Airtasker Limited (ART) Earnings Call Transcript

Hello, everybody. Welcome to Airtasker's Q1 '27 Trading Update. We're just going to wait another 5 seconds or so until everyone joins us before we get kicked off. So a little bit of awkward silence for 5 to 10 seconds. It can feel like an eternity when you're doing silence as a webinar starts. But let's break that awkward silence and jump right into it. So first of all, thank you, everyone, for taking the time to join us today. As you remember, in calendar year 2026, we started kicking off doing quarterly updates. So after our first quarterly update in March, we did our full year results at the end of June. And this is our first quarterly update for FY '27. So I'm Tim. I'm the Founder and CEO of Airtasker, and I'm joined today by Reena.

Hi, everyone. I'm Reena Minhas, the CFO, been in the role now just over 2 months and looking forward to presenting the first quarterly.

Amazing. Let's kick it off then. So if we go to our executive summary, really pleased to say that we have had a really, really great start to FY '27. So starting with Australia. We're still in the low period for Australia before we kick off into the spring/summer, but we had a record Australian GMV even in our low period. So that was up 20.9% on PCP to $57.3 million. And this was a great acceleration in growth. This does translate through to revenue up 15% on PCP to $12.2 million. And the reason why you're starting to see that is our strategy is really playing off of investing into memberships in which case we have revenue lagging over GMV growth and also rebooking and recurring tasks working in which case we work on a lower take rate, but have a great GMV acceleration from that. Across to the U.K. and the U.S., they're doing $26.4 million and $8.6 million GMV ARR. And I think the important thing to say here is that the momentum is holding up even as we start to focus in on getting more efficient with our cash flow in those markets. As we said in FY '26, we actually invested about $5 million of additional capital into the U.S. and U.K. markets in addition to the cash that we're generating from our Australian business. And in FY '27, we intend to be group cash flow positive. So we are looking at being really efficient in our growth in the U.K. and the U.S. We also passed over 25,000 paid subscribers in our membership programs. That was up from 10,000 at June and 1,000 at March. So really, really pleased with that growth and well on track to achieve our FY '27 target of 50,000 members. Just a reminder there that membership is $89 in exchange for no connection fees for our customers. And the reason why that we're doing that is that $89 equals a little over 3 tasks' worth of fees for customers. So every time we get a member signing up, that's someone signaling to us, I want to use Airtasker frequently. I want to use this 4 or more times per year, and this is why this makes sense for me to do. So we're really excited about that. But it is worthwhile saying that we recognize the revenue over the following 12 months. So when someone signs up for an $89 membership, we have about $7 of revenue coming in, but it comes in over the next 12 months. So you'll always see that the revenue lags the GMV growth. Finally, overall, our FY '27 guidance is reaffirmed, which is actually on the next page. So just as a reminder of that guidance, double-digit revenue growth, excluding Oneflare. And as mentioned, that was up 15% already in the quarter. And that's coming from an increasing contribution from top line GMV growth, which was up over 20%. We expect Australian cash flow generation to increase. We did $16.5 million of free cash out of our Australian business less head office costs. We expect that to be going up, and we're on track to do that. Membership delivering 50,000 paid subscribers. We're already at 25,000 after Q1. The U.K. and the U.S. continuing to grow. And as a reminder, our U.K. business, we're reducing our net cash investment into that business and moving it towards profitability and in the U.S. being very disciplined with our cash deployment in that market to make sure that we can deliver on the final point, which is our group positive free cash flow. So just an overview, Australian marketplace revenue, record at a GMV and a revenue level. Australian revenue, up 15% on PCP, $12.2 million, and our international business continues to scale, now delivering $1.8 million of revenue on a trailing quarterly basis. And now I'm going to pass it over to Reena, who can take us through the various marketplaces.

Thanks, everyone. So moving to Slide 6, Australia. First quarter '27 revenue was up 15% on PCP. So we delivered record quarterly GMV of $57.3 million, which was up 20.9%, which is the highest quarter we've ever had and what's normally a softer quarter for Australia. What's really notable is the rate of increase in GMV in the last quarter. That growth came from both volume and price. Booked tasks were up 7.8%, and average task price was up 12.2% from refreshed customer pricing and inflation. Membership fees are also now included in full in GMV. Revenue was up 15% to $12.2 million, our strongest first quarter, and we're on track for double-digit revenue growth for the year. As we've noted, the gap between GMV and revenue growth is the membership timing I described. Fees go into GMV when paid and into revenue over the membership period. Membership now has more than 25,000 paid subscribers globally. So we've got more than 22,000 in Australia and almost 3,000 internationally. On brand, in August, we renewed our partnership with oOh!media and signed a new one with NOVA Entertainment. So that's now $11 million of media over 3 years paid forward convertible notes. Together with Nine, that's now $16 million of Australian media capital. So moving to Slide 7, U.K. The U.K. had a revenue -- record revenue quarter also. Revenue was up 39% to AUD 1.4 million, driven by GMV growth. Over the trailing 12 months, GMV was up 44% to $23.3 million and revenue up 45% to $4.7 million. We also launched membership in the U.K., and we've already got signed up more than 2,000 paid subscribers there. The September GMV run rate was $26.4 million. And now as the Northern Hemisphere moves into autumn and winter, we expect GMV to soften through our second and third quarters, and then pick up again in the fourth quarter. And importantly, we're on track against the U.K. guidance, which is growing GMV and revenue while spending less cash than we did in FY '26. Moving to Slide 8, the U.S.A. First quarter '27 revenue was up 21% on PCP. In the U.S., revenue was up 21% to AUD 0.4 million. Over the trailing 12 months, GMV was up 81% to $1.4 million. The September GMV run rate was $8.6 million. Like the U.K., we expect the U.S. to soften through the winter and pick up again in the fourth quarter. We're rolling out a disciplined targeted marketing program alongside our media partners. So we're pleased with that revenue growth with a more targeted approach. With that, I'll hand back to Tim for any questions.

