Freelancer Limited (FLN) Earnings Call Transcript & Summary

[Audio Gap] results presentation and business update. I would like to introduce your host, Matt Barrie, Chief Executive of Freelancer Limited. Please go ahead. Thanks, Matt.

Hello, and welcome to the first half of 2020 financial results conference call. My name is Matt Barrie. I'm the Chief Executive Officer. With me on the call today, I have the Chief Financial Officer, Neil Katz; and Vice President of Product & Growth, Adam Byrnes. And during the Q&A, you may address your questions to any of the 3 of us. Now for those of you following along by phone, in addition to a [ meeting ] link, which was sent out on the investor e-mail address. For those of you that are on that e-mail address, you'll have a link in your inbox where you can follow along for -- on video on the Google meetings link. And for those of you who have a pen and want to write down that link, if you have a chance to now and you'd like to follow along with the slides, the address for that is meet.google.com/hhw-fgva-dsv, that's meet.google.com/hhw-fgva-dsv. And you can follow along with the video and the slides that refer to this presentation. So the Freelancer Limited consists of 2 major companies. These are Freelancer.com, which is the world's largest freelancer marketplace that offer jobs with over 46 million users and 18 million projects posted to date. Over $4.5 billion in jobs have been awarded since inception. The other business is Escrow.com, which is a global e-payments business. It's the most secure payments business. As we did highlight there, from a [indiscernible] perspective because the [indiscernible] business was [indiscernible] construction. And since inception in 1999 by Fidelity, with USD 140 million by SoftBank and a few other VCs. And today, Escrow has over a total of USD 4.5 billion in transactions through the bank accounts. Freelancer.com is really changing the global dynamics in the marketplace for people, and it's doing so in a $1 trillion market. The future of work is 5 billion customers looking for a better job because 5 billion people on the planet live on $10 a day or less. And it's one of the great things about this business is that we're helping entrepreneurs from both sides of the world. We're helping being small businesses right through to large organizations and consumers to kind of spark that idea into reality. At the same time, we're helping entrepreneurs all around the world get things done. So skipping through to some of the high-level numbers before I get to the financials. On Slide 8, we completed the first half of 2020 with 46.7 million users in the group and 18.1 million projects posted. And you can see there, there's some very strong graphs for the last 20 years showing the history of that growth. We have users anywhere they've got electricity and have Internet. And today, there's 53 regional websites, 34 languages, 39 currencies. So if you go to Freelancer.de in Germany, you can transact in euros and speak in German to our German-speaking support team. In terms of high-level statistics, 83% of jobs now receive bids within 60 seconds. And on average, there's 45 bids per job. It's the most liquid marketplace in the world for getting work done and so for context, lots of projects [indiscernible] coming up on that, particularly the fourth of this year, we had a big uptick in sign-ups. And you can try it for yourself, try any other marketplace in the world, any other place for getting work done, and there is no comparison to the speed or the cost efficiency that you can get with Freelancer. Now I'm getting through to -- on the slide deck to COVID-19. And really, COVID-19, according to the Harvard Business Review, is the new member of the C-suite responsible for digital transformation. Certainly, every major enterprise in the world now and also the smaller enterprises know that the world has changed. And even if we get through coronavirus and it gets eradicated, the nature of work is going to be irrevocably different. There's going to be a greater percentage of people working from home. In some circumstances, some large organizations have said they're going to [indiscernible] offices entirely. In the process of doing so, they're working online, and where better to supplement that workforce than through Freelancer. As of May 2020, according to the International Labour Organization, 94% of the global workforce now lives with active workplace closure measures. So we're going through certainly a transformative time in terms of the way people work. We have a slide in the deck comparing the month of June 2020 to the month of June 2019. This gives you a feeling for kind of what's happening in this new environment. A 53% increase in -- year-on-year in new paying employers, that's new customers who put money into the website. That's not including old customers who are repeating usage, but it's new customers coming in. A total -- this resulted in a total of a 21% increase in deposited money in U.S. dollars to the website in June year-on-year and an 18% increase in gross marketplace volume. As you'll see on the next slide, it also resulted in a 20% increase in revenue for the month in U.S. dollars and 21% in Australian dollars. In the month of June '20 on -- to June '19, there was a 60% increase in web traffic, a 39% increase in new funded jobs, a 36% increase in bids placed, a 44% increase in messages sent across the platform globally and a 26% increase in GMV from hourly projects, which we've improved the funnel [indiscernible] and that's growing a little bit stronger. On the next slide on COVID-19, there's a couple of graphs that I think quite illustrate kind of where we are today. As I mentioned in the first quarter, we had a negative impact from the China lockdown when Chinese freelancers couldn't log in to the Internet and had trouble transmitting large files and had erratic connectivity. And we had to shuffle around many of those affiliates across -- the job posts across to new freelancers, which had a bit of a negative impact on GMV. But really, from March, April onwards, that's when the lockdown hit, there was about a week or 2 of transitioning of -- from the office to home, people setting up their home environments, et cetera, where we saw a bit of a dip in [indiscernible]. And from there, it really just shot up. And so Q2 overall has been very positive from a rest of world perspective. We expect a permanent step change from COVID once people try working online and try hiring freelancers online and start finding jobs online. They realize how easy it is and how incredible it is in terms of the breadth and the speed [ which it has ] been done and the cost efficiencies and so forth. And we expect a permanent step change, just like there was in the Global Financial Crisis. And COVID [ compared to ] GFC is squared or cubed in terms of difference. Now we did have some headwinds from all the benefit of all the people signing up. And one of the headwinds was the average project size fell from USD 216 to USD 161 in the half, which is a drop of 24.5%. And this is a combination of new job posters and new freelancers. So we had 5 million sign-ups in the first half. On some days, midweek, we got 30,000 to 40,000 sign-ups per day, which is a phenomenal number of people signing up into the site. New job posters tend to start off with a smaller project and kind of build their spending over time, their familiarity and so forth. But we do expect this number to rise. The other thing to remember, from the way we calculate this number, there's a lag in metrics by nature. What we do is we measure from the date the job is posted, when we print these graphs, we add up all the payments to that project with the dates and time being the date that the project is posted. So a project posted this quarter, which goes into next quarter, that hasn't seen any payments will rise in terms of the average -- in terms of the project size. So we do expect this number to