Airtasker Limited (ART) Earnings Call Transcript & Summary

Thanks, everyone, for joining this morning to Airtasker FY '23 Interim Financial Results Presentation. My name is Tim, I'm the Co-Founder and the CEO Airtasker and I'm joined by Mahendra.

Good morning, everyone. I'm Mahendra Tharmarajah. I'm the CFO of Airtasker first management. I joined the company in October last year. Pleased to be here. Tim?

Thank you. So as a reminder, Airtasker, we're going to be the world's most trusted place to buy and sell local services. And in very, very simple terms, we simply connect people who need work done with people who want to work. At Airtasker, our mission is to empower people to realize the full value of their skills, creating jobs isn't a byproduct of the work that we do. It's actually the core purpose of the Airtasker platform. On the right-hand side here, you can see some of our great community members, [ tests and Mico ]. So these are all members of the Airtasker community. And probably, over lifetime since inception, Airtasker has put more than $428 million into the pockets of our taskers. So that's excluding all our fee revenue that so much has been paid out to create income and opportunities for our community and a number that we're simply proud of. Aligned with our mission to empower people to realize the full value of their skills, we've built a very unique marketplace. And tasks marketplace is unique for 2 reasons. The first is that we're in an open marketplace. That means that we don't rely on manual operations in order to create quality outcomes in our marketplace. We built a system based on transparency and accountability. That means 2 things. One is that we have a really scalable business. The second is that we have really, really strong gross margins. And we'll talk a little bit about through our light touch model, having a 93% to 94% gross margin. The second thing that's unique about Airtasker model is that we're infinitely horizontal. We don't just focus on one kind of service like cleaning or a few services like home services. We're a platform which lets people get anything done. And this is really powerful because that long tail of services, all those things you can't get done anywhere else is -- can be done through to. It also forms part of our growth strategy because we're able to do these remarkable services through the Airtasker platform, that creates really, really great content, and that helps to be able to talk to the media and tell the stories about the Airtasker community. Following on from our marketplace model, we have really, really strong unit and economics because the marketplace structure that we've built is very, very efficient and it creates a long-term sustainable advantage. Firstly, we have really strong unique organic customer acquisition. We saw a unique paying customers grow to 450,000 members in the trailing 12 months to December '22. And we've got a really low reliance on paid marketing. Over 63% of our customers are just returning customers coming back to the task a platform for the second, third or fourth time. And of the new customers that we acquired, 80% of those new customers came from nonpaid acquisition or organic channels. We've also got a really strong and profitable unit economics. Every task that's completed, we pay out about 81.8% to our taskers and community. Then Airtasker of about 16.6% ex GST. Of that, 16.6%, we have a gross margin of around 94%. But 2% goes out to pay for insurance costs. About 3.7% goes out to paying credit card costs. And the rest of it is Airtasker's gross margin. Then if we look at how the marketplace is sustainable and builds a defensive competitive advantage over a long time, Airtasker is building out the reputation passport of our customers and our taskers. We have over 5 million customer verified user reviews, and that means that our tasks have built their brands on the Airtasker platform, and that keeps them really sticky to our task go. Over the years, we've built the largest local services marketplace in Australia, and we're now exporting that to the world. In Australia on the load, we'd see more than 2 million posted task over the last 12 months. We have over 112,000 unique active taskers on our platform. And we have an annualized gross marketplace volume, the total value of all the tasks happening on our platform of over $200 million. Australia is a $52 billion TAM. But if we look at exporting this piece of software that we've built to the world, there's over a $70 billion total addressable market in the U.K. and over a $500 billion total addressable market in the U.S. So it really is a 10x opportunity to take Airtasker platform and export it to the world. We're a really interesting part of the economy at the moment. On the left-hand side here, we've charted what we call the Airtasker Labor Supply Index. And what this is, it's a measure of how much supply is in the Airtasker in a marketplace? How many people want to do jobs versus how many people are looking to hire people in the marketplace, the demand of our marketplace? And what you can see is that during 2020, we really saw a lever shortage start to form during the COVID pandemic. There was less immigration, and there are a large number of government incentives, which may people not want to be incentivized to work. And so during 2020 and '21, we saw the labor supply index go down and then down again. However, we saw a really interesting June in 2022. As the interest rates went up, we saw that the incentives to work really, really increased. We also see immigration barriers start to reverse. And while that manages a lot more people wanting to start working on the Airtasker platform, about halfway during [indiscernible] supply, the number of people wanting to work in versing slowly. And then in that last dollar point there, you can see in January of 2023, we've seen a phenomenal increase in the number of people looking to work on our platform. In fact, it's a 48% year-on-year increase in marketplace supply. So what this means is that during the current phase of the economic cycle, we're seeing consumer confidence come down, and that means demand has gone down. And in Airtasker's terms, posted tasks are starting to soften in our marketplace. Less people are coming at the top of the funnel to post their tasks. But on the other hand of the marketplace, we're seeing supply increase massively. What that means is -- the average task price has stayed about steady, the completion rate on jobs has increased massively, cancellations in our marketplace has decreased a lot, and take rate or our revenue in the marketplace has increased as well because we have more tasks compete decrease in consumer demand and taking that even further. Airtasker has got a really adaptive business model, which allows us to adapt to this low phase of consumer demand in the economic cycle. What does this mean? There are a few levers that we're able to pull during this period. The first is we've got proven elasticity of fee pricing. What that means is that task is really, really obviously value in Airtasker's platform. And so if we increase our fee pricing by 1 or 2 percentage points, we still maintain a really, really high degree of tasks engagement through our platform. So we can increase prices without losing demand in our marketplace. The second thing that we've done is we introduced a one-face subscription model into our portfolio of revenue. The Oneflare subscription model actually experiences higher demand from businesses during this low part of the economic cycle because businesses are really looking to compete to be able to find new business. And so we're seeing a huge surge in increase in the amount of people signing up for one flow subscriptions, and that's seeing our revenue increase on that side of our business. Over optimally as well, Airtasker has got a really low line on paid marketing. That's an important part of our mix. We acquired a lot of our customers organically, which means that we can manage our cost base during this part of the economic cycle. And lastly, we've got significant cash on our balance sheet. So we have $23.3 million on balance sheet, and that puts us in a really good position as our cash burn starts to lower. And now I'm going to pass it across to our CFO, Mahendra, who's going to talk a little bit about the results.

