AI stock Appen has issued a strong earnings upgrade which saw the shares bounce sharply after the lift to its 2019 forecasts.
In the year to date, the shares have now more than doubled from $12.80 in January to above $25 in November. The lift has been largely thanks to Appen growing its business from existing customers and signs that it is sorting out the troubles in its recent acquisition, Figure Eight.
Appen makes money by crowdsourcing labour for artificial intelligence/machine learning services for tech giants like Google, said full-year earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to be in the range of $96 million to $99 million for the year to the end of December.
Previously the company guided for underlying EBITDA to be around $90 million.
If current forex rates hold, this could add a further $1.5 million to EBITDA this year and take the amount above $100 million.
Appen mainly earns its sales in US dollars and the new guidance is based on an exchange rate of around 74 US cents, whereas the spot rate today is around 68 cents with few signs of rising by very much in the next six weeks.
“Appen’s improved FY2019 earnings forecast is driven by increases in monthly relevance revenues and margins, largely from existing projects with existing customers,” the company said.