REG - RWS Holdings PLC - Final Results
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RNS Number : 1738L RWS Holdings PLC 11 December 2025
This announcement contains inside information
For immediate release
11 December 2025
RWS Holdings plc
Results for the year ended 30 September 2025
Full year adjusted PBT within guidance with encouraging profit improvement in
H2
RWS Holdings plc ("RWS", "the Group", "the Company"), a global AI solutions
company, today announces its results for the year ended 30 September 2025
("FY2025") and provides further detail on its growth strategy and medium-term
guidance.
Financial overview
2025 2024 Change
Revenue £690.1m £718.2m -4%
OCC revenue -0.7%
Adjusted EBITDA¹ £100.8m £140.7m -29%
Adjusted profit before tax¹ £60.4m £106.7m -43%
Reported (loss)/profit before tax £(99.7)m £60.0m -265%
Adjusted basic earnings per share¹ 12.1p 21.6p -44%
Basic (loss)/earnings per share (27.0)p 12.8p -39.8p
Dividend:
Proposed final 4.6p 10.0p -54%
Total for year 7.05p 12.45p -43%
Operational free cash flow¹ £80.1m £55.1m +45%
Net (debt)/cash² £(25.4)m £(12.9)m -£12.5m
Financial highlights
• Organic constant currency ("OCC")³ revenue broadly flat, reflecting
resilience amid market disruption and significant strategic transformation:
o Growth in Language Services (up 3% OCC³; flat on a reported basis),
driven by strong progress in our AI services business and strong performance
in the APAC region
o Largely offsetting a decline in Regulated Industries OCC³ revenue
(down 10%, 12% reported) primarily due to reduced activity in our linguistic
validation business
o Language & Content Technology and IP Services were stable on an
OCC³ basis (down 3% and 6% reported, respectively), with encouraging SaaS
growth
• High client retention and satisfaction levels, with 95% repeat
services revenue (FY24: 95%) and NPS score of +46 (FY24: +48), demonstrating a
high level of trust in RWS. New client wins secured across all divisions and
in a wide range of end markets
• Momentum in planned shift towards SaaS, a core KPI, now representing
46% of licence revenues (FY24: 39%)
• 28% of Group revenues from AI-related products and services (FY24:
25%)
• Reported revenue of £690.1m, a 4% decline versus prior year (FY24:
£718.2m)
• Lower gross margins of 43.4% (FY24: 46.9%), driven primarily by a
shift in mix towards Train AI, APAC localisation, SaaS licences and lower
Regulated Industries revenues, partially offset by efficiency initiatives
• Adjusted profit before tax¹ ("PBT") of £60.4m (FY24: £106.7m),
reflecting the impact of lower top-line revenues, lower gross margins and
foreign exchange headwinds. The Group delivered a significant H1 (£18m) to H2
(£42m) improvement, through decisive overhead cost reduction in the second
half
• Adjusting items of £160.1m, an increase from prior year of
£113.4m, driven primarily by the non-cash goodwill impairment of £88.0m
(relating to Language Services and Regulated Industries) and exceptional items
of £22m (restructuring and integration), resulting in a reported loss before
tax of £99.7m
• £80.1m operational free cash flow¹ ("FCF") (FY24: £55m),
reflecting working capital improvements and tighter capex discipline. 126%
cash conversion¹ (FY24: 51%)
• Modest net debt² position of £25.4m at 30 September 2025 (FY24:
net debt of £12.9m) includes payment of £45.9m of dividends during the year
and receipt of the final £5.0m from the disposal of PatBase
• Following a review of the Company's financial position, performance
and strategic priorities, the Board recommends a final dividend of 4.6p per
share for FY25 (FY24: 10.0p). Together with the interim dividend of 2.45p per
share, this results in a total dividend for the year of 7.05p per share (FY24:
12.45p)
• The Board is recommending rebasing the dividend to align shareholder
returns more closely with sustainable profit performance. This will support
the Company's transition to a technology-led, AI-driven growth strategy. The
Board believes this rebased level will ensure sufficient investment capacity
to accelerate the Company's AI roadmap and M&A strategy, while maintaining
a prudent financial footing
• From this rebased level, the Board intends to resume a progressive
dividend policy
Strategic update and progress
• Our strategy is focused on maximising value creation through three
growth pillars:
• Refreshed go-to-market: Implementing a technology-first, regionally
specialised sales approach to drive share of wallet and new logos focusing on
enterprise clients in strategic high-value verticals and further developing
our partner network
• In November 2025 launched Trados as translation agent in Microsoft
Co-pilot as part of our Microsoft partnership
• Technology and innovation: Using RWS's technology assets and AI
expertise to build our next generation of AI-first products, that solve client
challenges and are easily embedded in their operations
• Finalised the integration of the Papercup technology acquired in
June to bring AI dubbing within our delivery capabilities in H2
• Initiated a new strategic partnership with Cohere, a Canadian large
language model ("LLM") developer, to develop best-of-breed automated
translation and transformation
• Efficiency: Developing a more efficient solution, through process
rationalisation, further scaling of our offshore delivery centres and
automation through the use of AI agents, enabling us to invest in product
development
• Implemented an efficiency plan that delivered a stronger H2 profit
performance
• Working with Alvarez & Marsal in Q1 FY26, enhanced the plan to
deliver further efficiencies across the Group, including a 10% productivity
improvement over the next 18 months
• These growth pillars are complemented by a high-performance culture,
enabled by better data and insights and clear, performance-driven incentives
• Successfully launched our new operating model on 1 October 2025,
with the Group organised around three strategic segments, Generate, Transform
and Protect
• Further strengthened leadership with the appointments of an EVP of
Go-to-Market and Head of Media and Entertainment, following the early H2
appointments of a Chief Product & Technology Officer and EVP Strategy
& M&A
Current trading, outlook and medium-term ambitions
• Trading in the early months of FY26 has been encouraging and we have
maintained the positive cost control momentum seen in the second half of FY25,
while noting the typical H1/H2 weighting of the Group's performance
• We expect to deliver low single digit OCC³ revenue growth in FY26,
moderate margin expansion and continued strong FCF conversion
• In the medium-term we expect Group OCC revenue growth to accelerate,
with a gradual improvement in profitability and a normalisation of operational
FCF to c.65%
• In setting our new strategy, the Group continues to evolve its
portfolio to ensure that it is prepared for future opportunities, with greater
focus, adding assets or streamlining where necessary to accelerate development
• In early October the Group successfully refinanced its revolving
credit facility. We increased the facility from $220m to $285m, extended the
maturity date to October 2029 and refreshed and strengthened our banking
syndicate. The Group continues to be well capitalised, supporting our plans
for future growth
• Following Candida Davies's decision to step down as Chief Financial
Officer ("CFO") and from her Board position as Executive Director, in October
we announced the appointment of Stephen Lamb as CFO; Stephen is expected to
join RWS during Q1 2026
• We also announce today that Julie Southern, Chairman and David
Clayton, Senior Independent Director ("SID"), have informed the Board of their
intention to step down as Chairman and SID respectively and as directors of
the Company, with effect from 31 December 2025.
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. Our new strategy is a recalibration of our value proposition. We
have unified our engineering power under a new Chief Product and Technology
Officer and executed our first major brand re-positioning in two decades, to
better reflect our proposition today and for the future. By placing technology
at the core, we are now addressing the full AI value chain - exemplified by
our acquisition of the IP of Papercup, which fast-tracks our capabilities in
AI-generated dubbing and synthetic media.
"Our financial performance in the year reflected the challenges we face as our
markets continue to evolve and it also validated our conviction that we can
and must lead the shift in our industry. We have responded with decisive
action, delivering material cost reductions in the second half and drawing us
towards a leaner, faster operating model fit for a technology-led company.
"With a Net Promoter Score of +46, trust remains the bedrock of our business.
Our global presence, access to large, digitally-addressable markets and
longstanding embedded relationships with our strong enterprise client base
provide robust foundations. With our proprietary technology and data,
specialised expertise, integrated AI lifecycle solutions, and proven track
record in transforming mission-critical content, RWS is uniquely positioned to
grow on the back of AI advancements as the natural trusted partner for
enterprises navigating the AI revolution. As we enter FY26, we do so with a
scalable technology stack, a clear strategy and the energy to define the
future of global understanding."
Analyst Presentation:
A results presentation and strategy update for analysts and investors will be
held today at 09:30 GMT. For those who would like to attend, please contact
RWS@mhpgroup.com (mailto:RWS@mhpgroup.com) . A recording of the webcast will
be made available on the Group's website via:
https://www.rws.com/about/investors/results-and-reports/
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.
For further information, please contact:
RWS Holdings plc
Ben Faes, Chief Executive Officer
Candida Davies, Chief Financial Officer 01628 410100
MHP (Financial PR Adviser) rws@mhpgroup.com 07884 494 112
Katie Hunt / Eleni Menikou
Deutsche Numis (Nominated Adviser & Joint Broker)
Stuart Skinner / William Wickham 020 7260 1000
Berenberg (Joint Broker)
Ben Wright / Toby Flaux / Mike Burke / Milo Bonser 020 3207 7800
The person responsible for arranging the release of this announcement on
behalf of the Company is Jane Hyde, Group General Counsel and Company
Secretary.
About RWS:
RWS is a global AI solutions company empowering the world's most trusted
enterprise AI.
Our proprietary Cultural Intelligence Layer, powered by 250,000 data
specialists, cultural and language experts and deep domain professionals,
backed by 45+ patents, makes enterprise AI culturally fluent, contextually
accurate and secure, ensuring every interaction reflects a brand's tone,
context and customer values.
Through our Generate, Transform and Protect segments, we deliver intelligent
content, enterprise knowledge, large-scale localization and IP protection for
global growth. Trusted by 80+ of the world's top 100 brands, RWS provides the
confidence, governance and expertise organisations need to deploy AI safely,
responsibly and at scale.
Headquartered in the UK, RWS is listed on AIM (RWS.L).
For further information, please visit:
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www.rws.com
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Forward-looking statements
This announcement contains certain statements that are forward-looking. These
include statements regarding our intentions, beliefs or current expectations
and those of our officers, Directors and employees concerning, amongst other
things, our results of operations, financial condition, liquidity, prospects,
growth, strategies and the business we operate. By their nature, these
statements involve uncertainty since future events and circumstances can cause
results and developments to differ materially from those anticipated. The
forward-looking statements reflect knowledge and information available at the
date of preparation of this document and, unless otherwise required by
applicable law, RWS undertakes no obligation to update or review these
forward-looking statements. Nothing in this announcement should be construed
as a profit forecast. RWS and its Directors accept no liability to third
parties in respect of this document save as would arise under English law.
Notes:
1. RWS uses adjusted results as key performance indicators as the
directors believe these provide a more consistent measure of operating
performance. The definitions for these key performance indicators can be found
in the Glossary.
2. Net debt comprises cash and cash equivalents less loans but before
deducting lease liabilities.
3. Adjusted to reflect a like-for-like comparison between reporting
periods and assumes constant currency across both reporting periods.
Chairman's statement
FY25 was a challenging year for RWS, marked by a decline in overall financial
performance. However, decisive action in the second half, including a
successful efficiency programme, helped to improve profitability. In January
2025, the Board was delighted to welcome Ben Faes as Chief Executive Officer
("CEO"). His impact has been immediate and transformative, introducing a bold
new strategy that evolves RWS from a language services leader into an AI
solutions enterprise partner. This redefinition of our market approach places
technology-led innovation at the absolute core of the Group's mission.
The rapid evolution of generative AI, coupled with the global explosion of
digital content, continues to be the primary catalyst transforming our markets
and creating new opportunities. Our new strategy, supported by an Executive
Team that was strengthened by several new appointments, positions RWS for
accelerated, profitable growth.
The Group operates in highly attractive, defensible markets with a combined
global value of approximately £32 billion. Our proprietary technology, deep
specialist domain expertise and trusted reputation are vital assets as our
global clients increasingly integrate advanced AI into their core operations.
Financial performance and capital strength
In FY25 the Group generated revenues of £690.1m, a 4% decline from the prior
year (£718.2m). On an Organic Constant Currency ("OCC") basis, revenue was
broadly flat versus the prior year, highlighting resilience amid market
transition and significant strategic transformation.
• Growth drivers: Performance was underpinned by OCC growth in our
Language Services division, driven by our TrainAI data solutions and strong
performance in the APAC region. Both Language and Content Technology and IP
Services were flat on an OCC basis, led by strong recurring revenue
performance in Propylon and our patent renewals business respectively. Revenue
in Regulated Industries declined, primarily due to reduced volume in
linguistic validation services.
• Profitability: Reported loss before tax was £(99.7)m (FY24: £60.0m),
while adjusted profit before tax was £60.4m (FY24: £106.7m). This result
reflects the impact of lower top-line revenues and the friction of market
transition, partially mitigated by decisive and material overhead cost
reduction in the second half of the year.
The Group's balance sheet remains strong, with net assets of £763.2m as at 30
September 2025 (FY24: 899.6m). Net debt (excluding lease liabilities) stood at
£25.4m (FY24: £12.9m). Following the year-end, we successfully renewed our
revolving credit facility, increasing it from $220m to $285m and extending the
maturity date to October 2029. This action leaves the Group well-capitalised
and provides the necessary medium-term liquidity to support our future organic
and inorganic growth ambitions.
People, leadership and organisational agility
At 30 September 2025, RWS employed 7,649 full-time equivalents across 52
global locations (FY24: 8,059).
We continue to drive organisational agility and efficiency. Our flexible
working model ensures talent retention and operational effectiveness, while
our strategy to rationalise our global footprint has resulted in the closure
of 11 offices during the year, delivering meaningful savings in property and
associated operating costs.
Ben Faes was appointed as CEO and a Board member in January 2025. He is a
proven global business leader with a strong track record of driving digital
transformation across the technology and media sectors. His extensive
background, including senior roles at AOL and Alphabet (Google Cloud, YouTube
monetisation), provides the precise expertise needed to leverage proprietary
technology and transform our business model for profitable, organic growth.
Ben has made solid progress in a short period, bringing vital energy and
strategic focus to the business.
Board changes
Having joined the Board at a pivotal time in the Group's development in July
2022, RWS now has an exciting AI-led strategy in place, led by a new
technology focused CEO and supported by a strengthened Board. With these firm
foundations in place, it is a good time to hand the reins over to a new Chair
as RWS embarks on its next chapter, and I have informed the Board of my
intention to step down as Chairman and as a director of the Company.
With a Board now consisting of a majority of independent Non-executive
Directors, David Clayton has also decided to step down following his 16 years
as a Board member of SDL and RWS.
David and I will step down with effect from 31 December 2025. Andrew Brode and
Gordon Stuart will become interim Chairman and interim Senior Independent
Director respectively, whilst the search for my successor is undertaken. The
outcome of that process will be announced in due course.
Sustainability and ESG
Our heritage is anchored in a strong commitment to the highest standards of
environmental, social and governance ("ESG") practice, forming the ethical
foundation for our operations.
