Appen Limited (ASX: APX) happens to be a global leader when it comes to the development of high-quality, human annotated datasets with regards to the machine learning (or ML) as well as artificial intelligence (or AI). The company had made an announcement that they have wrapped up the fully underwritten A$285 million institutional placement involving an offer price of A$21.50 per new share.
The placement was undertaken to finance upfront consideration payable by Appen for the acquisition of Figure Eight Technologies, Inc., that was announced earlier. We would now have a look at the management’s viewpoints. As per the top management, the placement got well supported by the present institutional shareholders and also the company managed to welcome a number of new institutional investors.
Also, the company had made an announcement that they have entered into a binding agreement for the acquisition of San Francisco-based Figure Eight Technologies, Inc. Figure Eight happens to be a best in class machine learning software platform which utilizes highly automated annotation tools for the transformation of unstructured text, image, audio, and video data into customized high-quality artificial intelligence training data. The release also stated that Figure Eight substantially increases the quality of revenues of APX and the breadth of Appen Limited’s customer base through high growth, high-gross margin recurring revenue from annual platform subscription fees (SaaS model) earned from its approximately 200 customers. The acquisition is anticipated to get completed in late March / early April 2019.
Appen Limited has earlier released the full year results for the year ended December 2018. The company’s Chief Executive Officer (or CEO) stated that the strong growth was because of accelerating AI (or Artificial Intelligence) market as well as the high and growing demand for quality training data. The growth momentum was because of present and new customers who are developing an increasing array of AI solutions.
The company stated that they are deploying to enhance the proven and highly scalable crowd-sourced delivery model with technology which enables greater crowed productivity, increases the data volumes and quality, and strengthens the competitive position of Appen Limited. The company had a closing cash balance of A$40 million which reflects the rise of $16 million on YoY basis. Appen had stated that they have used cash for the repayment of debt, payment of dividends, funding of capex and Leapforce transaction costs.
With respect to outlook, the company stated that it happens to be uniquely positioned and it continues to execute strongly in a high growth market. The company also added that future deployments necessitate a review of capital management priorities of APX which also includes the dividend policy. As on March 15, 2019, Appen Limited is having the market capitalization amounting to ~$2.52 billion. As per the Australian Securities Exchange (or ASX), the company is having an annual dividend yield of 0.34%. Coming to the stock performance, the APX’s stock has delivered the return of 81.52% in the span of past three months and, in the time frame of previous 6 months, the stock posted return of 66.88%.
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