Freelancer Limited (FLN) Earnings Call Transcript

Okay, 11:00. Welcome to the Freelancer Limited First Half of 2024 Financial Results Presentation. My name is Matt Barrie. I'm the Chief Executive and Chairman of Freelancer Limited. Today, we have full court. We have with us Neil Katz, Chief Financial Officer of the group. We have Shaun McMeeken, who's the Head of Sales, enterprise sales in the business. We have Andrew Bateman, who is [ OIC ] in Product, in charge of enterprise products; Adam Byrnes, VP of Products; August Piao from Escrow.com; and Cohen Wisniewski from Loadshift. As always, you may address the questions at the end of the presentations to any of the executives in the room or to myself. In the first half of 2024, gross marketplace value for the group was $449.8 million, which was down 18.2% on pcp. The Freelancer segment was flat at $64.7 million, down 0.8%. Escrow, which is fairly lumpy and has been, in the past, up and down, that was $385 million, which is down 20.5% on pcp. If you do look at the long-term trend for GPV for Escrow, it is trending up and that trend remains intact, and we lap a spike from the first half of 2023. I will also point out that we will have a good quarter this quarter coming up for Escrow. On Friday, we just had the buyer and seller signed for a USD 50 million transaction. So that's going to go through the next 2 weeks. So we'll have a big jump up in this quarter for the Escrow GMV. So that's going to be an up quarter. So we do have a bit of a lumpy profile on that, which goes up and down quarter-on-quarter, and I'll talk about it more when I get to the Escrow segment. The group net revenue was $25 million, which is down 8% on pcp. Freelancer was $20.4 million, down 9%. The contributor to that was engineering services, which was down a little bit in the first half, although as of yesterday, we've got agreement to proceed with an engineering services engagement on the generative AI work. And I think ultimately, that's probably going to end up being a low 7-digit engagement over time. But the first phase of that got approved yesterday, and we also have a second engineering services proposal going out this week, which we'll see where we get to more on the field services side. So there is improvement coming in some of those numbers on the engineering services side. And I will talk about on Freelancer a bit more detail kind of it's looking pretty good in last 6 weeks or so in terms of growth in that business, but I'll get to that in a bit. The Escrow net revenue was $4.6 million, down 3.2% on pcp, although if you look on a 3-month basis as of today, year-on-year is actually up. In fact, in the second quarter, we were actually up 10.5% on pcp. The profitability of business is basically flat, was near a $1 million loss in the first half. Operating cash flow was up 57% to $2.2 million, so that's doing okay. And the group ended with cash and cash equivalents unchanged on FY '23 to the decimal point. Now getting into the Freelancer segment for the business. So [ before ] the GMV was flat, but I do think this is going to actually grow fairly substantially in the second half of this year. In particular, we've got quite a large amount of work coming through on the generative AI side. And I think we've made some -- quite a number of announcements on the platform about that. We are currently sourcing probably well over 100,000 freelancers for work on training for one of the largest foundational AI models in the world. There will be actually an announcement about the partnership probably in about 60 days from now. We've got approval yesterday, that we're going to put together a release on this to talk about the partnership, but we have to go through a number of big company approvals before we can kind of get the names out there public. But we are actively already working on this. We've already [indiscernible] across many, many thousands of freelancers, and we are actively engaged in recruiting of those freelancers. And there are many, many, many projects involved with not just this particular one customer but also expanding across the generative AI field. So this is quite a very lucrative segment for us, and I do think that, by the end of the year, that this work will contribute a 7-figure U.S. GMV contribution per month to the business. So it will be a fairly substantial contribution, and there's quite a lot of upside from there as well. So we're, at the moment, just actively sourcing freelancers and getting them across. And it's across AI training. It's across safety work, and there's also a lot of specialists, generative AI work that we're doing as well, in particular niche areas of human endeavor. The marketplace added 1.74 million users in the second quarter. And in fact, we had quite a big win on the sign-up funnel for Freelancer. That resulted in, as of, I think, it was mid-June was it, Adam?

A little earlier.

A little earlier.

Yes.

