Freelancer Limited

This meeting is being recorded. 2022 Business Update. My name is Matt Barry and I'm the Chief Executive. moving into each of the segments in terms of freelancer obviously we had a series of pretty awful macroeconomic events which deteriorated sharply from May initially we had the crypto crash took a fair bit of millennial wealth impression that we've got from talking to Also, we do believe that while If you look here, for example, at the number of projects posted, U.S. on freelancing. Again, as I mentioned a second ago, we're getting a hit this week at CNBC, it just didn't do last night on that. And so we are, you know, we are, we've got the press team, the PR team is firing, which is good. Now, getting into a little bit more detail on the core marketplace, because those projects are set up in the main non-HIME funnels. This is the funnel where people post projects, freelancers bid on them, they're awarded, they're accepted and so forth. And effectively what's happened is that over time in the last few years there's been a bug or a feature, I don't know how you want to describe it, where when you award the project to a freelancer, the freelancer will then say that obvious until we really merged into platforms where the freelancers are bidding the most. For example, the Android app platform, which is the last code base to be merged in. Now, these tools... very well-structured and organized manner using what's called an A-B testing framework. So we have quite a sophisticated framework that we've built that uses quite a lot of statistics and data science to know that there's actual, you know, it's not correlation, it's causation. That something we've changed on the website has led to a certain output popping in and it becomes a bit of a problem. Because when the real bidders come in, they come in a couple of minutes later, but then you've already seen all these bots come in requesting all the money up front and so on and so forth. So you have to solve this bot problem first. And it's a bit of a technology war because it's a bit like high-frequency trading where high-frequency traders People get in front of you really quickly trying to get that client relationship and then they try to fill out the back end. We had to solve that problem and we actually managed to successfully do it in a quarter which is great. You can see this graph here that it was previously within 30 seconds you had a little bit under 50% of the bids coming in. That's too quick to actually read and write a well crafted proposal. came in less than five minutes, but it's really a minute and a half. A minute and a half is where we've kind of benchmarked the fastest that a human can possibly read a brief, probably think about it and write a reply. Those bitters run affected, but we was being required. And we A-B tested this, and if anyone wants to follow up and go through the So for the projects $80 and under, asking for $80 up front is not an issue. We've left the site to basically whatever the freelancers want to ask, they can ask. But above that, when you start getting into the $500, $1,000 and so forth, it's unreasonable to ask for a huge amount of money up front because you've never worked with that freelancer before potentially and you just want to get going, put enough to fund the project and so forth. where we talked about what happened last year and so forth. I'm pleased to say that's well under control. In fact, the numbers are actually better than this now. But in terms of the return on investment for our paid channels, it's performing very, very, very well, and it looks to be reasonably profitable, which is fantastic. And right now, we're really just focusing on lifting the volume up in that paid channel, but it's looking fantastic. We have a great return on investment there. And we did this all while reducing our cost remain the same. I won't go into the detail, but we are improving We've basically made it now so that if you're a verified freelancer, you can actually record a video on your bid, which actually breaks through and actually creates a bit of empathy between the client and the freelancer. What was very interesting about this is that when we pushed this live, it lifted the award rate by a couple of percent across the board. So these are basically a scalper And shortly, when you log in and you see the news feed, you'll see a completely different We did all that through our design system, which is improving in leaps and bounds, which is fantastic. You can see that as you use the platform, it's getting better and better and better in terms of how things look and feel. And I'm very confident by the end of the year we're going to have a really good-looking product. And we also reduced a lot of spam on the platform. This is a bugbear that is hitting everyone at the moment. If you go look at the news at the moment, Elon Musk, We've been battling it like everyone else has been battling it, but we've very successfully Q&A to him, but the GMV in the third quarter for enterprise did grow 99% year-on-year, which is very positive. There's quite a lot of really big things happening here that I will talk about in a little bit of detail here, but if you want to get into the nitty-gritty. repair my computer or printer, automatically get injected into our website, and there's a whole workflow. There's a whole workflow where field service technicians will get out and out of the job, they choose the job, there's a map, they get tracked, they've got to take photos of the parts, they then go through a whole multi-step process. a little bit, but we're live at the moment in eight cities in India, going to 18. We're live in six cities in Indonesia, six in Australia, and two in