Freelancer Limited (FLN) Earnings Call Transcript & Summary

Hello and welcome to the Freelancer Limited Full Year of 2023 Financial Results Presentation. My name is Matt Barrie and I'm the Chief Executive of the company. Today, with me in the room, I have Neil Katz, the Chief Financial Officer. I have Andrew Bateman, who's the Head of Enterprise Product; Shaun McMeeken, the VP of Sales; Adam Byrnes, who's the VP of Product and Growth; and Cohen Wisniewski, who is the Head of Operations for Loadshift and for Freelancer. As with all of our result presentations, you may address questions to any of the executives in the room at the end in the Q&A, or to myself, and you may do so through the facilities within Zoom. So today, we delivered gross marketplace volume of a bit over $1 billion, $1,020.7 million, down 4.8% on pcp. Freelancer was up 2.9% to $132.1 million. Escrow was $888.6 million, down 5.8% on pcp. The Group net revenue was $53.3 million, down 4.1% on pcp. Freelancer was down 2.8% on pcp to $44.2 million. And the Escrow revenue was $9.1 million, down 9.9% on pcp. The big result in these full year financial results was a momentous turnaround in the net profit before tax, which lasted with negative $7 million. And this year, we egged out a small profit. And we continue to build on that profit in 2024. So the Group, for those of you that are new investors, consists of 3 parts of the business. Freelancer.com, which is the world's largest cloud workforce in the world. It's about 72 million people. Escrow, which is the world's largest online escrow company, licensed in about 55 jurisdictions, all throughout the U.S., Canada, Australia, which facilitates and secures large value payments and powers businesses such as eBay Motors, where it's the exclusive payment system, and Loadshift, which is Australia's largest online freight marketplace, primarily dealing in heavy haulage freight. All our market-leading broad horizontal service offerings that consumers through the businesses and enterprises need every day in the fields of labor payments freight. So we're trying to build a mini Amazon here of services and these are all very, very big industries. So going to the segment reporting. So in terms of Freelancer, as I said before, the revenue is $44.2 million, down 2.8% on pcp. Freelancer GMV was up 2.9% to $131 million. [ OMP ], $2.1 million, and the segment was operating EBITDA positive in the year. The marketplace added 1.4 million new users and 201,000 new projects to the marketplace. The average product size was flat, effectively at $259, a little bit down, and that includes all the customers in our enterprise divisions and the Loadshift division, which balance out quite nicely if you look across the distribution be lows. Liquidity in the marketplace remains very strong with the average bids per project at 42, which is flat on pcp, the liquidity and contest has gone through the roof. We now get an astounding 341 entries per contest. And with contests, it may start with something as very simple as a $10 contest to get some image or logo design right up to the largest contest we have running right now, which we've just awarded many prizes for, is AUD 10 million for the National Institutes of Health and NASA for gene editing and the central nervous system of humans. And I'll show you a little bit later on the sort of stuff we're doing there, but you can really get anything done on Freelancer, no matter -- no job is too small, too large to get done on our platform. Our big focus for the year in product engineering was really around 4 items. The first was the personalization to drive the core marketplace conversion via AI. In the past, we really could call this personalization, but it actually is AI. We didn't want to give too much away in terms of what we're doing here, but we think there's a very, very bright future for us in 2024 applying AI technology through the platform, and I'll talk about this a little bit later on. The second is collaborative features to really drive retention, engagement and growth. Every unit of retention is worth more than a unit -- far more than a unit of acquisition. So we're building a number of things to really make it easy to work in teams and larger groups on the platform and really bring back the clients and the Freelancers to make it part of their everyday workflow to use our platform. Also to improve acquisitions through organic channels. We believe that the world of Google and dominating customer acquisition on the Internet is rapidly drawing to a close with the advent of large language models and chat-based interfaces. And I believe that search engine marketing and businesses that rely upon it are going to have a challenging time in the future. So we're really focusing on organic channels, and it's great that we've also got our search engine marketing to its highest profitability ever through quite a lot of work over the last number of quarters. And so, we'll talk about that in a second as well. And also taking the UX and design to the next level from consistent to life. So that was last year, and I think we achieved each of those 4 items, I think, in a pretty solid way. On the first, personalization to drive core marketplace conversion, throughout the year of last year, and we operate the calendar year, the product team had a big focus on really optimizing the funnel through the use of AI. And those that use the website quite frequently will see that, that when you post a project now, that flow is rapidly becoming a very delightful experience in terms of how you get jobs done. In fact, this morning and a couple of days ago, someone was posting stuff on Twitter that I've retweeted about how surprised and excited they were about how easy the site is to use and how much we assist now with AI. In the fourth quarter, we completely redesigned the job posting flow, and we deployed some updates to the AI model. There's a lot to go here. We actually have a pretty amazing experience that we've got in internal prototype. But the great thing is, when we apply AI to our particular business, which is very much a text, chat-based business, we get great conversions. I mean, LLMs are very, very much suited towards our business. And the other thing is that, Freelancer traditionally has had a huge amount of content on the Internet. So we've got 72 million users, each of those users is a web page. We've done 22 million, 23 million projects. Each of those projects is a web page, and then we translate those pages into 30-something languages. We have diced up into a whole different number of ways with the various project listings and other views that we show. As a result, we have a gigantic amount of content in the foundational models for AI, in fact, far more than our competitors in terms of just the breadth of information about Freelancer versus our direct competitors. And so, all that data that's going into those foundational models, coupled with the data we have internally around the world of work and how people communicate and get things done, means that we're getting pretty tremendous results when we apply this technology. And let me tell you, by the end of the year, the product is going to be absolutely wild in terms of what you're about to do on it. We've got some internal demos we've been showing off to people, and it's almost deep voodoo magic in terms of kind of how the experience is going to change. We also provided more personalization around the ability to modify profile pages, bid with specific profiles and so forth, which has been taken up quite strongly by the Freelancers. It's been about 0.5 million bids created from these new profile, multi-profile pages that we've created. With collaboration we've done quite a number of things in FY '23 with the bulk of our efforts improving our Group's products. And this is really a bit like Facebook groups, where you can have a group on a particular topic. It may be freelancers from Pakistan, or it might be AI freelancers, or another