A 40% uplift year-on-year in verified sign-ups to the platform. So we actually got quite a big lift in sign-ups from a bit of a win that we did in the sign-up flow. The average project size was $268, which is effectively flat on pcp, down 2.5%, was up 5.9% in the first quarter. So it's basically hovering around that mark at the moment. And that represents the average project size across everything we do, across the consumer side of the business, small business side as well as the enterprise side. So we put it all in together, and I think it gives a good feeling kind of where we are on the average project size. Marketplace liquidity improved a little bit. Average bids per project is 45, and average entries per contest is an incredible 340, which, I think, blows out the water any other contest platform on the Internet by far. And contests actually span all the way from very small level contests, where you might want to do something simple like get a logo design for $10 and you have hundreds of entries come in with a very attractive format right up to the high-end work we're doing. The largest contest we have running is currently USD 10 million -- AUD 10 million or about USD 6 million for gene editing in the central nervous system of humans. So the contest platform continues to amaze in terms of what we can do there, and I'll talk about that in a second. In 2024, we're really focusing heavily on client retention and engagement. We've got some great results there. We've had on a sort of 1- to 4-week basis that are trending up over time. We had quite a number of wins in the core marketplace in the last quarter across payments, across the user interface across collaborative features in the product, across design and so forth. And we're chipping away at that, and I'll talk about in a second kind of what that means in terms of revenue and what that means in terms of GMV. The core product focus for 2024 is really fourfold on the core marketplace side. The first is to turn Freelancer from painkiller into a narcotic. I mean people talk about you want to build a painkiller not a -- have a -- not sell a vitamin. We want to take it one step further and make it something that's quite addictive and getting people hooked like using Uber versus catching a taxi. If you stop using Uber, you'd have a bit of withdrawal and trying to go back to the old system of how you got transported around the place. And really, what that means is getting the clients to come back over and over again and have regularly ongoing work and to integrate Freelancer into the workstream of businesses small and large on an ongoing basis. I think we've got very, very, very strong retention on the Freelancer side. In fact, I think it's probably one of the strongest product platforms out there globally for retention on that side of the marketplace. We need to work on it on the client side. That's the key focus for the rest of 2024. The next is to reinvent the world of work in the world of AI. And I think we are in a very, very good place really on 3 fronts here. The first is that obviously our marketplace of 75 million people, which is the largest online workforce in the world now, is the skills have been lifted dramatically through the AI tooling. So if you're an average copyrighter now, you're an exceptional copyrighter using GPT or [ Quad ]. If you're an average designer, you're now an exceptional designer now with Midjourney. This is going to happen in software development with this bunch of AI tooling coming into that field. And effectively, every endeavor of white-collar work that man does will have AI assisted tools. So the value of our marketplace has lifted dramatically from the skills improvements they've gone through. The next is that just inherently the marketplace and how we interact in the marketplace and people [ change ] each other and so forth is very well suited to the foundational models improving conversion throughout the flow. So that is, for example, if you post a project today, we have AI assist. We'll help you writing a project brief. We can then take that project brief and break it down into tasks and plan out a technical specification of that particular work. There's a lot of things we can do with assisting on the recruiting side with our assistants. In fact, that's live already in the marketplace now today and gets good results. We just deployed this week an agentic framework to help clients basically activate on the platform, help them get projects posted, help them get the first step in understanding how the platform and the product works and to still select the Freelancer. And I think, ultimately, we'll be able to do a lot of things around project management as well. It's a pretty amazing framework. In fact, I showed that framework yesterday to one of the largest BPOs in the world that runs a gigantic multi-billion-dollar contact center business and they could be -- there's a potential we can take what we've done internally there and productize it for their contact centers. So I think we're really leading the way in kind of some of this agentic work we're doing here in AI. The next thing is that we are about to, we're on the cusp of, I think, a great transformation with businesses around the world. Now for those of you old enough in the call to remember 1994, that was the year that the gigs had e-mail addresses. 1995 was the year your grandmother got an e-mail address. Every business suddenly wanted to become an Internet business and to do so, they needed to build a website. And that led to the dot-com boom and every business in the world basically throwing websites and so forth. Today, website development is a very large category of what we do in Freelancer. It's about 30% of the jobs that we do. Every business of the world needs a website in order to kind of reach customers and to sell online and so forth. Subsequently, you had the iPhone and Android revolution come out and people build apps. That wasn't as big as website design, but it's still a fairly substantial category of what we do. What will happen now, starting right now is you'll get AI development happening across a range of different functional areas of businesses. You'll have AI-driven customer support. We have that live on the site right now for Tier 1 support in a range of different functions. Immediately, you can see side by side when you compare human support to AI support, but the AI-driven support is a lot more empathetic. The answers are more thorough. The AI is [ ultimately