New Zealand. That's also expanding. These are both regional and metro areas. Malaysia is imminently turning on. I forget the date on that, but it's literally imminent. And the integration will not just step up in order of magnitude, but actually quite a bit more than that. that are the overall break-fix jobs, and we will get a reasonable percentage of that. to buy, but I'll talk about that a bit later on when we get into the details. in January of next year, possibly before then, but... are looking to integrate. in terms of liquidity. What's also scaling is NASA. about 12-13 million has been awarded and we've won about 4.3 prior to the 6.7 million grant which has just come through. This is for gene editing. So we're looking at novel ways both in vivo and ex vivo of doing gene therapy in humans targeting the central nervous system and so forth. So you can see here this is about as high end a project as you can get. It's about as to Texas with our team, our NASA team. with NIST. There's a million-dollar task order right now to build a minority report style dashboard for instant response for NIST, et cetera, and so forth, Bureau of Reclamation and so on. So that's going to wrap up a lot. We've also just started as well exploring and going directly to these government departments after we've done work with them for a while. We've also been invited to bid on another around in-source for that, and that's looking fairly positive in terms of what we've seen so far. In addition, we've got a whole range of different clients. I haven't got the time to go through all of them on the enterprise side, but there's one called out here where there's commercials and program management work that's continuing with a €40 billion enterprise in Europe on energy. We also brought in And with the external pool already, so we're in the process of doing that right now. So that's all going very, very well, and it's more done here. There's a whole workflow, as I've talked about, in terms of how the field service technicians work. We're doing everything for this particular company, including recruiting the field services technicians, training them, quality control, on-ground management, parts warehousing and delivery, and routing, and all the logistics around that. The case tracking with the EEG integration, all of this photographs of Australia will be Friday slash Monday. India will be about two weeks after that in terms of being turned on with the EEG. There's a link there. And you'll actually see... of this panel. or any other one of our enterprise clients. Now, escrow in the quarter did have a fairly large drop in gross payment volume, but it had a very marginal effect on receipts. So the drop was 22% in US dollars, or 16% in Australian dollars, down to $200 million. And this is purely attributed to large value domains, basically transaction volume, over summer drying up, right? The pricing of those domains remains very high. looks like right here in terms of the GPV. It just hit June and you saw we've sold meta.com to Facebook, we've sold In addition, we made a number of things to improve In terms of partner activity, the one thing I will lead with was No solution is portable. But that is actually a negative thing that we had all this work, all this expectation and so forth. And explicitly, we haven't got a good answer out of AutoTrader about why they're paused. And we never saw a loan application came through. So it wasn't even rolled out into a pilot. So that was a negative thing. So what we've done with the sales team is the sales team now reports in all loads coming through go through the platform in the same way it goes through the enterprise versions of Freelancer and it's one code base. So LoadShift now benefits from all the updates as we do them on the core platform or for the enterprise customers, which is fantastic. In the quarter, we had about 8,000 So after three days, every single load was removed from the platform automatically and just rolled off. This is more of a board and board. And on the new platform, they're up to 30 days. So it's not really apples with apples comparison, comparing those loads in terms of the volumes. Since the platforms have merged, we've seen a good uptick in terms of The big uplift coming from this is about a million bucks a day of GMV posted on the platform. In fact, the number's gone up a bit because the freight charges have gone up quite a bit with the fuel charges. And the goal now, and I think the biggest area for growth for the revenue of the company, is converting that GPV of a million bucks a day, or gross load value, if you want to call it, to that 30% commission model. And that's really going to start kicking in from here for the rest of the year and into the first quarter in a big way. Now, with all of that, We've had also a focus on cost reduction. I know that was a comment and a bit of Q&A as of the last quarter. We successfully reduced in the quarter alone costs by $1.2 million. So we really, on an annualised basis, that'd be $4 or $5 million if that was an annualised basis. We will be reducing in the third quarter costs. We've done that because coming out of quarter, sorry the fourth quarter, and we will be profitable in the next quarter. We will be, and we'll keep a statement there, but we will definitely be profitable in the next quarter. We had a negative operating cash flow of $3.2 million for the quarter, and cash capital was about 2.7%. So what I will do now is I'll open up to the floor for questions and Q&A. So please ask your questions. You may address them to anyone in the room. I may remind you there's myself in the room, there's

Can you ask a question? Let me show you this next little bit so I can ask a question.

