Innodata Inc Q2 2023 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Tim Clarkson - Van Clemens & Co. Inc. - Analyst : Hey, Jack, good quarter. Everything I hoped for. So just a basic question. It seems to me looking at the results that your breakeven would be somewhere around, I don't know, $21 million to $22 million. Is that kind of a ballpark number?

Question: Tim Clarkson - Van Clemens & Co. Inc. - Analyst : Okay. Now historically, Innodata's strength has always been execution. I mean when we had problems, there's been contracts ending, being project-based, so on. But in terms of execution, I can't remember a screw up on that end. And how hard are these contracts that you're, these new contracts, to execute? Are these within obviously the competency of the company or how risky are they?

Question: Tim Clarkson - Van Clemens & Co. Inc. - Analyst : Right. Right now, how would you -- if someone was looking at Innodata from the outside, how would you articulate the competitive advantages that you guys have?

Question: Tim Clarkson - Van Clemens & Co. Inc. - Analyst : Sure. Now, let's pretend that at some point these contracts start to come to reasonable fruition and you're hitting say around $30 million in revenue. At that level, what kind of pre-tax margin would you guys be showing?

Question: Tim Clarkson - Van Clemens & Co. Inc. - Analyst : It should be at least 10% to 15% pre-tax once you get above $30 million. That's what I'm thinking.

Question: Tim Clarkson - Van Clemens & Co. Inc. - Analyst : Sure. Sure. Okay. Well, I mean everything is going great, obviously. I'm just thrilled. And it's still so early. I think that's the exciting part of it. So I'll let other people ask questions. Great quarter. Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 10, 2023 / 9:00PM, INOD.OQ - Q2 2023 Innodata Inc Earnings Call

Question: Dana Busca - Feltl and Company - Analyst : Hi, Jack.

Question: Dana Busca - Feltl and Company - Analyst : How are you this evening?

Question: Dana Busca - Feltl and Company - Analyst : You're welcome. Everything sounds like it's going pretty good. I have a couple of questions around your white-label program. Could you explain a little bit about what exactly you mean by white-label?

Question: Dana Busca - Feltl and Company - Analyst : Okay. Excellent. Around that, are you going to be relying on their salesforce to do that? Or is it you're having your sales team be involved with those type of projects?

Question: Dana Busca - Feltl and Company - Analyst : Okay, that sounds pretty impressive. Along those lines then, will like price negotiation, that will be all done through your clients and you guys won't have to deal with that? Or will you be more subject -- well, let me ask, how do you see the pricing going?

Question: Dana Busca - Feltl and Company - Analyst : Okay. Okay. And then you didn't really talk much about at all about Synodex or Agility. Those two seem to have had nice quarters. Could you elaborate a little bit on those two businesses?

Question: Dana Busca - Feltl and Company - Analyst : Excellent. Yeah, they do both look like they're going along well for you. And just to go back to DDS, could you talk a little bit about capacity with all these new projects that you have? Will you need to be adding capacity? Or do you have the capacity already available?

Question: Dana Busca - Feltl and Company - Analyst : Okay, wonderful. That does it for me. Congratulations on having things go so well. It looks very impressive to me. So thanks.

Question: Bruce Galloway - Galloway Capital Partners - Analyst : Hey, Jack, congratulations, great quarter. And it looks like you're firing on all cylinders. In the past, you spoke about growth rates and net margins going forward like two or three years. And then I guess you stopped when the world stopped. Are you going to be giving us some guidance going forward along those lines? And also, now that you're doing so well and you're sort of in the middle of the ground swell, are you going to be getting any Wall Street coverage?

Question: Bruce Galloway - Galloway Capital Partners - Analyst : And what about getting some Wall Street coverage? I mean, you've got an exciting story to tell. Let's tell it. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 10, 2023 / 9:00PM, INOD.OQ - Q2 2023 Innodata Inc Earnings Call

Question: Bruce Galloway - Galloway Capital Partners - Analyst : Also, the comment you made about the generative AI-focused IT services going from $87 million to $82 billion in 11 years, 12 years. I mean, could you elaborate on that? That's like hyper-hyper growth. Where do you stand within those IT services?

Question: Bruce Galloway - Galloway Capital Partners - Analyst : All right. It sounds exciting.

Question: Tim Clarkson - Van Clemens & Co. Inc. - Analyst : Yeah. Just one follow-up question, Jack. I know that you have sold stock before, Innodata stock, so it's not something that you've never done. But I've noticed you haven't sold any stock, say in the last couple of years. So I assume you're vested in this belief that things are going to be really good?

Question: Tim Clarkson - Van Clemens & Co. Inc. - Analyst : Right. But my point is you haven't sold any shares.

Question: Tim Clarkson - Van Clemens & Co. Inc. - Analyst : Thank you. I'm done.