special interest group, or it might be a work room on a project where you allow lots of people to work together. That group's functionality now, some groups have in excess of 8 million, 9 million people in them. So these groups scale quite well for a variety of different use cases, as well as for having large number of freelancers. And there are a couple of freelancers that started producing some very high-quality video content which they can post directly into the groups to educate people on the platform, how to use it and so on. So that's going to double down and increase over the course of this year. We've also got a project updates feature, which is currently in beta testing and will go fully live on the platform in the next week or 2. We believe that's going to drive engagement, really makes it easy for Freelancer to check in and shop their work and have the clients be informed of that. And we also launch package services. So this is really your Fiverr style model of click to purchase. Although we're doing it in, I think, a fairly more sophisticated way, we've built it on top of our quotes functionality and with a quote, you can quote -- send a quotation out as a fixed price, as an hourly engagement, or as a subscription, or as a combination of those 3. And so, our -- we think we've got a more robust offering here in terms of services, and there's some pretty exciting things happening in the next month or 2 building upon this to take it to the next level. But already there's thousands of these services that are being created and [ friends ] are sharing those links over the Internet. We also have been focusing on improving our acquisitions through organic channels, while at the same time lifting what's called our ROAS, which is a return on ad spend through our paid channels. And we've been investing in viral acquisition, which has resulted in distinct active referring users up about 70% year-on-year in the fourth quarter. And we continue to double down on that over the next couple of weeks. So our return on ad spend is actually the best it's ever been. And in fact, I saw the numbers this morning and there's a huge step up. What this mean is -- what this actually means is, we've been able to cut $3 million out of our ad spend budget on an annual basis and still have an uplift in return and actual revenue from that program. So that's been phenomenal and helped somewhat with profitability. And we did that through our data science team, basically launching a long-term predictor, which we reported on previous quarters. Because when you go through these paid ad programs, you have to make an estimation of the value of a customer through a number of -- small number of payments they make within the 30-day window of signing up. And so, it requires a fair bit of sophistication to be able to extrapolate and figure out what the customer is going to do over a longer time horizon. So we put a fair bit of investment into that, and we launched that some time ago, and that's paying off now in space. And the team now is just continually optimizing that. In terms of the design, for those of you that use the platform, you will see this. The platform for a long period of time had a UX that was lagging, simply because when we took this business public, we did so very early in the life of the company. We only raised $1.5 million before going public, and -- which is probably the smallest pre-raisings probably in the history on the ASX. And as a result -- and we use that money not for operating capital, we use that money to buy a platform. So when we took the business public, we didn't really have a platform that was robust enough for hundreds of millions of users and so forth. We've managed to rebuild all of that while being a public company. And we've taken a bit of punishment in terms of the share price by doing so, because companies don't usually do that. They usually kind of do that privately and before they go public. So we took a bit of a beating. But for those that use the platform now, you will see it is absolutely -- I think we probably nailed the consistent delight in FY '23. And day by day by day it keeps getting better. And let me tell you, by the end of this year, it's going to be winning awards. And that's one of our targets for this year, is to start winning awards for the designers. It's really becoming a delightful and engaging platform to use, and we'll see that flow through in the stats. The other thing we did was we really -- and this is a really major achievement that happens behind the scenes. We cleaned up the marketplace from a bad actor's perspective, a tremendous amount. We pretty much broke the back of 2 forms of bad actors. One is people spamming projects on the platform, either to take them off site or to cheat the freelancers by pretending like they've got work and then getting them to pay a job allocation fees. In particular, in Nigeria, there are many, many, many thousands of people that on all the platforms, and it's not just the work platforms. You see it on Facebook, you see it on LinkedIn, you see it all over the Internet, you see it in Dribbble. They're spamming to basically commit this sort of fraud. Our trust and safety team really destroyed Freelancer as a viable platform to do that in a big way in FY '23. That required a lot of work. We've identified 180,000 proxy domains we blocked. We've blocked thousands and thousands of SMS proxy phone numbers which allow people to send SMS without buying a SIM card. We have figured out we've got some software running and some pretty state-of-the-art analysis as a detector sort of fraud. To the point now that our team actually speaks a topic at conferences internationally, on forums, on basically international fraud online. We will continue to fight these bad actors. But we've really reduced this to a trickle. And you can see week by week by week those remaining are giving up. And so, it's a minority on the site. And it was a tremendous achievement to happen in 2023 in terms of cleaning that all of that up. And I think it will also provide a bit of a competitive advantage because these fraudsters never really truly give up. They just go to a platform that's easier to go work on it. So they'll be going to our competitors now to give them a bit of pain. The 4 major items from product focus for this year for the Freelancer platform is to turn Freelancer from a painkiller into a narcotic. They always say, you don't want to sell vitamins. It's nice to sell vitamins, but people forget to take them. You want to sell a painkiller? Well, what's better than the painkiller is a narcotic, and that's a platform or an application that is so good to use and so engaging that the customer has withdrawals and they stop using the platform. So, for example, that would be Uber. Uber is so easy to use, getting cars and so forth, that if I had to stop using Uber and go back to traditional way of using taxis, it would be somewhat of a painful experience to go back to the old world. And that's what we plan to do with Freelancer. We're doing that with personalization. We're doing that with collaboration. We're doing it with a delight platform, among other things. We also want to reinvent the world of work in the AI revolution. And I'll talk about this a little bit in 2 seconds when I get into the forward-looking statement. But we, I think, are phenomenally placed. And I know every company in the world is trying to tack AI somewhere into their presentations and on their homepage. But I'll explain in a second why we really are a phenomenal winner in this whole revolution. Our third thing is to rethink client acquisition and world without Google. We are really on top of that in terms of the paid channels. We've really got that return on ad spend really during a great return for us, and we'll be spending a lot of time looking at viral channels, organic channels, and we've had some great success. I talked about just recently with the viral channels in the fourth quarter. And