Technology company Straker Translations has announced plans for its best year in FY22 following increasing growth in FY21.

Technology-driven translations provider Straker Translations (ASX:STG) saw its share price reach a two-year high this morning as it released a forecast for FY22 of over NZ$50m in revenue, up more than 60% from NZ$31.3m in FY21.

The tech company is forecasting significant growth from its partnership with IBM, which it expanded this year, and has seen a contribution of NZ$1.9m from Lingotek in the two months since acquisition completion, which is 42% recurring revenue under a software as a service (SaaS) model.


A pathway to growth

Straker CEO and co-founder, Grant Straker, said the results were evidence of the success of the company’s growth strategy and ongoing plans for revenue growth.

“Through our AI-driven technology, we are reimagining how we can break down the barriers of language and communication on a global scale, to make it easier for our customers to grow and prosper,” said Straker.

“It is very pleasing to be reporting on a year where we have taken significant steps towards that vision and at the same time have delivered what can only be described as a transformational year.

“Our strategic priorities are clear. We are focused on driving consolidation in the translation sector, building repeating revenues – particularly among the large global enterprises that benefit from Straker’s global reach and our AI-powered RAY translation platform – and continuing to consolidate our technological leadership.

“What has been so satisfying for the board and management is that we have again successfully executed on those priorities. Moreover, we have done so while delivering financial and operational results that unambiguously validate the approach we are taking in global language services markets.”


Increasing recurring revenue

Despite seasonal slowdown and the impact of COVID-19 closures and economic changes, Straker announced revenue for the year to the end of March 2021 rose 13% to NZ$31.3 million from NZ$27.7 million. On a proforma basis, unaudited revenue exceeded NZ$41 million for FY21, a 48% increase on the previous period.

Through IBM and Lingotek, Straker plans to expand its global translation services relationships, building on its subscription revenue and forging more partnerships with leading brands and companies.

“Straker is committed to maintaining its position as a change-maker in the global language services sector. We will achieve this through our technological leadership and innovation, strong relationships with the world’s leading enterprise companies and a committed team,” Straker said.

“The year ahead remains uncertain. We are encouraged by the success of public health and COVID-19 vaccination programmes in many of our core markets. These successes hold out the prospect for a return to normal trading conditions, but we are taking nothing for granted.”

“Nevertheless, we remain optimistic. We expect to continue to grow in the year ahead with progress underpinned by the IBM alliance and the opportunities that have emerged with the acquisition of Lingotek and others before it. We also expect to reap the benefits that come with the integration of these companies into Straker and the ongoing focus on carefully managing our costs and cash reserves.”

Stockbroker Ord Minnett recently marked Straker stock as a Buy, pointing to its success with M&A and the partnership with IBM which is expected to deliver long-term growing revenue.

This article was developed in collaboration with Straker Translations, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.