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Appen Limited (APX) is a globally focused company that provides language technology data and services in more than 235 languages and dialects in over 70,000 locations and 170 countries to range of industries including technology companies and government agencies.
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Mr Mark Ronald Brayan
What does Appen Limited (APX) do?
It's the rise of the machines. Appen specialises in helping organisations “launch the world’s most innovative artificial intelligence systems”. Founded in 1996 and headquartered in Sydney, the company is the global leader in data for the AI Lifecycle which includes, data sourcing, data preparation, model training and deployment, and model evaluation by humans.
Appen’s AI Lifecycle work helps a wide range of sectors – including technology, automotive, financial services, retail, healthcare, and government – with search engines, social media platforms, voice recognition systems, sentiment analysis, e-commerce sites and much more.
The company operates via five customer-facing units:
Global — The Global unit delivers high-quality data annotation services and products to Appen’s five largest US global technology customers. Data annotation is the labelling or identification of text, video, image, and audio data. The majority of Global unit projects are made of large, at-scale relevance programs and rely on Appen’s crowd workforce to finish work. This negates the need for customers to employ an ongoing workforce.
Enterprise — The Enterprise unit serves commercial businesses outside of the Global Unit using Appen’s product suite (including data sourcing, data preparation and model evaluation) as well as AI-driven automation.
Government — The Government unit serves the emerging AI needs of Government bodies. The unit has over ten years of experience with UK, US and French Government contracts and possesses defence, law enforcement, and natural disaster recovery expertise.
China — This unit is currently responsible for capturing market share in China’s high-growth market.
Quadrant — During FY2021, Appen acquired Quadrant Global, a Singapore-based mobile location and Point-of-Interest (POI) data expert, for A$36m in cash.
Appen reports its revenue in two segments, Global, which covers activity and revenue generated by the Global unit, and New Markets, which covers revenue from the Enterprise, Government, China and Quadrant units.
Appen has nine offices around the world and over 1,125 employees. Some of Appen’s biggest clients include Adobe (ADBE), Microsoft (MSFT), LinkedIn (LNKD), Amazon (AMZN), Google (GOOGL), Salesforce (CRM), Bloomberg and John Hopkins University.
Is Appen a profitable company?
Yes, Appen is a profitable company.
Appen’s net income amounted to A$14.28m in FY2017 but leapt over 192% to A$41.73m in FY2018. Net income plateaued at A$41.6m in FY2019 but took another huge jump of 24.39% to A$51.6m in FY2020.
Unfortunately, due to COVID-19 impacts, the company’s profits came in at A$38m in FY2021.
As of the end of 2021, Appen is cash rich with over A$68.7m on its books and no debt.
Is APX a good stock to buy?
The emergence of COVID-19 in 2020 caused a downsizing or suspension of projects by some of Appen’s biggest customers. This hurt the company’s financials, prompting many shorter-term investors to dump the stock. Consequently, the APX stock price plummeted 80% from highs of over A$40 down to under A$7 between August 2020 and May 2022.
At this time, some long-term investors are seeing an opportunity in APX as the stock has fallen so much. A turn-around in financials may be possible as well, as the company recently reported overall revenue was up ever so slightly by 8% to A$642.76m and its China segment revenue was up an incredible 422% to A$35.5m.
More bearish investors are sceptical of Appen’s ability to rise from the ashes due to fears of inflation, escalating interest rates, geopolitical challenges and the possibility of a COVID-19 resurgence.
Does APX stock pay dividends?
Yes, APX stock has paid dividends to shareholders since 2015.
Between 2018 and 2020, APX’s dividend increased from $0.08 to $0.10, an increase of $0.01 per share each year. In 2021, APX stock paid $0.10 per share.
APX’s most recent interim dividend paid $0.055 per share in March 2022 with another payment of $0.045 highly likely later in 2022.
Who owns APX stock?
At 59.1% of the float, the general public owns the majority of APX stock. Institutional investors come in second at 32.1% ownership.
Some of these institutions include Mondrian Investment Partners Limited (9.4%), The Vanguard Group (5.06%), State Street Global Advisors (4.95%), Capital Research and Management Company (4.58%), BlackRock (1.53%), and Norges Bank Investment Management (0.96%).
Individual insiders own the remaining 8.8% of APX stock.
Insiders include Co-founder and Chairman Christopher Vonwiller (7.34%), CEO Mark Ronald Brayan (0.48%), CFO Kevin Levine (0.16%) and Independent Non-Executive Director Robin Low (0.14%).
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This does not constitute financial advice. You should do your own research before making an investment decision. Past performance is not a reliable indication of future performance. No representation is made as to the timeliness, reliability, accuracy or completeness of the market data provided.