income, expenses, and cash flows are translated at weighted-average exchange rates prevailing during the fiscal period, and assets and liabilities are translated at fiscal period-end exchange rates. Resulting translation adjustments are included as a component of accumulated other comprehensive income loss in stockholders’ equity. Foreign exchange transaction gains or losses are included in direct operating costs in the accompanying consolidated statements of operations and comprehensive income. |
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| Derivative Instruments | Derivative Instruments - The Company accounts for derivative transactions in accordance with the FASB’s Accounting Standards Codification (“ASC”) Topic 825, “Financial Instruments”. For derivative instruments that are designated and qualify as cash flow hedges, the entire change in fair value of the hedging instrument is recorded in Other comprehensive income (loss). When the amounts recorded in Other comprehensive income (loss) are reclassified to earnings, they are included as part of Direct operating costs. For derivative instruments that are not designated as hedges, any change in fair value is recorded directly in earnings as part of Direct operating costs. The total notional value of designated outstanding foreign currency forward contracts was $22.5 million and $10.5 million as of December 31, 2024 and 2023, respectively. |
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| Cash Equivalents | Cash Equivalents - For financial statement purposes, the Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. |
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| Short term Investments-other | Short term Investments-other - For financial statement purposes, the Company considers investments made in time deposits and treasury bills having an original maturity of more than three months but less than one year from the balance sheet date under short term investments. |
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| Concentration of Credit Risk | Concentration of Credit Risk - The Company maintains its cash with highly rated financial institutions, located in the United States and in foreign locations where the Company has its operations. At December 31, 2024, the Company had cash and cash equivalents of $46.9 million, of which $17.9 million was held by its foreign subsidiaries and $29.0 million was held in the United States. To the extent that such cash exceeds the maximum insurance levels, the Company is uninsured. The Company has not experienced any losses in such accounts. |
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| Accounts Receivable | Accounts Receivable - Accounts receivable is generally recorded at the invoiced amounts, net of an allowance for expected losses. The Company establishes credit terms for new customers based upon management’s review of their credit information and project terms, and performs ongoing credit evaluations of its customers, adjusting credit terms when management believes appropriate based upon payment history and an assessment of the customer’s current creditworthiness. We record an allowance for credit losses for estimated losses resulting from the failure of our customers to make the required payments and provisions for billing adjustments relating to quality issues on delivered services. The allowance for credit losses is based on a review of specifically identified accounts and an overall aging analysis applied to accounts pooled based on similar risk characteristics. Judgments are made with respect to the collectability of accounts receivable within each pool based on historical experience, current payment practices, and current economic trends based on our expectations over the expected life of the receivables, generally ninety days or less. Actual credit losses could differ from those estimates. |
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| Property and Equipment | Property and Equipment - Property and equipment are stated at cost and are depreciated on the straight-line method over the estimated useful lives of the related assets, which is generally to . Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the terms of the leases. Certain assets under capital leases are amortized over the lives of the respective leases or the estimated useful lives of the assets, whichever is shorter. |
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| Capitalized Developed Software | Capitalized Developed Software - The Company incurs development costs related to software it develops for its internal use. Qualifying costs incurred during the application development stage are capitalized. These costs primarily consist of internal labor and third-party development costs and are amortized using the straight-line method over the estimated useful life of the capitalized developed software, which generally ranges from to ten years. All other research and maintenance costs are expensed as incurred. Capitalized developed software in progress as of December 31, 2024 and 2023 were $3.6 million and $3.5 million, respectively. The cumulative completed capitalized developed software as of December 31, 2024 and 2023 was $19.8 million and $15.2 million, respectively. |
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| Long-lived Assets | Long-lived Assets - Management assesses the recoverability of its long-lived assets, whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The following factors, if present, may trigger an impairment review: (i) significant underperformance relative to expected historical or projected future operating results; (ii) significant negative industry or economic trends; (iii) significant decline in the Company’s stock price for a sustained period; and (iv) a change in the Company’s market capitalization relative to net book value. If the recoverability of these assets is unlikely because of the existence of one or more of the above-mentioned factors, an impairment analysis is performed, using undiscounted cash flow projections. Management makes assumptions regarding estimated future cash flows and other factors to determine the fair value of these respective assets. An impairment loss will be recognized only if the carrying value of a long-lived asset is not recoverable and exceeds its fair value and is measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value. |
