Sheffield tech group ZOO Digital celebrates 28% revenue growth for FY23

Sheffield-based ZOO Digital has achieved its fourth consecutive year of robust growth after the company’s revenue surged by 28%, reaching £70.9 million) up from £55.3 million last financial year and a four fold growth in operating profit to £6.2 million. Sales across its subtitling services business grew 15% while dubbing grew 73%.

Reporting bumper growth in revenue and profits, ZOO Digital, a key player in collaborating with major Hollywood studios and streaming platforms for content localisation and media services, has experienced a recent setback due to short-term disruptions in the market. ZOO Digital said the widespread strike action, the first simultaneous strike of US writers and actors in six decades, was now affecting the pipeline of titles that required its services to make them suitable for global streaming distribution. With speculation the action may last until at least October, Zoo said it was adjusting costs to combat the temporary slowdown.

Stuart Green, CEO of ZOO Digital, said: “Zoo delivered a fourth successive year of double-digit revenue growth and margin improvement in FY23 and we expanded our footprint in strategically important, high-growth regions. We generated strong cashflows and delivered record pre-tax profitability, demonstrating the benefits of the operational leverage in the business.

“The market has evolved rapidly over recent years as global audiences transition from traditional linear programming to streaming platforms. In this context, we view our customers’ strategic reviews and the Hollywood strikes as evidence that the industry is now recognising the structural nature of changes in how modern audiences watch film and television.

“Localisation is one of the most cost-effective ways to bring new content to global audiences, while also providing access to new markets and millions of additional subscribers. This is why we are investing ahead of the curve to expand our footprint in key international territories, most notably APAC which is a high-priority region for all global streaming services.

“While the current disruption is frustrating, the board remains confident that Zoo is fundamentally well positioned to continue our growth once the hiatus concludes. Over the medium and long-term, we expect to emerge stronger and take further market share as customers reduce their pool of vendors to those few with global end-to-end capabilities.”

Some players including the likes of Disney, Warner Bros and reportedly Netflix are looking to make cost savings in bids to refocus on profitability – moves that have impacted current trading, ZOO Digital emphasised its strong financial position, reporting a net cash balance of £18 million as of June 2023. The group anticipates emerging in an even stronger position in a resurgence next year, which is expected to translate into increased market share once former order levels rebound.