Appen Shares Surge 6% on Strong Q4 Update and AI Growth Momentum

January 30, 2025 12:58 PM AEDT | By Team Kalkine Media

Appen Shares Surge 6% on Strong Q4 Update and AI Growth Momentum — Image source: shutterstock

Revenue and AI Growth Drive Optimism

While overall revenue declined 7% to $66.7 million due to the loss of Google (NASDAQ:GOOG) as a major client, the underlying business showed strong momentum. Excluding Google’s impact, revenue surged 37% year-on-year, rising from $48.6 million in Q4 FY23.

Quarter-on-quarter, Appen recorded a 23.3% revenue increase, fueled by expansion in generative AI and large language model (LLM) projects. This suggests that the company is successfully capitalizing on the rising demand for AI training data, a crucial component for machine learning advancements.

Profitability Improves Amid Cost Controls

Appen’s financials also reflected a clear turnaround in profitability. The company posted an underlying EBITDA of $4.7 million, up from $2.8 million last year, while cash EBITDA improved to $3.2 million—a significant jump from $0.7 million a year ago.

With cost-cutting programs now complete, Appen’s management stated that its focus has firmly shifted toward profitable growth, reinforcing confidence in its long-term financial stability.

CEO’s Vision and Future Growth Areas

Appen CEO Ryan Kolln described the quarter as the culmination of a transformative year for the company.

Kolln also highlighted continued growth in LLM-related projects as a major revenue driver, alongside strong expansion in China and the Enterprise and Government sectors.

Stock Performance and Market Sentiment

Appen’s share price has now risen over 700% in the past 12 months, reflecting growing investor confidence in its strategic pivot toward AI-driven services.

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