Great. Thanks, Jim. So for the half, the group revenue was $21.8 million, which was up 57% on the comparative period. In line with that GMV, our gross marketplace volume was also up 58% and if we exclude the Oneflare marketplace, this is the business we purchased in at the end of FY '22, revenue was up 23% for the Airtasker marketplaces and GMV in line with that, up 24%. So all in all, a good result and quite pleasing. Next slide. Here, we're looking at our current balance sheet and our financial position. So we're in a pretty strong financial position at the moment. We've got $23 million of cash and no debt. We were pretty pleased that our operating cash burn for the half was down 29% second on the comparative period. And the net reduction in our cash balance for the half was only $400,000. We're continuing to focus on our cost base and our cash flow management. That's certainly one of the key foundations of our financial management. We've presented this marketplace staging economics previously. So what we're trying to demonstrate is, I guess, how the business is structured from a financial perspective. So we've got quite a significant investment in our core infrastructure. So our global head office, which manages most of our operations. And that enables us to then scale through new marketplaces. So what we've got here is the Australian marketplace, which is at the scaling stage, it's a much more mature business. We've got the U.K. and the U.S. at our new marketplaces, which are in the 10 to 100 phase and the 0 to 1 phase. And essentially, we attribute revenue to the local marketplaces as well as the new direct marketing and customer support service costs. And then our head global head office basically carries the fixed infrastructure costs. So the operating expenditure related to the platforms and then supporting those engineering product support, maintenance, as well as all our back-office support functions, so leadership in finance and their [indiscernible]. And then we've got -- I guess, what you might describe as a discretionary component, which is innovation. So we invest in, obviously, non-capitalizable operating expenditure to improve the features we offer to our customers and improve the customer experience to drive long-term growth in our marketplace volume and our revenue. On the next slide, that we sort of break that down into what that means in financial terms. So you can see here that the Australian marketplace is generating EBITDA of around $12 million for the half. And that largely covers our global head office operating expenditure, which is about the same $11.8 million which gives us a positive net EBITDA at that level. We're then looking at the global head office innovation and investment, which was $2.1 million for the half [indiscernible] expenditure effect and drive both demand and supply in those markets. Next slide. Looking more closely at individual markets. We've got the Australian marketplace. So this combines the Airtasker and Oneflare marketplaces within Australia. Revenue for the half was $21.4 million, up 56% on the comparative period. And gross profit was up 58%, in line with that, so 20.3%. As Tim mentioned earlier, our gross profit margin is about 94%. So that's sort of consistent with that metric. Next slide. Looking at the U.K. marketplace. This is a marketplace that's showing good promise for the half. We've taken a view of looking at trailing 12 months revenue and gross marketplace volume, principally because the business is quite cyclical. So in the smaller markets, there's a degree of seasonality. So to try and be more, I guess, to better reflect the performance of the markets and not show as much volatility between quarters. We've taken this approach. So revenue was up 153% to GBP 400,000 in the half or the trailing 12 months to the half, and GMV was up 83% to GBP 3.5 million. In the U.S., our market is much, much less mature. We're principally focused on our posted task volume and task dropper. So the demand side and the supply side of the market. So you can see here that in the half year, the posted tasks demand increased 5x on the previous period, up to 34,000 tasks, while taskers were 5.5x on the previous period, up to 54,000. So good re-share task offers to customer demand.

