Appen announces equity raising and return to profitability in Q3 FY24

Appen Limited (ASX:APX) has announced an equity raising of approximately A$50 million through a fully underwritten institutional placement and a non-underwritten Share Purchase Plan (SPP). The company has returned to underlying EBITDA and underlying cash EBITDA profitability in Q3 2024, following successful implementation of cost initiatives designed to manage its cost base in line with the available revenue opportunity.

Executive commentary on Q3 FY24 performance and equity raising

Appen's CEO & Managing Director, Mr Ryan Kolln, stated, 'Profitability is a key focus for Appen and we are very pleased to have returned to underlying EBITDA and underlying cash EBITDA profitability in Q3 FY24. Our external environment continues to display signs of improvement and we are excited by the potential opportunities that this presents. We're continuing to experience LLM-related growth which is contributing to our positive revenue trajectory. China continues to experience significant revenue growth and we remain optimistic about the potential of our Enterprise and Government divisions'.

Summary of equity raising and outlook

Appen (ASX:APX) has successfully undertaken an equity raising to fund generative AI related opportunities, with a fully underwritten institutional placement of approximately A$50 million and a non-underwritten Share Purchase Plan targeting to raise A$5 million. The company has returned to underlying EBITDA and underlying cash EBITDA profitability in Q3 FY24, and the net proceeds from the equity raising will provide additional liquidity to fund working capital and greater flexibility to pursue generative AI related opportunities. Appen's CEO expressed optimism about the potential opportunities and revenue growth, particularly in the LLM-related and Chinese markets. The company is set to provide additional commentary as part of its Q3 FY24 Quarterly Activity Report and Appendix 4C scheduled for release on or around 31 October 2024.