patient ] and ultimately, you get better at customer outcomes. You'll start to see this in sales with things like lead generation and outbound, ADR sequences or account development rep sequences being replaced through -- by AI agents. You'll start to see it in marketing. You'll start to see it in very simple functions. Every business in the world probably has someone on staff that answers a phone call, puts a booking into a calendar, maybe takes a credit card whether it's a hairdresser or through to what have you. So you're going to see a huge explosion in development across these particular areas for small businesses, midsized businesses, large-sized businesses. And where are you going to go to get that done? You're going to go to the same place you get your web development done. You're going to go to the same place you get your app development done, which is you're going to come to Freelancer to do so. Whether you hire a one-man band, a small agency or a large agency or someone like Deloitte, you'll come to us to get that done. So I think we're on the cusp of this. I think some demos will start to happen in the next weeks to months. In fact, tomorrow, I'm doing a session with all the freelancers talking about our AI strategy, talking about the AI marketplace of services that we're putting [ along live ], where freelancers can show off the services they offer to kind of deliver in this particular area. And I think this is going to be a massive, massive, massive industry. I think it probably is going to be bigger than web development because it touches on so many different areas of a business. So that's the second part of the product strategy. The third is rethinking client acquisition in a world without Google. We're doing incredibly well on the acquisition front, which I'll probably -- I'll talk about in a second. But we're seeing some good growth numbers on the early stage of the funnel and on the revenue side of acquisition and GMV side of acquisition and things like milestones. So I'll talk about it in a second. And the next is really to take the next leap in the evolution of the product quality and user interface and really start winning awards and get it world leading. And I think we're in a very good position here. And certainly, the feedback that we're getting across the board from our customers, particularly on the freelancer side, is they're extremely happy with the improvements we've made to products, and that's actually coming through with some more awards we're starting to win. So in terms of turning Freelancer from a painkiller to a narcotic, we are still starting to see some pretty decent improvements. In particular, what we're seeing at the moment is that gross marketplace value, which is payments to freelancers on a weekly basis, is starting to beat last year year-on-year and it's since June. And we think the second half of this year will start to beat 2022 as well. The 30-day GMV, so this is payments from new clients that have been acquired in the first 30 days, is already beating 2022 and has been entirely ahead of 2023 since mid-June. So we're starting to see some growth numbers there. And we're seeing a similar story with milestones created, which is physical cash that's been put into the system to pay for freelancers since late June, with the fixed price segment of that for fixed price projects, which is the main way you get work done starting to beat 2022. So we're really -- in the last 6 weeks or so, we're really kind of starting to beat 2023 consistently, particularly in the early stages of the funnel and starting to touch on beating 2022. So there is some growth there that's happening in the core marketplace, and it's turning around. And I think that we're in a good place now to just keep doubling down on the product quality, the product improvements, the tooling improvements, the AI improvements, the collaborative improvements and so forth. And I think we're in a pretty good place because, on top of that, you got all the enterprise work kind of layered in on top, which is going to start delivering some really funky numbers, which I'm pretty excited about. It's been a long time coming. In terms of client retention, really, for the last 1.5 years, we've been seeing some really good lifts in the 7-day retention of clients that is client [ stickiness ] after 7 days of staying use the product. It is coming through in the 14 day and the 21 day and the 28 day. You're seeing lifts just single-digit percentages up -- trending up. That is great because every unit of retention is actually far more valuable actually than even an acquisition. And we'll continue to build on that with the collaborative tooling improvements that we're building in the product, which we'll talk a little bit in a second. One example of which being -- is project updates, which is a way in which clients and freelancers get reminded to provide updates about the projects to each other and get feedback. One of the things that commonly goes wrong with projects on the Freelancer is particularly because a lot of projects are one on one. You have one client talking to one freelancer. So if one person doesn't show up or respond to a message very quickly, projects can fall apart just simply because there's a lot of small teams. So we built a system whereby freelancers are reminded on a daily or a weekly or whatever time -- the basis that you like to set to provide a little update about the project, what the blockers are, what the next steps are and maybe show a screenshot or provide a link to particular assets for the client to see and then provide a notification on to mobile. The client can then click acknowledge to reply, et cetera, and so on. Now that's a pretty simple functionality. But those daily reminders form the basis of one of the most powerful forms of game mechanics in platforms today. So for example, Duolingo, for those people who use Duolingo, it's got the concept of a streak, where every day, you kind of check in and you kind of do your language lesson for a few minutes, and you stay engaged with a particular product. And that's been an incredible powerful mechanism for Duolingo to [ become ] a very, very, very large business and a very, very simple game mechanic. And so we're kind of building this sort of functionality and to -- meaning that clients and freelancers stay in touch more often and can acknowledge that -- each other's work and progress with the project. So things like that, we -- that's being built in. We also have a lot of