Well, actually, I'm going to see if there are any questions. So now is the opportunity to ask any questions if there's anyone would like to. We'll just go through -- okay. So there's not a Q&A. One second. And we've had one question -- pre-webinar question, and then I'll go through the questions that we're receiving now. How will unit economics for Airtasker change as more users go from unpaid to paid subscribers? I would assume Airtasker will be making less money off its more active subscribers, but potentially lift task activity from its less active subscribers. Tim, do you want to take that one?

So if we take a step back, the goal of membership is to work on the core metric of improving our purchase frequency. The purchase frequency of our users is such that about 65% of users only purchased 1 task during FY '26. About 93% cumulative of our users did somewhere between 1 to 3 tasks for FY '26, and about 6% did 4 or more tasks per year. So the way that we constructed the membership product is that it's $89, which is roughly equivalent to 3 or more completed tasks. And so by purchasing a membership for $89, you're sort of signaling to us you want to use Airtasker 4 or more times per year. And that's really where we're trying to move people from low frequency into high frequency. And what we're really excited about is that the take-up of membership is much higher than that 6% of people that were already using Airtasker 4 or more times per year. So the great news there is that we're definitely going to be moving a bunch of people who might have been in that 1 to 3 up into being monetized into that 4x bucket. There was a question about just how the membership works in general. So $89 a year, including GST, so you knock off the 10%, so maybe $81. That's about $6.80 a month being recognized. So the vast majority of the memberships to date, the revenue hasn't been recognized because it's actually going to happen over the next 12 months. And great news is that we're already starting to bake in revenue for FY '28 because some of the members we're acquiring now are already building up our forward FY '28 revenue. So I think customer memberships loving it. So it's doing well.

Tim, do you want -- there's a couple of questions around Pro Pass on the other side, the task membership. Do you want to just give us an update on those as well?

Pro Pass is doing incredibly well. So coming back to the thesis and the genesis of Pro Pass, we saw that there -- it's one thing that customers or taskers, you read any of the Trustpilot stuff, it's that they don't like percentage fees. And there's always complaints about Airtasker's fees being too high. Now what we can categorically say is that Airtasker does more than 50% more jobs than hipages. But if you look at their revenue, their revenue is considerably higher. In other words, they're extracting more value from the user or revenue per job that's posted relative to the actual activity in the marketplace. And what you can kind of see from that is that a lot of people do prefer to pay a fixed amount of money rather than paying a percentage, even if that the percentages can be much more efficient for customers. So what we launched with Pro Pass, as a reminder, is $1,800 plus GST, which is $1,980 paid upfront, gets you $22,500 worth of earnings on our platform. So for our taskers, we are accountable to delivering them $22,500 worth of potential earnings on the platform. And that has proven to be quite an attractive model. We didn't release any specific stats around it, which -- so I won't call out that specific stat. But I can say we're well into the 6-digit figures of revenue being generated from Pro Pass and well into the millions of dollars of GMV that is now spoken for or has been pre-committed by our taskers to Airtasker. Why is this strategically so valuable? If we look at one of the biggest issues with Airtasker's capital deployment, it's that generally in a marketplace, we're investing all the cash upfront to build a marketplace. And at the end of that, we're monetizing it at $50 per completed task. And that's quite an intense capital deployment period as we're seeing in, say, the U.K. and the U.S. And what happens with Pro Pass actually inverts that. It actually says the capital is acquired upfront, the cash. And actually, the work to deliver on those commitments actually happens after that. And so it inverts the capital investment and creates, at an individual unit economic level, a positive working capital situation. And so I think it's a very, very exciting strategy to be pursuing, and we're seeing some great results out of it so far.

Thanks, Tim. There's a couple of questions around the U.S., which I might try and group. Was the U.S. in line with budget? What were the best-performing cities? And then just around why the U.S. GMV growth is 81%, but revenue growth is much lower.

