Airtasker Limited (ART) Earnings Call Transcript & Summary

[Audio Gap] Financial Results Presentation Webinar. I'm Tim, the Founder and CEO of Airtasker, and I'm joined today by our CFO, Reena Minhas. I have to apologize, I have lost my voice because it's that time of the year. So I have my Biosolvon and I'm ready to put it all on the line to deliver this webinar. And with that, we'll jump straight into it and if we can move 2 screens forward. So it's always good to start with Airtasker's mission and why we're all here to do what we're doing. And at Airtasker, that mission is to empower people to realize the full value of their skills. We believe that creating jobs isn't just a byproduct of the work we do. It's the core purpose of Airtasker and our mission. This mission is even more important right now in the age of AI. I think Airtasker is going to really thrive in the era of AI because as AI makes all of the white collar jobs, all of the work around us more productive; the thing that is going to be really necessary for the future are people with skills and crafts that they can do in the physical real world. 95% of the jobs on Airtasker require physical real-world skills; things like cleaning, moving, furniture assembly, handyman, gardening or trades as well. The founder of NVIDIA, Jensen Huang, actually has really publicly said, "The real vocation that you want to have right now is being a plumber because plumbers are going to win the AI race". FY '26 was a great year. We passed some really, really exciting milestones. Our group GMV hit over $240 million and that was up 14.9% on PCP. And what's really exciting about this is not only is the growth trajectory reaccelerating, we're also seeing that year-on-year the actual percentage growth continues to increase. In FY '24, we had a flat to slightly negative year. FY '25, we grew by about 9%. And FY '26, we're seeing that strong double-digit growth, which is really exciting to see and was a big contributor to our revenue performance as well. We move over one box to the right, Airtasker's revenue grew 15.5% and again the Australian contribution largely driven by reacceleration in GMV. This results in the Australian business after covering all of our head office costs generating over $16.5 million in free cash flow. That's really, really exciting because what that tells us -- what that creates is the envelope that we can use to invest in overseas markets. Looking to those international markets. We saw our annualized run rate in GMV surpass $40 million with the U.K. and U.S. both up over 50%. We saw international revenue growth up at over 65%. That was 55% in the U.K. and over 150% in the U.S. And we introduced a paid membership program for Airtasker customers in February of 2026 and that reached 10,000 paid subscribers as of 30th of June. So I'm now going to pass it over to our incoming and very exciting new CFO, Reena Minhas. Reena comes to Airtasker after significant experience across ASX-listed companies and a lustrous career in the financial services industry. So now I'm going to pass it over to Reena.

