New Zealand-based Straker Translations (ASX: STG) has inked a significant new deal with US tech giant IBM Corporation (NYSE: IBM).
Under a two-year agreement, with an option for an additional two years, Straker will support IBM’s cloud services, adaptive translations services and global media localisation divisions as a strategic translation service provider.
The deal significantly expands on Straker’s current relationship with IBM, from one language (Spanish) to up to 55 languages.
Straker co-founder and chief executive officer Grant Straker said the company is “thrilled” to build on its existing relationship with this world leader in data management, software, artificial intelligence (AI) and cognitive computing.
“Our industry, like almost every other, is being fundamentally changed by the accelerating use of AI across all facets of localisation,” he said.
“The agreement requires extensive integration with IBM and the opportunity to build a deep partnership with the world’s leading AI company is hugely exciting. We expect it will open up new opportunities for us to partner on innovation within our industry,” Mr Straker added.
Straker has developed a cloud-based hybrid translation platform that combines AI and machine-based learning with a crowd-sourced pool of some 13,000 freelance translators, who overlook and refine the first draft translation generated by the technology.
The company claims its proprietary platform enables the delivery of faster and more accurate translations, thus lowering the time and cost to deliver compared to traditional translation services.
Straker offers translation services for corporate customers (for example, for websites, business transactions, sales, marketing, legal, financial and medical documents) as well as personal purposes including legal and immigration documents.
Potential revenue is undetermined
Straker has not disclosed the value of the deal but said it will be a material contributor to company revenue and is expected to impact fourth quarter results (which in Straker’s case ends on 31 March 2021).
“Given the nature of this agreement, it is not possible to quantify the potential revenue to be generated … as such financial effect can only be determined over time based on usage volume,” it said.
“With the expanded scope, however, the company anticipates an [approximate] 30% increase in its headcount to support future service provision increase from the current single language to 55, including major languages such as French, Chinese, Portuguese and Japanese.”
Strong sales growth
In Straker’s latest quarterly report, it recorded a 29% jump in sales orders compared to the June quarter at NZ$7.5 million with recovery in most markets continuing.
In particular, the company reported a record $3 million in sales for September alone – 18% higher than its previous monthly record.
Recurring enterprise customers underpinned growth in new market segments, with 46% of sales over the past six months coming from them.
“Straker is fast becoming a world leader in using AI, humans and automation in the translation process. The growth in Enterprise customers is testament to this,” Mr Straker said.
“It’s not just about top line revenue growth. As a technology company, we’re very focused on recurring business.”
“Over 80% of revenues is currently related to repeat business and we have aspirations to further grow this,” he added.