Skip to content

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved.

ASX 200: Appen FY22 earning preview

Appen says its FY22 earnings will remain unaffected by a non-cash pre-tax impairment that has undermined its share price following a boost provided by the buzz around generative AI.

Source: Bloomberg

ASX-listed AI company Appen is set to release its earnings results at the end of February, following a tumble in share prices due to its reporting of a sizeable non-cash impairment arising from the poor performance of operations in new markets. 

When will Appen report its latest earnings?

Appen is scheduled to report its 2022 full-year results on Monday, 27 February 2023. 

What should traders look out for?

Appen is an AI company that bills itself as a specialist in 'data for AI lifecycle' with over 25 years of experience. 

The company provides data collection, labelling and annotation services using machine-learning assisted tools, with major partners including tech giants such as Microsoft, Nvidia, Amazon Web Services and Google Cloud. 

Key partners in other sectors include Bloomberg, Boeing, Dolby, Siemens and The Home Depot. 

As an AI company, Appen's share price received a boost in early February from the huge buzz surrounding the economic and business potential of generative AI platform Chat GPT. 

Investors see the potential for Appen to receive an investment boost from the excitement over generative AI, according to analysts at Morgan Stanley. 

Appen's share price has since sunk, however, on its flagging of a $204.3 million non-cash pre-tax impairment in its upcoming full-year results. 

The pre-tax impairment reflects the lacklustre performance of operations in new regions relative to earlier expectations.  

'The assessment of the carrying value of Appen's New Markets (excluding China), CGU [cash generating unit] reflects Appen's FY22 financial performance,' Appen said in a statement to the ASX made on Monday, 13 February. 

'Given the FY22 performance, future revenue growth assumptions have been reduced to reflect lower growth rates, resulting in an impairment loss.'

Appen's share price fell 10% in Monday morning trading following the announcement. 

Its underlying earnings before interest, tax, depreciation and amortisation (EBITDA) will not suffer as a result of the impairment, however, because the impairment is non-cash in nature. Underlying net profit after tax will also remain unscathed. 

The data company remains confident in its ability to fulfil the guidance update announced in October, which marked the eighth downgrade and followed trading in August and September without improvement. 

It expects revenue to be closer to the upper end of US$375 million to US$395 million, and EBITDA prior to foreign exchange adjustments near the low end of US$13 million to US$18 million. 

Appen seeks to diversify revenue 

One of Appen's chief accomplishments as an AI company has been its ability to garner some of the world's leading tech giants as clients and partners. 

This has also left Appen's revenue sources highly concentrated amongst a small coterie of large-scale tech clients, making it vulnerable to any shifts in demand. 

Appen recently saw its revenues undermined by a drop in advertising-related AI projects by Internet giants including Google and Facebook. This shift was a direct result of Apple making changes to its iOS platform to restrict the tracking of customers for digital advertising purposes. 

To compensate for this decline, Appen has stepped up its expansion into new offshore markets. While operations in China have posted a strong performance, other new markets have produced lacklustre results, contributing to the non-cash pre-tax impairment for its upcoming report. 

Appen is nonetheless confident that operations in new offshore markets will help to drive revenue growth in future. 

'There remains high conviction in the future growth prospects of the New Markets (excluding China) business,' the company said in its latest update.

Appen's fortunes could also receive a boost from the appointment of a new CEO at the end of last year. On 14 December, Appen announced the appointment of Armughan Ahmad as its new CEO and president, replacing Mark Brayan in the top role. 

Take your position on over 13,000 local and international shares via CFDs or share trading – all at your fingertips on our award-winning platform.* Learn more about share CFDs or shares trading with us, or open an account to get started today.

* Winner of ‘Best Multi-Platform Provider’ at ADVFN International Finance Awards 2022

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

Act on share opportunities today

Go long or short on thousands of international stocks with CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.