We are pleased to report that RWS is on track to meet its Science Based
Targets initiative emissions targets for FY25, achieving a 6% overall
year-on-year decrease in greenhouse gas emissions. Significant reductions in
Scope 1 and 2 emissions are a direct result of our focus on operational
efficiency and facility right-sizing.
Dividend
Following a review of the Company's financial position, performance and
strategic priorities, the Board recommends a final dividend of 4.6p per share
for FY25 (FY24: 10.0p). Together with the interim dividend of 2.45p per share,
this results in a total dividend for the year of 7.05p per share (FY24:
12.45p).
The Board is recommending rebasing the dividend to align shareholder returns
more closely with sustainable profit performance. This will support the
Company's transition to a technology-led, AI-driven growth strategy. The Board
believes this rebased level will ensure sufficient investment capacity to
accelerate the Company's AI roadmap and M&A strategy, while maintaining a
prudent financial footing. From this rebased level, the Board intends to
resume a progressive dividend policy.
Subject to final shareholder approval at the AGM, the final dividend will be
paid on 20 February 2026 to shareholders on the register as at 16 January
2026.
Summary
The performance challenges faced in FY25 were disappointing and highlight the
necessity of embracing a new vision and pursuing a refreshed growth strategy.
Our global presence, access to large, digitally-addressable markets and our
strong enterprise client base remain solid foundations. Given our proprietary
technology and specialised expertise, RWS is uniquely positioned to capitalise
on advancements in AI.
With the new vision, a decisive growth strategy and a strengthened leadership
team built for the AI era, I am confident that we are well-positioned to drive
the Group forward and deliver long-term value creation.
Julie Southern | Chairman
10 December 2025
Chief executive officer's review
FY25 was a definitive year of transformation for RWS. We have moved beyond the
boundaries of a traditional language services provider to become a
technology-led AI solutions partner, capable of powering seamless operations
for global enterprises.
Our new strategy is a recalibration of our value proposition. We have unified
our engineering power under a new Chief Product and Technology Officer and
executed our first major rebrand in two decades. By placing technology at the
core, we are now addressing the full AI value chain - exemplified by our
acquisition of Papercup, which fast-tracks our capabilities in AI-generated
dubbing and synthetic media.
While our financial performance declined this year, reflecting the challenges
we face as our markets continue to evolve, it also validated our conviction:
the old model is shifting, and we must lead that shift. We have responded with
decisive action, delivering material cost reductions drawing us towards a
leaner, faster operating model fit for a technology company.
With a Net Promoter Score of +46, trust remains the bedrock of our business.
As we enter FY26, we do so with a scalable technology stack, a clear strategy
and the energy to define the future of global understanding.
A new direction: Engineering global intelligence
Since joining RWS I have undertaken an intensive review of our platform,
engaged deeply with our clients, and mobilised our high-calibre talent. It is
clear that RWS is an indispensable strategic partner for the world's leading
enterprises, underpinned by a robust portfolio of proprietary technologies. We
operate at unmatched global velocity and scale, a capability driven by the
expertise and commitment of our exceptional teams.
The market transition is accelerating - fuelled by the rapid rise of
Generative AI and a global explosion of content. This shift is not a threat;
it is the single largest growth opportunity in our history. To seize it, we
must fundamentally reset our operating model to ensure we are product-led and
technology-first.
In June, we unveiled a new strategic mandate: to become the world's leading AI
Solutions Partner. Our vision is to move beyond generic applications, uniquely
focusing on making artificial intelligence work in the complex, high-stakes
reality of the global enterprise.
Addressing the enterprise AI deficits
Central to our new positioning is our ability to resolve three critical,
interconnected deficits that currently prevent widespread, trusted deployment
of AI at scale:
• The data deficit: Generic AI is trained on the public internet. Our
clients demand domain-specific, clean linguistic data. Our proprietary
datasets and domain experts inject the cultural nuance, technical precision
and human insight required for high-fidelity outputs.
• The culture deficit: While advanced AI mimics language, it lacks true
emotional intelligence and cultural context. Our vast, verified network of
over 43,000+ global experts provides that critical empathy layer - the
cultural intelligence every brand needs to connect authentically.
• The trust deficit: The autonomous nature of advanced AI introduces
complex, significant risks related to security, bias, privacy and compliance.
Our ability to embed human validation and verifiable workflows is our enduring
competitive moat and the foundation of enterprise trust.
With decades of experience in cultural and domain mastery, RWS's heritage as a
foundational localisation leader has laid the ultimate groundwork for our
natural evolution into an AI platform. Today, RWS is establishing itself as
the cultural intelligence layer for enterprise AI - bridging the AI value gap,
which is a critical barrier to realising the full potential of global
technology deployments.
Strategy: Accelerating our impact
Our strategy is focused on maximising value creation through three growth
pillars:
1 Refreshed go-to-market: Implementing a technology-first, regionally
specialised sales approach to drive share of wallet and new logos focusing on
enterprise clients in strategic high-value verticals and further developing
our partner network.
2 Technology and innovation: Using RWS's technology assets and AI expertise to
build our next generation of AI-first products, that solve client challenges
and are easily embedded in their operations.
3 Efficiency: Developing a more efficient solution, through process
rationalisation, further scaling of our offshore delivery centres and
automation through the use of AI agents, enabling us to invest in product
development.
Effective 1 October, we re-organised the Group around three strategic
segments:
Generate: Our content technology and TrainAI data platform businesses.
Transform: Our global localisation platform, integrating language technologies
and specialised services.
Protect: Our mission-critical IP Services business.
Three segments, one unified ecosystem where people and proprietary technology
work in harmony. We are the new connective tissue of the AI economy, a
world-leading AI solutions company that unites data, content and IP through
our proprietary language and content technologies.
With a clear strategy, a sharpened focus on technology-first execution and the
market position to succeed, we are entering this next chapter with real
momentum. We believe the opportunities before us are significant and we are
united in our determination to capture them, delivering stronger growth,
deeper client partnerships and lasting value for all stakeholders. I am
excited by what lies ahead and confident that, together, we will realise the
full potential of RWS in this fast-changing global market.
Accelerating the roadmap: Strategic integration
In support of our technology-first mandate, we were excited to announce the
strategic acquisition of Papercup's advanced IP and platform in June. This was
a critical step in accelerating our product roadmap and rapidly embedding
best-in-class generative AI across our technology stack.
This integration broadens our capacity to support clients with multilingual
video, voice and synthetic content localisation across all formats and
channels.
Papercup's breakthrough AI dubbing technology is a true market differentiator.
It uniquely solves the 'culture deficit' by accurately reproducing a speaker's
tone, pace and emotional intelligence. Its platform combines state-of-the-art
voice synthesis, proprietary AI voices and sophisticated editorial tools,
allowing our language specialists to fine-tune the final output. This delivers
human-grade output comparable to professional actors and artists, but at the
exponential speed and efficiency of AI.
Our product engineering teams executed a rapid, seamless integration,
successfully mastering this advanced technology stack. The Papercup AI dubbing
platform is now fully available to our teams, enabling us to deliver
end-to-end workflows that seamlessly blend AI generation with critical
human-in-the-loop validation.
This strategic move firmly anchors us in the high growth dubbing market, which
was expected to reach $4.3 billion in 2025 and $7.6 billion by 2033. Given
that a large proportion of this market is driven by AI dubbing language
technology platforms, this acquisition is an immediate and significant market
disruptor for RWS.
Operating review
Language Services
Focuses on localisation and related solutions for a wide range of industry
verticals, including automotive, chemical, consumer, manufacturing, retail,
technology, travel and telecommunications.
The Language Services division represented 47% of Group revenues in the year
(FY24: 46%). Revenues of £326.7m were flat on a reported basis (FY24:
£327.1m) and grew by 3% on an OCC basis.
Highlights:
• Platform enablement: We leveraged our unique blend of proprietary
technologies and human expertise to partner with new and existing clients. Our
Evolve platform played a key role, enabling significant client success
stories, including a major deal with a leading personal health technology
company.
• Market consolidation: Vendor consolidation remains a clear trend among
global clients, creating opportunities for RWS - as the scale platform - to
capture greater share of spend. Notable wins in the technology sector have
reinforced our preferred vendor status and opened new, high-velocity revenue
streams.
• Responding to LLM shift: While some clients shifted towards initial
LLM-first translation approaches (resulting in volume impact), we are
successfully diversifying our service portfolio to mitigate this. We saw
continued growth in specialised linguistic testing services with our largest
technology clients, alongside increased demand for quality review and
accessibility services - all driven by the need to validate and govern
AI-powered workflows.
TrainAI continued to build significant momentum during the year. We secured
new opportunities from existing global technology clients and new logo
acquisitions.
• We won a significant new engagement with the world's largest
professional network, engaging a major new brand and revenue stream.
• We deepened our strategic relationship with a multinational technology
conglomerate, becoming a preferred vendor for complex, specialised data
engagements.
• As the model and data training market rapidly shifts towards
high-fidelity, specialised linguistic experts, our broad access to
domain-specific resources uniquely positions us to capture this premium
demand.
Operating loss was £68.8m (FY24: profit £25.4m) and adjusted operating
profit was £23.4m (FY24: £39.6m), reflecting adverse mix driven primarily by
accelerated growth in TrainAI and good growth in the APAC region in core
localisation, adverse foreign exchange impact, with cost reductions broadly
offsetting inflation.
Regulated Industries
Provides a range of specialised services for three verticals - life sciences,
financial services and the legal sector. Service provision is centred around
highly specialised technical translations with a strong emphasis on quality
and security.
The Regulated Industries division accounted for 19% of Group revenues in the
year (FY24: 20%). Revenues of £128.5m declined by 12% on a reported basis
(FY24: £146.5m) and by 10% on an OCC basis.
Highlights:
• Strategic wins: Despite market pressure, we secured three major customer
wins within global regulatory affairs in the pharmaceutical sector. We also
delivered a strong RFP performance in financial services, winning two
significant mandates, and achieved a major competitive displacement at a
leading European medical device company.
• Market headwinds: A decline in demand for our linguistic validation
services was the largest contributor to the segment's performance, where
reduced client outsourcing and tighter study budgets impacted volumes and
margins.
• Future integration: Investment in an improved go-to-market structure,
alongside planned integration with the other language businesses as part of
the new Transform segment, is expected to accelerate the recovery of this
critical operation in FY26.
Operating loss was £30.8m (FY24: profit £5.9m). Adjusted operating profit
decreased to £9.3m (FY24: £19.8m), driven principally by the decline in
top-line revenues and mix changes, and adverse foreign exchange impact.
Language and Content Technology
Offers a range of technology products for enterprises and critical industries,
ranging from neural machine translation to content management solutions.
The Language and Content Technology ("L&CT") division accounted for 20% of
Group revenues in the year (FY24: 20%). Revenues of £138.4m were 3% lower on
a reported basis (FY24: £142.3m) and in line with prior year on an OCC basis.
Highlights:
• SaaS and cloud migration: Performance was robustly underpinned by strong
new customer wins and continued momentum in SaaS adoption across the content
technology portfolio, led by Tridion Docs. The majority of new and expansion
contracts were SaaS, including migrations from on-premise deployments,
reinforcing the structural transition towards recurring revenue, cloud
delivery models.
• Enterprise focus: New logo growth was driven by demand from regulated
sectors, including financial services, healthcare and government. Our
regulatory-focused software (Propylon) and technical content solutions
(Contenta) performed strongly, demonstrating the success of our strategy to
focus on large, regulated enterprise customers.
• AI product innovation: We accelerated the evolution of our key
platforms:
• Trados Enterprise: Positioned at the forefront of AI-driven
localisation, key innovations included the launch of Smart Insights
(AI-powered co-pilot for project managers) and Connected AI (breakthrough
integration of large language models directly with translation engines).
• Language Weaver: We delivered a robust Speech-to-Text AI solution
deployable in private cloud or on-premise environments for highly sensitive
audio use cases. The platform was named Machine Translation Solution of the
Year at the AI Breakthrough Awards.
• We celebrated a significant industry milestone - translating more than a
trillion words in 12 months - demonstrating the unparalleled scale and
enterprise adoption of our language technology.
Operating profit was £11.1m (FY24: £18.5m) and adjusted operating profit was
at £25.8m (FY24: £34.2m), reflecting our anticipated growth in SaaS,
increased expensing of technology investments, partially offset by favourable
pricing and ongoing cost reduction efforts.
IP Services
One of the world's leading providers of patent translations, filing solutions
and IP search, renewal, recordals and monitoring services.
The IP Services division represented 14% of Group revenues in the year (FY24:
14%). Revenues of £96.5m were 6% lower on a reported basis (FY24: £102.3m)
and grew marginally on an OCC basis.
Highlights:
• Strategic Growth: Our strategic focus on expanding outreach across the
entire Intellectual Property (IP) lifecycle delivered significant growth in
our patent renewals business. This helped offset a decline in the Eurofile
segment due to external reductions in European Patent grant rates.
• Digital Platform Integration: We secured several notable client wins,
including three of the top ten patent filers in China, driven by the
localisation and launch of our patent renewals functionality within our IP
services digital platform. This digital enablement strengthens our ability to
serve clients across their global patent portfolios. We also successfully
entered the key growth market of South Korea with a major renewals agreement.
Operating profit was £15.3m (FY24: £33.3m) and adjusted operating profit was
£19.4m (FY24: £26.9m), driven by changes in mix and investments in sales
capability.
People: Engineering talent for the AI era
Our competitive advantage rests on our ability to attract and empower the
specialised talent required to build and scale advanced AI solutions. We are
committed to fostering an inclusive, high-performance culture that drives
innovation, maximises productivity and delivers exponential value for our
stakeholders.
Cultivating a high-performance culture
Our annual RWS Engagement Survey remains a vital data input, providing
insights into key performance drivers like collaboration, professional growth
and alignment with our technology vision.
We are pleased to report continued progress in talent retention, with
voluntary attrition improving to 9.2% (FY24: 10.6%). This is a direct result
of our focus on building a career platform where talent is engaged and sees a
long-term trajectory. Our 'intent-to-stay' metric increased to 69%, reflecting
the positive impact of agile working, autonomy and the trusting relationships
colleagues have with their direct managers.
To ensure our teams are equipped to lead the AI transformation, our MyLX
eLearning platform remains the foundation of our upskilling strategy. Through
this platform, our colleagues accessed over 217,000 learning assets in FY25 -
from compliance and quality to advanced technical skill development. This
enables the efficient delivery of critical, high-velocity training necessary
for a rapidly evolving technology organisation.
Strategic leadership for a product-led future
A core focus this year was restructuring our leadership to match our
ambitions. We were delighted to strengthen the Executive Team with key
appointments designed to execute our product and growth strategy:
Chief Product and Technology Officer
In May, Christina Scott joined the Group as Chief Product and Technology
Officer (CPTO). Christina is now the architect of our global product and
technology strategy, directly responsible for shaping the innovation agenda
and delivering scalable, market-leading solutions. Her leadership is
instrumental in sharpening our portfolio focus and bringing our ambitious AI
roadmap to market. Christina is a proven senior executive with over 25 years
of experience in driving revenue growth and cost optimisation across complex
technology, digital products and data solutions at major companies undergoing
large digital transformations.
