The Effect of Currency Exchange on Language Industry Growth


Article by Sarah Hickey.

It's earnings season and several publicly traded companies from the Nimdzi 100 — our ranking of the 100 largest language service providers (LSPs) in the world — have released their half-year results for 2022. We at Nimdzi collected, normalized, and analyzed the data in an effort to see how 2022 is advancing for the language industry and to check if our growth projections are panning out.

Half year results for the financial year 2022

(FY) fiscal year, figures for the latest financial half year (verified with financial reports); (c) calculation based on public financial records

The impact of exchange rates: A direct comparison

The majority of the publicly traded companies on our list are reporting growth and profits in their half year reports and messages to the investors — and it’s true. When we look at the financial statements in the companies’ reporting currencies, it looks like 2022 is shaping up to be a good year. Eight out of the ten companies on our list are reporting positive growth and for five of those companies that growth is more than 25 percent. Only one company saw a decrease and one company’s growth stagnated. On average, companies grew by 30.4 percent — an impressive figure.

However, these numbers only tell half the story. When we create the Nimdzi 100 and estimate the size and growth of the market, much like other industries, we use the US dollar as a common denominator. So, when we convert the half-year results in our table from the companies’ reporting currencies to USD, the results look quite different. While the number of companies that grew remains the same, only three companies achieved growth of 25 percent or higher and for two companies revenues declined. In USD, the ten companies on our list had an average growth of 24.9 percent. This is still a solid result. The difference of 5.5 percent between the growth averages comes down to currency fluctuations.

Impact of exchange rates on average growth

Impact-of-exchange-rates-on-average growth

*Growth figures based on the results of the companies listed in the table above

This is particularly noticeable for the businesses based in Japan and the UK but also those reporting in EUR, AUD, and NZD are impacted. This is not surprising considering news of both a strong dollar and weakened world currencies have been making the headlines lately. At the time of writing, in late September 2022, the Japanese Yen reached its lowest level against the US dollar in almost a quarter of a century and the British Pound has fallen to an all-time low against the USD as a response to the government’s announcement of tax cuts.

To illustrate, the average exchange rate for GBP to USD still stood at 1.34 for the period we are reporting on in our analysis, whereas this week, the British Pound has almost reached parity with the US dollar. What this means is that companies that have a significant amount of revenue in USD will see a positive impact on their growth figures in local currency in the second half of the year.


Source: Statista

What the price of a Big Mac tells us about the economy

The impact of the latest currency fluctuations can also be seen in the Big Mac Index, which is based on the theory of purchasing power parity (PPP). The Big Mac Index was first introduced by the Economist in 1986 as a lighthearted way to illustrate whether currencies are at their correct level (versus being over- or undervalued) and the impact currency fluctuations have on the prices the final consumers have to pay. However, it has stuck around and is now known as one of the most cited and reliable sources for comparing global standards.

Below are two examples of the Big Mac Index at different points in time. The first image shows the price of a Big Mac in different countries based on data from January 2020, whereas the second image contains data from January 2022. Taking the US price for a Big Mac as the baseline, the index shows the purchasing power of the different currencies in relation to the USD.

Source: Statista, January 2020

Source: theedgemarkets, January 2022

What stands out right away is that Switzerland was and remains the country in which a Big Mac is the most expensive (over one dollar more than in the US), illustrating the fact that currently, the Swiss Franc is the most powerful currency in the world. In contrast, in both versions of the index, a Big Mac costs more than one dollar less in the UK than in the US, and in Japan, it’s even more than two dollars cheaper.

If we examine the data more closely we can see the development of the exchange rates over time. For instance, in January 2020, the exact price difference between a Big Mac in the US and a Big Mac in the UK was USD 1.26, whereas in January 2022 the difference was only USD 1.07. Looking at the latest Big Mac Index data published by the Economist in July 2022, the difference between a Big Mac in the US and a Big Mac in the UK further decreased to USD 0.7, highlighting the fact that the British Pound continues to depreciate against the US dollar. 

The language industry is growing — but how much exactly?

So what does all of this mean for the language services industry?

When we published the last Nimdzi 100, in March 2022, we estimated that the industry reached USD 60.5 billion in 2021 and should continue to grow at an annual compounded growth rate (CAGR) of 7.0 percent. If we now consider the combined revenues of the companies in our list published for the first half of 2022 and compare those to the combined revenues of the same companies for the same period in 2021, those combined revenues grew by 11.8 percent year over year.

What this tells us is that although currency fluctuations have had an impact on the results of the language services industry in the first half of the year, Nimdzi's growth projection is still on track. We will be monitoring results and the evolving impact of currency exchange and inflation in the language industry, but still expect the net result to be strong growth for the sector as a whole.


This article presents a snapshot of the industry at this point in time, in late September 2022. The data presented are based on the following methodology:

  • We are only considering publicly traded companies from the latest Nimdzi 100, published in March 2022. However, not all of the publicly traded companies from the latest Nimdzi 100 have released their half-year results at this point in time.
  • The rank listed in the table refers to the rank the company obtained in the latest Nimdzi 100, in March 2022. This is not a new ranking.
  • All revenue figures are converted to USD. 
  • We are using the average exchange rate to USD for the specific reporting period of the half-year results listed for each company.
  • To show the impact of currency exchange rates, growth was calculated twice — once in USD and once in the companies’ reporting currencies, which are listed in the table as well.
  • How companies report their figures and when varies greatly. As a matter of transparency, we are listing the end of the half-year period for each company as well as how we arrived at the figures presented in the table. 
  • All figures are based on the companies’ financial records.

This article was prepared by Sarah Hickey, Nimdzi's VP of Research. If you have any questions about interpreting technology, reach out to Sarah at [email protected].

27 September 2022

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