Google’s decision to end contract deals a blow to Appen’s revenue

  • Google terminates contract with Appen, ending a deal that contributed 30% of Appen’s 2023 revenue
  • Appen will cease all work on projects covered by the contract by March 19
  • Appen had no prior knowledge of the decision and called it unexpected and disappointing
  • Appen’s unaudited 2023 annual revenue was down about 30% compared to 2022
  • Appen generated an unaudited underlying EBITDA loss of $20.4 million for 2023

Alphabet’s Google has decided to terminate its inbound services contract with Appen, a move that will result in the end of a deal that contributed about 30% of Appen’s 2023 revenue. Appen, an Australian data-annotation provider, will cease all work on projects covered by the contract by March 19. The decision came as a surprise to Appen, which had no prior knowledge of it and described it as unexpected and disappointing. As a result, Appen will immediately adjust its strategic priorities. The company’s unaudited 2023 annual revenue was down approximately 30% compared to the previous year, and it generated an unaudited underlying EBITDA loss of $20.4 million for 2023.

Public Companies: Appen (ASX:APX), Alphabet (NASDAQ:GOOGL)
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Factuality Level: 8
Justification: The article provides factual information about Appen’s contract termination with Google, including the percentage of revenue contributed by the contract and the date by which Appen will cease work. The article also includes unaudited financial figures provided by Appen. However, the article lacks additional context or analysis, and it does not provide any perspectives from Google or other relevant parties.

Noise Level: 3
Justification: The article provides a straightforward report on Appen’s announcement of Google terminating its inbound services contract. It includes relevant information such as the impact on Appen’s revenue and the company’s response. However, it lacks in-depth analysis, evidence, or insights into the long-term implications or potential solutions for Appen.

Financial Relevance: Yes
Financial Markets Impacted: Alphabet’s Google and Appen

Presence of Extreme Event: No
Nature of Extreme Event: No
Impact Rating of the Extreme Event: No
Justification: The termination of the inbound services contract between Google and Appen will have a financial impact on both companies. Appen stated that the termination was unexpected and disappointing, and it will need to adjust its strategic priorities as a result. The termination of the contract contributed about 30% of Appen’s 2023 revenue, which amounted to $82.8 million. This news is relevant to financial markets as it involves a significant revenue loss for Appen and a strategic decision by Google.

Reported publicly: www.marketwatch.com