Image source: Shutterstock

Highlights

  • Shares rise 18% to A$1.45 after FY25 revenue guidance of A$235–A$260 million
  • FY25 revenue outlook implies up to 10.9% growth from FY24’s A$234.3 million
  • Company targets 20% CAGR revenue growth and 10% EBITDA margin by FY27

Shares of Appen Ltd (ASX: APX) jumped 18% to A$1.45 on Friday morning following the company’s annual general meeting, where it provided updated financial guidance and longer-term growth targets. The rise reflects investor response to a more optimistic near-term and strategic outlook, particularly around AI-driven opportunities and international expansion.

The company projects FY25 revenue between A$235 million and A$260 million, compared to FY24’s A$234.3 million, suggesting flat to 10.9% growth. Appen also anticipates positive underlying EBITDA for FY25, although it did not clarify whether this would exceed the A$7.8 million recorded in FY24.

CEO Ryan Kolln highlighted three key growth drivers supporting the FY25 outlook: increased predictability of project work from large U.S. technology clients, continued expansion in China, and short-term opportunities in generative AI services. Kolln pointed to high-quality deliverables as a factor in securing ongoing business from top-tier clients, particularly in the second half of the year.

China was singled out as a significant revenue opportunity, with Appen reporting solid progress in this market. Additionally, although generative AI work remains unpredictable, it is often awarded on short notice and presents incremental revenue potential.

Looking further ahead, Appen outlined new strategic goals aimed at restoring sustainable profitability. These include a greater than 20% compound annual growth rate (CAGR) in revenue over three years to FY27, and achieving a circa 10% underlying EBITDA margin by FY27.

Despite past challenges and revenue declines, the company's renewed focus on predictable revenue streams and geographic diversification appears to have resonated with the market. The stock has now gained 115% over the past 12 months, signaling shifting sentiment as Appen navigates the evolving AI data services landscape.