Airtasker Limited (ART) Earnings Call Transcript & Summary

Welcome, everyone, to today's webinar for Airtasker, Australia's leading online marketplace for local services -- sorry, we -- my screen panel will be there. And Airtasker is pleased to invite you to attend this webinar where we will be going through the half-year '25 results. Shortly, I will be introducing Airtasker's CEO, Tim Fung; and CFO, Mahendra Tharmarajah, who will provide detailed presentation on the company's half year results. At the completion of the presentation, Tim and Mahendra will then participate in a live Q&A session. Feel free to submit your questions using the Q&A function on the screen throughout the webinar. I'll be collating these and putting those to Mahendra and Tim during the Q&A session. Thank you for joining us. And without further ado, let's get started. Please join me in welcoming Tim and Mahendra, who will now run you through the formal presentation.

Thank you, David, and thanks, everyone, for joining us today. So, I'm Tim. I'm the Co-Founder and the CEO here at Airtasker.

And I'm Mahendra. I'm the CFO at Airtasker. Good morning.

Okay. Let's jump into things, and we'll move past the fine print disclaimer quickly, and I'll just talk a little bit about Airtasker. So, Airtasker is building the world's most trusted marketplace to buy and sell local services. So, if we just move to the next slide, it would be great. Airtasker building the world's most trusted marketplace to buy and sell local services. In very simple terms, we connect people who need work done with people who want to work, sort of the world's most simple business model. On the next slide, our mission at Airtasker is to empower people to realize the full value of their skills. And I think something that's really important in the age where a lot of jobs are being automated and moving to artificial intelligence and autonomous driving, things like that. Airtasker is all about creating jobs for humans and allow humans to be able to monetize their skills to be able to earn income. Really pleased to say that we've passed a new milestone of putting over $650 million into the pockets of Australian workers. And that's after that we've created a business, generated revenue. This is the money going into the pockets of Airtaskers for all time. So, a really great milestone to pass. On the next slide, Airtasker is building out a marketplace for local services, and we've built Australia's #1 marketplace for local services. And we're doing things in a slightly different way to some of the other folks that have gone about building a business in this space. The first is that we built Airtasker as an open community. And that means that anyone can be a customer, anyone can be a tasker. And what Airtasker enables is that transparency and accountability between the buyer and the seller of services. That's a really great thing in terms of reducing friction and allowing more jobs to be created, but it's also a really great business model. It's very light touch, and this helps us generate gross margins of about 95%. The second thing that makes Airtasker very unique is that we're infinitely horizontal. And this has 2 really important consequences. The first is that we can help address services that don't fit into like those traditional cookie cutter categories, which a lot of other marketplaces and services have assumed people need. We're allowing people to do all these things that don't fit into those categories. The second thing is it's great as a way to be able to build awareness for Airtasker because people always hear about Airtasker and all the crazy jobs that we can help people with. They're inspired by that. That drives up our earned media, that drives down our cost of acquisition in marketing, and that's what makes us a very efficient and ultimately a very cash flow generative business. On the next slide, competition is really interesting. So, if you were to segment the market in a couple of ways -- first of all, it's important to sort of differentiate those who are in remote work versus those who are in local services. So in remote outsourcing, you've got companies like Fiverr and Upwork and Freelancer. And those companies have a similar business model, but a completely different market. They're traditionally having customers in developed countries and outsourcing that to workers in lower labor cost countries. So they have a similar business model to Airtasker, but completely different market. The second way then, if you look into local services, the second way to segment the market is to differentiate between those in advertising businesses and those who are in e-commerce. If you look at advertising, there are companies like Hipages in Australia or there's Thumbtack, Angi and Checkatrade in the U.S. and the U.K. that don't operate in Australia. And these businesses are typically characterized by making the seller of the services, the primary paying customer. And that's very different to Airtasker. We're very customer-centric. We're very much -- the person who is buying the services is the person that generates revenue for us as a paying customer, and our business model is very customer-centric. So, in this space, really, there's only 2 main players: Airtasker and TaskRabbit. And TaskRabbit operates in the U.S. and the U.K., not in Australia. We have quite a different business model, though, which is that TaskRabbit is a very curated agency type model where they will essentially charge workers to join the platform, and they'll make the decisions about who gets what job. Whereas, Airtasker is very much your community model. Anyone can join. It's completely democratized. And we're not in control of who gets the work, the customer chooses. So, if we move to the next slide, that we're well positioned from a competitive landscape. But importantly, we've also got a revenue and a business model, which tightly aligns us with our customers, too. So it's a really simple business. It's free to post the task receive offers. It's free for workers to be able to access all the jobs and create quotes to do jobs, and we only charge a fee when a job is successfully completed. So, if you look at those charts on the right-hand side there, the GMV is all the money that we collect in terms of booked tasks. So after you've decided which task you want to use, that money is the amount that's going into our escrow platform. And then from that, we charge about 20.7% is our cut of that GMV that we charge as revenue. And on that revenue, we have about a 95% gross profit. So we pay a little under 1% out to insurance premiums, and we pay a little over 3% out in terms of credit card merchant fees for transacting those payments. So, we end up with about 95% of each job that goes through. So, if you kind of take the average job value in Australia, which hovers between $240 and $250, we were making about 20.7% on that, which is in the range of $45 to $50 per job, and we have about a 95% gross margin on that. So, a really, really scalable business model with a strong average basket value. So, that's a little bit about Airtasker. I'll be back after Mahendra presents our results to talk about the growth strategy for the future. In the meantime, over to you, Mahendra, to give a recap of the first half.