Executive Vice President of Strategy and Corporate Affairs
In April, Joseph Ayala joined to lead strategy, investor relations and global
M&A. His mandate is to identify opportunities for strategic growth and
innovation in rapidly evolving competitive landscapes and to drive a
disciplined, growth-focused M&A strategy to capitalise on market trends.
Joseph brings 14 years of senior leadership experience within
technology-enabled service companies, where he successfully engineered
large-scale buy-and-build strategies.
Operational alignment and new segment leadership
To ensure crystal-clear accountability and alignment with our three new
Generate, Transform and Protect segments, we executed a key internal
realignment:
• We promoted several existing leaders to CEO roles within these
businesses, reflecting the depth of talent within RWS and our succession
planning process.
• James Lacey, previously head of our IP Services division, was appointed
CEO of Protect.
• John Harrington, formerly General Manager of Propylon, was appointed CEO
of our Content Technology business within the Generate segment.
• Jérôme Grateau was appointed to the newly formed position of Executive
Vice President of Go-to-Market, responsible for redefining and steering the
Company's commercial operations to maximise adoption of our new AI solutions.
These appointments, effective 1 October, reflect our commitment to building an
agile leadership structure engineered to deliver on our growth strategy.
On 3 October 2025, Candida Davies informed the Board of her intention to step
down as Chief Financial Officer and Executive Director. She will stay until
the end of 2025 to support a smooth transition and the reporting of the
full-year results. I would like to thank Candida for her immense contribution
and commitment over the last three years during a pivotal time for the
business and our industry. She has been a key member of our leadership team,
which has made considerable progress in redefining the Group's strategy and
operating model, strengthening its position for the future.
Culture and brand: The foundation for velocity
Alongside restructuring our organisation, streamlining our technology stack
and maximising the power of AI, developing a culture of clarity, intensity and
high-velocity execution is integral to our transformation.
Values and strategic alignment
In June, alongside our new strategy and technology-led brand, we launched our
refined core values. These values serve as the operating principles for how we
think, behave, and make decisions - capturing RWS at our best and ensuring
every colleague's actions are aligned with our strategic goals.
While each value holds significance independently, they are designed to form a
powerful equation that defines our high-performing culture.
Our focus on recognition remains key to driving engagement and reinforcing
behaviours that fuel client success. The third year of the Ambassador Awards
programme - which received over 1,000 nominations - celebrates individuals and
teams who best embody our four values, publicly recognising the performance
that underpins our innovation and delivery excellence.
Transparency and leadership communication
Transparency is the cornerstone of a high-performance organisation. When
leadership communicates openly - about our strategy, decisions and challenges
- we minimise friction, empower our teams and create alignment across the
business, allowing us to move with greater speed and precision.
Since joining I have prioritised honesty regarding both our opportunities and
our challenges. This includes a weekly newsletter sharing operational insights
and strategic reflections, ensuring we move forward with clarity and shared
purpose. Additionally, six all-colleague town halls were held during the year,
providing direct, unrestricted access to the Executive Team.
The RWS rebrand: Engineering understanding
The internal launch of our new vision culminated in our inspirational 'RWS
Hello World Day'. This event, which brought together teams through 40
face-to-face events in 27 countries, was a perfect opportunity to energise and
align colleagues around our new direction. We clarified how individual roles
contribute to our collective success as an AI solutions company. The day
featured Erin Meyer, INSEAD Professor and author of 'The Culture Map',
reinforcing the essential role of cultural intelligence in our global
strategy. The response was overwhelmingly positive, with 74% of colleagues
expressing excitement for the new brand.
Our new brand is about meeting the future head-on, and critically, helping our
clients lead it. Our brand puts understanding front and centre - not just
linguistic understanding - but cultural, contextual and customer-led
understanding.
Understanding is the strategic key that unlocks a world of possibilities for
our clients and we deliver it everywhere - across every channel, language and
market.
The new brand is built around one powerful idea:
Growing the value of your ideas, data and content - by making sure you're
understood. Everywhere.
We achieve this by bringing together a rare combination of cutting-edge AI
platform, proprietary technology and human expertise to unlock global
understanding at scale. I am genuinely inspired by this new brand and
direction, and the enthusiastic response from our colleagues, customers and
industry peers confirms the strength of our path forward.
ESG: Sustainable platforms and responsible governance
Environmental, social, and governance ("ESG") is an integrated layer of how
RWS operates, reflecting our commitment to long-term sustainability and
responsible platform governance. Our clients, partners and specialised talent
expect us to lead with purpose.
Environmental commitment: Operational efficiency
We were proud to have had our ambitious greenhouse gas ("GHG") reduction
targets officially approved by the Science Based Targets initiative ("SBTi")
in May 2024. This commitment formalises our drive for operational efficiency
across our global footprint:
• Scope 1 & 2 reduction: Committed to reducing absolute Scope 1
and 2 GHG emissions by 54.6% by FY33 (from an FY22 baseline).
• Scope 3 reduction: Committed to reducing Scope 3 emissions
(purchased goods, commuting) by 61.1% per million GBP value added within the
same period.
Our overall GHG emissions are down 6% year-on-year, keeping us on track for
FY25 targets. Reductions in Scope 1 and 2 are driven by strategic office
right-sizing - a key component of our leaner operating model. While Scope 3
emissions saw a projected rise due to factors like increased employee
commuting and external regulatory updates, these remain within our target
corridor. Furthermore, the proportion of renewable energy powering RWS offices
increased by 15% to 30% in the first half of FY25.
Governance and social impact
Our commitment to ethical operations was recognised with a Bronze Medal by
EcoVadis in April 2025. While our overall rating saw a slight dip from 68 to
66 - driven by increased sector-specific scrutiny on human rights and labour
issues - we successfully improved our score in three out of four categories,
demonstrating progress in our governance framework.
Crucially, our social focus is centred on cultivating the next generation of
specialised talent:
• The RWS Campus programme, our global initiative for localisation talent
development, continues to forge strong educational partnerships with more than
600 universities worldwide.
• These collaborations are essential for nurturing the specific linguistic
and technical skills needed to power the future of global AI.
By integrating rigorous ESG standards into our technology platform and
operational efficiency goals, we are building a more resilient, responsible
and sustainable company for all stakeholders.
Current trading, outlook and medium-term guidance
RWS's proprietary technology and data, specialised expertise, integrated AI
lifecycle solutions and proven track record in transforming mission-critical
content mean the Group is uniquely positioned to grow on the back of AI
advancements as the natural trusted partner for enterprises navigating the AI
revolution. We enter FY26 with a scalable technology stack, a clear strategy
and the energy to define the future of global understanding.
Trading in the early months of the year has been encouraging and we have
maintained the positive cost control momentum seen in the second half of FY25.
As we realise the benefits of the new operating model and action taken in
FY25, in FY26, we expect the Group to deliver:
• Low single digit OCC revenue growth with:
• Generate expected to deliver mid-teens digit growth, primarily driven by
growth in TrainAI
• Transform expected to deliver a low to mid-single digit decline, whilst
we pivot to a tech-first offering, whilst benefitting from increased
predictability from a higher proportion SaaS revenue
• Protect expected to deliver mid-single digit growth, primarily driven by
growth in recurring renewals revenue and recent wins
• Moderate margin expansion, with gross margin expected to expand by
c.150bps and adjusted operating margin expected to expand by c..100 bps; and
• Continued strong free cash flow conversion.
In the medium-term we expect:
• Group OCC revenue growth to accelerate with:
• Transform's tech-first offering and growing business lines, with
resilient pricing, gradually offsetting declining traditional products and
services
• Generate and Protect to grow, driven by growth in their underlying
markets boosted by their strategy of diversification across products, services
and industry verticals.
• A gradual improvement in profitability with:
• Transform benefitting from the new tech platform and redesigned
processes coming on stream and its tech-first model providing more efficient
delivery and economies of scale
• Generate and Protect achieving more efficient delivery driven by
modernisation investment and improving profitability as new business lines
mature
• Improved gross margin and operating margin further supported, across the
Group, by off-shoring and increased central overhead efficiency.
• A normalisation of operational FCF to c.65%, as working capital and
capital expenditure normalise alongside accelerated growth.
Benjamin Faes | Chief Executive Officer
10 December 2025
Chief financial officer's review.
RWS navigated a challenging environment in FY25 focusing on disciplined cost
and working capital management. The Group delivered material overhead cost
reductions in the second half, supporting a leaner operating model. Strategic
hires and ongoing transformation programmes continue to strengthen operational
foundations. The renewal and upsizing of the Revolving Credit Facility further
enhances financial flexibility. The Group remains focused on cash generation,
capital efficiency, and selective investments.
Reported revenue was £690.1m, down 4% year-on-year. Adjusted profit before
tax was £60.4m (9% margin) down from £106.7m (15%) in FY24, reflecting
adverse foreign exchange, temporary margin pressure and increased amortisation
charges. The Group reported a loss before tax of £99.7m (FY24: profit of
£60.0m), the decrease being driven primarily by the non-cash goodwill
impairment of £88.0m, the reduction in gross profit in the year and foreign
exchange headwinds.
Despite lower earnings the Group remained cash generative, with cash generated
from operations of £86.1m and cash conversion of 126%, ending the year with a
very modest net debt of £25.4m (Net Debt / adjusted EBITDA < 0.5).
Within the Finance function, operational foundations were strengthened through
the implementation of a new ERP platform in IP Services, completion of the
transition to a global finance shared service centre, and the ongoing
simplification of the Group structure.
Revenue
In FY25, the Group generated revenues of £690.1m, representing a 4% decrease
compared to FY24 and 1% lower on an organic constant currency (OCC) basis.
Language Services delivered revenue of £326.7m, broadly in line with the
prior year and showing a 3% improvement on an OCC basis. Strong growth in
TrainAI, our AI-powered data services, helped offset declines in traditional
translation volumes as clients move to machine translation, and pricing
pressure. In addition, demand for language quality review and testing is
increasing, driven by rising adoption of AI powered workflows.
Regulated Industries recorded revenue of £128.5m, down 12% year-on-year (10%
lower OCC), primarily reflecting reduced activity in linguistic validation
among major pharmaceutical clients. There were a number of new client wins, in
the pharmaceutical and finance sectors.
Language and Content Technology achieved total revenue of £138.4m, a decrease
of 3% year-on-year but flat on an OCC basis. New customer wins and robust SaaS
growth helped mitigate lower perpetual licence sales.
IP Services reported revenue of £96.5m, a 6% decrease compared to the prior
year but flat on an OCC basis. Growth in patent renewals offset weaker
performance in the EuroFile segment.
The majority of the Group revenue, categorised by geography, is in the US
market, which accounts for 55% of the total.
No one client accounts for more than 10% of Group revenue.
Gross profit
Gross profit was £299.3m, £37.2m lower than the prior year, resulting in a
gross margin of 43% (FY24: 47%). The decrease primarily reflects lower
reported revenues, notably from linguistic validation within Regulated
Industries and some operational challenges in Language Services during the
migration to new automated delivery models. The shift towards lower margin
services, including a rapid growth in TrainAI and the sale of Patbase in the
prior year also contributed. Adverse impacts from foreign exchange, cost
inflation, and the expected shift towards increased SaaS licences were
partially offset by cost efficiencies delivered in the latter part of the
year. These actions supported the transition to a leaner organisational
structure, effective 1 October. The Group continues to pursue further
efficiency gains through ongoing transformation programmes and increased use
of AI.
Administrative expenses
Total administrative expenses have increased to £393.1m (FY24: £270.7m).
Adjusted administrative expenses (gross profit less adjusted operating profit)
increased to £233.2m (FY24: £224.2m) due to a loss of £5.1m related to
foreign exchange versus a £5.2m gain recognised last year.
The underlying overheads costs remained flat year-on-year with the cost of
inflation, selective investments and increased amortisation of non-acquired
intangibles (primarily related to the Group's new finance and HR systems, and
other internally generated software) being offset by continued efficiency
efforts.
Adjusting items in FY25 totalled £159.9m, including
• A goodwill impairment of £88.0m within the Group's Language Services
and Regulated Industries CGUs. This non-cash charge reflects the market
transition we have been experiencing on the core localisation business, the
under performance in the Linguistic Validation business, the shift in
investments and focus to support the new transition to a technology first
proposition and the rise in discount rates due to macroeconomic factors (FY24:
£nil).
• Amortisation of acquired intangibles was £40.3m (FY24: £40.8m). The
reduction was mainly due to the impact of exchange rate movements during the
period.
• Exceptional costs of £22.2m (FY24: £3.4m) were incurred during the
year, relating to Group restructuring, transformation, integration and other
strategic projects. Acquisition costs of £5.1m (FY24: £7.2m) were primarily
related to the contingent consideration of Propylon Holdings Limited and ST
Communications, both purchased in prior periods.
Finance costs
Net finance costs excluding exceptional finance costs were £5.7m (FY24:
£5.6m), with slightly higher average borrowings offset by lower interest
rates. Exceptional finance costs were £0.2m (FY24: £0.2m).
Profit before tax
The Group reported a loss before tax of £99.7m (FY24: profit of £60.0m), the
decrease being driven primarily by the reduction in gross profit in the year,
foreign exchange headwinds, the non-cash goodwill impairment of £88.0m as
well as the £30.0m profit on disposal of Patbase reported in the prior year.
Adjusted profit before tax
Adjusted profit before tax ("Adjusted PBT") is stated before amortisation of
acquired intangibles, impairments, acquisition costs, share-based payment
expenses, profit on disposal of business and exceptional items. The Group uses
adjusted results as a key performance indicator, as the Directors believe that
these provide a more consistent and meaningful measure of the Group's
underlying performance across financial periods. The Adjusted PBT of £60.4m
(Adjusted PBT margin: 9%) recorded in the period has decreased from £106.7m
(Adjusted PBT margin: 15%) in the prior year. Strong cost control measures and
restructuring efforts were implemented to counteract the weaker business
performance and foreign exchange headwinds but were not sufficient in the
period. This led to the non-payment of financial performance related
management bonuses and a lower adjusted PBT compared to the previous year.
Tax charge
The Group's tax charge for the year was £0.1m (FY24: £12.5m). This reflects
a current tax expense of £16.2m, mostly offset by the reversal of previously
recognised deferred tax liabilities and the recognition of additional deferred
tax assets during the period.
The adjusted tax charge for the period was £15.7m (FY24: £26.6m)
representing an effective adjusted tax rate of 26% compared with 25% in the
prior financial year. The increase in the effective rate is largely due to an
increase in withholding tax payable on dividends received from overseas
subsidiaries by the UK parent.
Earnings per share and dividend
Basic earnings per share for the financial year decreased from 12.8p to a loss
of (27.0)p, while adjusted basic earnings per share decreased from 21.6p to
12.1p, representing a decrease of 44%, which reflects the drop in adjusted
profit before tax. The weighted average number of ordinary shares in issue for
basic and adjusted basic earnings decreased from 371.3m to 369.5m, principally
due to the proportionate impact of the ordinary shares repurchased through the
share repurchase programme that ended during FY24.