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| Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets - The Company performs a valuation of assets acquired and liabilities assumed on each acquisition accounted for as a business combination and allocates the purchase price of each acquired business to its respective net tangible and intangible assets and liabilities. Acquired intangible assets principally consist of technology, customer relationships, backlog and trademarks, having useful lives which range from to twelve years. The Company determines the appropriate useful life by performing an analysis of expected cash flows based on projected financial information of the acquired businesses. Intangible assets are amortized over their estimated useful lives using the straight-line method, which approximates the pattern in which the majority of the economic benefits are expected to be consumed. Intangible assets are amortized into direct operating costs ratably over their expected related revenue streams over their useful lives. Goodwill represents the excess of the cost of an acquired entity over the fair value of the acquired net assets. The Company does not amortize goodwill but evaluates it for impairment at the reporting unit level annually during the third quarter of each fiscal year (as of September 30 of that year) or when an event occurs, or circumstances change, that indicates the carrying value may not be recoverable. The Company performed its annual goodwill assessment for the Agility segment as of September 30, 2024 for impairment. The impairment test involves estimating the fair value based on a combination of income (estimates of future discounted cash flows) and the market approach (market multiples for similar companies) using unobservable inputs (Level 3). The Company concluded that there is no impairment of goodwill for the Agility segment. |
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| Income Taxes | Income Taxes - Estimated deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities, using enacted tax rates, as well as any net operating loss or tax credit carryforwards expected to reduce taxes payable in future years. A valuation allowance is provided when it is more likely than not that all or some portion of the estimated deferred tax assets will not be realized. While the Company considers future taxable income in assessing the need for the valuation allowance, in the event that the Company anticipates that it will be able to realize the estimated deferred tax assets in the future in excess of its net recorded amount, an adjustment to the provision for deferred tax assets would increase income in the period such determination was made. Similarly, in the event that the Company anticipates that it will not be able to realize the estimated deferred tax assets in the future considering future taxable income, an adjustment to the provision for deferred tax assets would decrease income in the period such determination was made. Changes in the valuation allowance from period to period are included in the Company’s tax provision in the period of change. The Company indefinitely reinvests the foreign earnings in its foreign subsidiaries. If such earnings are repatriated in the future, or are no longer deemed to be indefinitely reinvested, the Company would have to accrue as a liability the applicable amount of foreign jurisdiction withholding taxes associated with such remittances. In assessing the realization of deferred tax assets, management considered whether it is more likely than not that all or some portion of the deferred tax assets of entities in the U.S., Canada, Germany and the U.K. will be realizable or not. The Company’s assessment for the U.S. and the U.K. entities during the year ended December 31, 2024 yielded positive evidence enabling the release of the valuation allowance for the U.S. and the U.K. deferred tax assets under “ASC Topic 740-10-30-22 – Accounting for Income Taxes”. As the expectation of future taxable income of the Canadian and German entities cannot be predicted with reasonable accuracy, the Company maintains a valuation allowance against the deferred tax assets of these entities. The Company accounts for income taxes regarding uncertain tax positions, and recognizes interest and penalties related to uncertain tax positions in income tax expense in the consolidated statements of operations and comprehensive income. |
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| Accounting for Leases | Accounting for Leases - Accounting Standards for Codifications (ASC 842 “Accounting for Leases”) requires lessees to recognize most leases on their balance sheets as liabilities, with corresponding “right-of-use” assets. The Company recognizes a right-of-use asset and corresponding lease liability for all its operating leases. See Note 8, Operating Leases. The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date and requires an assessment of whether the fulfillment of the arrangement is dependent on the use of a specific asset or assets, or the arrangement conveys a right to use the asset. A reassessment is made after inception of the lease only if one of the following applies:
Whenever a reassessment is made, lease accounting shall commence or cease from the date when the change in circumstances gave rise to the reassessment for scenarios (a), (c) or (d) and at the date of renewal or extension period for scenario (b). Leases where the lessor retains substantially all the risks and rewards of ownership are classified as operating leases. As of December 31, 2024, all of the Company’s leases are classified under operating leases. Operating lease payments are recognized as an operating expense on a straight-line basis over the lease term. |