Thanks, Tim. Good morning, everyone. As this is my first results presentation as Airtasker's CFO so I'd like to take a moment to introduce myself. I've spent more than 20 years in finance leadership, including 17 years as CFO and Company Secretary of ASX listed companies, most of them growth-based businesses working alongside founders like Tim and entrepreneurial leadership teams, which is a big part of what drew me here. I want to acknowledge the finance team for the quality and rigor of work behind these results and I'm looking forward to meeting many of you over the coming weeks. I'll start with the guidance we gave you at the start of FY '26 and how we went against it. There were 5 commitments. First, Airtasker Australia to deliver double-digit revenue growth with an increasing contribution from top line GMV growth. We delivered that. Revenue up 11.3% and GMV up 10.9% because everything in FY '26 was delivered by customer growth not by pricing. The monetization rate held at 21.9%. We didn't put prices up to hit these numbers, which means the growth is real demand and it leaves pricing as a runway for the future. Second, maximize the cash contribution from Oneflare. We migrated the Oneflare business on to the Airtasker Australia marketplace, retired the brand and technology platform and redeployed the sales team to launch Airtasker Pro Pass, a paid subscription for professional trades people. Third, Australian marketplaces cash flow generation to increase. Australia generated $16.5 million of cash after covering all of our global head office costs, up 8.6% on PCP. I'll come back to this later. Fourth, the U.K. and U.S. to accelerate their growth trajectory supported by the $5 million marketing program we flagged at the capital raise. U.K. revenue was up 55% and U.S. revenue up 150% and the underlying group cash outflow came in at $5.2 million inside the $5 million to $6 million range we had guided to. And fifth, a strong balance sheet. This is the point I want to highlight. We settled the oOh!media and ARN media partnership notes in June with $10.8 million of cash and we negotiated a $300,000 early settlement reduction. That made our cost of capital on those notes 27% lower than it was going to be. The media deals were a smart use of the balance sheet. They funded brand investment, we settled them in cash and there was no dilution to shareholders. We finished the year with $12.4 million in cash and term deposits plus $13.2 million of prepaid media assets to deploy across FY '27. So 5 commitments were made and 5 were delivered. Moving to Slide 9. Group revenue reached a record $57.8 million in FY '26. The Airtasker marketplaces; Australia, the U.K. and U.S.; grew 15.5% to $52 million. Australia contributed $46.3 million, up 11.3% and international $5.8 million, up 65.8%. Including Oneflare, statutory group revenue growth was 9.9%. The gap is the planned Oneflare wind down ahead of its migration. Moving to Slide 10, Australia. Australia delivered record GMV of $211.6 million and revenue of $46.3 million, double-digit growth in what was a soft consumer economy and all of it from customer and volume growth with the monetization rate stable. Two things I'd just like to call out. We introduced 2 new recurring revenue streams. Airtasker membership, a paid subscription launched in February for customers, has passed 10,000 paid subscribers by 30 June. And we also launched a subscription model called Pro Pass on the tasker side. From a financial perspective, the point is that paid subscriptions convert one-off transactions into recurring higher quality revenue. And on the balance sheet, we chose to repay the oOh!media and ARN notes in cash rather than issue equity $10.8 million with a $300,000 early settlement reduction avoiding dilution at the current share price level. Moving to Slide 11, United Kingdom. The U.K. really is a milestone story this year. When we signed the Channel 4 media deal in October '23, we set a 3-year goal for a city level marketplace, a $25 million GMV annual run rate. The U.K. passed that goal at 33 months, a $29.3 million run rate at June and that's the whole U.K. market with London the clear majority of it. For the full year, U.K. GMV grew 47% to $21.6 million and revenue grew 55% to $4.4 million with the monetization rate improving of 4 percentage points. So the marketplace is monetizing better as it scales. The U.K. has now reached a point where it could fund its own marketing in FY '27. We intend to reduce the total cash investment in the U.K. relative to FY '26. Slide 12. The U.S. is earlier in its journey, but tracking ahead of the same 3-year time line measured from when the U.S. media deals were signed in September 2024. At 22 months, the GMV run rate reached $10.9 million, which is ahead of target. FY '26 GMV grew 141% to $6.3 million and revenue grew 150% to $1.3 million. iHeartMedia made a follow-on investment in November to support continued investment in growth activity and brand awareness taking their total investment to around $15 million. Turning to Slide 13, cash flow. So I'm just going to give you a quick reminder on seasonality because it frames how our cash flows land. Australia is a cash generator and its cash generation peaks in our second and third quarters, the Southern Hemisphere spring and summer. U.K. and U.S. are net cash investors and their investment peaks in the fourth and first quarters, the Northern Hemisphere spring and summer, which is then when we deliberately weight the marketing spend. Put together, the group is typically cash positive in Q2 and Q3 and cash negative in Q1 and Q4. Moving to Slide 14. We finished the year with $12.4 million in cash and term deposits. Two things explain the movement. Firstly, net operating cash flow was an outflow of $2.3 million, but that includes the planned $5 million of one-off marketing investment in the U.K. and the U.S. that we raised capital for back in November. That investment contributed to GMV growth of 47% in the U.K. and 141% in the U.S., a great result for the dollars deployed. Operating cash receipts were strong at $64.1 million, up 9.6% in line with revenue. Our customers pay upfront so revenue converts to cash quickly. Second, we settled the oOh!media and ARN Media partnership notes in June. As I noted before, that was $10.8 million with a $300,000 discount. Alongside cash, we carry $13.2 million of prepaid media assets across our 3 markets, marketing power that we already have on the balance sheet for FY '27. Slide 15. Australia generated $16.5 million to fund international expansion. This is an important slide and it comes down to 3 numbers. So Australian marketplaces generated $52 million of revenue. After all direct operating costs, that produces $37 million of Australian cash flow. And after covering all of our global head office costs, Australia generated $16.5 million of cash, up 8.6% on PCP. That cash funds the U.K. and U.S. FY '26 included the $5 million of one-off accelerated program as you'll see on the outlook slide later in the pack. In FY '27, we expect Australian cash generation to increase again and the group to return to strong positive free cash flow over the full year. With that, I'll hand back to Tim to take you through the growth strategy.