A final dividend for the financial year ended 30 September 2025 of 4.6 pence
per share has been proposed, equivalent to £17.0m, while an interim dividend
of 2.45 pence per share, equivalent to £9.1m, was paid during the financial
period. A final dividend for the year ended 30 September 2024 of 10.0 pence
per share, equivalent to £36.9m, was paid in this financial period.
The proposed total dividend for the year of 7.05 pence per share represents a
43% decrease on the total dividend relative to the prior financial period of
12.45 pence per share, aligning shareholder returns with sustainable earnings
and supporting the Company's transition to a technology-led, AI-driven growth
strategy.
Balance sheet
The Group's balance sheet remained strong, with net assets at 30 September
2025 of £763.2m (FY24: £899.6m). The main drivers of the decrease was the
one-off impairment of goodwill of £88.0m and the routine amortisation and
depreciation of certain fixed assets. Current assets at 30 September 2025 of
£245.8m have decreased by £32.5m on the prior year. This includes a decrease
in trade and other receivables of £6.9m and a reduction in cash and cash
equivalent balances of £28.9m reflecting the focus on working capital and
cash repatriation, partially offset by a reclassification of the Chalfont
property to an asset held for sale £3.5m.
Current liabilities have increased to £164.1m at 30 September 2025 (FY24:
£158.4m), an increase of £5.7m. Non-current liabilities have decreased by
£34.9m, as a result of a net decrease in the RCF loan balance of £16.4m and
a reduction in deferred tax liabilities of £16.3m.
The carrying amount of the Company's net assets exceeded the Group's market
capitalisation and as a result, management performed an impairment test of the
Company's major investments in line with the requirements of FRS101.
Management concluded that an impairment was required and the RWS Holdings
plc's separate financial statements includes an impairment charge of £279.5m
Cash flow and working capital
Operational free cash flow was £80.1m (FY24: £55.1m) reflecting working
capital improvement and tighter cash discipline. Working capital improvement
has been driven by enhanced receivables collections and payables optimisation.
There has been a marked improvement in the ageing of account receivables in
the year. Cash conversion improved to 126% of adjusted net income (FY24: 51%).
Capital expenditure included purchases of intangible assets of £22.2m and
property plant and equipment of £3.4m.
Cash flows from other financing activities included dividends paid within the
financial year ended 30 September 2025 of £45.9m.
Following a focus on repatriation of cash in the year, cash balances at the
financial year-end amounted to £32.6m, with external borrowings of £58.0m,
excluding lease liabilities, resulting in a net debt position of £25.4m
(FY24: £61.5m cash and external borrowings of £74.4m, resulting in net debt
of £12.9m). Net debt including lease liabilities was £47.9m (FY24: net debt
of £40.1m).
Post balance sheet events
In early October the Group successfully refinanced its Revolving Credit
Facility increasing the facility to $285m and extending the maturity to
October 2029. The refinancing strengthens the Group's liquidity position and
provides continued flexibility to support its strategic objectives. Related to
this, the Group transitioned its principal banking relationship to HSBC. This
change does not impact the Group's financial position at 30 September 2025 but
is disclosed as a significant development in the Group's treasury operations.
No other significant events have occurred between the balance sheet date and
the date of authorising these financial statements.
Candida Davies | Chief Financial Officer
10 December 2025
Consolidated statement of comprehensive income
for the year ended 30 September 2025
Note 2025 2024
£m
£m
Revenue 3 690.1 718.2
Cost of sales (390.8) (381.7)
Gross profit 299.3 336.5
Administrative expenses (393.1) (270.7)
Operating (loss)/profit (93.8) 65.8
Analysed as:
Adjusted operating profit: 66.1 112.3
Amortisation of acquired intangibles 10 (40.3) (40.8)
Impairment of goodwill and intangible assets 9,10 (88.0) (11.7)
Impairment of property, plant and equipment - (10.5)
Acquisition costs 5 (5.1) (7.2)
Share-based payment expense (4.3) (2.9)
Profit on disposal of business - 30.0
Exceptional items 5 (22.2) (3.4)
Operating (loss)/profit (93.8) 65.8
Finance income 0.8 0.9
Amortisation of capitalised exceptional finance costs (0.2) (0.2)
Finance costs (6.5) (6.5)
(Loss)/profit before tax (99.7) 60.0
Taxation 6 (0.1) (12.5)
(Loss)/profit for the year attributable to the owners of the Parent (99.8) 47.5
Other comprehensive income/(expense)
Items that may be reclassified to profit or loss:
(Loss)/gain on retranslation of quasi equity loans (net of tax) (2.3) 1.7
Gain/(loss) on retranslation of foreign operations 7.8 (64.1)
Gain on hedging (net of deferred tax) - 0.4
Total other comprehensive income/(expense) 5.5 (62.0)
Total comprehensive expense attributable to owners of the Parent (94.3) (14.5)
Basic earnings per ordinary share (pence per share) 8 (27.0) 12.8
Diluted earnings per ordinary share (pence per share) 8 (27.0) 12.8
Consolidated statement of financial position
for the year ended 30 September 2025
Note 2025 2024
£m £m
Non-current assets
Goodwill 9 485.9 570.8
Intangible assets 10 276.7 317.0
Property, plant and equipment 9.0 13.5
Right-of-use assets 19.7 22.7
Non-current income tax receivable 2.1 2.2
Deferred tax assets 6 1.7 2.0
795.1 928.2
Current assets
Trade and other receivables 204.3 211.2
Assets held for sale 3.5 -
Income tax receivable 5.4 5.6
Cash and cash equivalents 12 32.6 61.5
245.8 278.3
Total assets 1,040.9 1,206.5
Current liabilities
Trade and other payables 137.6 127.7
Lease liabilities 5.6 8.5
Income tax payable 10.6 14.3
Provisions 10.3 7.9
164.1 158.4
Non-current liabilities
Loans 11 58.0 74.4
Lease liabilities 16.9 18.7
Trade and other payables 0.1 0.4
Provisions 1.4 1.5
Deferred tax liabilities 6 37.2 53.5
113.6 148.5
Total liabilities 277.7 306.9
Total net assets 763.2 899.6
Capital and reserves attributable to owners of the Parent
Share capital 3.7 3.7
Share premium 56.0 54.5
Share-based payment reserve 9.3 8.1
Reverse acquisition reserve (8.5) (8.5)
Other reserve 0.1 0.1
Merger reserve 624.4 624.4
Foreign currency reserve (26.3) (31.8)
Retained earnings 104.5 249.1
Total equity 763.2 899.6
Consolidated statement of changes in equity
for the year ended 30 September 2025
Note Share Share Other Total
capital
reserves
attributable
£m premium
(see below) £m Retained earnings
to owners
account £m
of Parent
£m
£m
At 30 September 2023 3.8 54.5 651.4 277.6 987.3
Profit for the year - - - 47.5 47.5
Gain on hedging - - 0.4 - 0.4
Gain on retranslation of quasi equity loans - - 1.7 - 1.7
Loss on retranslation of foreign operations - - (64.1) - (64.1)
Total comprehensive income/(expense) for the year - - (62.0) 47.5 (14.5)
Deferred tax on unexercised share options 6 - - - (0.1) (0.1)
Dividends 7 - - - (45.5) (45.5)
Purchase of own shares (0.1) - 0.1 (30.4) (30.4)
Equity-settled share-based payments charge - - 2.9 - 2.9
Deferred tax on share-based payments - - (0.1) - (0.1)
At 30 September 2024 3.7 54.5 592.3 249.1 899.6
Loss for the year - - - (99.8) (99.8)
Loss on retranslation of quasi equity loans - - (2.3) - (2.3)
Gain on retranslation of foreign operations - - 7.8 - 7.8
Total comprehensive income/(expense) for the year - - 5.5 (99.8) (94.3)
Issue of shares - 1.5 - - 1.5
Dividends 7 - - - (45.9) (45.9)
Exercise of share options - - (2.6) 1.1 (1.5)
Equity-settled share-based payments charge - - 3.8 - 3.8
At 30 September 2025 3.7 56.0 599.0 104.5 763.2
Other reserves Share-based payment reserve £m Other reserve Reverse acquisition reserve £m Merger reserve Foreign currency reserve Hedge reserve Total other reserves
£m
£m
£m
£m
£m
At 30 September 2023 5.3 - (8.5) 624.4 33.7 (3.5) 651.4
Other comprehensive (expense)/income for the year - - - - (62.4) 0.4 (62.0)
Fair value (losses)/gains on net investment hedge taken to currency reserve - - - - (3.1) 3.1 -
Equity-settled share-based payments charge 2.9 - - - - 2.9
Purchase of own shares - 0.1 - - - - 0.1
Deferred tax on share-based payments (0.1) - - - - - (0.1)
At 30 September 2024 8.1 0.1 (8.5) 624.4 (31.8) - 592.3
Other comprehensive income for the year - - - - 5.5 - 5.5
Exercise of share options (2.6) - - - - - (2.6)
Equity-settled share-based payments charge 3.8 - - - - - 3.8
At 30 September 2025 9.3 0.1 (8.5) 624.4 (26.3) - 599.0
Consolidated statement of cash flow
for the year ended 30 September 2025
Note 2025 2024
£m £m
Cash flows from operating activities
(Loss)/profit before tax (99.7) 60.0
Adjustments for:
Depreciation of property, plant and equipment 4.6 6.3
Amortisation of intangible assets 10 63.6 54.8
Impairment of goodwill and intangible assets 9,10 88.0 11.7
Impairment of property, plant and equipment - 10.5
Depreciation of right-of-use assets 6.8 8.2
Equity settled share-based payment expense 3.8 2.9
Profit on disposal of business - (30.0)
Lease modification (0.4) (1.6)
Net finance costs 5.9 5.8
Operating cash flow before movements in working capital 72.6 128.6
Decrease/(increase) in trade and other receivables 1.7 (6.8)
Increase/(decrease) in trade and other payables and provisions 11.8 (26.3)
Cash generated from operations 86.1 95.5
Income tax paid (17.3) (20.2)
Net cash inflow from operating activities 68.8 75.3
Cash flows from investing activities
Interest received 0.8 0.9
Disposal proceeds 5 5.0 25.0
Acquisition of subsidiary, net of cash acquired - (0.5)
Purchases of property, plant and equipment (3.4) (2.6)
Purchases of intangibles 10 (22.2) (40.5)
Net cash outflows from investing activities (19.8) (17.7)
Cash flows from financing activities
Net (repayment)/proceeds from borrowings (17.2) 22.9
Interest paid (5.0) (4.6)
Lease liability payments (including interest charged of £1.1m (2024: £1.1m)) (8.6) (9.5)
Purchase of own shares - (30.4)
Dividends paid 7 (45.9) (45.5)
Net cash outflow from financing activities (76.7) (67.1)
Net decrease in cash and cash equivalents (27.7) (9.5)
Cash and cash equivalents at beginning of the year 61.5 76.2
Exchange losses on cash and cash equivalents (1.2) (5.2)
Cash and cash equivalents at end of the year 12 32.6 61.5
Notes to the consolidated financial statements.
1. Accounting policies
Basis of accounting and preparation of financial statements
The financial information is extracted from the Group's consolidated financial
statements for the year ended 30 September 2025, which were approved by the
Board of Directors on 10 December 2025.
RWS Holdings plc ("the Parent Company") is a public company, limited by
shares, incorporated and domiciled in England and Wales whose shares are
publicly traded on AIM, the London Stock Exchange regulated market.
The financial information set out in this announcement does not constitute the
Company's statutory accounts for the year ended 30 September 2025. Statutory
accounts for 2024 have been delivered to the registrar of companies, and those
for 2025 will be delivered in due course. The auditor has reported on those
accounts; their reports were (i) unqualified, (ii) did not include a reference
to any matters to which the auditor drew attention by way of emphasis without
qualifying their report and (iii) did not contain a statement under section
498 (2) or (3) of the Companies Act 2006.
The principal accounting policies adopted in the preparation of the
consolidated financial statements are set out below and within the Notes to
which they relate to provide context to users of the financial statements. The
policies have been consistently applied to both years presented, unless
otherwise stated.
The potential climate change-related risks and opportunities to which the
Group is exposed, as identified by Management, are disclosed in the Group's
Annual Report and Accounts. Management has assessed the potential financial
impacts relating to the identified risks and exercised judgement in concluding
that there are no further material financial impacts of the Group's
climate-related risks and opportunities on the financial statements. These
judgements will be kept under review by Management as the future impacts of
climate change depend on environmental, regulatory and other factors outside
of the Group's control which are not all currently known.
Going concern
The financial statements have been prepared on a going concern basis, as
outlined in the Directors' report. The Directors have conducted an assessment
of the Group's ability to continue as a going concern for a period of at least
twelve months from the date of approval of the accounts.
In making this assessment, the Directors considered the Group's current
financial position, as well as forecasted earnings and cash flows for the
18-month period ending 31 March 2027. The business plan supporting this
evaluation is based on the Board-approved budget.
The Directors' assessment also considered the Group's existing debt levels,
committed funding, liquidity position under its debt covenants, and its
ongoing ability to generate cash through trading activities. As of 30
September 2025, the Group had net debt of £47.9m (2024: £40.1m), which
includes the Group's US$220m revolving credit facility ("RCF") of which
£59.0m was drawn at year-end (2024: £76.0m), lease liabilities of £22.5m
(2024: £27.2m), offset by cash and cash equivalents of £32.6m (2024:
£61.5m). The RCF matures in October 2029, after an Amend and Extend of the
existing facility was completed in October 2025. At year-end, the Group's net
leverage ratio, as defined by the RCF agreement, was 0.5 EBITDA (2024: 0.3),
while the interest coverage ratio was 19 EBITDA (2024: 24), both of which are
well within the limits set by the Group's RCF agreement.
In view of the Group's principal risks and uncertainties, the Directors have
applied appropriate sensitivities in their going concern assessment. They
modelled a range of downside scenarios, including a 20% reduction in the
Group's gross margin percentage and corresponding cash flows. No significant
structural changes to the Group were assumed in these scenarios, and no
mitigating actions were assumed.
In each downside scenario, the Group maintained headroom with respect to both
covenants and liquidity through to 31 March 2027. It is noted that EBITDA
would need to fall by over 56% to breach the net leverage covenant test and by
over 54% to breach the interest coverage test, based on the net debt and
interest projection at the end of the forecast period. As a result, the
Directors are confident that the Group and Company will have sufficient cash
reserves and committed debt facilities to withstand reasonably plausible
downside scenarios and continue to meet their liabilities as they fall due
during the period ending 31 March 2027 and therefore prepared the financial
statements on a going concern basis.
2. Critical judgements and accounting estimates in applying the Group's
accounting policies
The preparation of financial statements in accordance with generally accepted
accounting principles requires Management to make certain judgments,
estimates, and assumptions that affect the reported amounts of assets,
liabilities, income, and expenses. These judgments and estimates are evaluated
on a regular basis and reflect Management's best estimates, drawing from
historical experience and other relevant factors, including reasonable
expectations of future events. Revisions to estimates are recognised
prospectively. However, actual results may differ from these estimates due to
unforeseen events or actions, and such differences could be material.