So I think maybe, Reena, you can take the one on the revenue and GMV growth and the difference between PCP and quarter-on-quarter and things like that. But I can take the one on generally how the U.S. is going. Overarchingly, one of the things that we're now focused on in FY '26, we flagged to the market that we were going to invest an extra $5 million into U.S. and U.K. growth and predominantly, that was into the U.S. And the reason that we wanted to do that is to test how much capital we could deploy and what the efficiency of that looked like. So we delivered an astounding result in the fourth quarter of FY '26 in the U.S. And now, what we're looking is moderating that cash flow because we don't want to be negative cash flow this year. We want to be group positive cash flow. And so we are looking more at efficiency as opposed to just all-out growth. So yes, we're absolutely on track in terms of internal targets and goals. But we are looking at efficiency and how much cash we're deploying, what the ROI on that is as much as we are just looking at all-out growth at all costs. In terms of what cities are working, I think New York continues to be a powerhouse. And again, it comes down to test and learn. The more that we go out and test new markets, the more that we find certain markets which we didn't necessarily expect to perform well, doing better than others. And so we're using a lot of like algorithmic techniques to find and optimize to which cities that we end up deploying the capital into. And we are not like Uber, where we have to decide on a city, commit to millions of dollars in doing that. And then that's a very one-way door approach. We're very much able to be agile and deploy the capital exactly to where the algorithms tell us that the best outcomes are going to be achieved.

Thanks, Tim. I'm just going to go back to the questions. Let me just pull these. So total Australian revenue, including Oneflare, appears to have gone from $13.8 million in Q1 FY '26 to $14 million in this quarter. Is this in line with expectations?

Yes. So we were -- in the second half of FY '26, we made the decision to retire the Oneflare brand and platform and to make sure that we maintained all of the assets and the goodwill of that business. So for example, some of the top-performing sales team were retained. And of course, all of the knowledge and databases, et cetera, were retained. But we did effectively retire the brand and the platform. So I think it's an outstanding result to actually have earned back all of that and absorbed that into Airtasker still shown growth even though that brand and platform is no longer operational. So yes, I'm really, really stoked with this result actually, and I think more to come.

Okay. There was a question around AU GMV growth memberships versus booked task price, but we're not -- I don't think we've disclosed the revenue number for memberships. We won't do that one. I'm going to try and group some of these. How has the AI-referred traffic metric you spoke to at the FY '26 result evolved? Has it changed at all since personal agents have taken off in the U.S. and the U.K.?

We haven't disclosed an AI traffic number. And I think, however, a bit of color there, I think, is really relevant. Overarchingly, there are a lot of -- the distribution, online distribution completely changing, changing in a couple of different directions. The first is that if you look into traditional search through platforms like Google and Bing, a lot of that is being replaced by AI answers now. That number used to be about 13%, I think, about 6 months ago, and that number is now about 70%. Like if you put something into Google, you get an AI-referred answer. The great news is that Airtasker really benefits in these AI-referred answers because we have a lot of specific data. So when you are looking at something like how much does it cost -- how much can I earn as a plumber in Parramatta, classic thing, that will come up as an AI answer. It'll just tell you what the answer is, but Airtasker will be cited as the data source from that. And you do get traffic from those citations. Airtasker is cited more so than platforms which don't have a closed loop because they just don't have the data. That said, where you're losing traffic is when you see all of these like SEO-type pages that said things like price of plumber in Parramatta, price of electrician in Parramatta, price of blah in Parramatta, and having all of this. And so you're losing that traffic, but you're gaining in citations. So that's one big change. Another big change is, of course, LLM traffic. We're seeing that in general, we're tacking that on top of search traffic. So that's been a great evolution for us for the same reasons. AI -- Airtasker benefits from AI inquiries because we have very proprietary data, which you can't get from anyone else, and we get cited in more queries. And then the third area is agentic commerce. And as we said in our June '26 update, we're now live in the OpenAI's marketplace connectors and in Claude as well. So you can connect Airtasker as an app into those marketplaces. And what that means is that Airtasker -- Claude and OpenAI can do end-to-end e-commerce through Airtasker and actually buy tasks on their behalf, and we've seen great growth in that area as well. Even more excitingly, as you've seen things like Instinct, Meta Muse, and these other sort of agentic assistants coming to life, we're right on the cutting edge of that and deploying into those marketplaces where it is possible, where they have open integrations, but even more so making sure that just our Model Context Protocol is really, really clear. So that when AI bots or agentic-type models want to come in, Airtasker is marked up in a way that makes it really easy for the agents to make their way around. Overarchingly, we think that this is a massive boon for Airtasker because we're not just sort of like a lead gen website, which sends traffic around to the Internet, we're actually providing you a core service and providing the payments, the insurance and the system of record in getting your tasks done. And so we're able to open up a lot of our data to these platforms because we know, ultimately, that's going to result in more people coming into our funnel rather than being cut out of the funnel altogether. So AI, super excited.