Shares in data firm Appen have jumped thanks to an upgraded earnings outlook, even as the company confirmed August’s downgraded revenue guidance for its Figure Eight acquisition.
Appen – one of the ASX’s so-called WAAAX tech stocks – says full-year underlying earnings for the 12 months to December 31 are expected to lift from $71.3 million last year to between $96 million and $99 million, trumping previous guidance for the upper end of $85 million to $90 million.
The company’s stock rose to a fresh two-month high of $25.73 at the open of markets on Monday and was still 6.26 per cent higher at $24.77 by 1010 AEDT.
The company also reinforced that annual recurring revenue from its Figure Eight machine learning software will hit $30 million to $35 million, firming up the downgrade guidance offered three months ago.
Appen bought Figure Eight in March for $US175 millilion up front ($A260 million) and up to $US125 million in earn-out bonuses, and initially forecast annual recurring revenue to rise by 50 per cent to 60 per cent this year.
But in August it said it expects Figure Eight revenue to be up just 9.0 per cent to 27 per cent, or between $30 million and $35 million after the takeover of the San Francisco-based firm had been “more destabilising than we thought”.
Shares in Appen have nearly doubled in value in 2019 but are still slightly down on the historic peak of $30.71 hit in July.
AAP
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