Machine learning and A.I. company, Appen (ASX:APX) reported results that the market loved hearing, with its headline profit coming in at $41.6 million in the full year ending 31 December 2019, slightly less than 2018’s.
But the market was looking at, underlying net profit after tax, that rose 32%, to $65 million, slightly above Citi’s expectations.
Its revenue rose 47% to $536 million, and its earnings or EBITDA (another closely watched line in its financials) rose 42% to $101m.
So what does that mean? Well the business is growing 51% more times than 2018 and it also beat its own forecasts as its speech and image earnings grew strongly (up 32%).
As for what’s ahead, the company that works with the world’s biggest tech companies says its set up with the US government is on track and will enable it to now take part in more government operations. APX also says its operations in China and other parts of the world are also progressing well. All of which is why APX upgraded this year calendar earnings to between $125-$130m. This upgrade was also stronger than the market expected.
After their results were out, APX shares rose about 7% to $25.60. Over the last 5 years, APX has gained 4,000%. We have the stock as a buy with a 12-month price target of $28.75, but expect analysts to upgrade and review their recommendations tomorrow.