1. H1-2023 Revenue
Revenue is not simply a monetary figure. It quantifies our growth and measures our value added to the client’s business. In this sense, we have a very good first-half of 2023:
- Almost USD 1mil has been made, which is 104% of our target.
- A new striking monthly revenue record at VND 5.05 bil in April.
- 46% up compared to H1-2022
Our MKT & Sales contributed VND 5.36bil, accounting for 23% of total rev (215% of Sale’s target). PM & AM delivered the rest 77% – VND17.01bil (117.5% of their target). Very nice job, guys and girls!
But behind these very positive data, there’re still things to do. The high revenue came mostly from some big projects (both LSP & EC). We have not gained any new strategic account with significant monthly revenue yet. As I’m writing these lines, the July rev is expected to be as low as the break-even point. A good H1 also puts the pressure on us to overcome our own performance in H2.
Overall, we have reasons to feel good for the past half year. But stay alert for the 2nd half.
2. One step higher in the value chain
During the last few years, we have been trying to move up in the value chain by working directly with end-client, rather than just being a sub-contractor for other LSPs. H1-2023 marks a new milestone in this journey. For the first time, the revenue from our direct clients has outgrown the revenue from LSPs. More than half of our revenue, or 53%, is now from direct clients (EC, EM & ES of the below chart). While the revenue from LSP is still growing itself, it now makes up only 47% of our total revenue.
It is important to be less dependent on LSP clients. During hard times or under new supplier strategies, LSP clients can simply switch from agencies like us to in-house and FLs. We may lose clients without doing anything wrong. A relatively safe ratio for us is less than 30% of revenue coming from LSP clients. Let’s keep working on this goal.
3. Macroeconomics & industry trend
We hear the news about the global economic downturn everywhere. The “AI” buzzword has flooded our social media. But no one can tell exactly what will happen to our industry, and what we can do from our position as a company. FYI – here’re my personal opinions to prepare for GTE:
It’s closer than we think. One day, AM told me that the PIC from Meta is no longer working so we can’t ask for their testimonials. The other day, I was reported that client RedHat laid off almost their entire L10n department. And many other stories, directly or indirectly, linked to our clients and us. There’re a few actions we can take:
- Think positively. The pressure of the big Corps to cut costs may result in their shift from big LSPs to smaller ones like GTE.
- Stay resilient. Any economic crisis will eventually end. Survivors from the crisis have more chances to grow. We keep preparing for future growth despite the current negative outlook.
- Try to diversify our client base, both in terms of industry and size. If a client industry/size is down, another is likely to be up.
- Find ways to be effective with cost. I’m not a fan of cost-cutting but being efficient in the cost structure and fully utilizing human capacity to avoid waste are necessary.
- Depend less on LSP clients, as analyzed above.
AI vs Human
- AI is real, but it takes more time to measure AI effects on human, L10n industry, and our company. Also L10n is a very fragmented industry with thousands of suppliers and millions of buyers across the globe, making it unlikely for AI to transform our industry overnight. Wait for the AI hype to die down first.
- GTE is too small to be proactive, such as developing a new AI-integrated tool or technology. Our strategy is adaptive.
- Just like past lessons with CAT tools & MT, our industry expects (hopes) that AI will be a friend, not a foe. We may need to switch from high-unit-price services like TE, to lower-unit-price services like MTPE. But the volume (total demand for L10n) should be bigger. Before the CAT tool era, only the biggest Corps can afford multilingual website by paying for all as New word. Then CAT tools make translation accessible for medium companies by offering discounts on reps and fuzzy words. What if every single SME can buy L10n service at an even lower cost fueled by AI? Definitely not our industry’s doomsday.
These data & information were shared to help you gain an overall picture of your work and to promote our transparency. Do NOT disclose them to external parties unless you have written approval from the MD.
95 total views