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Shares in Sydney-based global AI annotation and services group Appen (ASX: APX) have soared by 24 per cent this morning after the company revealed to investors it expects revenue for FY25 to sit between $235 million to $260 million – a figure still shy of its previous highs when tech giant Google was its largest client.
The collapse of Appen’s major deal with the US tech giant in early 2024 saw revenue fall by 14.2 per cent to $234.3 million, however non-Google revenue saw a rise of 16 per cent for the full year and 36 per cent year-on-year in the second half.
Appen noted that predictable project work from “large US tech customers”, sustained growth in China, and “less predictable generative AI related work” has left the group optimistic about its FY25 revenue opportunity.
The firm also posted a positive underlying EBITDA of $3.5 million compared to a previous loss of $20.4 million in FY23, returning it to profitability.
Following the announcement, shares soared as high as 24 per cent this morning, reaching $1.53 each.
“We delivered a significantly improved financial result, reset the business operationally, strengthened our customer base beyond Google, and positioned the company to participate further in the generative AI market,” Appen chair Richard Freudenstein said in his address to shareholders.
“There is more to do, but the foundations are now in place.”
The update to investors comes more than a year after the company lost Google as a customer, prompting the firm to shut down two North American offices, including its US headquarters. The news saw the company’s share price plummet, with former CEO Armughan Ahmad jumping ship and being replaced by US-based chief operating officer Ryan Kolln in August 2024.
The Google deal, which was worth US$82.8 million ($126 million), collapsed after the tech giant announced a re-evaluation of its supplier partnerships, including with search quality raters. At the time the contract was terminated, it represented around 30 per cent of Appen’s annual revenue.
Founded in 1996 by linguist Dr Julie Vonwiller and engineer Chris Vonwiller, Appen provides data sets to companies like Alphabet and Meta to train their AI models, and at its peak traded at more than $40 per share in August 2020.
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