Innodata Inc. (NASDAQ:INOD) shares are trading lower Monday. The move follows a 86% rally on Friday. Investors are now digesting a blowout first-quarter earnings report.

Market Digests Massive Gains

The pullback reflects a standard cooling period. On Friday, the AI data engineering firm exceeded Wall Street estimates. Revenue hit $90.096 million, up 54% year-over-year. Analysts expected only $76.469 million. Adjusted earnings reached 42 cents per share, doubling the 17-cent consensus.

Rising Short Interest in Innodata

Short interest in Innodata increased during the latest reporting period, climbing from 5.05 million shares to 5.30 million shares. As a result, 17.29% of the company’s publicly traded shares are now being held short.

With an average daily trading volume of 988,640 shares, it would take approximately 5.36 days for short sellers to cover their positions.

Outlook Hits New Heights

Management is leaning into the momentum. CEO Jack Abuhoff raised the full-year 2026 revenue forecast. He now expects growth of “approximately 40% or more year-over-year.” This beats the 35% guidance issued just 10 weeks ago. The company targets annual revenue of $352.38 million.

New Reporting Structure

Innodata is streamlining its business. Starting this quarter, it reports as a single operating segment. It previously split results across DDS, Agility, and Synodex. The company ended March with $117.4 million in cash.

Innodata Price Action

INOD Price Action: Innodata shares were down 2.29% at $82.94 during premarket trading on Monday, according to Benzinga Pro data.

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