A technology company, Appen Limited (ASX: APX) is a leading market player in machine learning and artificial intelligence space. The company today held its Annual General Meeting (AGM), at which both the CEO and Chairman addressed the shareholders.
While addressing the shareholders, the company’s Chairman, Mr Chris Vonwiller, highlighted the 2018 financial performance of the company. In 2018, the company’s revenues increased by 119% to $364.3 million, which includes a full-year contribution from Leapforce, which the company acquired in late 2017. During the year, the company’s underlying EBITDA grew from $28.1 million to $71.3 million, representing an increase of 153%. The statutory EBITDA increased 206% to $68.1 million as compared to pcp.
Revenue and Underlying Earnings (Source: Company Reports)
During the year, the company’s underlying EBITDA margin increased from 16.9% to 19.6%, due to scale and technology-led improvements provided by the Leapforce acquisition. At the end of 2018, the company had a strong balance sheet with a cash balance of $40.0 million.
During the year, the company successfully completed the acquisition of Figure Eight, a Silicon Valley best of class machine learning software platform, which uses highly automated annotation tools to transform unstructured text, image, audio and video data into highly customised, high-quality artificial intelligence training data. The platform is offered to a wide range of customers on a subscription basis.
The company now has a presence in China, including software development professionals and operational staff.
The Chairman has advised that the company is ready to participate in the dramatic growth of artificial intelligence and machine learning adoption in China. Appen’s China office is structurally separate from its global business to enable it to react to local market conditions and protect data privacy.
The company has reduced its unit cost base and sharpened its responsiveness to evolving customer requirements. Further, the company has broadened its client base, with new sources of revenue, part of which is SaaS regularly recurring revenue. The company is now focused on the diversity of revenue sources and revenue types. In the case of the capital raise for the recent Figure Eight acquisition, the company provided for a Share Purchase Plan, which was limited to $15 million.
The strategic acquisitions in the last three years have positioned the company to support client needs for high levels of data security and large volumes of data.
Both Leapforce and Figure Eight acquisitions have added key skills and areas of experience. The company’s workforce has now grown to 513 full-time employees, up from 374 at the end of 2017.
Now, let’s have a glance at the company’s stock performance and the returns it has posted over the past few months. The stock is trading at a price of $26.030, down 6.636% during the day’s trade with a market capitalisation of ~$3.37 billion as on 31st May 2019. The counter opened the day at $29.100 and reached the day’s high at $29.700 and touched a day’s low at $25.470, with a daily volume of ~2,246,382. The stock has provided a YTD return of 117.81% and also posted returns of 100.58%, 15.93% and 10.11% over the past six months, three and one-month period, respectively. Its 52-week high and low price stands at $29.700 and $9.600, with an average volume of ~797,324.
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