absolutely go up. But you can see there was a big influx of what we call rookies or new job posters and also a huge influx of labor. And we talked about in the first half, we haven't really seen too much of a deflation in that respect in the first quarter. But it really started kicking in the second quarter. Because in the first quarter, COVID hasn't really hit. It was really in the last 2 weeks or 3 weeks of the quarter that COVID really hit the world ex China. So we did have a headwind of about 25% in deflation in average project size. That's going to lift. It's also going to lift from a number of things we're doing around collaboration and so forth, which we're now -- and should get on to now and informs a lot of the work with the single-page architecture on the front end that we're powering through the mobile work. On the right-hand side of this table, this shows you marketplace revenues, excluding enterprise consulting services, so our engineering services. So a couple of customers like Deloitte and Arrow pay us large amounts of money, 6 figures per month, to customize their products for them. In all circumstances, we've owned the intellectual property for almost the entirety of that, which is fantastic because we have to build products that help multiple customers. As you can see, in U.S. dollars, in January 2020, we were at negative 4%, so that's 96% with revenue comparison between January 2020 and January 2019, 96% for February. And it's really monotonically increasing from there, 98% in March. And then really, as you go on to Q2 [indiscernible], 107%, 120% in U.S. dollars. And in Australian dollars, similarly, same [indiscernible] and end up, as I said, 121% June 2020 on June 2019 revenue. You go to the bottom right-hand graph, you kind of see what's happening here is that the GMV and the deposits have been lifting very strongly and they're at a high. And that's -- even though we had a slight dip in the job posting deposits -- depositing job posters, if you look at the left-hand bottom graph, as we headed into summer and with the riots and the easing of restrictions. So July is usually the seasonal low for the year. Over the next 2 to 3 weeks, it's expected to keep rising to the end of the year. And you can see from the GMV and the deposits, they're very, very strong. So that's kind of flowing into July and August and so forth from here. So we're in a pretty good position. And it's not just COVID that's causing this. We've also made some product improvements which I'll talk about that in a second, particularly around mobile on the front end. So we're -- I think we're in a new base. And from here, we're going to be in a very strong position. In terms of marketplace dynamics, Slide 19. You can see there that they're fairly similar to how they've been in previous quarters, I'm talking to average completed project size. The definition there in Note 3, it's the average amount paid per awarded project, and that the number continues to rise as further payments are made on these projects over time. So if you actually backtrack through previous quarters, you'll see that the average completed project size from previous quarters has been rising as the slide decks have come out in ensuing periods because it is, in its very nature, a lagging metric. The revenue model stays the same. Projects, many of you are familiar with that. Contests, many of you are familiar with that. So I'll kind of skip through a few of these slides. And I'm just really now down to just some stats around contests because I think you might find that interesting. It really is an incredible platform for both projects and contests. As I said before, 83% of projects are bid on within 60 seconds, nowhere else is as liquid. And 45 bids on average per project, no matter what the size. That's across the whole gamut. So contests is -- [ it's actually more liquid ]. So 80% of contests now receive an entry within 1 hour. On average, there are 180 entries per contest. To date, at this point, per month, there are 1.1 million entries being made into contests per month and over 10 million entries per year and over 1.5 million participants per year in contests, so nowhere as [indiscernible] as Freelancer's contest. You can try it for yourself. You can even put $10 in and get many, many, many hundreds of designs submitted for things like -- I remember last time, I put a contest [ into ] a business card, about 430 entries for $10. I put a little bit more that, about 1,000 entries. And then there's -- you see the graphs now on the next slide, contests, where it just shows the phenomenal rise in metrics. In January '19, it was about 500,000 entries per month and now it's over 1.1 million, over 10 million entries per year. And you can see that how much that's risen, really taken off since January '19 and kind of growing [ exponentially ] [indiscernible]. Average number of entries, I mentioned 180 is kind of what we're measuring at the moment. But in the last month, it was peaking some weeks at around 200 -- almost 240 entries per contest. And you can see in terms of how quickly entries are being submitted, it's 80% with 1 hour and about 86% or so within 2 hours and so on. So you see that it's a very, very, very liquid segment of the market. Then we've got some examples of what people are doing. So there's a 3D shop design for UNIQLO and so forth. I'll skip through a lot of those and get to further in. We've included this time all sorts of examples of what enterprises are doing as an example of some projects, including an Andon manufacturing consulting project for Airbus, where we flew someone into Toulouse to help with the efficiency improvements in their helicopter aircraft manufacturing line. And it was a USD 21,000 project, done in 3 months, where someone actually -- who's going physically into work with the actual -- the enterprise. There's some work here with Sky News, so workflow automation, $28,000. And Fujitsu, we've [indiscernible] some amazing things, ensuring the accuracy of their pseudo-quantum computing architecture, where we have programmers from around the world verifying implementations and, in many cases, doing it very efficiently. They expected to pay $50,000 for this particular project, and it cost them $300. It was done in 1 week. And the [indiscernible] solution was the best solution that was seen for that particular problem by this machine learning engineer in the Ukraine that cost $300. Moving on to other enterprise customers. We've also [indiscernible] with NASA. At this point, over 13,000 product designs from over 6,000 freelancers. For those who haven't read the white paper, you should. It's an extraordinary cost savings, between 80% and 99% when compared to traditional methods. I don't think of -- I can't think of very many industries where you have 99% cost deflation. Maybe in semiconductors, maybe in biotech, but it's pretty phenomenal results. And 97% can be applied across wide federal space programs. Only 3% were insufficient in terms of quality. And that relationship has deepened in the quarter because in 2020 June, we jointly won a $25 million NASA Open Innovation Services 2 tender. That's shared between 19 companies, but we are, by far, the biggest and many other very, very, very small businesses. So we expect to get a substantial portion of this, somewhere between $5 million and $10 million. Note that this $25 million does not include the prize money awarded to Freelancer. That's on top of it. So this is actually kind of -- well, so that would be, for the most part, recognized as revenue. So the task orders for this have come through -- started coming through already. We've submitted 2 already, and there's a third which we're committing as we speak. They range in project sizes. The first project that came out is for USD 5 million. We were not eligible for that one. That was for U.S. small businesses only. So that's dealing with the majority of the people who applied for tender -- have applied for tender. It was