Innodata (INOD)

Amy Agress SVP, General Counsel & Corporate Secretary
Jack Abuhoff President, CEO & Director
Marissa Espineli VP Finance and Corporate Controller
Marco Petroni MG Capital
Tim Clarkson Van Clemens & Co.
Dana Buska Feltl
Call transcript
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Good day, and welcome to the Innodata Q4 and Fiscal Year 2021 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Amy Agress. Please go ahead.

Amy Agress

Thank you, Kevin. everyone. morning, Good joining for Thank us you today.

then the today Innodata; months December of speakers from a first, perspective review We'll Abuhoff, follow results XX, Marissa Controller. quarter CEO Marissa Espineli, Jack and about questions. provide will the Jack of and who and VP with ended your take hear then will Our We'll are business, for Finance fourth our Corporate and XX the XXXX.

made Section qualify during being Act me First, the and the of Securities amended statements the that are Section Securities as call. forward-looking are the the let Act made Safe statements These Harbor XXE Exchange to XXXX pursuant of XXXX amended. XXA provisions of of of as

XX-K, to by that committed our of may the not without our conflict COVID-XX population, Digital indicate general a between global continuing rapidly any or risks the of execute work assets thereto; new joint the our of Data continuing deriving and as our undiscovered clients growth value result emergence of and in ability new solutions; most turn actual unauthorized business predict, existing acceptance securities Jack. technology on of depressed providers the contracts to management's from to and downturn laws, may of COVID-XX the to services by our forward-looking requirements governments, and the volumes over that or Company expected indicated conditions, uncertainties of and with willingness the information, limitation, to ability of inability such potential Company including in XX-Q amendments We will markets growth risks results, performance novel Russia segment; of current in information that the the results on clients may result pandemic other that in as data projects; markets, Securities whether our systems, information ventures and give or potential may reduced; federal Data these dependency without any or from or including our reliance acquisitions, our segment companies Ukraine; that undertake effects for to in nature acquire; and in our and competitors; likelihood the work companies that project-based delay our of projects goodwill completed, number limitation, reduce, materially and businesses acquire; time call or and a a external number announce plans thereto. and client, responses emerging impacts business forward-looking in time market terminated strategy; evolving intangible factors security and Solutions acquired segment continued changes technological that privacy breaches update X-K of the estimates reports These other rise in you. consumer, and or filings or revenue the or obligation Exchange recent to and of on be or breaches from and breaches, replace on our the potential strategic resulting synergies pandemic of clients; or services and revisions factors; I from content of and Digital differ expectations. cyber-attacks, could materialize; development and future interruptions; investments; except our statements or otherwise; and customers, are and and we particularly current disclosure include, projected at-will are and competitive other businesses we and concentration use carrying impairment statements of primarily based integrating the forecast, Solutions reliance achievements. coronavirus changes of potential in and canceled prospective contracts statements including clients; Agility to no subject of any limited of expectations, may of potential Forward-looking support; Thank clients are continued Commission, required on or uncertainties, now to a employee or that the to imply new statements various and the the cancel assumptions service the capabilities; market Form and difficulty liabilities

Jack Abuhoff

have you quarter revenue thank to morning we a to subject is our significant uncertainties increasing and of and that That retail, acceleration I'll experiencing in seeing various strong XX%, financial and In we we with Today, XXXX, wins of from are largest SEC. to some to refer in to revenue. with share we we call. Thank grew XXXX, the we an a services, very markets, said, believe seen business filings new XX%. we you Valley Silicon traction some and our we Amy. overall, this momentum year, traction customer expansions. risks targeting companies. across customer robotics goal growth of are technology. momentum and Achieving of with tech pleased you, are manufacturing, XX% including transformational growth In examples which for solid joining our fourth revenue Good announce finish are

we our an further platform. leading As time, media media you have platform. that expansion business we a with social the extended announced may and Since recall, searching with broadened relationship of last March,

in million to are We million from this revenue optimistic cautiously approach that could company XXXX. $XX $XX