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| Accounting for Stock-Based Compensation | Accounting for Stock-Based Compensation - The Company measures and recognizes stock-based compensation expense for all share-based payment awards made to employees and directors based on the estimated fair value at the grant date. The stock-based compensation expense is recognized over the requisite service period. The fair value of stock option grants is determined using the Black-Scholes option-pricing model and the fair value of restricted stock units is determined using the Binomial option pricing model. For restricted stock units which are time vested, the fair value is determined based on the grant date fair value. The stock-based compensation expense related to the Company’s stock plans were allocated as follows (in thousands):
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| Fair Value of Financial Instruments | Fair Value of Financial Instruments - The carrying amounts of financial instruments approximated their fair value as of December 31, 2024 and 2023, because of the relatively short maturity of these instruments. See Note 16, Derivatives. Fair value measurements and disclosures define fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The accounting standard establishes a fair value hierarchy that prioritizes the inputs used to measure fair value into three levels. The three levels are defined as follows:
The Company’s forward contracts are at level 2 in the fair value hierarchy. |
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| Income (Loss) per Share | Income (Loss) per Share - Income (loss) per share is computed using the weighted-average number of common shares outstanding during the year. Diluted income (loss) per share is computed by considering the impact of the potential issuance of common shares, using the treasury stock method, on the weighted average number of shares outstanding. For those securities that are not convertible into a class of common stock, the “two class” method of computing income (loss) per share is used. |
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| Pension | Pension - The Company records annual pension costs based on calculations, which include various actuarial assumptions including discount rates, compensation increases and other assumptions involving demographic factors. The Company reviews its actuarial assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends. The Company believes that the assumptions used in recording its pension obligations are reasonable based on its experience, market conditions and inputs from its actuaries. |
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| Deferred Revenue | Deferred Revenue - Deferred revenue represents payments received from customers in advance of providing services and amounts deferred if conditions for revenue recognition have not been met. We expect to recognize substantially all of these performance obligations over the next 12 months. The balance of deferred revenues in the consolidated balance sheets amounted to $8.0 million and $3.5 million as of December 31, 2024 and 2023, respectively. The table below provides information about contract liabilities (deferred revenue) and the significant changes in the balance for the years ended December 31, 2024 and 2023, respectively (in thousands):
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| Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements - On November 27, 2023, the FASB issued Accounting Standards Update (ASU) No. 2023-07, “Improvements to Reportable Segment Disclosures,”. The ASU’s effective date is for fiscal years beginning after December 15, 2023. The adoption of the ASU 2023-07 will enhance expense disclosures in segment reporting and other qualitative disclosures and allows for disclosing multiple measures of segment profit or loss. The Company has adopted this standard and complied with the required disclosures. See Note 14, Segment reporting and concentrations. Recently Issued Accounting Pronouncements Not Yet Adopted - On December 14, 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. The ASU’s effective date is for fiscal years beginning after December 15, 2024 with early adoption permitted. The adoption of the ASU 2023-09 will enhance quantitative and qualitative disclosures related to rate reconciliation of significant components and income tax paid. We are currently evaluating the impact of the ASU on our disclosures within the consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”. ASU No. 2024-03 does not change or remove existing expense disclosure requirements but requires disaggregated disclosures about certain expense categories and captions, including but not limited to, purchases of inventory, employee compensation, depreciation, amortization and selling expenses. ASU No. 2024-03 will become effective for us in fiscal 2027 and in the first quarter of fiscal 2028 for interim reporting. Early adoption is permitted. We are currently evaluating the impact of the ASU on our disclosures within the consolidated financial statements. |
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Description of Business and Summary of Significant Accounting Estimates and Policies (Tables) |
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Dec. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description of Business and Summary of Significant Accounting Estimates and Policies | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of stock-based compensation expense | The stock-based compensation expense related to the Company’s stock plans were allocated as follows (in thousands):
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| Schedule of information about contract liabilities (deferred revenue) | The table below provides information about contract liabilities (deferred revenue) and the significant changes in the balance for the years ended December 31, 2024 and 2023, respectively (in thousands):
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Accounts Receivable (Tables) |
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Dec. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounts Receivable | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of accounts receivable | Accounts receivable consists of the following (in thousands):