All right. So just passing through some great imagery from Airtaskers promotion alongside the Racing Bulls Formula 1 team. Some great stuff there at the Silverstone Grand Prix, appearing on the career ladder and even having Arvid Lindblad cause a 600,700-person line in London, an event we held where you can see Airtaskers were very prominent in promoting. So some really cool stuff there. Let's talk a bit about our growth strategy. This has remained unchanged over the past 3 years. First of all, we want to continue to invest into the core platform to leverage our market leadership position in the Australian market and also to be able to ship all the features that we create in Australia and get leverage on that platform as we distribute them into the U.S. and the U.K. In the Australian market, we're going to continue to focus on profitable growth. Reena just mentioned the $16.5 million of cash that was generated in the Australian market, which was a great step forward. We're going to continue to increase that by growing in a very profitably focused way. In the U.S. and the U.K., we're going to leverage those platform investments and then work alongside our media partners to really turbocharge and scale those network effects in the early stages of the marketplace. So first of all, investing into our core platform. One of the things that we wanted to focus on a lot was to reduce platform leakage and to improve purchase frequency. So our rebooking program, which is customers coming back to Airtasker to work with the same tasker again for the second task or more, continued to see rapid growth. It grew over 96% during FY '26 and that now accounts for about 33,000 bookings annually and GMV of about $8 million per year. The way that we're able to achieve that kind of growth is by launching AI-powered business cards, which now sit on your home screen, so you can easily find the taskers you worked before. We also created a new interface for taskers to engage with rebookings to make sure that those transactions get closed on the Airtasker platform. And we also addressed fee pricing. So we brought down our fees for rebooking jobs to 1.9% for the taskers and only $5 for customers. And that had a really strong effect in getting out of the way and removing one of the main friction points to rebooking. With respect to platform leakage, we also made great strides forward by launching AI-powered content moderation into our platform. What does that mean? It means that when we see people are trying to leak off the platform or bad behaviors, we're able to jump on to that bad behavior in real time and remove it whilst being super efficient on a labor cost basis, but also creating a much more trust and safe Airtasker community. Moving forward. Continuing the theme of frequency, we also had a target to improve the purchase frequency and generate recurring revenue by Airtasker's membership program. As we mentioned in the Q3 update, we launched this program in February and we had 1,000 customers paying subscribers as of the 31st of March. Fast forward to the 30th of June and we really saw the pace of acceleration improve there, which you can see on this top left-hand chart there where subscription acquisition, the rate of acquisition really started to scale and we now have over 10,000 paying subscribers to that. As a reminder of what Airtasker's membership program is; it's $89 paid upfront, which gives customers unlimited tasks with no connection fees. It also renews automatically at the end of every 12 months. In terms of revenue recognition, it is worthwhile saying here that if you look at that chart on the bottom right there; the cash flows do come in early, but the revenue is recognized over a full year. So you can see there that as we acquired 10,000 members in FY '26, the majority of that revenue is actually going to be recognized in FY '27, but the cash has already been collected for that, which I think is really, really important. Continuing the theme of core platform investment and I think AI has been something that has really changed the world over the last 2 to 3 years. A few things that we've done to stay ahead of that curve and make sure that Airtasker is going to thrive in this environment. Firstly, we launched Agentic Commerce. So Airtasker's MCP is now available on OpenAI and in the Claude marketplace and it's actually a phenomenal experience. If you connect Airtasker into your OpenAI or Claude instance, you can actually post, assign and complete tasks through that platform; and what that represents is end-to-end Agentic e-commerce and we're seeing uptake of this. There are some customers who actually enjoy this experience and are willing to outsource that leg of the journey to AI agents. That said, I think we are very early on in this journey of Agentic commerce and I think there's going to be a few iterations to come. But what's really important is Airtasker is on the cutting edge. We're hosted on an open platform, which allows us to get all the data on how people want to use Agentic commerce to scale into the future. We also saw traffic from AI sources increase significantly with traffic coming in from OpenAI, ChatGPT, Claude, Gemini, Perplexity growing by over 200% throughout the year. And actually since the beginning of January '25, we've seen about close to 10x growth in our AI referred traffic. So as AI distribution is eating into our search volume, Airtasker is on the cutting edge of that and winning more than our fair share of that traffic. A lot of our competitors actually saw declines in posted tasks this year, but actually Airtasker continued to grow and thrive. Finally, we're using AI to deliver a great productivity and product velocity boost. We're seeing about a 3x velocity improvement in terms of our pull requests from our developers and that's allowing us to ship more product, more value to customers faster than ever. Moving forward, profitable growth. So as we've been on the thematic for the last 2 years, we've really been in Australian market trying to drive an improvement