Judgements
In the process of applying the Group's accounting policies, Management has
made the following judgements, which have the most significant effect on the
amounts recognised in the consolidated financial statements:
Revenue - multi-element arrangements
Due to the complexity of multi-element contracts which often include the
provision of products and services, Management judgment is required to
determine the appropriate revenue recognition. Management assesses whether the
contract should be accounted for as a single performance obligation or as
multiple performance obligations.
Judgment is applied in establishing the criteria for determining when revenue
related to multiple elements should be recognised and in determining the
stand-alone selling price of each element. The Group typically determines the
stand-alone selling prices of elements based on prices that are not directly
observable, relying on stand-alone list prices which are then subject to
discounts. These prices are reviewed annually and adjusted as necessary. This
process is undertaken alongside a fair value assessment of the stand-alone
selling prices to ensure the reasonableness of the transaction price
allocation. Further details regarding the determination of stand-alone selling
prices for the purpose of allocating the transaction price in multi-element
arrangements can be found in Note 3.
The judgement could materially affect the timing and quantum of revenue and
profit recognised in each period. Licence revenue in the year amounted to
£63.7m (2024: £60.0m).
Capitalised development costs
The Group capitalises development costs relating to product development in
line with International Accounting Standard ('IAS') 38 'Intangible Assets'.
Management applies judgement in determining if the costs meet the criteria and
are therefore eligible for capitalisation. Significant judgements include the
technical feasibility of the development, recoverability of the costs
incurred, economic viability of the product, and potential market available
considering its current and future customers and when, in the development
process, these milestones have been met. Where software products are already
in use, Management applies judgement in determining whether further
development spend increases the economic benefit and whether any previously
capitalised costs should be expensed. Development costs capitalised during the
year amounted to £9.7m (2024: £11.2m) (see Note 10).
Estimates and assumptions
The key assumptions and estimates concerning the future and other key sources
of estimation uncertainty at the reporting date, that have significant risk of
causing a material adjustment to the carrying amount of the assets and
liabilities within the next financial year are discussed below:
Acquisition accounting
Judgement is often required in determining the identifiable intangible assets
acquired as part of a business combination that must be recognised in the
Group's consolidated financial statements. Estimation is required in
determining both the fair value of all identified assets, liabilities
acquired, any contingent consideration and in particular intangible assets. In
determining these fair values, a range of assumptions are used, including
forecast revenue, discount rates, and attrition rates that are specifically
related to the intangible asset being valued. The useful economic lives of
these assets is being estimated using Management's best estimates and
reassessed annually.
Other estimates and assumptions
The consolidated financial statements include other estimates and assumptions.
Whilst Management do not consider these to be significant accounting
estimates, the recognition and measurement of certain material assets and
liabilities are based on assumptions which, if changed, could result in
adjustments to the carrying amounts of assets and liabilities.
Revenue - rendering of services
Management estimates the total costs to be incurred on a contract-by-contract
basis, and these estimates are reviewed on an ongoing basis to ensure that the
revenue recognised accurately reflects the proportion of work completed as of
the balance sheet date. All contracts are of a short-term nature, with the
majority of services being invoiced upon completion. As at the year end, the
value of work in progress amounted to £58.3m (2024: £56.0m). Changes in the
estimated total costs of contracts could, in aggregate, have a material impact
on the carrying amount of accrued income at the balance sheet date.
Impairment of goodwill and intangible assets
An impairment test of goodwill and other intangible assets, requires
estimation of the value in use ('VIU') of the cash generating units ('CGUs')
to which goodwill and other intangible assets have been allocated. The VIU
calculation requires the Group to estimate the future cash flows expected to
arise from the CGUs, for which the Group considers revenue growth rates and
EBITDA margin to be significant estimates. The estimated future cash flows
derived are discounted to their present value using a pre-tax discount rate
that reflects estimates of market risk premium, asset betas, the time value of
money and the risks specific to the CGU. See Note 9 and 10 for further
details.
Key assumptions used by Management in estimating VIU are
Discount rates - Pre tax discount rates which are based on the Weighted
Average Cost of Capital (WACC) of a typical market participant and reflect
market volatility in risk free rate and equity risk premium inputs. The
discount rates have increased reflecting market volatility in risk free rate
and equity risk premium inputs. See Note 9 for details.
Forecast cash flows - based on assumptions from the approved budget and 5-year
plan which incorporate Management's best estimates of future cash flows and
take into account future growth and price increases, have proved to be
reliable guides in the past and the Directors believe the estimates are
appropriate. See Note 9 for details of long term growth rates used outside
of the plan period.
Terminal growth rates - 2.0% (2024: 2.0%) was used for cash flows outside the
plan projections. This rate is conservative and is considered to be lower than
the long-term historic growth rates in the underlying territories in which the
CGUs operate and the long-term growth rate prospects of the sectors in which
the CGUs operate.
Taxation - uncertain tax positions
Uncertainties exist in respect of interpretation of complex tax regulations,
including transfer pricing, and the amount and timing of future taxable
income. Given the nature of the Group's operating model, the wide range of
international transactions and the long-term nature and complexity of
contractual agreements, differences arising between the actual results and
assumptions made, or future changes to assumptions, could necessitate future
adjustments to taxation already recorded. The Group considers all tax
positions on a separate basis, with any amounts determined by the most
appropriate of either the expected value or most likely amount on a case by
case basis.
Most deferred tax assets are recognised because they can offset the future
taxable income from existing taxable differences (primarily on acquired
intangibles) relating to the same jurisdiction or entity. Where there are
insufficient taxable differences, deferred tax assets are recognised in
respect of losses and other deductible differences where current forecasts
indicate profits will arise in future periods against which they can be
deducted. The total value of uncertain tax positions ('UTPs') was £4.7m
(2024: £6.4m), see Note 6.
3. Revenue from contracts with customers
Accounting policy
Revenue represents transaction prices to which the Group expects to be
entitled in return for delivering goods or services to its customers. The
Group applies the five-step model in IFRS 15 Revenue from Contracts with
Customers ("IFRS 15"). Prescriptive guidance in IFRS 15 is followed to deal
with specific scenarios requiring Management judgement. The approach taken to
evaluate revenue recognition is consistent across all divisions, although each
contract is considered on a case-by-case basis.
Group contracts have single or multi-elements performance obligations.
Multi-element arrangements revenue is allocated to each performance obligation
based on stand-alone selling price, regardless of any separate prices stated
within the contract. Some contracts include performance obligations in respect
of the licences, support and maintenance, hosting services and professional
services. Software licences are either perpetual, term or software as a
service (SaaS) in nature.
Contract revenue is billed in advance and revenue is deferred where the
performance obligation is satisfied over time. The Group's revenue contracts
do not include any material future vendor commitments and thus no allowances
for future costs are made.
The Group applies IFRS 15 when accounting for contract modifications and
variable consideration. A contract modification is a change in the scope or
price (or both) of a contract that is approved by the parties. When a
modification occurs, the Group assesses whether it should be treated as a
separate contract or as part of the existing contract. This depends on whether
the additional goods or services are distinct and whether the price reflects
their standalone selling price. If not accounted for as a separate contract,
the transaction price and progress toward completion are updated on a
cumulative catch-up basis.
Variable consideration, such as discounts or rebates, is estimated at contract
inception and updated as circumstances change. The Group includes variable
consideration in the transaction price only to the extent that it is highly
probable that a significant reversal of revenue will not occur when the
uncertainty is resolved.
The following provides information about the nature and timing of the
satisfaction of performance obligations in contracts and the related revenue
recognition policies, categorised by reporting segments:
1) Language and Content Technology
Identification of performance obligations
The Group's Language and Content Technology contracts typically include
multi-elements performance obligations in respect of licences, support and
maintenance, hosting services and professional services. Identification of the
performance obligations in such arrangements involves judgement, more details
of the nature and impact of the judgement are included in Note 2.
The Group provides professional services to customers including training,
implementation and installation services alongside certain contracts for
software licences. These services are sold in units of consultant time and are
therefore measured on an output method basis.
Determining transaction prices
At the inception of a contract, a transaction price is agreed, being the
amount the Group expects to be entitled over the expected duration of the
contract. Such expected amounts are only included to the extent that it is
highly probable no revenue reversal will occur.
Allocation of transaction prices to performance obligations
The service contracts typically consist of multiple components and typically
have more than one obligation, each with its own contract duration as adjudged
by management. Management applies judgement to allocate the consideration
specified in the contract with the customer to each performance obligation
based on the stand-alone selling price. See below for details.
Revenue recognition
The Group's contracts for term licences are recognised upfront when
performance obligations are delivered in the same manner as a perpetual
licence sale but, typically, are billed annually and do not follow the same
billing pattern as the Group's contracts for perpetual licences, instead
billing follows more closely that of a SaaS licence contract.
The Group's perpetual and term licences are accounted for at a point in time
when the customer obtains control of the licence, occurring either where the
goods are shipped or, more commonly, when electronic delivery has taken place
and there is no significant future vendor obligation.
Perpetual and term software licences have significant standalone functionality
and the Group has determined that none of the criteria that would indicate the
licence is a right to access apply. In addition, the Group has identified no
other performance obligations under their contracts for these licences which
would require the Group to undertake significant additional activities which
affects the software. The Group therefore believes the obligation is right to
use the licence as it presently exists and therefore applies the point in time
pattern of transfer. Transaction price is allocated to licences using the
residual method based upon other components of the contract. The residual
method is used because the prices of licences are highly variable and there is
no discernible standalone selling price from past transactions.
'SaaS' licences have material ongoing performance obligations associated with
them. The Group has identified that this creates a right to access the
intellectual property, instead of a right to use. Accordingly, the associated
licence revenue is recognised over time, straight line for the duration of the
contract. As with other licences, the Group utilises the residual method to
allocate transaction price to these performance obligations.
Support and maintenance contracts have obligation to provide additional
services to the Group's licence customers over the period of support included
in the contract. The Group measures the obligation by reference to the
standalone selling price, based upon internal list prices subject to discount.
The pattern of transfer is deemed to be over time on the basis that this is a
continuing obligation over the period of support undertaken and accordingly,
recognised as revenue on a straight line basis over the course of the
contract.
Hosting services contract revenue is recognised over time for the duration of
the agreement. Transaction price from the contract is allocated to hosting
services obligations based upon a cost plus method.
Professional services are sold in units of consultant time and are therefore
measured on an output method basis. Revenue is therefore recognised on these
engagements based on the units of time delivered to the end customer.
Transaction price is allocated based upon the standalone selling price,
calculated by reference to the internal list prices for consultant time
subject to any discounts. A small number of the Group's professional services
contracts are on a fixed price contract and the output method is used based on
an appraisal of applicable milestones.
2) IP Services
Identification of performance obligations
The Group's Patent Filing Contracts have one performance obligation, which is
to deliver patent filing and translation services.
Determining transaction prices
The transaction price is based on the value of services rendered.
Allocation of transaction prices to performance obligations
Transaction price is assigned to a single performance obligation.
Revenue recognition
Revenue is recognised at a point in time for patent filing services and over
time for language translation services.
3) Language Services
Identification of performance obligations
The contracts provide for the Group to be reimbursed for translation services.
Determining transaction prices
The transaction price is the consideration specified in the contract.
Allocation of transaction prices to performance obligations
Each contract has a single performance obligation and so the whole contract
price is assigned to that single obligation.
Revenue recognition
The Group recognises revenue over time and measures the completeness of this
performance obligation using input method (cost incurred to date as a
proportion of total costs).
4) Regulated Industries
Identification of performance obligations
Regulated Industries services contracts provide for the Group to be reimbursed
for specialist translation services provided.
Determining transaction prices
The transaction price is as stipulated in the contract.
Allocation of transaction prices to performance obligations
Contract price is allocated to the sole performance obligation in the
contract.
Revenue recognition
The Group recognises revenue over time and measures the completeness of this
performance obligation using input methods. The relevant input method is the
cost incurred to date as a proportion of total costs, in determining the
progress.
Revenue from contracts with customers
The Group generates all revenue from contracts with its customers for the
provision of translation and localisation, intellectual property support
solutions and the provision of software. Revenue from providing these services
during the year is recognised both at a point in time and over time as shown
in the table below:
Timing of revenue recognition for contracts with customers 2025 2024
£m £m
At a point in time 16.5 22.4
Over time 121.9 119.9
Language and Content Technology 138.4 142.3
At a point in time 30.6 30.7
Over time 65.9 71.6
IP Services 96.5 102.3
Over time 326.7 327.1
Language Services 326.7 327.1
Over time 128.5 146.5
Regulated Industries 128.5 146.5
Total revenue from contracts with customers 690.1 718.2
See Note 4 for information on revenue disaggregation by geographical
location.
Capitalised contract costs
Capitalised contract costs primarily relate to sales commission costs
capitalised under IFRS 15 and are amortised over the length of the contract.
The Group has taken advantage of the practical expedient to recognise, as an
expense, any costs which would be recognised in fewer than 12 months from
being incurred. This primarily relates to the Group's language services
commissions and point in time technology revenue related commissions. The
value of capitalised contract costs at year-end was £1.5m (2024 £1.5m).
Capitalised contract costs are recognised within other debtors on the
statement of financial position.
Receivables, contract assets and contract liabilities with customers 2025 2024
£m £m
Net trade receivables 124.6 125.9
Net contract assets (accrued income) 58.3 56.0
Contract liabilities (deferred income) (47.3) (41.6)
Contract assets are recognised where performance obligations are satisfied
over time until the point at which the Group's right to consideration is
unconditional when these are classified as trade receivables which is
generally the point of final invoicing.
For performance obligations satisfied over time, judgement is required in
determining whether a right to consideration is unconditional. In such
situations, a receivable is recognised for the transaction price of the
non-cancellable portion of the contract when the Group starts satisfying the
performance obligation. The Group recognises revenue for partially satisfied
performance obligations as 'Accrued Income'.
The total value of the transaction price allocated to unsatisfied or partially
unsatisfied performance obligations at the year-end is £58.3m (2024:
£56.0m). Support and maintenance is a stand ready obligation discharged
straight line over the duration of the Group's software contracts, the period
over which this is recognised can be identified based on the value of current
and non-current deferred income. Unsatisfied performance obligations in
respect of language and professional services are all short-term and expected
to be recognised in less than one year.
The Group offsets any contract liabilities with any contract assets that may
arise within the same customer contract, typically, this only applies to the
Group's licence and support and maintenance revenue contracts. In all material
respects there are no significant changes in the Group's contract asset or
liability balances other than business-as-usual movements during the year.
Revenue recognised in the year that was included in deferred revenue at 1
October 2024 was £41.2m (2024: £47.6m).
4. Segment Information
The chief operating decision maker for the Group is identified as the Group's
Board of Directors collectively. The Board reviews the Group's internal
reporting in order to assess performance and allocates resources. The Board
divides the Group into four reportable segments and assesses the performance
of each segment based on the revenue and adjusted profit before tax.
