UK-based Super Agency, RWS, announced a 4% drop in half-year revenues in its financial results for the six months to March 31, 2024.
The results, which are in line with the company’s recent trading update to investors, confirm the challenging market conditions for the language service and technology provider, with group revenues of GBP 350.3m in H1 FY24 (USD 446.8m), and pre-tax adjusted profit of GBP 45.6m (USD 58.2m).
Despite the Group’s ongoing cost reduction activities and increasing efficiencies in its Language eXperience Delivery (LXD) platform, the company’s gross margins remained at H1 FY23 levels (45.7%) due to foreign exchange headwinds, and a “weaker performance” in parts of its “higher margin businesses”.
RWS attributed this weaker performance to its content management system, Tridion, and to its Regulated Industries division, which has seen clients undergo cost-cutting exercises and a non-recurrence of some key projects.
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The London-listed Super Agency remained upbeat, however, citing a return to growth in two of its four divisions in the second quarter, and “early signs of recovery” for its Regulated Industries division in H2 FY24.
In particular, the company highlighted high levels of repeat revenue in its linguistic validation services, as well as growing traction for its AI-based solutions, which have contributed to new business wins in the first half of FY24.
These solutions include the company’s data-for-AI solution, TrainAI, and its enterprise machine translation product, Language Weaver, which both now contribute to “more than a quarter” of the Super Agency’s revenues.
RWS stated that another key focus for revenue growth is Evolve — a linguistic AI solution that leverages LLM technology — released in January 2024. The company confirmed that it has a “strong opportunity pipeline” for the product with at least eight potential customers, which is expected to contribute to H2 FY24 revenues.
The company also announced the release of a new self-service translation platform, HAI, for small and medium businesses, leveraging human expertise and AI. The company also plans to launch AI features in upcoming releases of Trados Studio and Tridion Docs, to boost H2 FY24 revenues.
Ian El-Mokadem, CEO of RWS, said that the company “remains committed to the investments in growth and transformation that will underpin future revenue and margin development, alongside continued effective cost management.” Earlier in May 2024, RWS announced that CEO El-Mokadem is to step down in early 2025.
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Julie Southern, Chairman at RWS, stated that “[El-Mokadem], and our broader leadership team, have made considerable progress in line with the Group’s strategy, strengthening its position for the future.”
El-Mokadem highlighted that the company “returned to growth in the second quarter, and has had an encouraging start to H2, currently pointing to a performance in line with market expectations for the full year.”
At the time of publication, RWS’s shares rallied over 20%, crossing the GBP 200 mark to levels last seen in March 2024. Investors seem to have found renewed confidence that RWS is gaining traction in reorienting the company around AI-centric service and tech.