Appen Reports FY25 Growth Led by Generative AI and China Surge

Generative AI and China Drive FY25 Momentum

Appen Limited (ASX:APX) delivered a year of meaningful progress in FY25, with total group revenue reaching $230.8 million, up 4.5% on the prior year when excluding the impact of its former Google contract. The standout contributor was Appen China, which surged 75% to $102.9 million in revenue and achieved a remarkable 640% increase in underlying EBITDA to $10.6 million, reflecting a 10.3% margin. This growth was primarily fuelled by new and expanding projects related to large language models (LLMs), including support for Chinese technology companies expanding internationally.

Meanwhile, Appen Global experienced a challenging year with revenue down 21% excluding Google, but ended FY25 on a high note. The segment posted a 56% revenue jump in Q4 to $41.4 million, alongside a robust 24.6% EBITDA margin for the quarter, signalling a strong turnaround driven by generative AI project wins and expansions. This rebound followed a period of lower project volumes earlier in the year, consistent with seasonal patterns in the business. The company executed $10 million in annualised cost efficiencies across Appen Global through automation and operational improvements, enhancing profitability despite the revenue dip.

Appen’s Critical Role in the AI Data Ecosystem

At the heart of Appen’s strategy is its role as a key provider of high-quality, human-generated data essential to training and improving AI models. The CEO’s address emphasised that while algorithms and compute power are vital, the quality and diversity of real-world data remain the primary drivers of AI model performance. Public datasets have largely been exhausted by leading AI labs, and synthetic data generated by AI models carries risks such as model collapse. Appen’s unique value lies in delivering bespoke, human-annotated data across diverse languages and modalities, supporting complex AI applications from robotics to multi-lingual speech models.

Appen’s ability to adapt to evolving AI demands is demonstrated by its work in frontier areas like physical AI for robotics, coding vulnerability testing with foundation model developers, reinforcement learning environments across 20 domains, and multi-modal evaluations including music generation. The company’s global crowd of over one million contractors, speaking more than 500 languages, underpins its capacity to meet the nuanced data needs of AI builders worldwide.

Growth Strategy Focused on Quality, Customer Expansion, and Efficiency

Looking ahead to FY26, Appen is concentrating on four strategic priorities: relentless pursuit of data quality, targeted customer growth focusing on hyperscalers and foundation model builders, expansion into new data segments such as coding, and embedding AI-led operational efficiencies. The company has bolstered its technical expertise by adding over 20 industry experts in AI and machine learning over the past year, enhancing its capability to deliver complex projects.

Operational efficiency remains a key theme, with Appen deploying AI quality agents to improve annotation accuracy, automating workflows for faster project delivery, and using AI-assisted interviewing to enhance workforce onboarding and performance validation. These innovations aim to reduce costs and accelerate output, supporting scalable growth as AI adoption expands globally.

FY26 Guidance Reflects Confidence Amid Seasonality

Appen reaffirmed its FY26 guidance, projecting group revenue between $270 million and $300 million, with an underlying EBITDA margin before FX of approximately 5% to 10%. The company highlighted that Appen Global revenue remains predominantly project-based with seasonality skewing results towards the second half of the fiscal year. Tight cost controls will continue to align expenses with revenue opportunities, reflecting a prudent approach amid a fast-evolving market.

Cash reserves remain strong at US$59.8 million as of December 2025, providing a solid foundation for ongoing investment in technology and growth initiatives. The company’s strong market position in China, where it outpaces established local competitors, and its expanding footprint in generative AI projects globally, position it well to capitalise on the accelerating demand for human-generated AI training data.

Recent quarterly updates have shown sustained momentum, with Appen’s Q1 FY26 revenue rising 9% year-on-year driven by an 88% surge in the China business despite seasonally weaker Global segment results, underscoring the ongoing strength of its growth engines. This progress builds on the exceptional Q4 FY25 performance, which saw an 81% year-on-year revenue increase in China and a 56% quarter-on-quarter revenue jump in the Global segment, both propelled by generative AI projects and operational efficiencies.