then we want our design to win awards and that's a big one for me. I think we're getting close to that sort of level. So I tab it forward-looking for the year, and let me tell you, I've done a fair bit of speaking around the world on the topic of AI. Last year, in July, JPMorgan invited me to speak at their Global Chief Investment Officer Summit on the topic of AI, which was kind of a bit of a life achievement because in that room there were 100 people managed $7.8 trillion. Jensen Huang was first up, Bill Browder, [ John McEnroe ], Jamie Dimon and myself. So that was a pretty amazing forum. I did an opening keynote last week again on the topic of AI. The reason why is because Freelancer is probably the biggest user of AI in the world, with 72 million people on the platform, and all the Freelancers using ChatGPT and Midjourney and Stable Diffusion and all the other [ tooling ] that's coming out, our marketplace is probably the biggest user as an online community globally. And what's happening there is, all the skills in the marketplace are leveraging dramatically. You can be an average designer, now you can be an exceptional designer with Midjourney. You can be an average copywriter, now you can be an exceptional copywriter with GPT. This year, something will come out in the software tooling space where you can be an average programmer, you'll be an exceptional program. And already people are using GPT and the like to kind of help write code. But this year, there would be a Midjourney moment happening in software development. So number one, all the skills in the marketplace now are lifting very rapidly to the elite level. And so, if you compare and who's going to lose here? Well, the Western world is going to lose because if you've got now a Freelancer, say, in the Philippines or middle of Pakistan or what have you, with the AI tooling, they can, in some circumstances, and increasingly compete with the top elite Western Freelancers because of the AI tooling. So it really does lift the skills for the largest low-cost workforce in the world. And it's low-cost because it's, not just from emerging markets, but also it's on demand. The other thing is that, every business in the world will want to transform, to be AI-powered. For those of you that are old enough listening in the call, I mean, 1994 was the year that your grandmother -- so that your geeks had email addresses and 1995 was the year that your grandmother had an email address. And between '94, '95, the world changed dramatically and led to the dot-com boom through the late '90s, every single business in the world, small business, large business, wants to become an Internet business. And what did that involve? It involved building websites. So you had this huge industry of website development, a lot of with the cottage industry, one man bands, small agencies, right up to the larger companies like your sausage software and so forth, were doing web development. And today, web development is a very, very big category on Freelancers, maybe 30% if you consider it at a gross level. And then we've had waves since then. We had a whole wave of mobile phone app development that happened when the iPhone came out and led to a revolution and sort of apps, the mobile experience. The next revolution, which I think is going to be 10x bigger will be the AI revolution. Every business in the world will want to apply AI to make their business better and where are they going to go, right? They're not going to be -- they're going to go -- it's just like web development. They'll go to small one man bands, they'll go to agencies, and there'll be larger companies that will do the transformation. And all those companies that are doing that transformation will be on Freelancer, on the platform. So we will be the place. I'm very confident, where every business will want to figure out how to apply AI to grow their business. And it's a bit more complicated because it's not as discreet as I want a website. And so, you kind of clearly know what the project is. It's going to be across all the functional areas. It'll be used to basically replace customer support functions or enhance customer support functions. It'll be used to enhance lead generation for sales. It'll be used in the B2B funnel for sales. It'll be used in marketing to overhaul all the content on people's websites, graphic design and for text, and it'll be used for training videos. It'll be used for so many different things. It'll be used for enhancing all the operational side of the businesses. And so, we're getting ready and we're getting prepared in order to fulfill all of that and look forward this year to see a number of offerings come out from Freelancer. Really making this easy to understand and really easy to adopt and really easy to get going and transform these businesses. It's going to be a pretty crazy world the next couple of years. Now, I've talked about the combination of low-cost freelancers leading to unprecedented levels of productivity with the AI tooling. Jensen Huang, and he spoke before me at the JPMorgan conference. He said, AI won't steal your job, but someone using AI tools will. And our Freelancers equipped with AI are the ultimate combination to drive business success. Our platform is not just a marketplace, it's a launch pad for businesses of all sizes to look into the future. I've talked about all the data we produce. It's not just the public data that's going into the foundational models, it's also the private data. We have all the private data, the 23 million projects of 72 million people working together on how jobs get done. That's extremely valuable for our fine-tuning of our own internal models. And our core marketplace also has numerous areas of opportunity to apply AI to solve real significant marketplace and customer problems which were intractable previously. For example, it was previously hard to customize the funnel and the project experience for the 10,000 or more different types of work we can do on our platform. With generative AI, now that's very straightforward. Before, it was very hard to have one of our agents provide induction for all the Freelancers because we get 20,000 or so sign up a day and it'll be intractable problem to be able to welcome to the platform, guide them through using all the tooling on the platform, how to get going, how to get on jobs, fill their profile in, et cetera. We can now tell with generative AI. In fact, I personally have written an agent to do that. So there are a lot of things that we can do. And the very nature of the platform being very chat-based, very text-based, very visual, means that the affinity with AI here is phenomenal. We also believe that AI will drive an explosion in entrepreneurship because starting businesses will get easier and easier and also less expensive. And we also believe that there's going to be a fair bit of -- in the macro environment, dislocation in full-time traditional jobs. And as we've seen in the past where you do have that dislocation like COVID or the GFC, you get a lot of -- people going online looking for work, you get a lot of business looking to cut costs online, and you get a lot of startup businesses being created. And I do think that there is going to be a fair bit of disruption from AI and traditional jobs such as customer support, which I think is probably the first place that's going to happen, where the support team is going to be incredibly empowered with AI technology. But businesses will need less people in the jobs they were doing previously. So people need to move up the stack to become managers to find new roles or reskill or retrain. But I think in more of the traditional companies, like your banking and insurance and what have you, you will see quite a lot of dislocation and that will lead to a lot of entrepreneurship. On the enterprise side for Freelancer, I don't know if I should, Shaun, but we welcome back Shaun McMeeken and leading the team. Did you want to have [indiscernible]?