Great. Thanks, Tim. Good to move forward a couple of slides, David. Next slide, please. Okay. So, I might start with, I guess, looking at what we said we would do at the start of FY '25. So, we set a couple of objectives for the full-year. So, the first one was that we were going to operate within our cash envelope and be at least breakeven or FCF positive over the full-year. And we're pleased that we're on track to achieve that. So, we had an FCF result of just over $0.5 million for the first half, which also helps us fund -- that's after funding our U.K. and U.S. expansion or the cash component of the U.K. and U.S. expansion. The second objective was on our Airtasker marketplaces to achieve double-digit revenue growth. So we've achieved just under 15%, 14.8% for the first half, and we are pretty confident of maintaining that trajectory into the second half of the year. And the third item was really to leverage the media partnerships that we closed in the back half of 2024 and then the early part of 2025. So we obviously implemented or completed a number of transactions in Australia, the U.S. and then the U.K., follow-on media in the U.K., which allowed us to have media inventory of about $51 million at the start of, I guess -- roughly at the start of FY '25. Move to the next slide, David. So, breaking that down, how does that look? So, group revenue was up about 10% on the previous half or the corresponding half, $25.7 million. And then as I mentioned, Airtasker marketplace was sitting just under $22 million at 14.8% up and then the positive cash flow, which was a significant turnaround. But in the prior period, the statutory cash flow was impacted by the fact that, from an accounting perspective, we treated term deposit investments as cash outflows in the first half and then cash inflows in the second half. So, on a full-year basis, they net 0, but it does present a different picture. And you can see it in the chart, they're going out in 1H '24 and coming back in, in 2H '24. And then operating cash flow has been consistently positive for the last couple of halves. So you can see 3 consecutive halves of positive operating cash flow, and we finished obviously just under $2 million, which is about a 36% turnaround on the previous year. So, really pleased, and I think that's the core of the business in terms of you can get that positive operating cash flow going, then it drops through into the FCF number. Move to the next slide, please, David. So one of the things we wanted to talk about was our statutory -- non-statutory operating segment result and group EBITDA working backwards. So if I start with the Australian marketplace. So we look at our Australian marketplace as being cash generative and EBITDA positive. So we had about $14 million of EBITDA out of the Australian, I guess, operational business. That went down a little bit about just under $2 million on the prior period. And that was principally because we invested significantly more dollars into marketing. So there's about $3.5 million increase in marketing in the year, including about $2.5 million relating to our noncash marketing from our media partners. So, all this is going into above-the-line brand marketing. The next 2 items are really our fixed head office operating expenditure and innovation investments. So they tend to move between those categories, depending on what projects are happening in the business over the course of the year. So sometimes, our projects can be capitalizable and they'll be capitalized on the balance sheet because they relate to the core platform. Other times, they're more maintenance-oriented or of that nature, and so there might be operating expenditure. And then other times, they fall in between capitalizable and OpEx and then more classified as innovation. So, that sort of explains those 2 numbers. So basically, our Australian business covers those costs, and we finished with an Australian net EBITDA of $4.1 million. After that, we get into our new marketplaces, so principally the U.K. and the U.S. So we can see we had a negative EBITDA of about $14 million. That was up about AUD 8.9 million on the prior half. And that was really driven by the fact that we invested about $8.8 million into marketing in the course of the first half. So, that comprised largely a noncash marketing from our media partners in above-the-line brand marketing. And then the final item was really the treatment of how we account for it. So this is a statutory accounting of -- for our share purchase liability. So, obviously, we structured these media partnerships where we're receiving the media capital upfront from our media partners, and we have an obligation in 4 to 7 years' time to either repay the convertible notes or convert them to equity and then subsequently to repurchase the equity we've issued currently or in subsequent periods. So there's a mark-to-market calculation that occurs at each reporting period. And so what