APPEN LIMITED — AGM Information 2019

May 30, 2019

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Appen Limited Annual General Meeting 31 May 2019

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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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2

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Chairman’s welcome

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3

Agenda

• Chairman’s address

• CEO presentation

• Address from Nomination & Remuneration Chair

• Formal business and resolutions

• Morning tea

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4

Board of directors

• Mr Chris Vonwiller

• Mr Bill Pulver

• Ms Robin Low

• Ms Deena Shiff

• Mr Mark Brayan

• Chairman

• Non-Executive Director

• Non-Executive Director

• Non-Executive Director

• Chief Executive Officer

Apology:

• Mr Steve Hasker

Non-Executive Director

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5

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Chairman’s address

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6

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CEO’s presentation

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7

FY2018 highlights (A$M)

Appen’s strong growth continues

• Revenue up 119% to $364.3M

• Underlying EBITDA of $71.3M up 153%, statutory EBITDA up 206%[1]

• Underlying EBITDA margins improved from 16.9% to 19.6%

• Underlying NPAT of $49.0M up 148%, statutory NPAT of $41.7M up 192%[2]

• Substantial 2H for Language Resources delivers record annual revenue

• High revenue growth and margin expansion for Content Relevance. Strong Q4 performance

• Leapforce integration virtually complete

• Strong cash conversion (92% of underlying EBITDA)

• Full year dividend of 8.0 cps, up 33% on 2018

• Underlying EBITDA excludes transaction costs and share based payment expenses relating to the Leapforce acquisition.

• Underlying NPAT excludes after tax impact of items relating to the Leapforce acquisition, including amortisation of identifiable assets, share based payment expenses in respect of contingent shares and transaction costs.

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Revenue
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364.3
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166.6
FY2017 FY2018
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Underlying Earnings
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71.3
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28.1
19.7
FY2017 FY2018
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49.0
EBITDA
NPAT
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($Am)
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Strong divisional performance (A$M)

Substantial 2H for Language Resource delivers record annual revenue

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Language Resources
51.4
40.4
Revenue
EBITDA
12.2 11.2
FY2017 FY2018
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• Half on half revenue growth of 39%, from $21.5M 1H to $29.9M 2H, delivers record full year revenue result of $51.4M, up 27% on FY2017

• Growth fueled by multiple tech sector projects

• Margins continue to be impacted by mix of work. Lower volumes of complex government work

High revenue growth and margin expansion for Content Relevance

Content Relevance

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312.8
Revenue
126.2 EBITDA
74.8
22.1
FY2017 FY2018
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• Revenue growth of 148% driven by existing and new customer investments in AI

• Margin expansion from 17.6% to 23.9% from Leapforce and organic growth, and economies of scale

• Strong Q4 performance

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High growth, long term customer relationships (A$M)

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364.3
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166.6
110.9
82.6
50.9
FY2014 FY2015 FY2016 FY2017 FY2018
Language Resources [1]
Content Relevance [1]
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Ongoing customer growth and repeat revenue

• New and existing customers growing with multiple projects

• Consistent growth underscores importance of data and quality of Appen’s delivery

• Growth driven by data for new projects, more data for existing projects and data refresh

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1. Chart shows revenue by customer cohort origination and successive revenue from those originating cohorts, for each division

10

Business initiative updates

Secure facilities

• Growing demand due to data privacy and commercial confidentiality

• Manila facility ISO 27001 certified

• Exeter facility ISO 27001, and ISO 9001 certified

Leapforce

• Integration virtually complete

• Increased automation and scalability for all operational processes under Appen Connect (prior Leapforce platform enhanced for all Appen projects)

• All Relevance projects now on Appen Connect

• Speech, Image and Video work on Appen Connect end Q2

• Efficiency savings of $6M expected in 2019 from Leapforce integration

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Additional growth initiatives

Customer-centric alignment

• LR and CR sales teams combined to unify customer engagement and support

• Operations teams combined under global Client Services team to improve scalability and quality of delivery

• Reporting to continue to be based on data type

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China

• Largest AI market outside US

• Building out team, customer base and operations in Shanghai

• Providing Chinese language data to US customers

• Judicious investment

• ‘Air gapped’ tech and operations for data and IP security

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Transformative acquisition

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Leading global crowd

• Over 1m on-demand global crowd

• Covers 130 countries across 180 languages and dialects

• Delivered over 3 billion relevance data points and 500k hours of speech data

• Blue chip customer base, including eight of the world’s top ten technology companies

