APPEN LIMITED — AGM Information 2016

May 26, 2016

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Appen Limited Annual General Meeting 27[th] May 2016

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Disclaimer

The forward looking statements included in these materials involve subjective judgement and analysis and are subject to significant uncertainties, risks, contingencies, many of which are outside the control of, and are unknown to Appen Limited. In particular, they speak only as of the date of these materials, they are based on particular events, conditions or circumstances stated in the materials, they assume the success of Appen Limited’s business strategies, and they are subject to significant regulatory, business, competitive and economic uncertainties and risks.

Appen Limited disclaims any obligation or undertaking to disseminate any updates or revisions to any forward looking statements in these materials to reflect any change in expectations in relation to any forward looking statements or any change in events, conditions or circumstances on which any such statement is based. Nothing in these materials shall under any circumstances create an implication that there has been no change in the affairs of Appen Limited since the date of these materials.

No representation, warranty or assurance (express or implied) is given or made in relation to any forward looking statement by any person (including Appen Limited). In particular, no representation, warranty or assurance (express or implied) is given in relation to any underlying assumption or that any forward looking statement will be achieved. Actual future events and conditions may vary materially from the forward looking statements and the assumptions on which the forward looking statements are based. Given these uncertainties, readers are cautioned to not place undue reliance on such forward looking statements.

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Company Confidential 2
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CEO presentation

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Company snapshot

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!82.7!!
!51.0!!
!13.8!!
!4.8!!
FY2014' FY2015'
(A$m) Revenue' EBITDA'
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Appen (APX) is a global language technology company with operations in Australia, the US and The Philippines

Strong growth in 2015

• ~A$190M market capitalisation[1]

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Customers include the world’s leading technology companies, auto makers and governments Covering over 130 countries and 180 languages 230 employees and over 350,000 on-demand global crowd

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Company Confidential 4
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1. At 25[th] May 2016

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Appen’s high quality data is critical to automatic speech recognition, used by the world’s leading technology companies and government security agencies

Appen supports major ecommerce vendors to improve their search accuracy and make shopping easier, improve conversion rates and grow business

Appen works with leading search and social media companies deliver relevant content and news

Appen helps the world’s leading vehicle makers develop hands-free, voice-activated systems for safer driving

Appen works with gaming console providers for voice activated commands that enhance the player’s experience

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Company Confidential 5
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Positioned for growth

Leading position in high growth language technology and machine learning markets underpinned by deep linguistic and crowd-sourcing capabilities

Global customer base of the world’s leading technology companies, auto manufacturers and governments

Scalable business model including variable cost base and on-demand crowd for global deployment at strong margins

Strong balance sheet with no debt provides a solid foundation for growth

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Company Confidential 6
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Full year results (A$m)

Revenue up 62% EBITDA up 189% NPAT up 414%

Pro forma EBITDA up 110% Pro forma NPAT up 136%

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Revenue! Earnings!
!82.7!!
!13.8!!
!51.0!!
!8.3!!
EBITDA!
!4.8!! NPAT!
!1.6!!
FY2014! FY2015! FY2014! FY2015!
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Company Confidential 7
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New revenue growth

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!25,000!!
!20,000!!
!15,000!!
FY14!
!10,000!!
FY15!
!5,000!!
!"!!!!
eCommerce! Search!Customer! Social!Media!
Customer! Customer!
Revenue in FY2015 from customers
won after successful pilots in FY2014
($#'000)#
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Customers won through successful pilots in FY2014 provided substantial revenue in FY2015

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Company Confidential 8
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Improved customer diversification

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FY2014
FY2015
Others
14%
Improved revenue distribution Others
2%
28%
23%
2%
across top ten customers 3%
3%
1%
No single customer > 28% 2%
48%
3%
2%
2%
4%
3%
5%
9%
10%
9%
27%
Percentage of revenue from top ten customers in FY2014 and FY2015
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Company Confidential 9
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Repeat revenue

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&82.7&
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Appen maintains long and growing relationships with customers that drive repeat revenue year-on-year

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&33.3&
29.5
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&60.6&
&51.0&
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FY2011& FY2012& FY2013& FY2014& FY2015&

Language Resources customers originating in year Content Relevance customers originating in year

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Company Confidential 10
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Strong growth from both divisions (A$m)