happens is at the start of the transaction, we booked the face value of those commitments. And then there's a mark-to-market associated with the fact that the final purchase price is tied to the revenue forecast for that subsidiary and the group market cap multiple. So, obviously, in the last half year, we've had a couple of some movement on our group market cap. So it's been up about 16% from the start of the fiscal year to the end of the first half. And then at the same time, all those obligations are denominated in foreign currencies, so sterling and U.S. dollars. And so there's been about a 5% to 8% movement on those currencies over the course of the year relative to the Australian dollar. And so we've had to recognize an unrealized foreign currency loss. So we see that as, I guess, the noncash unrealized transactions. There will be some movement on those numbers depending on what happens with foreign currency translation rates and what happens with our group market cap multiple. But we're focused on really the core business, which is the Australian marketplace generating $14 million and then investing a significant amount of marketing dollars in the new marketplaces to scale those markets. And keep in mind that we own 80% of those new marketplaces. So while we might be recognizing an increasing repurchase obligation, we're also gaining the balance value of those assets. Next slide, please, David. So if we turn to the Airtasker marketplace, as I said, 14.8% revenue growth, GMV was up a little bit less, about 9%, but we hit a record $105 million in GMV over the course of the half year. And we've obviously been investing in brand marketing across all our marketplaces, as I mentioned. If we turn to the Australian marketplace, really good results. So, we've had not a lot of marketing dollars invested in Australia over the last few years, and we've certainly increased that in the current half. And you can see that we've gotten into double-digit -- low double-digit growth, 11.5% in the Australian marketplace, and that's on a good trajectory. And our GMV is also up just under $100 million. And pleasingly, our monetization rate continues to improve through the funnel optimization work we've been doing plus our yield management activities. We also launched brand marketing through oOh!media and ARN in the half year, and they've certainly helped us improve our unaided brand awareness by just about 7% from where we started the half year. Next slide, please, David. If we turn to the U.K. and the U.S., so they're both on a good trajectory. The U.K. was just on 100% improvement in revenue -- growth in revenue on the previous corresponding period. And GMV was up about 65%. And that translates into about a $13 million annualized run rate. And I think we'll talk -- Tim will talk a bit more about that further on. We obviously secured a follow-on investment from our partner, Channel 4. So, we completed a media partnership with Channel 4 in June '23, which they provide is about $6.5 million. And we completed another transaction in November '24 for about $7.8 million. So, it was a really good validation from that partner that, 18 months later, they were prepared to invest further dollars about the same amount as they did the first time in the business, and we're pleased in the trajectory that's taken. We're obviously now in London as well as Birmingham and Manchester. So we're feeling pretty confident as we go into the peak spring and summer seasons in the Northern Hemisphere. Turning to the U.S. Obviously, a very, very small market, still, very early stage. Revenue growth just under 200% on the corresponding period. We've completed the deals with TelevisaUnivision and iHeart in August and then Sinclair and Mercurius in November. So we had about $33 million worth of media capital from them. We started with Televisa and iHeart in September, and we'll move into utilizing the media distribution -- or the media distribution from Sinclair and Mercurius in the second half. We also were in L.A. at the start of the period, and we're going to be expanding into further cities in the second half of the year, again, as we go into the peak season in the Northern Hemisphere. Next slide, please, David. So, looking at where we are at the halfway point of FY '25. So we're on track to deliver full-year free cash flow. We're on track to deliver Airtasker marketplace with double-digit revenue growth, so currently sitting at 14.8%. The Airtasker Australia business continues to generate enough cash to fund the cash component of our U.K. and U.S. expansion. And we're accelerating the growth trajectory in those new markets with the combination of cash investment as well as the noncash media marketing, 100% growth in the U.K. and just under 200% growth in the U.S. And we're starting the second half with $18.3 million of cash on the balance sheet and about $45 million of unspent media capital from our media partners. I'll hand back to Tim.

