Appen (APX) Q2 2025 TU earnings summary

Executive summary

• Q2 FY25 revenue reached $51.9 million, down 6% year-over-year but up 3% sequentially from Q1 FY25.

• H1 FY25 revenue excluding Google was $102.1 million, a 2% increase year-over-year.

• China business delivered strong growth, with Q2 revenue of $23.7 million, up 77% year-over-year, and achieved its fifth consecutive quarter of standalone underlying EBITDA profitability.

• The rest of the business faced short-term volatility due to the dynamic US AI market and uncertainty in large LLM project timing.

• Approximately $10 million in annualized cost efficiencies identified, with 70% to be executed by end of Q3 FY25.

Financial highlights

• Q2 FY25 group revenue was $51.9 million, a 6% decrease year-over-year.

• H1 FY25 group revenue was $102.1 million, down 10% year-over-year.

• Gross margin for Q2 FY25 was 36.6%, down 1.0 percentage point year-over-year.

• Underlying EBITDA for Q2 FY25 was -$0.6 million, compared to $0.6 million in Q2 FY24.

• Cash on hand at 30 June 2025 was $60.9 million.

Outlook and guidance

• FY25 revenue is tracking toward the low end of the $235 million to $260 million guidance range.

• Limited visibility on timing for resumption of large LLM projects and US policy uncertainty may impact short-term government revenue.

• Long-term revenue targets remain unchanged.