So last year we deepened a number of our strategic engagements with our partners around the world. I returned during the fourth quarter. In that quarter, we delivered 55% revenue growth on pcp, resulting in overall growth for the year, double digits, 12%. In terms of some of the highlights in some of the sectors. So in oil and gas, we finalized negotiations with one of the world's largest oil and gas companies in direct partnership with their managed service provider in the United States. The scope of work has been defined and set to roll out in the first half of this year, which we're excited about. In the FMCG space, in November, we finalized the commercials and onboarded one of the leading beauty companies in the world out of Europe. They're an iconic brand and they selected us as they're looking for an alternative sourcing strategy and more flexibility in their hiring initiatives, which is a common theme that we're seeing for multinational companies. That company is going through their vendor onboarding at the moment and activating their first projects in the first quarter. In terms of in-flight proposals, we ended the quarter with a number of proposals in progress, not just for the core marketplace, but also across engineering services and project management, including a transformation opportunity with one of the biggest BPO leaders globally. In terms of new partners, we have a very positive outlook for the first half of this year as we're making future or more inroads into global talent management. We've got a number of agreements that are being discussed around the U.S., EMEA and through APAC. And there's a lot of companies around the world that are really looking to explore emerging markets for talent, and they're looking to Freelancer to provide that talent. We've also overhauled our Activation Program for new clients to really take them from posting their first projects to kind of really scaling up over time. And so, we've got a number of clients that are going through that process at the moment. And the major goal there is to really take them from first time users of the platform. As Matt was talking about earlier, really using our platform as a daily habit when it comes to hiring staff in their company. In terms of government engagements outside of NASA, there's also a lot of work going on with a lot of governments, particularly in EMEA, who are looking at how to best utilize their workforce and create a digital economy heading into 2030. There's a lot of strategic engagements around how they best utilize the workforce. And so, there's a lot of governments who are talking to us about how best to utilize our global talent to fit those objectives. We also continue our engagement with Deloitte MyGigs, which has been going for over 7 years now. In addition to the U.S., we've now got member firms in EMEA and APAC also asking about how they can deploy their own instance of MyGigs. And so, discussions will continue with those member firms in the first half of this year. On the field services front, with our partnership with the technology company globally, we're now in 47 cities across 5 countries. Our volumes -- our project volumes increased by over 150% in 2023, and we're currently planning how to surge those volumes even further. We're going to concentrate our efforts, particularly on the bigger cities in India, but also look to open up other countries such as the U.S. And we're now approaching in the last few years, we've now completed almost 50,000 work orders through our engineers who are being deployed in hard to reach areas on a very flexible and on demand basis.

