Future of Australian technology company Appen uncertain as shares fall by 27 percent

Shares of an Australian tech company plunged after earnings fell 69 percent lower than expected.

On Tuesday, Sydney-based artificial intelligence firm Appen released its results for the first half of 2022, but that hurt its share price.

The company, which provides key data to tech giants around the world, including Facebook, Google and Amazon, has struggled in recent months.

According to The Australian, it had earned 69 percent less than in the same period the year before, when its earnings were factored in before interest, taxes, depreciation and amortization.

Appen generated $8.5 million in net income in the past six months, compared to $12.5 million in the same comparable period in 2021.

To top it off, the Australian company also posted a net loss of $3.8 million.

In total, it suffered a seven percent drop in sales to $182.9 million.

As a result, Appen’s stock price fell 27.3 percent to $4.15 on Tuesday. At the time of writing Wednesday morning, it had recovered slightly, down two percent to $4.24.

Appen’s CEO Mark Brayan blames the poor performance on global market conditions and a weaker appetite for digital advertising.

Speaking on the earnings call, according to the Sydney Morning Herald, Mr Brayan said: “Without trading improvement in July, uncertainty remains about a continued slowdown in our global clients’ spending and their exposure to weaker digital advertising demand.

“As a result, the conversion of forward orders to sales is less certain this year than in previous years.”

Brayan added in a statement to the ASX that the conditions were “challenging” and that they saw a “flow-on effect” as customers spent less on advertising.

With a declining demand for their services, Appen also revealed that costs had risen as day-to-day operations became more expensive.

It cited investment in products and technology, increased personnel costs, recruitment and IT costs as another way money was lost.

Like many tech companies around the world, Appen has taken a plunge as its share price plunged 62 percent this year after huge gains at the height of the pandemic.

At its peak, Appen’s shares were worth about $43.50 in August 2020. It is now trading at $4.24.

Appen first started its downward trend in June after its rival, Canadian IT firm Telus, crushed an acquisition deal.

The Canadian company had proposed a $9.50 per share takeover bid for Appen, which would have made the Australian company worth $1.2 billion.

It is not known why Telus withdrew the deal.

News.com.au has contacted Appen for comment.

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