in brand salience to reaccelerate GMV growth. And I'm pleased to say there that our brand salience or our unprompted brand awareness actually grew by 20% on PCP and that's seen been a big contributor to those GMV volumes and our booking volumes increasing. In addition to looking at the long term of brand awareness, we're also looking at the near-term direct ROI that we're getting from this marketing investment and we're working alongside Mutinex. So a shout out to the guys at Mutinex, a great partner for us to build detailed models of what exactly we're getting back for every dollar of marketing that we spend. And I'm pleased to say there that incremental direct ROI on this marketing spend has grown from 1.08 to 1.22 during the half. And we are generating about $5.48 in GMV for every $1 that is spent into marketing. So we're getting really lean and efficient and putting this marketing budget to work in the smartest possible way in the Australian market to squeeze every penny out of our marketplace and revenue that we can generate. Also exciting today is to announce, and we have a separate ASX announcement for this, that we've extended our partnerships from 9 that we announced in February of this year to also be announcing new media partnerships with leading audio player, NOVA, as well as extending our partnership from 2 years to 5 years now with oOh!media. What this does is it brings over $15 million of media capital onto our balance sheet and these notes are repayable at our option in FY '20 and FY '30 or can be converted into equity if the share price and stance is correct at that point in time. So these partnerships have proven out that over the last 2 years, we can reaccelerate GMV and we're doubling down and continuing these partnerships into the future. Now to the U.S. and the U.K. and the goal here is really rapid iteration and moving extremely fast to deploy and learn and iterate in our experiments. We have discovered some really exciting growth flywheels. First of all, our Airtasker Pioneers program. So this is where we use Agentic AI to identify influencers on social platforms that have a service need. For example if they're moving homes or if they've just had a kid or if they're just starting a business. We're able to then using these AI agents reach out to these influencers and give them Airtasker credits and we do that in exchange for them creating branded content on the platform. So if you go and look at Airtasker USA in particular, you're going to see an incredible stream of user generated content from prominent influencers in those markets. We scaled that program over 5x during the previous quarter. We're going to continue to scale that, the power of AI and the efficiency we can get out of that. And what that's doing is not only creating that primary flywheel of being able to get these influencers and create branded content, but it's creating a secondary flywheel. Because now we have a lot of influencers coming to us and a lot of users coming to us saying, "Geez, I wouldn't mind some Airtasker credit to be able to try and sample your marketplace". So that has been very, very, very exciting and something we're going to continue to double down on. We've also had great success in the U.S. and U.K. markets in our product expansion. We fast followed a memberships launch in Australia into the U.S. and the U.K. in May of last year and we've already acquired a significant number of customers in both of those markets in just a few short weeks of FY '26 that we were present in those markets. Finally, I think a really interesting area that we're seeing growth in is in our AI and robotics partnerships. So we are working with a number of AI data acquisition platforms who are looking for video content of skilled workers using their hands and doing physical crafts. This is all AI training data that can be used to train various AI models. This is creating an additive stream of job opportunities into the Airtasker marketplace and this is a great way to start building network effects in local marketplaces using third-party capital because we've got these AI data labs wanting to inject capital into our marketplaces to be able to secure this video content and thereby create jobs at the same time. So really, really exciting to be part of what is a very, very fast-growing space. Now looking forward to FY '27. We're expecting Airtasker Australia to deliver double-digit revenue growth ex Oneflare and we're going to see that coming from increasing contribution from top line GMV growth. If you look at the rolling quarters throughout FY '26, we continue to see great momentum in GMV growth reacceleration. We're expecting Australia to generate over $16.5 million or more in FY '27 and that's after covering all of our global head office costs. Membership is going to deliver 50,000 paid subscribers and as a reminder, that's at about $89 subscription fee per year. So it's going to be meaningful revenue in FY '27. Airtasker U.K. is going to continue to grow, but we're going to start moving towards profitability. We're going to increase our GMV and our revenue, but at the same time reduce our cash investment commit to FY '26. The U.K. has passed that magical number of $25 million a year and so now we're looking at really that accountability loop of driving towards cash generation and profitability over a number of years with the first step in FY '27. In the U.S., we're going to of course see GMV and revenue growth and we're going to do that with very targeted program of marketing activity alongside our media partners. And finally, all of this is going to come together and be done with a group positive free cash flow. So in closing, I just want to say thank you to all of you who have supported us over the FY '26. I think the Airtasker team has worked their butts off to deliver a strong result for the year. And really thankful for both their support, blood, sweat and tears as well as the support of our investor community. So thank you very much. And now I'm happy to move forward into some questions.

