While there is still work to do to compile this year’s edition of the Nimdzi 100 — the ranking of the largest language service providers (LSPs) in the world — we can already say that there is movement at the top.
After the language services industry once again proved to be impervious to crises and continued to grow in 2020, early indicators point toward a very prosperous 2021. For one thing, the language industry now has its first billion-dollar company. Long-time industry leader TransPerfect just revealed that the company reached USD 1.1 billion in revenue in 2021. This is up from USD 852.4 million in 2020 and an increase of more than 30 percent year-over-year. Especially for a company of this size and during times that saw the world economy suffer, this is an impressive level of growth. Asked about it directly, TransPerfect’s CEO, Phil Shawe said, “We are very proud to have surpassed the $1 billion mark in annual sales. Of course, it did not happen overnight. It has taken almost thirty years of delivering for our clients day-in and day-out — and is a testament to the hard work and professionalism of our team. Revenue is just one measure of success on our journey — but continued growth objectively shows that we are achieving our goal of providing more and more value to our customers’ businesses and helping them succeed in the global marketplace.”
Last year’s Nimdzi 100 reported that RWS became the new de facto leader in the industry after its acquisition of former rival SDL. Back then, in March 2021, the combined 2020 revenues of RWS and SDL stood at USD 937.5 million and outperformed TransPerfect by USD 85.1 million, which indicated a shift in leadership at the top. However, TransPerfect made a strong comeback and solidified its position as the largest LSP in the world once again.
Given the acquisition of former rival SDL, which propelled RWS to the top, the company was expected to reach the billion-dollar mark in 2021. However, the newly combined company only grew by a little less than two percent in 2021, reaching USD 955.3 million. A possible explanation could be a focus on aligning company efforts after the mega acquisition and a change in leadership — in June 2021, RWS announced the appointment of a new Group CEO, Ian El-Mokadem, who replaced former CEO Richard Thompson. One way or another, we can expect RWS to take the second position in the ranking this year.
What the graph shows is by how much the two largest positions in the industry have grown in only five years. Between 2017 and 2021, the number one position in the language industry (consistently held by TransPerfect) grew by more than 80% and the second position (previously Lionbridge, now RWS) grew by close to 60%. Put differently, if we consider the compound annual growth rates (CAGR) for the two top positions in the ranking, the growth was at least twice as fast as for the rest of the industry (15.9% and 12.4%, versus 6.0%) .
It still remains to be seen who will be the third largest LSP this year. Judging by what we know at this point, the position will most likely be filled either by Lionbridge or LanguageLine Solutions. LanguageLine Solutions is focused on remote interpreting and has been growing significantly since the start of the pandemic. The company reached USD 618 million in 2020.
Lionbridge, another household name in the market, held the position as the second-largest language service provider for many years. In 2020, the company sold its AI division — Lionbridge AI — to TELUS International, a digital customer experience company from Canada. The deal went through for approximately USD 935 million (CAD 1.2 billion). Despite the sale, Lionbridge is not leaving this lucrative field altogether but will rather focus its AI efforts exclusively on language services (namely, on neural machine translation).
While the research for this market analysis is still ongoing, it is already possible to reveal is that it is looking like 2021 was a great year for language services. In research briefings to date, 9 out of 10 LSPs reported record growth and some businesses even had the best year since their founding. Asked about the drivers behind this level of growth, the following themes stood out:
- Increased demand fueled by the pandemic, especially in areas such as remote interpreting, Life Sciences and Technology.
- Backlog of requests coming in after lockdowns and meeting restrictions were lifted, e.g. in media localization but also for court hearings and events.
- Reaping the rewards after adjusting the business to the new challenges and client requests that came with the pandemic, e.g. having added new service lines, technological innovation, increased digital offering, more automation.
Although this is just a snapshot of the industry at this stage, it is looking like the market may have outperformed growth expectations in 2021.
There is still time to take the survey for this year’s Nimdzi 100 ranking. To put your company on the map and be recognized as a leader in language services, access the survey here.