Yes, that's a pretty big footprint we have now across India, Malaysia, Australia, New Zealand. And we plan on getting live in the U.S. We're supposed to do it last year, but they've been pushing forward to this year. So I think we've now really proven ourselves that the Freelancer model for field services works extremely well. And the great thing about this particular program is, we do everything here. So we do training, we do the QA, we do parts distribution and warehousing in a Freelancer model, which is really innovative and breakthrough and new. We opt to do the work, we then do the follow up QA and happy calls and so forth. And we do all of this just with Freelancers. We have 1 person in our company here in Sydney managing a network of hundreds of people. So it just shows you how easy and scalable the model is. And now, we look forward to that, kind of taking it to the next level. One thing I will mention about the government programs is the other thing we're doing with government, which is -- which we're developing a solution for. It's very early days, but all the major governments of the world have a problem with unemployment benefits. They pay billions of dollars a year in unemployment benefits to a range of workers with a range of skills, in a range of environments and so forth. And all of them are looking for ways and trying to mobilize the unemployed, particularly the bottom 20% socioeconomically to stand on their own 2 feet and generate income and a future for themselves. And we've got a bit of a plan of how we're going to do this, but this could be quite lucrative for us because all governments have this particular problem and begging for a solution because traditional ways of just providing handouts don't really encourage people to get into the world of work. While if you do micro work in the cloud, you can kind of edge way into it. And it's great for people who can't work full-time for whatever reason, are in remote areas, disabled or have other issues, elderly or what have you, which restrict them from working full-time. On to NASA. I'll do this one. Another big year for NASA and the U.S. government team. We are continually showing the power of the platform in delivering highly complex and high-end projects with very, very high-end service providers performing on them. We also broadened -- this team broadened outside of NASA to team up with the ELO2 consortium to do an innovation challenge for Australia for the first lunar rover arm design. Over the course of the year, we did challenges such as teaming up with Harvard around creating a sustainable future. We delivered for NIST a heads up display for first responders for $1 million going into emergency situations such as bombings or other disasters. For the Department of Reclamation, we designed a better precipitation measurement device, which is out in the field now being measured for the final award. We delivered a 30 to 60x speed up in computational fluid dynamics modeling for river sedimentation. Also for the Bureau of Reclamation in basically optimizing linear equations, sparse matrix solvers. As I mentioned before, we did some work with the Australian Space Agency and we delivered some of the prizes for the targeted genome editor delivery challenge, which is for editing genomes in the human central nervous system, both in vivo and ex vivo. And you look at some of the winners, these prizes, and it just shows you the extent of stuff you can get things done. You've got here School of Medicine at the University of Pennsylvania, you've got PhDs, you've got the Beth Israel Deaconess Medical Center, you've got Indiana School of Medicine, you've got a bunch of commercial companies, Columbia University, the Broad Institute of MIT and Harvard, you name it, right? So, I mean, you can get anything done on Freelancer scales up from very, very simple work right through to very, very sophisticated work. And as you increase the prize money in contests or the project size, the quality and the sophistication of the Freelancers goes through. And you can see that this is only just the beginning of what is being delivered under this particular program. I think it's about $1.375 million of the $6 million. And you can see here there's incredible amount of innovation that's been delivered under this particular program. So we will increasingly be prioritizing innovation contests and applying them to governments and also the large enterprises around the world to deliver breakthrough innovation results. MyGigs got about 50,000 U.S. consultants on the platform. This has gone on for a long period of time, but we look like we're about to get into Europe and into Australia. The big thing here is really activating the external side of the marketplace. At the moment, they've really been focusing on the internal side. It's just very, very slow going because there's a lot of stakeholders on their side now ensuring success. So we're just inching forward slowly by slowly by slowly. But the great thing is that, we've got a platform which has gone through extensive QA, extensive review by compliance, HR, legal consulting, the other, and that's a platform that's learned from all of that to be able to be provided to other companies around the world. On the Escrow front, we had in the fourth quarter GPV of $217.9 million, which is up 15.1%. In U.S. dollars, it was up 14.2%, it was down for the year, but we had a good fourth quarter turning it around. Escrow as a business was profitable for the year. The GPV was $897.7 million, down 5.9% in Aussie dollars, a bit more in U.S. dollars. And if you look at the overall GPV trajectory of the business, we had that silly period in 2021 where in the 0 interest rate environment, you had some very large purchases being made, et cetera. But the trend is intact from pre-COVID. And the big thing we're really focused on now that we're throwing all our resources into is, we're about to go live in one of the largest shopping cart platforms in the world. The shopping cart platform will be the first payment method ever to be able to do large value complex transactions. It's a household name and the volumes here should be pretty decent, I would think. It really allows a new class of shop to go inside this shopping cart platform, and it has huge reach. So that's happening in the next month or 2 that's going live, and it'll be out there and we'll see the volumes pick up, hopefully from that. We've been spending a lot of time automating and streamlining our operational process and preparation for that. In terms of partner activity, we signed partner agreements with the Fortune 500 e-commerce platform and another with the NASDAQ, which is e-commerce platform. We actually have quite a few of shopping carts now. That can be a big focus to turn on, one after the other after the other, which is great. We've been doing pretty well with M&A marketplaces and brokers growing that portfolio. And in automotive, we've been solidifying a relationship with the eBay Motors and looking at expansion and getting into things like financing and so forth. And we also -- we're just at the NADA show, which is the National Automotive Dealers Association show, and we've got a bunch of automotive things that we're doing there. And I do think that the next 24 months, you're going to see the entire automotive industry go to thinking about payments and putting up their roadmap concretely. Domain names ease slightly in the end of the year. Domain names really track venture capital, financing, and that kind of dried up a fair bit. Although I do expect a big rebound to happen with AI shortly. And when it does so, it will pick up the high value domains and the lumpiness will kind of come back into the GPV. On the Loadshift front, Loadshift had a great year, phenomenal year. We had to transition from a bulletin board model to marketplace model. As of today, Loadshift just operates on the Freelancer enterprise code base. You post a job, you post a load. Drivers bid on the load. Freelancers bid on the job, put a milestone payment in, you release the milestone payment. The commissions are the same, 3% of the shipper side, 10% on the driver's side. We saw a big uplift in GMV for the year as we did that conversion. The number of loads posted eased a little bit, but it's hard to look at those numbers because we actually -- as more loads got awarded, the repost rate dropped. And we also banned a bunch of people who were freight brokers who were not basically paying through the site and so forth. But the number of quotes went up 220%. Liquidity went up massively, went from 1.5 quotes per job to 5.6. So it really is quite. And actually the numbers have been higher than that, actually closer to 8 in the last week or so. The percentage of awarded jobs went from basically 0% to about 22.8%. That number will continue to grow as we convert more and more of the loads to pay through the marketplace, in the marketplace model, and we produce more products and features -- features in the product to enable it to happen, particularly around things like the audio calling and so forth. And so, there are about 17 million kilometers post on the platform and about $4 per kilometer represent about 70 million in notionally posted volume. We're just trying to eat into as much as we can as fast as we can. Overall, the Group level, we made significant progress in extracting about $8 million of -- $8.8 million of cost efficiency out of the business. And in fact, it surprises me there's actually a fair bit to go in terms of what we can do in terms of cost optimization. There's always places you look where you go, wow, there's actually, we can reduce the cost there. So overall costs were 18% lower and as a result, the Group was EBITDA positive in FY '23. The Group has now structurally lower cost base and well in a position to increase that net profit before tax in 2024 and we will be doing so. We also fixed a longstanding problem we have with our OTCQX listing and this has been a, I don't know how on earth this happened, but when we originally went OTCQX, it's quite a complicated process. This is best markets. It's top ranked listing on the OTC on the U.S. stock exchange -- exchanges. But we had to lodge a share of stock and this is more of a ceremonial thing rather than an actual practical thing. And when we lodged our stock with OTCQX, we lodged one share of FLNCF, which is the OTCQX ticker. As it turns out, that was not the stock we should have lodged. We should have lodged FLN and none of the service providers working with picked up on that. And the listing worked fine for a few months and then just broke and we was completely at a loss to figure out what was going on there, until eventually we found out that without any notice, without anything being sent to us, without I'm being aware, it was because someone decided that the listing was not valid because the wrong stock was lodged. We finally fixed that, which involved going through a whole new listing again. But that was a bit of egg on face and I don't know how that happened. But that should operate a lot better now, and we've got some market makers -- market maker stock in the U.S. Overall, the Group had positive operating cash flow of $1.9 million for FY '23, which is a big turnaround. Negative $4.2 million the year before. And cash, capital, cash flows was $21.2 million, down 9.4% of FY '22. That should be going up this year. Now, what I'll do is, open up the Q&A to the audience. Please state your name and your question. And [ Alex Dory ], who's driving the Zoom, will relay on the questions. As always, you can address it to myself or anyone in the room. We've got Neil Katz, the Chief Financial Officer. I've got Andrew Bateman, who's the Head of Enterprise Product; Shaun McMeeken, who's the Head of Enterprise Sales and Escrow Sales; Adam Byrnes, who's the VP of Products and Growth; and Cohen Wisniewski, who runs Managed Service, as well as Loadshift and stepping for Drew today, who's the General Manager, sick, and also on the Managed Service side of Freelancer. So, please ask questions, and Alex will relay them to the team.