work being done underway by Cohen's team on the audio and video calling and screen sharing. We've got a very robust solution, which is currently in demo on the iOS platform and soon to be fully launched in the next couple of weeks, and then following that will be Android. And that's going to give us a really, really robust system for people to make calls and communicate, which will work even when the phone is unlocked and the screen's turned off. So we've got the background calling stuff figured out. So I think that's going to be a huge improvement on the Freelancer platform and even more powerful in the Loadshift platform, where people are driving all day and need to interact by voice. Now the AI work we're doing, I talked about that in a little bit. We see big uplifts. Every time we do an A/B test and we apply effectively an LLM to help people fill out forms or fill out the next stage in the funnel or going to proceed with the project or break it down or figure out what the next plan is, we're seeing really big uplift. So we'll continue to double down on the high tempo testing there and deploying that in addition to building out a number of roles we have under our agentic framework to assist people on our managed service layer, particularly with the Tier 1 support. So Tier 1 support, Tier 1 recruiter functions, Tier 1 project management functions and so forth, we're seeing some really, really amazing results. And in fact, you're seeing -- we see much better results than you'd ever see from a human agent during the Tier 1. Of course, human agents are always there. They're always there for escalations. They're always there for Tier 2 support. We're also seeing some pretty good results on the organic channels. So particularly with the rollout of that Google Search Generative Experience, I mean, Freelancer has a lot of content that's constantly being sucked into the various AI training models and the search engines and so forth for indexing. In fact, there was an article over the weekend where I was interviewed by the Financial Times about Anthropic doing fairly aggressive scraping of our content. There is a good positive flip side to that, is that the content we selectively decide to show is valuable content that lifts the prominence of Freelancer within these AI foundational models as well as the search engines. And then we're starting to see that actually through quite a decent uplift in sort of SEO-driven traffic, which is up quite substantially from Google after the SGE push and rollout they did. So particularly on the acquisition front, we're seeing some pretty good numbers, and then we're coupling that with some work we're doing on the retention front. So we're seeing some upticks there in the core marketplace. And I think second half of this year was going to be -- core marketplace alone is going to be pretty damn good. This shows the uplift now in new user sign-ups, the verified sign-ups. We had a big uplift here from late May, 40% year-on-year in terms of sign-ups through improving the funnel for the sign-up flow. So that was a big win. And then we just continue to double down on great products and great design. And one of the things we've done is we've shipped dark mode into beta along with a number of other improvements, which is the profile pages, which has led to a small uplift in clients creating milestones and so on. The heads-down approach to really focusing on quality products and so forth is also paying off in terms of awards. We have the highest ranked award the major freelancing platforms now for customer satisfaction and anyone can independently associate that for themselves on Trustpilot or on Sitejabber. We ranked 4.5 excellent on Trustpilot. And in fact, our rating on Sitejabber was so high this year, we won an award because we had 96% positive feedback for the last year from clients. So we ranked 4.7 out of 17,500 reviews. And in fact, one of our major competitors actually has pulled down their Trustpilot page because they've been review bombed because they've been raising their prices so frequently, the freelancers are very, very upset. So I think that's really paying off quite well. There's an interesting survey that Marko did on AI usage by the freelancers, and most freelancers are reporting that they are earning more or the same with AI tooling because their productivity has gone up as well as most people are either -- see a bright future in terms of kind of where all of the stuff is going. I think the tooling is going to really take off for the next 12 months across a wide range of different industries. And I think you're going to see some pretty amazing productivity lifts in many of the skill areas. On the enterprise front, probably the most exciting thing we're doing by far is on the generative AI side of things. We have closed -- we had an MSA in place for some time with a particular partner that has a lot of foundational work, one of the largest foundational models in the world that everyone would know about if I mentioned it. As I said, probably in the next 60 days, we will announce the partnership publicly with all names. We're already sourcing many, many, many freelancers. In fact, there's over 80,000 freelancers now that have gone through the first stage of qualification, and then we're putting them through exams and then ultimately white listing them on the work platform for doing work. The first, there are 3 engagements with this particular foundational model. We're only doing the first engagement right now. As I said before, this engagement should lead to, before the end of the year, 7 digits of GMV per month on an ongoing basis. And then there's a lot of upside from there with rollout into several other projects. It's [ RL Loadshift ] training. It's safety training. It's looking at creativity and factuality of responses and so on. We can really excel at this work, at this rating work. We have lots of freelancers available to do it. We can source on a sustained basis somewhere around 20,000 freelancers a day if we're out there hitting our channels and pushing it and so forth. So we can assemble very, very large teams here better, I think, than any other competitors by far, simply because we have the range and the breadth of the users across all different demographics. As I said as well, we also won, as of yesterday, some engineering services work. So that's kicking off immediately to do a workflow integration to scale it up quicker. And I do think that engineering services engagement will