For personal use only

Market Announcement | 27 July 2022

1H22 Financial Results & Business Update

Freelancer Limited delivers Gross Payment Volume in 1H22 of $652 million, up

15.2% on pcp (US$471 million, up 7.8% on pcp):

  • Freelancer GMV $64.7m, down 4.8% on pcp (US$46.6m, down 11.0%)
  • Escrow GPV $564.1m, up 18.7% on pcp (US$407.2m, up 11.1%)

Group net revenue 1H22 $29.2m, up 5.1% on pcp (US$20.9m down 2.1%):

  • Freelancer revenue $23.5m up 3.4% on pcp (US$16.9m, down 3.6%)
  • Escrow revenue $5.7m up 12.8% on pcp (US$4.1m, up 4.2%)

FX had a tailwind of 6.8% in 1H22 as the Australian dollar depreciated against the USD from an average of 0.7715 to 0.7192.

Approximately 74% of group revenue is USD and 7% is AUD.

The group had positive net operating cash flow of $2.3 million for 1H22 (1H21: $2.7 million) and ended with cash & equivalents of $31.7 million, flat on pcp.

Escrow ended the quarter with off-balance sheet cash of US$42.6 million, up $11.6m or 38.0% on pcp.

SYDNEY, 27 July 2022 - Freelancer Limited (ASX: FLN) (OTCQX: FLNCF), the world's largest freelancing and crowdsourcing marketplace by total number of users and jobs posted, today released its business and activities update for 1H22.

The Freelancer Group primarily consists of Freelancer.com- the largest cloud workforce in the world, Escrow.com- the world's largest online escrow company, which facilitates and secures large value payments, and Loadshift- Australia's largest online freight marketplace. All are market leading, broad, horizontal service offerings that consumers through to large enterprises require as part of their everyday business.

1 of 36

For personal use only

Market Announcement | 27 July 2022

Freelancer.com

Summary

Freelancer revenue was $23.5m up 3.4% on pcp (US$16.9m, down 3.6%). Freelancer GMV was $64.7m, down 4.8% on pcp (US$46.6m, down 11.0%).

Marketing

During 1Q22, we focused our attention to increasing the volume of transactions produced through paid advertising (SEM). This initial stage involved campaign expansion and proved to be successful with our deposits from SEM reaching near-all-time highs.

During 2Q22 we shifted our attention towards optimising and lifting the profitability of the campaigns we are running, especially the new ones. Although there was a drop in the total volume during May, we soon reached a high of average revenue per user in the channel, with our key profitability metrics trending in the right direction.

Figure 1: Average Revenue Per Paying User (SEM)

2 of 36

Market Announcement | 27 July 2022

For personal use only

Figure 2: Campaign Cost (SEM)

Our efforts on the SEO front are also starting to show results. The top-level metric (Impressions) has experienced significant growth over 2Q22. The focus in 2H22 will be converting this up-funnel traffic into down-funnel GMV and revenue.

Figure 3: Impressions from organic traffic (SEO)

This is just a start. In 2Q22 we have been mobilising engineering resources to work on the next stage in the SEO strategy, focusing on user generated content and site architecture, which we believe will drive further impression growth and leverage our strengths as the largest online freelancing marketplace by users and projects.

We have also begun work on the retention marketing strategy. Whilst this work is long-term in outlook, we believe we should begin to see some initial wins in the coming months as we enhance our ability to market to our existing customers.

Supply & Demand

On the supply side, the marketplace continues to grow strongly, with another 1.5 million users added to the marketplace in 2Q22, for a total of 3.1 million over 1H22.

3 of 36

For personal use only

Market Announcement | 27 July 2022

Liquidity also improved slightly, with the percentage of projects receiving their first bid in 30 seconds increasing to 49% as of writing this report.

Figure 4: Average Completed Project Size

In 1H22, the average project size was US $241, up 12% on pcp. As discussed in 1Q22, this was primarily as a result of the improved acquisition targeting and partially from the long term marketplace trend of increasing sophistication in skills and quality of work delivered by our talented freelance workforce.

Product & Engineering

As discussed in previous reports, we are now fully leveraging our front end and mobile technical architecture improvements of the past few years, with our product teams now heavily focused on new product development. All product development is now mobile first and delivered across all of our platforms simultaneously.

Throughout FY22, the focus of this new product development will be:

  1. Visual design, responsiveness & UI/UX
  2. Enhancements to payments, enterprise features, matchmaking and collaboration
  3. Trust and safety

In 1H22, we released a number of new products, discussed in further detail below.

Quotations

In 1Q22 we introduced a new product offering - Quotations. The basic premise behind this is to allow freelancers to easily pitch services to clients. This overhauls our current paradigm, whereby the onus is on clients to set up, itemise and price the work, in complete contradiction with how the real world works.

4 of 36

For personal use only

Market Announcement | 27 July 2022

By placing the friction around pricing and payment setup onto the freelancers, we reduce friction for clients. In addition, by presenting the quotation in a familiar format, we aim to reduce confusion and UX issues, reducing a client's purchase decision to just a couple of clicks. As stated in our 1Q22 report, confusion around our milestone payment system is a top three detractor in our customer surveys.

Furthermore, the product is designed to encourage freelancers pitching for follow-up work, with the goal of driving client retention.

In 2Q22 we spent a significant amount of time further iterating on this product, with the goal of launching a swathe of new features in 2H22. This product has a long roadmap ahead of it, and we consider it to be a key pillar of our product strategy moving forward.

Figure 5: Quotes

Upgrades

Over the past half-year, we have been optimising the experience of purchasing value added services and upgrades. We improved our paid NDA offering for clients, offering more protection in an age where confidentiality is increasingly crucial. We also made upgrades more visible and compelling to purchase. Operational teams have also adopted new processes to increase mid-project sales. All of this has led to a 42% increase in 1H22 upgrade revenue on pcp.

5 of 36

This is an excerpt of the original content. To continue reading it, access the original document here.

Attachments

  • Original Link
  • Original Document
  • Permalink

Disclaimer

Freelancer Ltd. published this content on 26 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 July 2022 23:31:03 UTC.