priced around $700,000 and another one which is, I think, $90,000, and there's another one coming in now. So these are much larger in terms of the scope and scale of work we're doing with NASA. It's way beyond the $50 and $100 projects we've been doing for some time in contests. These are very substantial engagements that go over, in some cases, months and years. And so at freelancer.com/nasa, we've built a micro site, and we will start pushing out the work onto that site as we get the task orders awarded to us. But we, as I said before, expect to be probably the largest receiver of funding under the NASA Open Innovation Series 2 tender. We're just forecasting this based upon our company size and based upon the presentation that NASA has made that some publicly are on the Internet, where they talk about the scale of Freelancer compared to the other solutions they're working with. So -- and the others are very, very much point solutions. So I do think that we'll be doing some substantial work here over the next 5 years as part of this tender, and I think it's great recognition to the team that we could win this. We've done work for many other large organizations, with the U.S. Department of Energy, Airbus, [indiscernible] all of that and go to Deloitte. So as many of you know, we've had a long-term engagement with Deloitte. We've now got a testimonial from Deloitte where you kind of get a color over the size and scope of this engagement. They've been paying us for our engineering services up until now and continue to pay up for the rest of the year and probably longer to customize a product for them. That's a product called Deloitte MyGigs, which is basically a platform for Deloitte consultants to hire other Deloitte consultants and then also hire freelancers. You can see from Slide 44, there's a picture of what, for example, the [indiscernible] job page looks like. On the left-hand side, if you click the button, you can hire Deloitte consultants. On the right-hand side, it [indiscernible] external freelancers. We've onboarded over 17,000 Deloitte staff, which has doubled since March. And we're up to 100,000 hours posted, which is up 10x since March. And Deloitte is now expanding to 50,000 users at phase 1, and the goal is 20% of all U.S. consulting projects. And in the next page, on 45, I have a quote from Nishita Henry, who's the Chief Innovation Officer of Deloitte, who said, "We accelerated the launch of the MyGigs platform, a self-service short-term staffing app, connecting our internal talent pool to open project opportunities in an effort to create the #1 remote talent experience. Since March 2020, the number of gig workers has more than doubled to a total of 16,800, and the number of job posts has increased tenfold for a total of 100,000 hours. As we begin to navigate the new normal, we will focus on onboarding another 35,000 internal resources and drive to delivering 20% of all projects through this platform." That 20% is 20% of all U.S. consulting projects by Deloitte, all right? So this is a phenomenally large number is what their definition of success is, 20% of all U.S. Deloitte consulting projects. And by the U.S. consulting, that also includes U.S., India and a bunch of the other groups. "MyGigs is changing the way we deliver work on our projects for our firm, our clients and society." So these are big numbers. Deloitte is the largest of the Big 4, and they want 20% of all their U.S. consulting, which includes many projects outside the U.S. as well as the current U.S. platform. Moving on from here. And there's more to come with Deloitte. More to come from here, but moving to Arrow. We've delivered a major milestone, obviously, in delivering that marketplace to them. They've moved into marketing now. We actually are seeing GMV ramp. It's still a fairly low base, but it is continuing to ramp up, which is great as they move into the marketing side of the engagement. And through them, we've been introduced to companies like IBM and so forth, where we're doing a whole bunch of different things. So over 70% of Fortune 500 use freelancers to get work done, and we've got some amazing things happening in Enterprise. In the first half, we signed master service agreements and/or statement of work with major companies in professional services, [indiscernible], consumer goods, chemicals and robotics. I mentioned that we're joint winner of a $25 million NASA Open Innovation solutions 2 (sic) [ NASA Open Innovation Services 2 ] tender. And also, I mentioned that $25 million does not include the prize money for Freelancer. So there's prize money on top of that for the contests. So that's payment that will be, for the most part, recognized as revenue. And again, we expect to be the largest receiver under that. But I obviously don't want to tempt fate too much here. But we are the largest company so far and [indiscernible]. We began pilots with global health care, energy, consumer staples and telecommunications companies. We successfully piloted an $11 billion chemicals company that's led to global expansion. They're onboarding in Singapore as it starts, and there's 5 other countries to roll out in a multi-country pilot. We also onboarded business leaders who control 70% of Pakistan's regional spend in an FMCG, a $100 billion consumer goods company, and that's rolling out. That's -- there's actually 7 countries that have approached us [ from that particular ] company. And it's now run by headquarters starting in Pakistan. For another U.S. hardware computing company, we have been doing field services in computer and printer repairs. We were successful in Indonesia. We achieved a 15% cost savings, sending fleets to people in cities out to repair computers and printer equipment. That's now rolling out to a second country, and there are 13 countries in the rollout. And the cumulative GMV that [indiscernible] of those 7 countries will be a multiple of the total GMV of the company. But it requires a significant amount of work to get there. There are no committed volumes in [ current ] time, and we've got to really show our stuff. We were successful in the first country. I know we'll be successful in the second country, where there's 1,000 projects in that particular pilot. If we're right, then we might be in 2 countries, next in 3 countries after that and then eventually get to 13. But that's only 40% of this particular type of work, break/fix work that they do globally. And they were really looking to change the way they do things. So there's a lot of potential to [indiscernible] this one particular customer. But as I said before, there's a lot of work to be able to get there. But things are moving in the right direction. They take time with large enterprises, but they do have a large demand that matches up with our large supply. We've got ongoing engineering service work with Deloitte, Arrow and a few other customers as well. And we continue to build out the sales, product and operations team globally. We just brought on a technical operations manager in London and quite a number of other people in other parts of the organization. We've got someone now who is in charge to identify -- recruiting now in Vancouver, helping with [indiscernible] team and so forth. So we're really building up the delivery side of enterprise. In terms of mobile, we had a huge number of app downloads in the first half, up 272% to 1.9 million downloads out of 7.5 million total. 