(Nasdaq: INOD)(Nasdaq: INOD)

Investor OverviewMay 2012

www.innodata.com

Safe Harbor Statement• Certain statements in this presentation are forward-looking statements, which are based largely on our

current expectations. These statements are subject to a number of risks and uncertainties, which could cause the actual results, performance or achievements of Innodata to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements.

• The following important factors could affect future results: Innodata Advanced Data Solutions (IADS) segment is subject to the risks and uncertainties of early-stage companies; the primarily at-will nature of the Company’s contracts with its Content Services segment customers and the ability of the customers to reduce, delay or cancel projects; continuing Content Services segment revenue concentration in a limited number of customers; continuing Content Services segment reliance on project-based work; inability to replace projects that are completed, cancelled or reduced; depressed market conditions; changes in external market factors; the ability and willingness of our customers and prospective customers to execute business plans which give rise to requirements for digital content and professional services in knowledge processing; difficulty in integrating and deriving synergies from acquisitions, joint ventures and strategic investments; potential undiscovered liabilities of companies that we acquire; changes in our business or growth strategy; the emergence of new or growing competitors; various other competitive and technological factors.

• Other factors that could materially affect such forward-looking statements can be found in Innodata’s FormOther factors that could materially affect such forward looking statements can be found in Innodata s Form 10-K and our other filings with the Securities and Exchange Commission. Investors, potential investors and other listeners are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are only made as of the date of this presentation, and the company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstancesobligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

Business Overview

Who is Innodata?

We are a leading services company proving content solutions, data analytics, and related services to publishers, information providers, and other enterprises.

Our services:– Content solutions and services

• Creating, enhancing and re-purposing digital content• Strategic consulting and reengineering services • Content technology services including application development• Developing new products

– Advanced data analytics solutions and services

One-shore global delivery model with offices in US, Philippines, India, Sri Lanka, Europe and Israel, with over 7,000 employees.

Q1 2012: Revenues of $25 1 millionQ1 2012: Revenues of $25.1 million and EBITDA of $4.6 million

FY 2011: Revenues of $74.0 million and EBITDA of $8 1 millionand EBITDA of $8.1 million

Our Markets and Clients

Knowledge intensiveComplex evolutionStable segments

Professional Publishers and

Information Services

Stable segments

Other Publishers

BroaderEnterprise

Opportunity

What’s Driving the Market?

Profound technological and commercial changes in the $350 billion globalchanges in the $350 billion global publishing & information markets

What’s Driving the Markets

Rapid Digital Adoption:

Shifting trend in content consumption from print to digital.

Increasing demand for digital content such as e-books, e-textbooks, e-journals and other content by users of smart mobile devices, e-readers and tablets.

Evolution of digital content with design and highly interactive multi-touch capabilities.

Th hift i t diti l t t t b d d fThese shifts require traditional content to be rendered for consumption in multi-channel format for the digital and mobile world, which drives the need for Innodata’s specialized services for creating, managing and distributing content.

Data:

Increasing demand for smart analytical data within large enterprises to minimize risk and improve business outcome is creating new demand for advanced data analytic solutions and services. y

Innodata transforms print to high-impact digital, migrate print-centric operations to digital operations and build new digital first productsto digital operations and build new digital first products.

Our Market Opportunity for Content Services

Publishing Verticals

• Significant growth potential in core publishing market:

– Content production accounts for 50% of publishing

Market Segment

Approx. Segment Revenue$BN 1

Est. Production 

Costs$BN 2

p gindustry revenues.

• eBook market projected to grow to $12.71 billion in 2013

• Other Knowledge Process

Professional Publishing

$89 $44

Education &• Other Knowledge Process Outsourcing markets projected at $17 billion for 20143

Education & Training

$51 $25

Other Publishing

$227 $114g

Total $367BN $183BN1Outsell, Inc.2Estimated at 50% of revenues3Evalueserve

Our Clients’ Needs and Our Services

Professional Publishers & Information Services Other Publishers Broader Technology &

Enterprise MarketMarketsMarkets

Complex Content CreationNew Information ProductsRepurpose and Enhance Existing Legacy ContentEnable Mobility Discoverability SearchabilityEnable Mobility, Discoverability, SearchabilityImprove End-User ExperienceDevelop Supporting Content Systems and TechnologiesReengineer Business ProcessesInformation and Data Analytics

Client NeedsClient Needs

End-to-End Outsourcing: Information Technology:Transformative Consulting:

