Freelancer Limited (FLN) Earnings Call Transcript & Summary

Byrnes, who is the Vice President of Product and growth. Brock obviously showed -- who's running the trip at the Escrow division, and Habib Ullah is running the Load Shift division. You may address any question in the Q&A to any of us in the room at the end of the financial results presentation. So in the first half, Freelancer Limited delivered gross payment volume of $576.9 million, which is down 1.6%. Freelance GMV is up 0.8% to $65.2 million. Escrow GPV was $489.4 million, down 13.2%. Group net revenue was 27.1%, down 7.3% on pcp with Freelance revenue of $22.3 million, down 4.8%. Escrow revenue was $4.8 million, down 17.2% on pcp. The Escrow division was profitable for the first half and the core marketplace and Load Shift now effectively at a breakeven position there in operating profitability and breakeven overall. We had a significant turnaround in profitability with NPAT at negative $300,000 versus $3.1 million in the pcp and FX [indiscernible] is at 6.5%. The group had a positive net operating cash flow of $1.3 million for the first half ended with cash and cash equivalents of $23.1 million, up 1.8% on the first quarter. Moving by the segment. So the Freelance revenue was $22.3 million, down 4.8%. Freelance GMV was $65.2 million, up 0.8% of pcp in the segment excluding load shift was operating in a positive and breakeven for EBITDA in the quarter, the difference being the unrealized FX translation. This is with a decrease of $1.7 million in marketing costs year-on-year as the marketing has got quite profitable in the last 12 months. In the second quarter, we added 1.8 million new users and 280,000 new projects in the marketplace. The average credit size lifted to $275, up 4.1% from pcp in the quarter. Note in the calculation average of average project size, we're including everything in the Freelancer segment and the [ logic ] segment, given the financial metrics put together. The average project size includes all enterprise customers and Load Shift division. In the enterprise customer segment, there's actually quite a significant lift in the volume of low-value projects from the live computer and printer company that we have -- we've talked about for a few quarters -- that is kind of balance to some extent by the Load Shift division where the average product size is close to $4,000. So we put it all in together because these financial metrics are being reported together in terms of revenue and GMV in this segment at the moment. On the content side, the average entries per contest was very strong and liquidity in the marketplace is extremely strong. I would challenge anyone to find a marketplace that was stronger for labor in terms of liquidity anywhere. There's about 300 entries per contest in contest scale anywhere from $10 up to $10 million. So for $10, you can get a logo done or some simple graphic design done or photo-shopping or what have you as an example, we could do it in 2700 of the categories we have. At the high end, the largest content we had active right now is for USD 6 million, roughly AUD 10 million, which is for NASA and the National Institute Health in gene editing in the central nervous system of humans. It's pretty exciting contest and it shows that the high end on the [ cystication], the work we can do compared to any competitive peers is pretty unrivaled as well as the quality of the freelancers entering, which in this case will be very high in research institutes and sciences and so forth. The focus for 2023 for Freelancer, we've talked about this several times before in the quarterlies and so forth. Is 4 major points. The first is really personalization to drive the core marketplace conversions. So what we're doing here with personalization was really telling the experience taking advantage of some of the advances and things like AI which can really look at [indiscernible] content and really provide a highly tailored experience. It's pretty amazing. Our AB testing in various parts of the funnel all the way from traffic to poster projects to awarded to ultimately paid and completed, showing quite dramatic lifts actually, when we apply very high levels of personalization. So that's very encouraging. And we -- as a result of this, actually, we have bucked seasonality quite well over the last couple of months. So we're currently heading into the northern -- we're in the middle of the Northern Hemisphere summer, Usually, that's a bit of a downtrend in the metrics, and we've bucked that with the improvements we've made with personalization. So that's doing quite well. So that's really driving sort of conversion of the funnel. We've also made improvements in the way we do recommendations to clients. Again, we can do that in a very highly personalized way. We've got a lot more coming here. We can actually go quite a long way with how we do personalization recommendations given the fact that a lot of the interactivity of the website is text based. And then following up to chat and video and these are all areas in which you can apply things like AI very, very, very well and very strongly. We also have a very large showing in some of the open corpuses for training of the AIs given the fact that we have a lot of data on our website and we have more users than any other competitors. We also optimize how we provide notifications and so forth, which has led to a statistically significant increase in GPV and GMV and we intend on driving that further. We're also really on a role moment on delivering product features for many quarters.