All right. Thanks, Mahendra. Great update on the first half. And yes, really pleased to see that we have been able to continue to like really scale the business into new markets while, at the same time, maintaining our group cash flow positive. So, very disciplined investment and smart use of our capital. So if we move forward 1 or 2 slides. And by the way, we're skipping over these lovely pictures of Airtasker's taskies. So you will probably start to see, in a lot of our marketing campaigns, these great characters like Terra the Pot. And these are really the folks that are going to hero all of the categories on Airtasker and be there together with our taskers. And from a marketing point of view, I think it's a great brand asset, but it's also a really smart brand asset because what it allows us to do is extend all of our content and be able to make a lot of imagery and video at a very low and efficient cost. And that's a big part of why we're using animation throughout our marketing. If we do move to the actual crux of the growth strategy, so I would say at the highest level, our strategy is to invest into Airtasker's brand and core platform and make sure that we maintain the market leadership position that we've built out in Australia, and use that to drive profitable growth. So in our Australian market, we've been very disciplined with how we invest into the platform and the brand, and we're able to increasingly drive more free cash flow out of our Australian business and use that investment to expand into that third pillar, which is our U.S. and U.K. market expansion. And in order to do that, we're taking the learnings that we took from Australia around media partnerships, combining that with our cash to really like turbocharge that investment into the U.S. and the U.K. On the next slide, I can talk a little bit about each of those pillars. So first of all, in terms of investing into our core platform, we have made some great investments into Airtasker's brand alongside our Australian media partners, oOh!media and ARN. And you can see up here some of the great integrations that we're doing together with talent as well as just straight advertising. So, we're doing a combination of both earned and paid media in collaboration with these partners. And over the period, we've been able to already start to see some great results from those marketing investments that we've made. We've seen unaided brand awareness during the last quarter increased by about 10.5%, and we're seeing our consideration increase by about 28%. So making that upfront investment in brand, you've got to look at those leading indicators and those leading indicators are really telling us we're making the right moves to invest into the long term of our brand. I think that is very, very important in this age of -- whereby Google is increasing their acquisition costs by about 60% CAGR over the last 3 years. So if you're dependent on Google and you're dependent on these like paid advertising platforms, that's not a good place to be. So where Airtasker has really invested into is our brand and so we're less reliant on those channels. The second thing we've done to invest into the core of Airtasker's platform is double down into building out marketplace trust. So what we're really doing is making sure that, from a conversion perspective, customers who post a task are more and more likely to be able to find a task that they can trust, and be able to assign that task, and that's what generates revenue for us. And we're also making sure that the customer experience of Airtasker is enhanced as we do that. Some of the things that we've done there, for example, in -- during the last quarter, we rolled out ID verification across all users. And so now our taskers are ID verified. We also capture legislative reporting or tax information on our task, and that also helps to drive trust and increase the quality of our tasker base. We also rolled out, for example, Airtasker's top offer product, which allows customers to be able to see what are the offers and how are they stack ranked and providing guidance to our customers as to which tasker is going to be the best for them. So, stepping into that space of helping customers understand who they can trust throughout the marketplace. All of these features, we feel, are really combining together to increase trust and ultimately increase customer confidence to be able to buy services on Airtasker. If we move to the next slide, we've also started to look into AI and how artificial intelligence could really help Airtasker. And there are 2 main areas which we think are very, very interesting: One is to improve the customer experience of Airtasker. And when you think about posting a task, we can really use these generative and LLM models to be able to help customers explain and articulate what they need, make that easier for them. That's going to help make that funnel even more slick, and that's going to result in more posted task. So, really excited about how AI can help us take a loose customer need and turn it into a very definitive and useful task in our marketplace. The second area is operational productivity. So, lots of opportunities. We're already starting in our business to invest in AI in customer service, in AI for model and task categorization. So, that's happening by the buy, not the least of which is using Copilot to make our engineering and product teams a lot faster. But on the right-hand side, we've actually got quite an exciting announcement to share today, which is that Airtasker has been collaborating with OpenAI, which is ultimately the industry leader in artificial intelligence. And we are an official partner in rolling out AI -- OpenAI's Operator product in Australia. What is Operator? It's really, really interesting. Basically, it allows you to speak with an AI agent who will go to Airtasker and help book you a task. And this is really, really exciting because we are looking at ways that AI can help customers make it even easier for them to make bookings on Airtasker. And this is sort of like the ultimate opportunity to experiment with how that could work in the real world. So, if you actually are an OpenAI Pro subscriber and you go in and look into how you can use Operator to book local services, you'll see Airtasker's prompts in there. So, really excited to see both how this can help us drive distribution. As Google search and traditional search starts to decline and artificial intelligence search starts to increase, it's a great opportunity to explore distribution, but it's also a great opportunity to learn from how customers are engaging with our Operator to learn how we can build those features into Airtasker. Ultimately, Airtasker is really, really well positioned because our business is built on a real-world network of real-world people. And so as much as AI is likely to disrupt and most likely undercut a lot of these sort of advertising businesses, it's -- Airtasker's moat is a real physical network of real people. And that's probably going to be some of the last stuff to be automated out. On to the next slide. So, as we mentioned, we are investing heavily into our core platform. We're going to keep doing that in a very disciplined way while staying cash flow generative. And in Australia, if you look into FY '24, we roughly generated about $45 million of rev in Australia, had about $14 million of direct cost to power the Australian market and generated cash flow of about $31 million whilst growing revenues at the same time. So we know how to build a very cash-generative marketplace and Australia is sort of the prime example of us being able to do that. If we go to the next page then. What we're doing, if you look at that left-hand column there, we've generated $31 million in green. And then Airtasker had about $80 million of fixed operating expenditure or fixed investment in FY '24. And so the $31 million generated in Australia covers all of those fixed costs and leaves us with