Appen's China Engine Roars as Legacy Business Stabilizes

Appen's H1 FY26 results mark a clear inflection. The company's dual-engine strategy is paying off, with Appen China delivering explosive growth while the traditional work in the Global business stabilizes amid a $12 million cost-out program. Revenue rose 17% to $119.9 million, and underlying EBITDA swung to a $5.3 million profit, a $7.5 million improvement year-over-year.

The China Engine

The standout is unmistakable. CEO Ryan Kolln opened the call by calling out that “Appen China was a standout for the half. Revenue grew 80% to $76.2 million and achieved an annualized revenue run rate exceeding $175 million in June” — Ryan Kolln, Chief Executive Officer and Managing Director · 2026-08-26. That momentum is not a one-quarter spike; it reflects deepening relationships with Chinese foundation model builders and the rise of consumer AI applications. The company's robotics and video-generation work are adding new data modalities, and Kolln highlighted that “international support required to support Chinese technology companies” is a growing driver.

This is exactly the kind of revenue diversification investors have wanted to see. In the prior call (Feb 2026), Kolln explained why the mix shift matters: “One is as China becomes a larger portion of our revenue, that is less variable to quarter-on-quarter shifts because it's — in China, our customers come to us and ask more for an allocation of resources rather than a specific project base” — Ryan Kolln, CEO and Managing Director · 2026-02-24. That stability is now showing up in the numbers.

The Global Turnaround

Appen Global remains the tougher battle. Revenue fell 26.9% to $43.7 million, but CFO Justin Miles noted that “growth in new areas has not yet offset a reduction in traditional work” — Justin Miles, Chief Financial Officer · 2026-08-26. Crucially, the decline is slowing: Q2 revenue grew 65% sequentially ex the largest client, and the company says foundation model work is expanding across frontier AI labs. The cost discipline is aggressive—$12 million of annualized savings, 70% executed by year-end, and all through AI-enabled operations, not headcount cuts.

This is a continuation of a theme from the August 2025 call, where Kolln noted “we're seeing increased conversations around areas where Appen has long strengths, notably large-scale multilingual data related to speech interface systems” — Ryan Kolln, CEO and Managing Director · 2025-08-28. The difference now is execution: employee expenses in Global fell 19% and other expenses 29% on a PCP basis, buying time for the new business to fill the gap.

New Frontiers and the Path Forward

On robotics, Kolln is explicit about the opportunity:

So, you can think about 3 sources of data that are needed to train, particularly the humanoid robotics... this part of the market is very interesting. It's a little bit of a commoditizing really quickly because there are many companies that are out there...

All of this supports reaffirmed FY26 guidance of $270–300 million revenue and 5–10% underlying EBITDA margin. As Kolln put it, “We remain confident in the AI data market and Appen's ability to contribute meaningfully to the development of leading foundation models” — Ryan Kolln, Chief Executive Officer and Managing Director · 2026-08-26. With AI labs across both China and the U.S. accelerating their model cycles, Appen is positioned directly in the data supply chain that underpins it all.