Airtasker achieves positive free cash flow of $2.5 million in Q3 FY24, a $5.1 million improvement on the prior corresponding period (pcp)
Positive group EBITDA of $600k is a $1.5 million improvement on pcp
Group revenue hits $12.2 million, with Airtasker marketplace revenue increasing by 11.5% to $10.1 million on pcp
UK posted tasks increases 49% on pcp
Special Report: Airtasker, an online marketplace for local services, has announced its second consecutive quarter of positive free cash flow.
Founded in 2012, Sydney based Airtasker (ASX:ART) provides an online marketplace where users can outsource everyday tasks to other community members, who then bid to complete the task.
After another strong result in Q3 FY24, ART says it remains confident of delivering full year FY24 positive free cash flow.
ART says the latest result was achieved by growing ART marketplace revenue by 11.5% to $10.1m and delivering solid group revenue of $12.2m whilst at the same time improving operating efficiency and reducing total operating expenditure by 6.4% on pcp.
Cash flow from operating activities for Q3 FY24 was $3.1m, up $4.3m on pcp. Q3 FY24 was the third consecutive quarter of positive operating cash flow for ART, delivering a total of $4.5m in positive operating cash flow over the first three quarters of FY24.
Against Q2 FY24 cash flow from operating activities improved $2.4m, reflecting a 46.4% decrease in payments for operating costs due to the timing of annual software subscription renewals and a 40.3% decrease in marketing payments.
ART says the Q2 FY24 included payments related to the production of the ‘Airtasker. Yeahtasker!’ creative assets.
Given the strong Q3 FY24 free cash flow result, and with northern hemisphere seasonality peaking in Q4 FY24, ART expects to accelerate international growth through investment in several marketing initiatives during this quarter.
“We remain confident of delivering full year FY24 positive free cashflow,” the company says.
In the ART marketplace, the strong revenue result was driven by a recovery in consumer demand (posted tasks) from the previous year as well as successful funnel optimisation programs.
The company revised its cancellation policy designed to improve platform reliability and address task leakage. As a result cancellations reduced by 23.9% on pcp resulting in the monetisation rate improving by 12.8% on pcp to 20.5%.
ART finished the quarter with $19.7m in cash and term deposits on balance sheet and zero debt.
Source: ART
Media partnership delivers 49% increase in UK posted tasks
ART says a key strategy to build the number 1 marketplace for local services in Australia was a media-for-equity partnership between the company and Seven West Media (ASX:SWM).
The company says the partnership enabled it to build a trusted household brand name and scale network effects rapidly, resulting in 20x revenue growth and a 5x investment return for SWM over five years.
The model is now being replicated by ART to drive rapid scale in the UK, with the company forming a five-year media-for-equity partnership with Channel 4 in the UK in June 2023.
The deal provides ART with an initial $6.7m in advertising media and access to Channel 4’s reach of 47 million UK people or 78% of the UK population.
Following the successful release of the UK television advertising campaign ‘Airtasker. Yeahtasker!’ in Q2 FY24, ART says marketplace demand continued to accelerate in Q3 FY24 with posted tasks up 49.1% on pcp.
Seasonally, marketplace activity in the northern hemisphere is strongest in the third and fourth quarters, during spring and summer.
Source: ART
In the UK, ART’s marketplaces demonstrated strong performance during the quarter with trailing twelve months (TTM) gross marketplace volume (GMV) up 12.3% on pcp to £4.1m (A$7.8m) and TTM revenue up 30.6% on pcp to £574k (A$1.1m) as a result of strong growth in posted tasks.
In Airtasker’s US marketplaces GMV increased 23.0% on pcp to US$533k (A$806k) and revenue increased 102.1% on pcp to US$64k (A$96k) during the quarter.
In the US, ART says it’s seeing healthy growth in marketplace activity while maintaining a disciplined approach to investment as the company explores several media partnership opportunities.
Investing in new marketplaces
ART’s marketplaces fall into two business segments, being the established marketplaces segment and the new marketplaces segment plus global head office expenditure which is not directly attributable to a segment.
Geographic operations are segmented based on the maturity of the marketplaces as economics differ at each stage of growth.
The ART Australia and Oneflare Australia marketplaces are at the ‘scaling’ stage as they have established user bases and operations and represent the established marketplaces segment.
International marketplaces, particularly in the US and the UK, are at the ‘zero to one’ and one to 100’ stages, respectively, as they have less established user bases and operations and represent the new marketplaces segment.
The company is continuing to invest in establishing and growing its international marketplaces.
During Q3 FY24, ART’s established marketplaces delivered positive Australian net EBITDA of $3.9m, after contributing to all global head office expenditure.
Group EBITDA was $600k, which included a $3.3m net investment in new marketplaces, including marketing and amortisation of media advertising assets.
‘Well-ahead of plan’ to deliver positive free cash flow for FY24
Founder and CEO Tim Fung says he’s pleased ART has delivered a second straight quarter of positive free cash flow.
“We are well ahead of plan to deliver on our promise of positive free cash flow for FY24,” he says.
“With consumer demand recovering and our continued focus on the core product experience, we’ve seen a dramatic improvement in our sales funnel with reduced leakage, which lays the foundations for re-acceleration of growth in the Australian market.
“In the UK, we’ve been blown away by the results of our ‘Airtasker. Yeahtasker!’ campaign and partnership with Channel 4 which has already delivered a 49% pop in posted tasks as we enter the UK spring and summer period – our biggest quarter.”
This article was developed in collaboration with Airtasker, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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