Some notes from the Appen investor presentation and call today.

Market research forecasts 25% CAGR in the data annotation market, rising to $5B by 2024
Appen has experienced 38% CAGR in revenue from 1H16 to 1H21
Order book is 10% above the value it was at this time last year
Revenue $196.6m is 2% down on pcp, but this masks 31.5% growth in 'new markets' revenue, reaching $49m compared to the $149m of 'old markets' revenue from its traditional global tech customers
EBITDA down 14% to $27.7m, due partly to lower revenue, partly from costs of investments in 'new markets'
'World's largest provider of training data'
'Continued growth in demand for high-quality training data'
74 new customers in this 1H21, 320 active customers in total
'New markets' focus is on expanding to other markets (China, government) and also monetising their data annotation platform by selling it to enterprise customers
10.8% of revenue invested in product development
Strong balance sheet with no debt
25$M cash spent on acquisition of Quadrant, giving access to location data, much of which is crowd-sourced, and hence operationally a good fit with Appen. It is an early stage comany, so not bringing any significant new revenue
Full year 'underlying' EBITDA expected to be in the range $81M to $88M ($2M less than previous guidance, due to acquisition of Quadrant)

None of this sounds like a company that is under existential threat, which is what the stock market (and many analysts') reaction would have you think. There is clearly a pivot going on to more diverse revenue streams. The corporate mission seems to be broadening to 'helping people build AI', and 'there are plenty of directions we can go' - but they seem to be waiting for the onboarding of a new head of product development to define what this strategy will be.
The elephant in the room is the ability to generate ML data without human annotation, which would potentially decimate the size of the market that Appen dominates.

I hold Appen in my RL portfolio, and am down 44% after today's market rout. I was hoping that the results today would give me a strong reason for keeping the faith, but they haven't. I don't doubt that Appen will survive and prosper, but I think it is going to experience a turbulent few years, in a very dynamic market which is wide open to disruptive new entrants. I think it is time for me to exit.