around about $13 million of free cash after making those -- covering all of those fixed costs. We're taking that $13 million and investing that into the U.K. and the U.S., leveraging that platform and those fixed costs that we've already covered. And as Mahendra mentioned early on, we did about $50 million of these media deals in 2024. And so what that does is it takes that $13 million of cash and really allows us to get massive leverage on that to grow the marketplaces in the U.S. and the U.K. And the deals that we've done with these media partners, it's a massive win-win, but it's also really powerful for Airtasker because we only pay for performance in these deals. So the more revenue we generate in these marketplaces, the more we have to pay. But of course, the more value that we've created because we're generating a lot more revenue. The second thing is we've really ring-fenced the downside. So these media partners are investors into Airtasker U.K. and Airtasker U.S.A. And so we're talking about being able to scale incremental value in our business and not risking or betting the house on these new marketplace. We're not betting what we've built in Australia to do this is very much incremental. If we look on to the next page and how those media deals are actually structured. So we have a combination of different instruments that we've used. But ultimately, they all come down to the fact that at the end of the investment period, which is between 4 to 7 years from today, we buy back the equity that any of these media partners hold in Airtasker U.S. or Airtasker U.K. And the way that we're valuing that equity is to take how much revenue is being generated in those marketplaces, multiplied by whatever our group revenue multiple is. So, hopefully, we're trading at a good revenue multiple of 6x to 10x revenue or something like that, and Airtasker U.S.A is generating in the range of, say, $50 million, we would pay $50 million times by -- 6x to 10x revenue multiple to value Airtasker U.S.A. And then, of course, we own 80% of that business and our media partner owns in the range of 20% of that business. So it really is paid for performance. The more revenue these media partners help us generate in these entities, the more we're going to pay for them, and it's a very, very win-win situation for those. But it's also what's great is a really good deal for the media partners. They are loving this model because Airtasker has proven that this broadcast media works in the Australian market. They really love the fact that there's minimal fixed costs. So every dollar that we're generating in these markets is going back into growing that marketplace. So all of the software is paid for all the fixed costs are already covered by Australian business, and it's all upside. And then the third thing is, as much as it is a right for us to buy back this equity at the end of the investment period, it's also a guaranteed exit from their point of view. So it's really a win-win all around. And I'm really excited about when you see the magic happen between 2 partners really being able to help each other, and that is something that we've really achieved with these media deals. On the next slide, as mentioned, in 2024, we completed over $50 million in global media partnerships across Australia, the U.S. and the U.K. And really excited about how we deploy that war chest of media to grow both in Australia and the U.S. and the U.K. And what we really thought about is like, so if we have this media at scale, how do we make the most of every time we're talking to the customer, every time we're reaching in the U.S., how we make the most of that media and take Airtasker's brand to the next level. So if we look back, we started speaking to a few celebrities in the U.S. and you came like if you look at what Ryan Reynolds has done with Mintmobile in the U.S., well, maybe we could use a celebrity to be a spokesperson for Airtasker. So we start exploring this opportunity. And during that period, we actually get pitched, hey, what about Formula One? Have you guys looked into sponsoring a Formula, it's a huge investment, 1 billion people a year watch the Formula One, and it's growing so aggressively in the U.S. market. It's absolutely nuts. You guys should get onto that train. We initially were hesitant with that. We like Airtasker is not really about the glitz and the glamor and we're not so much about Ferrari and Rolex. We're about honest people doing a hard day work and making money from their skills. And so we sort of set that to one side. But then I'm looking at what happens in Formula One, we started looking at all the people who are doing the jobs behind the scenes in Formula One. The person who's in the pit stop or the person who's assembling the garage or disassembling and moving the garage to the next country or the person who's cleaning out the garage and the car. We started looking at and going, that really is what Airtasker is all about. That's people doing incredible jobs with unique skills, but really putting their effort into to do that at the highest level. And so in speaking to the Red Bull team, they were like really excited about this, too. They're like, we're not monetizing this asset. Like there's 1,500 people in the Red Bull Racing teams. And people only know that the top 2, the drivers in the team, how could we tell that story? And so it was really a collaborative partnership where we said, we can do this together. We could tell the stories about all the team behind the dream of Formula One. So if you go on to the next page, we announced last week that we have -- we're going to be working with the Visa Cash App Racing Bulls Formula One team and doing a unique world-first global partnership where we focus on the people behind the scenes in the team as opposed to just the drives and just the cars. So if we move to the next slide. This is like a really, really exciting opportunity to leverage all of that media value that we have to make compelling content, which is exciting for our customers and our users. First of all, we drive through this partnership a global brand cache. If you open up the Airtasker app right now, you'll see the VCARB official team partnership throughout. And that really helps people to trust the Airtasker brand and want to give us a grow across Australia, the U.S. and the U.K. The second thing we get from this partnership is extensive content opportunities. So across the team, we've got access to drivers, to the races and to the factory to create content and be able to talk to our audience to drive brand salience for Airtasker. And then the third thing is it's highly efficient. So this partnership is -- costs less than 5% of our annualized marketing budget. So it's a really, really efficient partnership because we're focusing on the people that are not typically the ones that are put in front of the audiences. So you can see on this screen here, Danny, Edward and Renzo, the EA, the garage ops and the [ R Jackman ] for the car, they're the people that we're celebrating. So I think it's a very, very efficient partnership. To put into perspective how big Formula One is now, about 1.2 billion people watch Formula One per year now. And I think a lot of that is due to Netflix's Drive to Survive series, which famously has had about 390 million people watching. So Formula One is really, really taking off, about 144% year-on-year growth in young viewers. So really excited about this partnership. We announced it last week and the buzz that's already happening around this is really, really great to see. So thank you very much. We can move to the next slide. Thank you very much for your time today. We provide a lot of information about our results in the annexures of this presentation, but we won't go through those, but they're there for transparency. And yes, I think we've done a great job in this first half, really excited about the results and continuing that momentum into the second half. Thank you very much.