Also, Thanks, Mahendra. I'll now take a moment to talk a little bit about our growth strategy. And as you can see, I think a lot of this strategy is consistent with the previous halves that we're starting to see the Australian market continue to scale, but also investing into the U.S. and the U.K. So in terms of our strategy in Australia, it's really about scaling our home marketplace. In Australia, we've built these network effects, and we've built this scale. And that allows us to really generate strong margins and positive cash flows over time. In Australia, we're really focused on improving customer purchase frequency. And on the next slide, I'll talk a little bit about how we're doing that. But our real focus is on improving that frequency so that we can increase the gross margin continue to expand into the fetal addressable market of $52 million in Australia. Within taking that and we're really scaling it and monetizing it. Scaling it through our smart and profitable marketing and monetizing it by really thinking where is the value that our customers are getting from our product and how do we make sure that we price it accurately and correctly to optimize Airtasker revenue as well. Within taking the cash flows that we generate in Australia and using that to invest into building new marketplaces in the U.S. and the U.K. As mentioned, in the U.S., we're really in that early stage in the 0 to 1 stage where we're still working on just ramping up base customer engagement. That means getting a flow of posted tasks so that we can build a steady stream of job opportunities for our tasks, and that's how we build that core of the network effect. In the U.K., we're in that second stage of building. We've already got that engaged customer base, and we're really starting to scale it in the 1 to 100 phase. During that basis on a balance in supply and demand, and we're also trying to scale our financial metrics like gross marketplace volume. So let's go a little bit deeper into what we're doing in Australia to improve customer frequency. First of all, we're investing into our core product experience to improve marketplace reliability. One of the things that we found here is that Airtasker can be stronger in terms of enforcing our community guidelines. So our for taskers, we're starting to rank them and form an algorithm to determine reliability and where it's necessary, we're taking enforcing actions to remove our taskers or restrict them from the marketplace if they're not following our community guidelines. We're also investing into enhanced marketplace matching. One of the great things about having a marketplace at scale is you get a lot of data about our customers and taskers and which customer suits, which tasks at best. So as we develop that machine learning and data science to be able to do matching better, we're building a really strong defensive moat around the business and creating a better experience for our customers. We're also improving purchase frequency by opening up new client of use cases for people to use Airtasker. One example of use cases is unlocking repeat relationships. So up until about 11 months ago, you actually couldn't find a tasker that you'd worked with previously. You couldn't get in touch with them, you couldn't stay in touch with them. And so every time you wanted to engage someone in the marketplace, you have to go and find someone new -- you had to post a task, put it to the market and find that person new every single time. So about 11 months ago, we shipped the product called Airtasker Contact. It's really simple. It basically allows you to keep in touch with all the taskers that you've worked with before through a really simple messaging system, you're able to hit a button and request to rebook that task through the marketplace. And then we have a really simple payments model, which means you're covered for insurance. You've got a really convenient way to engage and communicate with that tasker, and we're paying much, much lower fees to our tasker for that. Instead of paying a service fee of somewhere between 11% and 20%, you're paying about 1.9%, which makes sense for our customers and taskers and it also makes sense for Airtasker. We're starting to see some really exciting engagement here on the right-hand side there. You can see the growth week-to-week in how many millions of dollars is being processed through that platform annualized. So a really big opportunity here to capture that repeat relationship and to nurture that through Airtasker. The second thing we're doing to increase purchase frequency in