Appen (APX) H2 2025 earnings summary

Executive summary

• FY 2025 revenue reached $230.8 million, up 4.5% year-over-year excluding Google impact and major contract termination, driven by new project wins and Generative AI expansion, especially in China.

• Underlying EBITDA before FX was $12.2 million, 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, driving margin improvements.

• Strong momentum heading into FY 2026, with a robust balance sheet and strategic focus on high-value AI data projects.

• Cash balance increased to $59.8 million, reflecting robust cash flow from operations.

Financial highlights

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

• Underlying EBITDA grew 251% year-over-year to $12.2 million.

• Cash balance at year-end was $59.8 million, up $5 million from December 2024.

• Cash flow from operations improved by $23.4 million year-over-year, with 178% EBITDA cash conversion.

• Underlying NPAT was a loss of $10.3 million, with statutory NPAT at a loss of $21.8 million, impacted by non-cash amortisation.

Outlook and guidance

• FY 2026 revenue guidance is $270 million–$300 million, with underlying EBITDA before FX margin of 5%–10%.

• Continued focus on data quality, customer growth in hyperscalers and model builders, new data segments, and operational efficiency.

• Strong Q4 momentum and confidence in AI data market growth, with positive signals for LLM-related growth in both segments.