The Straker Translations Ltd (ASX: STG) share price is rocketing higher today after the company released its quarterly activities report.
The Straker share price is up a hefty 13.55% at the time of writing, trading at $1.76 per share.
Straker is a cloud-enabled translation services provider, involved in both business and personal translation. Let's see what's driving its share price so much higher today.
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Straker's continued growth
Straker reported $9 million in unaudited revenue for its March quarter results, up 19% sequentially on the previous December quarter. Its FY21 revenue was up 31% on the previous year to $31.3 million, while its acquisition of translation service Lingotek has brought in $1.9 million in two months.
The company is attracting blue-chip clients, with Panasonic signing up to its subscription-as-a-service (SaaS) for Lingotek, and its strategic alliance with IBM is "driving a surge in translation and product development activity", according to the report.
The company says its revenue slowed down seasonally over the northern hemisphere winter, exacerbated by various COVID-19 lockdowns, however by March was already rebounding and continues to grow.
Gross margins improved to 57.8%, operating cash inflow of $18,ooo was slightly down on the previous quarter, and Straker reported net outflow of cash of $313,000 for the quarter, with cash reserves of $7.175 million.
What did management say?
CEO Grant Straker said the company was progressing well and continued growth was expected.
After the intense activity of the third quarter, a period when we negotiated the IBM alliance and the Lingotek acquisition, we have turned our focus onto executing on the enormous opportunities that have emerged from these transformational agreements.
We are seeing a significant ramp up in content delivered to IBM since the alliance went live in January. March content volumes are 60% ahead of the content we delivered to IBM in February and we have seen no letup in this growth since the end of the quarter. We expect the positive revenue impact from the IBM alliance to become more apparent in the current and future quarters.
Straker share price snapshot
The Straker share price is up 4.7% this week, adding to monthly gains of 16%. It's risen 95% higher over the past 12 months.