32% of bids were placed from mobile in June 2020, and 36 million messages were sent in the first half alone. Now what I will say about mobile is we've made quite a number of changes to mobile. This is part of our ongoing efforts to really overhaul the entire website. As many of you have known that for the last year and probably a half, we've been overhauling the front-end interface by building a single-page architecture to the web stack. We have now got over the hump in terms of deploying the critical pages. We're now in the home straight. Page after page after page is now deploying, and we're getting some great results, really, really good uplift in some of the conversion metrics as we push some of those pages. We pushed one just recently, and across the board, had roughly a 7% or 8% improvement in a number of the conversion metrics. And that's what this new app [indiscernible] particularly [indiscernible] our site. Obviously, in 2019, we took a few of the pages [indiscernible] and we took [indiscernible] by not having page -- full page compatibility and full QA. So we've got a very rigorous QA environment now run by Jason Lee, who wrote -- who's got a PhD in software testing, [indiscernible] proper software testing and [indiscernible] internationally in software testing. So we've actually managed off with fully terraformed and [indiscernible] the whole back-end infrastructure. We managed to build a proper staging environment. We deployed end of last year. And now we're in a much better place in terms of the QA and so forth. So what this has allowed us to do, by picking up the front end of the active website, we've not just improved the conversion and make it super fast to load, shaving lots of seconds off the load time, but we've also made it responsive. So that means we've started to rip out the legacy mobile website that we had, which is a separate website, different code base with a different set of engineers working on it. And it was always keeping it in parity in terms of features and functionality. About a month ago, we removed the logged out version of that completely, successfully. And we're now in A/B tests from the log [indiscernible]. There's a little bit of polish to go for the next 2 or 3 weeks. So I expect the mobile logged in to be ripped out, which means the entire legacy mobile website will be gone, and it will be one code base running both desktop and mobile. And that means that for the first time on mobile web, the full functionality and features of Freelancer are available. The A/B test is already winning, double digits from the legacy websites. If you look at the past, we have to do it because on desktops, if you send a message with an attachment, there's pop-ups, et cetera. So we've got a mobile -- find something that's kind of an interactive like -- it is absolutely phenomenal. When you actually log into that mobile website, you can test it for yourself. If you reload a couple of times in your browser and you -- from incognito, and eventually, you'll kind of hit the A/B tests for log-in, where you actually get a responsive website. And you really see, you log in, the full functionality is there. The full website is there. And we think a big lift in a number of metrics across the board, particularly metrics that -- and features that didn't exist before, obviously, where the guys [indiscernible] for the company. The next big thing we're doing is we're getting rid of the entire iOS and Android apps, and we're ripping that out and replacing it with a [indiscernible] version called responsive web, which means we'll have 1 code base across all 4 platforms, and all the functionalities will finally be in the app. The apps have been lagging for some time. The problem is you have 4 teams of engineers working on the same code base or different code bases with the same features. So it's always troubled -- trying to keep them more on lockstep. So by end of the quarter, that should be in beta. So by end of this quarter, we should have unification of all our code bases, which means our engineers are working on 1 code base, a lot more productive, and we'll have a good uplift in the mobile statistics. So that's something to look forward to. Moving on to managed services. We've seen some good uplift in recruiter projects. In the first half, we were up 44% on pcp. And the size of the preferred talent program, a number of users of the top talent, we got 36%. So a lot of this coming out, the API, which we're about to announce, along with field services/local jobs. I think I'll save that for a future announcing, talk that in detail. But we've got some great things happening there. And then that's enough for Freelancer. I'll skip across to Escrow and give you a few of the highlights for Escrow before I get into the financials. So the big thing -- well, obviously, for those of you that don't know about Escrow, it's a payment system. You can think of it like PayPal, but the difference is it's the buying and selling that's complicated and expensive. We done over $4.5 billion in transactions secured with bank accounts we had since 1999. And it's really for buying and selling things like cars, boats, airplanes, jewelry, gems and diamonds, import/export, shipping containers and so forth. It's not around buying its own cup of coffee, which is where most innovation payments is. It's fairly unique in that perspective. I challenge you to find an escrow services out there to compete against ours at scale. We really compete with more firms at the top end since we're not [indiscernible] -- top accounts and then signed agreements and so forth [indiscernible] very clunky, expensive and slow or PayPal buyer protection or credit card insurance programs at low end. Those insurance programs are really painful if you buy a phone off Craigslist, and it turns out to be there's something wrong with it. You've got to fill in a claim form where the [indiscernible] was described, was it within the right category, is it something insurable, fill in the form, submit it and hope maybe you still get your money. With Escrow, we hold the funds until the payment goes through -- I'm sorry, until the goods are delivered and to the point of delivery. And then when you're happy, we release the funds. So it's a much better experience from a customer's perspective. And to go to that point, we protect cars, boats, airplanes, what have you. But skipping through, one of the big things that we did this quarter was we closed and successfully went into production with eBay Motors U.S.A. So we are live in the U.S. for eBay Motors. We are the only online payment method for eBay Motors for private party listings. So this is private individuals selling to other private individuals. It's not used for dealers because if you're going to buy a car from Toyota, you are not so worried about spending your money into Toyota and getting a refund if there's an issue. Plus dealers usually deal with financing, and we don't, at this point, have a financing offering. Probably and certainly, we might in the future. So it's really for private party transactions. We're the only online payment method for eBay Motors. That's been live now since June. That's ramping up in the volume, and it's been quite a significant opportunity for us. There are a few things going on here. Firstly, we're obviously changing consumer behavior. People aren't used to paying through the Internet for a car. But with eBay behind us and an educational program, that's going to ramp in a big way. One of the positive things to remember here is, because of the way the regulators set the rules, consumers need to be informed about where their money is held, and so they can make a complaint to the regulators and so forth and so on. What that means is Escrow can never be white labeled. It must always be co-branded. So on eBay, you can quite see on the screenshot, the digital payment option is Escrow.com. It's not eBay Escrow. It's Escrow.com. Every e-mail that goes out about this will have our logo on it. So every time that eBay promotes it, they're promoting our website. And they're educating consumers about the offering. And eBay is standing behind Escrow, just like Escrow is standing behind eBay, so this is going to further the penetration into other markets outside of eBay Motors. This is great marketing for us. And all of our partners, when they integrate likewise in send out communications or do TV ads and so forth, and I've seen some great TV ads, is they talk about Escrow.com, and that's a competitive benefit, competitive advantage. So