Australia is to enable customers in the high-value to segment. If you recall, the acquired Oneflare in 2022, the reason for that was to, of course, enhance network effects, but also to move up into what we call the high-value trade segment. Our Oneflare has thousands and thousands of businesses in this high-value segment. And we're starting to migrate them across to Airtasker through our new product called Airtasker Plus, which is a subscription model on the Airtasker side. That's going out as a proof of concept this financial year, and we're really looking forward to slowly migrating and bringing to the 4-hour vision, which is to bring the Oneflare, Airtasker platforms into a single [indiscernible] and to create a synergy of having a single marketplace platform for both everyday jobs but also high-value tasks as well. Over to the U.K. where we're establishing new marketplaces. So in Australia, really focused on the frequency and new use cases. Over in the U.K., we're actually focused on building the basics of what we created in Australia. The marketplace for everyday tasks. We're doing that for a few -- through a few different methods. First of all, we're rolling out our proven PR Playbook. We've done some incredible news tacking. As you can see here on the left, we had a Prince Harry look alike, which managed to grab the headlines during the Queen's Jubilee and that was really a way to talk about all the novel use cases you can use Airtasker for. We're also expanding our local partnerships. We've got a fantastic working relationship with Dunelm, which is the equivalent of spotlight meets IKEA meat Bunnings in the U.K. with over 188 stores and Airtasker partnering with Dunelm not only create local jobs but also to unlock our furniture assembly and installation services, which is really exciting. And then thirdly, we're doing smart and efficient above-the-line investment into brand. We're doing that through some U.K.-specific localized channels, things like marketing into the tube stations, which has been very, very efficient for us to grow, especially during the high point of our seasonality, which is typically in March, April and May as we go through Northern Hemisphere spring and summer. Across to the U.S., where we're in that earlier stage. In the U.S., we are also rolling out our PR Playbook here. So you can see here on the left, we've had some great spots, for example, in KTLA, which is the morning show over in Los Angeles, putting in a whole segment about how to throw the ultimate Super bowl party with Airtasker, all of that is happening completely organically and unpaid. So really leveraging Airtask is in finitely horizontal marketplace to tell these great stories and to inspire people about how they can use Airtasker. We're also doing the news tacking. So we're finding all these opportunities where we can jump on the back of hot trends that are occurring in the local marketplace. So for example, during Harry Wein last year, everyone wanted the tickets to the Harry Styles concert and so people were posting up on Airtasker to get those jobs done. Again, that allows us to really join the conversation in the local area and then our leverage organic PR and organic social media off the back of that. Third thing we're doing is we're making sure that we've got the real kernel of a strong community in the Los Angeles area. As you can see here on the right, starting to hold in [indiscernible] starting to actually work closely with our community. And this community is really what helps to build the next and the next layers of taskers in our marketplace, and that's ultimately what drives the network effects in our business. So the U.S. market are really, really exciting to see that the pace of its growth is getting faster and faster from when it took 10 years to be in Australia, we're seeing that happen much faster in the U.K., and we're seeing that happen even faster across in the U.S. So really excited about Airtasker our growth strategy despite the difficult circumstances of the current macroeconomic environment. Ultimately, Airtasker is taking a really, really strong long-term view on the value that we're creating. And that's all centered around Airtasker's mission to empower people to realize the full value of their skills. We're creating jobs, we're creating income. And I believe that, that is something that is important, not only during the boom part of the cycle but also in the more challenging parts of the economic cycle. So now happy to open up to some of the questions, and I might pass it over to Mahendra to call out the first question.

