Half Year 2024 Appen Ltd Earnings Call Transcript
Key Points
- Revenue growth of 16% in Q2 compared to the same period in FY23, and 22% up on Q1 this year.
- Significant improvement in underlying EBITDA, with a $7.8 million improvement in Q2 compared to the same period last year.
- Operating expenses decreased by 33% compared to H1 2023 due to cost reduction programs.
- Strong growth in generative AI-related projects, with 28% of group revenue in June 2024 coming from these projects.
- China business achieved consecutive quarterly revenue records, with a 66% increase in revenue compared to H1 2023.
- Total revenue decreased by 18% to $113.4 million, reflecting the termination of the Google contract.
- Global Services revenue decreased by 36% to $63.6 million, also due to the Google contract loss.
- Underlying EBITDA before FX still resulted in a $2.3 million loss despite improvements.
- Inconsistency in project volumes for Global Product, leading to potential volatility in H2 2024.
- Employee expenses and other costs have been significantly reduced, which may impact future growth and innovation.
Thank you very much, Rachelle, and good morning, everyone. Welcome to Appen's H1 FY24 results presentation. Today, I'm joined by our CFO, Justin Miles. There are four sections to the presentation as per the agenda on page 3.
Firstly, I'll share an overview of our H1 performance. Second, Justin will provide greater detail in the financial performance for the half. Third, I'll share an update on how we are tracking against our strategy; and finally, we will provide an update on July trading and discuss our FY24 outlook.
Moving to page 5 in the presentation. Including the impact of the Google contract loss, we're very pleased that Appen is returning to revenue growth. In Q2, revenue grew 16% compared to the same period in FY23 and was up 22% on Q1 this year.
For the half, H1 revenue was up 13% on H2 last year if we exclude Google. H2 revenue has historically been higher than H1,much of the growth has been supported by new generative AI-related projects, especially from our global and China customers. We
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