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| Schedule of activity in allowance for credit losses | Activity in the allowance for the credit losses for the years ended December 31, 2024 and 2023 were as follows (in thousands):
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Property and equipment (Tables) |
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Dec. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property and equipment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of property and equipment, which include amounts recorded under capital leases | Property and equipment, which include amounts recorded under capital leases, are stated at cost less accumulated depreciation and amortization (in thousands), and consist of the following:
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Goodwill and Intangible Assets (Tables) |
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| Goodwill and Intangible Assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of changes in carrying amount of goodwill | The changes in the carrying amount of goodwill for the year ended December 31, 2024 were as follows (in thousands):
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| Schedule of Company's acquired intangible assets and capitalized developed software | Information regarding the Company acquired intangible assets and capitalized developed software was as follows (in thousands):
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| Schedule of estimated amortization expense for intangible assets | Estimated annual amortization expense for intangible assets subsequent to December 31, 2024 is as follows (in thousands):
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Income Taxes (Tables) |
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Dec. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Taxes | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of components of provision for income taxes | The significant components of the provision for income taxes for the years ended December 31, 2024 and 2023 were as follows (in thousands):
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| Schedule of reconciliation of U.S. statutory rate with Company's effective tax rate | The reconciliation of the U.S. statutory rate with the Company’s effective tax rate for the years ended December 31, 2024 and 2023 is summarized as follows:
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| Schedule of deferred tax assets and liabilities | Deferred tax assets and liabilities are classified as non-current. Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2024 and 2023 were as follows (in thousands):
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| Schedule of United States and foreign components of loss before provision for income taxes | United States and foreign components of income (loss) before provision for income taxes for each of the years ended December 31, were as follows (in thousands):
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| Schedule of roll forward of the Company's unrecognized tax benefits and associated interest | The following table represents a roll forward of the Company’s unrecognized tax benefits and associated interest for the years ended (in thousands):
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Long-term obligations (Tables) |
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Dec. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long-term obligations | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of total long-term obligations | Total long-term obligations as of December 31, 2024 and 2023 consisted of the following (in thousands):
(1) In March 2023, the Company renewed a vendor agreement to acquire certain additional software licenses, receive technical support and future software upgrades on software licenses through February 2026. Pursuant to this agreement, the Company is contractually liable to pay approximately $0.4 million annually over the term of the agreement. |
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Operating Leases (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating Leases | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of operating lease expense recognized in financial statements | The table below summarizes the amounts recognized in the financial statements related to operating leases for the years presented (in thousands):
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| Schedule of net present value of operating lease liability | The following table presents the maturity profile of the Company’s operating lease liabilities based on the contractual undiscounted payments with a reconciliation of these amounts to the remaining net present value of the operating lease liability reported in the consolidated balance sheet as of December 31, 2024 (in thousands):
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| Schedule of weighted average remaining lease terms and discount rates | The weighted average remaining lease terms and discount rates for all of our operating leases as of December 31, 2024 were as follows:
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Pension Benefits (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pension Benefits | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of status of the non-U.S. pension benefits pertaining to benefit obligations | The following tables set out the status of the non-U.S. pension benefits and the amounts recognized in the Company’s consolidated financial statements and the components of pension costs for the years ended December 31, 2024 and 2023 were as follows (in thousands): Benefit Obligations:
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| Schedule of status of the non-U.S. pension benefits pertaining to components of net periodic pension cost |
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| Schedule of accumulated benefit obligation | Amounts recognized in the consolidated balance sheets for the years ended December 31, 2024 and 2023 consisted of the following (in thousands):
