How INOD (Innodata) Makes Money in 2026: A Deep-Dive With Income Statement

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Understanding how a data engineering and analytics company like INOD makes money is essential for investors and anyone interested in the business of AI-driven data management. In this post, we break down INOD's quarterly income statement (Q3 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick INOD Overview

INOD operates as a data engineering company providing AI-powered data management solutions, including data ingestion, transformation, and analytics platforms for enterprises. Revenue comes primarily from software subscriptions, professional services, and managed data services in the AI and cloud data space. The company focuses on helping businesses leverage unstructured data for AI applications.

Revenue Breakdown

• Total Revenue (Q3 2025): $62.5M (+19.8% YoY)
  • Core data platforms and services: Primary driver, comprising the bulk of revenue as no segment breakdown available.
  • Growth is powered by increasing demand for AI data infrastructure and enterprise adoption of INOD's tools.

Gross Profit and Margins

• Gross Profit: Not specified (gross margin not available)
  • Cost of Revenue: Not specified
  • INOD maintains margins supported by its scalable software model, though detailed gross figures unavailable.
• Most costs come from operating expenses, with limited visibility into cost of revenue categories.

Operating Income and Expenses

• Operating Income: Not specified (+N/A YoY, N/A margin)
• Operating Expenses: $13.7M (+38.7% YoY)
  • R&D: Not specified
  • SG&A: $13.7M (+38.7% YoY, 22.0% of revenue) — Covers sales, general administration, and marketing efforts to expand market reach in competitive AI data sector.
  • INOD continues to prioritize innovation and growth while investing heavily in sales to capture market share.

Net Income

• Pre-Tax Income: Not specified (+N/A YoY, N/A margin)
• Income Tax: Not specified (N/A effective tax rate)
• Net Income: $8,342.0 (other item, -52.0% YoY, 13.3% net margin)
• INOD converts a significant portion of sales into profit due to operational leverage in its software business, despite YoY net decline.

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What Drives INOD's Money Machine?

• Data platform subscriptions: Core of revenue, fueling 19.8% YoY growth through AI data tools.
• SG&A as key metric: At 22% of revenue, reflects aggressive sales investment amid 38.7% expense growth.
• R&D and innovation: Strategic focus on AI enhancements, though specific spend not broken out.
• AI infrastructure expansion: Emerging areas like managed data services, driving future growth though profitability details limited.

Visualizing INOD's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.[1][2][3]

• Most revenue flows into gross profit, with operating expenses (especially SG&A) taking the largest chunk.
• Even after significant costs, 13.3% of revenue drops to the bottom line.

Key Takeaways

• INOD's money comes overwhelmingly from data engineering services and software
• High net margins illustrate the power of INOD's scalable AI data model
• Heavy investment in SG&A, balanced by efficiency in revenue growth
• Ongoing growth is driven by AI data demand and platform adoption

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FAQ About INOD's Income Statement

1. What is the main source of INOD's revenue in 2025?

INOD generates its revenue from data engineering platforms and AI data management services. Total revenue reached $62.5M in Q3 2025.

2. How profitable is INOD in Q3 2025?

INOD reported net income of $8,342.0 in Q3 2025, with a net margin of approximately 13.3%, reflecting strong profitability driven by revenue growth despite expense increases.

3. What are the largest expense categories for INOD?

The biggest expenses on INOD's income statement are operating expenses, particularly SG&A costs. SG&A investment reached $13.7M in Q3 2025, as INOD prioritizes sales expansion in AI data markets.

4. Why does other items operate at a loss?

Other items, listed at $8,342.0 as an expense, contributed to net dynamics in Q3 2025. This reflects specific one-time or categorized costs, as INOD invests for long-term growth in data platforms.

5. How does INOD's effective tax rate compare to previous years?

INOD's effective tax rate in Q3 2025 was not specified, with limited comparability due to unavailable prior data. Tax details remain opaque in provided filings.