Appen Limited (ASX:APX) Announces 2024 Financial Results
Financial Performance
Appen Limited reported a decrease in revenue of 14% to $234.3m, reflecting termination of the Google contract. Excluding the impact of Google, a 16% increase in revenue for the year ended 31 December 2024 was noted. The company achieved reduced operating expenses by 26% compared to FY23 and returned to profitability with an underlying EBITDA of $3.5 million, marking a $23.9 million improvement from the previous year.
Revenue Growth
Excluding Google, revenue for Q4 FY24 grew 37% on pcp (from $48.6 million in Q4 FY23). Appen reports that growth continues to be driven by large technology customers in US and China.
Operational Efficiency
Operating expenses were reduced by 37% from H1 FY23 to H2 FY24, with employee expenses decreasing by 41% and other expenses by 28%. Cost reduction initiatives, including establishing a hub in Hyderabad and consolidating business units, were key to achieving these savings.
Market Highlights
Appen saw a 71% revenue growth in its China division, driven by generative AI projects and partnerships with leading LLM model builders.
2025 Outlook
Appen remains optimistic about growth in the LLM market for 2025, despite expected month-to-month revenue variability. The company will continue to focus on cost management and maintaining cash EBITDA positivity.
Motley Fool contributor Matt Burgess has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Appen. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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