The four reporting segments, which match the operating segments, are explained
in more detail below:
• Language and Content Technology ("L&CT"): Revenue is generated
through the provision of a range of translation technologies and content
platforms to clients. This was enhanced by the acquisition of Propylon
Holdings Ltd in July 2023.
• IP Services: The Group's IP Services segment provides high quality
patent translations, filing services and a broad range of intellectual
property ("IP") search services.
• Language Services: The revenues are derived by providing localisation
services which include translation and adaptation of content across a variety
of media and materials to ensure brand consistency.
• Regulated Industries: Revenue is generated through the translation and
linguistic validation for customers who operate in regulated industries such
as life sciences.
Unallocated costs reflect corporate overheads and other expenses not directly
attributed to segments.
Segment results for the year ended L&CT IP Services Language Services Regulated Industries Group
30 September 2025
£m
£m £m £m Unallocated costs £m
£m
Revenue from contracts with customers 138.4 96.5 326.7 128.5 - 690.1
Adjusted operating profit/(loss) before charging: 25.8 19.4 23.4 9.3 (11.8) 66.1
Amortisation of acquired intangibles (15.0) - (13.6) (11.7) - (40.3)
Impairment losses - - (65.4) (22.6) - (88.0)
Acquisition costs - - - - (5.1) (5.1)
Exceptional items (see Note 5) 0.8 (3.7) (11.9) (5.5) (1.9) (22.2)
Share-based payment expense (0.5) (0.4) (1.3) (0.3) (1.8) (4.3)
Operating profit/(loss) from operations 11.1 15.3 (68.8) (30.8) (20.6) (93.8)
Net finance expense (5.9)
Loss before taxation (99.7)
Taxation (0.1)
Loss for the year (99.8)
Segment results for the year ended L&CT IP Services Language Services Regulated Industries Group
30 September 2024
£m
£m £m £m Unallocated costs £m
£m
Revenue from contracts with customers 142.3 102.3 327.1 146.5 - 718.2
Adjusted operating profit/(loss) before charging: 34.2 26.9 39.6 19.8 (8.2) 112.3
Amortisation of acquired intangibles (14.9) - (14.0) (11.9) - (40.8)
Impairment losses - (22.2) - - - (22.2)
Acquisition costs - - - - (7.2) (7.2)
Profit on disposal of business - 30.0 - - - 30.0
Exceptional items (see Note 5) (0.3) (0.9) 1.0 (1.6) (1.6) (3.4)
Share-based payment expense (0.5) (0.5) (1.2) (0.4) (0.3) (2.9)
Operating profit/(loss) from operations 18.5 33.3 25.4 5.9 (17.3) 65.8
Net finance expense (5.8)
Profit before taxation 60.0
Taxation (12.5)
Profit for the year 47.5
The table below shows revenue by the geographic market in which clients are
located.
Revenue by client location 2024
2025 £m
£m
UK 61.6 75.4
Continental Europe 164.3 171.0
United States of America 382.7 382.8
Rest of the World 81.5 89.0
Total 690.1 718.2
The Group does not place reliance on any specific customer and had no
individual customers that generated more than 10% or more of its total Group
revenue.
The following is an analysis of revenue by the geographical area in which the
Group's undertakings are located.
Revenue by subsidiary location 2024
2025 £m
£m
UK 167.1 184.8
Continental Europe 152.5 146.7
United States of America 296.3 315.3
Rest of the World 74.2 71.4
Total 690.1 718.2
The table below presents the Group's operating assets by geographical
location. Goodwill and acquired intangible assets are excluded, as they
support all four divisions across all countries where the Group operates (see
Note 9 and 10 for further details on goodwill and intangible assets).
Operating assets by geography 2024
2025 £m
£m
UK 163.8 209.8
Continental Europe 63.1 64.3
United States of America 125.8 115.3
Rest of the World 42.6 47.9
Total 395.3 437.3
Goodwill 485.9 570.8
Acquired intangible assets 159.7 198.4
Current liabilities (164.1) (158.4)
Non-current liabilities (113.6) (148.5)
Net assets 763.2 899.6
5. Exceptional items
Accounting policy
Exceptional items are those items that in Management's judgement should be
disclosed separately by virtue of their size, nature or incidence, in order to
provide a better understanding of the underlying results* of the Group. In
determining whether an event or transaction is exceptional, Management
considers qualitative factors such as frequency or predictability of
occurrence. Examples of exceptional items include the costs of integration,
severance and restructuring costs which Management do not believe reflect the
business's trading performance and therefore are adjusted to present
consistency between periods.
2025 2025 2025 2024 2024 2024
Pre-tax Tax impact Total Pre-tax Tax impact Total
£m £m £m £m £m £m
Group transformation programme (0.3) 0.1 (0.2) (1.4) 0.3 (1.1)
Strategic project costs (1.7) 0.4 (1.3) - - -
Restructuring & integration related costs (20.2) 5.2 (15.0) (2.2) 0.6 (1.6)
Legacy payment arrangements - - - 1.7 - 1.7
Total exceptional items - operating (22.2) 5.7 (16.5) (1.9) 0.9 (1.0)
Amortisation of exceptional finance (0.2) 0.1 (0.1) (0.2) - (0.2)
Disposal costs - - - (1.3) - (1.3)
Total exceptional items - excluding profit on disposal of business (22.4) 5.8 (16.6) (3.4) 0.9 (2.5)
Profit on disposal of business - - - 30.0 - 30.0
Total exceptional items (22.4) 5.8 (16.6) 26.6 0.9 27.5
*Underlying results are performance measures that exclude one-off charges or
non-recurring events, offering a clearer reflection of the core financial
performance without the influence of unusual or extraordinary items.
A description of the principal items included is provided below:
Transformation costs - £0.2m was incurred in relation to the implementation
of a Group EPM system, £0.1m was incurred in relation to other Group
transformation projects. A total of £0.3m of these costs were paid during the
period.
Strategic projects - £1.4m was incurred in relation to corporate development
including the purchase of the intellectual property of Papercup and £0.3m was
incurred in relation to the Group's rebranding. A total of £1.6m of these
costs were paid during the period.
Restructuring costs - £18.8m was incurred in respect of severance and
termination payments (and related costs) related to the Group's cost reduction
plans. A total of £12.5m of these costs were paid during the period. £13.0m
expected to be charged and paid in 2026 along with £5.8m currently provided
for. The project will conclude in FY26.
Integration costs - £0.7m was incurred in relation to corporate restructuring
and £0.7m was incurred in relation to the two office properties the Group has
vacated and currently holds for sale. A total of £1.4m of these costs were
paid during the period.
Legacy payments - No cost was recognised in the period in respect of ongoing
liabilities related to historic agreements with former owners of the business
and their respective families. Payments of £1.7m were paid during the period.
Finance costs - £0.2m was incurred related to amortisation expense associated
with a gain on debt modification recognised in previous accounting periods.
In the prior period, operating exceptional items included £1.4m of Group
transformation costs, £1.4m of restructuring related costs, £0.8m of
integration related costs and a £1.7m credit for legacy payment arrangements.
In total £1.9m was charged during the prior period.
Acquisition-related costs
Acquisition-related costs totalled £5.1m (2024: £7.2m) and include a £0.3m
(2024: £0.3m) contingent payment linked to continued employment as part of
the ST Communications acquisition, contingent consideration of £4.7m (2024:
£5.6m) in relation to the acquisition of Propylon and £0.1m of other
acquisition related expenses. In the prior year costs totalling £1.2m were
charged in relation to the acquisition of Fonto. All contingent
consideration expenses relate to acquisitions from prior years and these
amounts are accounted for in compliance with IFRS 3 Business Combinations and
IAS 19 Employee Benefits.
6. Taxation
Accounting policy
The charge for current taxation is based on the results for the year as
adjusted for items which are non-assessable or disallowed. It is calculated
using tax rates that have been enacted or substantively enacted by the balance
sheet date. Current tax assets and liabilities are offset when the relevant
tax authority permits net settlement and the group intends to settle on a net
basis.
Deferred tax is recognised in respect of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes where this differs.
Deferred tax is not recognised for temporary differences related to
investments in subsidiaries and associates where the Group is able to control
the timing of the reversal of the temporary difference and it is probable that
this will not reverse in the foreseeable future; on the initial recognition of
non-deductible goodwill; and on the initial recognition of an asset or
liability in a transaction that is not a business combination and that, at the
time of the transaction, does not affect the accounting or taxable profit.
Deferred tax is measured on an undiscounted basis, and at the tax rates that
have been enacted or substantively enacted by the reporting date that are
expected to apply in the periods in which the asset or liability is settled.
Deferred tax assets are recognised to the extent that it is probable that
future taxable profits will be available against which they can be used and
are reviewed at each reporting date.
Deferred tax assets and liabilities are offset when they relate to income
taxes levied by the same taxation authority, when the Group intends to settle
its current tax assets and liabilities on a net basis and that authority
permits the Group to make a single net payment.
Current and deferred tax is recognised in the income statement except when it
relates to items credited or charged directly to other comprehensive income or
equity, in which case the current or deferred tax is also recognised within
other comprehensive income or equity respectively (for example share-based
payments).
Uncertain tax positions
The Group operates in numerous tax jurisdictions around the world. At any
given time, the Group is involved in disputes and tax audits and will also
have a number of tax returns potentially subject to audit. These tax audits
may give rise to significant tax issues that take several years to resolve. In
estimating the probability and amount of any tax charge, Management takes into
account the views of internal and external advisers and updates the amount of
tax provision whenever necessary. The ultimate tax liability may differ from
the amount provided depending on interpretations of tax law, settlement
negotiations or changes in legislation. As referenced in Note 2, the Group
considers all tax positions separately and uses either the most likely or
expected value method of calculation on a case by case basis.
VAT
Revenues, expenses and assets are recognised net of the amount of VAT except
where the VAT incurred on a purchase of goods and services is not recoverable
from the taxation authority, in which case the VAT is recognised as part of
the cost of acquisition of the asset or as part of the expense item as
applicable; and trade receivables and payables are stated with the amount of
VAT included. The net amount of VAT recoverable from, or payable to, the
taxation authority is included as part of receivables or payables in the
balance sheet.
Taxation recognised in income and equity is as follows: 2025 2024
£m £m
Current tax charge
UK corporation tax at 25% (2024: 25%) - 1.9
Overseas current tax charge 17.6 17.4
Adjustment in respect of previous years (1.4) (4.0)
Deferred tax charge
Origination and reversal of temporary differences (17.2) (7.5)
Rate change impact 0.2 1.3
Adjustment in respect of previous years 0.9 3.4
Total tax expense in profit or loss 0.1 12.5
Total tax charge in equity - 0.1
Total tax in other comprehensive income (0.8) (0.2)
Total tax charge for the year (0.7) 12.4
Reconciliation of the Group's tax charge to the UK statutory rate: 2025 2024
£m £m
(Loss)/profit before taxation (99.7) 60.0
Tax (credit)/charge at corporation tax rate of 25% (2024: 25%) (24.9) 15.0
Effects of:
Expenses not deductible for tax purposes 2.1 2.7
Income treated as non taxable - (7.5)
Impact of impairment losses 22.0 1.9
Adjustments in respect of previous years (0.5) (0.6)
Changes in recognition of deferred tax 1.2 -
Rate change 0.2 1.3
Impact of overseas tax rates - (0.3)
Tax charge as per the income statement 0.1 12.5
Effective tax rate (0.1)% 20.8%
Factors that may affect future tax charges
The Group's taxation strategy is aligned to its business strategy and
operational needs. The Directors are responsible for tax strategy supported by
a global team of tax professionals and advisers. RWS strives for an open and
transparent relationship with all tax authorities and are vigilant in ensuring
that the Group complies with current tax legislation. The Group's effective
tax rate for the year is distorted due to the loss before tax, as well as the
impact of non deductible acquisition costs and withholding tax suffered of
intragroup dividends. The Group's tax rate is also sensitive to the geographic
mix of profits and reflects a combination of higher rates in certain
jurisdictions, such as Germany and Japan, and a lower rate in Czechia with
other rates that lie in between.
The adjustments in respect of prior periods includes a release of historic
uncertain tax positions, offset by new risks identified and provided for
during the period.
Transfer pricing
Tax liabilities are recognised when it is considered probable that there will
be a future outflow of funds to a tax authority. The methodology used to
estimate liabilities is set out in Note 2. In common with other multinational
companies and given the Group has operations in 31 countries, transfer pricing
arrangements are in place covering transactions that occur between Group
entities.
The Group periodically reviews its historic UTPs for transfer pricing and
whilst it is not possible to predict the outcome of any pending tax authority
investigations, adequate provisions are considered to be included in the Group
accounts to cover any expected estimated future settlement. In carrying out
this review, and subsequent quantification, Management has made judgements,
taking into account: the status of any unresolved matters, strength of
technical argument and clarity of legislation, external advice, statute of
limitations and any expected recoverable amounts under the Mutual Agreement
Procedure ('MAP'). During the period the Group reduced the provision for
liabilities that are expected to no longer be sought by tax authorities on the
basis that the relevant statute of limitations has expired.
The current tax liability of £10.6m on the balance sheet comprises £5.2m of
UTPs, although it is not expected that these will be cash settled within 12
months of the year-end date. The deferred tax liability of £37.2m is net of
deferred tax assets and liabilities arising on UTPs of £0.5m.
Pillar Two
On 20 June 2023 the UK enacted Pillar Two legislation which imposes a global
minimum tax rate of 15%. The Group is within the Pillar Two rules for the
period ended 30 September 2025.
The Group has adopted the amendments to IAS 12 which was amended in response
to the OECD's BEPS Pillar Two rules, which includes a mandatory temporary
exception to the recognition and disclosure of deferred taxes arising from the
jurisdictional implementation of the Pillar Two model rules. RWS has applied
the mandatory exception and is not recognising any deferred tax impact.
The Group has sought to assess whether any Pillar Two top up taxes apply in
the periods based on its current jurisdictional profits and losses, which
concluded that the Republic of Ireland is the only jurisdiction where top up
taxes would apply. A provision of £0.2m has therefore been included in the
tax provisions for top up taxes payable in Ireland.
Deferred tax Share-based payments Accelerated capital Other Acquired Tax losses
allowances
temporary differences
intangibles
£m
£m Total
£m £m £m
£m
At 30 September 2023 0.5 (1.9) 10.0 (69.1) 4.0 (56.5)
Adjustments in respect of prior years - (0.6) (0.5) 0.6 (2.9) (3.4)
Acquisitions - - - (0.2) - (0.2)
Credited to income 0.5 0.7 (0.9) 7.3 (0.1) 7.5
Transfers to current taxes - - (0.1) (1.2) - (1.3)
Charged to equity / OCI (0.1) - - - - (0.1)
Foreign exchange differences - - (0.5) 3.1 (0.1) 2.5
At 30 September 2024 0.9 (1.8) 8.0 (59.5) 0.9 (51.5)
Adjustments in respect of prior years 0.1 (3.6) 1.0 0.7 0.9 (0.9)
Credited to income - 0.4 4.3 8.2 4.3 17.2
Rate change - - - (0.2) - (0.2)
Foreign exchange differences - (0.1) 0.2 (0.2) - (0.1)
At 30 September 2025 1.0 (5.1) 13.5 (51.0) 6.1 (35.5)
Deferred tax assets and liabilities are presented on the balance sheet after
jurisdictional netting as follows:
2025 2024
£m £m
Deferred tax assets 1.7 2.0
Deferred tax liabilities (37.2) (53.5)
Net deferred tax liability (35.5) (51.5)
Deferred tax assets and liabilities
Deferred tax is calculated using tax rates that are expected to apply in the
period when the liability has been settled or the asset realised based on tax
rates that have been enacted or substantively enacted at the reporting date.