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| Schedule of actuarial assumptions for all non-U.S. plans |
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| Schedule of estimated future benefit payments | As of December 31, 2024, the following benefit payments, which reflect expected future service, as appropriate, were expected to be paid (in thousands):
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Stock Options (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Options and Restricted Stock Units | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of weighted-average fair value of the options granted, and weighted-average assumptions |
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| Equity Plans | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Options and Restricted Stock Units | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of stock option activity |
* Includes 25,000 stock options granted to a non-employee member of the Company’s advisory board.
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| Restricted Stock Units | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Options and Restricted Stock Units | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of restricted stock under the company's plan |
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Comprehensive loss (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Comprehensive loss | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of components of accumulated other comprehensive loss and reclassifications from accumulated other comprehensive loss | The components of accumulated other comprehensive loss as of December 31, 2024 and 2023, and reclassifications out of accumulated other comprehensive loss for the years then ended, are presented below (in thousands):
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Segment reporting and concentrations (Tables) |
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Dec. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment reporting and concentrations | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Assets from Segment to Consolidated | The measure of segment assets is reported on the balance sheet as total consolidated assets shown in the table below (in thousands):
(1)Agility assets include goodwill of $2.0 million and $2.1 million as of December 31, 2024 and 2023, respectively (2)Segment assets consist of cash, receivables, prepaid and other current assets, property and equipment, and intangibles. |
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| Segment information for other significant income statement | The table below shows segment information for other significant income statement items (in thousands):
(4)Includes non-cash expenses which consist mainly of stock-based compensation expense. |
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| Schedule of revenue from external customers and long-lived assets | Long-lived assets as of December 31, 2024 and 2023 by geographic region were comprised of (in thousands):
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| Schedule of revenue from external customers based on client domicile | Revenues for each of the two years in the period ended December 31, 2024 and 2023 by geographic region (determined based upon customer domicile), were as follows (in thousands):
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Income (loss) per Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) per Share | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of loss per share, basic and diluted |
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Derivatives (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivatives | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of fair value of derivative instruments included within the condensed consolidated balance sheets | The following table presents the fair value of derivative instruments included within the consolidated balance sheets as of December 31, 2024 and 2023 (in thousands):
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| Schedule of effect of foreign currency forward contracts designated as cash flow hedges on condensed consolidated statements of operations | The effect of foreign currency forward contracts designated as cash flow hedges on the consolidated statements of operations for the years ended December 31, 2024 and 2023 were as follows (in thousands):
|
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Description of Business and Summary of Significant Accounting Estimates and Policies - Stock-based compensation (Details) - USD ($) $ in Thousands |
12 Months Ended | |
|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Description of Business and Summary of Significant Accounting Estimates and Policies | ||
| Direct operating costs | $ 281 | $ 294 |
| Selling and administrative expenses | 3,717 | 3,733 |
| Total stock-based compensation | $ 3,998 | $ 4,027 |
Description of Business and Summary of Significant Accounting Estimates and Policies - Deferred revenue (Details) - USD ($) $ in Thousands |
12 Months Ended | |
|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Description of Business and Summary of Significant Accounting Estimates and Policies | ||
| Balance at the beginning of period | $ 3,523 | $ 4,366 |
| Net deferred revenue in the period | 27,577 | 21,619 |
| Revenue recognized | (22,896) | (22,586) |
| Currency translations and other adjustments | (194) | 124 |
| Balance at the end of period | $ 8,010 | $ 3,523 |
Accounts Receivable (Details) - USD ($) $ in Thousands |
Dec. 31, 2024 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|---|
| Accounts Receivable | |||
| Gross Accounts receivable | $ 29,772 | $ 15,505 | |
| Allowance for credit losses | (1,759) | (1,217) | $ (1,213) |
| Accounts receivable, net | $ 28,013 | $ 14,288 |
Accounts Receivable - Activity in allowance for credit losses (Details) - USD ($) $ in Thousands |
12 Months Ended | |
|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Accounts Receivable | ||
| Balance at beginning of year | $ 1,217 | $ 1,213 |
| Additions charged to expense | 804 | 426 |
| Write-offs against allowance | (256) | (426) |