ultimately be in the low 7 digits in terms of the work because there's actually quite a number of things we're doing here and it's also quite ambitious. We're actually rebuilding a whole platform for the customer. So that's good. And I also mentioned we've got a second engineering services proposal that we're setting out this week. It's actually in the final form. After today's results, we'll approve that, and we'll get that out. Quite a number of clients are also been acquired in the half. I think it's over 50 now that you've actively engaged in various stages, Shaun. The key thing we have to do is -- I think we have probably the most stellar pipeline in terms of the brands and the quality of the companies in this pipeline. The trick is we have to figure out very quickly how to get them into a position where we can put a team full time on that particular client. As, for example, with the generative AI opportunity, I mean, this is going to be a very, very large client. I think in the longer term, I can see per annum the GMV for that particular client being 8 digits fairly -- in a fairly straightforward way, in fact, potentially even to 8 digits per month, I think, the time. But the point is that each of these big customers have huge amounts of work. A Fortune 500 customer would spend probably at least $10 billion a year on wages. So the ability for us to deliver significant GMV for actually these clients is there. It's just there's some things you have to do we've figured out in order to achieve that. The first thing is you've got to find deep pockets of repeatable work. So you've got to find pools of work where you can very quickly get in there and you can tackle it, where you can do the -- where jobs are being done over and over and over again many thousands of times. So for example, with our field services division, we have a large computer and printer company that needs thousands and thousands of laptop and server, desktop and printer repairs done every month. With the generative AI work, it's rating work, but it's over and over again, and it's millions of hours' worth of work per year and so forth. So you've got to find those pools of work. And the second thing is you've got to integrate. You've got to be able to integrate the workflows, so the payments flow really well all the way from that client ultimately down to the freelancers. And you want to make sure that the more they consume your products, it doesn't come more of an overhead because you have manual invoices going backwards and forwards and so forth. So you need to integrate into the vendor management system as you need to integrate into workflows. You got to make sure that if a job gets passed from that particular client, there's a very, very smooth flow right through the customer, from the Freelancer acquisition right through to the Freelancer delivery and the payment. But we have clients in oil and gas, in fact, one of the largest oil and gas companies in the world at the moment, one of the largest e-commerce companies in the world, FMCG, health care, technology and so forth. So there's a lot of work in Shaun's division. We're building out on the delivery side for that as well. And the goal is really on a client-by-client basis to really figure out how can we get a team deployed and integration happening and a ramp-up so that we get really a meaningful revenue stream because we do have a overabundance of clients, and we need to make sure that we kind of focus on building a scalable model for getting each of them to pay in a fairly substantial way. Our Global Fleet program continues to grow in terms of the volumes going through it. We've done -- as I mentioned before, we've talked about the generative AI work. I probably won't get into that in more detail, but if you want to read it, here's an example of some of the marketing we're doing to the freelancers to get them onboard. We send out an e-mail like this. We'll get about 20,000 people a day signing up and going through the qualification as I meant before. On the field services, we're now at 48 cities. 71,000 jobs are being completed globally. We have a proposal going in maybe today, some engineering services work to expand the capabilities of the platform and also the skill areas that the platform will handle. And we're tentatively looking at 2 other markets now -- 2 other countries that are fairly substantial and western in nature to join too. And there's some examples of kind of what the -- most build might look like in terms of some more enhanced functionality. In terms of the U.S. government work, we continue to win with this particular program. We just won in the last 2 weeks. We won one engagement. And just to show you kind of the sorts of things you can do on Freelancer, it's for navigation on the Lunar South Pole of the moon for the Artemis manned space mission, particularly when astronauts go into craters and maybe perhaps the sky is -- are obscured. They want a way to be able to navigate in that sort of environment. We also won another engagement for improving the simulator for Space Robotics Operating System framework and so forth. And we had quite a number of engagements where we awarded winners and prizes. You'll get 1 for detecting 1-millimeter to 10-centimeter particles in space and remediating them -- tracking them and remediating them. We had another engagement, which we awarded for venting or refueling spaceships in micro gravity, another one around art and so forth. So -- as well as one for improving the visual disturbance in air taxis. We also do something with the Australian Space Agency around an arm for a lunar rover for them. And we also have an engagement -- separate tool, is now some work that we're bidding on at the moment with the Department of Energy in the U.S. as well, which could be a 7-figure engagement, which we're working on. We also have 2 major engagements, which continue to happen. One is the USD 6 million work on gene editing. We've awarded about half the money of that so far. And again, when you look at the quality of the entrants, the quality of the client, the quality of the work, I mean, this is the most high-end, sophisticated work in the world you can think of. We had MIT, Harvard, Stanford now participate. We had biotech start-ups, research groups, individual researchers and so forth, incredibly skilled and talented service providers, incredibly high-end clients, incredibly high-value work, really shows off the power of the platform, and no one comes close to kind of