there's some great things happening here. So this is going to continue to ramp as education gets out there, consumer behavior changes, et cetera. This is the direction in which eBay wants to head. We were actually selected because of a [indiscernible] in rising insurance premium. We are a better solution for [indiscernible], and we're better positioned in terms of cost efficiency and so forth and also from management perspective from eBay. The first -- there's a picture here on Slide 70 of the first transaction that was secured. It illustrates why eBay wanted to use Escrow. The first transaction was a secure sale of a 1930 Ford Model A from Poway, California to Farmington, New York. This is a 3,000-mile distance, 46 hours to travel by car. To buy a car on one side of the U.S. to the other, it usually presents a bit of a problem. Do I send the money first or do I send the car first? How do I ensure that I'm going to receive the car correctly as described? How do I make sure that someone's not trying to rip me off? Traditionally, this has been a very hard thing to organize. And we make it simple with a few clicks using Escrow.com. So the very first transaction is a car to sell and transit coast-to-coast, which would have normally been a very, very difficult transaction to occur. You can see the happy owner of the car, the owner of the car leaning against it. It's a Ford Model A 1930. Since then, since we've gone live, we've sold cars, trucks, sports cars, exotic cars, boats, motorcycles, electric motorcycles, electric cars, SUVs, you name it, it has gone through it. They've all been sold, closed out and paid for. So there's a lot of stuff happening here. We also do a lot of stuff in the fine art world. There's a slide later on the deck showing that in the half, we closed and went live with Artsy. So Artsy is a global fine art marketplace. We've done lots of different paintings through there already. Outside of Artsy, we did a lot of Warhols, Picassos, Kinkades, Hirsts, for many, many, many years. But now we're actually going into fine art marketplaces as well. And I think that has significant volume, like 9 digits of volume in GMVs per annum. So as we ramp up through there, that looks like a good opportunity for us. There's a few things we also have to do there. We have to get the pound sterling bank accounts all happening, et cetera, with Escrow because we're waiting for our API license to go through in the United Kingdom. That will take -- hopefully, it will be done this -- in the next quarter. But that's a big effort to actually get it to where we are today in terms of the application and so forth. And we're also starting up in the United Kingdom an office in our London office, but we expect to have a lot more happening in fine art as we get that going. We've also seen a lot of transactions set up for personal protective equipment with Escrow.com. In the first half, traditional supply chains have broken down. There's a lot of mistrust. So people are trying to do millions of dollars of transactions with masks and gowns and nitrile gloves and so forth. There's a lot of that happening right now. In fact, every day, we get probably a half dozen to a dozen e-mails from people [indiscernible] significant transactions. There were a lot industrial equipment, network equipment and construction equipment, et cetera, import/export services, et cetera, domain names. And I'll skip through the API, Escrow Offer and Escrow Pay because I've talked about it before. So moving on, I'll probably just get down to the financials now for the first half. And then I'll provide some context. So getting to Slide 106, the first half '20 results. The group net revenue was an all-time record of $29.5 million for the half, up 3% on pcp. Freelancer revenue was an all-time record of $25.7 million, up 4%. If you exclude enterprise services because we had a bit of a drop-back in the enterprise service consulting revenue, it is only consulting for labor, for engineering, it dropped back a little bit since the Arrow project has been completed. And so that's the -- they're still paying us a lot of money, but it dropped back from that USD 500,000 a month. So if you actually exclude the enterprise consulting revenue, the marketplace is up 11% on pcp. As you can see from the earlier slides, that's been continuing to ramp. And in fact, in June, that was 20% year-on-year for U.S. dollars and 21% for Aussie dollars. Escrow revenue is $3.8 million, down 1%. GPV was an all-time record of $417 million, up 4% on pcp. Freelancer had an all-time record of $95.5 million, up 3.6%. And Escrow had a record of -- all-time record of $321.1 million, up 4.4% on pcp. The gross margin, consistently high, 83.7%. Operating EBITDA and NPAT, very similar to previous period at about negative $1.5 million, negative $1 million. But in April, May and June, we were profitable. We continue to expect that profitability will continue for the year. For the first half, positive operating cash flows, it was up a lot. It was up $6.2 million, up 520% in -- from negative $1 million in the previous period and $5.8 million up in the second quarter alone. And a lot of that cash flow has gone into deposits and milestone payments. In many cases, those milestone payments have not been paid out yet. And so revenue hasn't been -- or fees haven't been charged on that. So it's been slowing in the amount of cash kind of coming into the system. Cash and cash equivalents were $37.1 million as of 30th June, up 16% on December. Moving on to 108. You can see here the GPV over time climbing. I talked about the numbers already for that. And the net revenue for our first half '20, again, you can see it continue to climb here. And we haven't changed thinking around the commissions at all or the fee structures. On the cash flow profile. Started with $32 million, up $6.2 million in operating cash flow. There's negative $1.2 million for repayment of a lease and de minimis CapEx and FX revaluation gets us to $37.055 million cash in the bank at the end of the quarter, up $4.9 million or 16% on the 31st December numbers of cash. Coming to profit and loss. We had an increase in employee expenses marginally, up 4%, primarily due to adding some more senior enterprise resourcing. We also brought some of the FTEs down in terms of head count numbers, primarily in areas like support. So even though we had a big uplift in project volumes and so forth, we've managed to get a lot of the efficiencies out of the support team. So I really think [ Ian ] has done a fantastic job there. We've really lifted a lot of the metrics. So we actually brought some of the head count down. And we did that through natural attrition for the most part, where we just didn't need to rehire people in the support team in lockdown. Instead, we got people super productive. So that was great. And we've also got support functions now running in Buenos Aires as well, and there's been some great productivity there. And also, we did have a bit of an office rivalry between BA and Manila because they like to be top of the leaderboard. And so that's working the metrics as well. So we've got just some good operational efficiencies in terms of head count. There was a bit of an increase in marketing costs and our occupancy because we moved our offices in Sydney to a new office, though unfortunately, we haven't managed to actually have a day in it as a company as a whole. So it's still on rent-free period. But the way AASB 16 accounting works, we've got to kind of account for that. So there's not -- there's an uptick in the occupancy costs, and we also extended the [ newer lease ]. And you can see the rest of the numbers there for EBIT and EBITDA. Let's talk about cash and cash balances, et cetera, and so forth. So probably not much to say there. We've got an increase in receivables, obviously, because we got more cash flow [Audio Gap] around that, but we're taking some things that are coming through [Audio Gap] [Technical Difficulty]