Most deferred tax assets are recognised because they can offset the future
taxable income from existing taxable differences (primarily on acquired
intangibles) relating to same jurisdiction or entity. Where there are
insufficient taxable differences, deferred tax assets are recognised in
respect of losses and other deductible differences where current forecasts
indicate profits will arise in future periods against which they can be
deducted.
Losses
At the balance sheet date the Group has unused tax losses of £115.7m (2024:
£95.7m) available for offset against future profits. A deferred tax asset of
£6.1m (2024: £0.9m) has been recognised in respect of £24.4m (2024: £4.5m)
of such losses. The increase in recognised losses is due to current year
losses generated that are expected to unwind in future periods on reversal of
recognised deferred tax liabilities and future expected profits. Recognised
losses have also been impacted by the unwind of deductions arising on
corresponding adjustments that could be claimed on settlement of uncertain tax
positions, as well as a classification of available deductions as a reduction
to the current tax liability, as accounted for under International Financial
Reporting Interpretations Committee 23 ('IFRIC 23').
No deferred tax asset has been recognised in respect of the remaining £91.3m
(2024: £91.2m) as these can only be used to offset limited types of profits
and as it is not considered probable that there will be the required type of
future trading or non-trading profits available in the correct entities
necessary to permit offset and recognition.
The unrecognised deferred tax asset on losses is £21.1m (2024: £21.2m).
Recognised deferred tax assets principally relate to UK and US activities.
The Group has recognised deferred tax assets on losses in the US which have a
20 year expiry date and expects to use these losses in this period. The
earliest date these losses expire is 31 December 2033 and at the year-end
losses amounted to £1.7m (2024: £2.7m).
Unremitted earnings
Dividends received from subsidiaries are largely exempt from UK tax but may be
subject to dividend withholding taxes levied by the overseas tax jurisdictions
in which the subsidiaries operate. The gross temporary differences of those
subsidiaries affected by such potential taxes is £67.8m.
The Group has recognised a deferred tax liability of £0.8m (2024: £0.9m) in
respect of expected tax liabilities on remittance of these undistributed
earnings to the parent entity. The amount has been determined based on the
Group's current intention to remit a portion of these earnings in the
foreseeable future.
Since the Group is able to control the timing of reversal of these temporary
differences, deferred tax liabilities of £3.1m have not been recognised where
no distributions are expected to be paid in the foreseeable future.
7. Dividends to shareholders
Accounting policy
Dividends payable to the Parent Company's shareholders are recognised as a
liability in the Group's financial statements in the period in which dividends
are approved by the Parent Company's shareholders.
2025 2024
£m £m
Final ordinary dividend for the year ended 30 September 2024 was 10.0p (2023: 36.9 36.4
9.8p)
Interim ordinary dividend, paid 18 July 2025 was 2.45p (2024: 2.45p paid 12 9.0 9.1
June 2024)
45.9 45.5
The Directors recommend a final dividend in respect of the financial year
ended 30 September 2025 of 4.6 pence per ordinary share, to be paid on 20
February 2026 to shareholders who are on the register at 16 January 2026. This
dividend is not reflected in these financial statements as it does not
represent a liability at 30 September 2025. The final proposed dividend will
reduce shareholders' funds by an estimated £17.0m.
8. Earnings per share
Accounting policy
Basic earnings per share
Basic earnings per share is calculated using the Group's profit after tax and
the weighted average number of ordinary shares in issue during the year.
Diluted earnings per share
Diluted earnings per share is calculated by adjusting the basic earnings per
share for the effects of share options and awards granted to employees. These
are included in the calculation when their effects are dilutive.
Adjusted earnings per share
Adjusted earnings per share is a trend measure, which presents the long-term
profitability of the Group, excluding the impact of specific transactions that
Management considers affects the Group's short-term profitability. The Group
presents this measure to assist investors in their understanding of trends.
Adjusted earnings is the numerator used for this measure. Adjusted earnings
and adjusted earnings per share are therefore stated before amortisation of
acquired intangibles, impairment of other assets, acquisition costs,
share-based payment expenses and exceptional items, net of any associated tax
effects.
The reconciliation between the basic and adjusted earnings per share is as
follows:
2025 2024 2025 2024 2025 2024
£m £m Basic earnings Basic earnings Diluted earnings Diluted earnings
per share per share per share per share
pence pence pence pence
(Loss)/profit for the year (99.8) 47.5 (27.0) 12.8 (27.0) 12.8
Adjustments:
Amortisation of acquired intangibles 40.3 40.8
Impairment losses 88.0 22.2
Acquisition costs 5.1 7.2
Share-based payments expense 4.3 2.9
Capitalised finance costs 0.2 0.2
Exceptional items 22.2 (26.6)
Tax effect of adjustments (15.6) (14.1)
Adjusted earnings 44.7 80.1 12.1 21.6 12.1 21.6
2024
2025 Number
Number
Weighted average number of ordinary shares in issue for basic earnings 369,463,383 371,315,586
Dilutive impact of share options 559,084 490,640
Weighted average number of ordinary shares for diluted earnings 370,022,467 371,806,226
9. Goodwill
Cost and net book value 2025 2024
£m £m
At 1 October 570.8 608.6
Additions - 0.3
Impairment (88.0) -
Exchange adjustments 3.1 (38.1)
At 30 September 485.9 570.8
Accounting policy
Goodwill arising on business combinations (representing the excess of fair
value of the consideration given over the fair value of the separable net
assets acquired) is capitalised, and its subsequent measurement is based on
annual impairment reviews, with any impairment losses recognised immediately
in profit or loss in the statement of comprehensive income. Direct costs of
acquisition are recognised immediately in profit or loss in the statement of
comprehensive income as an expense.
At least annually, or when otherwise required, the Directors review the
carrying amounts of the Group's property, plant and equipment and intangible
assets to determine whether there is any indication of an impairment loss. If
any such indication exists, the recoverable amount of the asset is estimated
in order to determine the extent of any impairment loss. A full impairment
review is performed annually for goodwill regardless of whether an indicator
of impairment exists.
The recoverable amount is the higher of fair value less costs of disposal and
value in use. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money as well as risks
specific to the asset or CGU for which the estimates of future cash flows have
not been adjusted.
If the recoverable amount of an asset or CGU is estimated to be less than its
carrying amount, the carrying amount of the asset or CGU is reduced to its
recoverable amount. An impairment loss is recognised as an expense immediately
in profit or loss in the consolidated statement of comprehensive income.
Where an impairment loss subsequently reverses, the carrying amount of the
asset is increased to the revised estimate of its recoverable amount, but not
beyond the carrying amount that would have been determined had no impairment
loss been recognised for the asset in prior years. A reversal of an impairment
loss is recognised immediately as income in the Consolidated Statement of
Comprehensive Income, although impairment losses relating to goodwill may not
be reversed.
Where it is not possible to estimate the recoverable amount of an individual
asset, the impairment test is carried out on the smallest group of assets to
which it belongs for which there are separately identifiable cash flows; its
CGU. Goodwill is allocated on initial recognition to each of the Group's CGUs
that are expected to benefit from the synergies of the combination giving rise
to the goodwill. Goodwill is allocated at the lowest level monitored by
Management, and no higher than an operating segment.
Key assumptions for the value in use Long-term Discount rate Average Average
- 30 September 2025
growth rate
revenue growth
EBITDA margin
IP Services 2.0% 14.4% 10.2% 26.8%
Regulated Industries 2.0% 14.4% 2.9% 16.3%
Language Services 2.0% 14.3% 2.4% 11.6%
Language and Content Technology 2.0% 16.6% 5.0% 33.3%
Key assumptions for the value in use Long-term Discount rate Average Average
- 30 September 2024
growth rate
revenue growth
EBITDA margin
IP Services 2.0% 13.0% 4.6% 23.2%
Regulated Industries 2.0% 13.3% 2.0% 19.0%
Language Services 2.0% 13.3% 3.4% 17.5%
Language and Content Technology 2.0% 14.5% 6.7% 31.4%
The Group has four CGUs, which match the four segments detailed in note 4, and
in accordance with IAS 36, Management performed a value in use impairment test
at 30 September 2025. The key assumptions for the value-in-use calculations
are those regarding discount rates and revenue growth rates. All of these
assumptions have been reviewed during the year. Management estimates discount
rates using pre-tax rates that reflect current market assessments of the time
value of money and the risk specific to each CGU. This has resulted in a range
of discount rates being used within the value in use calculations.
Determination of key assumptions
The long-term growth rate is the rate applied to determine the terminal value
on year five cash flows. This rate is determined by the long-term compound
annual growth rate in adjusted operating profit as estimated by Management
with reference to external benchmarks.
The discount rate is the pre-tax discount rate calculated by Management based
on a series of inputs starting with a risk-free rate based on the return on
long-term, zero-coupon government bonds. The risk-free rate is adjusted with a
beta to reflect sensitivities to market changes, before consideration of other
factors such as a size premium.
Revenue growth is the average annual increase in revenue over the five-year
projection period. The revenue growth rate is determined by Management based
on the most recently prepared budget for the future period and adjusted for
longer term developments within operating segments where such developments are
known and possible to reliably forecast.
The trading projections for the five-year period underpinning the value-in-use
reflect assumptions for EBITDA margins. The EBITDA margin is based on a number
of elements of the operating model over the longer-term, including pricing
trends, volume growth and the mix of complexity of translation activity and
assumptions regarding cost inflation.
As part of the value-in-use calculation, Management prepares cash flow
forecasts derived from the most recent financial budgets and 5-year plan as
approved by the Board of Directors.
The Group has conducted sensitivity analyses on the value in use/recoverable
amount of each of the CGUs. Based on the result of the value in use
calculations undertaken, the Directors conclude that the allocation of
goodwill to each of the CGUs is as shown in the table below:
The allocation of goodwill to each CGU is as follows: 2024
2025 £m
£m
IP Services 30.7 30.8
Regulated Industries 110.7 133.1
Language Services 142.9 208.1
Language and Content Technology 201.6 198.8
At 30 September 485.9 570.8
Goodwill assessment
The value-in-use calculations performed confirm that the recoverable goodwill
amount for IP Services and Language and Content Technology CGUs exceed their
asset carrying value. The calculation for the Regulated Industries and
Language Services CGUs gave a value-in-use result of £164.6m and £282.4m
respectively. This was below their asset carrying values and resulted in an
impairment loss of £22.6m for Regulated Industries and £65.4m for Language
Services being recognised.
This impairment loss has been recognised within administrative expenses in the
Consolidated statement of comprehensive income in the period. The impairment
has arisen primarily due to the market transition experienced this year on the
core localisation business, including the underperformance in the Linguistic
Validation business, the shift in investments and focus to support the new
transition to a technology first proposition, and the rise in discount rates
due to macroeconomic factors. Whilst the Group expects long-term growth from
the technology first strategy, the accounting standard (IAS 36) for impairment
assessments does not allow forecasts to be used where assumptions cannot be
evidenced or have not yet been fully implemented (e.g. cost savings). As a
result, whilst the Group is focused on committing to delivering its new growth
strategy, the evidence to demonstrate this future growth as at the balance
sheet date is not yet available. Consequently, the full extent of potential
longer-term gains are not reflected in the impairment modelling.
Sensitivity analysis
Additionally, the Group has considered other to the assumptions underpinning
the valuations that would need to occur and which would cause an impairment or
change to the existing calculations as follows:
For the Language and Content Technology CGU, the recoverable amount is
£332.7m which exceeds the carrying amount by £36.6m based on current
assumptions. A reasonably possible change of a decrease in projected revenue
growth rates by 373bps would result in an impairment of approximately £13m.
Projected revenue growth would need to reduce by 273bps in order for the
unit's recoverable amount to be equal to its carrying amount. A reasonably
possible change of a decrease in projected EBITDA margin by 418bps would
result in an impairment of approximately £12m. Projected EBITDA margin would
need to reduce by 318bps in order for the unit's recoverable amount to be
equal to its carrying amount. No impairment is currently recognised, but these
changes illustrate the sensitivity of the valuation to key assumptions.
For the Regulated Industries CGU, the recoverable amount is £164.6m which is
below the carrying amount by £22.6m based on current assumptions. A decrease
in projected revenue growth rates by 100bps would increase the impairment by
approximately £7m. A decrease in projected EBITDA margin by 100bps would
increase the impairment by approximately £11m. Adjusting the discount rate to
the top of the acceptable range, an increase of 218bps would increase the
impairment by approximately £26m.
For the Language Services CGU, the recoverable amount is £282.4m which is
below the carrying amount by £65.4m based on current assumptions. A decrease
in projected revenue growth rates by 100bps would increase the impairment by
approximately £15m. A decrease in projected EBITDA margin by 100bps would
increase the impairment by approximately £29m. Adjusting the discount rate to
the top of the acceptable range, an increase of 213bps would increase the
impairment by approximately £50m.
10. Intangible assets
Accounting policy
Intangible assets are carried at cost less accumulated amortisation and
impairment losses. Intangible assets acquired from a business combination are
initially recognised at fair value. An intangible asset acquired as part of a
business combination is recognised outside goodwill if the asset is separable
or arises from contractual or other legal rights.
Where computer software is not an integral part of a related item of computer
hardware, the software is classified as an intangible asset. The capitalised
costs of software for internal use include external direct costs of materials
and services consumed in developing or obtaining the software, and directly
attributable payroll and payroll-related costs arising from the assignment of
employees to implementation projects. Capitalisation of these costs ceases
when the software is substantially complete and ready for its intended
internal use.
Intangible assets are amortised using the straight-line method over their
estimated useful lives as follows:
Trade names 5 to 8 years
Clinician database 10 years
Supplier database 13 years
Technology 3 to 7 years
Non-compete clauses 5 years
Trademarks 5 years
Client relationships 7 to 20 years
Acquired computer software licences are capitalised on the basis of the costs
incurred to acquire and bring to use the specific software. These assets are
amortised using the straight-line method over their estimated useful lives
which range from one to five years, these costs are recognised in
administrative expenses within the consolidated statement of comprehensive
income.
Research and development
Research costs are expensed as incurred. Development expenditure is
capitalised when Management is satisfied that the expenditure being incurred
meets the recognition criteria from IAS 38. Specifically, this is at the point
which Management believe they can demonstrate:
• The technical feasibility of completing the asset
• The intention to complete the asset for use or sale
• The ability to use or sell the asset
• The future benefits expected to be realised from the sale or use of the
asset
• The availability of sufficient resources to enable completion of the
asset
• Reliable measurement for the costs incurred during the course of
development
Where these criteria are not met the expenditure is expensed to the income
statement.
