Ann: Appen 2020 Full Year results, page-50

From the Age this morning:
"Appen misses earnings targets

By Colin Kruger

Tech darling Appen missed earnings targets when the company unveiled its full year results on Wednesday.

The company reported an 11 per cent rise in revenue to $600 million, a 23 per cent rise in net profit to $50.5 million and a 5.5c per share dividend that will be paid March 19.

The company reported underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $101.7 million which is below its downgraded guidance last year.

In December, Appen said it expects FY20 underlying EBITDA - including the impact of the stronger Australian dollar – to be in the range $106 million to $109 million at the actual exchange rates to November of US74c.

The original guidance was for EBITDA of $125 million to $130 million at that exchange rate.

Appen makes most of its money in the US from crowdsourcing a global workforce that does the low-level grunt work for the technology giants.

The workers teach computers to recognise basic images and speech, laying down the basic groundwork for the development of ‘Artificial Intelligence’ solutions.

Around 80 per cent of Appen’s revenue is generated by just five customers which includes Google, Facebook, Amazon and Microsoft.

The December downgrade was triggered by these heavyweight technology customers tackling fresh lockdowns in California and also shifting their resources to new projects in the wake of COVID-19.

Those actions have led to Appen’s traditionally strong fourth quarter coming in weaker than expected, with underlying earnings for the period to fall as much as 15 per cent below previous forecast.

On Wednesday Appen said it is involved in many of these new projects, which are in their early stages and growing, and they will complement its major programs. The majority of deferred projects are recommencing in 2021.

The company is forecasting underlying EBITDA of $120 million to $130 million for the 2021 financial year ending December 31.

Appen chief executive Mark Brayan said “2020 was a breakout year for new sales, new projects, committed revenue and our entry into China, but it was not without its challenges.”"