Appen (APX) H1 2025 earnings summary

Executive summary

• H1 2025 revenue was $102.1 million, up 2% year-over-year excluding Google, but down 10% including Google due to contract termination; 24% of revenue came from generative AI projects, with China revenue up 67% and annualized run-rate exceeding $100 million.

• Operational improvements and technology transformation drove $10 million in annualized cost efficiencies, with 70% to be realized by Q3 FY 2025 and the remainder by year-end.

• Cash balance at June 30, 2025, was $60.9 million, up $6.1 million from December 2024, reflecting prudent cost management and operational efficiencies.

• The group remains debt-free and declared no interim dividend to prioritize capital allocation.

• The company focuses on human-annotated data for AI, leveraging proprietary platforms and automation to enhance efficiency and quality.

Financial highlights

• New Markets segment revenue grew 20% to $59.6 million, driven by China’s 67% growth; Global Services revenue fell 33% to $42.4 million due to US market volatility and Google contract loss.

• Group underlying EBITDA before FX was a loss of $2.2 million, with China contributing $2.9 million in underlying EBITDA, a $2.8 million improvement year-over-year.

• Statutory net loss after tax was $19.3 million, including a $3.3 million accelerated amortization charge.

• Employee expenses fell 9% and all other expenses dropped 11% compared to H1 FY 2024, reflecting cost-out programs and prudent management.

• Cash flow from operations improved to $12.9 million, and cash from operating activities was $13.2 million, up from $11.4 million in H1 2024.

Outlook and guidance

• FY 2025 revenue is expected toward the low end of the $235 million–$260 million range, with positive full-year underlying EBITDA reaffirmed.

• Limited visibility on timing for resumption of large LLM projects and reduced short-term U.S. government revenue due to policy uncertainty.

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