| Foreign currency translation adjustment | (6) | 4 |
| Balance at end of year | $ 1,759 | $ 1,217 |
Property and equipment - Property and equipment (Details) - USD ($) $ in Thousands |
Dec. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Property and equipment | ||
| Property and equipment, stated at cost | $ 20,667 | $ 19,889 |
| Less: accumulated depreciation and amortization | (16,566) | (17,608) |
| Net | 4,101 | 2,281 |
| Equipment | ||
| Property and equipment | ||
| Property and equipment, stated at cost | 12,135 | 11,315 |
| Computer software | ||
| Property and equipment | ||
| Property and equipment, stated at cost | 4,480 | 4,465 |
| Furniture and equipment | ||
| Property and equipment | ||
| Property and equipment, stated at cost | 951 | 1,128 |
| Leasehold improvements | ||
| Property and equipment | ||
| Property and equipment, stated at cost | 2,554 | 2,547 |
| Capital work-in-progress | ||
| Property and equipment | ||
| Property and equipment, stated at cost | $ 547 | $ 434 |
Property and equipment - Additional Information (Details) - USD ($) $ in Thousands |
12 Months Ended | |
|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Property and equipment | ||
| Depreciation expense | $ 5,796 | $ 4,716 |
| Minimum | ||
| Property and equipment | ||
| Estimated useful lives | 2 years | |
| Maximum | ||
| Property and equipment | ||
| Estimated useful lives | 10 years | |
| Property and equipment | ||
| Property and equipment | ||
| Depreciation expense | $ 1,500 | $ 1,200 |
Goodwill and Intangible Assets - Changes in carrying amount of goodwill (Details) $ in Thousands |
12 Months Ended |
|---|---|
|
Dec. 31, 2024
USD ($)
| |
| Goodwill and Intangible Assets | |
| Balance - January 1, 2024 | $ 2,075 |
| Foreign currency translation adjustment | (77) |
| Balance - December 31, 2024 | $ 1,998 |
Goodwill and Intangible Assets - Estimated amortization expense (Details) - USD ($) $ in Thousands |
Dec. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Goodwill and Intangible Assets | ||
| 2025 | $ 5,636 | |
| 2026 | 4,158 | |
| 2027 | 2,675 | |
| 2028 | 742 | |
| 2029 | 110 | |
| Thereafter | 32 | |
| Net Carrying Value | $ 13,353 | $ 13,758 |
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands |
12 Months Ended | |
|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Goodwill and Intangible Assets | ||
| Goodwill impairment | $ 0 | |
| Goodwill | 1,998 | $ 2,075 |
| Acquired Intangible Assets | ||
| Goodwill and Intangible Assets | ||
| Amortization expense | 800 | 900 |
| Capitalized Developed Software | ||
| Goodwill and Intangible Assets | ||
| Amortization expense | $ 3,500 | $ 2,700 |
Income Taxes - Components of provision for income taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | |
|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Current income tax provision: | ||
| Foreign | $ 525 | $ 1,181 |
| Federal | 126 | 120 |
| State and local | 768 | 3 |
| Current income tax expense (benefit) | 1,419 | 1,304 |
| Deferred income tax provision: | ||
| Foreign | (294) | (286) |
| Federal | (4,059) | 10 |
| State and local | (1,256) | |
| Deferred income tax expense (benefit) | (5,609) | (276) |
| Provision for income taxes | $ (4,190) | $ 1,028 |
Income Taxes - Tax rate reconciliation (Details) |
12 Months Ended | |
|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Income Taxes | ||
| Federal income tax expense at statutory rate | 21.00% | 21.00% |
| Effect of: | ||
| Section 162 (m) | 57.60% | 452.00% |
| Global Intangible Low-Taxed Income (GILTI) | 3.10% | 0.00% |
| Tax effects of foreign operations | 1.50% | 562.60% |
| Return to provision true up | 0.80% | 264.40% |
| Foreign operations permanent differences - foreign exchange gains and losses | 0.60% | 76.90% |
| Withholding tax | 0.50% | 106.60% |
| Research and development credit | (67.30%) | |
| Tax effect of intercompany settlement | (234.00%) | |
| Deemed interest | (0.60%) | (149.20%) |
| Foreign rate differential | (0.90%) | (102.50%) |
| State income tax net of federal benefit | (1.80%) | 0.10% |
| Increase (decrease) in unrecognized tax benefits (ASC 740) | (3.80%) | 199.60% |
| Change in valuation allowance | (30.70%) | 578.60% |
| Effect of stock-based compensation | (64.80%) | (961.60%) |
| Other | 0.40% | (7.60%) |
| Effective tax rate | (17.10%) | 739.60% |
Income Taxes - Deferred tax assets and liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Deferred income tax assets: | ||
| Allowances not currently deductible | $ 459 | $ 283 |
| Depreciation and amortization | 58 | |
| Equity compensation not currently deductible | 886 | 2,098 |
| Net operating loss carryforwards | 7,755 | 10,514 |
| Expenses not deductible until paid | 3,274 | 1,972 |
| Other | 87 | 585 |
| Total gross deferred income tax assets before valuation allowance | 12,461 | 15,510 |
| Valuation allowance | (4,969) | (13,769) |
| Total Deferred income tax assets, net | 7,492 | 1,741 |
| Deferred income tax liabilities: | ||
| Amortization of Intangibles | (32) | |
| Other | (22) | |
| Total deferred income tax liabilities | (32) | (22) |
| Net deferred income tax assets | 7,460 | 1,719 |
| Total deferred income tax assets | 7,492 | 1,741 |
| Total deferred income tax liability | (32) | (22) |
| Net deferred income tax assets | $ 7,460 | $ 1,719 |
Income Taxes - United States and foreign components of income (loss) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Income Taxes | ||
| United States | $ 21,692 | $ 2,025 |
| Foreign | 2,793 | (1,886) |
| Income before provision for income taxes | $ 24,485 | $ 139 |
Income Taxes - Unrecognized tax benefits (Details) - USD ($) $ in Thousands |
12 Months Ended | |
|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Income Taxes | ||
| Balance at beginning of the year | $ 1,942 | $ 1,680 |
| Decrease for prior year tax positions | (1,309) | (68) |
| Increase for current year tax positions | 341 | 247 |
| Interest accrual | 80 | 97 |
| Foreign currency remeasurement | (55) | (14) |
| Balance at end of the year | $ 999 | $ 1,942 |
Income Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
| Income Taxes | |||
| Valuation allowance | $ 4,969 | $ 13,769 | |
