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Sajan’s earnings announcements make an interesting case study for the challenges and opportunities faced by mid-sized language service providers (LSPs). Unlike its peers, Nasdaq-listed Sajan has to dutifully report on progress every quarter, providing detailed information in a market segment that prefers to keep things private.

The company saw sales triple within six years from USD 10.5m in 2009 to USD 28.3 in 2014; although growth tapered in 2015, with revenues increasing by only 5% to USD 29.3m. And 2016 is not shaping up to be a year of growth either. In the first six months of the year, sales were down 5.8% to USD 14.04m from the 14.86m in the same period of 2015.


The 6% decrease on the top line in the first six months trickled down the P&L, resulting in a USD 0.05m EBITDA loss compared to USD 0.66m profit the year prior.

In a call with analysts on August 4, 2016, Sajan CEO Shannon Zimmerman attributed the earnings decline to the “project-oriented nature” of the business, as well as increased spending on customer acquisition and retention efforts. Sajan is trying the risky strategy of spending its way back to growth.

The company added a channel partnership for its website localization proxy solution, hired senior professionals into its life sciences division, upped its presence at industry conferences such as LocWorld, is competing for an Elia board seat, and is trying to go after large and complex accounts by launching a solutions architect group.

To bring down costs on the production side, the company said it deployed technology to automate the use of machine translation within its proprietary Translation Management System (TMS).

Similar to many diversified mid-sized LSPs, Sajan has a high amount of non-recurring clients. Sajan CFO Tom Skiba reported the company had managed to sign up 35 new clients in the second quarter.

On the flipside, 93 clients that generated over USD 0.6m in the second quarter of 2015 failed to repeat business with Sajan this year. Skiba, echoing his CEO’s words, called this a “prime example of the project-orientated nature” of Sajan’s business.

A mildly bright spot in the earnings report was the 18% increase in Sajan’s life science business unit. Just like many other LSPs, Sajan is looking for growth in this highly regulated space. Zimmerman said they added a new sales representative and freed up their Life Sciences VP to exclusively focus on new business development.

Sajan is not alone in struggling to grow past the USD 25–35m mark. A number of competitors have opted to sell majority stakes to private equity firms for access to financing in order to drive growth through acquisitions. As a listed company, that is not an option for Sajan. And rather than going to investors with cap in hand, Sajan made a USD 0.3m share buyback in 2016. by Hazel Mae Pan on August 8, 2016

Research Editor at Slator. Wide reader, online course consumer, computer science and transhumanism enthusiast, among other things. Bikes to work, so not a total couch potato.









