Appen Revenues Up 47% in FY 2019, Speech Annotation Posts Strong Growth

Australia-listed data annotation provider Appen announced 2019 full-year results in a February 25, 2020 analyst call with CEO Mark Brayan. Revenues were up 47% to AUD 536m (USD 352m) compared to the previous year, Brayan reported, and underlying EBITDA was up 42% to AUD 101m (USD 66m) — pretty much as the company said it expected back in November 2019.

EBITDA margins of 18.8% compared favorably to last year’s 19.6% and, added Brayan, “that’s considering investments made in Figure Eight but also in technology in general.” Appen acquired Figure Eight, a Silicon Valley machine-learning training platform in 2019.

In the same call, Brayan broke out revenues into Relevance, Figure Eight, and Speech and Image. Relevance (annotated data with SEO, social media, and e-commerce applications) was up 37% to AUD 430m (USD 282m); and annual recurring revenue from machine-learning platform Figure Eight was at AUD 33.7m (USD 22m), which lifts it to a CAGR of 56% over the last four years.

Calling the record growth for Speech and Image “awesome,” Brayan said sales were up 32% to AUD 67.7m (USD 44.5m). Speech and Image, formerly called Language Resources, includes the collection and annotation of audio, speech recordings, natural language data, image and video data, machine translation, and other machine learning technologies. Applications include Internet-connected devices, in-car automotive systems, speech-enabled consumer electronics — in short, the Internet of things.

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Speaking at SlatorCon San Francisco last fall, Appen CEO Brayan noted how “data is not only expensive to collect, it is also complicated to collect and it’s complicated to work with.” Contributing to the complexity, Brayan explained, is the variety of speech data, technical considerations, and the huge recruitment effort required. (Appen’s recruiters in the Philippines work 24 hours a day and process 100,000 job applications for crowd work each month; and the company has over a million crowd workers, while paying monthly salaries to 40,000–50,000 employees.)

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Given this barrier to entry coupled with big tech’s ever-growing appetite for language data, no surprise then that Appen continues to report, as Brayan described it in the analyst call, “high performance results” — and why the company has experienced exceptional growth since going public in 2015.

Shares in Appen, listed on the Australian Securities Exchange under ticker symbol APX:AX, rallied on results day but were sold off the next day, reflecting broader market jitters linked to Covid-19. Appen’s market cap stood at AUD 2.75bn (USD 1.81bn) at the time of writing.