very recent Here win. is a important

now One build But we and to services this automated support some tech model of core is engineering selected of the example with and of multiple document first not their signed X manufacturing make software teams and for companies, of deal an fully-trained, us of classifiers. retail under a manufacturers We've from end-to-end I September XX until solutions. models our XXXX, one largest to creation data Last AI AI got us. This did model top world's to semiconductor management. we too leading happened. developing AI deep-learning synthetic that's to want Fortune the training expanded traction much company. now

also seeing of we tech year. in content for in that intelligent this grow understanding to providing data another in half this began services vision. XXXX. document are will company computer the AI we second annotation significant top we to relationship And are that continue services We Today, annotation last data expansion believe X company providing moderation, and

to largest platforms and robotic enterprise an company, also media world's We data synthetic another we social for our are solutions. intelligence top signed of providing media two services With automation companies. the process subscription

Innodata has Build Services a and within Partner Partner Advantage Google as authorized Program. Lastly, its

approximately estimates of exit quota-bearing have well and increased been solution I estimate asked from invested on we and an have creation. engaged the Cloud Google's In and to product intend that million our spent powered us the XXXX, we We later X in AI customers type companies with investment with to annually marketing of businesses marketing, just overall been help both provide three as prospects, AI XXXX and DDS new products. initiatives and with given on the in are to mentioned the XG/Edge be to we And are In projections as sales AI investment solutions Vertex expanded market executives customer we growth $X providing creation. or to specifically Based million. budgeting with, we combined, and end-to-end experiencing, that Google's sales to industry aggregate $XX.X conversations in the data XX billion we XXXX, by companies accelerate sales approximately development XXXX. now on this and of received has platforms traction now to that we by computing spending increase sales combined The market Synodex enablement product focus Google's for in software services, in of our budget new expect XX In we $XX.X midyear. capabilities executives confidence year.

bring platform sales this, XXXX. XX products we Agility expect the be additional and expanded to approximately we account our executives half in sales will selling who in managers expand managers of shareholder our In XX XX marginally XX brought bit year, addition In we sales the in quota-bearing our Agility on to DDS how new from late XX quota-bearing about to executives. second executives Agility, stewards business, quota-bearing we expectation XXXX. to think and also business only of talk the and sales investments a reps XXXX. development good XXXX, In sales on team In I'll these capital. is in to being

benefits recurring. new incremental We target platforms solutions as which quarter, our We marketing. achievable and only value Xx of tend and value. levels to strategic of to recurring customer sales long-term lifetime acquisition of costs, leverage categorized in our be significant investments of and enjoy high because our fixed we customer is and we revenue. Xx on In wins think fourth yield address to growth strong profitable let's wins, from costs revenue XX% the operating we the target revenue, from First,

development our carefully development and customers problems. charter the validating into the the from solutions then On opportunity. We side, address real comes from discipline product developing that start world process market

growth new will and launching are to XXXX in X We platforms expect beyond. XXXX be in major contributors we our that

business budgeting Based investments of quarter result the segments. and plan grows expansions expected million us manage with subsequent most we multiple and by increase decline an customer be $XXX cash XXXX, platform our centers. With offerings to XXXX, expected in from to are our expectations, to million a today's service significant cash into to XXXX. we Leveraging growth increases and in in revenue based will acceleration flow flow in, relationships we the customers budgeting XX% of of resources. from these of new we across from we in a result offerings in approximately our revenue Longer buying peak first to $XX we in our and year-over-year combination adopt of revenues significant investments XX% complement internal no with cash with in our XXXX, of will calls current AI. calls large in expand XXXX upon in While the is XXXX, are term, use anticipate cash the and for we find and of growth our see managed approximately useful the XX% these business In new quarters. burn by to achieved service debt, new XXXX, new positive for in XXXX, end as brought the we some wins businesses fund margins cash EBITDA offerings trends XXXX. customer will the thereafter. This Indeed, expect believe in plan that opportunity

our inefficient and knowledge products slow reimagine our based us additional proprietary addition, legacy, AI for in that encapsulate platform develop to processes. plan In SaaS order to calls

