Our record full year revenue and underlying EBITDA, as reported by our Chairman, maintained our run of constant growth since our IPO in 2015. Revenue has grown 49% CAGR from 2015 to 2020, and underlying EBITDA has increased 51% CAGR. Our growth has been underpinned by the ongoing demand for high-quality training data for AI, principally from our major customers, the world’s largest technology companies, but also from many new customers.
2020 was a breakout year for new customer wins. Our investments in sales and marketing yielded 136 new customers last year across a variety of sectors, including technology, autonomous vehicles, financial services and education, and multiple data types, such as image, video, LiDAR, text and speech. Many of these customers are small, but they increase Appen’s market penetration and lay a strong foundation for growth in coming years.
We also expanded the number of projects across our top five customers by 34%, increasing the value we deliver to our largest customers, cementing our relationships with them, and supporting their many new product developments.
Customer and project growth was enabled by our annotation platform, acquired with Figure Eight in 2019. The platform delivers utility to companies without data labelling or crowd management technology, provides additional functionality to our largest customers, and supports multiple data types and use cases that allow all of our customers to deliver on their expanding AI roadmaps. The platform also provides us with a pathway to valuable committed revenue, which was 31% of total revenue in the second half of the year, up from 12% in the first half.
We’re pleased to report very high growth in China, with revenue increasing 60% each quarter in 2020. We’re coming off a low base, but we have a solid foundation for growth. We count China’s largest technology companies amongst our customers, as well as a number of autonomous vehicle companies, and health and education technology providers.
Our government team is in place, having navigated the turbulence of last year, and is focused on building our brand and pipeline.
Combined, our new customers and projects, higher committed revenue and growth in China, along with our existing customers and programs, improves our market position and provides a strong foundation for further growth in 2021.
2020 was not without its challenges however. We had a strong first half but a number of factors conspired to dampen our second half result.
The global shift to working from home due to the pandemic limited our B2B selling, resulting in fewer customer wins in Q2 and Q3, but sales bounced back in Q4 as we established new ways of working. Our customers’ operations were similarly affected but the passage of time has and should continue to see more consistency.
The pandemic’s effect on some business sectors, such as tourism, reduced online advertising mid-2020 and thus lowered our major customers’ main source of revenue. Despite advertising bouncing back later in the year, we saw less spending on our advertising-related AI programs as well as a re-prioritisation of spend to new product development as our customers build less reliance on advertising. Fortunately, we’re involved in many of these new projects, but they are earlier in their life cycle than the ad programs and hence our 2020 revenue was impacted overall. We expect the new projects to grow and complement our major programs through 2021.
A few of our customers deferred programs amidst the uncertainty of the pandemic, including some major projects late in the year, which also impacted our 2020 revenue. We have seen the majority of these programs return in 2021.
Our market is dynamic and we, along with our customers, are responding to important issues that include trust, safety and data privacy. This may impact us as well, but it could also give us opportunities to support our customers in this changing environment.
Our focus in 2021 remains firmly on our customers. Providing high-quality data and services for our existing and recently won customers sets us up for expansion opportunities. Our more experienced sales teams and healthy pipeline will enable further new customer acquisition. The pace of AI adoption and use case proliferation will also drive continuing demand for high-quality training data.
Our technology is at the forefront of our work in 2021. The growing feature set, scalability and security of our platform will help us to win more customers, and our annotation tools, including AI-enabled automatic labelling, will improve the speed and quality of data provision and yield greater productivity of our crowd.
We will continue to support and grow our crowd. They are essential and valuable contributors to our business, and we strive to lead the way on the ethical and fair treatment of crowd workers.
Our customers highly value our deep expertise in the AI training data market. We are the largest provider of high quality data at scale, and in 2021 we will reach our 25th year in operation. Our team of training data experts continues to deliver huge value to our customers.
We have new challenges to navigate in 2021, including a strong Australian dollar, the pace of the economic recovery post-COVID, the evolving regulatory environment facing our major customers and their transition into new products.
We remain very optimistic however, due to the strong tailwinds of the AI market, our position as the largest in our market, the strength of our capabilities and technology and our proven ability to evolve with our customers’ needs.
I’d like to recognise all of my colleagues at Appen. Despite the many challenges of 2020, they were unwavering in their hard work and support of our customers, our mission and each other. They deserve our heartfelt thanks.
Thank you for your ongoing support. We look forward to a strong and successful 2021.
Mark Brayan
CEO