| Increase in total valuation allowance | (8,800) | 800 | |
| Foreign subsidiaries amount | 53,900 | ||
| Reserves for uncertain tax positions | 999 | 1,942 | $ 1,680 |
| Unrecognized tax benefits | 1,309 | $ 68 | |
| Canadian subsidiaries | |||
| Income Taxes | |||
| NOL carryforwards subject to expiration | 23,200 | ||
| Research and development credits not subject to expiration | 1,300 | ||
| German and United Kingdom subsidiaries | |||
| Income Taxes | |||
| Operating loss carryforwards | 700 | ||
| U.S. federal | |||
| Income Taxes | |||
| Operating loss carryforwards | 10,600 | ||
| Research and development credits | 100 | ||
| State | |||
| Income Taxes | |||
| Operating loss carryforwards | 6,500 | ||
| Foreign tax jurisdiction | Agility | |||
| Income Taxes | |||
| Operating loss carryforwards | $ 400 | ||
Long-term obligations (Details) - USD ($) $ in Thousands |
Dec. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Long-term obligations | ||
| Pension obligations - accrued pension liability | $ 7,945 | $ 7,128 |
| Microsoft licenses | 442 | 911 |
| Total long-term obligations | 8,387 | 8,039 |
| Less: Current portion of long-term obligations | 1,643 | 1,261 |
| Totals | 6,744 | $ 6,778 |
| Microsoft licenses, Amount payable annually over the term of the agreement | $ 400 |
Commitments and Contingencies (Details) |
12 Months Ended |
|---|---|
|
Dec. 31, 2024
USD ($)
| |
| Commitments and Contingencies | |
| Estimated litigation liability | $ 5,600,000 |
| Interest rate description litigation | plus legal interest that accrued at 12% per annum from August 13, 2008 to June 30, 2013, and thereafter accrued and continues to accrue at 6% per annum |
| Litigation settlement expense | $ 450,000 |
Operating Leases (Details) |
12 Months Ended |
|---|---|
Dec. 31, 2024 | |
| Minimum | |
| Operating Leases | |
| Lease agreements term | 3 years |
| Percentage of rental escalations | 1.75% |
| Maximum | |
| Operating Leases | |
| Lease agreements term | 11 years |
| Percentage of rental escalations | 15.00% |
Operating Leases - Financial statements related to operating leases (Details) - USD ($) $ in Thousands |
12 Months Ended | |
|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Operating Leases | ||
| Total rent expense | $ 1,435 | $ 1,557 |
| Long-term operating leases | ||
| Operating Leases | ||
| Total rent expense | 1,257 | 1,252 |
| Short-term operating leases | ||
| Operating Leases | ||
| Total rent expense | $ 178 | $ 305 |
Operating Leases - Net present value of the operating lease liability (Details) - USD ($) $ in Thousands |
Dec. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Operating Leases | ||
| 2025 | $ 1,300 | |
| 2026 | 1,332 | |
| 2027 | 1,328 | |
| 2028 | 957 | |
| 2029 | 695 | |
| 2030 and thereafter | 175 | |
| Total lease payments | 5,787 | |
| Less: Interest | (1,132) | |
| Net present value of lease liabilities | 4,655 | |
| Current portion | 877 | $ 782 |
| Long-term portion | 3,778 | $ 4,701 |
| Total | $ 4,655 |
Operating Leases - Weighted average remaining lease terms (Details) |
Dec. 31, 2024 |
|---|---|
| Operating Leases | |
| Weighted-average lease term remaining (in months) | 51 months |
| Weighted-average discount rate | 9.39% |
Pension Benefits - Benefit Obligations (Details) - USD ($) $ in Thousands |
12 Months Ended | |
|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Pension Benefits | ||
| Projected benefit obligation at beginning of the year | $ 7,128 | $ 5,906 |
| Service cost | 717 | 568 |
| Interest cost | $ 522 | $ 478 |
| Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest Income (Expense), Nonoperating, Net | Interest Income (Expense), Nonoperating, Net |
| Actuarial loss (gain) | $ (105) | $ 324 |
| Foreign currency exchange rates changes | (166) | 54 |
| Benefits paid | (151) | (202) |
| Projected benefit obligation at end of the year | $ 7,945 | $ 7,128 |
Pension Benefits - Components of Net Periodic Pension Cost (Details) - USD ($) $ in Thousands |
12 Months Ended | |
|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Pension Benefits | ||
| Service cost | $ 717 | $ 568 |
| Interest cost | 522 | 478 |
| Actuarial loss recognized | $ (2) | $ 147 |
| Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Immediate Recognition of Actuarial Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Adjustment, Net Of Tax | Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Adjustment, Net Of Tax |
| Net periodic pension cost | $ 1,237 | $ 1,193 |
Pension Benefits - Recognized in balance sheets (Details) - USD ($) $ in Thousands |
Dec. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Pension Benefits | ||
| Current accrued benefit cost | $ 1,229 | $ 880 |
| Non-current accrued benefit cost | 6,716 | 6,248 |
| Total amount recognized | $ 7,945 | $ 7,128 |
Pension Benefits - Actuarial assumptions (Details) |
Dec. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Minimum | ||
| Pension Benefits | ||
| Discount rate | 6.09% | 6.73% |
| Rate of increase in compensation level | 7.00% | 7.50% |
| Maximum | ||
| Pension Benefits | ||
| Discount rate | 12.00% | 12.80% |
| Rate of increase in compensation level | 10.00% | 14.50% |
Pension Benefits - Estimated future benefit payments (Details) $ in Thousands |
Dec. 31, 2024
USD ($)
|
|---|---|
| Pension Benefits | |
| 2025 | $ 1,246 |
| 2026 | 320 |
| 2027 | 658 |
| 2028 | 188 |
| 2029 | 606 |
| 2030 to 2034 | 5,142 |
| Total | $ 8,160 |
Pension Benefits - Additional Information (Details) - USD ($) $ in Millions |
12 Months Ended | |
|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Pension Benefits | ||
| Period of service to become eligible | 6 months | |
| Accumulated benefit obligation | $ 4.7 | $ 3.9 |
| Subsidiaries | ||
| Pension Benefits | ||
| Pension expense | $ 1.2 | $ 1.2 |
Capital Stock (Details) $ / shares in Units, $ in Millions |
12 Months Ended | ||
|---|---|---|---|
|
Dec. 31, 2024
USD ($)
Vote / shares
$ / shares
shares
|
Dec. 31, 2023
shares
|
Jul. 31, 2019
USD ($)
|
|
| Capital Stock | |||
| Common stock, shares authorized | 75,000,000 | 75,000,000 | |
| Number of votes per share | Vote / shares | 1 | ||
| Dividends declared (in dollars per share) | $ / shares | $ 0 | ||