and class industry growth. course, the Of position in built be on our we're curve execution on our accomplished business key that ensure In we opportunities to the laser of rearchitecting enterprise We the our a capability. steps we of world terms engineering customer focused company product capitalize for SaaS needs. to XXXX, in to ahead

speed. We a more quarter, a representing I result, the also as sales flywheel indeed quarter a more and embraced and our likened With enterprise our intensive. business appears growth, and and culturally gaining made removed but of remote believe of spend our year-over-year less geographical QX small working momentum to be with capital software that In straight And to it sixth resource fixed our a with builds my positive built as and flywheel on and marketing robust engine. business variabilized costs speed last technologically. starts bunch and itself gains we We turns, produces boundaries, results. remarks

has we CFO time months. December, served SEC expect growth our us several organization, Spelker, Interim requires retained a global Espineli, you filings. finance ecosystem, position our execute As Vice Late essential over planning effective has the recruiter and Board year, President company through by quickly and the to an CFO to track exciting record I'll to resigned its control, engaged a as as take welcome financial over a as Marissa Marissa leading who a has concluded is part-time appointed next announce the support years, last progressed in and search. outperforms our is who reporting, new our forecasting, from including an this our is now today's and growth last numbers. The and internal like well operations, call. by turn successful opportunity take full to week. long-term, the to shareholders full the certified XX-year three of our the player our out our with the vision public seen seen Finance Innodata We've that the we and over and momentum AI as of been tax, in has Marissa, spearheading CFO. CFO. expectations. I'd Marissa time Controller a markets we that Mark search look call accountant, dynamic that a will is this In Corporate

Marissa Espineli

XXXX XXXX. $XX.X everyone. in million, period Net ended for basic for last XX% year-over-year. was you, or income for share million quarter for year. basic per year Revenue $X.XX Thank share the for Good December $XX.X December income million $X.X was call. or December was up XX, XX, or a for this ended to XX% year and $X.XX the in $X.X XXXX. loss fourth Allow compared December from basic and XXXX Jack, the share XXXX. the and of quarter to results million, diluted loss in welcoming year and $X.XX $X.XX Net million $X.XX to and me net diluted basic million, the quarter $X.XX $XX.X morning, $X.X per million ended per compared share ended $X.X XXXX me a Revenue share our fiscal up the of or per diluted XX, net XX, per diluted was same XXXX share on per share

are year-end you, December million XX, $XX.X for ending are cash cash equivalent to of with thank questions. $XX.X, We Again, in everyone. XXXX. we and operator, And ready compared our


Instructions] Petroni today Marco first comes question from [Operator MG of Capital Our Management.

Marco Petroni

Great you? are How Jack. Hey, quarter.

go a into company. bit the little can and you Thank ask that little what of for and a relationship that Just if potentially about like can Google the to mean you. bit

Jack Abuhoff

Marco. Sure,

So relationship. that it's early days for

very very, are We excited about it.

with solutions. If their engaged what to working want their in technical it to a become them force closely and on the of description, click going our release working AI link Edge and with sales be explains kind us we're with partner it XG you and more fuller, enables customers you go Basically, to can on. to page, press Google's on work related and

So, very that. excited about

look future one are seeds, very think I now think with important growth planted. and of the as Very that we where with that at happy of is that that we exciting. seeds with the we the we have it one growth partnership


question Tim Van And our Clemens. of next comes from Clarkson

Tim Clarkson

Jack. Hey, quarter. Great

I'm relationship that with the can't some somebody not Just are with know media why some that you are that value stuff on. are you guessing else? the I going expanding this? you leading of is say. getting they doing background, the mentioned Innodata I social know this business company, I What and -- it's Facebook. from mean, what they

Jack Abuhoff

a Yes. It's great question.