Data and Content Enrichment

⋅ Production Services⋅ Editorial Services ⋅ Business Process Services⋅ End-to-End Content Supply Chain

Solutions

⋅ Application Development⋅ Application Maintenance⋅ Systems Integration

⋅ Product Strategy⋅ Content Architecture⋅ Global Sourcing⋅ Process Reengineering

InnodataServicesInnodataServices

Unrivaled Knowledge of Content Publishing

Our Differentiators

Deep Domain expertise with more than 15 years of enterprise experience in co-creating

knowledge-intensive, data-rich content for leading publishing companies and information

providers in legal, medical, engineering and social sciences. Seven of the top 10 publishing and

information providers are our clients.

Largest producer of eBooks for the world’s leading eBookstores Produced over 1 2 millionLargest producer of eBooks for the world s leading eBookstores. Produced over 1.2 million

eBooks, helping to power a $12.7 billion global business.

Strong relationships with eBook platform providers: g p p p

One-shore global delivery model with more than 7,000 employees including subject matter

experts strategically well-positioned to optimize the cost of production and increase speed-to-

market for our clients.

Consistently delivering high quality content and maintaining quality standards.

Financial Overview

Five-Year Operating Performance

$000s, except p/share data 2011 2010 2009 2008 2007p/share data 2011 2010 2009 2008 2007

Revenue $73,942 $61,513 $76,710 $73,175 $67,731

Gross Margin $23,766 $14,229 $24,568 $21,828 $19,502g , $ , $ , $ , $ ,

32.1% 23.1% 32.0% 29.8% 28.8%

EBITDA $ 8,097 $ 2,275 $11,963 $ 9,044 $ 7,025

11.0% 3.7% 15.6% 12.3% 10.4%

Earnings $ 4,471 $ (747) $ 7,313 $ 6,658 $ 4,566

6.0% n/a 9.5% 9.0% 6.7%

EPS $ 0.18 $ (0.03) $ 0.28 $ 0.26 $ 0.18

Revenue Analysis – 2011 vs. 2010 $ In Millions

2011 2010 Growth ($) Growth (%)

$74.0M $61.5M $12.5M 20%

14Content Services

(others)Content Services

(e-books)

10

12

(others) (e books)

Our revenue growth was primarily fueled by strong demand for e-books services.

4

6

8$13.0M

e books services.

0

2

$(0.5)M

-2

Gross Margin Analysis – 2011 vs. 2010 $ In Millions

2011 2010 Growth ($) Growth (%)

$23.7M $14.2M $9.5M 67%

12 Facility costs IADS costsMargin

ExpansionHigher gross margins

8

10

12 Facility costs IADS costs Expansionwere contributed by margin discipline on new bookings and productivity gains on existing business, which

4

6$12.5Mwas offset by

investments made for future expansion.

-2

0

2

$(2.0)M $(1.0)M

Pre-Tax Income Analysis – 2011 vs. 2010 $ In Millions

2011 2010 Growth ($)

$5.3M $(1.2M) $6.5M

10 Gross Margins S&M IADS

6

8 $9.5MHigher gross margins offset by higher selling and marketing costs to support company’s growth strategy and

2

4

growth strategy and investments in IADS contributed to higher pre-tax earnings.

-2

0

$(1.4)M $(1.6)M

Business Challenges

• eBooks as a category is still evolving. Rapid changes in the market place represents both an opportunity and a challenge.

• Over 30% of our current business is subject to volume (and revenues) fluctuation.

$• About 80% of our costs are incurred in Asia. US$ volatility against Indian Rupee and Philippine Peso impacts our margins

Strategic Objectives – Drill Down

Key Strategic Objective Supporting Strategies FY 2011 and Q1 2012 Update

Launch new productized • Target new developments Developed productized offerings forLaunch new productized service offerings in 2011-12

Target new developments• Hire a senior product marketing

executive

Developed productized offerings for “new digital product development”, eBook conversion and distribution, iXBRL for the UK etc. and prototyping several others. Hired VP of Product Marketing in Q3 2011

Launch new information analysis businesses in 2011-12

• Leverage domain expertise and global platform to serve other industries that require information analysis to reduce risk or manage

Launched IADS division, with new brand Synodex performing medical information analysis, and docGenixperforming a range of data-analysis y g

key business processesg g y

services related to special kinds of legal agreements, primarily derivatives, for financial institutions.Reported revenues of $600K from a test engagement in Q1 2012.

