On Dec. 12, RWS Holdings, one of the top three companies in language and content services, reported a 2% revenue decline to GBP 733.8 million (USD 873.0 million) in its fiscal 2023 ended Sept. 30 amidst a challenging macroeconomic environment.

CEO Ian El-Mokadem said RWS made “steady progress,” pivoting into higher growth business lines like linguistic validation and elearning, which boosted incremental revenues. However, reduced client activity dampened translation demand, especially in RWS’s core Language Services division. Revenues here fell 7% adjusted for currency and acquisitions as major tech customers tightened their belts.

Chairman Julie Southern stressed high retention as RWS won significant tech client contract renewals. She indicated that new AI products like Evolve, which fuses human linguists with software to translate content rapidly, position RWS to capitalize as conditions improve.

On costs, RWS responded to market challenges with a GBP 25 million (USD 29.7 million) savings program while still funding growth initiatives and a business transformation. These efforts helped profits decline by only 11% amidst shrinking revenues.

For fiscal 2024, management sees an uncertain demand environment, offset by optimism about AI and RWS’s long-term positioning. The firm forecasts efficiency gains from platform investments like its Language eXperience Delivery production system, which increasingly leverages AI.

CEO El-Mokadem said “no change will be made to base salary levels” for executives in 2024, with selective increases targeted only for more junior staff. This signals fiscal restraint as RWS continues investing for the future.

RWS expects developments in generative AI and large language models to support services growth ahead.

Expansion also continues; RWS recently acquired an African LSP to deepen capabilities in over 40 languages while integrating past purchases like content management system software company Propylon.

Chairman Southern stressed resilience owing to diversification across sectors, geographies, and solutions. She and El-Mokadem believe the firm is positioned to strengthen market leadership longer-term.

M&A remains on the table to accelerate RWS’s medium-term plans as the company continues to boast robust cash generation and a strong balance sheet despite doling out GBP 46 million (USD 54.7 million) in dividends.

RWS is the first major LSP to disclose its 2023 financial performance.