- AI translation services company Straker Translations has announced positive financial results across last six months ending on September 30
- Straker has seen an increase of over 13 per cent in revenue which reflects its strategy of acquisitions and customer service
- The company is also seeing wins in its gross margin which continues to generate at higher than industry norms
- Cost growth, however, was slightly higher than revenue growth due to securing acquisitions and investing in its Ai RAY platform
- Straker is debt-free and has a cash balance of NZ$14 million
- Despite the news, Straker is down 8.73 per cent, with shares trading for $1.62 each
Straker Translations has announced positive financial results for the six months ending on September 30 2019.
Straker is an artificial intelligence (AI) translation services agency powering global business growth.
The company translates documents, websites, technical manuals and e-commerce platforms across a range of industries to make content accessible to people and companies speaking different languages.
The New Zealand-based company reported a revenue of NZ $13.6 million (A$ 12.8 million) in H1 FY20. This represents an increase of 13.3 per cent from the previous financial year period.
Straker attributes this increase to its growing emphasis on business and enterprise customers to drive long-term growth.
Additionally, positive returns are based on the addition of four months revenue from On-Global Language Marketing Services which was acquired in June this year, and six months of revenue from a March acquisition of COM Translations.
Repeat revenues of NZ $12.4 million (A$11.6 million) were up 28 per cent from H1 FY19 and represented 92 per cent of overall revenues compared to 81 per cent in H1 FY19.
Repeat revenue growth was driven organically through core business activities and acquisitions.
The acquisitions over the past few months have benefited the company’s scale and will aim to secure another one by the end of the 2020 financial year as part of its merger and acquisitions global growth strategy.
Straker is also seeing wins in its gross margin which continues to generate at higher than industry norms for translation services.
This has been leveraged by Straker’s Ai RAY technology platform which is made up of a suite of components to automate and streamline the translation process.
“We are excited by the opportunities we see for Straker’s Ai RAY platform in the global translations market and have focused on ensuring we have the right growth foundations in place to deliver on the opportunities we see,” CEO and Co-founder Grant Straker said.
Operating costs were up by 17 per cent in H1 FY20 due to the increased costs of the acquired businesses, research and development investment in Ai RAY and the additional costs of being listed.
On an adjusted EBITDA basis, Straker generated a loss of NZ $240,000 (A$226,000), a decrease of NZ $350,000 (A$330,000) on H1 FY19’s adjusted EBITDA profit of NZ $110,000 (A$103,000).
Operating cash flow in H1 FY20 was NZ $1 million (A$943,000) which is much the same as the previous reporting period.
Straker continues to be in a strong position to deliver on its growth strategies with NZ $14 million (A$13.2 million) cash in the bank and debt-free.
“[We] are confident that the investment in platform technology, M&A, and sales and marketing over the first half of this financial year, as well as our focus on Enterprise clients, will underpin strong growth to come,” Grant said.
A recently-struck partnership with U.S.-based AppTek, a leading provider of automated speech recognition and neural machine translation, has increased Straker’s offerings to customers.
Straker will continue seeking acquisition opportunities and increasing its competitive advantage.
Despite the news, Straker is down 8.73 per cent, with shares trading for $1.62 each at 12:19 pm AEDT.