what we can do in terms of the scale of providing and doing work. And then we also built a water precipitation device for the Bureau of Reclamation as well and delivered that. On the Escrow front, you can see here this is the long-term trend in gross payment volume. We were lapping sort of year-on-year a bit of a spike. But as I mentioned on Friday, the buyer and the seller for one particular transaction signed. In the next 2 weeks, we'll have a $50 million transaction go through. So we'll still have a big spike up in the next quarter. To get away from this lumpiness in the spikes, we're working on a checkout solution. We're going into one of the largest shopping carts in the world in a fairly unique way because we'll be the only large value payment system in that particular shopping cart. We're going to beta this quarter. For that, we actually have all the shopping carts pretty much lined up one after the other. So there's about 4 of them in a row, which we're going to deploy in. I think it's going to be pretty unique because, at the moment, you can go to a shopping cart. You can stop at consumer electronics store or a clothing store or what have you that you'll be able to, using Escrow, set up a place for selling cars. You'd be able to set up a real estate marketplace. You'd able to set up a fine art store. You'll be able to set up a diamond store. You'd be able to set up music rights or royalties. Whatever you want to do, you can do on these platforms, and we're going to get into all the biggest names. So that's all pretty exciting, and that's going to be starting to go into beta as of this quarter with one of the platforms. We also updated our pricing for the very first time in 20 years on Escrow. Our price card used to cap out at $25,000 and the feedback from the sales team was every single engagement they're going into, because we're a large value payment, you would go over that $25,000 price point. And then that would kind of ask us what happens to the rate card after that. So we've extended that rate card out to $10 million, and we also lifted our pricing across a few different areas. Really, what we did here is we're looking to get the take rate up a little bit. When we bought the business with Escrow, the take rate was 1.45% blended. What we did probably mistakenly is we gave the account management team a bit of flexibility to negotiate pricing because we've got, off the top of that rate card, way too frequently on deals. And so because there's a little bit of flexibility on that kind of, I think, I've taken advantage of, so I think the take rate ended up last year being about 0.9% as opposed to 1.45%. So we've done a bit of a reset there in terms of the pricing. We've gone through all our major partners and talked to our partners and explained it, et cetera, and I think that's been fairly well received at the end of the day. So we should see a lift in the take rate for Escrow. The other thing we've done is we've got some margin improvement we've made in this business as well. We did some cost cutting in a few particular areas, particularly around an affiliate program that wasn't doing particularly well, which will replace the market development program. So we should see a few points in improvement in the gross margin of this business as well. So in the last quarter, we've done, I think, a fair bit of improvement in the fundamental take rate and the fundamental gross margin of the Escrow products. And of course, the most exciting thing is getting the shopping carts out live. So August is working hard. He's got some pretty slick looking designs and really getting as smooth as possible to provide a really nice checkout experience. Now the one thing to remember is that with Escrow, we are high friction simply because we are high-value complex transaction payment method, in particular with KYC, the vast majority of our transactions because they're above USD 3,000 in the U.S. We're about AUD 0 in Australia. And so we do, do quite detailed KYC, AML sanctions checking, fully exposed to persons checks, negative news checks, et cetera. So the goal is to make that process as slick and as smooth as possible. But the flip side is, going into the shopping cart platforms, this will be the very, very first time they'll have large value payments. So a lot of these platforms, it's going to be a coming of age because no longer will they be selling sort of micro priced clothing or retail products, but they'll be able to sell high-end valuable items. So I think it's going to be, I think, a real huge change for the ability of these shopping carts to sell in the big end of town. And e-commerce as a percentage of retail sales is only around 11% in the U.S. and dropped a few points since COVID and will never get to 50% of sales unless the large value payments is handled properly. And that's what we enable almost uniquely. And almost uniquely because, effectively, we have, in many ways, a regulatory monopoly on large value payments with Escrow licensing, and the license is, I think, about 55 jurisdictions now. And to achieve that licensing, took a long time. It took us a decade, and it is not something we could do again from scratch. If we -- I took all the best of the team here, and we wanted to start Escrow out again. We couldn't do it simply because this business was started by Fidelity in 1999. Softbank funded it at USD 30 million. They took about a decade to get their first licenses, and then we took a decade getting the rest of the licenses in the U.S. Canada and Australia. And to do that again is an incredibly complicated and difficult task. Airbnb started trying to get the licensing at the same time we did in 2015 and still haven't completed the U.S. program. So it was a huge amount of effort, and this is a very unique business. The other thing we're doing is we've got a couple of automotive engagements, which I think are quite substantial. We submitted a proposal to a tender to a large U.S. automotive marketplace that's looking to term payments on. And there's another Canadian marketplace as well that we put a proposal into. And additionally, there is an Australian government RFI that we responded to, which is quite substantial. That particular RFI is in -- on pause mode, but it will continue after they've sorted out a few things they've got to figure out on their end, but there is another substantial 1 in the wings there that -- I mean, ultimately, that's going to be about [ $13 billion ] of the volume as that gets over the line. But