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Highlights

  • RWS recorded 1.4% YoY OCC revenue growth in H1 FY25, rebounding from a 2% decline in H1 FY24.
  • The company reported a YoY gross margin decline to 43.3% in H1 FY25 from 45.7%, impacted by Regulated Industries and pricing pressures.
  • RWS to restructure into three core business units: Generate, Transform, and Protect, effective 1 October 2025.

RWS Holdings plc (LSE:RWS), a UK-based language and content technology company, released its financial results for the first half of the financial year 2025 (H1 FY25), reporting modest organic growth and outlining a new corporate strategy to streamline operations and adapt to evolving client needs.

The company recorded organic constant currency (OCC) revenue growth of 1.4% YoY, reversing the 2% decline seen in the first half of the previous fiscal year. The improvement was driven by three of its four divisions, with continued recovery following a challenging FY24.

Despite this, reported revenue declined 2% YoY to GBP 344.3 million, compared to GBP 350.3 million in H1 FY24. Gross margins decreased to 43.3% YoY from 45.7% YoY, primarily due to Regulated Industries results and continued pricing challenges in Language Services. The product mix was also impacted by increased activity in TrainAI and the APAC region.

Adjusted profit before tax dropped significantly to GBP 18.0 million, down from GBP 45.6 million in the prior-year period. This was largely attributed to GBP 22 million in non-trading items, including foreign exchange impacts, increased amortisation, the sale of PatBase, and a shift in how technology investments are accounted for. A GBP 6 million gross profit shortfall from changes in business mix further contributed to the decline. As a result, the adjusted profit margin fell to 5.2% YoY from 13.0% YoY.

Net debt stood at GBP 27 million at the end of March 2025, reflecting the payment of a GBP 37 million dividend for FY24. The interim dividend remained unchanged at 2.45p per share.

The Language Services division experienced revenue growth, supported by increased activity in TrainAI and new client contracts in the APAC region. The Language & Content Technology (L&CT) division also posted positive results, led by demand for its SaaS solutions, including products from Propylon and Language Weaver.

In contrast, Regulated Industries reported a decline due to lower activity levels and internal changes within the Linguistic Validation team. The IP Services division saw OCC growth driven by the renewals segment, though its reported revenue fell due to the divestment of PatBase.

Notably, 84% of localisation volume in Language Services and Regulated Industries is now managed through the company’s production platform, Language eXperience Delivery (LXD), with around 60% of that content initially processed via machine translation using Language Weaver.

RWS expects continued modest organic growth in the second half, maintaining guidance for low single-digit OCC growth for the full year. The Group continues to forecast FY25 adjusted profit before tax in the range of GBP 60 million to GBP 70 million, based on an assumed second-half GBP exchange rate of 1.33.

The company also announced a new strategic framework aimed at simplifying operations, improving delivery, and adapting to changing market demands. Starting from 1 October 2025, RWS will restructure into three core business units Generate, Transform and Protect.  This approach includes revamping its sales structure, increasing regional outreach, and embedding technology more directly into client workflows. A key part of this strategy involves the recent acquisition of dubbing technology IP from Papercup, which RWS plans to integrate into its Trados platform to expand its media services offering.

Christina Scott, recently appointed as Chief Product & Technology Officer, will oversee product development efforts with a focus on AI-driven language solutions and system integration. These initiatives aim to transition RWS toward more stable revenue models such as SaaS and subscriptions.