I'm sorry to interupt. You are cross sharing your screen I think you [indiscernible]. Sorry, Screen sharing here.

So we're really deploying a lot of our products quite quickly for many quarters, we talked about improving the front end instruction or the back in instruction and so forth, and we've got through that now. So really pairing through the release of features. The product clarification board is a way in which you can post a project and then Freelances can ask clarifying questions, which improves the conversion of projects. We also have got a feature we pushed a little while ago with quotations and continue to iterate on, which allows freelancers to issue quotations naturally like they would in the real world where someone can ask them for some work and a considerable quotation this now supports fixed price and hourly projects and shortly, it will also support many other ways in which you can pay for work. We've had a lot of success with the collaborative features. We talked about this last quarter, but we've got a number of things which allow us sort of interactivity between the clients and the Freelancers. One is with groups, which is simply very similar to sort of what you expect with sort of Facebook group sale interface. This is growing very, very strongly. It grew about average at 6% month-on-month through the first half of 2023 and will continue to grow. Our audio and video calling is growing very strongly. It grew about 300% in terms of core count in the first half. All this interactivity is designed to increase the average project size at $275, that is still a relatively small amount of work. If you are in the Western world, you hire one full-time staff member in the U.S., U.K., Canada, Australia and so forth, you're probably paying $40,000, $45,000 minimum wage no matter where you are in the world for an annual wage, the USD 275 is a relatively small amount of work compared to what businesses will pay to employ one person. And even if you're a freelancer in India and you're a software developer, you probably earned USD 1,500 to USD 2,000 a month. So really, this is the [indiscernible], I think we can pull that to really drive the growth of the business. If you got to down funnel conversion and we've had some pretty tremendous lift actually with the personalization results we've seen to double-digit increases in up-funnel metrics for conversion. And then re-filtering down to the down funnel metrics. That's great, but you can get a big lift, I think, pulling the average project size and adding a 0 to the end of it. So you can see that this is the lift in the sort of core connected count and that will, I believe, continue as we continue to really hone and push out collaborative features like this. We also have improved our acquisition funnel. I think if you remember, the second half of last year, we pushed out new predictive long-term value model for paid acquisition of customers through the paid search engine marketing channels and so forth and that requires a bit of time to train and calibrate and so forth, that's fully live and active now, and we've actually delivered now 5-year highs in terms of section to marketing profitability, which is up 81% on pcp -- and this is all in the face of coming back about $1.7 million of spend in the -- on the marketing side as well. So the paid acquisition channel is doing pretty well. We also have got some personalization that we've deployed in all the funnels for paid acquisition, and that's showing some strong uplifts. In particular, a Series AB test, we had showed a 20% increase in new paying clients and also one test showed post-project conversion about 14% of mobile apps and other showed new paying clients and Fiverrs up about 16.5%. So we continue to deploy that across the website and hone that and improve that. So that's good. And I think we've got a very clear pathway, at least for the rest of the year and probably into next year in terms of what we can do with personalization and what we can do in terms of fund optimization in terms of what we can do with driving the average project size. And the second major thing that we're focusing on product is really going to design from consistent to delight over the course of the last year, we had to deploy a new front end interface that really basically involved rebuilding the entire website, well public company, which is obviously a very challenging thing to do. That interface is now fairly consistent. We've got our own design system called Bits and now we're taking that from consistency to delight. So where I want to get to at the end of the year is to be able to hold up the app and hold up the website and be on target, so the well leading examples of great UX and great design. So examples like GitHub or Discord or the Like, and that's really what the goal is of design and UX to get to by the end of the year. So we're powering through that. And I think anyone who uses the website, will see the changes. We've got a lot of positive feedback from the Freelancers on this. We actually had a whole bunch of quotes from the freelances in this report that the [ ASX ] for some reason doesn't like that set to pull it out. But -- but anyone use the website, we'll see that the interface is improving and sort of leaps and bounce. Now the Enterprise division in the first half the GMV was up 37% on pcp. In the second quarter, the growth was a bit slower than past quarters. That almost entirely was attributed to timing with certain extra payments. if