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Australia – Freelancer FY 2018 net revenue returns to growth while loss narrows

18 February 2019

Freelancer (FLN: ASX), the Australia-based online freelance platform, reported net revenue for the full year 2018 of AUD 51.9 million (USD 37.1 million), up 3.1% when compared to the same period the year before. The 3.1% increase in 2018 is a return to growth after full year net revenue for 2017 fell 4.6%.

(AUD millions) FY 2018 FY 2017 Change FY 2018 (USD millions)
Net Revenue 51.9 50.3 3.1% 37.1
Gross Profit 44.2 44.1 0.2% 31.6
Gross Margin 85.2% 87.5% N/A N/A
EBITDA -1.3 -4.7 N/A -0.9
Net Profit After Tax -1.5 -4.8 N/A -1.0

 

The group said FY 2018 revenue growth was impacted by a drop in its “core desktop funnel”, driven by the introduction of “1-click” funnel, which has been reverted but has held revenue back. The group also stated that memberships as well as initiatives to improve quality and Net Promoter core came at the expense of short-term revenue impacts.

Net revenue included Freelancer revenue which stood at AUD 44.7 million (USD 31.9 million), up 2% compared to the previous year, and Escrow revenue which stood at AUD 7.2 million (USD), up 12%. As its name suggests, Escrow is an online escrow service for e-commerce sites which holds payments for goods or services until a transaction is successfully completed. Freelancer acquired Escrow in 2015.

Gross Payment Volume for the full year 2018 reached a record high of AUD 740.6 million (USD 529.5 million), up 26.0% compared to the previous year. Gross Payment Volume is calculated as the total payments to Freelancer and Escrow users for products and services transacted through the Freelancer and Escrow websites plus total Freelancer and Escrow revenue.

The group reported fourth-quarter cash receipts earlier this year of AUD 13.3 million (USD 9.6 million).

Freelancer said FY 2019 will be a growth year for the Freelancer and Escrow segments.

“For Freelancer.com, marketplace health is improving and growth is returning to trend. We are excited in particular about the build out of collaborative tools, usability improvements, mobile, performance, managed service, API (Application Programming Interface) and enterprise offerings,” the company stated.

“For Escrow.com, FY18 was one of the best years ever for gross payment volume growth, we are highly optimistic about opportunities from the new Escrow.com API and ecosystem we are developing around this API,” Freelancer stated.

“We planned to increase Operating EBITDA to above breakeven in FY18, but were slightly under due to one off compliance and regulatory costs as we near completion of our US licensing program,” the company stated. “We will do so in FY19.”

In trading today Freelancer shares closed at AUD 0.64 (USD 0.46), down sharply to 8.57% on the day and 72.97% above the 52 week low of AUD 0.37 (USD 0.26) set on 27 February 2018. Based on its current share price the company has a market value of AUD 317.48 million (USD 227.0 million).

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