Appen Ltd (ASX: APX) shares are back in the green on Friday after the artificial intelligence (AI) data company gave investors a closer look at its turnaround.
At the time of writing, the Appen share price is up 8.93% to $1.22.
That move comes after a rough month for shareholders, with the stock down around 25% over the past 4 weeks.
Despite the recent slide, Appen shares are still up about 50% in 2026.
So, what did Appen tell the market today?
Why AI demand is driving the update
At today’s Annual General Meeting (AGM), Appen Chief Executive Ryan Kolln focused heavily on the company’s role in the AI market.
Appen provides data used to build and improve AI models. That includes human-generated data, model evaluation, speech and audio work, computer vision, coding tasks, and reinforcement learning environments.
The company argues that this work is becoming increasingly valuable as AI models move beyond public data and require more specialised inputs.
As AI models become more advanced, they need more than internet data. They also need people to review answers, test outputs, label information, check quality, and build datasets in complex areas.
Appen said it is already winning work in areas such as robotics annotation, coding vulnerability testing, reinforcement learning environments, multilingual audio models, and multimodal evaluation.
After years of pressure on revenue and margins, the question now is whether Appen can turn that AI demand into steadier growth.
China growth helps the result
The FY25 result gave investors a few signs that the business is stabilising.
Appen reported group revenue of $230.8 million for FY25, up 4.5% on FY24 when excluding the impact of Google.
Underlying EBITDA before foreign exchange (FX) impacts came in at $12.2 million, up 251% on the prior year.
Gross margin also improved to 40.3%, helped by a better mix of generative AI projects.
Appen China was a strong part of the result, with FY25 revenue rising 75% to $102.9 million. Underlying EBITDA before FX lifted to $10.6 million, with the business benefiting from new and expanding LLM-related projects.
Appen Global was still weaker over the full year, with revenue down 21% to $127.9 million. However, management pointed to a much stronger fourth quarter, helped by generative AI work and cost savings.
FY26 guidance stays in place
The other key point from today’s update is that Appen has reaffirmed its FY26 guidance.
The company continues to expect revenue of $270 million to $300 million.
It is also targeting an underlying EBITDA margin before FX of around 5% to 10%.
Management said the business continues to see positive signals from LLM-related growth across Appen Global and Appen China.
Furthermore, Appen is also trying to keep costs under control while putting money behind the areas showing revenue growth.
Foolish bottom line
Appen is still a highly volatile stock, but today’s update gives investors a few reasons to stay positive.
The company is now seeing stronger demand from AI customers, China is growing quickly, and underlying EBITDA has improved.
The next test is whether Appen can turn the current AI demand into more consistent revenue growth.
The post This ASX AI stock is surging 9% today after a wild month appeared first on The Motley Fool Australia.
Should you invest $1,000 in Appen right now?
Before you buy Appen shares, consider this:
Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Appen wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
And right now, Scott thinks there are 5 stocks that may be better buys…
* Returns as of 20 Feb 2026
.custom-cta-button p {
margin-bottom: 0 !important;
}
More reading
- These under-the-radar ASX AI shares are starting to turn heads
- Why Appen, Gentrack, Magellan, and Regis Resources shares are falling today
- Why Appen, Catalyst Metals, South32, and Woolworths shares are sinking today
- Why Appen shares just crashed 28% despite a return to growth
Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Appen. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.