Thanks, Tim. Great presentation, very, very detailed, which is good, which is what investors like to see. Like I said at the beginning, we'll now move into the Q&A. So any submit them using the Q&A button on the screen and I'll put them to Mahendra and Tim. So we'll jump straight into it. We do have a few questions already. So you had a very large group EBITDA loss this year. Can you explain it?

Sure. Mahendra, do you want to take that one?

Yes. So as I mentioned earlier, we -- at the start of last year, when we implemented these media partnerships, we obviously knew we had an obligation at some point down the track to repay those partners by buying back their equity or repaying their notes. So there is an accounting treatment that goes with that. We need to recognize that value or that obligation, that future obligation. And so we generally recognize that at the face value of the media value we're getting at that point in time. There's then essentially a mark-to-market obligation that occurs in each half year. And so we revalue that obligation. And so if you revalue the obligation, the obligation is going up, then that has to be recognized as a P&L expense. So at the moment, it's an unrealized expense. It could swing the other way depending on what happens with our revenue forecast or what happens with our market -- group market cap multiple, which are the 2 main drivers of that valuation. And then the final component is really what happens with FX. So obviously, we're transacting in 2 very strong currencies in the U.S. dollar and sterling relative to Australia. So we've obviously had some adverse movements over the last half year, and that's impacted that. But I think it will swing back and forth, I think, over the course of the next couple of years where the first of those international partnerships is not due to be settled until June '28. So we've got still a number of years to go. And time will tell how we will end up settling those, whether we end up paying for those, the repurchase of that scrip in the U.K. business and in the U.S. business with cash, or we end up repurchasing it by issuing scrip in the parent entity. A lot of things will depend on which option we select.

I think it's also worthwhile just adding to that. The share purchase liability that Mahendra spoke about is dependent upon the Airtasker's group revenue multiple and the local -- the estimate of the local revenue that's being generated. And so as our forecast of revenue goes up and Airtasker share price goes up, that liability will also go up on paper. But I think both -- we can all agree, the revenue is going well in the U.S. and the U.K. and our group share price is going up, that's a good thing. So unintuitively, I think those 2 things are actually linked.

And in terms of your marketing spend this year, what proportion was cash and non-cash from media partners?

Yes, I can take that again. So we had a pretty significant uplift in marketing spend across the group. So we -- total marketing spend is about $18.2 million across the whole group. So in Australia, Airtasker Australia, the international Airtasker marketplace as well as the Oneflare business. About $10.9 million was in the form of noncash through our media partners and the balance $7.3 million or so in cash.

Probably a question for Tim. You touched on in your presentation above-the-line brand marketing strategy. Can you explain probably in a bit more detail what that means?

Sure. So I think there's probably 2 main ways you can sort of generate customer engagement and drive revenue. One would be an investment into pay performance marketing, which is a little bit like things like Google Ads where you pay $5 per user that comes to your website and hopefully you can make $6 on that, and that's going to arbitrage you $1. Really great in terms of like incrementality and predictability and being able to look at the data on that. But the big downside of that kind of marketing is that you get hooked on to it. And you can never actually get leverage because you're always paying $5 to generate $6. But that's typically where a lot of like e-commerce products companies find themselves, which is they're beholden to the Google and the Meta and the TikTok to generate revenue. The other kind of marketing is the above-the-line brand investment marketing, which would be things like our broadcast television, which would be the outdoor and audio marketing. And that's really about investing into the brand so that people come to Airtasker directly when they need it and you're bypassing and reducing your dependency on things like Google ads and Meta ads. So the upside of that is that you are building a long-term asset that's going to continue to generate new customers for over a long period of time. But the downside of that is you do have to invest upfront into doing that. And that's why what you'll see, and we look at about a 3-year payback period on that kind of above-the-line marketing. And so the important thing there is that you've got to look not at just the revenue in that period, but you want to look at the leading indicators of what's going to generate the revenue over a long period of time. And the most important indicators for us are unaided brand awareness, which increased about 10.5% during the period. So it is working. That is good. People are aware of Airtasker. They're thinking of Airtasker when they need something done. And also consideration, which is once you're thinking about Airtasker, would you actually consider using Airtasker? And that increased by 28% during the period. So the leading indicators are working. It is an upfront investment, but it is also a very long-term and robust return that you get from that investment.

And just looking at the F1 deal sort of towards the end of the presentation, what was the -- is there any -- sorry, is there any cost or investment from task for this deal?

Yes, there is a sponsorship transaction fee. And as we mentioned there, it's really a very efficient marketing investment. It's less than 5% of what we -- of our projected full-year marketing investment. So we're under confidentiality and we don't disclose the very specifics of that. But I think a very disciplined and highly efficient in marketing investment.

In terms of the top offer point that you raised in your presentation, is that based on just the price or price-plus rating, plus completion rate? What drives the top offer element?

Yes. We've got a very sophisticated algorithm, which combines a number of those vectors that were mentioned. So experience, pricing, speed of offer, all of these things go into that algorithm. And we don't share the specifics of that because what we want to do is drive really good overall tasker behavior. So what we showed about task is, hey, if you make your prices competitive, if you have a really great profile, if you have really great reliability, you're going to do well. But we don't disclose the specifics of those things because we don't want people to just do so well to gain the algorithm. But yes, it's all of those components.

Question here on the improvement in the monetization rates in offshore marketplaces. What do you think is driving that?

Yes. What was really cool is during this period, we didn't really change pricing. We didn't really change fees. So all of these improvements in the monetization rate are really just a reflection of how slick the sales funnel for a customer has become. So the more that customers get a reliable, good outcome from Taskers, the more those monetization rates are going to improve. So when we, for example, implemented a cancellation policy and cancellation fee in Australia, we saw cancellations absolutely plummet. We rolled that out to the U.S. and the U.K., and it had the exact same effect. And I think what that's really illustrative of is you can really invest into the platform and some of these features of the platform and get massive global leverage on them because you're investing into a piece of software, which rolls out everywhere. So predominantly, it was just because we saw reliability increase, cancellations decrease. And so we're getting more happy customers and a higher monetization rate at the same time.