Sure. Thanks, Tim. So the first question we have is, what will be the catalyst that we'll see investors attracted to the Airtasker shares and a decent recovery in the share price.

So every day, we are focused on building value into this business and taking a long-term view on that. So I think that rather than focusing on quick announcements or sort of short-term boost to the share price, but I really wanted to take a sustainable approach, which is to build long-term value into the business. As Mahendra mentioned, revenue growth of 57% on PCP is really something that I think if we continue to just have our heads down, focus on strong profitable unit economics and growing revenue while being disciplined on costs. I think that's ultimately the way that we're going to build value into this business. And across all growth of tech stocks right now, I think we've seen compression in valuation multiples. I think the most important thing for us as a company is being focused on long-term value creation, focused on revenue, focused on customer value and focused on discipline with costs. And if we take care of those things, I believe the share price is going to naturally find a strong recovery.

The next question is, any idea on what the levels of leakage might be?

So a really, really interesting question around leakage. There are actually multiple kinds of leakage in Airtasker's marketplace. One kind of leakage is the leakage where 2 people don't even want to assign a task through the Airtasker platform. And so we are using machine learning to actually detect when that's happening and reducing that a lot. I actually think that has become a very, very small percentage now with Airtasker marketplace. We've really got to clamp on that one. The second kind of leakage we see is what we used to call $5 leakage, which is when 2 people would agree to do a task or a task but not agree to the true value of that task. So rather than the task being $1,000, it would only be recorded as $5 through our marketplace and the rest of the transaction would happen offline. We've also shut down that leakage by creating a policy where you can't actually have a task completed for anything less than 30% of the starting price. And so that leakage is almost disappeared as well. There is a third kind of leakage, which is 2 people meet on Airtasker, do one job together. We monetize that really well. We earn a take rate of close to 17%, but the following jobs all happen offline. Up until about a year ago, the leakage on that was 100%. All of those jobs went offline, and we didn't capture any of those things. Through the introduction of contacts, we've now started to reintroduce that GMV back into Airtasker's marketplace. We've made it really easy to be able to nurture a repeat relationship through our platform. And because of that, with 0 marketing, 0 incentives, we're seeing multimillions of dollars of GMV starting to flow back into our marketplace, and that's growing at a compounding rate from 0 to close to $4 billion of annualized GMV in the space of about 9 months with fertile education and close to 0 incentives. I'm really excited about that because it takes time to educate the population about the availability of this service. And each week, we're just starting to see that compound and compound and compound and to look at what the upper bounds of what that could be. When we acquired Zaarly in the U.S. We saw the repeat booking transactions were about 3x the size of initial booking transactions. And to put that into perspective, Airtasker as core initial booking transactions is about $200 million a year. So if you kind of imagine 3x that for the repeat booking part, I think that addressable market is absolutely enormous.

The next question is the current Australian macroeconomic environment, increasing interest rates inflation, having an impact on any of the key tasks -- tasks categories as it is.

So short answer, yes, we actually -- we are seeing an impact on the macroeconomic environment. One of our task is our large categories is the removalist category, and we have seen some softening in that space. Actually, in the half of -- in the first half of FY '23, we actually saw overall poster jobs, so demand still increased by about 10% or 11% in Australia, which is quite interesting to see, especially when platforms like high-pay us saw a decline of about 8% during that same period. So I think we're really starting to see those network effects start to really come through. So Airtasker go up 10%, homepage is down 8%. We have continued to see some softening in FY '23 on posted tasks. Less people are coming to the platform to post their jobs because there are less -- there is softening consumer confidence. But as mentioned, due to increased supply, we're seeing higher completion rates, lower cancellation rates and higher revenue and take rate. So actually kind of shows the adaptability of our business model, whether it's demand high supply low or demand low supply high, we always are seeing a growth in our revenue line, which is really promising to see.

Okay. The next question is on the U.S. market. So what is required to see a rapid growth in the U.S. market, which is a massive marketplace? How long do you think it will take to create a serious asset? And what will be the key drivers of growth?