Thanks, Matt. You're back in the call now.

Sorry about that. This just dropped off for some reason. I heard a recorded message actually from the conference provider, saying something about the conference call ending, and then it just cut me off. So I don't think the phone actually dropped. I think the conference call actually just disconnected after 40 minutes for some reason. But where I did stop? Was it the GPV slides? You can see there we've got fairly high numbers for the quarter. But we do look forward to seeing what the lift is going to be from eBay and so forth in the future and other partners. We've now got to a point where we are actually starting to close some major partners and get into production. And I can't think of a bigger partner to really kick that off with than eBay Motors U.S.A., right? So there's -- obviously, that's a great endorsement of the quality and the need for a product like Escrow. And as I said before, if you do a -- do your own research and try and find competitive products out there, you'll be very limited in your ability to find that. So looking at the outlook statements of 2020. An all-time record group net revenue and strong lift in operating cash flows and cash and cash equivalents. Our revenue is, as I said before, $25.7 million, up 4% on pcp, excluding enterprise, service revenue was 11% up to $24.5 million. Our revenue growth year-on-year by month, if you look at January, February, March, April, May, June, monotonically increased quite strongly to 20% year-on-year in June. You're starting to see the effects of COVID and some of the product improvements starting to flow in. In Australian dollars, it's 21%. Well, the Australian dollar bounces around a lot. So if you look at the U.S. dollar numbers, you get a truer indication of kind of -- if it matches the customer flows. There was headwind, as I talked about before, from the average project size, that did fall 24.5% from USD 216 to USD 161 from a large influx of rookie posters and freelancers. We do expect that to rise over time. And I will say that having a business so deflationary, it's actually a competitive advantage because it just means the product offering is just so more attractive to our customers over time from a job poster perspective. And so really, if you compare this to the traditional way of getting things done, it just becomes more and more and more compelling, right? So I actually see that as a competitive advantage, although that was a 25% headwind in terms of project size for the half. And I've talked about significant improvements to mobile. There's a lot happening there. In the next few weeks, I expect the complete mobile website to be removed and replaced with the responsive webapp. Logged out is done. Logged in as an A/B test 50-50. You can test out for yourself, as I mentioned, going on incognito and reloading your browser a few times, and you will be able to see that experience, and it's like night and day. And the iOS and Android apps will go into beta testing by end of the quarter. I've seen some demos of that in the apps already, and they're great. So the mobile experience is going to be fantastic by end of the year, which is a big thing. And also the webapp experience will be fantastic on the year as well. So it's just going to be -- I've never been in a happier place and more confident of the product than I am now, and that's both from a Freelancer perspective and an Escrow perspective. For enterprise, we signed MSAs and SOWs with major companies, professional services, FMCG, chemicals, robotics. Obviously, won that $25 million NASA tender. That $25 million is not including prize money. So some of that will be recognized as revenue. Again, pilots across many different areas, many different industries, health care, energy, consumer staples, et cetera. These are, in many cases, multi-country pilots and they're very large GMVs at the end of the rainbow, enough for the GMV. They'll, hopefully, make a big dent in the GMV numbers and be visible. And the front-end improvements continue to deliver wins. And the good thing is now we've actually gone through the trouble of rebuilding the entire website, and we've got through the hump of that. We've got just some pages to push out still, but it's -- we've got through all the critical pages for the most part. For example, right now live, the contest page, main contest page is actually in 50-50 A/B test. That was going to be pushed live this week. So we're really getting through it. We've done the project page. We've done a whole bunch of the [indiscernible]. It's just coming and going through the whole site one by one by one. We're pretty much in the home straight now. At the same point in time, we're using a reasonable design [ library ]. It looks great in addition to working better and converting better and being super fast to load and obviously, increasing conversion. But this allows us now to focus more on collaborative tooling, usability, new mobile experience, managed services, API, design overhauls, great in technical design, where our rock star design team I've hired out of Foxtel and enterprise offerings in coming quarters. So you can really get back to product that matters in terms of new functionality, new features, getting the revenue moving and so forth in a good way. For Escrow. The first half GMV -- GPV was $321.1 million, up 4.4%. I've talked about eBay Motors and just what a great validation that is of the product. If we can get into eBay Motors, we can get it in anywhere, right? And I've said before in previous conference calls, we're going to tip the entire automotive industry. I am very confident, it might take 2 or 3 years, but we will tip the global automotive industry. It might be very surprising for you to know that car classified websites do not know if the car is sold. They presume the car is sold because the listing does not get renewed. But because they don't take that payment. They don't know if it's sold. They don't have if the buyer is reputable. They don't know if the seller's reputable. They can't generate feedback efficiently because they don't know if the payment's going through. There's a lot of problems and a lot of fraud and things happening in these classified automotive sites that are happening right now. And you won't want to run a classified automotive site in a world where everyone else is running marketplaces, right? So we will tip automotive, which means that we will eventually tip marine and all the things around automotive, cars, trucks, et cetera. We're in airplanes as well. It's obviously a less liquid market. But all the things around that, trailers and course floats, and you name it, it's all going to go through us, yellow line construction and so forth. We've got another major automotive marketplace that's been signed, that's being integrated. It hasn't gone live in the production yet, trying to get into production. They've got some things they're doing around dealers at the moment because of COVID. They're trying to get the dealer volume up, but we're coming back to that. They made a great TV commercial. I've seen the TV commercial. They're #1 in their segment. So that's just something that just -- it was waiting on the customer to get that into production. That's going to be -- when that drops, it's going to be -- people are going to see that and go, okay, I can see now why you get [indiscernible] automated globally. We went live with Artsy, which is a big one. And we've got -- we also signed with a global marketplace, increasing our presence in luxury goods. And this is a big one. This is actually quite a big one. It's going to be announced by the end of the quarter, but stay tuned for this. And I think when you see this, the penny is going to drop in terms of what we're doing with Escrow. And so for 2020 and Escrow.com, there was a little bit of drop in the domain name volume, but it's offset automotive, IPv4 and personal protective equipment. So it's showing we're diversifying the customer base. And we've continued to put a lot of work in terms of the payment automation into the products. We did a lot of that as part of the eBay work. And so it's, again, super slick in terms of its ability to scale with these partners. So some pretty major milestone in 2020. We're not going to run Startcon this year. We're probably not going to run it next year. That's going to give us a positive impact to EBITDA of $0.5 million because it actually cost us a bit of money to run that conference. That will not be running this year and probably won't be running next year. That's positive for the earnings. And overall, in summary, for the first half, we delivered all-time group net revenue of $29.5 million, up 3%. All-time record Freelancer revenue of $25.7 million, up 4%, up 11% excluding consulting. All-time record GPV of $417 million, up 4%. All-time record Freelancer GPV of $95.5 million, up 3.6%. All-time record Escrow GPV at $321.1 million, up 4.4%. Consistent high gross margins, 83.7%. Operating EBITDA and effectively breakeven, negative $1 million, negative $1.5 million. And the group was profitable. April, May, June will continue to be profitable for the rest of the year, hopefully. That's my intention. Positive operating cash flow, big uptick, $6.2 million, up 520%. $5.8 million positive operating cash flow in second quarter alone, a lot of cash flowing in the business now. Cash and cash equivalents, up 16% to 31 -- $37.1 million as of the 31st of December. And just in summary, Freelancer presents a fairly unique investment thesis in that they're large markets, $1 trillion dollar markets that we work in, in terms of labor and payments and so forth. On-demand and crowdsourced economy, increasing internet penetration of emerging markets, rising sophistication in emerging markets labor. Software and mobile eating the world. Structural imbalances in global labor markets, and we really thrive in economic crises. People looking for work, people looking to hire cheaper and people working on side projects increasingly, particularly in COVID as their existing business can't run for a period of months. So looking to set up other businesses, and we're incredibly deflationary, which gives us a huge competitive advantage in the market. So thank you, operator. I'll now open up for questions.