Okay. Tim, I'll just read some of the questions that have come through. So we've got a number of questions on growth across Australia, U.K. and the U.S. over the next 3 years. So what is the growth plan for the next 3 years and what is the market potential and market share targeted?

So in the Australian market -- in each of our markets, we have close to a $600 billion TAM: $50 billion in Australia, $70 billion in the U.K. and $500 billion in the U.S. market. So absolutely enormous opportunity. That said, I think when you have a TAM that's that big, it's much more healthy to look at being bottoms up rather than tops down. And in that respect, we can refer to the guidance, which is that Airtasker Australia is going to do double-digit revenue growth. I think we can certainly -- we're going to be pushing hard with memberships with Pro Pass subscriptions with a new pricing change that just rolled out as well as GMV growth to outperform that target. But refer to the formal guidance for the Australian market. In the U.S. and U.K., we're going to see much more aggressive growth. Of course in the U.K., that's going to temper a little bit from the 50% to 80% revenue growth lines that we've seen because we're going to start moving it towards profitability by reducing the net cash investment into that market. And then across to the U.S. and of course, as we said, we're going to be group cash flow positive. So that sort of determines an envelope of investment that you can make into that market. But we're confident in delivering growth in both Australia and the U.K. and I think that's going to result in capacity to deliver a great 50% to 100% sort of growth rate in the U.S. market.

There's another question here. How do you plan on competing with both Taskrabbit and Thumbtack in America?

So Taskrabbit and Thumbtack are worthy competitors in the U.S. market. That said, there's some core differences. So let's start with Taskrabbit. Taskrabbit has actually moved from being an open community to more like an Uber-like network where they're setting the prices and they're determining who does [Audio Gap] jobs. And that although it appears to be similar to Airtasker is completely identical to what we do at Airtasker, which is that we let customers and taskers have an open conversation and they decide on the price and scope of jobs themselves. That is quite a big differentiation on both sides of the market. Customers want to be able to get that long tail of jobs done, which you cannot get done on Taskrabbit anymore and taskers do not want to be told by an algorithm who's going to do what job. They want to get in there and they want to be able to compete. When they have a spare weekend where they want to earn money, they want to be able to get on a platform and win 2 jobs on Saturday not be dictated to by an algorithm. With respect to Thumbtack, I think this is a similar model to hipages in Australia, which is sort of like lead generation or advertising type fee platforms. And I think what's really exciting here is that Airtasker's Pro Pass product is actually taking the best of both worlds. What we're doing is we're for $1,800 a year allowing taskers to be able to earn up to $22,500 on Airtasker with absolutely no fees. They keep 100% of their earnings. And so what you get on Airtasker are unlimited leads, unlimited quotes compared to Thumbtack, which is saying you'll get a certain amount of leads or quotes per month. And on Airtasker, you're going to do that unlimited until you earn this $22,500. So we're combining a fixed annual fee $1,800 per year combined with this concept of unlimited quotes and unlimited offers.