it's currently in pause mode while they figure out a few things because it's quite complex and quite a substantial change to how vehicles will be sold in that particular jurisdiction in Australia. The IPv4 space is doing pretty well. That $50 million transaction we're doing in the next 2 weeks is an IPv4 transaction, and we'll make announcement on that as well when it happens. The domain name space ticked up a little bit. I do expect this to tick up a lot higher, a lot quicker this year. It's proportional to venture funding activity. And the venture funding activity is not really back yet in a big way. It's happening at the macro scale with AI like, for example, X.ai, which is Elon Musk's group raised a huge amount of money earlier this year. We're not seeing it broad-based across start-ups yet. It's really these mega transactions. But we do think it will tick up. I think there's going to be a big boom in AI-powered transformation of all these different industry segments, and I think we're going to see the uptick when that starts to happen. But it's ticking up, and we have put some pretty marquee domains through in the last couple of weeks. But I do expect that to be a lot higher than what it is. And then on Loadshift front, Loadshift had a great first half. GMV was up 43.6%. We had pretty good engagement with quotes, which were up triple digits, 105% year-on-year. Average quotes per job is now 8, so it's a fully functioning marketplace. We've successfully transformed the Loadshift acquisition, which was a [ bought and brought ] and the Freightlancer merger into a fully functioning marketplace that Cohen and the team has done extremely well. We had a 77% increase in awarded loads year-on-year. Delivered loads doubled to 105% year-on-year. Project fees were up almost double and so forth. So the numbers are all up into the right in the Loadshift division. Now the big thing to remember here is we've got now a fully functioning marketplace, but we have a lot more freight than we're actually converting and monetizing just simply because we're changing a business model here from one which is a membership model to a marketplace model. We've got the award right now. I talk about 30%. You can see that it started at 0 a bit over 1.5 years ago, but now it's at 30%. I personally think we can get this to 60%. The big thing now to get the next big uplift in the award rate is to get the calling on the platform rock solid. Most people -- most drivers are in the cab driving the truck all day. You don't want to see them on their phone kind of texting and chatting while they're driving, so you've got to have a voice interface. So Cohen has been working with his team on getting that rock solid, so it's audio calling, video calling and screen sharing. The beta for iOS calling is live and currently in testing with users. The background calling, which allows the phone to ring when it's locked or the screen to be turned off, will be live when, Cohen?

In a couple of weeks.

A couple of weeks? And then it's about 2 months after that, we'll have Android fully [ implemented ]. So we're chipping our way at that, but I think by the end of the next quarter, we'll be in a pretty good position. Of course, this goes live not just for Loadshift, but it goes live for Freelancer because it's the same code base. And I think this is probably going to be the next big leg up on the award rate side, which will get us up at fairly decent number. So this business is going very strong. We have a lot of freight on the platform that we just need to convert. We have a lot more freight in a greater network of assets that we've got, that we've been picking up on [indiscernible]. We have a lot more freight we can draw into the platform we haven't drawn in. And then we have some enterprise engagements as well, which will also lift the numbers fairly significantly with car auction yards, with auction houses and machinery platforms as well, which we're in the -- yes, we've been talking to you for some time, and we're just a little hesitant to bring it on because we want to convert the freight that we have rather than bring on a lot more freight and bring the reconversion rates down a little bit. So we're working our way on that. I think operationally, we've got that in a very good place. Product-wise, it's gotten in a very good place. There's a bunch of features coming through shortly. I think the load tracking is in show right now and probably live by this week. So you'll have all the -- like a FedEx style interface so you, at any point along the way, know where the loads are. And the truck's arriving now in 30 minutes and just at the other -- so that's great functionality. And Drew has been working with a whole range of very large enterprise clients to bring on more freight primarily in the construction, industrial, manufacturing sort of areas. So we've got quite a good half for Loadshift, and there's a picture of sort of things we moved in the cycle. It's all the ugly heavy stuff. And the machinery is the most valuable freight, and that's 30% of what we do, which is pretty good. So overall, our profitability was kind of flat. There's a loss of $1 million, which is a fairly small number and I think got a lot of upside in the core marketplace, a lot of upside in the enterprise side of the division. I've got all -- although it's not happening over on Escrow with the shopping carts, we've got a big transaction going through, which we'll do a big press release about because that's our biggest transaction ever to the platform happening in the next 2 weeks. And Loadshift's going pretty well. So that's where we are. I think we're going to have a better second half than we did in the first half, but I think we're in a pretty good place. We've got cash flow up. The cash was flat in the quarter, and it's a very minor loss of $1 million. And I think that that's going to go quite positive quite quickly. So that's where we are. So I think what we'll do now is we'll open up to Q&A with the audience. As I mentioned before, you can address questions to either myself, to Neil Katz, the Chief Financial Officer; to Shaun McMeeken, who's Head of Sales; to Adam Byrnes who's the Head of Products; Andrew Bateman, who's [ OIC ] and in charge of Enterprise. August Piao on the Escrow side and Cohen Wisniewski on the Loadshift side. So we'll open it up now. So [ Alex ], maybe if there's any questions in the chat, please read them out and who they're addressed to and who they're from and we'll go through them.