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Best in class SaaS platform

• Unique ‘human-in-the-loop’ platform capabilities transforming unstructured data into high quality training data

• 325m data points delivered in 2018

• Growing partner ecosystem with leading cloud providers including Google, Amazon, IBM and Microsoft

• Diversified customer base, including government contracts, providing recurring revenue

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Integrated global data annotator

• Vertically integrated combination with global crowd solutions utilising advanced annotation platform

• Increased revenue growth, longer term margins and an accelerated path to sticky recurring revenues

• Optimal efficiency providing reliable and high quality data quickly

• End to end solution to serve growing need for labelled data

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AI mimics human behaviour, typically two approaches

Humans provide the rules

Humans provide examples

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We support leading AI applications by providing ‘examples’ (aka training data)

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To learn, computers are ‘told’ what data represents

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This sequence of numbers is an image of Abraham Lincoln

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More training data = better performance

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Source: Andrew Ng

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Training data is the ‘product’ when it comes to AI

Design Code Test Iterate Improve the Start with logic performance by (e.g., Abraham Take the logic and Use real world Old approach Lincoln has a beard convert into code examples to test adding/changing logic and corresponding but no moustache) code Start with training Deep learning Deep data (e.g., 5000 of network programs Use real world Add more training data learning Honest Abe, 5000 itself using training examples to test of other people) data Typically most important step in process

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Appen provides high-quality AI training data

Data Collection

Machine learning models require large volumes of high-quality data to be trained effectively. Scale your data collection efforts across multiple file formats including text, image, video and speech.

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Data Annotation

Annotated data enables richer and more valuable machine learning-based products. Appen’s curated crowd allows you to get the high-quality data you need to develop better products for your customers.

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We focus on three main data types

Relevance

• Enhance on-site search, categorization, personalization and more

• Use cases include search, social media and eCommerce

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Speech & Natural Language

• Data for speech recognition, speech synthesis and natural language understanding

• Used for personal assistants, chatbots and in-vehicle speech systems

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Image & Video

• Data collection and annotation for computer vision

• Use cases include driverless vehicles, surveillance, medical image diagnosis, etc.

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We deliver at scale

Scale >1m crowd, >10 billion data points to date Diversity >180 languages, >130 countries, >70k locations Social impact Access to ‘Differently Abled’ workforce

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Leading technology to enable our crowd and customers

• Global crowd workforce

• Crowd Client Annotation

• management workspace tools

• • Recruiting • Collect and load data • Speech and text • Onboarding • Design job • Relevance • Quality assurance • Select workers • Image and video • Payments • Launch and monitor • Collection

• Flexible scaling • Download labelled

• • Project management data

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21

Appen is strongly positioned in a high growth market

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Established Provider

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Established Provider Global Presence Scalable Operations
Founded in 1996 with
industry-leading work in 600+ full-time staff
speech solutions worldwide
Added search relevance Exeter High staff engagement,
expertise in 2007, Seattle Detroit Beijing low turnover
working with leading tech San Francisco Shanghai
companies ManilaDavao 1+ million on-demand
skilled annotators globally
Strategic acquisitions over
the past 3 years have Providing data for an
positioned Appen to Sydney increasing range of AI
support client needs for applications
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1+ million on-demand skilled annotators globally

Strategic acquisitions over the past 3 years have positioned Appen to support client needs for high levels of data security & large volumes of data

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22

Outlook

Appen is strongly positioned and continues to execute in a high growth market Appen’s core business is performing well and Figure Eight is meeting expectations YTD revenue plus orders in hand including Figure Eight for delivery in 2019 ~$270M at mid-May 2019

The Company’s full year underlying EBITDA for the year ending Dec 31st 2019 including Figure Eight is currently forecast to be in the range $85M - $90M (at A$1 = US$0.74 May-Dec 2019)

Outlook susceptible to upside or downside from factors including timing of work from major customers and Australian dollar fluctuations.

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23

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Thank you

Mark Brayan, CEO mbrayan@appen.com Kevin Levine, CFO klevine@appen.com

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appen.com