Q2 FY26 revenue rose 26% year-on-year to US$65.1 million.
Appen reaffirmed its FY26 revenue and EBITDA guidance.
Strong growth in AI-related projects continued to support business momentum.
Shares of Appen Limited (ASX: APX) climbed nearly 10% on Thursday to AU$1.12, following the release of its Q2 FY26 quarterly activity report, which highlighted strong revenue growth, improving profitability and continued momentum across its artificial intelligence (AI) data business. The company also reaffirmed its full-year guidance, reinforcing confidence in its growth outlook.
Revenue and Earnings Show Strong Improvement
Appen reported Q2 FY26 revenue of US$65.1 million, representing a 26% increase from the prior corresponding period and a 19% rise from the previous quarter. Revenue for the first half of FY26 reached US$119.9 million, up 17% year-on-year. Meanwhile, underlying EBITDA before foreign exchange impacts improved to US$4.4 million, marking a US$5.0 million improvement compared with the same period last year.
The company attributed the improved performance to stronger contributions from existing customers, new client wins and increasing demand for AI data solutions across global markets. Management also highlighted ongoing adoption of AI within its own operations to improve efficiency and reduce costs.
China Business Continues to Drive Growth
Appen China remained a key contributor during the quarter, with revenue climbing 75% year-on-year to US$41.3 million. The business exited June with an annualised revenue run rate exceeding US$175 million, supported by growing demand for generative AI projects and higher-margin datasets. Underlying EBITDA for the segment reached US$7.0 million, reflecting significant operational improvement.
Outside China, Appen Global also recorded quarter-on-quarter growth, supported by expanding work with leading AI laboratories and increasing project diversity across coding, STEM, finance and robotics.
FY26 Guidance Remains Intact
Appen reaffirmed its FY26 outlook, expecting revenue between US$270 million and US$300 million, alongside an underlying EBITDA margin of approximately 5% to 10%. The company ended the quarter with a cash balance of US$44.7 million, providing financial flexibility to support future growth initiatives while capitalising on expanding AI opportunities.Note- All data presented is based on information available at the time of writing.Disclaimer for Kapitales ResearchThe materials provided by Kapitales Research, including articles, news, data, reports, opinions, images, charts, and videos ("Content"), are intended for personal, non-commercial use only. The primary goal of this Content is to educate and inform readers. This Content is not meant to offer financial advice, nor does it include any recommendation or opinion that should be relied upon for making financial decisions. Certain Content on this platform may be sponsored or unsponsored, but it does not serve as a solicitation or endorsement to buy, sell, or hold any securities, nor does it encourage any specific investment activities. Kapitales Research is not authorized to provide investment advice, and we strongly advise users to seek guidance from a qualified financial professional, such as a financial advisor or stockbroker, before making any investment choices. Kapitales Research disclaims all liability for any direct, indirect, incidental, or consequential damages arising from the use of the Content, which is provided without any warranties. The opinions expressed by contributors or guests are their own and do not necessarily reflect the views of Kapitales Research. Media such as images or music used on this platform are either owned by Kapitales Research, sourced through paid subscriptions, or believed to be in the public domain. We have made reasonable efforts to credit sources where appropriate. Kapitales Research does not claim ownership of any third-party media unless explicitly stated otherwise.
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Why Did This ASX AI Stock Surge Nearly 10%?
Highlights:
Shares of Appen Limited (ASX: APX) climbed nearly 10% on Thursday to AU$1.12, following the release of its Q2 FY26 quarterly activity report, which highlighted strong revenue growth, improving profitability and continued momentum across its artificial intelligence (AI) data business. The company also reaffirmed its full-year guidance, reinforcing confidence in its growth outlook.
Revenue and Earnings Show Strong Improvement
Appen reported Q2 FY26 revenue of US$65.1 million, representing a 26% increase from the prior corresponding period and a 19% rise from the previous quarter. Revenue for the first half of FY26 reached US$119.9 million, up 17% year-on-year. Meanwhile, underlying EBITDA before foreign exchange impacts improved to US$4.4 million, marking a US$5.0 million improvement compared with the same period last year.
The company attributed the improved performance to stronger contributions from existing customers, new client wins and increasing demand for AI data solutions across global markets. Management also highlighted ongoing adoption of AI within its own operations to improve efficiency and reduce costs.
China Business Continues to Drive Growth
Appen China remained a key contributor during the quarter, with revenue climbing 75% year-on-year to US$41.3 million. The business exited June with an annualised revenue run rate exceeding US$175 million, supported by growing demand for generative AI projects and higher-margin datasets. Underlying EBITDA for the segment reached US$7.0 million, reflecting significant operational improvement.
Outside China, Appen Global also recorded quarter-on-quarter growth, supported by expanding work with leading AI laboratories and increasing project diversity across coding, STEM, finance and robotics.
FY26 Guidance Remains Intact
Appen reaffirmed its FY26 outlook, expecting revenue between US$270 million and US$300 million, alongside an underlying EBITDA margin of approximately 5% to 10%. The company ended the quarter with a cash balance of US$44.7 million, providing financial flexibility to support future growth initiatives while capitalising on expanding AI opportunities.Note- All data presented is based on information available at the time of writing.Disclaimer for Kapitales ResearchThe materials provided by Kapitales Research, including articles, news, data, reports, opinions, images, charts, and videos ("Content"), are intended for personal, non-commercial use only. The primary goal of this Content is to educate and inform readers. This Content is not meant to offer financial advice, nor does it include any recommendation or opinion that should be relied upon for making financial decisions. Certain Content on this platform may be sponsored or unsponsored, but it does not serve as a solicitation or endorsement to buy, sell, or hold any securities, nor does it encourage any specific investment activities. Kapitales Research is not authorized to provide investment advice, and we strongly advise users to seek guidance from a qualified financial professional, such as a financial advisor or stockbroker, before making any investment choices. Kapitales Research disclaims all liability for any direct, indirect, incidental, or consequential damages arising from the use of the Content, which is provided without any warranties. The opinions expressed by contributors or guests are their own and do not necessarily reflect the views of Kapitales Research. Media such as images or music used on this platform are either owned by Kapitales Research, sourced through paid subscriptions, or believed to be in the public domain. We have made reasonable efforts to credit sources where appropriate. Kapitales Research does not claim ownership of any third-party media unless explicitly stated otherwise.
Customer Notice:
Nextgen Global Services Pty Ltd trading as Kapitales Research (ABN 89 652 632 561) is a Corporate Authorised Representative (CAR No. 1293674) of Enva Australia Pty Ltd (AFSL 424494). The information contained in this website is general information only. Any advice is general advice only. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of this product for your circumstances. Please be aware that all trading activity is subject to both profit & loss and may not be suitable for you. The past performance of this product is not and should not be taken as an indication of future performance.
Kapitales Research, Level 13, Suite 1A, 465 Victoria Ave, Chatswood, NSW 2067, Australia | 1800 005 780 | info@kapitales.com.au