The Appen Ltd (ASX: APX) share price is on watch this morning after providing a trading update and announcing a restructuring to the market.
This restructuring is aimed at aligning to the company's product-led and consumer-centric strategy, as well as changes to financial reporting to give greater visibility to the drivers and performance of the business.
Appen says that the changes reflect its evolution to become a broader range of AI data annotation products and solutions.
The new structure and reporting
Its new organisation structure will have four customer-facing business units – global, enterprise, China and government.
The global unit will focus on providing data annotation services and products to major US global tech customers.
Appen's enterprise unit will be responsible for driving growth outside of its global customers by leveraging its product suite to serve new customers and AI use cases.
The China and government units will continue to try to capture market share in those high-growth markets.
Appen said that the new leadership structure, combined with profit and loss responsibility, will increase performance.
Management believe that the organisation alignment and technology-enabled productivity will allow resources to be optimised for the company's future needs.
The tech company also said that there's going to be new segment reporting for investors to get a better understanding on performance, growth and market dynamics.
There's two segments – 'global services' for the services provided to global customers using data annotation tools and 'new markets' for global customers using annotation products and the enterprise, government and China businesses.
Reporting will be in US dollars, to enable easier comparison of financial performance between periods.
Appen CEO Mark Brayan said:
Our new structure will drive performance and growth by aligning our business with market opportunities and customer needs. Value will be created by pursuing product-led expansion and by giving teams end-to-end responsibility and control over delivery for their customers.
Appen trading update
The company's year to date revenue plus orders in hand for delivery in FY21 is approximately US$260 million at the end of April 2021. Appen said this US dollar figure was consistent with the same methodology and timing used for the update provided at the annual general meeting in May 2020.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) for FY21 is expected to be between US$83 million to US$90 million. This is the guidance provided to the market at its FY20 result that was given out in February.
