Slide 1: 2024 full year results
2024 full year results 26 February 2025
Slide 2: Important Information
Important Information The forward-looking statements included in these materials involve No representation, warranty or assurance (express or implied) is given or subjective judgement and analysis and are subject to significant made in relation to any forward-looking statement by any person (includi
Slide 3: Agenda
Agenda 01 Results and overview 02 FY24 performance 03 Strategy update 04 2025 outlook 3
Slide 4: Results and overview
Results and overview Ryan Kolln
Slide 5: 2024 performance highlights
2024 performance highlights Broke into LLM market with 28% 16% revenue growth for the full Grew China revenue for FY24 by of revenue in H2 FY24 from LLM year, excluding Google 71% projects Our technology playing a more Returned to profitability with Reduced OPEX by 26% for the important role in proj
Slide 6: Revenue growth returning
Revenue growth returning Group revenue Commentary • Excluding the impact of Google, we are 80.0 experiencing a return to revenue growth largely due to the rise of generative AI 70.0 • Excluding Google, revenue for Q4 FY24 grew 37% 19.1 60.0 23.3 on pcp (from $48.6 million in Q4 FY23) 18.3 13.4 • Gro
Slide 7: China success continues
China success continues China division revenue Commentary 20.0 • 71% growth in FY24 compared to FY23 • China customers include leading LLM model 18.0 builders, along with leading technology and auto customers 16.0 • Projects are mostly for in-facility annotation, 14.0 resulting in a more predictable
Slide 8: Generative AI major driver of revenue growth
Generative AI major driver of revenue growth 28% of group revenue from generative AI-related projects1 Non-LLM growing ~2% HoH, $33.6m revenue in in H2 FY24 H2 FY24 from generative AI related projects 30% 140 28% 120 33.6 100 20% 14.7 5.3 80 15% 60 10% 83.5 85.3 87.2 40 6% 20 0% H2 FY23 H1 FY24 H2 F
Slide 9: Global product growth reflects reliance on Appen's technology
Global product growth reflects reliance on Appen’s technology Global Product revenue Commentary 16.0 • Global Product revenue represents projects that are delivered on Appen’s data platform 14.9 14.0 • For our largest US technology customers, most work has traditionally been delivered on their 12.0
Slide 10: Opex reduced by 37% H1 FY23 to H2 FY24
Opex reduced by 37% H1 FY23 to H2 FY24 Opex1,2 Commentary 80.0 • Employee expenses reduced by 41% and all other expenses by 28% compared to H1 FY23 • Significantly reduced product and engineering spend achieved by establishing a hub in Hyderabad 60.0 20.0 • Consolidation of business units and ration
Slide 11: EBITDA improving as costs remain in control
EBITDA improving as costs remain in control Underlying EBITDA before FX1 Commentary • Underlying EBITDA1 (before FX) for Q4 FY24 was a 8.0 profit of $4.7 million, continuing the return to profitability 6.0 • We acted swiftly to control costs following the 4.0 4.7 Google announcement, and have now co
Slide 12: Financial performance
Financial performance Justin Miles
Slide 13: FY24 snapshot
FY24 snapshot FY24 FY23 Change Commentary • Revenue decreased 14% to $234.3m, reflecting termination of the Google Revenue 234.3 273.0 (14%) contract • Excluding the impact of Google, revenue grew by 16% Global Services revenue 118.1 191.5 (38%) • Global Services impacted by termination of the Googl
Slide 14: Revenue
Revenue Group Global services New markets 300 300 140 250 273.0 250 120 116.2 234.3 100 200 200 191.5 80 150 150 81.5 60 100 100 118.1 40 50 50 20 0 0 0 FY23 FY24 FY23 FY24 FY23 FY24 • Revenue down 16% on FY24 • Revenue down 38% on FY23 • Revenue up 43% on FY23 • Impacted by termination of Google co
Slide 15: Underlying EBITDA (before FX)
Underlying EBITDA1 (before FX) Group Global services New markets 25 25 25 15 15 15 17.5 14.7 5 3.5 5 5 -5 -5 -5 -8.1 -15 -15 -15 -20.4 -25 -25 -25 -32.7 -35 -35 -35 FY23 FY24 FY23 FY24 FY23 FY24 • $23.9m improvement on FY23 • EBITDA of $14.7m down 16% on FY23 • $24.6m improvement on FY23 • Despite l
Slide 16: EBITDA improving quarter-on-quarter
EBITDA improving quarter-on-quarter Revenue Underlying EBITDA1 Underlying cash EBITDA2 before FX before FX 6.0 4.0 80.0 4.7 3.2 60.0 3.0 2.0 13.4 0.6 40.0 1.0 0.0 0.0 66.7 0.04 55.0 54.1 45.0 20.0 -2.9 -3.0 -2.0 -2.9 -3.5 0.0 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 -6.0 -4.0 Total excluding Google Google Q1
Slide 17: Global revenue growth returning
Global revenue growth returning Global revenue excluding Google Commentary 50.0 • Following stabilisation of revenue in H2 FY23, growth 45.0 returned in Q2 FY24 • Global Product growth driven by multiple generative AI 40.0 projects. Volumes for these projects can be inconsistent with 3.4 14.9 large
Slide 18: Impressive growth for China with record revenue each quarter
Impressive growth for China with record revenue each quarter China revenue Commentary 20.0 • Revenue growth for China which includes Japan and Korea 18.0 continued throughout the year, with an impressive increase of 71% in FY24 compared to FY23 16.0 • Growth was largely driven by continued traction
Slide 19: Conviction in the potential for Enterprise, Government – timing is unclear
Conviction in the potential for Enterprise, Government – timing is unclear Enterprise, Government revenue Commentary 12.0 • Decrease in revenue driven by lower volumes within existing large Enterprise projects, including some projects coming to an end 10.0 • Conviction remains in the opportunity; ho