Following the initial capitalisation of the development expenditure the cost
model is applied, requiring the asset to be carried at cost less any
accumulated amortisation and impairment losses. Any expenditure capitalised is
amortised over the period of expected future economic benefit from the related
project. For capitalised development costs this period is 3 to 7 years.
The carrying value of development costs is reviewed for impairment annually
when the asset is not yet in use or more frequently when an indicator of
impairment arises during the reporting period indicating that the carrying
value may not be recoverable.
Development costs that are subject to amortisation are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable.
Trade Clinician Technology Non-compete & trademarks Client Internally Total
names & supplier £m £m relationships Software generated £m
software
£m databases & order books £m
£m
£m £m
Cost
At 30 September 2023 1.1 7.0 158.5 2.3 351.6 15.2 36.1 571.8
Additions - - 11.2 - - 0.1 29.2 40.5
Transfers - - - - - (11.2) 11.2 -
Disposals - - - - - - (4.0) (4.0)
Currency translation (0.1) (0.6) (1.3) (0.2) (25.0) (0.7) 1.4 (26.5)
At 30 September 2024 1.0 6.4 168.4 2.1 326.6 3.4 73.9 581.8
Additions - - 9.7 - - 0.1 12.4 22.2
Disposals - - - - - (1.2) (3.3) (4.5)
Currency translation - - 0.1 - 0.6 0.2 1.2 2.1
At 30 September 2025 1.0 6.4 178.2 2.1 327.2 2.5 84.2 601.6
Accumulated amortisation and impairment
At 30 September 2023 0.1 4.9 62.8 2.3 126.2 10.6 5.5 212.4
Amortisation charge 0.2 0.6 22.6 - 25.8 0.3 5.3 54.8
Impairment - - - - - - 11.7 11.7
Disposals - - - - - - (4.0) (4.0)
Transfers - - - - - (7.4) 7.4 -
Currency translation - (0.4) (0.6) (0.2) (10.3) (0.5) 1.9 (10.1)
At 30 September 2024 0.3 5.1 84.8 2.1 141.7 3.0 27.8 264.8
Amortisation charge 0.2 0.6 27.9 - 25.2 0.2 9.5 63.6
Disposals - - - - - (1.2) (3.3) (4.5)
Currency translation - - 0.1 - (0.2) 0.1 1.0 1.0
At 30 September 2025 0.5 5.7 112.8 2.1 166.7 2.1 35.0 324.9
Net book value
At 30 September 2023 1.0 2.1 95.7 - 225.4 4.6 30.6 359.4
At 30 September 2024 0.7 1.3 83.6 - 184.9 0.4 46.1 317.0
At 30 September 2025 0.5 0.7 65.4 - 160.5 0.4 49.2 276.7
Amortisation of acquired intangibles was £40.3m (2024: £40.8m) and
amortisation of other intangibles was £23.3m (2024: £14.0m). The £23.3m
amortisation of other intangibles includes £9.5m on internally developed
intangibles (2024: £5.3m) and £13.8m (2024: £8.4m) of technology which
related to the SDL business. The Group has identified intangible assets which
are individually material as follows:
• SDL technology products acquired of £25.7m (2024: £38.0m) with a
remaining useful life of 2 years
• SDL's Helix platform of £5.7m (2024: £7.9m) with a remaining useful
life of 2 years
• SDL's customer relationships of £74.9m (2024: £86.8m) with a remaining
useful life of 6 years
• Moravia's customer relationships of £66.5m (2024: £72.3m) with a
remaining useful life of 12 years
• Life Science's customer relationships of £3.1m (2024: £5.3m) with a
remaining useful life of 2 years
• Dynamics 365 finance systems of £16.4m with a remaining useful life of
7 years
• Dynamics 365 HR systems of £10.9m with a remaining useful life of 7
years
The Group's Dynamics 365 finance and HR systems are internally generated
software which reached 100% completion during the year and is now being
amortised over their estimated useful lives. No other classes of intangible
assets or assets under construction hold individually material items.
11. Loans
Accounting policy
Loans are recognised initially at fair value, less directly attributable
transaction costs. Subsequent to initial recognition, loans are stated at
amortised cost using the effective interest method. Loans are classified as
current, unless the Group has the discretion to roll over an obligation for a
period of at least 12 months under an existing loan facility.
Directly attributable transaction costs are capitalised into the loans to
which they relate and are amortised using the effective interest rate method.
Borrowings are derecognised from the Consolidated Financial Statements when
the contractual obligation is discharged, cancelled, or expires. Any
difference between the carrying amount of the financial liability extinguished
or transferred to another party and the consideration paid, including any
non-cash assets transferred or liabilities assumed, is recognised in the
Consolidated Income Statement as either Other Income or Finance Expense.
If an existing financial liability is replaced with a new one from the same
lender under substantially different terms, or if the terms of an existing
liability are significantly modified, the transaction is treated as the
derecognition of the original liability and the recognition of a new
liability. The resulting difference in carrying amounts is recorded in the
Consolidated Income Statement.
2025 2024
£m £m
Due in more than one year
Loan 59.0 76.0
Issue costs (1.0) (1.6)
At 30 September 58.0 74.4
Analysis of net debt 30 September 2025 At 1 October Acquired Cash flows Non-cash At 30 September
£m £m £m charges £m
£m
Cash and cash equivalents 61.5 - (27.7) (1.2) 32.6
Issue costs 1.6 - - (0.6) 1.0
Loans (current and non-current) (76.0) - 17.2 (0.2) (59.0)
Net debt excluding lease liabilities ("Net debt") (12.9) - (10.5) (2.0) (25.4)
Lease liabilities (27.2) - 8.6 (3.9) (22.5)
Net debt including lease liabilities (40.1) - (1.9) (5.9) (47.9)
Analysis of net debt 30 September 2024 At 1 October Acquired Cash flows Non-cash At 30 September
£m £m £m charges £m
£m
Cash and cash equivalents 76.2 - (9.5) (5.2) 61.5
Issue costs 2.1 - - (0.5) 1.6
Loans (current and non-current) (54.7) - (22.9) 1.6 (76.0)
Net debt excluding lease liabilities ("Net debt") 23.6 - (32.4) (4.1) (12.9)
Lease liabilities (33.5) - 9.5 (3.2) (27.2)
Net debt including lease liabilities (9.9) - (22.9) (7.3) (40.1)
Non-cash charges against the loan balance represent the effects of foreign
exchange on the financial liability.
On 3 August 2022, the Group entered into an Amendment and Restatement
Agreement ("ARA") with its banking syndicate which amended its existing
US$120m RCF maturing on 10 February 2024, to a US$220m RCF Facility maturing
on 3 August 2026 with an option to extend maturity to 3 August 2027.
Under the terms of the ARA, the Group's interest margin over the Secured
Overnight Financing Rate ("SOFR") or Sterling Overnight Index Average
("SONIA") reference interest rate ranges from 95bps to 195bps and is dependent
on the Group's net leverage. Commitment fees are payable on all committed,
undrawn funds at 35% of the applicable interest margin. The ARA also contains
a US$100m uncommitted accordion facility.
On 3 August 2024, the Group exercised its option to extend the maturity of its
US$220m Revolving Credit Facility by one year, moving the loan's maturity date
from August 3, 2026, to August 6, 2027. The terms of the facility, including
the interest rate, remained unchanged. This extension did not qualify as a
significant loan modification under IFRS 9.
There were no extensions or any other changes made to the Group's ARA during
the year ended 30 September 2025.
All transaction costs incurred in amending and re-stating the RCF were
capitalised and are being amortised over the extended maturity period of the
facility on a straight-line basis. Group borrowings under the RCF are
denominated in US Dollars or Sterling.
12. Cash and cash equivalents
2024
2025 £m
£m
Cash at bank and in hand 25.9 52.4
Short-term deposits 6.7 9.1
32.6 61.5
The fair value of cash and cash equivalents is £32.6m (2024: £61.5m).
Restricted cash at 30 September 2025 was £nil (2024: £nil).
Short-term deposits have an original maturity of three months or less
depending on the immediate cash requirements of the Group, and earn interest
at the respective short-term deposit rates. Management consider short-term
deposits to be subject to an insignificant risk of changes in value.
13. Post balance sheet events
Subsequent to the year end, the Group refinanced its revolving credit
facility, increasing the available commitment from US$220m to US$285m and
extending the maturity to October 2029. This change does not impact the
Group's financial position at 30 September 2025.
There are no other significant post balance sheet events.
Alternative performance measures
RWS uses adjusted results as a key performance indicator, as the Directors
believe that these provide a more consistent measure of the Group's operating
performance. Adjusted profit is therefore stated before charging amortisation
of acquired intangibles, impairments of other assets considered material and
one off in nature, acquisition costs, share-based payment expense and
exceptional items. The table below reconciles the statutory profit before tax
to the adjusted profit before tax.
Reconciliation of statutory profit before tax to adjusted profit before tax: 2025 2024
£m £m
Statutory (loss)/profit before tax (99.7) 60.0
Amortisation of acquired intangibles 40.3 40.8
Impairment losses 88.0 22.2
Acquisition costs 5.1 7.2
Share-based payment expense 4.3 2.9
Profit on sale of PatBase - (30.0)
Exceptional items (Note 5) 22.2 3.4
Exceptional finance costs 0.2 0.2
Adjusted profit before tax 60.4 106.7
Reconciliation of adjusted operating profit to statutory operating profit: 2025 2024
£m £m
Adjusted operating profit 66.1 112.3
Amortisation of acquired intangibles (40.3) (40.8)
Impairment losses (88.0) (22.2)
Acquisition costs (5.1) (7.2)
Share-based payment expense (4.3) (2.9)
Exceptional items (Note 5) (22.2) 26.6
Statutory operating (loss)/ profit (93.8) 65.8
Cash conversion: 2025 2024
£m £m
Adjusted profit before tax 60.4 106.7
Adjusted tax charge (15.7) (26.6)
Adjusted net income 44.7 80.1
Net cash inflow from operating activities 68.8 75.3
Exceptional cash flows 25.7 21.6
Purchase of PPE (3.4) (2.6)
Purchase of intangibles (22.2) (40.5)
Net interest (4.2) (3.7)
Lease liability payments (8.6) (9.5)
Free cash flow 56.1 40.6
Cash conversion 126% 51%
Operational free cash flow: 2025 2024
£m £m
Adjusted EBITDA 100.8 140.7
Change in working capital 13.5 (33.0)
Lease payments (8.6) (9.5)
Capital expenditure (25.6) (43.1)
Operational free cash flow 80.1 55.1
Organic revenue
Organic revenue is calculated by adjusting the prior year's revenues. This
involves adding the revenues from acquisitions during the corresponding
ownership period and subtracting the revenues from disposal during the same
period such that prior year results are prepared on a common basis with the
current year.
2024 2024 2024 2025 2025 Organic revenue 2025
Organic revenue
Organic revenue
Reported revenue Patbase revenue
growth/(loss) Organic
at FY24 rates1
revenue growth/(loss) %
IP Services 102.3 (4.2) 98.1 (1.6) 96.5 (2%)
Regulated Industries 146.5 - 146.5 (18.0) 128.5 (12%)
Language Services 327.1 - 327.1 (0.4) 326.7 0%
Language & Content Technology 142.3 - 142.3 (3.9) 138.4 (3%)
Total 718.2 (4.2) 714.0 (23.9) 690.1 (3%)
1 Excludes PatBase pre-divestment operating results
Organic revenue at constant currency
Organic revenue at constant exchange rates is calculated by adjusting the
prior year's revenues. This involves adding the revenues from acquisitions
during the corresponding ownership period and subtracting the revenues from
disposal during the same period such that prior year results are prepared on a
common basis with the current year, and applying the 2025 foreign exchange
rates to both years.
2024 2024 2024 Organic revenue at constant exchange rates 2025 2025 Organic revenue Organic
Revenue at
Patbase revenue
Revenue growth
constant currency revenue growth
FY25 rates
at FY24 rates1
IP Services 100.6 (4.2) 96.4 0.1 96.5 0%
Regulated Industries 143.0 - 143.0 (14.5) 128.5 (10%)
Language Services 316.7 - 316.7 10.0 326.7 3%
Language & Content Technology 138.6 - 138.6 (0.2) 138.4 0%
Total 698.9 (4.2) 694.7 (4.6) 690.1 (1%)
1 Excludes PatBase pre-divestment operating results
Adjusted operating profit
Adjusted operating profit is calculated by adjusting operating profit for the
impact of exceptional items, amortisation acquired intangibles, impairments of
other assets considered material and one off in nature, and share-based
payments. This is further analysed in Note 4 and labelled as 'Operating
profit/(loss) before charging:'.
Glossary.
Adjusted earnings per share or Adjusted EPS - is stated before charging
amortisation of acquired intangibles, impairments of other assets considered
material and one off in nature, acquisition costs, share-based payment expense
and exceptional items, net of associated tax effects.
Adjusted net income - is calculated as profit for the year adjusted for
amortisation of acquired intangibles, impairments of other assets considered
material and one off in nature, acquisition costs, share-based payment expense
and exceptional items.
Adjusted operating cash flow - is operating cash flow excluding the impact of
acquisition costs and exceptional items.
Adjusted operating profit - is operating profit before charging amortisation
of acquired intangibles, impairments of other assets considered material and
one off in nature, acquisition costs, share-based payment expense and
exceptional items. The Group uses share-based payments as part of remuneration
to align the interests of senior management and employees with shareholders.
These are non-cash charges and the charge is based on the Group's share price
which can change. These costs are therefore added back to assist with the
understanding of the underlying trading performance.
Adjusted profit before tax or Adjusted PBT - is stated before amortisation of
acquired intangibles, impairments of other assets considered material and one
off in nature, acquisition costs, share-based payment expense and exceptional
items.
Amortisation of acquired intangibles - is the value of amortisation recognised
on intangibles that were acquired as part of business combinations, net of the
amortisation on those intangibles charged by the underlying business. This is
reconciled to total amortisation as part of Note 10 in the financial
statements.
Free cash flow - is the net cash inflow from operating activities before
exceptional cash flows, less purchases of fixed assets, net interest paid and
lease liabilities.
Operational free cash flow - Adjusted EBITDA plus change in Working Capital
less lease payments and Capex.
Cash conversion - is the free cash flow before exceptional cash flows, divided
by adjusted net income.
Constant currency - constant currency measures apply consistent rates for
foreign exchange to remove the impact of currency movements in financial
performance.
EBITDA - is defined as the Group's profit before interest, tax, depreciation
and amortisation.
Adjusted EBITDA - is EBITDA before impairment, amortisation and depreciation,
exceptional items and share-based payment expenses.
Net debt - net debt is calculated by taking the Group's cash balance less any
amounts under loans, borrowings and lease liabilities. The Group presents net
debt both including and excluding the impact of lease liabilities as part of
Note 11.
Organic - organic measures include pre-acquisition results of acquired
businesses and exclude revenues from disposals during the same period such
that prior year results are prepared on a common basis with the current year.
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