NEW YORK - November 7, 2017 - INNODATA INC. (NASDAQ: INOD) today reported results for the third quarter and the nine months ended September 30, 2017.
Total revenue was $15.0 million in the third quarter of 2017, a decline of 2% from $15.3 million in the second quarter of 2017. Total revenue was $16.1 million in the third quarter of 2016.
Net loss was $1.1 million in the third quarter of 2017 or $(0.04) per diluted share, compared to a net loss of $0.2 million in the second quarter of 2017 or $(0.01) per diluted share. Net loss in the third quarter of 2016 was $2.8 million (which included $1.6 million of one-time costs and charges) or $(0.11) per diluted share.
For the first nine months of 2017, total revenue was $45.3 million, a decline of 4% from $47.4 million in the first nine months of 2016. Net loss was $3.0 million, or $(0.11) per diluted share, in the first nine months of 2017, compared to a net loss of $4.5 million (which included $3.0 million of one-time costs and charges), or $(0.18) per diluted share, for the same period in 2016.
- Adjusted EBITDA (as defined below) was $0.2 million in the third quarter of 2017, compared to $1.0 million in the second quarter of 2017. Adjusted EBITDA was $(0.4) million in the third quarter of 2016.
- Cash, cash equivalents and investments were $12.5 million at September 30, 2017 compared to $14.2 million at December 31, 2016.
The tables that accompany this release set out results by segment.
Jack Abuhoff, Chairman and CEO, said, "Consolidated revenue this quarter was at the mid-point of our previously provided guidance. Revenue in our Digital Data Solutions (DDS) segment was $11.6 million in the third quarter of this year, compared to revenue of $10.7 million in the second quarter of the year after excluding $1.1 million of previously deferred revenue that was recognized in the second quarter. This increase primarily reflects higher volumes from an existing customer. We continue to reposition our service capabilities and to reduce our fixed costs. We expect that our 2018 fixed costs will be approximately $2.0 million lower than our annualized fixed costs as of January 2017.
"Revenue in our Innodata Advanced Data Solutions (IADS) segment was flat on a sequential basis in the second and third quarters of this year, although revenue in our Synodex business increased by $100,000. We improved our Synodex production efficiency significantly during the first three quarters of 2017 and anticipate further efficiency improvements and cost alignments."
Abuhoff continued, "Revenue in our Media Intelligence Solutions (MIS) segment declined 4% sequentially from the second quarter this year to the third quarter. Revenue of the portion of the business we acquired from PR Newswire in the third quarter of 2016 declined 22% from approximately $1.6 million (net of a one-time acquisition-related adjustment) to $1.2 million in the third quarter of 2017. MIS used approximately $900,000 of cash in the third quarter of 2017. Transition issues should be largely behind us in 2018 and we will target customer renewals in excess of 75%."
Abuhoff concluded, "We anticipate fourth quarter revenue to be in the range of $14.4 - $15.3 million, consisting of DDS revenue in the range of $11.0 - $11.6 million, IADS revenue in the range of $1.2 - $1.4 million and MIS revenue in the range of $2.2 - $2.3 million."