[Operator Instructions]

And I will say you can address your questions to myself; Neil Katz, the CFO; or Adam Byrnes, the VP of Product & Growth.

Okay. We do have a question from [ Chris Titley ].

Matt, just on Escrow. I mean what's going to drive that growth? Is it new wins? I mean -- and also, I want to sort of get a bit of more understanding of the competitive advantage of Escrow and potentially how you value it. And potentially, would you keep it within the group?

Good questions. So we compete really -- I mean in terms of direct competitors, you can do your own research there. But there are very small number or very marginal and unlicensed competitors in the online escrow space. Payoneer tried to enter the space for 2 years. In fact, they hired our former CEO from Escrow.com for 2 years and then gave up and shut down about a year a bit ago. [ Accrue Software ] out of Colorado, they bought [ Paysafe ]. They tried to give it a go. They shut down last year. In fact, we won their business like Flipper and so forth that [indiscernible] further -- as they shut down and transitioned to -- across to us. So that was a [indiscernible] in Australia actually tried doing that -- we got the [indiscernible] business from them. And we got a bunch of the business from [ Accrue ] that was separate to that. So a lot of people tried entering the space and just given up. It's a tough business to start from scratch. And in fact, if I tried starting the business from day 1 today, I actually couldn't do it. The U.S. is licensed state by state by state. There are 50 states in the U.S., 4 don't require licensing in 6 territories. You actually need 52 licenses to operate in the United States with global coverage. We've got all but 2 states and the territories in motion or granted. We really -- really -- the only thing left to really be granted in the U.S. is New York, which we're in the final stages; Nevada, which we're, again, in the final stages of applying; and Hawaii, where there's an issue around using the word escrow in your name, unless you're a real estate company. So in terms of competition, where we really compete against with Escrow is at the high end with law firms, where you have to sign -- get an agreement in place, set up a trust account and so forth. It's very complicated and expensive and slow and cumbersome. The lawyers don't like doing because their insurance premiums go up when they touch money. And sometimes they send money to the wrong place. And then there's some big cases of 9 digits amounts of money going to the wrong accounts because someone typed in a wrong account number and sent it out. And at the low end, we compete with credit card purchase protection teams and PayPal, which are like insurance policies, they're very complicated and painful for a customer because you have to fill in a claim form and wait 6 to 8 weeks, and it doesn't apply to everything. In the case of eBay Motors, one of the reasons why they came to us is because the insurance premiums that they were looking at for their motor vehicle division went up massively in the 9-digit range. So they came to us -- sorry, in the 8-digit range. So they came to us to solve that problem as well as provide better customer experience. I think the big volume growth in terms of GPV for Escrow is going to come from partners. It's going to come from partners where we'll do not much as millions of GMV per annum, but tens of millions or hundreds of millions or more at GMV. Certainly, if we can get into eBay Motors, we can get into many other very, very large marketplaces like that. At the moment, we're not a mandatory payment method for eBay Motors. It's an optional payment method for eBay Motors. However, there are marketplaces we're going into where we are a mandatory method. And we've got some stuff coming up where they can provide a bit more color about just the scale and scope of which we can achieve with major marketplaces where we're a mandatory payment method. Now in time, consumers need to get familiar with Escrow. People need to KYC with us and provide their IDs, which ultimately, the competitive advantage just is for the banks. Once you've KYC'd with the bank, you can do all sorts of things with the bank, right? But -- so having these big platforms behind us and getting their customer bases onto our platform, KYC, active and familiar with the product, is going to encourage usage of the product way beyond just the platform itself. Every time eBay Motors sends out an e-mail saying, use Escrow.com. It's the most secure way of buying something. Don't get scammed. Never buy or sell online a car unless you use Escrow.com. The more they send that message to the market, the more the consumer is going to think, well, hang on, I should be using this when I buy the iPhone off Craigslist. I should be using this when I sell my boat, right, through a private listing or what have you. But I think the big growth, and I really do think that we're going to get customers signing up where you're going to see either very large impact on our GMV or even multiples of our GMV from one customer a time because some of these marketplace are doing billions in volume, obviously, or tens of billions of volume. So that's kind of where we're heading. We're aiming to hit the hole -- hit in the hole and not the green, right? So we're -- by going and focusing on the likes of the eBay Motors, et cetera, it's really going to demonstrate to the rest of the market that -- where we can go with this product and that we can aim for the top, right, and get into the top. We're in Shopify, but we're in the Shopify Exchange Marketplace. We're going to work towards getting into all Shopify shops, for example. That's something that's been on our plate for a while. We've been working for 2 years. But I know we can get there, right? So there's lots of these big things like that. And if you look at the GMVs of some of these large marketplaces, shopping cart businesses, et cetera, they're huge, right? So there's a lot coming in. A great question.

[Operator Instructions] Matt, we have no further questions.

I'm sure we will in a second. People are just either shy to ask a question. So don't be afraid. Jump on, I'll take any questions from anyone. And you can also direct it to the CFO and also the Head of Product and Growth, if you wish.

Next, we have [ Michael Chan ] from [ Micro Investments ].

I was just wondering, what's your -- well, with your such large competitors in the market, what's your strategy to compete against such a large advertising spend from your competitors? And where do you think you'll position Freelancer compared to the competitors?

And who you're referring to specifically?

Anyone. Matt, I guess, in terms of your strategy.

Sorry? Okay. Well, from a Freelancer perspective, if you look at -- I probably won't name any competitors, but if you look through their filings in the U.S., you'll see how many they're spending on marketing. And you'll see -- you can see in the numbers what their return is from their marketing. There's one particular competitor who has actually stopped publishing the average project size, instead they now refer to average customer spend per annum. Their average customer -- average project size used to be around $86, $89 when they were publishing that number. Now I think they refer to average spend as like $140, $150. This particular customer -- this particular competitor makes about 25% monetization rate. So they're making about $24 a project roughly. They're currently paying in their affiliate program $100 to acquire a customer. And in Google AdWords, they're paying hundreds of dollars to acquire a customer. So even under their most cost-effective paid channel, they're expecting that customer to post 5 projects before they generate a return, right? So what they're doing is they're basically, what I call, [ find a greater ] full theory of venture investing, which basically, you raise $100 million, you dump it into a channel, you make back maybe $110 million. You show a big revenue ramp. You then raise $0.5 billion, you dump in the marketing, but you make back $400 million. Then you raise $1 billion, you dump in the marketing, you make back $600 million, right? Like, they're effectively -- it's feeding the beast. And we know the profitability of the channels that they're working on in [ pays ]. We know exactly what metrics are, right? And they're losing money to generate artificial revenue growth to show a big revenue number because the way the market values some of these companies is on an [ enterprise ] day, the sales ratio versus revenue growth year-on-year, the more you can pump that revenue growth year-on-year, the more the premium you get and your [ enterprise ] day, it [ sells ]. So they do that to pump their market cap, to raise money, to then dump into marketing, to pump the revenue growth, to raise the market cap, to dump in the marketing. But the problem is, these channels are not elastic -- inelastic, sorry. Basically, as they pump money into these channels, they distort them and they get more and more marginal customers. So we don't focus on paid marketing as a primary method for growing the business. We focus more organic methods, such as search engine optimization, PR, content marketing, other forms of referrals, et cetera, to really drive the product, and we focus on things like conversion optimization and improving the funnel and improving the product experience so people use it more and more and more and love it. And we put a huge amount of investment into improving the product. We had a lot of technical debt to pay off. We were growing at 50.0% compound for 6 years on average until about 2016. And then we just got to a point where we were just making all these minor little changes to the website constantly, and we didn't have the financial resources to do a big investment to overhaul the architecture until then. And from then until now, we've been making those really, really big investments. And they're really going to now start paying off in a big way. So if you actually look at some of the competitors' numbers, yes, they're spending a lot of money on marketing, but are they getting a return on that marketing? And so if you look at the growth in marketing spend and you look at the growth in the revenue numbers, and you net out the marketing from the revenue, you'll see that all of these business actually, they're kind of artificial in terms of how they're growing. And as I've said before, we compete directly in these channels. I mean I have a return on investment target where I want to make back every dollar I spend on marketing within 12 months, right? And if I can't -- if I could do that, I will keep putting money into that channel until that channel saturates and exhausts itself. But above that threshold, my propensity to put more money into that channel drops off dramatically. I don't want to spend $1 to make that $0.50, right? And I think a lot of the major competitors, and there's really only 2 major competitors, one is more consumer, it doesn't compete on enterprise at all, and the other competes in enterprise but not internationally. It's just really in the U.S. for the most part. We have 46 million users in our marketplace. The latest statistics are around 800,000. I think one has got 830,000 that was the last thing I saw, which might be 12 months old; and the other's got 800,000 freelancers. So we are -- in terms of our offering, we are more users, more projects, more languages, more currencies, we're everywhere, more skills. And it's -- when you see some of the things coming out of enterprise whether there's big demand to match up with the massive supply that we have, you'll see where we're going with this. But it's not a war that's going to be won by dumping money into Google AdWords. It's a war that's going to be won by great products and great marketplace and great things you can do with that marketplace. Thank you for your question.