you actually have the massive payments we had in the first quarter and you are adding to against the second quarter, you would be on par with Q2 with Q1. We did have a couple of other things that kind of contributed to the second quarter being a little bit soft. One was that we had a very, very, very large enterprise client that we really dedicated a lot of work and energy into. And we've talked about in previous quarters, this is one of the -- it's a $1 trillion tech company that we are working for very -- very hard for a very long time to activate for a very large engagement. Now what actually happened was they had a couple of other vendors in the program, they shut the whole program down the day after we pass a vendor onboarding. Now they have told us that there is an actual engagement for us and post-summer here in the Northern Hemisphere. We've got a kickoff meeting to kind of figure out what that engagement might exactly be in August. So I'm pretty hopeful and pretty positive. We will get something they told us uniquely, we have the broadest offering and we actually were the best pricing by far. So we'll see what it is, but big company sometimes make some decisions to hold divisions and that -- that was before that we actually generated a dollar of GMV and three other vendors have been totally cut from that program. But we do put a bit better that, but I think that will turn around because I think it's quite promising that the number of meetings we had since then have also paid a little bit of money for something else. So I think we'll kind of get there on that. And the other two things are: one is that the -- in India, we've got quite a number of BPOs. In fact, the [indiscernible] who were BPOs and back office sort of style organizations in the -- was the signing that says that we're supplying labor to somewhat a victim of our own success, that volume has been ramping quite well, and we have to change the operating model because when we first went into India, what we did was we were running the payments directly out of India to our Australian entity. And as that becoming bigger and bigger and along with computer and printer company, that's also ramping volume quite significantly, we basically were accruing quite a large withholding tax issue because of that model. So what we've done now is we're fully committed to India -- we have an incorporated entity in India, and we've got a new model where we get paid directly in rupees with the pure agent model. And so we had a little bit of disruption going through client by client and enterprise customer by customer. Moving across to that new model. We haven't fully completed that yet, but there was a bit of disruption, obviously, getting them across to a new model. Now ultimately, I think that our Indian clients will be much more happy to be paying in rupees than paying FX and paying an Australian entity. There's a number of other advantages because there's quite a complex tax situation in India with a tax collected at source tax [indiscernible] and equalization levy on top of that. So we've got to -- the good news is we I think it's significantly better for India. It's been paying paid in rupees, it's much better for both the enterprise and customer and ourselves. By the [indiscernible] disruption in the quarter, kind of even across, and we put them off fully all the accounts fully there. The other thing is that we did have a change in the leadership of the Enterprise division. Shaun McMeekan, unfortunately left us. And we've already well into a process with a number of candidates. We in fact, finished our final presentation. And the final 4 in the last couple of days, and we can make an offer in the next 24, 48 hours to a candidate, and I think we'll get a very, very solid step-up of candidate. There, So there are a few things, but some highlights in terms of the quarter where basically, we execute MSA with the Fortune 1000 IT consulting firm with 50,000 employees kicked off this project, which is definitely a hard one. We continue our relationship or relationship with a consulting firm over 200,000 employees globally. They've been running several locations, specific research projects for hundreds of Freelancers in the in the platform, about [ 450 ], we've got 123% quarterly growth proportion for a technology client and strong forward bookings. We're running several large-scale projects to expand their central contingent workforce program. We find us an engagement model with a statewide government organization in APAC as that's quite interesting. We're actually bringing them together with another big price client to do something pretty interesting. This is a very, very well funded government organization that's looking to provide employment in their particular area to about 6 million people who are unemployed. We obviously want to do full 6 million. The point is that very well resourced and they've actually done a fair bit of work on the [ FTL ] platform which is quite interesting, and we're going to [indiscernible] into that. We also added to our government team with the new hire to lead the growth of our asset [indiscernible] engagements. Trisha is quite a solid performer, a masters from Caltech in Geophysics. So that's a great complement in terms of the science base for NASA. We, in fact, have won three task orders in the last week, for NASA so some pretty good stuff coming, including -- one of them is actually for the protection of micro-debris in orbit. This is 1 millimeter -- 