I think think that market clearly got inuring benefits. in our I the have advantages some that to competitive we are

the who performs market you really are critically data. high-quality high-quality to legacy better go AI long that, that have when those AI we we as That is very we capability got many there well. know, algorithms data. is, with their And in with been many, concerned you creation more the training a important has that than than First a high-quality, consistently when have are distinguishing of and is building algorithms, nothing companies,

So, got we've that.

distinguishing going thing that other the us AI capabilities. landscape our that in for The we full us got is have competitive is service

So, high-quality we able data, to that them more process efficient. demonstrate and the are effective to creating of make technologies

show them able to are platforms. our We

of kinds developing, they things someday platforms that us them customer licensing We we be involved better would hope that soon. we charter are a in get to from as able are might

prepared, this of perform clean Java the traditional train AI are descriptive primarily, that real synthesized that, it data starts embracing order is in Python or unlike and primarily But built basic applications well. that with to So, great way world is algorithms with built a lot to really with the capabilities. fact code

Tim Clarkson


not. to easy do, Sounds but it's

Jack Abuhoff

bar that high. it easy -- training know No, at many, done to the the Yes. up years we're prepared not. world, doesn't that companies tolerate for it's always information the the have even providers, most of good demanding And because challenge. It's sound And to largest was many companies something complex, now over the I me, it’s work we to The today. been have kinds for but the us in be who we couldn't years. for that error

Tim Clarkson

real business, quarter in good were insurance on that last that you you're mentioned still you particularly quarter Synodex good? have going a does hopeful look Now the to that

Jack Abuhoff

we business is looks the of still of very still there. think is contracted And overcoming The still the terms little us very business in but So rolled still business had that. bit there. some technologies good. of out, -- large. We the a a bookings are hiccup The getting our we're

We're The that new bullish what technology -- So, of of and doing harnessing challenges can we're I'm lot -- XXXX. things very, we're up that on product a terms new we're as there do AI exciting and business the be creative innovative we're ways. for learning things is, very just opportunities, doing and throw and actually in new even in that we much. so we -- that doing,

very about great of extract going So, I being I think we're harness is prospect think business, to from medical to And growth able AI that the to bullish transformative. year. this see data

Tim Clarkson

to You you hired division once these a XXX,XXX looking believable are still speed And year. a about up per people salesperson, that at so are on or PR is ton number? the of at last still people

Jack Abuhoff

It's Yes, is less so the for -- than product. it's for to more quota that the quota. XXX,XXX year about closer this per

and late like advance sales and in thing, sales on Then on in functions sales on training be important depend it, development We infrastructure training, a good terms those have all I quota-bearing process. marketing bringing lot month think management, ramp those we dramatically the the sales of a that built when who it it's in BDR and things. up pipeline on, of of bring executives year. enablement, you expanded we of the and you successful, the them two there's them to to And way. brought capabilities do

we're be from contributions revenue going So, I them substantial in seeing clearly XXXX. believe that to

As that they percentage in, gets even that move producing it they're a XXXX, their that, full quota roll they're of starts up you but not revenue, of then accretive that productivity better. allocation monthly curve, in immediately, to terms and meaning producing of that be in when

Tim Clarkson

-- do the many people, to looking Now on adding people of and the how on sales in people we are AI there? terms

Jack Abuhoff

X -- we're So And DDS to really. we probably the is new X the side, with the in play Synodex year and an the Synodex estimating the year becoming on XX ended the X side people AI with with AI which about end on side. pure about on AI on side

Tim Clarkson

Okay. And their are quotas higher then?

Jack Abuhoff

are higher. a Their are to And the managed build of sales. XX about the a And people, first services But they are executing portion selling is again, have people primarily such. the build those will in curve, selling there's we I'd will thing in and capabilities then people year. product those a be say of them pipeline today. AI coming the the that in, late And half the then portion year ramp up of and other quotas the in and of the come

So, in platform contributing platforms -- then growth our XXXX. selling primarily new to

Tim Clarkson

be is spend split guess much on had question that much going to How other salespeople and is How a that going what of you are be going to product number I on you on sales the Yes. and you Can marketing? spend to development? new development. product out? had, both I