[ Wolfgang ] asks is there a plan to integrate Escrow with Loadshift.

[ Wolfgang ] asks, okay, is there a plan to integrate Escrow with Loadshift. That's a very good question. The answer is yes. And in fact, there's a couple of different things -- ways we're going to do this. One is that we make about -- as I mentioned before, it's a little bit under 1% take rate on the Escrow side. And on the freight side, we're making -- I think we're at what, 11% now?

Yes.

That's going to tick up to 13% because we're cycling off the membership discounts to we provided through the transition period. So the freight division makes about -- will make about 13% maybe over the next 6 months, should get to about 13%. So if -- anything that sells that's physical through Escrow needs to be moved. So for example, eBay Motors in the U.S., we are the exclusive payment method for them. Some of those cars need to be moved. They need to move interstates or internationally or what have you. We sell a lot of machinery through Escrow. We sell a lot of physical stock. And so at some point, we will go international with Loadshift. It's not going to happen this year. It may happen sort of towards the end of next year. Maybe we'll turn on somewhere first like Canada because we've got a lot of mining industry experience. And I think maybe we'll do something like that first, and then after that, we'll just go global. But from there, what we'd want to do is we want to turn on the ability to get freight for anything you buy or sell on a Escrow. So that would lift the margin up quite significantly from 1 point whatever the percent to an extra 13%, which would be great. On the flip side, there are some payments that do want to use Escrow for the movement of freight. It all depends on the particular industry and the particular thing that's being moved and so forth. For example, in the past, we've had someone use us to move manganese on a railway line in Africa because they couldn't find insurable options that made sense. So -- and we also do plan potentially on -- we've got some tentative plans to merge the Escrow and the Freelancer code base to modernize the Escrow products fairly substantially and take advantage of all the features we've got in the Freelancer side of things. So there is potentially a plan to move the Escrow stack, the front end of the Escrow stack on top of the Freelancer stack. And that will gain us a modern front end, the design system or the AI tooling that we've built around agents, built a transactional system. We've got real-time chat, calling, et cetera, and so forth. So there may be some integration, what we do there in the midterm on the Escrow side with the actual product stack as well. Next question. Feel free to ask questions. Put them in the chat, send them through and [ Alex ] will read them out. Any questions, [ Alex ]? Don't be shy. There's a few on the call. Any questions, [ Alex ]? Sometimes it takes a minute or 2 for people to [ put questions ]. I think I mentioned everything in my notes. Maybe while people think of questions, I'll just go through the highlights again just in a very, very high level. So generative AI work, I think it's going to go extremely well. I think that will contribute by the end of the year to 7 digits, low 7 digits GMV per month. We've got an engineering services engagement we've got approved for on the generative AI work as of yesterday. I think that will lead to a low 7-digit engineering services engagement [ where they're ] still a customer. There's a lot of work here. These customers are going to grow very, very strongly. We had a great -- actually did a full day with one of the senior executives today. That's fantastic. In the core marketplace, verified sign-ups are up 40% year-on-year, particularly on the acquisition front with GMV from 30-day customers -- customers up 30 days and milestones created. We're bidding in -- really since June year-on-year 2023 numbers, and we're starting to touch 2022 numbers year-on-year I terms of [ beating them ]. We've had some A/B test wins in payments, the UI collaborative tooling and AI conversion. And I think we're going to have pretty decent, for the rest of the year, numbers on the GMV side on the core marketplace alone. I think it's pretty good. And the retention between 1 and 4 weeks is doing okay, and we continue to double down and build on that. On the Escrow front, we had a very large transaction that got approved as a Friday, which will happen the next 2 weeks. We still have a very good quarter for GMV for Escrow coming up. We're going into shopping carts with a couple of automotive marketplaces working, et cetera, and range of other customers. And the Loadshift stacks are going pretty well and the next big leg up, an award where it will be from the calling work we're doing. So that's at a super high level of the summary. Has anyone got questions in?

We do. So [ Simon ] asks, share price has been quite depressed for some time. Where would you like this to be in 12 months? And what are the top 2 or 3 things that would move this price from where it is?