Our next question is from [ Michael Skips ], a private investor.

Matt, I think you might have touched on this on your past answer, but do you see any consolidation across the market? The American and [ Israelian ] services competitors have sort of discrete markets. And I'm wondering if you think there's an opportunity partnership or some sort of consolidation.

Well, the funny thing is I've actually bought more businesses than anyone in this space. I bought 23, of which I think that's 15 or so were direct competitors of Freelancer, and I merged them in very quickly. And early on in the game, I actually was in the chats with Fiverr actually back in 2012, quite informal chats where I've had a chance to buy that business for $20 million, and I didn't really have the money. And I thought it was bit too expensive, and it would have been quite dilutionary that to try and buy it, and I didn't. Obviously, Micha has done well in his execution since then, and it's got a big market cap, et cetera. We'll see where that business goes. I'm skeptical about where they are and how they're generating their growth and just how sustainable that is. But my hats off to him for executing well. I also did approach oDesk before the merger with Elance and tried to buy that, again, informally when my market cap was high at the time of the IPO, and I had the currency to do so. And that, I believe, precipitated the merger with Elance. What I didn't realize at the time is another reason for the merger with Elance was Elance had the escrow license. And we didn't have Escrow.com at that point in time. And I think that they were well aware that to go public that the regulators would have required them to have an escrow license. And so that's one of the major reasons why they merged with Elance instead of going with us. So I almost consolidated that the entire space, but there's only a few players out there, and you've got to have competitors. And I think they're worthy competitors. Look, I think, I think it's highly likely would that one of them won't be an independent company for long. I won't say which one, but I just think one of them has a very strong alignment with a particular large corporate. And I just think that they've been for some time trying to exit that business because they've been running for a long, long, long period of time. And they've put it in a bit of a tailspin when the company they originally targeted got acquired by someone, and now this bigger conglomerate, I think may, at some point, make a move. I don't know. I'm just purely speculating. It's not based upon any high data other than just my experience in the space and kind of my observations. But I think there's -- that it probably won't continue to be 3 in the space. I don't see it towards them merging together. We certainly had no discussions since the last number of years with either of them about any consolidation nor have they approached us about any consolidation. We don't have any interest in consolidating with anyone. We get approached by other people all the time for large investments in equity stakes and so forth from other strategics that are out there, but none in the last quarter. But I think that from the nature of one of these businesses, I just don't think it's going to last independent for long, but it may. In the global marketplace for product space, you've got Amazon, Alibaba, eBay, it's a bunch of very, very large global marketplaces and various segments and services. You're going to have that. So you're going to have a couple of major players. I think that the global marketplace of services is larger than the global marketplace of products. It is more complex to deliver a service than a product. If you deliver a book, you know what a book looks like, feels like, weighs, et cetera. You can -- the quality is fairly consistent. In services, it's very subjective. I like it -- CTO technology is terrible, but your girlfriend thinks it looks beautiful and thinks it's a great website or whatever it may be, right? So they're much more complicated to deliver. And it's also being delayed in terms of its evolution compared to the global marketplace of products because emerging markets didn't really hit the Internet at scale until 10 years ago. It was really 2007, 2008 that the Philippines and Bangladesh and Vietnam and all those different countries around the world [ got ] Internet. Now before that, there was no Internet. In fact, I remember a point in time where I was running this business where pretty much all of Bangladesh came through one IP address. So we'll see how it does play out. I don't think they're going to get -- there's going to be very many new players in the global generalized marketplace for services. It's very hard to chase the position that the 3 of us are in now, particularly chasing the 46 million users. By the time you get the first 100,000 sign-ups, we'll be at 100 million users. So I just don't see it happening with new entrants. Some of the major players have tried to enter the space. Google tried twice. They tried with a company called [ prices.org ], run Max Levchin, who was one of the founders of PayPal. They gave up and shut that a few years ago. They tried with Helpouts on top of Hangouts. They shut that down. Microsoft had a task center. They shut that down years ago. eBay has tried about 5 times with various partnerships with Elance. And then they have things like secret -- and guru.co.uk. They've given all that up. At this point, I just don't think the major players are going to try to build their own. I think that if they do anything, the major players buy. And if you think about which major players need to have an offering in the space, and if they can't buy it, they'll have to partner with us or likely to channel with us. You've got all the major marketplaces like your Amazons, your eBays, et cetera. You've got all the major traditional staffing companies, Recruit, Adecco, Randstad, Persol -- PERSOLKELLY, Manpower, which is tapped in and so forth. None of these guys, Adecco -- none of these guys have a solution. They need to have a solution. Every single major enterprise is saying, we know that 5%, 10%, 20% of our workforce in the future will come in the cloud. What's your offering? These guys don't have a current offering. They are going to have to partner with someone or they're going to have to buy. So I don't see start-ups coming in. The majors have given it a go. They've given up. They're going to buy something or they're going to partner with someone. And then you've got all the other companies like your SEEKs and so forth. There are so many different companies that are out there that need to have a freelance marketplace offering that are going to have to come to us. And likewise, in the escrow space, I'm not sure how many of you are aware of this. But all the regulators around the world have formed a view that if you provide a service for the provision -- a payment for the provision of a service, and you hold that payment until the service is delivered that you may require an escrow license. And so California, for example, wrote letters to Fiverr and 99designs and DesignCrowd and even to Freelancer.com saying, do you have an escrow license? Luckily, we own Escrow.com with all the licenses. And so -- our California payments, for example, go through Escrow.com. But in Europe, under the Payment Services Directive 2, marketplaces will no longer be able to accept payments, et cetera. So -- and even Airbnb, Brian Chesky from Airbnb, has been on record saying, the DBO has told them, they need to get an Escrow license. The problem is it takes 2 years to get an escrow license, probably on average, some cases, 5 years. If you get one in California, you'll need one in Texas, you'll need one in Arizona, you'll need one in New York. We've been -- 7 [indiscernible] funds in New York in 2015 just to get our license for New York. It's going to happen in the next few months, but that tells you how long it takes. So even a company like Airbnb would need to get 52 licenses to operate in the United States. And then they're going to look at it and go, do we really want to do this? Or we'll just use someone else's payments, payment systems? That was actually a great question, and thank you for that.

Our next question is from [ Ray Johnson ].

Sorry, I've got to go see someone. Pass.