Yes. Well, I think that we're obviously trying to make that the U.S. market growing as quickly as we possibly can. We're seeing somewhere between 5 to 10x annual growth on both posted tasks and offers off a base are very, very low. And so we're clearly building traction and we're building it fast. I think the great thing to see is that in Australia, it took us quite a number of years to get through to that traction point where you're doing sort of $25 million a year in a city. We've seen that be much, much shorter in the U.K. from 5 years down to a couple of years. And what we're seeing in the U.S. looks really, really promising that it's significantly faster than what we're doing in the U.K. So how do we do that? I think one of the things we're starting to formulate or postulate around is what's the point at which we really hit a market with that above-the-line branding? In Australia, we did that when we were in a gross marketplace volume of around about $15 million per year annualized. By partnering up with 7 West Media, we saw a real acceleration in that growth. Interestingly, the U.K. market is now coming up to that phasing where we've really built that initial traction, and there's an opportunity there to really start investing in scaling above the loan marketing. So we're looking at innovative ways that we can do that during a cash-constrained market and still maintaining discipline in our net cash investment -- and then in the U.S., I think that since that market is growing so fast and it's following the U.K. and being even faster than the U.K., the opportunity to do that might come a little bit earlier as well. So I think in summary to the question, we do have to spend at that time, whether it's a year or 2 or 2.5 years to build up base traction. But we are starting to formulate a playbook around on how you're going to invest in brand to really turbo it into a big marketplace.

Okay. The next question is, are you still confident that the AU marketplace can continue to fund global head office costs going forward? I can probably take that one. Yes, I think at the moment, we're keeping a weather eye on the performance of the Australian business and what's happening with the demand and supply metrics. And certainly, if we need to take steps to adjust our run rate, we can do that. Next question is, are you still targeting cash flow breakeven on a monthly run rate basis by the end of FY '23 so FY '23? We were originally targeting the end of calendar '23, and that's still the plan at the moment. The next question is early traction in the U.K. looks to be solid GBP 3.5 million trailing 12 months revenue. What level of scale in your opinion, would need to be reached to call it a success and to be able to extract meaningful gross margin?

Great question. So I would say that success is definitely -- there are different levels of success there. But the first outlook for us is, can we get 0 to 1? Like do we have something going here that we can build on? And I would say we would definitely tick that box. In fact, I would actually point us back to 2019 where tasker actually decided that we needed to extract profit out of the U.K. market for short-term reasons. And so we removed all of the cost base out of the U.K. We have no fixed costs in any of these marketplaces. So when we removed all of the cash costs out of the marketplace, we're actually generating a net cash flow between $20,000 to $30,000 a month that was coming from 0 capital invested. So reflecting on that, these marketplaces can really be profitable whatever time you want to turn off all of the marketing. Now the issue with that is the marketing is on labels you to keep to grow that marketplace and level it up and really build those network effects, which is why in 2021, we started to invest back into the U.K. marketplace. So when does that marketplace become profitable, I think, is an interesting question. My view on that is that at about $25 million of GMV and a gross margin take rate of something like 15%, you're talking about generating about $4 million, $3.5 million to $4 million of net profit margin out of that marketplace. And I believe that's quite a hefty amount of money that can be reinvested into marketing to create that sustainable growth loop. So I think somewhere in that range of sort of $25 million of annualized GMV is when a marketplace can start to wash its own face, and actually just invest in itself to keep growing self-sustainably. I think one important thing to also mention is that the Airtasker has very, very low, close to 0 fixed costs in each of these incremental new marketplaces that we develop. And so in order to be profitable at a bottom line level in each of these new countries, it's really just that the gross margin that we generate has to be greater than the marketing dollars that we want to spend in that marketplace. But we don't need to replicate the software development, the product and engineering side of things, which is a large portion of the fixed costs that we baked into our head office operating costs already and that are covered by the Australian profit margin.

The next question is Slide 8, talk to lower consumer confidence and top-of-funnel demand softening. Can you unpack that a little? Is this being more than offset by more supply?