My name is [ Brandon McKinnon ]. I'm just wondering, you've talked a lot about all the improvements you've made to the Freelancer platform, but we're still down 2.9% on pcp.

Yes, that's a good point. We have made a number of improvements and we have made a number of funnel improvements. I think the big -- look, in my mind, and maybe, Adam, you can chip in a second, your thoughts about this is -- it's really about retention. And I hate to say something about the macro, but coming out of COVID a lot of people didn't want to work. And a lot of people -- I think we see the downturn in people kind of starting businesses. I see anecdotally amongst people I know that people kind of wanted to go and spend holidays in Europe or go skiing or this, that the other. I think generally there has been a -- we've been coming out of a drop. I think that's turning around. The beginning of this year, we saw our enterprise customers coming to us very early on for the year. In fact, we got a tender document sent to us on Boxing Day of last year. I think people want to work this year. I think people realize macroeconomically we're heading into reasonably tough times. Those tough times would be good environment for us for the 3 reasons I said previously. But the big thing we need to do is just increase the retention. I think we had some retention effects just from people just generally losing a bit of puff in terms of wanting to start businesses coming out of COVID really, that's, I think the big thing. Adam, I don't know if you want to contribute to that?

Yes, absolutely. Look, I mean, retention is a huge for us as a business is why is the #1 thing on the product focus? It's the biggest revenue driver, in my opinion. Really, it's about turning [ Freelancer ] from a painkiller to a narcotic. And really what we mean by that is, basically making the product a lot more sticky than where it is today. A lot of the time people come on, they post jobs, and then we perhaps don't provide as much value as we could towards the working portion of the job, like when the job is actually being conducted. And I think there's huge opportunity there for us, and we have been slowly working away at this for some time now, but there's a real opportunity for us to accelerate that. And in particular, I want to come back to what Matt was saying on the macro trends moving forward, which is around in the AI space. Particularly AI, as Matt said, every business really wants to put AI in their reports and filings and so on and so forth. But it actually is really fundamentally beneficial to us. We actually have real revenue opportunities, really deep problems that this business has faced for many years. For example, the one that we put in the report is historically, it's been impossible for us to design essentially customized project posting funnels. It's just been an intractable problem, right? There's about -- there's over 10,000 skills that we do work in on the platform. And historically, it's just been an intractable data science problem to try and build essentially a customized funnel for each of these, right? So we have this sort of very historically generic funnel. Today, with the introduction of generative AI, what was previously a completely intractable and exceedingly difficult problem is basically trivially easy, and you're seeing that now in some of the job posting process. But it's not just job posting. We can break projects down into tasks. We can estimate project budgets. We can basically create breakdowns and reminder schedules for projects. But we can pretty much now dissect a lot of the text input that we were previously getting and use it to create essentially micro revenue opportunities, right? Each one of those tasks is a follow up point for a client. It's a potential revenue opportunity as well. We can potentially associate payment with it and so on and so forth. So, I do think that unlike a lot of businesses that are just essentially just trying to get AI in their -- to ride the wave and for a trend, we actually have real hard problems that we've been facing for a long time now as a business that are now a lot easier because of AI. So that will be a huge focus for us next year. In my opinion, a big reason behind my confidence in terms of the potential revenue growth for FY '24.

Yes, I mean, the other thing I want to point out is, we cut $8.8 million out of the operating costs, $3 million of which was marketing, and the revenue is down 1.27 or whatever the number is. So the big focus really was just getting profitability up and sustained profitability and just making sure every month we got a nice healthy margin coming through because the macro environment changed. So that was really a big focus. So yes, there is a 2.8% revenue drop on the Freelancer side. There's also a $3 million cut in the marketing and $8.8 million overall costs. Structurally we're in a much better place in terms of the cost base.

Michael Chan asks, Upwork posted solid growth. Is Freelancer losing share? Or in the wrong market segment? How has the competitive environment for attractive jobs onto the platform changed over the last 12 months? What do we need to do to be ahead of the competitors?

