Appen (ASX: APX) has issued an upgrade to its FY19 earnings expectations, will the share price rise in response?
Appen provides data for machine learning and artificial intelligence. Basically, it provides and improves data for the development of artificial intelligence and machine learning products. With more than 20 years of experience in over 130 countries, Appen has firmly established itself as a global leader in this space.
Appen’s FY19 Profit Upgrade
This morning Appen has announced an increase to its 2019 full year earnings guidance.
The technology company is now expecting full year underlying EBITDA (click here to learn what EBITDA means)
for the 12 months to 31 December 2019 to be somewhere in the estimated range of $96 million to $99 million.
In FY18 the company generated underlying EBITDA of $71.3 million, so now the company is predicting that underlying EBITDA will grow by 34.6% to 38.8%.
The company said this forecast translates November and December performance at A$1 equals US$0.74 whereas the exchange rate at current levels would add a further $1 million to $1.5 million to underlying EBITDA.
Previous guidance for underlying EBITDA was previously at the upper end of $85 million to $90 million, so the top end of the guidance has been increased by 10%.
The improved forecast to FY19 earnings was due to an increase in monthly relevance and margins according to the company, mostly from existing projects with existing customers.
Appen said that its high conviction of the Figure Eight acquisition has been reinforced and reconfirmed previous 2019 annual recurring revenue guidance of $30 million to $35 million set in August 2019.
However, Appen warned that its full year earnings are susceptible to upside or downside factors including timing of work from major customers and Australian dollar fluctuations.
The Appen share price has risen by 75% since the start of 2019, however since the all-time high at the end of July the Appen share price has dropped 26%.
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