Key Highlights

  • Group Revenue increased 17% to $119.9 million, with Underlying EBITDA (before FX) of $5.3 million, a $7.5 million improvement on the prior corresponding period.
  • Appen China revenue rose 80% to $76.2 million, with Underlying EBITDA up 316% to $12.1 million and an annualised revenue run-rate exceeding $175 million in June.
  • Appen Global revenue declined 27% to $43.7 million, though performance improved through the half with Q2 revenue up 20% on Q1.
  • The company reaffirmed FY26 group guidance of $270-300 million in revenue and Underlying EBITDA Margin of approximately 5-10%.

Appen Limited (ASX:APX), a global provider of data for the AI lifecycle, reported H1 FY26 revenue of $119.9 million, up 17% on the prior corresponding period, reflecting accelerated growth from Appen China and continued turnaround at Appen Global. Group gross margin declined slightly to 36.7% from 37.0%, which the company attributed to a change in customer and project mix, noting that Appen China margins are traditionally lower compared with Appen Global.

Group Underlying EBITDA (before FX) was $5.3 million, representing a $7.5 million improvement on H1 FY25. The company said this reflected revenue and gross margin growth, prudent cost management, and operational Leverage within Appen China. The Group held a cash balance of $44.7 million (A$64.8 million) at 30 June 2026.

Appen China Delivers Substantial Growth

Appen China was the standout performer during the half, with revenue increasing 80% to $76.2 million and Underlying EBITDA rising 316%, or $9.2 million, to $12.1 million, representing a 15.9% EBITDA margin. The segment exited the first half with an annualised revenue run-rate exceeding $175 million in June, up from $135 million at the end of 2025.

CEO and Managing Director Ryan Kolln said Appen China continues to be a major growth driver for the Group, with the sustained growth demonstrating the strength of its relationship with Chinese model builders. Revenue growth was driven by generative AI-related projects, including supporting international expansion for Chinese technology companies, while EBITDA margin improvement reflected a greater mix of higher-margin generative AI projects and increased revenue from high-margin prebuilt datasets.

Appen Global Turnaround Continues

Appen Global reported first-half revenue of $43.7 million, down 27% on the prior corresponding period, with an Underlying EBITDA loss of $4.5 million, an improvement of 25% on the pcp loss. The company said the revenue decrease reflects the continued turnaround, with lower volumes from traditional work not yet fully offset by growth in new areas. Performance improved during the half, with second-quarter revenue up 20% on the first quarter, and excluding the segment's largest client, second-quarter revenue grew 65% on the first quarter.

Mr Kolln said Appen Global made strong progress during the period in capturing growth in the generative AI market and diversifying revenue, winning new work in domains including coding, STEM, finance and robotics, in addition to its long-standing strengths in speech and relevance. The company has identified approximately $12 million in incremental annualised operational efficiencies within Appen Global through expanded use of AI in operations, with approximately 70% of this cost-out to be executed by the end of FY26 and the remainder by the end of the first quarter of FY27.

FY26 Guidance Reaffirmed

Appen reaffirmed its FY26 group guidance of revenue between $270 million and $300 million, and Underlying EBITDA (before FX) margin of approximately 5% to 10%. The company noted that, consistent with previous years, Appen Global revenue continues to be mostly derived from project-based work, with seasonality skewing revenue toward the second half of the year.

Mr Kolln said the AI market continues to grow rapidly, with competition intensifying across Western and Chinese AI model builders, and that Appen remains one of the few AI data partners working across both frontiers of AI. He said the company remains focused on revenue growth from the global expansion of AI and ongoing underlying EBITDA profitability, supported by a strong Balance Sheet and continued efficiencies from AI adoption across its own operations.

Conclusion

Appen's H1 FY26 results reflect a Business transitioning through two distinct growth dynamics, with Appen China delivering substantial revenue and margin expansion while Appen Global continues a gradual turnaround from a lower revenue base. The combined effect was a meaningful improvement in Group Underlying EBITDA, even as Appen Global revenue remained below the prior corresponding period. With FY26 guidance reaffirmed and a strong cash position at half-year end, the company's near-term trajectory will likely depend on whether Appen China's growth rate can be sustained alongside continued stabilisation at Appen Global.