Question here around penetration and sort of the advertising time line. And I'm going to try and paraphrase it the best I can. Do you spend and then monitor spend and then have a penetration time line of when you think that spend will translate? And what sort of upfront advertising spend do you need to commit to then try and help you reach that penetration goal?

I think one of the big upsides of what we -- of how we're expanding into the U.S. and the U.K. is that all of -- the first thing is all of the investment is essentially variable investment, where we can dial it up and dial it down and we're not going and creating new fixed commitments. So it's not like investing in real estate leases or hiring big teams of people. It's very much how much do you want to invest into the brand at what point and how much do you want to invest into performance marketing to back up that brand investment. So I think that's the fair thing to say is that it's very much a 2-way door. We can dial it up and dial it down literally on a week-to-week and month-to-month basis without taking on massive sort of long-term risk. In terms of the timing of when you invest into brand relative to scale, what we learned in Australia is it's always really uncomfortable. The quantity or the quantum that you need to make a dent into brand investment is often very large relative to your current revenue. And when we look back at what we did in the Australian market, we were sub-$1 million of revenue when we sort of started investing with Channel 7. And it was certainly, I remember people would always say, oh, geez, that's courageous -- let's say, for you to invest in your brand so early. But I think when you look at the data, we shared that chart, I think, on Slide 14, you can really see that over 5 years, it's very smart to invest in your brand upfront. You do not want to be reliant on Google and Meta. Like I said, some pretty compelling data, which is showing that Google is increasing their prices by about 60% each year. So companies that are dependent on that as the primary source of customer acquisition, I think, are going to find it pretty challenging.

A couple of macro questions here, so we'll do the best we can. So just talking about operationally at the moment, particularly post the recent rate cut here in Australia, are you seeing any uptick in jobs posted or any operational changes as a result of the rate cut that's been announced?

Look, we look at data very frequently. And we -- I'm very big on having a very high frequency cadence of iteration. So we look at data weekly, and we make decisions very rapidly off that data. But the rate cuts were sort of, I think, 7 days ago. So have we seen immediate day-to-day notable impact? I would say, it's positive week-to-week, definitely, but not like some crazy step change. That said, if we look back at since 2022, it's certainly been a difference in the demand trajectory between an environment of increasing or very high interest rates versus the period that we saw before 2022, which were consistently low interest rates and very high consumer confidence. So we are pretty encouraged that there's a high correlation to as interest rate -- the interest rate cycle starts coming down, that could be very, very interesting for consumer demand in local services.

Another macro question in relation to the ATO, which I don't like talking about at best of times, but we'll jump into it anyway. ATO reporting regime, how has that been received by Taskers? Does that help them with their business and therefore, encourage further use of Airtasker?

Yes. I would say, the legislative reporting, so just to step back and explain what this is, all platforms, which were -- which are doing -- transacting workers through a platform, we're required to collect tax information so the ATO can make sure that people are staying honest to their earnings and paying their tax. So first of all, the vast majority of Taskers on Airtasker were doing this anyway. So there are obviously, you're paying through a centralized platform into a bank account. It's not like it was cash in hand or something like that. Most Taskers were used for this already. What was the impact? I would say, the impact was that we have seen a migration to very high-quality Taskers winning a lot of work on our platform. We have seen that a number of workers that were using VPNs and coming from overseas and things like that, non-local workers, we put a bit of friction on them. And so share is moving towards these local and high-value Taskers. But I would also say that it has put some friction on Taskers, you can argue whether that is a good thing or a bad thing. There's 2 different lenses on that. But certainly, I would say the overall impact of this has actually been really, really positive and really, really aligned with our strategy to increase trust in the marketplace, which certainly made it a more trusted environment. For example, you see that all Taskers, who pass this ID verification and reporting regime have a blue tick next to their name now, and that is the vast majority of Taskers on our marketplace due to this change.

And a question in relation to the Australian market. Do you classify this market now as mature? And are you therefore sort of protecting your patch rather than looking for significant growth?

I would say that it's very established. And so I think that it's neither black nor it's white. I would say the Airtasker in Australia is definitely more established than it is in the U.S. and the U.K., where we're looking for 100% and 200% year-on-year growth and delivering on that. In the Australian market, we're doing close to 15% year-on-year growth. And if we can -- we believe there's an opportunity to accelerate that, but the 100% and 200% volume growth is probably where we are targeting in the U.S. and the U.K. That said, I think there is a very large opportunity in Australia, which is our repeat transactions. between the same customer and the same Tasker. And we're seeing some really encouraging results in how people use Airtasker in that way. And if we can find product market fit in that space, then game on in Australia could be a very, very large opportunity.

A couple of questions here in relation to Oneflare. So I'm just going to group them together to make it easier. How is that business going? It appears that revenues from Oneflare have been steadily declining. Is there any reason for that? And are you moving sort of marketing spend more towards Airtasker to capitalize on the opportunities there?

