The Appen Limited (ASX:APX) share price was trading 7% lower after the market’s open on Tuesday following the release of its 2019 annual report.
For context, the broader Australian share market or S&P/ASX 200 (ASX: XJO) was trading at 6881.6, down 1.39%.
Who is Appen?
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.
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Appen report headlines
| This period | Last period | Change | |
| Revenue | 535.5 | 364.3 | 46.99% |
| Profit | 41.6 | 41.7 | -0.24% |
| Cash flow | 67.3 | 46.8 | 43.8% |
| Dividends (cents) | 5 | 4 | 25% |
Source: Appen Limited announcements; author calculations, AUD millions unless otherwise stated.
As can be seen above, Appen reported a 47% increase in full-year revenue to $536 million. While the company said its organic revenue rose 37% to $498 million, the business it acquired relatively recently, Figure Eight, rebounded to high growth.
In terms of statutory net profit, the company reported $41.6 million. However, its underlying profit was $64.7 million, up 32% over the prior corresponding period. Analysts surveyed by Bloomberg had expected a profit result of around $53 million.
“The Company’s ability to maintain this high level of growth in revenue and translate this into improving margins and earnings growth, while investing heavily in technology, is a testimony to the strength and durability that we’ve built into the business,” Appen CEO Mark Brayan said.
On the cash flow statement, which is an important financial statement since it typically represents the underlying health of the core business, operating cash flow was $67.3 million, up $20.5 million.
“We’re very pleased with this year’s result,” Appen Chairman and co-founder Chris Vonwiller said.
“As we are getting bigger we are getting better, demonstrated by the Company’s ability to simultaneously deliver growth, margin expansion and invest in future-proofing the business through technology, sales and marketing and entry into new markets.”
Appen achieved underlying EBITDA of $101 million in FY19 and expects to report an EBITDA result of between $125 million and $130 million in FY20 (the year ending 31 December 2020).
Appen shares were last seen trading at $22.65, giving the company a market capitalisation more than $2.5 billion.
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