There's a question around whether there'll be another capital raise in the near future.

We don't think that -- we are confident that there won't be any capital raise anytime in the near future, certainly not one that is planned. And I think we're signaling here that Airtasker is going to be group cash flow positive in FY '27. So we're generating a ton of cash in the Australian market. And our expenditures and investments into the U.S. and the U.K. are entirely variable. So we've got a lot of flexibility in there and certainly not putting ourselves into a position in which we need to raise capital.

A couple of questions around AI, which I'll try and group. On the AI-driven traffic or Agentic referrals, can you talk to the type of jobs and/or task value that is coming through the funnel? I might let you do that one.

Super early stage. So I wat to start by saying I think OpenAI, 1 billion users a year, so really important to be on that frontier of allowing Agentic commerce through that platform. But I would say this area is really, really nascent. I don't think that many customers are yet willing to hand over their credit card and just say you go book it for me. They're using OpenAI and these platforms more for their generative content capabilities; the ability to be able to describe your task more easily, be able to pick the tasker more easily, be able to get input and recommendation on budgets. And so the use case for this is less about Agentic commerce right now and more about contextual content generation.

And just leading on from that, how has AI referral traffic impacted paid acquisition and marketing costs?

In general, Airtasker has been a big winner out of AI and LLMs generating traffic for us. The reason why we're a winner is because Airtasker has much more data than say a hipages type platform or a Thumbtack type platform because we are processing the transaction end-to-end. All of the communication happens on the Airtasker platform, all of the pricing and agreements happen on the Airtasker platform. That gives us very, very rich data, which we can use to train and inform a platform like OpenAI. So if you go and search for something like, hey, I want to know what a handyman is worth in Parramatta, you're going to get Airtasker cited a lot for that type of query because we've actually got reliable and real data. And so that has been very, very good for us in driving traffic.

Okay. The next question I think we're going back to overseas. You spent over $40 million in overseas marketing to generate revenue of only $5.7 million. Please explain how these metrics work.

In any new market that we're going into, we are investing in the first 5 or so years predominantly into actually building a network effect. When you think about any kind of network effect product on day 1 like let's just take the example of a nightclub or a music festival or party, any kind of network effect product. The first customer that comes in is not -- they actually have no product to acquire. They're not experiencing any of the value of the network effect because there is no network effect. So when you're bringing that first customer in, you're not actually saying, "Hey, I want to make money out of that individual customer". What you're saying is 'Come in and join this network". And you're going to have to do that for a number of years as we did and experience in the Australian market to build up to roughly 5,000 to 10,000 tasks a week. Once you're at that level, you have a network effect. The N plus 1 customer, call it the 100,000 customer that comes in says "Wow, this is an amazing network and I'm willing to pay more than you're going to pay to acquire me in order to experience that network effect". And so the investment that we've made to date in the U.S. and U.K. is really tied towards establishing those network effects. We did not go into that with the expectation that the money in is going to be beaten by the money out in those early stages. This is a multiyear investment cycle to be able to get up to that level of marketplace network effect. Now in the U.K. market, we set out a target of getting to $25 million GMV ARR as emblematic of having a good network effect and we passed that goal. We're now at $29 million of GMV in the U.K. market. And that's why at that point in time, we're starting to move it back towards profitability and we're going to be reducing our net investment into that market in FY '27 compared to FY '26. And what you can see from that is you're moving from working on establishing a network effect to becoming a profitable business where the return on advertising is actually more than what we invested in.

Just I think following on from that. So I think in previous presentations, you said that once overseas markets hit breakeven or profit, you will then expand into new overseas markets. Are there any further plans to do that and noting that that would likely generate more losses?

At present, we're really focused on the U.S. and the U.K. markets and we're being really smart with the way that we deploy our cash capital because that's really the constraining factor to growth. So right now we have no plans to launch in any new markets and the U.S. and the U.K. is absolutely the focus. Noting that the U.K. market also has Ireland as part of that and that's been doing quite well.