Promote unified company culture

• Local brand management• Increased communication

Changed corporate name to Innodata and investing in building brand equity around Innodata.

Financial Objectives – Drill Down

Key Financial Objective Supporting Strategies FY 2011 and Q1 2012 UpdateKey Financial Objective Supporting Strategies FY 2011 and Q1 2012 UpdateIncrease bookings 20% per year over 2010 bookings. Reach revenue run rate of $100 million per annum in 2013

• Bolstered sales leadership and sales force, and improved account management process.

• Emphasis on new transformative and technology offerings

In line with our business plans

2013. technology offerings • Increase wallet share with top 10

clients• Increased investment in marketing to

prospect for new clients

Achieve targeted project gross margins on new bookings and on existing portfolio of recurring business to attain 35% gross margins

• Consulting-led transformation services

• “Technology-Enabled Services”• Launch new high-margin services• New automation technologies

In line with our business plans

% g gat Company level.

g• Discipline in making pricing decisions

Advanced Data Solutions (IADS)Advanced Data Solutions (IADS)

Launched IADS in Q2, 2011 to render data with high quality advanced, g q yanalytics to clients in financial services and medical industries. IADS usesproprietary software to extract, analyze and summarize data from highvolume source documents to render it in a form that clients can use forminimizing risk and improving business outcome at the transaction levelminimizing risk and improving business outcome at the transaction level.

• IADS division focuses on the healthcare, medical andinsurance areasinsurance areas.

• IADS division focuses on financial and legal documentationrelating to swaps, derivatives, repos, securities lending, primerelating to swaps, derivatives, repos, securities lending, primebrokerage, investment management and clearing, serving the financialindustry.

Recent Quarterly Financial TrendC ti P f I tContinuous Performance Improvement

Revenue & Gross Margin Earnings Before Tax

$25

$30

Revenue & Gross Margin

$3 000

$4,000

Earnings Before Tax

$15

$20

Mill

ions

36%

$2,000

$3,000

$ M

illio

ns

15%

$0

$5

$10$

27%30%

33%36%

$0

$1,000

$1%

6%10%

9%

Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

Revenue Gross Margin

Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

Revenue Gross Margin

Recent Quarterly Financial TrendImproving Existing Core Business and Investing in IADSp g g g

21% Pre-Tax (without IADS costs)Pre Tax Consolidated

Pre-ti

n M

illio

n)

15%

$5.2M

IADS Costs

Pre-Tax Consolidated Quarter operating costs

Cap-ex

Q2 11 $0.3M $0.4M

x (%

& $

in

14% $2.7M

10%

$3.5M15%

$3.7M Q3 11 $0.8M $0.5M

Q4 11 $1 3M $1 2M

Pre-

Tax

6% $1.0M

7.5% $1.2M

10% $2.0M

10% $2.3M

Q4 11 $1.3M $1.2M

Q1 12 $2.1M $0.6M

Q2 11 Q3 11 Q4 11 Q1 12Cumulative $4.5M $2.7M

Recent Quarterly Financial Report Enhancing Performance and Enabling Future GrowthEnhancing Performance and Enabling Future Growth

Revenues:Q1 2012: $25 1 million (Growth QoQ: 6%; YoY: 71%)Q1, 2012: $25.1 million (Growth QoQ: 6%; YoY: 71%)Q2, 2012 Guidance: $21 million or more, but not to the extent of Q1 2012

EBT:EBT: Q1, 2012: $3.7 million (Growth QoQ: 65%; YoY: compared with break-even pre-tax income during the three months ended March 31, 2011)

Cap-ex: Q1 2012: $2.1 million. Estimated spend in Q1 2012: $2.5 to $3 million of which 50% is to expand capacity in anticipation of future IADS business.

Shelf Registration: Reported our intent to file shelf registration for an aggregate amount of $70 million.

Innodata Key Stats: INOD (NASDAQ)

• Financial Position:

– Enterprise Value (EV): $122M– Cash & Investments: $23M– Total Assets: $63M– Working Capital: $31M– No Debt

C it l St t d V l ti• Capital Structure and Valuation:

– Number of shares: 25M – Current Price: $6Current Price: $6– Current Market Cap: 145M– 52 Week Price Range: High $6.24 Low $2.35

Investor Contact Information:

O’Neil NalavadiO’Neil NalavadiSenior Vice President and Chief Financial Officer

onalavadi@innodata.com201-371-8019201 371 8019

Raj JainjVice President

rjain@innodata.com201-371-8024