Tech stocks have been slammed amidst a broader market selloff but Appen (ASX:APX) is going in the other direction thanks to its financial results.
The company, which provides annotation products for AI data, saw a substantial rise over five years from its IPO until 2020 but has been declining in recent months.
The selloff in the ASX tech stock all began with its half-yearly results in August last year in which it reported slower growth than expected. Investors were further disappointed with an earnings downgrade in December as well as its 2020 results released in February.
Today Appen gave a trading update in which it reiterated its earnings guidance – expecting US$83-$90 million in 2021. Its year to date revenue was approximately US$260 million at the end of April.
The company also announced a new organisational structure and now has four customer facing business units:
- Global – which will focus on providing data annotation services and products to its tech customers in the US
- Enterprise – which will drive growth outside global customers
- China – which will focus on capturing share in China; and
- Government – which will focus on government clientele.
It will also report its global services and new markets segments separately as well as in US dollars.
“Our new market structure will drive performance and growth by aligning our business with market opportunities and customer needs,” said CEO Mark Brayan.
“Value will be created by pursuing product-led expansion and by giving our teams end-to-end responsibility and control over delivery for their customers.”
Shares rose by as much as 12 per cent this morning despite the selloff among ASX tech shares.
Appen (ASX:APX) share price chart
EML Payments leads the ASX tech selloff
Among tech stocks that were sold off, EML Payments (ASX:EML) took the cake.
Its shares fell by as much as 45 per cent this morning with news its Irish payments subsidiary (PFS), received a letter from Ireland’s Central Bank (CBI) raising concerns in relation to its Anti-Money Laundering/Counter Terrorism Financing (AML/CTF) risk and control frameworks and governance.
EML Payments says that the CBI is minded to issue directions that could restrict its activities but was currently engaging with the CBI in relation to its concerns.
While the company reiterated its guidance, clearly investors disagreed as PFS was responsible for 27 per cent of EML’s revenue in the March quarter of 2021.
EML Payments (ASX:EML) ASX share price chart
EML backer Ron Shamgar, head of Australian Equities at TAMIM Asset Management, was evidently not one of those investors heading for the exits.