Japan’s Rozetta More Than Triples MT Revenues in Q1 FY2020

On July 12, 2019, Tokyo-based language service and tech provider Rozetta Corp. released results for Q1 of its 2020 financial year. Overall revenue stood at JPY 975m (USD 9.03m), up 49.8% from JPY 651m (USD 6.03m) the previous year. Operating income shot up 279% to JPY 170m (USD 1.57m) from the prior year’s JPY 44m (USD 0.41m).

These latest results show a company transitioning aggressively to a business model driven solely by selling machine translation. As a result, the company has streamlined its business units from five to three and now operates three distinct business lines: Machine Translation (MT), Human Translation (HT), and Crowdsourcing.

In addition, the company merged its Quick Translate unit with Conyac (acquired in 2016) to form a new entity called Xtra. According to its website, Xtra operates Conyac’s crowdsourcing platform and an MT service called Qlingo, and sells Rozetta’s T-400 MT service as well.

Revenues of the machine translation unit more than tripled in the quarter compared to the same period a year ago, rising to JPY 469m (USD 4.34m) from JPY 139m (USD 1.29m) — meaning MT now generates nearly half of Rozetta’s revenues. Operating Income in MT stood at JPY 52m (USD 0.48m), up 235% year on year. According to a case study, Rozetta runs its neural machine translation infrastructure on Dell EMC.

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The human translation segment, meanwhile, retreated to JPY 387m (USD 3.58m) from JPY 421m (USD 3.9m). Thanks to cuts in overhead spend the company managed to boost profits for the segment by 82% to JPY 111m (USD 1.03m). The crowdsourcing business rose to JPY 118m (USD 1.09m) from JPY 90m (USD 0.83m). The company said it plans to ramp up investment in sales and business development for the MT unit.

According to Rozetta, due to “significant improvements in the accuracy of our MT,” it has shifted its strategy much more toward an MT-only world.

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After rallying in the run-up to the release of its full-year 2019 results in April, Rozetta’s shares have retreated slightly. However, the company — listed on the Tokyo Stock Exchange under the ticker (Ticker: 6182) — still weighs in at an impressive market capitalization of JPY 38bn (USD 350 m) as of July 15, 2019.

Image: Yuichi Furuya, Representative Director and CEO, Xtra courtesy of Xtra Media Kit