Straker wins EU & IBM deals to boost AI translation revenue
Straker has secured a new contract to provide translation and post-editing services for the Translation Centre for the Bodies of the European Union (CdT).
EU contract details
The contract, valued at EUR €525,000 (NZD $1.06 million) for the initial term, covers translation from English into French. It runs for 12 months and is eligible for automatic renewal up to three times, presenting the possibility of a four-year collaboration.
Straker, which is listed on the ASX, stated that this agreement extends its role in servicing government and institutional markets, and aligns with its ongoing strategy to boost artificial intelligence-driven translation services.
Chief Executive Grant Straker commented that the contract highlights the company's capabilities within demanding regulatory environments:
"The European Union has, on and off, been a valued customer of Straker since 2022. We are naturally pleased to be continuing our relationship under this agreement, which affirms both our technological leadership and our proven ability to meet the demanding linguistic and compliance needs of EU institutions."
The CdT is an official EU agency providing translation for various institutions, processing millions of words annually, predominantly in policy, legal, and regulatory domains. According to Straker, its combination of automated technology and human expertise offers an advantage in these sectors.
International expansion
The announcement of the EU contract follows a series of notable advances by Straker in international markets. Straker is among a small group of publicly listed companies focused exclusively on AI-driven translation solutions. Its proprietary AI technology is embedded within a cloud-based translation management system designed for large-scale, multilingual projects for both enterprise and government clients.
Last month, Straker disclosed a renewal and expansion of its partnership with IBM, valued at NZD $28 million over three years. This agreement will see Straker continue as IBM's strategic translation service provider and move beyond traditional localisation into the co-development of Small Language Models (SLMs) on the IBM watsonx AI platform.
Under the IBM partnership, Straker is embracing an AI token billing model which links revenue directly with AI usage, and is strengthening its technical connection to IBM's cloud infrastructure. IBM has rolled out Straker's AI translation application to 10,000 employees globally, allowing immediate multilingual communication within collaborative tools such as Slack.
Participation in the IBM Ecosystem Partner Network, especially with IBM Japan, opens further prospects in the Asia-Pacific AI market. Co-developed models have shown positive results in early tests regarding accuracy and processing speed.
Commenting on the relationship with IBM, Grant Straker stated:
"Our partnership with IBM has evolved from service delivery into AI co-innovation. Together, we are not only transforming translation services with AI-powered solutions but also opening the door to broader enterprise AI opportunities."
Enterprise AI focus
Straker's activity with IBM, Siemens, and EU bodies reflects a substantial shift towards enterprise contracts based on recurring AI SaaS revenue. The company reported an adjusted EBITDA of NZD $4.8 million for FY25 and gross margins of 67 per cent, figures Straker attributes to automation-powered efficiency and tighter cost controls.
Straker's AI products, Verify and SwiftBridge, have been deployed in Japan in partnership with IGUAZU Corporation, assisting financial sector clients with compliance for new bilingual disclosure requirements. Additional integrations with platforms such as Slack and n8n aim to integrate AI translation more deeply into daily enterprise workflow, helping to accelerate processes and reduce bottlenecks.
Despite sector volatility, investment analysts have taken a broadly optimistic view of Straker's repositioning. Ord Minnett reported that while immediate revenues may remain variable as clients adapt to AI tools, relationships with large technology companies could drive margin improvements and scalable growth for the business.
The recent European Union contract will add regular government translation work to Straker's international portfolio, and the company's ongoing co-development with IBM is expected to support its ambition to supply AI-powered multilingual infrastructure to global enterprise clients.