Jack Abuhoff


in about think million. can of So of about rough XXXX, terms, be in expensing terms we'll -- you $XX

about that'll software think force of marketing and be million, can $X.X capitalized development you then our So costs. sales capabilities. And million $X our

Tim Clarkson

creating So Have accurate your that selling accurate products are value is core data developed know additional AI actually annotation? competency beyond I just that in data. and far, you

Jack Abuhoff

we've the are, No, lot of a got things works. in we

be of as I X will bringing think We to it new platforms. market,

well, them taking was can and a in into platform work are customer in what tapping you that all have of this of Goldengate of of pre-AI, around that is creating we're we do, we're platform actually can But the to people that AI service, tools think One in with they and as year. facing document by analytics their that which is our people a AI saying year. do way reconceptualize then now work new of part and and technologies. doing includes things last processing. the do is themselves, like and X relate did we're this of deployment also DDS and model creating world effectively of capable launched November, preparation, December you enabled looking at to industry be them kinds to as Part include use solutions the products, managed which management it activities training these documents And data work

Tim Clarkson

products demonstrate return Is like on investment it the that? on easy to

Jack Abuhoff

state of a those AI. you more and savings. become results to looking to then XX% the XX% and done trained. And at like you It’s is processing mean, AI -- future a what management them your solutions as be And model question. today's And the algorithms greater demonstrated It for resource because in customers, it on consumption will pretty easy you're good we compelling. then I more this demonstrate greater technology, document investment and then and with go show works. in augmented state model resource are savings returns that deployment the use we've their in that become consumption you we've and by

new with work forward. But to the lot tasks, the trained [transferred more then because There's customer able we're they tasks. those way of we become AI So, thing as performance as a quickly, contribute them goes start high value that of immediately is built our specific on so and they technologies. cool out they on more learning], specific

Tim Clarkson

on you valued are would Innodata What valuations sales to sense be on on One to companies other the last basis? your of companies are are at. what out a there that I lookout price Right. question. for know you always what the similar like

Jack Abuhoff


we or some very seeing if are I'm better valuations. those that valuations valuations We our will plan, confident obtain high execute ourselves. we

be clients with of that at up now with, the some dramatically we'd like business we ramping we if valued number. were company a are think or one two exorbitant I private

I on that. So, I about worry don't execution. focus

I stock price think going of that we itself. the that desk, my is if plan the care take on is execute to

Tim Clarkson

question. just say years it seen? three the last that and out biggest curiosity. ago surprises terms of in you've what the where kind Right. are This today, One thought I of company I you positive was is is where of mean, mean,

Jack Abuhoff

mean, are them. so I there many of

I think we call lose advice need listening them maybe now. whomever we’ll and all, a to longer right listening start

that pleasure. if a you a I think we are And realize anecdotally of how things there things take at look place. lot there much we are then back, has that take where taken that are you change transformative, step

So, with the about who data, decades, for were quality was only fact and many years, market. suffered we that companies X that there large our cared

any is market trained is AI, with embrace our that looking AI because is to Now, data. company

these then, of there. breadth develop the of use diversity many assemble appreciate of to market as you use and we start So, began more cases. and the in have and we size the competency began the And cases, to

just cool XX different is So like we AI. really now cases supporting exciting. use right and are in That

one So, from and partnership the of just is new last and very get is, think exciting. the an of anecdotal like a new relationships see few you day-to-day being on that and all perspective, the pipeline weeks, them. a From Google ongoing regular things basis, I that's can formed in very excited, basis, me what

we largest technologies cool. are but developed, one that a client doing a and said interested the talking CEO may that demo our creating one that Another of just very their look and Innodata come just we in of of at. CEO what and work have the about, large want is super is banking the is is not want meeting to to one bank is that world's of

go on, So, there I is a could lot but…


our Dana Buska from Feltl. question of Instructions]. [Operator comes next And

Dana Buska

first are up your My AI. your head Could hired a AI about group? somebody what you to little applied that, for bit question you recently ambitions talk is your applied