Yes. So great question. The answer -- the short answer is yes. The increase in supply has more than compensated for the decrease in demand at a revenue level, which is why you're seeing revenue continue to increase and continue even into the second half of FY '23. We're still seeing revenue up year-on-year despite the demand being very, very soft. As I mentioned, high pages, which I think is a decent proxy for some of the renovation jobs and some of that actually saw a significant decline in poster jobs, about 8% already in the first half during that same period. Airtasker saw a growth of about 10% in posted jobs there. So I think that bodes well for Airtasker, our position within the macroeconomic environment. But in short, what's really interesting is, although that you see slightly less jobs at the top of the funnel, we're seeing high completion rates, lower cancellation rates, higher take rates, and that means higher revenue despite softening demand. And I think that bodes really well for the adaptiveness and the resilience of our tasks business model.

We've got a couple of questions here on customer acquisition costs, what is the customer acquisition cost for new customers in Australia, the U.S. and the U.K.?

Yes. I'm happy for Mahendra, if you want to expand on this any further. But at a high level, Airtasker predominantly invests into our brand marketing and organic acquisition to acquire customers. So there's roughly 2 buckets. There's one bucket of direct paid marketing, which is you put it out in Google and how much does that customer costs to acquire. And then the rest of our customers are coming purely from word of mouth and effectively because they've heard the [indiscernible] and they love our brand. And to just kind of cover that off, around 63% of our customers are just returning customers. So that's just -- they're coming back again and again. Of that 37% of customers that are new customers, roughly 80% of those are coming from just a completely organic acquisition. So if you sort of reverse that map out, we're actually acquiring about 7% of our customers through some sort of paid acquisition model. And so it actually makes up a very low portion of our total revenue, which means that the CAC when you look at that is a representative of the overall cost of acquisition of our customers.

Right. And let me also add that I think on Slide 9 in our deck, we note that paid marketing as a proportion of our marketplace volume is only about 2.5%. So it's quite low proportionately.

Yes. And I might just add one more thing to that, which is I think that there's 2 angles to that. One is that predominantly Airtasker doesn't need to consume $100 million of marketing costs to acquire a bunch of customers, which is really, really a great thing. And it means that during this tough time, where we need to be disciplined with costs, we can bring down that brand investment and not see too much impact on our top line growth. And of course, we're balancing discipline went costs with top line growth at the same time.

Okay. Can you explain the business model of Airtasker Plus?

Yes, really, really excited about this. So Airtasker's traditional model is -- can be framed up in some ways as a freemium model. And what does freemium mean? It means that customers can come in with very low friction, you just get a lot of value from the product for free, and we only monetize it at the very back end of the value chain. So as a customer, you can come and post a task, and it's free as a task go, you can join our platform for free. You can see all the leads for free. All of that is free. And only if you get a job in which you see money in your bank account or you're a customer, you get your job done, do you pay a small fee to Airtasker. So that's the freemium model. And that's really important because that's how you build up network effects. You let everybody come into the platform, use the product, get value, and we'll just monetize at the back end, and that's been very successful for us in building networks. However, some people preferred to take a more commitment style approach, which is I would rather not pay you a variable fee of 16 or 17 deployment. I would rather pay a subscription fee of maybe $100, maybe $200 a month and not have that [indiscernible] -- and we think that's going to be really, really powerful because it's going to allow some of these small businesses that I'm so interested in the percentage model to join our marketplace. And this is a proven model because our Oneflare has a very, very active base of service providers paying somewhere between 100 and a few thousand dollars a year to use the marketplace. What we're going to be doing is building our own version of that on Airtasker, migrating all the one-play customers across to that. That's called Airtasker Plus, and we see it's the best of both worlds. So we'll always keep the freemium model, but the Airtasker's subscription model will sit on top of that.

Next question is we've gone from -- we've gone from seeing team all over the media promoting Airtasker to now have [indiscernible]

Well, it's quite interesting actually. I think we're -- maybe the question Airtasker is it watching as much free to TV, but I can probably say that Airtasker has probably been on Channel 7, 9 this year, more than a dozen times already, whether it's on sunrise, current affair, the morning show. So we're doing a lot. We've also had some great appearances in the U.K. market as well. So I was over there a few weeks ago and doing media over there and off to the U.S. in a couple of weeks as well. So usually, I get the opposite, which is Tim get off TV, but I'll take that one on point and hope to represent our brand the best way that I can.