10-millimeter particles in orbit figure out way to detect and remediate that is a pretty interesting challenge as a base program, and we're pretty excited to be supporting that another one with one, which is improving the GCT compiler, which is being used by the Orion space mission. And there's another one on comfort in Air Taxis. So visual company and Air Taxis. So you are flying around in a air taxi in the future, how can you make sure people are kind of [indiscernible] and so forth. So they're pretty interesting projects, and we -- and task force continue to come out and ramp. Obviously, the program has expanded from $25 million to $175 million let's talk about standing it further. So -- we'll see where that goes ultimately, the engagement still is going very, very strong and continues to get bigger and better. And we're seeing the size of these task orders grow quite significantly, obviously, with the NIH on it's like on the website for June think that's one of the biggest ones to date, which is USD 6.7 million. We also added two [indiscernible] price sales team with this -- new senior hire with a than 9 years the Sales and Marketing experience. Deloitte it's now at the 8,000 consultants in the platform. We're powering through a whole bunch of product improvements that they want to put in the platform. MyGigs is quite a revolutionary, I think quite world-leading platform for augmenting a physical workforce with the cloud workforce you can post a project as a Deloitte consultant to have it go to 48,000 other Deloitte consultants all go to because of the [indiscernible]. Couple of quarters ago, they doubled the engineering services component for us on that, and that will continue through the rest of the year. So that's quite strong. So we really just heads down building product for them. The big focus is on the internal side of the MyGigs marketplace rather than the external. Obviously, you've got to go slightly slowly in the consulting world and actually kind of everything is kind of well ordered and well managed. You've got a lot of compliance and risk and other participants, making sure that everything is done in a great well-ordered fashion. So that means things go slowly. On the other hand, we've built a really robust enterprise-grade product offering, we can take to others. One advantage, however, building the internal marketplace is at 60% of the internal projects are eligible for external even if they're not being allowed by the compliance team to go external. So as we build that internal marketplace, it's also building potential external volumes. So we're still plugging away at that -- at scale, and that's growing that engagement, and there's a lot of participants on the Deloitte side, we're working on that. And it's powering along. So that's going well. Our global fleet is going very well as well. We're now operative in the 5 countries. We're in 28 cities, 25 of them, we've integrated directly into this customers back in the support system. The job We've done -- 22,000 jobs now. So there's 22,000 jobs for parent computers and printers in 5 countries. That's going to go pretty quickly to that sort of order manship per month now because we're in the ramp-up phase. We've got some pretty interesting results a lot of us [indiscernible] [ uses for repair than a not the case ]. We're just not sure, but that's initial statistic. We've got a service agreement on par with the other partners and we've got a customer satisfaction follow up to 22,000, which is a a pretty solid [indiscernible] for a global fleet offering. So basically, what's happening here is you break computer in these petal of regions -- there's a chance that one of our Freelancer out there are they going to repair -- we're also going live and in out other cities in these 5 regions. So a couple of cities in India. In Australia, we're going to Wungong and Alice Springs and so forth. And so you can see we're quite good not just in City Metro, but also regional. We've actually thrive where it's very hard to get in service coverage from either full-time staff or traditional providers. We're also been told the bonds going to ramp significantly in Malaysia. We've got into Singapore. And we're going about to turn on overflow operations in the U.S., which is really the main games. This is where we want to go ultimately, is the big volume, the high-value projects are. And we had a couple of months ago, we had a kickoff meeting I was in that call, and it was quite interesting going through all the various regions in the U.S. and so forth. And where we will start is the same as in all other countries, we'll be in Wichita and Arkansas in these weird places and we'll start with only overflow. But as we kind of prove ourselves, we'll get more and more in close to metros and so on. But the last regions will be get 2 ultimately will probably be New York and San Francisco and L.A. and so forth, and that we'll have to prove ourselves just like we improved everywhere else. But we've done so quite well so far, and 22,000 jobs have been done to date. So that's pretty significant. In terms of NASA, we have just completed the $1 million task order with the National Institute of Standards and Technology, that's the building up the next [indiscernible] of display. For first response going into emergency situation. So -- this is because I'm going to an earthquake or a bombing and the AR/VR system allows you to tap into the CCTV streaming cameras, vital signs of the first responders and so forth. And