The Appen Ltd (ASX: APX) share price is taking a tumble today.
Shares in the S&P/ASX 300 Index (ASX: XKO) AI stock closed yesterday trading for 42 cents. In morning trade on Tuesday, shares are swapping hands for 41 cents apiece, down 2.4%.
For some context, the ASX 300 is down 0.2% at this same time.
This comes following the release of Appen's full-year financial results for 2023.
Read on for the highlights.
Appen share price sinks on ongoing losses
- Operating revenue of $273 million, down 29.7% from 2022
- Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA), including FX losses, came in at a loss of $20.4 million, down from positive $11.0 million in 2022
- Statutory net loss after tax of $52.8 million, an improvement from the $239.1 million loss in 2022
- Cash balance of $32.1 million as at 31 December
- No dividend declared
What else happened during the year?
The Appen share price is in the red amid slumping revenues. Management said the 29.7% year on year decline in revenue was driven by a lower contribution from its global services.
New markets revenue, which was down 7.8% from 2022, was hit by a 46.5% decline in Appen's global product.
The company recorded a $69.2 million non-cash impairment, which it said reflects the impairment of goodwill and certain non-current assets associated with its global services cash generating unit.
During the year, Appen said it responded to falling revenues by significantly resizing its cost base. This resulted in $60 million of annualised cost savings in 2023.
And there was some promising momentum in the fourth quarter. The company reported that Q4 revenue in its global services and new markets segments increased from Q3.
With full-year losses ongoing, however, the final dividend was suspended. Appen last paid a dividend in March 2022.
What did management say?
Commenting on the results that have failed to lift the Appen share price today, CEO Ryan Kolln said:
2023 was a transitional year for the AI market and for Appen. The mainstream availability of generative AI created huge interest from our customers, but also resulted in many reevaluating their AI investments.
We experienced a material revenue reduction as customers navigated the rapidly evolving AI market and responded to the general economic slowdown…
A key priority in FY23 was gearing Appen to support generative AI. Appen has deep expertise and technology platforms that are highly applicable to generative AI.
What's next for Appen?
Looking at what could impact the Appen share price in the year ahead, Kolln noted that the company is now working with 22 "large language model builders globally" to support the development of generative AI foundation models with a focus on delivering high-quality data.
2024 will also see further cost reductions of $13.5 million targeted, expected to be complete by June.
As for earnings profitability, management said this will "largely depend on revenue growth from our non-global customers", noting that this timing remains uncertain.
Appen share price snapshot
It's been a tough 12 months for the Appen share price, down 76% since this time last year.
More recently, shares have soared 52% since 6 February.