Yes, I think as Adam said, I mean, I think that we will have a phenomenal year. I'm absolutely certain of it. I mean, the things that we can do in our products and I think we've got the ability to innovate a lot faster than our peers. I've got a lot of feedback recently from users of both platforms saying that, wow, actually Freelancer is a delight to use. And wow, some of these features are pretty cool. And I think we will double down on that. Obviously, they've raised a ton of money. I don't know how much money the total is now, but it's many, many, many hundreds and hundreds and hundreds of millions of dollars. And we are the underdog. We were the first to go public. We were first to get USD 1 billion market cap. I actually tried acquiring oDesk actually back in 2013, but they merged with Elance to form Upwork. But we did have a go at trying to buy them out when we were bigger than them. But this game is not anywhere near in the late stages, we've got 72 million users. I don't know what their exact user number is, but they got to 20 million years ago, they kicked off about 18 million to kick off all the low paid workers. Now they're back around 20 million. I think I saw some ads on Reddit saying they're about 18 million. Whatever the number is, let's say, it's 20 million, 25 million at a guess. You add up our numbers, their numbers, and the #3, and you're only adding up to about 100 or so million users, 120 million users out of 5 billion people on the Internet. And of the 5 billion people in the Internet, either you won't need a better job and that's the vast majority of people, or you need to get someone to help you get something done. So this whole space is just very, very, very early days still, and we're going to have a big fighting shot this year to try and grow our market share. But as I said, it's a tiny market. It's a market that I'm surprised hasn't grown significantly faster. But it is a complex -- it's very complex to deliver a service over the Internet compared to a product, right? So if you're selling a book, a book is a book and it's pretty straightforward sale. If you're selling services like a website, it's far more complex. So -- but I think we're in a phenomenal position. We got the largest workforce in the world. We got the largest low-cost workforce in the world. I think we're going to innovate -- out innovate and we haven't sucked down anywhere near as much capital to some of the businesses they have. We raised $1.5 million before going public. That was it total. And then the only money we've really raised since has been to acquire businesses. So we raised some money in 2015 to acquire Escrow and we raised a little bit to acquire Loadshift, right, and that's it, right? So I think we do have a very tightly held register. I think the numbers will turn. They turned quite a bit last year in terms of the profitability. I mean, as we said before, it's a momentous turnaround from negative $7 million to slight net profit before tax. And if we can double down on that and have that continue to grow this year, I think there's a very good, solid chance we'll grow that fairly well this year. I think that there will be a realization that we've basically built this entire business while being public with very, very little money and we're now in a position to actually start cranking it. And I think you're going to start seeing that in numbers real soon, to be frank.

Alan Wise is asking, any comments on improving the liquidity of the ASX listing or Freelancer?

Yes, so that is a big thing we're going to do. So we've appointed Marko Zitko to run Investor Relations and really start getting our activity together on that. I am doing Results Day in Hong Kong tomorrow with investors and I will do an Australian Week locally when I'm back. And we've got a number of things we are starting to improve on our IR program. I mean, liquidity, it is a tightly held stock and I do think the liquidity eventually does sort itself up as the market cap goes up, liquidity joins. I mean, I've heard the liquidity story ever since we listed, right? So when we're a $1 billion market cap, people said we weren't liquid enough. When we're at $100 million market cap, we're saying, it's not liquid enough. But eventually you get sorted once you kind of get the steady long-term growth in the share price. And so, that's what we're focused on doing now. Yes, I hear you, but we're doing a lot more on IR, so hopefully that will pick up a bit.

Ray Johnson asks, are there any developments with Escrow in the U.K. and Europe?

There's lots of stuff happening all the time with Escrow. Shaun, if you've got the things on top of your head, we've got -- the really big thing we're focused on right now is really getting this shopping cart up and running. And they've got customers globally, about 120 billion of volume a year from their shopping cart. That is the major focus. We continue to do transactions in Europe. We've had a long slog trying to get a license in the U.K. That's just taking forever and very, very, very painful. But, Shaun, can you mention anything else about Europe with Escrow?

Not so much there. Interest we're getting now is out of APAC. The interest right now.

Yes. And the automotive, the big one -- the big focus is, we've got 3 shopping carts lined up and they're 3 of the biggest and we're going to knock them off one after the other. And it's really automotive and M&A. That is really what kind of we're focusing at the moment, as well as getting the large value domains going and getting the checkout solution as slick as possible and automation in the back end process as much as possible. Any other questions? We'll keep it open for another few minutes for a question to come in. Don't be afraid. Or if you want to, you can also have it one-on-one with us if you contact us at Matt, [email protected]. Okay, another question?

One question. Yes. Any comment on what you think the shopping cart will do to Escrow? When is it coming online?

Yes, so this shopping cart has got lots of different payment methods available to it. It's a household name, you would know it, but we just don't want to mention the name until we actually do the launch date. There's lots of payment methods in that shopping cart. They've got default payment methods, and then they've got additional payment methods. Of the 120 billion of volume that goes through that platform, 55% of the volume goes through the default payment methods. This is credit cards and the like. The additional methods which you can add in based upon your geography or what you're selling, what have you, not a single one of them has large value payments or Escrow payments. It's a completely new paradigm. When we integrated, we had to spend a fair bit of time actually figuring out the flow with their product management team because obviously we hold money until the provision of a service or a product has been provided. So there was a new flow that they had to kind of build into their shopping cart. We figured that all out. We're now just doing the final stage of the merchant onboarding flow for sign up. Look, I don't know what the volume is going to be because it's hard to forecast that it's brand-new, but we've got many hundreds of requests to be in the shopping cart over the years. And it ranges everything from agricultural products through to reef fragments and automotive marketplaces and, God, so many different weird and wonderful things that people want to build stores for with their shopping cart. I think it's going to be game changing in a way as well for this particular platform, because you can't sell in their shops at the moment, items above $20,000. Because above $20,000, credit cards start to fail or it's quite expensive to put on the credit card. So there's no payment methods of large value, and we're going to take the ability for them to -- so they've got lots of different payment methods, up to about $20,000, from $20,000 to $100 million. They've got nothing. And that's going to be us. So I think, in a way, that platform, which is quite a well-known global platform, it's now going to mature and allow the selling of products and services at the big end of town. And so, who knows what the volumes will be. I think there's quite a good potential to get significant volumes. And as I've said, there's a lot of irons in the fire with a lot of the businesses that we have here. We've got the whole enterprise division on Freelancer. We've got all sorts of things happening. It comes to mind. Actually, we didn't mention one of the things we're doing for one of the foundational AI platforms, but we've got an engagement where working through a partner, we potentially going to start helping with the RLHF training of that foundational model. And so, there's quite a lot of ongoing work using Freelancers with native language capabilities all around the world, which could happen fairly soon. We've got a lot of opportunity with AI in the main marketplace and all the collaboration tools in the main marketplace. We've got all the enterprise customer work. We've got these shopping cart platforms, the automotive platforms, the M&A platforms, to name just a sub-segment on the Escrow side. And then we've got quite a lot of project work building up on the Loadshift side of the business, in addition to the kind of all that is converting the main volume. So there's a lot of irons in the fire, and I've always said, one of these irons in the fire is going to do a multiple of the total GMV of the existing business one day, and that one day may be getting close with a couple of the irons in the fire, but we'll see. And it's been a long work to get the platform really in a scalable position. We've done that publicly with no money, effectively. It's been a long slog to just get everything operationally under control. I think we're in that spot now where everything really is, got a good grip of everything. We brought the whole group to profitability in the last year, aim to build on that this year. We've done a big cost base, cost production, et cetera. So I think we're just now in a place where it's just time to scale, right? Time to scale, time to grow. And I think we're to start to see that this year. It's been a while coming [indiscernible], yes.

