Appen shares crash after Google terminates contract

The news: Google has terminated its contract with Australian data services company Appen, ending a deal that delivered the Sydney-based firm over a quarter of its gross revenue last year.

The numbers: The ASX-listed company told shareholders on Monday that Google would be terminating its contract following a strategic review process, with all projects ceasing by 19 March. The global inbound services contract earned Appen USD82.8 million ($126 million) in FY23, 26% of its gross revenue. Appen reported total revenue of USD273 million and an underlying EBITDA loss of USD20.4 million for the year.

The context: Appen said the news was "unexpected and disappointing", particularly having seen quarter-on-quarter growth in its Global Services and New Markets divisions. However, the company has recently faced a drop in spend for its services by major partners such as Google and Facebook, with the company's shares down 80% over the past 12 months. Appen said it will provide a further update when its full-year results are published on 27 February.