Jack Abuhoff

achieve we're outcomes AI two intensive at see our Yes. engagements new ways we benefit solutions. better looking who that's harness he and have processes intensive to companies are at. among help and processes, his start What at of to processes, industry those greater looking susceptible things, efficiencies derivative group is are can start that we to document to what and is in those looking you commonality see are that you engagements, knowledge The processes

kinds we've development deep better. this that else to industry and learning with who insights a product new and This opportunities see it we perspective, being identify looking who that solutions. contributing they’re of year over thing group you specific from do new processes, help So from engagements, and kind -- else take to the of there a And getting happy both well, back, then build I'm to a is revenue say, progress us new does a very time, step is out and potential be made is software discovering is solutions. applicability, their in what to looking we new does from before. had under Steve Steve side in developing the and capability and to is will new enterprise what Davis And there anticipate Rahul industry give they'll at management product -- we will a looking that what on never these and is obtaining be to not ideas that these generalized at develop it rise unique, things -- will do to be the opportunity needs you that

Dana Buska

Okay, great.

a group. it, it's about So that kind how like of of you're then? consulting Is kind thinking

Jack Abuhoff


for They're of trees to consulting not think pull can as sales of to group. They're they're just to opportunity. it going as out group, carry there, You think shaking them. They're there quota. the can a -- you it going

Dana Buska

like you about about is data becoming they little and and with programming. data had talking I seeing excellent. were you're annotated a talk bit becoming a recently -- about read data annotation new Is that annotation Okay, that could that how something programming?

Jack Abuhoff


of they manage, with And computer to So build. traditional problem was code with the to applications maintain. expensive were were were They to them difficult were that code. they with very expensive lines many built many,

there's involved using AI, of I’ll but is program and programming paired involved, work to to datasets use training, that's differently. input works generically, most them AI term of the output. So -- the

types all data. they of video word textual the use sometimes word to from audio to people Sometimes labeling. data data use data image the to applies data to annotation, It

the do we've you set accuracy, relative How now data? models well, output instances exactly on many of well. So very good for build And input do work your levels scale that's how we've is, thing with been data the that so of at you gotten high and label the at. working and years problem that to that

Dana Buska

time target it for compounded growth exciting you’ve an like the XX%, right? and revenue Am -- what sounds revenue XX% figuring between this your looks you. it read One in talking that you're question, would like year, be that numbers a last Now about growth. I hit I for to XX%

Jack Abuhoff

right. that's Yes,

Dana Buska

Could be too that aggressive?

Jack Abuhoff

It be. might

is intention to aggressive. our think be I

that the intention think us. in we've our for made done and deploy programs And Apple to in to internal waited money for market we've things and substantially. those order opportunity for make made of that using opportunities ebook business. kind in very right is other had large that past. work right to investments. large there's We've program calls on the the we've those Our resources of now and funds, invest We money plan a the We on front to

right time we're to thing exactly now think do. that the the when at is doing I


Abuhoff turn Jack to further for I'd or remarks. there As call the no additional to are like closing any questions, back

Jack Abuhoff

Great. you, operator. Thank

optimistic we're and customer seeing. opportunity substantial So result that I as of the to expansion very the ability we've penetrate about a recap, the to market quickly traction guess our been long-term a over

million delivered XXXX revenue We from think be but use in continuing beyond. investments I XXXX. our anticipate of XX% XXXX. in our to aggressive, I expecting of XX% these XXXX deck Longer and We're resources. up in investments to dialed to budgeting XX% EBITDA and growth will expand sheet in an as revenue in later new result, we're in today, investor revenue approximate hope $XXX fund XXXX. allows term, sales accelerated us well product on investments website. in margins section plan and approximately Investors cash these also in like the benefits business QX the were XXXX, development. and our a We're revenue saying to strong posting we our And our and by we'll I that XX% of new reap growth marketing, deliver is But growth overall. targeting balance internal just a Dana as As result

and So I little have there, out bit that just more hope be helpful everybody. detail want a to I throw to

today. our to So us very will which QX next forward will much. come again, you be our looking you together, pretty soon, for -- for joining me. excuse Thank much so time call, thank call I QX


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