TransPerfect Treading Water in Q2 2020 as Pandemic Caps Growth

Translation Agency TransPerfect 2nd Quarter 2020 Results

Unlike many of its closest rivals — like listed Super Agencies SDL and RWS — TransPerfect is a privately-owned company and is therefore not obligated to disclose financial results. But the world’s largest language service provider (LSP) by revenues has chosen to make its results public on a regular basis since 2014.

In Q2 2020, TransPerfect generated revenues of USD 198.7m, up nearly 4% on Q2 2019. Like for like, organic growth (excluding acquisitions) was “roughly flat,” TransPerfect said in a company press release.

TransPerfect’s growth in the first full quarter since the coronavirus pandemic took effect (Q2 2020) is in stark contrast to the first three months of 2020 when their revenues grew 14% to USD 190m from Q1 2019. TransPerfect described Q1 2020 at the time as “our best-ever start to the year.” 

Slator contacted TransPerfect CEO Phil Shawe, who shared an update on how coronavirus has impacted specific areas of the business and shaping customers’ needs. 

Online Collaboration & Remote Working

In TransPerfect’s media segment, for example, “demand has held firm,” Shawe said, despite the fact that “there has been a slowdown in new original productions.” He also noted that “traditional brick-and-mortar studios have been unable to operate normally” throughout lockdowns and said that in some instances “we have seen subtitling replace dubbing” as a result of the disruption to the traditional dubbing supply chain.  

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Much like ZOO Digital CEO Stuart Green, who highlighted an increased interest in cloud dubbing throughout the pandemic during his presentation at SlatorCon Remote 2020, Shawe observed that “we have also seen workflows adapt to allow for decentralized and remote resources in content creation.” 

TransPerfect’s cloud-based media localization platform, Media.NEXT, saw good traction in Q2 2020, and Shawe sees longevity in a hybrid delivery model that blends in-studio and remote recording: It’s “not just a stopgap for business continuity during the pandemic,” Shawe said.

Although Shawe declined to comment on demand levels across life sciences and finance and banking, he said that TransPerfect’s e-clinical solution, Trial Interactive, was continuing to “gain momentum.”

Shawe also told Slator that TransPerfect’s GlobalLink products are generally faring well and that their technology roadmap has been reprioritized with a focus on “features which facilitate online collaboration and remote working” for clients.

One example of this is TransPerfect’s remote interpreting offering; Shawe said that they provide both phone (OPI) and video interpretation (VRI) via the cloud to help facilitate virtual meetings for their customers. As to be expected, most clients moved their events to an online setting during the pandemic, he added.

Meanwhile, Shawe said an area of growth and investment for TransPerfect is data labeling and so-called AI support services. This fast-growing niche is dominated by darling of the Australian Stock Exchange (ASX) Appen; TransPerfect’s closest rival by revenues, Lionbridge, is also heavily focused on data labeling. 

M&A Outlook

Looking forward, Shawe described the business outlook for Q3 2020 as “cautiously optimistic” and also signalled that M&A is still very much on the table for TransPerfect, despite the uncertainty wrought by the pandemic. 

While TransPerfect’s M&A strategy has tended to focus on small bolt-on acquisitions in recent years, Shawe said that he “would not rule out M&A on a larger scale,” pointing out that they “have the liquidity and dry powder necessary for larger deals.”

Discussing the potential impact of the pandemic on the pricing for and availability of target acquisitions, Shawe said that TransPerfect’s “models for evaluating attractive M&A candidates have not changed with the pandemic.” On the technology front, the pandemic may also bring “some opportunities for strategic purchases, which would not otherwise present themselves,” he added.

Erratum: An earlier version stated that TransPerfect began sharing financials in 2017. They have, in fact, begun doing so since 2014.