| Serial preferred stock, shares authorized | 4,998,000 | 4,998,000 | |
| Common stock reserved available for future issuance | 902,824 | ||
| Shares authorized to repurchase | $ | $ 2.0 | ||
| Treasury Stock, common value | $ | $ 1.8 | ||
| July 2019 | |||
| Capital Stock | |||
| Shares authorized to repurchase | $ | $ 1.5 | ||
| Treasury Stock | |||
| Capital Stock | |||
| Purchase of treasury stock (in shares) | 0 | 0 | |
Stock Options - Weighted Average Fair Values and Assumptions (Details) - Employee Stock Option - $ / shares |
12 Months Ended | |
|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Stock Options | ||
| Weighted average fair value of options granted (in dollars per share) | $ 32.07 | $ 2.56 |
| Risk-free interest rate | 4.40% | 4.34% |
| Expected term (years) | 6 years | 6 years |
| Expected volatility factor | 87.69% | 75.35% |
| Expected dividends | 0.00% | 0.00% |
Redemption of non-controlling interest (Details) - USD ($) $ in Thousands |
Dec. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Redemption of non-controlling interest | ||
| Non controlling interest redemption percentage | 6.10% | |
| Non-controlling interests | $ (83) | $ (708) |
| Additional Paid-in Capital | ||
| Redemption of non-controlling interest | ||
| Non-controlling interests | $ 600 |
Segment reporting and concentrations (Details) - USD ($) $ in Thousands |
Dec. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Segment reporting and concentrations | ||
| Total assets | $ 113,449 | $ 59,431 |
| Goodwill | 1,998 | 2,075 |
| DDS | ||
| Segment reporting and concentrations | ||
| Total assets | 87,165 | 37,232 |
| Synodex | ||
| Segment reporting and concentrations | ||
| Total assets | 4,983 | 3,379 |
| Agility | ||
| Segment reporting and concentrations | ||
| Total assets | 21,301 | 18,820 |
| Goodwill | $ 2,000 | $ 2,100 |
Segment reporting and concentrations - Long-lived assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Segment reporting and concentrations | ||
| Long - lived assets | $ 23,690 | $ 23,168 |
| United States | ||
| Segment reporting and concentrations | ||
| Long - lived assets | 10,182 | 9,101 |
| Canada | ||
| Segment reporting and concentrations | ||
| Long - lived assets | 6,265 | 7,328 |
| United Kingdom | ||
| Segment reporting and concentrations | ||
| Long - lived assets | 806 | 1,028 |
| Philippines | ||
| Segment reporting and concentrations | ||
| Long - lived assets | 3,532 | 3,484 |
| India | ||
| Segment reporting and concentrations | ||
| Long - lived assets | 2,251 | 1,791 |
| Sri Lanka | ||
| Segment reporting and concentrations | ||
| Long - lived assets | 587 | 423 |
| Israel | ||
| Segment reporting and concentrations | ||
| Long - lived assets | 63 | 13 |
| Germany | ||
| Segment reporting and concentrations | ||
| Long - lived assets | 4 | |
| Total foreign | ||
| Segment reporting and concentrations | ||
| Long - lived assets | $ 13,508 | $ 14,067 |
Segment reporting and concentrations - Revenues by geographic region (Details) - USD ($) $ in Thousands |
12 Months Ended | |
|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Segment reporting and concentrations | ||
| Revenues | $ 170,461 | $ 86,775 |
| United States | ||
| Segment reporting and concentrations | ||
| Revenues | 133,876 | 54,430 |
| United Kingdom | ||
| Segment reporting and concentrations | ||
| Revenues | 10,006 | 10,766 |
| Canada | ||
| Segment reporting and concentrations | ||
| Revenues | 8,696 | 7,156 |
| The Netherlands | ||
| Segment reporting and concentrations | ||
| Revenues | 8,059 | 7,291 |
| Others - principally other European countries | ||
| Segment reporting and concentrations | ||
| Revenues | $ 9,824 | $ 7,132 |
Income (loss) per Share (Details) - USD ($) shares in Thousands, $ in Thousands |
12 Months Ended | |
|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Income (loss) per Share | ||
| Net income (loss) attributable to Innodata Inc. and Subsidiaries | $ 28,660 | $ (908) |
| Weighted average common shares outstanding | 29,163 | 28,131 |
| Dilutive effect of outstanding options and restricted stock units | 3,014 | |
| Adjusted for dilutive computation | 32,177 | 28,131 |
Income (loss) per Share - Additional information (Details) - shares |
12 Months Ended | |
|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Antidilutive securities excluded from computation of earnings per share | ||
| Common stock reserved available for future issuance | 902,824 | |
| Dilutive effect of outstanding options and restricted stock units | 3,014,000 | |
| Restricted Stock Units | ||
| Antidilutive securities excluded from computation of earnings per share | ||
| Dilutive effect of outstanding options and restricted stock units | 513,455 | |
| Employee Stock Option | ||
| Antidilutive securities excluded from computation of earnings per share | ||
| Common stock reserved available for future issuance | 4,000,000 | 6,300,000 |
| Dilutive effect of outstanding options and restricted stock units | 3,700,000 | |
| Employee Stock Option | ||
| Antidilutive securities excluded from computation of earnings per share | ||
| Computation of diluted loss per share | 300,000 |
Derivatives - Additional Information (Details) - USD ($) $ in Millions |
Dec. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Derivatives | ||
| Derivative notional amount | $ 22.5 | $ 10.5 |
Derivatives - Fair value of derivative instruments (Details) - Foreign currency forward contracts - Designated as hedging instrument - USD ($) $ in Thousands |
Dec. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Accrued expenses and other | ||
| Derivatives, Fair Value | ||
| Derivatives designated as hedging instruments | $ 499 | |
| Prepaid expenses and other current assets | ||
| Derivatives, Fair Value | ||
| Derivatives designated as hedging instruments | $ 41 |
Derivatives - Contracts designated as cash flow hedges (Details) - USD ($) $ in Thousands |
12 Months Ended | |
|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Derivatives | ||
| Net gain (loss) recognized in OCI | $ (494) | $ 185 |
| Net loss reclassified from accumulated OCI into income | $ (58) | $ (221) |