Language Resources revenue up 42%

Improvement on high margins

Content Relevance revenue up 78%

Operational scalability from offshoring and technology

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Language!Resources! Content!Relevance!
!50.7!!
!31.9!!
!28.4!!
Revenue!
!22.5!!
Opera:ng!Profit!
!13.0!!
!8.1!! !7.7!!
!4.2!!
FY2014! FY2015! FY2014! FY2015!
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Company Confidential 11
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Currency impact (A$m)

Results have benefited from the falling AUD

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Revenue!
!13.7!! !82.7!!
!18.0!!
!51.0!!
FY2014! Currency! Currency! FY2015!
Neutral! Impact!
Growth!
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EBITDA!
!4.9!! !13.8!!
!4.1!!
!4.8!!
FY2014! Currency! Currency! FY2015!
Neutral! Impact!
Growth!
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Company Confidential 12
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People and culture

Employee satisfaction high at 90% Turnover low at 13% 230 employees, up from 150 in FY2014 Over 350,000 crowd-sourced on-demand independent contractors worldwide 180 languages and dialects Rated in Flexjobs Top 100 companies for remote work Active in-house Corporate Social Responsibility program

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Company Confidential 13
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	FY2015	FY2014	% change	% change constant currency
Statutory Results
Language Resources	31.9	22.5	42%
Content Relevance	50.7	28.4	78%
Total Revenue	82.7	51.0	62%	35%
EBITDA	13.8	4.8	189%	85%
EBITDA Margin	17%	9%
NPAT	8.3	1.6	414%	144%
Pro Forma Results*
EBITDA	14.0	6.7	110%	48%
NPAT	8.5	3.6	136%	38%

Full year results (A$m)

Revenue up 62% on FY2014 Language Resources up 42% Content Relevance up 78%

EBITDA up 189% (Pro forma up 110%*)

Margin improvement due to operational scalability underpinned by offshoring and technology

NPAT up 414% (Pro forma up 136%*)

*Pro forma results exclude one-off expenses associated with the IPO and other non-recurring items

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Company Confidential 14
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Balance Sheet (A$m)

	FY2015	FY2014
Current Assets	30.3	18.9
Non-Current Assets	11.7	11.2
Total Assets	42.0	30.1
Current Liabilities	11.4	9.3
Non-current Liabilities	1.9	1.2
Total Liabilities	13.3	10.5
Net Assets	28.7	19.6
Total Equity	28.7	19.6

Strong balance sheet. No debt.

Current assets up due to increase in cash reserves and receivables related to increase in revenue volumes

Interim dividend of 1.2 cents per share fully franked

Final dividend of 3.0 cents per share fully franked Total dividend for year of 4.2 cents

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Company Confidential 15
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Cash Flow (A$m)

	FY2015	FY2014
Receipts	72.5	58.8
Payments and other	(67.6)	(49.6)
Cash flow from operations before interest and tax	4.9	9.2
Taxes	(0.9)	(0.9)
Total Cash flow from Operations	4.0	8.3
Cash flows - Investment Activities	(0.6)	(11.4)
Cash flows - Financing Activities	(0.5)	5.3
Net Cash flow for the period	2.9	2.2
Opening cash balances	8.6	5.8
FX Impact	1.2	0.6
Closing cash balances	12.7	8.6

Cash balance increased by $4.1m Cash flow from operations impacted by:

Working capital investment relating to increased sales volume

IPO payment of $1.3m

Cash flow reconciliation ($m):

EBITDA	13.8
Working capital (Balance Sheet movement)	(6.2)
Payment of IPO costs not going through P&L	(1.3)
FX impact	(1.2)
Other	(0.2)
Cash flow from operations before interest and tax	4.9

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Company Confidential 16
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Outlook - Pipeline

FY2016 orders in hand over $75m at end April 16 Pipeline continues to build:

Successful conversion of a key pilot to production Large pilot secured in a major technology company Re-signed contracts with major social media and security clients Full year outlook for earnings growth trending to high teen percentages and above

Outlook susceptible to timing of work from major customers and a stronger Australian dollar (outlook at 76c)

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Company Confidential 17
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Thank you

Mark Brayan, CEO, mbrayan@appen.com Kevin Levine, CFO, klevine@appen.com Leanne Ralph, Company Secretary, leanne.ralph@boardworx.net.au

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Company Confidential
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