that was very successful, four finalist, I believe, are all APAC commercial product are about to have it produce a commercial product. So there's commercial chart comes in these innovation contest not only do the organizations that launch and get to solve very innovative moonshots sort of problems at the high end as also commercial outcomes that come from that as well as a talent pool that can tap into to do further work. So there's a lot of advantages and contest general give you a 40x bank for buck in terms of spend to results that sort of pretty [indiscernible] price. So foundation book bold. We also -- I've talked about this $10 million task order and generating [indiscernible] work. We also completed an innovation contest for the Bureau of Reclamation in modeling of sedimentation of Rivers, this required speeding up a [indiscernible] -- and we actually got very dramatic improvements in that. I can't remember what the original target was they wanted to get in speed up, I think the [indiscernible] can take up to a month to run. And I believe they're looking for us to be up around 30%, 40% from the memory, and we end up getting at 80x faster. So that will pretty blind away with the results for that. So that was quite a good achievement. And then we also build a next-generation precipitation measurement device. So this was for water measurement in extreme -- environments that could be extreme, so from negative 40 to plus 50 UV exposure, high wind loads, extreme precision events and so forth, probably something that could be quite useful for Australia as a product if it was productized. I just want to [indiscernible] small project. As I mentioned in the last week, we won 3 either buy sells or in partnership. Now in terms of Escrow, the GPV in the second quarter, now this is quite interesting. It was $220.6 million, down 20.7% or $147 million, down 27% on PCP. Now -- you can see the long-term trend. I mean, we're still in the uptrend. And in fact, this is a top 10 result. But up until the last 4 weeks of the second quarter, we were actually very strong on a rolling 3-month basis, Up until the end of May, the GPV was actually at $193 million, which is actually above the first quarter number. So really just in the last 4 weeks, but that came off. And again, the volatility you see in these numbers here comes from domain name transactions, in particular, the mega transactions. Is that $45 million of mega transactions that kind of rolled off in those last 4 weeks that weren't replaced by a new transaction I did actually expect that to continue. We had just come out of the NamesCon conference, which is the big domain conference year, which ends at 3rd of June. And [indiscernible] told is that after the 3rd of June, and the conference and the traveling, that -- a lot of the participants to involve in these big transactions actually just to relieve rather than going to business. So I was a bit surprised by that. That was really just in the last 4 weeks. I do expect this to bounce back quite strongly. For the rest of the year, there is a bit of a boom happening in venture funding in certain segments, such as AI. And I do think we'll see a bunch of mega transactions go through in the second half of this year. We already sold chat.com and prompt.com for quite significant numbers. I do expect a lot more of that to continue. And I do think that the funding for venture back start-ups is strengthened little bit of that value of debt in the second half of last year. So I was a little bit taken back by the last 4 weeks we do think that's going to come back in the second half. And so on, you can see that if you kind of go into July, this is, again, very short-term data is only 4 weeks into July, you can see the count my balance start and just the confidence [indiscernible] that this is going to come back and we actually will finish up the year actually pretty strong and will continue that trend. In terms of Product, we did do a major overhaul in the second quarter. We've really regarded [indiscernible]. It was quite dated. So that's quite a bit of technical set we paid down and that will continue into the third quarter a little bit, but we will finish that off cutback [indiscernible], obviously, customers always come first. Second is to improve the KYC to be best-in-class, the next thing is to improve the friction of the transaction flow. It has got a sort of slick and then really provide a great [indiscernible] 95% of the volume that goes [indiscernible] Escrow [indiscernible] and eBay Motors eBay Watches and you know quite a common -- and so on to the -- it's a really long-term plan with Escrow is to get their checkout experience into slick and then kind of do -- trying to do what Afterpay did, which is that [indiscernible] ganging up to merchants and platforms and the second is having a partner activation team that you do these platforms you activate and really strong when you really build that ecosystem and you get the volume the bits around partners of major of the shopping cut [indiscernible] so we're really digging a lot of resources in the third quarter on that. So I'll talk about it later, but it's early days that were 1 of the alternate ship [indiscernible] segment. This is going extremely well. In the second quarter. We saw significant ups in the first quarter. We're not really reporting year-on-year as the merger of the Bolton Board mill and the Marketplace really only happened in August of last year. So we'll soon be able to talk about