Straker Ltd Reports $44.9M Revenue and 10.6% EBITDA Margin Amid AI Shift

FY25 Financial Overview

Straker Ltd (ASX: STG) has delivered a resilient financial performance for the fiscal year ending March 31, 2025, reporting revenue of NZ$44.9 million, comfortably within its guidance range of NZ$43-45 million. Despite a 10% revenue decline from the previous year, largely attributed to the loss of IDEST contracts and broader macroeconomic pressures, the company improved its adjusted EBITDA margin to 10.6%, reflecting disciplined cost management and operational efficiencies.

The company’s gross margin rose to 67%, underscoring the benefits of its transition towards higher-margin AI services. Straker’s cash position strengthened to NZ$12.9 million with no debt on the balance sheet, providing a solid financial foundation to support ongoing strategic initiatives.

Strategic Shift to AI-Driven Language Services

Central to Straker’s FY25 narrative is its deliberate pivot from traditional language translation services to AI-powered language verification and translation solutions. The company’s proprietary AI models, notably the Tiri small language model and VERIFY AI platform, are designed to deliver superior accuracy and efficiency in specialized language pairs and verticals such as Japanese-English financial document translation.

This AI-driven approach not only enhances translation quality but also reduces operational costs by shifting human translators’ roles towards verification rather than initial translation. The rollout of SwiftBridge AI, developed in partnership with IBM, targets the complex Japanese financial disclosure market, with a planned commercial launch in the first half of FY26 supported by a 60-strong sales team from technology distributor Iguazu.

Investment in Innovation and Market Expansion

Straker invested NZ$7.6 million in research and development during FY25, emphasizing the acceleration of proprietary AI technologies to maintain competitive advantage. The company’s strategic objectives include expanding its global distribution base across 10 countries and leveraging ecosystem partnerships with major technology players such as IBM, Salesforce, and Microsoft.

By integrating its AI verification services into hundreds of platforms offering large language model translations, Straker aims to create scalable, recurring revenue streams without proportional customer acquisition costs. This ecosystem integration strategy positions the company to capitalize on the growing demand for premium AI translation verification services.

Outlook and Management Priorities

Looking ahead to FY26, Straker’s management plans to maintain a strong financial position while deploying capital towards high-growth AI initiatives. Priorities include commercializing existing AI innovations, exploring new verification applications across industries such as healthcare, legal, and e-commerce, and optimizing margins through a shift to SaaS and AI consumption token revenue models.

Operational efficiency remains a focus, with AI agents expected to streamline workflows and reduce costs further. While the company navigates pressures on its traditional business segments, its strategic investments and partnerships suggest a confident trajectory towards AI-powered language leadership.