The Straker Translations Ltd (ASX: STG) share price is off to the races this morning, up 6.58% to $1.70 having earlier hit $1.72.
Below we take a look at the highlights from the technology-enabled translation services provider's half-year financial results for the 6 months ending 30 September (1H FY22).
What half-year results were reported?
The Straker Translations share price is surging after the company reported a 57.6% lift in revenue to a record NZ$23.3 million (AU$22.2 million). Straker credited acquisitions and organic growth for adding NZ$17.0 million in annualised revenue compared to 1H FY21.
Gross profit reached NZ$13.1 million, up 73% from the NZ$7.5 million reported in the prior corresponding half year.
Adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) fell from a profit of NZ$40,000 in the corresponding period to a loss of $1 million for the reported half-year.
The company pointed to the investments it made "to meet the needs of the rapidly scaling IBM business" along with an increased spend on its own sales and marketing for the loss.
Commenting on the results possibly driving the Straker Translations share price today, CEO Grant Straker said:
The transformational deals we struck in the second half of the prior financial year – the acquisition of the US-based Lingotek and the strategic translation contract win with IBM – set us up for continued strong growth…
Since the start of the year translation volumes through our platform have surged. IBM content is now running at more than 10 million words a month up from 1 million in January and is ahead of expectations. We are also delivering translations in 90 different languages up from just two in January and the 55 envisaged when we set this contract in motion.
The Straker Translations share price could also be getting a lift from its strong balance sheet. As at 30 September, the company has NZ$18.2 million cash on hand and no debt.
Straker maintained its guidance for the full 2022 financial year, forecasting revenue will exceed NZ$50 million, up by more than 60% from FY21. It expects gross margin will exceed the 53.4% it recorded in FY21.
Straker Translations share price snapshot
The Straker Translations share price is up 15% in 2021. That compares to a 12% year-to-date gain posted by the All Ordinaries Index (ASX: XAO).
Over the past month shares in Straker Translations have lost 0.6%.