Our target date to have, this has gone on for a long time in the United Kingdom. We have Darren Grobner, who runs the compliance team, and we've got a head of compliance and MLRO in London. The application date for submission, we submitted earlier in the year, back in April, and there was some feedback that came back.

Yeah, the internal deadline, they were using two weeks to sort of do internal review, and it was submitted in early December, and we expect, because we've had quite a few dealings with the FCA already, and we've got a relationship manager, we expect the application to be fast-tracked once it's submitted.

is going in again in November. Airbnb went out there with Airbnb payments and started in 2015, the same thing we did themselves, and they still don't have the licensing in the US everywhere. They're still missing a bunch of different states. It can take five to seven years to get a license in many jurisdictions. So I know it's been a long time, but I think we're at the final end of the road for the UK.

At least it will be Europe. Thank you. Right.

Literally nothing. the road from Victoria to Queensland to ensure that the width of the vessel would actually make it through all the power lines, et cetera, and so forth. There had to be some power lines that had to be removed. We had to make sure it would take certain paths because there's a bridge in the way and what have you. Pilots had to be organised. Police escorts had to be organised. Permitting had to be organised. Lobbying had to be organised with actually the electric $79 a month prior to the Murray If there's an accident or a load's not tied down properly or this, that, the other, the ramifications are a lot more, a lot higher than they were in the past. And so, you know, both the shipper and the carrier needs the support that we provide in terms of assisting to make sure that everything goes through safety, security, and meets all the compliance standards and so on. So there is a lot of value there. We're going to build a feature, and you hit a button, it basically holds your hand up, and on the map of the world, there'll be a blinking little light, the GPS coordinates saying there's a truck available, looking for a back load, here's roughly where I want it to pick up, here's roughly where it's going to go. So we're going to reduce the number of instances where a driver is driving empty on the road, because when they're driving empty, they're paying for the fuel, but they're not making any money off it, and it's the bugbear of all drivers. They're very similar to the freer if we think there's a loading area matching and we need someone to take something and deliver it straight away. So there's a lot of benefits there, and the cost is marginal. 3% of the shipping cycle is nothing. 10% of the driver cycle, the driver cycle can factor that into their bid, so they know about that and they factor it in when they put their bid in. Yeah, so we're live in watches, we're live with Manuel and so forth, the various different parts of eBay.

Any other questions?

We are in the process of building a bunch of sort of marketing collateral for them. There's a really nice eBay watch video. We're in the process of building a nice eBay motor vehicle video that will go out to their users.

in each of these categories. Any other questions? B. Howell asks, can you elaborate in your confidence in achieving profitability next quarter? Is the confidence from revenue growth or more due to additional costs out? Yes, for both revenue growth and from costs.

Maybe I'll get Neil to add some colour to this as well. Yeah, as Matt said, it's from both. We've done significant cost reductions, so on that level we're... and expect another million in Q4 should reach that point.

So we are confident we will get there. Thank you. Any other questions?

ready to go for the volume. Gently how we've done it. But that will start really kicking through. There's a huge amount of upside there in being able to generate 13% from some substantial portion of one million GMB a day. And, you know, so all that combined, there's a lot of things happening there in terms of positive upside.

So, but it's hard to forecast. But the work is done for the majority of that in terms of the actual technical work, the engineering work that's done. So we're just reading down for the volume. Any other questions?

I don't know, Sean, if you've got any other comments around that at all. But, you know, we have a solution. The good thing is because it deals with private-party financing and most vehicles are financed and we onboarded the finance companies with us directly, you know, we are ready to go with that with other automotive platforms. So we will be taking it to them both in partnership with Blinker and we continue to do the work we're doing with our sales team independently of that.

John, anything else to say on that? We've got our most experienced partner manager on the team. She's in contact with Blinker and Autotrader on a weekly basis, and we'll continue to do so until we can resolve that situation.

Adam asks, is there anything happening with Estro Real Estate?

of the items in the compliance side of real estate.

industry. Any other questions?

Okay, well thank you for your time today with the 30-quarter business update, and if you'd like to reach out directly to either myself, Neil, or investor at grants.com to arrange a one-on-one, please do so. Thank you.