Australian artificial intelligence firm Appen Ltd said on Tuesday it expected to post its first half-year loss since going public in 2015 due to weak demand for digital advertising and rising costs, sending its shares to a five-year low.
Appen said in a statement its unaudited underlying net loss after tax was $3.8 million for the six months ended June 30, compared to a net profit after tax of $12.5 million a year earlier.
It added that steepening transformation and IT costs, and higher employee expenses also led to a 69% drop to its core earnings.
The Chatswood-based company, which counts Meta Platforms and Alphabet’s Google as its star clients, said its global division was impacted by a weaker digital advertising demand spurred by a slowdown in spending by some of its major customers.
Shares of the company, which have lost around 77% since the end of 2020, tumbled 23.8% in early trade to their lowest level since Aug. 10, 2017.
The firm, which sells a range of automation software including programs to help companies including Meta’s Facebook collate user data, however added that it expected to achieve higher volumes in the latter part of the second half of 2022.
“While only 26% of our first-half Global revenue supports digital advertising, we are seeing a flow on effect to non ad-related projects and some of our core programs,” said Chief Executive Officer Mark Brayan.
(Reporting by Upasana Singh in Bengaluru; Editing by Rashmi Aich)