Appen has announced that its full-year revenue is tracking towards the lower end of its previously issued guidance of $235 million to $260 million. The company attributes this revision to ongoing uncertainty within the United States artificial intelligence market, which continues to negatively affect overall performance. Appen provides data for use in improving artificial intelligence systems. It focuses on providing high-quality, human-annotated datasets that power machine learning and artificial intelligence.
Revenue for the June quarter saw a 6 per cent year-on-year decline, landing at $51.9 million. This decrease occurred despite significant growth in China, where quarterly revenue surged by 77 per cent to reach $23.7 million. The China business also marked its fifth consecutive quarter of underlying EBITDA profitability. Appen has identified $10 million in annualised cost savings outside of China, with approximately 70 per cent of these savings expected to be realised by the end of September.
The group’s underlying EBITDA remained negative at $600,000, unchanged from the March quarter and down from the slight profit recorded in the previous year. Appen has stated that ongoing investment in technical talent will partially offset the cost savings achieved.
Appen noted limited visibility regarding the timing of new large language model projects and a weaker outlook for short-term US government work. Despite these challenges, the company remains confident in its long-term prospects and has affirmed that its medium-term revenue targets remain unchanged. As of the end of the quarter, Appen’s cash on hand stood at $60.9 million, and the company remains focused on automation, execution, and profitability outside of its China operations.
