Rozetta’s Market Cap Nears USD 400m as Bet on Machine Translation Pays Off

On April 12, 2019, Tokyo-based language service and tech provider Rozetta Corp. released results for its financial year ended February 2019. Overall revenue stood at JPY 2.91bn (USD 25.97m), up 44.96% from JPY 2.01bn (USD 17.92m) the previous year. Operating income stood at JPY 338m (USD 3m) up strongly from the prior year’s losses.

Listed on the Tokyo Stock Exchange, Rozetta (Ticker: 6182) currently has a market capitalization of JPY 42.59bn (USD 380.42m) as of April 16, 2019. Shares have rallied strongly and are up nearly 150% since the start of 2019.

The company has five business segments: MT, Translation and Interpretation, GLOZE (CAT tool), Crowdsourcing (Conyac), and Company Training. As Slator previously reported, Translation and Interpretation contributes the most to group revenues and, until January 2018, Rozetta’s bet on machine translation had not paid off.

Well, along with these latest results, Rozetta highlighted the performance of their Machine Translation (MT) business in six pages of a 21-page report, stating it had “entered into a period of rapid growth from the fourth quarter of 2018.”

Rozetta posted JPY 916m (USD 8.18m) in machine translation sales, up a hefty 231.88% from 2018 (JPY 276m). The Japanese language tech provider made a particular point of breaking out “MT orders” on the second page of the report plus a couple of charts, showing that orders “including those from existing customers” grew 325% to JPY 1.32bn (USD 11.76m), year on year (2018: JPY 310m).

In terms of operating profits, the MT line clawed its way back from a loss of -JPY 300,000 to JPY 124m (USD 1.11m).

As for the company’s 2016 acquisition, crowdsourcing translation platform Conyac, which makes up the Crowdsourcing segment, revenues stood at JPY 398m (USD 3.55m), nearly 88% up from JPY 212m in 2018.

Revenues from the rest of Rozetta’s business lines (Translation and Interpretation, GLOZE, Training) remained steady, contributing a total of JPY 1.59bn (USD 14.23m) compared to JPY 1.52bn the year prior.

Prototype drawings of Rozetta’s wearable interpretation device called “T-4 PO” round up the report. The name appears to be an homage of sorts to the golden Star Wars protocol droid, C-3PO (who is fluent in 6 million languages!).

The company promises to “start a prototype model or pre-stage of T-4PO [in] the current fiscal year” in keeping with the company’s mission to “liberate Japan from the burden of [its] linguistic handicap.”