Revenue at Zoo Digital Group has fallen by 55% year-on-year to $40.6m (£31.15m) in what the firm has described an "extremely challenging year".

The Sheffield-based provider of end-to-end cloud-based localisation and media services to the global entertainment industry also recorded a loss of $19.1m (£14.6m) in the year to 31 March, having recorded a profit of $8.1m (£6.22m) a year previously.

The firm, which also has locations in Los Angeles and Dubai, said the results were due to the industry-wide disruption from Hollywood writers’ and actors’ strikes in 2023 and the hiatus in media production and orders that followed.

In this time, its media localisation and media services revenues fell by 52% and 63% respectively, as a result of these strikes and the associated lack of new content release.

However, Zoo Digital added that it had strategic progress in India, Turkey and South Korea, while also launching in Spain and Italy.

Chief executive officer at Zoo Digital, Stuart Green, said: "It has been a year of unprecedented challenges for the entire film and television entertainment industry as the Hollywood writers and actors strikes brought new productions to a standstill.

"This has required difficult decisions to conserve cash while positioning the business for the market recovery that is in progress. Customer demand has improved recently as delayed 2023 productions have completed, with Zoo's technology platforms, global reach and trusted reputation positioning us well as the recovery continues.”

In its outlook for the 2025 financial year, Zoo Digital said that it had seen improved trading in the first quarter, with sales increasing by 35% year-on-year, while cost reductions implemented in the previous financial year had led to an EBITDA profit in Q1.

It added that while major customers had not yet provided full order schedules for the third quarter, it expects further revenue growth and an EBITDA profit in H1, and is on track to meet market expectations for the full year.

Green added: "We view the market disruption as a symptom of a sector undergoing structural change away from linear and towards streaming on demand. With this comes a preference for vendors that can deliver multi-platform, multilingual content across international markets.

"As one of the few end-to-end vendors with the scale and skillset required by major media companies, we believe that Zoo's model is strategically aligned with the future direction of film and TV streaming. These structural dynamics of the industry continue to move in Zoo's favour such that the Board remains optimistic for the long-term prosperity of the group."

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