Straker Limited reveals Nike will not renew its services contract, impacting a notable portion of its revenue and earnings in the upcoming fiscal year.
- Nike contract accounts for 3.3% of Straker's FY25 revenue
- Contract ends December 15, 2025, with no renewal
- Expected FY26 revenue decline of NZ$0.48 million
- Adjusted EBITDA to drop by NZ$0.29 million
- Straker remains focused on AI-powered language technology innovation
Contract Termination and Financial Impact
Straker Limited (ASX: STG), a New Zealand-based leader in AI-driven language technology, has announced that Nike, Inc. will not renew its legacy services agreement beyond its current term, which expires on December 15, 2025. This development marks a significant shift for Straker, as Nike's business represented approximately 3.3% of the company's revenue in the fiscal year 2025.
The cessation of this contract is expected to reduce Straker's revenue by NZ$0.48 million and adjusted EBITDA by NZ$0.29 million in FY26. While these figures are modest relative to Straker's overall operations, the loss of a high-profile client like Nike inevitably raises questions about the company's future revenue streams and client diversification strategies.
Strategic Context and Market Position
Straker has built its reputation on combining advanced AI technology with linguistic expertise to deliver scalable and cost-effective language services globally. The company’s technology stack and AI layer underpin its competitive edge, enabling it to serve a diverse client base. However, the Nike contract's conclusion highlights the challenges of maintaining long-term agreements with major multinational clients in a rapidly evolving market.
Despite this setback, Straker's leadership, including CEO and Co-Founder Grant Straker, remains focused on innovation and expanding its technological capabilities. The company’s commitment to future-proofing global communications suggests it will seek new partnerships and opportunities to offset the revenue impact from Nike’s departure.
Looking Ahead
Investors and market watchers will be keen to see how Straker navigates this transition. The announcement does not detail any immediate replacement contracts or mitigation plans, leaving some uncertainty about the near-term financial outlook. Nonetheless, Straker’s solid foundation in AI-powered language solutions positions it well to adapt and potentially capture new market share.
As the December 2025 contract expiry approaches, the company’s next moves will be critical in shaping its growth trajectory and reassuring stakeholders of its resilience in a competitive landscape.
Bottom Line?
Straker’s challenge now is to turn the loss of Nike into an opportunity for renewed growth and diversification.
Questions in the middle?
- What strategies will Straker deploy to replace the lost Nike revenue?
- Are there other major clients at risk of contract non-renewal?
- How will this impact Straker’s investment in AI technology development?