Translation and Interpretation Services

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 2,700 translation and interpretation service providers in the US translate written material, interpret speech from one language to another, and offer sign language services. Specific services include localization (adapting digital content for a specific market), transcription, subtitling, voiceover/dubbing, and language testing or training.

Dependence on a Highly Skilled Workforce

Translation and interpretation agencies and companies rely on highly skilled workers to provide services.

Industry Growth

Globalization and increasing diversity within the US population has boosted demand for translation and interpretation services.

Industry size & Structure

The average translation and interpretation service provider operates out of a single location, employs fewer than 5 workers, and generates $2.4 million annually.

    • The US translation and interpretation services industry consists of 2,700 firms that employ 37,000 workers and generate about $6.5 billion annually.
    • The global language service provider (LSP) industry is estimated to be worth nearly $56 billion, according to the Business Research Company.
    • The industry is concentrated at the top; the top 50 companies account for 68% of industry revenue.
    • Types of companies include multi-national firms, language technology firms, local agencies and freelance interpreters and translators.
    • Large firms include TransPerfect, Lionbridge, and LanguageLine Solutions (Teleperformance).
                              Industry Forecast
                              Translation and Interpretation Services Industry Growth
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              May 24, 2024 - Steady but Flat Industry Growth
                              • The translation services industry is expected to experience slower sales growth in 2024 after an improvement in demand in 2023. The industry’s year-over-year sales growth fell to 0.1% in 2022 before rising to 7.34% in 2023, according to Inforum and the Interindustry Economic Research Fund, Inc. The industry’s sales growth is forecast to moderate to 3.1% in 2024, then rise to 4.6% in 2025 before seeing an average annual rise of about 5.4% through 2028, according to Inforum and the Interindustry Economic Research Fund, Inc.
                              • In mid-May, OpenAI released the latest iteration of its large language model generative AI tool, GPT-4o (with the “o” standing for “omni”). OpenAI touted its latest AI offering as having enhanced capabilities, including more human-like response times in conversations using facial expressions to interpret emotions. OpenAI claims GPT-4o is more multilingual, with “enhanced performance in around 50 languages,” according to TechCrunch. In reaction to OpenAI’s latest debut, some observers on social media suggested GPT-4o wasn’t much of an advancement on Google Translate, while others argued GPT-4o was faster and easier to use, according to Slator.
                              • Merger and acquisition (M&A) activity was a significant driver of revenue growth for language service providers in 2023, according to the 2024 edition of the Language Service Provider Index (LSPI) by language industry news and data firm Slator. The LSPI includes about 250 language service provider (LSP) firms, categorized by size: Super Agencies (revenue of more than $200 million), Leaders (more than $25 million but less than $200 million), Challengers (between $8 and $25 million), and Boutiques (between $1 and $8 million). The combined revenue for all firms in the 2024 LSPI was nearly $9.8 billion, up 5.6% from 2023, but much of the rise was due to industry consolidation rather than organic growth. In terms of both M&A and organic growth, Leaders posted the biggest gain in 2023 with a revenue increase of 9.9%, followed by Challengers (9.3%), Boutiques (2.4%), and Super Agencies (1.8%).
                              • At a language industry event in October 2023, RWS Group CEO Ian El-Mokadem gave a keynote speech titled, “Goodbye Translators, Hello Language Specialists,” according to Slator. El-Mokadem suggested that while humans continue to play a role in the localization of content, that role is changing amid the era of machine and artificial intelligence (AI) translation. To follow up on the comments with industry insiders, Slator surveyed its newsletter readers by asking them if they thought the term “translator” would disappear within five years. In results posted in January, 43% of respondents said “absolutely not,” 25% said it has always been five years away, 16.7% said the term will definitely disappear, and 15.1% it could possibly disappear.
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