Appen (APX) H2 2025 earnings summary

Executive summary

• FY25 revenue reached $230.8 million, up 4.5% year-over-year excluding the impact of a major contract termination, driven by new project wins and Generative AI expansion, especially in China.

• Underlying EBITDA before FX was $12.2 million, up 251% year-over-year, with a full-year margin of 5.3% and Q4 margin of 18.2%.

• Operational efficiencies and technology-led cost savings of $10 million were realized, supporting margin improvements.

• Cash balance at year-end was $59.8 million, reflecting robust cash flow from operations.

• Strong momentum heading into FY26, with a robust balance sheet and strategic focus on high-value AI data projects.

Financial highlights

• Gross margin improved by 100 basis points to 40.3%, driven by a higher mix of Generative AI projects and operational efficiencies.

• Underlying EBITDA before FX grew 251% to $12.2 million, with a full-year margin of 5.3%.

• Appen China revenue surged 75% year-over-year to $102.9 million, with underlying EBITDA up 640% to $10.6 million and a 10.3% margin.

• Appen Global revenue declined 21% year-over-year to $127.9 million, but Q4 saw a 56% sequential revenue increase and 24.6% EBITDA margin.

• Statutory NPAT was a loss of $21.8 million, impacted by non-cash amortisation.

Outlook and guidance

• FY26 revenue guidance is $270–$300 million, with underlying EBITDA before FX margin of 5%–10%.

• Continued focus on high-quality data, customer growth, new data segments, and operational efficiency.

• Strong Q4 momentum and confidence in AI data market growth, especially in LLM-related projects.