year-on-year numbers that make sense. Otherwise, you're kind of mostly talking about different business models. The GMV was up 53.7% in quarter and we had all time record must quotes per day, which is up 53% quarter-on-quarter. We had an all-time record quarter [indiscernible] commission jobs up 72% in the quarter. We even completed those up 39% average Load Size is about 3600, flat rate charge [indiscernible] the quarter thing. Like you've also got to break in. So it's even May slightly net of June. So we basically businesses I think you got a bit little and is on its way. So the goal is to keep that going. In the second half, I assume -- we got to start publishing year on new because it will lap the August -- in terms of total Loads posted and I do put these numbers out there, but they don't really -- a bit of apples and oranges here. So when we compare the Bolton Board model before, where it was free to post a project and for $79 the drivers to get final numbers compared to -- but now we've got to put the money through the site, et cetera, and so on. Removed a lot of the fluff and the other activity that's happening on the site. The Loads Post in the second quarter about 13,000 and the commerce are about almost 18 million. These numbers are down a fair bit from the actual Bolton Bold model, but they're not realistic because in the Bolton Bold model, the Loads came off within 72 hours automatically in the marketplace model that up 30 days. So there's a lot of reposting. It's in the original numbers, but I'm still reporting on consistency sake. It will make more sense for me year-on-year. You've got to see a real understanding -- there's about $300 million of notional load volume from being posted under the site. And the goal really is now to basically be as much of that as possible to GMV and revenue. The composition of freight machinery stays strong. It was about 29% of the work. [indiscernible] 6.5%. You can see here the sort of stuff we do freight that moves in locations strand location. In the [indiscernible] only. The goal is to basically convert as much of that freight as process currently that's come from the merger of the two individual paid for the site and the marketplace model and after that. We have a couple of avenues quite strongly in Australia and lever that go internationally. Product wise, we did a few things, again improving the flow and so forth with through button, Which is I think a listed company. Payment terms, which is in order to manage the cash flow, quite a better way on the trucks, the website, the few and so forth. You see a quite strong conversion [indiscernible] models -- in the old days, the funds got handed out, and it was the Wild West in [indiscernible] all through the website, quite -- we have done quite a decent amount of work in getting that more going from one where it was literally is a number of you go to going through website, going to platform into the platform. Putting reviews to the platform and so -- so I can successful [indiscernible] say that the model has worked. It's [well] and truly away. It's ramping very strongly. And there's a huge number of benefits now being part of the market place model. So ship is now come to reviews of truck drivers in the past, they couldn't do that because the reviews were not weighted by dollars, right? You're not taking the payment, you don't know the review is real or not. So that's happening now. So there's a lot of trust and safety that's been built in the marketplace. We've got rid of a lot of the bad actors that happened under the Old Bolton Board -- Wild West model. These are drivers that would take a deposit and not show up. And also, if you have poor performance, you get a bad review and so on. So this is growing quite strongly. There's a lot of growth to come in terms of the revenue of the GPV here. And you can see the award rate is climbing very, very strongly. And the question is going to be how far can we push this? I believe that we should better get probably about 60% for Loadshift. If you're getting a quotation on an Excavator moving from one side of the country to the other, it's a little bit different from -- do I want to be an entrepreneur and get a website built and so I think the award rate here will be significantly higher than on general for those marketplaces. We've got a segmentation here in terms of the freight that's pre-consistent with previous quarters. So overall, the operating costs are about 90% lower [indiscernible] [anticipated] cost efficiencies across all expense categories. Second quarter, we were pretty flat on the first quarter. We're effectively breakeven on [indiscernible] operating EBITDA basis, and we've reached the cost base and we're, I think, in a good place for the whole group now. Now bring cash flow of $1.3 million for the first half and cash and cash equivalent 1.8% in the first quarter. So what I might do now is Q&A, you may ask a question to myself or ask a question to any of the executives in the room. I remind you about Neil Katz, the Chief Financial Officer in the room. I've got Adam Byrnes, the VP Product and Growth. I've got Brock who's running Escrow and Habib on the Load Shift Side, address questions to myself as in the room [indiscernible], not for the Q&A.

[Operator Instructions] Alex [and Mike], can you read them out because I can't actually see with this view with a run sharing my screen with the chat [indiscernible]. So if a question comes into the chat, please read it out, and I'll address that.

