2021 Annual Report
This year, we reported a record full year revenue performance that was underpinned by a strong second half year revenue and EBITDA performance.
Revenue in the second half of $250.7 million was an all-time high for the company. It included the expected second half skew to our Global customers, and breakout growth in China:
On a full year basis:
The result benefitted from a 32% increase in Global Services revenue from first half to the second half of FY21. Global Services revenue is derived from projects done on the platforms of the world’s largest technology companies. It included a higher proportion of revenue from non-ad-related projects in the second half, reinforcing our customers’ shift to new product developments and future sources of revenue for them, such as ecommerce, maps and the metaverse.
We had a breakout year in China. China continues to grow at a rapid pace with quarterly compound revenue growth of 56% (1Q20-4Q21). We count China’s technology and internet giants amongst our customers, along with leading mobile phone and autonomous vehicle companies. AI models for autonomous vehicles require vast volumes of data and we’re establishing ourselves as a key provider in that market in China.
Our Enterprise team, who serve commercial businesses outside of the Global technology companies, had a good year but has yet to achieve its potential. We’ve rebuilt the team under Jen Cole, who brings more than twenty years of experience in high growth ad-tech, ecommerce and marketing solutions. We’re pleased to have Jen and her team on board and have strong confidence in them.
The market for training data and AI in the government markets is steadily evolving. We continue to deliver into existing programs while adding new pilot projects that will bear fruit in time.
During the year, we experienced negligible COVID-related impacts, and continued to deliver quality outcomes for our customers, with our seamless, flexible remote crowd delivery capability.
Ours is a dynamic and fast-paced market. We completed a strategic review with external experts in 2021 to ensure that we remain at the forefront of technology and market trends.
The review confirmed that AI will continue to grow at a rapid rate and that high volumes of high-quality training data are essential to develop AI products that work in the real world. It found that our expertise and track record in three of the four essential stages of the AI lifecycle: data sourcing, data preparation and real-world model evaluation, along with our range of data types and scale, make us the clear market leader.
The market is evolving. New data types are emerging, such as spatial and geo-locational data, and technology is playing a bigger role in the creation and preparation of training data.
There are four pillars to Appen’s strategy: Grow revenue and diversify our customers, automate our crowd and labelling processes, expand our product offerings and evolve how we do business. Growth is a key strategic priority. Our focused business units: Global, Enterprise, China, Government and Quadrant, are targeted primarily on revenue growth and customer acquisition to diversify and grow our customer base. Our non-global customers represented 14% of our revenue this year, up from 9% in 2020.
We will increase our investment in product and engineering to streamline and automate crowd and labelling processes. Sujatha Sagiraju joins us as Chief Product Officer, from Microsoft, and brings many years of product and engineering experience in search technologies and machine learning. She will work alongside our CTO, Wilson Pang, to create and evolve market leading products.
We’ve also expanded our data science team and they are adding to our suite of machine learning models. We’re using the models to pre-label training data to high levels of accuracy before they are checked and completed by our experts and crowd. This data is created far cheaper and quicker than fully human-labelled data and with higher quality, improving the value we provide to customers as well as our scalability, productivity and margins.
The acquisition of Quadrant supports our strategy to expand our addressable market and product offerings with new data types and capabilities. Quadrant’s Geolancer product efficiently collects real world location data ‘in the field’ that supports the creation and update of geo-locational applications used in maps, ecommerce and marketing. We welcome Quadrant’s founder Mike Davie and his team to Appen and we are already seeing interest and uptake of Geolancer across our customer base.
Our high growth rate of recent years has seen some of our internal systems lag customer demands. We’ve invested in a transformation office so that we can continue to evolve the way we do business. Eric de Cavaignac joined Appen in November 2021 and will lead internal processes to digitise our business to improve productivity and scale, and to make the work of our expert staff more meaningful and fulfilling.
The success of our strategy depends on its implementation and that relies on the expertise and engagement of our team.
We are investing in culture and leadership development to bind and support our global team, help us navigate the challenges of virtual work and improve employee engagement and productivity. We’re pleased to welcome Andrea Clayton who joins Appen in late February as our new Chief People Officer. She will support these and other initiatives to make Appen a great place to work.
Our strategy positions us to maximise long-term growth and shareholder returns. Our plans include a set of targets for 2026 that include revenue, customer mix and profitability.
Our strong second half result, the new members of our leadership team and our growth strategy give us great confidence in our future.
On behalf of my team, I would like to thank everyone in Appen and the members of our global crowd for everything they do for our customers and for each other.
Thank you for your ongoing support. We are looking forward to a successful and rewarding 2022.
Mark Brayan
Managing Director and
Chief Executive Officer