The next question is what marketplace impacts are being felt by the new fee schedule released in February this year?

Super interesting. So we continue to see incredibly high rates of supply. So the fee schedule change that we made this year was as follows. So Airtasker as a tiered pricing system, which is Bronze [indiscernible]. So if you're just doing one job a month start at 20%, and our top task is we're on a fee rate of about 10%. If you did thousands of dollars of jobs part. What we decided to do is bring that a little bit closer together. So our bronze tasker is our entry-level passes did not see a fee increase at all. And what we did do is we just need the platinum, gold and silver thresholds all moved up a little bit closer. That was done for a couple of reasons. Most importantly, we want to give people who are new to the Airtasker marketplace, a good start in that marketplace. And so we believe that this fee movement was the best way that we could increase prices without seeing a decline in marketplace activity. That has proven to be true. Now why is this the case? I think the percentage fees at the task of charges are often a little bit emotional jarring and you see a 1% increase of 2% increase, that's not anything that people love to see. And so of course, when you do a price increase, you going to get some feedback on that. But if you actually put that into the context of earning a $200 job and seeing a 1 or 2 percentage point increase, you're talking about $3 to $4 for the average job would be the maximum difference that you would see due to that price increase. So because tasks got such a high-value proposition come in, use our product for free, see all the leads free, talk to all of our customers for free, and we're going to charge an extra $3 to $4 at the end of that task only if you are successful, I think it's a very compelling proposition. And because of that, we haven't seen any drop off, albeit definitely receive some feedback on price increases as perusal and as expected.

Next question is around our market -- international market expansion. So when we enter new markets, cash burn will be required to gain market share. Is the plan to raise money to engine markets or engineer markets slowly lowering the cash burn.

I think it's a good balancing question here. So yes, we do have to invest into building network effects in new markets. The first thing I would say is it's almost entirely variable expenditure. What I mean by that is it's basically marketing expense we own to these new markets, not fixed infrastructure, not tons of employees and all that. So it is on a dial, we can dial it up or dial it down depending on the cost of capital. Cost of capital is very, very high, which it is right now because of current share prices and valuations. We're going to be a little bit more disciplined, if there's an opportunity to go faster because the cost of capital comes down, we can move a little bit faster. Where we are now is in a high conviction but disciplined approach, which is that we're investing a couple of million dollars into both the U.S. and the U.K. markets to ensure long-term momentum is maintained, but we're certainly not hitting the pedal super hard. And I believe that -- the cost of capital was different, i.e., if valuations and things were higher. We could be moving faster in those markets. But I think what is really important for all of our shareholders is that we're really committed to not putting this company into a position where we're forced to raise capital. And so Airtasker is very much in a position where the $23.3 million on our balance sheet is certainly enough to take us through the profitability and breakeven.

Great. And I think that leads us on probably the last question I think we have here, which is what's the market feedback from your various communications around the financial performance with brokers and funds? So I think that you touched on it already.

Sure, I mean I'm happy to sort of give some light feedback and if you want to add anything. I think [indiscernible], it's a tough macro environment. And I would say that we've seen high pages declined by 8% and have to really turn up the wick on ARPUs and things like that. That's kind of a sign of a challenging macro environment. And so to see our taskers it grows 10% in poster tasks relative to 8% decline for high pages, seeing 57% revenue increase, 23% even without Oneflare being added. I think is a strong outcome, whilst at the same time, keeping a discipline on costs. So I think the results are really strongly. I'm really proud of these results. Would I love to be moving faster for sure but I think really important is the responsibility here, which is the longevity of Airtasker and making sure that we can continue to service our mission into the long run, and that means making sure that we have enough cash on balance sheet, and that means [indiscernible] and our goal is to keep that momentum on reducing cash burn happening over the next year and until we get profitability.

Great. I think that's the last question. We've got Tim...

Thank you so much, everyone, for joining us this morning and the support in supporting and asks mission and what we're doing. And hopefully, as customers as well helping us with that consumer demand or if it's your bag to be working through our platform, too. I really appreciate it. And I think my conviction is as strong as ever that what we're doing here is going to be a really, really powerful impact to the community over the long term. So thank you very much.

Thank you.