Okay. There's a quick question from [indiscernible] in Escrow, where do you see the most potential growth outside domain names,

Well, there's a -- yes, and going to -- the [indiscernible] answer is [indiscernible] I kind of think I alluded to the account. I'm most excited about actually -- at the very end of the commentary. We have won a shopping cart. We're one of the payment methods going a visible net shopping cart. There are quite a number of payment methods in that shopping cart, but we are a unique differentiator -- and [indiscernible] a lot of volume. It's many, many, many billions of dollars per amp. We believe -- we believe we offer a very differentiated payment system. So for payments specially from $0 to, say, $10,000, they are very well served by existing payment methods. So for example, you've got credit cards, and you've got your PayPals for the world, you've got your Afterpay got [indiscernible] and so on. The issue is that all those payment systems that [indiscernible] the digital payment systems you hear about every day, they're all built on top of debit and credit cards. So for example, ApplePay, you put your debit or credit card into your phone and that wallet is built on that. PayPal is the same. You've got a debit or credit card in and it's built on top of that. AfterPay has effectively built on top of debit and credit card, none alike. Now all those payment methods that there's electronic wallets -- the entire volume of digital payments as well as the build on cards there are only 3% of U.S. domestic per value, not by counter by value because they're all low-value payments. So ApplePay the average payment size is $23 PayPal was about $60, [indiscernible] $64 and so forth, right? So -- and then you take all the card volume in the U.S. and you look at that by value in domestic payments, it's only 8% of domestic card volume, [domestic] payment for, I'm sorry, in the U.S. by value. So all these digital wallets was a 3% or 8% of U.S. payment volume in the ends. The reason why is because large value payments are not served by any of those payment methods. -- we fairly uniquely, and I say uniquely because there's a very intensive regulatory environment around large value payments or escrow payments -- we have a complete licensing footprint in the U.S. except the territories. So there's 50 states in the U.S., 4 don't require licensing in these 6 territories. We've got -- we're licensed across all the U.S. states to provide escrow and escrow allows you to take a payment from, say, $1,000 to $100 million or potentially even more. And so by going into things like shopping cuts and payment aggregators, we think we can unlock transactions that otherwise couldn't occur. So for example, you're going into a shopping cart at the moment, they can very much sell things below $10,000 very well with a whole range of payment methods you might get. -- might be 30 or 40 different payments you can select from. But if you want to sell something like a Yacht or you want to sell a Fine Art or Jewelry or some Royalties or businesses or high-end websites or wherever it may be, you can't do that because above $10,000, these payment systems will break down. So I think we are at a unique differentiator to shopping carts. And I think we had a unique differentiator to the payment aggregators. And I think that's -- I think once we go into this particular shopping cart, I think we've got to tilt of the industry and I think to tilt a lot of the payment aggregators because we offer a unique differentiator to a really Tier 1 [indiscernible] cart. And so I think the volumes we could say, that could be quite significant. I mean, when I say significant, I mean, it could clear a multiple of our entire volume of the company. And I'm running that number off, just averaging the number of -- the total volume that they put through their alternate paying methods and just looking at that not taking into account the fact that we just do we do the high-value payments where you expect to have a larger share than average -- so I think that those sort of businesses will have quite a large materiality in terms of the effect from going to them. I also think we can get a fairly large volume from the automotive space. As you know, we're in eBay Motors. We power eBay Motors. That's a relatively smaller player, but we have demonstrated we can do those payments very, very well. And I think that there's a whole bunch of automotive and ancillary marketplaces that we are in various levels of engagement with or in some circumstances, they're in development in some substances, they're just signed an agreement that kind of haven't started development or prospecting. There is a challenge in automotive that you have to have to unlock a lot of volume, you've got to [indiscernible] the financing part. Now we built a financing marketplace with Blinker for autotraders. Unfortunately, that particular engagement was not successful, but we are working with Blinker to go to other marketplaces. So I think we'll ultimately crack automotive because I believe the time is right that people do want to pay for a car over the Internet. We've shown that with eBay Motors. And I think we'll get into the other automotive marketplaces, but we just keep plugging our way at it. And I think we've got to have a strong financing solution, which I think we've kind of at least mostly there with Blinker. I also think the M&A as well will be a fairly material segment. We're in aquire.com, we used to call micro acquirers, you can buy businesses and start-ups from a bunch of other similar competitors, but