Slide 20: Profit and loss summary
Profit and loss summary FY24 FY23 Change Commentary Revenue 234.3 273.0 (14%) • Revenue decreased 14% to $234.3m, reflecting termination of Google contract Gross Margin1% 39.3% 36.3% 3.0 pp • Gross margin % improvement primarily due to change in customer and project mix Employee expenses 2 55.1 77.8
Slide 21: Balance sheet
Balance sheet Dec 2024 Dec 2023 Commentary Cash 54.8 32.1 • Cash balance of $58.4m, up $22.7m from December 2023. Balance impacted by receipt of a $10.0m payment from a major customer in the Receivables 46.7 49.9 first week of January 2025 versus December 2024 as scheduled Contract assets 19.7 15.6
Slide 22: Cash flow summary
Cash flow summary FY24 FY23 Commentary Receipts 231.5 294.5 Payments and other (232.5) (317.9) • Cash balance of $58.4m, up $22.7m from December 2023 Cash flows - operations before interest and tax (1.0) (23.4) • Cash flow used in operations of $1.0m, an improvement of $22.4m compared to FY23 Net in
Slide 23: Strategy update
Strategy update Ryan Kolln Appen
Slide 24: Appen specialises in high-quality data that brings human expertise into AI model development
Appen specialises in high-quality data that brings human expertise into AI model development Data Your model People Curate the Prepare useable Develop and deploy Evaluate model right data training data your models performance 24
Slide 25: Appen AI data solutions
Appen AI data solutions AI/ML data = we support Personalized Content Content Metaverse Computer Vision Audio & Speech LLM Foundation Enterprise LLM Ad Relevance Recommendation Relevance Moderation AR / VR Models Models Models Customization AI Solutions Product News Feed Search Sentiment Autonomous T
Slide 26: Appen global workforce
Appen global workforce 1M+ 50M+ 500+ 100+ 7 200+ people people hours on languages domain specific secure facility countries platform capabilities options 26
Slide 27: Human data a critical component in Generative AI model development
Human data a critical component in Generative AI model development LLM development lifecycle Pre-Training Post-Training Evaluation Builds general knowledge from large- Adapts the model to specific style, Ensures accuracy, safety, and Purpose scale internet data tasks, context, or languages reliabili
Slide 28: Generative AI is a key component of our service offering
Generative AI is a key component of our service offering Multilingual fine-tuning data Multi-domain reasoning data Coding/programming fine- Localisation of multimodal for a leading LLM model for a leading LLM model tuning data for a leading LLM generative AI applications for a builder builder builde
Slide 29: Generative AI market opportunity continues to grow – three growth drivers
Generative AI market opportunity continues to grow – three growth drivers 1. Development cost New model techniques are lowering training and More models developed decreasing inference costs (e.g., DeepSeek) Inference prices are rapidly declining, including for 2. Unit price declining complex reasoni
Slide 30: 2025 focus
2025 focus Double down in our market – focus on LLM Accelerate our growth technology innovation Operational Evolve our data efficiency and automation Quality & workforce Speed Prudent cost Grow our people management 30
Slide 31: 2025 outlook
2025 outlook Ryan Kolln Appen
Slide 32: 2025 outlook statement
2025 outlook statement We continue to see positive signals on LLM related data growth, including from our Global and China customers • The LLM market is evolving rapidly and there is significant experimentation, therefore we expect to see month-to-month revenue variability. • Year to date, LLM proje
Slide 33: Appendix
Appendix Appen
Slide 34: Appendix 1: Appen reporting structure
Appendix 1: Appen reporting structure Global Services New Markets Services provided to New Markets reflects progress against our product led strategy leading US tech companies utilising their Includes Global Product (Global customer revenue through Appen products), platform Enterprise, China, and Go
Slide 35: Appendix 2: Google contribution to revenue
Appendix 2: Google contribution to revenue Group revenue Global revenue 80.0 70.0 60.0 19.1 60.0 23.3 18.3 50.0 19.1 21.9 13.4 40.0 18.3 23.3 40.0 21.9 13.4 66.7 30.0 54.3 55.0 54.1 47.2 48.6 43.4 45.0 20.0 38.2 20.0 40.2 34.5 30.6 31.5 26.8 26.6 23.1 10.0 0.0 0.0 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1
Slide 36: Appendix 3: Investment in product development
Appendix 3: Investment in product development Investment in product development¹ Commentary Product development (exc. amortisation) as a % of revenue • $19.6m investment in product development significantly lower than prior periods, reflecting cost out program executed during FY23 12.7% • Savings pr
Slide 37: Appendix 4: Reconciliation between statutory and underlying results
Appendix 4: Reconciliation between statutory and underlying results Year ended Year ended Change 31-Dec-24 31-Dec-23 $000 $000 Underlying net loss after tax (NPAT)1 (10,546) (52,810) nm% 1. Underlying results are a non-IFRS measure used by management to assess Less underlying adjustments (net of tax
Slide 38: Appendix 5: AI market opportunity
Appendix 5: AI market opportunity Appen’s traditional TAM New Generative AI opportunities Deep learning model Generative AI model Companies adopting builders builders generative AI Description Technology and software companies Well-funded start up and technology Companies that are customising that h