2 more questions. Ray asks, will remuneration ever be tied to share price and profitability?

Well, there is no LTIP or long-term incentive plan or short-term incentive plan. I wish there was, but there isn't one at the moment. So yes, hopefully one day, probably speaking for everyone around, we do have an ESP program, which staff participate in. Some staff participate in. I don't. But yes, something's bringing up with the REM committee, I think.

Alan Wise asks, Nvidia surging share price is often talked about as an example. We are in an AI inspired bubble. Most investors on forums and et cetera are not convinced Freelancer is involved in AI much at all and is not likely to be benefit from it. Do you have any comments on how Freelancer and its involvement in AI could be marketed as better?

Yes, we could mark it better. But Jensen Huang spoke before I spoke and basically laid out the whole thesis at the JPMorgan Global Chief Investment Officer Summit just before I came on. Let out the whole thesis why Freelancer will be the benefit of AI technology. I mean, AI is the great democratization of technology. It can allow someone with ordinary skills to become exceptional in a particular field. You can be average at copywriting, now you're exceptional at copywriting. You can be average at design, now you're exceptional at design. You'll be shortly average in programming, exceptional in programming. It's going to go through all the world of work. And he said -- he was actually with Modi and he actually said the week before and said that India is going to be the big winner of this. You can Google it. Jensen Huang with Modi, India is going to be the big winner because of the democratization of technology and enabling a low-cost workforce to use AI tooling to compete at the global scale at the elite level of talent, right? So at the end of the day, the proof is going to be in the pudding and just wait and see. But if you get anything done on Freelancer, you can just see that the Freelancers are all adopting the tools. They're probably one of the biggest adopts of the tools that are out there. And if you think about it, do you believe the thesis, yes or no, that every business in the world is going to want to use AI technology to revolutionize themselves? If you believe that thesis, and I think that's a fairly obvious thesis, who's going to provide it? Where are they going to go? Who's going to be providing those services? Transforming small businesses, medium-sized businesses and large businesses. Now, there will be a whole bunch of service providers doing so, but they're going to aggregate on our platform, right? Just like they did for web design, just like they did for app development.

Michael Chan is asking, how much is Deloitte contributing to GMV? Will this be a material contributor to profits? Please discuss other relationship you have and if any, will be material contributors?

Yes. So Deloitte is de minimis currently for GMV. When they get round to the point where they will pull the trigger, I think they will be material very rapidly. So where we are is, we built the platform. It's live, it's operating, it works. Projects are flowing through. Projects can go to either the internal marketplace or the external marketplace to Freelancers. The internal marketplace, that goes to Deloitte consultants. And that's where basically the vast majority of projects are going right now is from Deloitte consultants to Deloitte consultants. 60% of projects that go to the internal marketplace are eligible to go external. And in fact, we will show them to external and the bids will come in from external with a very highly better curated talent pool. And in fact, the number of bids coming in from external is much higher than the number from internal. Just the issue is that, with so many cooks in the kitchen and just being so cautious about slowly getting this operational, they're not letting projects go into the external marketplace other than a bit of testing here or there. At the point in time in which they do decide to pull the trigger. For example, I mean, the average project size on Deloitte is about USD 1,500 to USD 2,000, right? There's 50,000 consultants there, right? I mean, pulling the trigger and allowing those 50,000 consultants to post external, I think there'll be a few things happening. One, I think there'll be a big eureka moment because a lot of the consulting heads who realize -- before those that they realized it would cost them $40,000 to do something and cost them $4,000 to do something or $400 to do something. I think there'll be a big eureka moment on the profitability side. And the other thing is that, I just think that the numbers, I mean, 50,000 people have already been on boarded, right? It doesn't take very much if they gave everyone credit to post one project and everyone posted one project, it's 50,000x by $2,000. So $100 million of GMV if everyone posted a project now, probably you won't get everyone posting a project, but you might get 10% posting a project. So we've seen some forecasts from them in terms of what they wanted to do in terms of cost savings and in terms of GMV, but it's just taken a lot longer and a lot slower than we anticipated. But all the noise is a positive. It's now moving out of a think tank which was managing us to the talent team. The good thing about being managing talent means that when people join Deloitte that go through their hand that we trained from day 1 that they could use this marketplace to get jobs and to post jobs. It also means that we can scale across the entire organization globally. And the other positive things is the discussions we're having going into Europe and going into the U.K. and going into Australia. So it just -- this stuff sometimes takes very slow -- it's very slow to get going, but we're ready to scale when they're ready. So at some point, it will, I think, be very meaningful. It'll be one of those irons in the fire where the volume will come in and you go, wow, that just came out of nowhere. But it has been a very, very, very long slog to get here. Any other questions? Okay. Well, for a few more seconds to see if anyone's asked questions. Okay, last call for questions. 3, 2, 1. Okay. Well, thank you, everyone, for joining the FY '23 results. You may arrange a one-on-one by emailing [email protected] or myself Matt, M-A-T-T [Audio Gap]