Yes. So Oneflare, we're committed to this business, and we're maintaining robust revenue in that. So it's on track to do between $8 million to $10 million of revenue in FY '25, and we're committed to that business. It's a great strategic asset to learn more about our customers and gather more market share in the Australian market. But it is a challenged business model, these advertising business models like Hipages and Oneflare because ultimately, we think that the right move is to be a customer-centric customer -- a customer-centric marketplace where the person who is paying for the services is the ultimate person that needs to be satisfied and happy in order to generate more repeat business rather than an advertising business model where it's more the seller needs to do that. So we're very much committed to the Oneflare business model. I think we're maintaining resilient revenue there. We're at the same time, exploring some bigger swings to try and turn this business model around, for example, exploring things like instant access. So we've run a number of experiments to test whether we can have our customers be able to sign up directly on the website rather than going through a telephone sales operation and also some pretty big experiments in terms of pricing to make sure the value of the product is perceived to be super, super high by the users. But it is correct to say that it is a challenged business model, but it is strategically valuable to Airtasker and we're committed to it.

Mahendra, probably a question for you. In terms of the full-year '24 revenue in Australia versus '25, do you have a sort of a makeup there?

Well, we don't have FY '25 yet because we haven't finished the year. So I'm assuming that's meaning to be the half year -- so half year '25 for Australia was just over $20 million. So it was about 11.5% growth on the FY '24 period.

Now a question in relation to probably market awareness, pretty direct question, so I'll just hit it straight off the bat. Share price hasn't moved much off the back of today's results announcement and associated presentation. Is there more work to be done to educate the investor on the value of media deals, how the media deals work and why they're going to help the company generate the returns they're going to generate?

Yes. Ultimately, I think it's about walking the walk as much as talk the talk. So I think delivering results clearly, that's where the ultimate focus has to be. For example, I'm here in Los Angeles and focused on delivering in the U.S. market and getting it on rails to deliver compounding growth. That said, investor education is also something that we've started to prioritize. And Mahendra, do you want to jump in with any specifics on that. But we do believe it's important to drive education. We're working with some great partners. And I think we've made some great progress there in terms of investors starting to understand the media deals a bit more. And one interesting thing on that is when people get the media deals and it's sort of like the light bulb mode that happens, you generally see them switch from a little bit of skepticism to like, Oh my God, that's epic. That's incredibly strong in terms of those media deals. So Mahendra, is there anything you wanted to add in terms of what we're doing in.

Yes. I think I'd add, I think we obviously see the movement on the register and the composition of the register over time. And I can certainly say that there have been a number of smaller institutional funds that have taken interest over the course of the last 6 months to 9 months in the business and have been building up positions. And that has partly accounted for at times during the course of the year, a ramp up in the stock price as there's obviously buying activity and then it settles back down. We have a -- we don't have a lot of liquidity given that the stock is quite tightly held. So the original founders and early investors still hold the lion's share of the stock, and we have quite a long retail tail of investors that probably aren't as active in trading and buying and selling their shares. So I think that tends to lend itself to short burst of activity pushing the price up when people want to build a position or funds want to build a position. A number of funds have said to us they've built positions and are waiting to see kind of what the next milestone is. And so then they'll reassess. And I think for us, as a management team, it's really about, as Tim said, walking the talk, delivering on -- doing what we say we're going to do and delivering on that. And so we're in it for the long haul. I think it's a long journey. The media partnerships are long term. They're over a long horizon. So I think we just need to keep doing what we're doing.

Another macro question more related to the U.S. Does the Trump presidency and its -- or his focus on various communities or groups within the U.S. have any impact on the Airtasker business?

I don't think so. So it's important to say that I think there's sort of like an old world view that the Hispanic community in the United States is -- there's a stereotypical sort of view that can be taken on that. But if you actually look at the growth of the second-generation, third-generation Hispanic community now, the fastest-growing cohort of college educated, wealthy Hispanic community. So I think it's the stereotype of the Hispanics doing all of the work for the other people is probably not quite the real world picture. And I think overall, yes, we're probably staying out of U.S. politics.

Last couple of questions. You have given a fair amount of time and you've got through a lot of questions. There was a question here, and it was -- sorry if I missed this, but how much of the U.K. entity does Channel 4 now own? And what valuation was the recent follow-on investment done at?

10% of equity and the recent transaction was structured as a cone, so we didn't settle on a valuation. If we complete a subsequent equity round, there'll be a valuation set at that point.

Well, that does bring us to the end of the questions. I know I'm taking up -- we've gone through a lot of questions, and there's a couple coming through, but we might deal with them offline. So apologies, we have kept Tim sort of here for an extended amount of time, and I appreciate the time both of you have given not just to the presentation, but answering all the questions that have come through. So to Tim and Mahendra, thanks for presenting today and participating in the Q&A session. And for each of you, thanks for watching and for giving us a whole pile of questions as well. The webinar itself will be recorded. So that will be -- a copy will be sent out to each of you in the coming days and will be made available to shareholders. So thank you, everybody, for your time today. Thank you, Mahendra and Tim, and have a great day.

Thanks so much.

Thank you.