Earnings call transcript: Appen H1 2026 profit rebound overshadowed by stock drop

Appen Limited released its first-half earnings results for FY2026, reporting stronger performance despite a decline in its global business. Revenue rose 17% to $119.9 million, while underlying EBITDA before foreign exchange improved to $5.3 million, marking a significant turnaround from a loss in the prior year. The company's China segment drove the growth, with revenue increasing 80.4% to $76.2 million.

However, Appen Global revenue fell 26.9% to $43.7 million. Despite the mixed results, the company reaffirmed its FY2026 guidance of $270 million to $300 million in revenue and an underlying EBITDA before FX margin of 5% to 10%. Appen's stock, however, dropped 14.14% after the earnings call, closing at $1.25. The strong performance in China, particularly the annualized revenue run rate exceeding $175 million, signals a potential turnaround, but the global business remains under pressure.

Management noted some stabilization in traditional work within Appen Global, and they expect further demand from foundation model builders, hyperscalers, and vertical AI companies. The company also identified potential operational efficiencies, which could add about $12 million annually by the end of FY2026.