there's a lot of volume in that particular space. I think that will be filter material. And then in fact, in the slide deck, which is attached to the releases that went to on the [indiscernible] decks, there are quite a number of segments we've identified that I think we'll be fairly successful and simply because at the moment, they're not well serviced by payments. And in fact, the payments are very much offline or they're done through asset purchase agreements. So they're done through wire transfers to effectively -- an intermediary in a very clunky way. And I think we can -- I think basically, those segments are going to be quite strong. So in summary, [indiscernible] car's payment aggregators, automotive and M&A are really my focus sectors and ultimately want to get to real estate. We don't get to real estate directly, we can do half the state. It's not very extensive work on what we can do and we can't do at this point in time given the state best regulation on title transfer and so on. But I do think it looks like construction and taking deposits to purchase at us. I think we'll -- that will be unusually inroads there. And how we build operating average, well I mean simply get the cost down. I mean these businesses are all marketplace models. There's a fairly high gross margins by 84% across the businesses, plus or minus a couple of percent across the all businesses. And so you get cost down in terms of with the expense side and then you get operating leverage as you grow the revenue, right? And I believe that we'll get a lot of leverage out of the improvements we're making in the core marketplace. I think we'll get it out of any one of these enterprise customers on the Freelancer Side, really take off, and we're staying to see signs of that in a couple of accounts. And on the Escrow side, again, it's just one customer could do significant amount of volume. And on the low ship side, we've got just [indiscernible] in a the board bar we acquired, and that's going extremely well and we're demonstrating that with the results from Load Shift.

[indiscernible] asked the question, can you comment on the implications of recent AI development?

I've actually written -- if you -- Ray, if you want a full detailed thing about this, I'm be publishing an [indiscernible] in about a week to two weeks. I've written quite an extensive essay on the speakable topic. And I've actually been interviewed by macro voices, which is a prominent macreconomic [indiscernible] us in the world. They're going to do a 2-part special in August, late August for the summer holidays on this. But effectively, in the short term, AI has is today charging the freelancers because now you can be moderately skilled or relatively unskilled as a freelancer. And you now use these tools, whether it's ChatGPT or mid-journey for design, you can now design it at the elite level. And so I believe -- and we're seeing it now. The adoption of the AI tools about Freelance is pretty quick. Like as soon as the tools came out, the Freelancers run them. I think we've done some -- done a couple of media hits around a couple of contests we ran. One was a Harry Potter -- re-imagine Harry Potter in a different scene. We just -- and if you could just click through the entries in that particular context. You'll see that the Freelancer is all of the AI tools, all the entries we're incorporating AI and fairly advanced uses of that. So I think what it does is it lifts the skilled labor in our marketplace. So the winners here, I think, with AI, in particular, in the short term, are the relatively new workers, the relatively unskilled workers who are now -- their skills are lifted very, very significantly in terms of their abilities and talent -- the elite freelancers the very top, they're fine because they offer having [indiscernible] their business model and they've got relationships and they've got a track record. I think the Western-style traditional service provider will be challenged. Because, for example, if you're an illustrator and you're in the Western world and you're charging 20 to 40 hours worth of work to design something, I think that the appetite in the future from companies to want to pay for 20 to 40 hours work with something you can tap out in 10 [indiscernible] is [indiscernible] challenged. So I think that it's a [indiscernible] article actually came out last night in India. I did an article interview with the Indian Express. Where I think I said India is going to be a big winner of AI because they've got a once in a lifetime, [indiscernible] the influx about 14 million people into the work -- and those graduates are relatively unskilled and now using AI tools and whether it's in copywriting or design it shortly to the software development, they're going to be now superpower, which is great. And I think it's fantastic for us. I think it is the skilled labor that the Freelancers delivered at a lower unit cost and quicker. That lets businesses get things done cheaper and to a high level of quality. And I think for some time, I mean, you're going to need freelancers driving the tools. I mean my mother is not going to be interface with any of the AI tools anytime soon to completely grow her business. She might get to get a little bits and pieces done, but you're going to need someone on the tooling for now. Now where it's going to end up in 5, 10 years, I don't know, right? I mean things are advancing pretty quickly. But at least for the foreseeable future, I think it's fantastic for us having the largest local low-cost workforce in the world, they're on [indiscernible] power.