RWS Holdings plc Reports Revenue and Profit Falls Amidst Strategic Shift

RWS Holdings plc (LON:RWS), a global AI solutions company, announced its results for the year ended September 30, 2025, revealing a decline in both revenue and adjusted profit before tax. The company is undergoing a significant strategic transformation, shifting towards a technology-led, AI-driven model.

Revenue for FY25 decreased by 4% to £690.1 million, compared to £718.2 million in the previous year. Organic constant currency (OCC) revenue remained broadly flat. Adjusted profit before tax fell sharply by 43% to £60.4 million, down from £106.7 million in FY24.

Adjusted EBITDA also experienced a substantial decrease, dropping by 29% to £100.8 million. The company reported a loss before tax of £99.7 million, a stark contrast to the £60.0 million profit reported in the prior year, impacted by adjusting items of £160.1 million – primarily a non-cash goodwill impairment of £88.0m.

Basic loss per share was (27.0)p, a significant drop from the 12.8p earnings per share in FY24. The board has proposed a final dividend of 4.6p per share, bringing the total dividend for the year to 7.05p per share, a 43% decrease compared to the previous year's 12.45p. The board is rebasing the dividend to align it with sustainable profit performance, allowing for greater investment in AI and M&A.

Operational free cash flow increased significantly by 45% to £80.1 million, reflecting improvements in working capital and tighter capital expenditure. The company's net debt position modestly increased to £25.4 million.

Despite the overall decline, Language Services saw growth of 3% on an OCC basis, driven by AI services and strong performance in the APAC region. SaaS revenue now represents 46% of license revenues. AI-related products and services account for 28% of Group revenues, up from 25% in the previous year.

Key Drivers:

• AI Focus: Increased revenue from AI-related products and services, indicating a growing presence in this sector.
• Language Services Growth: Positive performance in Language Services, particularly in AI services and the APAC region, partially offsetting declines in other areas.
• Cost Reduction: Implemented efficiency plans leading to improved H2 profit performance

Ben Faes, Chief Executive Officer of RWS, commented: “FY25 was a pivotal year for RWS, as we moved to become a technology-led AI solutions partner, trusted to power seamless operations for global enterprises.” He emphasized the company's commitment to leading the shift in the industry and its unique position to grow on the back of AI advancements.

Looking ahead, RWS expects to deliver low single-digit OCC revenue growth in FY26, moderate margin expansion, and continued strong free cash flow conversion. In the medium term, the company anticipates accelerating OCC revenue growth and improving profitability.

The company recently refinanced its revolving credit facility, increasing it to $285 million and extending the maturity date to October 2029, bolstering its financial position and plans for future growth.

The departure of key board members, including the Chairman and Senior Independent Director, at the end of 2025 adds another layer of transition for the company.