Appen (APX) investor relations material

Executive summary

• Revenue for H1 FY25 was $102.1 million, up 2% year-over-year excluding Google, but down 10% including Google due to contract termination in Q1 FY24; 24% of revenue came from generative AI projects.

• China business delivered 67% revenue growth year-over-year, exiting the half with an annualized run rate exceeding $100 million.

• Group remains debt-free with a cash balance of $60.9 million as of June 30, 2025, supporting growth and operational efficiency.

• Operational improvements and cost efficiencies identified, with $10 million in annualized savings, 70% to be realized by Q3 FY25.

• Strategic focus on AI data, technology transformation, and operational efficiency, with no interim dividend declared to prioritize capital allocation.

Financial highlights

• Revenue increased 2% to $102.1 million compared to H1 FY24, excluding Google; including Google, revenue declined 10%.

• New Markets revenue grew 20% to $59.6 million, driven by China’s 67% growth; Global Services revenue fell 33% to $42.4 million.

• Underlying EBITDA before FX was a loss of $2.2 million, a slight improvement from H1 FY24; statutory net loss after tax increased to $19.3 million.

• China contributed $2.9 million underlying EBITDA, a $2.8 million improvement year-over-year.

• Employee expenses down 9% and all other expenses down 11% year-over-year.

Outlook and guidance

• FY25 revenue expected toward the low end of $235–$260 million range, with positive full-year underlying EBITDA reaffirmed.

• Limited visibility on timing for large LLM project resumption; US policy uncertainty impacts short-term government revenue.

• Near-term strategy focuses on LLM growth, operational efficiency, automation, and prudent cost management.