Freelancer Limited

Here we go. Hello and welcome to the Freelancer Limited third quarter of 2025 Business Update. My name is Matt Barrick. I'm the Chief Executive and Chairman of Freelancer Limited. Today with me in the room, I have our Chief Financial Officer, Neil Katz to my left. I have Andrew Bateman, who's VP of Product, as well as Adam Burns, VP of Product. but the strategy and product management side of things. I have Mas from Loadshift and from the Field Services Division of Freelancer and August Pial from escrow.com. And as always, at the end of the Q&A, you may address your questions to any of the executives in the room, or you may follow up if you'd like to do a one-on-one by emailing investor at freelancer.com. In the third quarter, which was the Northern Hemisphere summer quarter, so usually it is a little bit quiet, Group GMV was down 22.5%. That's primarily due to a single 50 million US dollar transaction that we lacked from the third quarter of 2024 from escrow. The freelancer GMV was up a little bit, 4%, almost 34.1 million. The escrow GMV lapped, obviously, that large transaction spike. And I will say, actually, we're looking at a reasonably large transaction happening in the next quarter. So you may see a reversal of that in Q4. Group revenue was basically flat at $13.8 million. The free answer revenue was at $10.1 million, was down 2.2%. And the escrow revenue was up 2.9% at $3.2 million, even though we lapped that single transaction spike. The group continued to achieve operating profit in third quarter 2025. And as I've mentioned previously, for the last couple of quarters, we aim to continue to produce profit in the business from here on in. Operating cash flow was $1.6 million. Again, continued to be positive. And across the entire year, cash flow was flat at $0.3 million and cash and cash equivalents was $25.6 million down a touch on the first half. And the last two is primarily as a result because we're buying back a number of shares in the load shift business. And we have basically increased our stake to 73.4% in the quarter. So overall, it was a stable third quarter result during the Northern Hemisphere summer, which is a quiet period. Group revenue of 13.8% was broadly in line with the prior cross-spending period, and there was a modest growth to escrow, partially offsetting a softer performance at Freelancer. While the GMB declined by 22.5% to $216.6 million. This is largely due to cycling a single large IP address block that we transacted in the third quarter of 2024. And as I said, we have a transaction that's going to go through in the fourth quarter. So you may very well see that spike reverse in the next quarter. Experience at GMB grew 3.9% in the period. Group continued to be operationally profitable. So getting down into each of the segment reports, we added 1.86 million new users in the quarter, which is down 4.1% versus PCP, and so 171,000 new projects in the marketplace. The average project size continued to grow up. There is a typo here we just detected, which is it's up 17.8% on the quarter, not on the year. On the year, it's actually up a much higher number. So it's currently at US$395 per job, and that includes the enterprise customers and the load shift division. This metric has basically doubled over the last five years, representing a significant lift in the sophistication and quality of work done through the marketplace. Liquidity is one thing that is really standout at the moment. We've got record high bidding activity of 57 bids per project. And the contest activity is actually quite ludicrous at 107% up on TCP. So we get on average about 846 entries per contest. We actually just did a quarter, took some steps to reduce that a little bit by limiting the number of entries that can be done on a free account. And we probably will continue to take some steps to continue to limit the number of entries in contests. A lot of this liquidity has been driven by, as I reported in previous quarters, by AI. Not only are the skills of all the freelancers lifting quite dramatically across the board, so it doesn't matter if you're an average copywriter, you can now be exceptional with GPT and so forth. If you're an average illustrator, you can now be exceptional with mid-journey and so on. We were seeing also work being submitted quicker as a result of AI, and that's basically coming through in the form of liquidity. This is a graph of the average project size over time. You can see there it's really been lifting quite strongly since 2020. and continues to grow i do think we can still add a zero to the end of this um you know if you've got a um any employee and you're a western company anywhere around the world uh you will probably be paying at least 45 000 us dollars a year for their salary so a 390 us dollar uh project um is still only one one hundredth of what a full-time staff member would cost so i think there's quite a substantial uh ability to lift that and we actually have something quite a number of things actually coming up quite big before the end of the year and into the new year, which I think will move this number quite significantly. In terms of acquisition of new clients, in the first 28 days, the cash coming in was up about 7.6 over the quarter year on year. You can see that in the red line moving average. We primarily have been achieving this through funnel conversion and AI personalizing the experience, et cetera. There are actually five further enhancements we're pushing out between now and the end of the year, which should drive this number up a bit more. We did have a few delays over the quarter in getting a few of these things out, but two of the five are currently in AB testing and actually testing quite positive. And so we should hopefully have some good numbers to report between now and the rest of the year on the acquisition front. Some of them will also, I think, lift as well the sign-up numbers and the activation numbers through the business. The GMV for new clients similarly trended positive for the majority of the year and also flowed into all client GMV. You can see that pretty much over the entire year, we had positive GMV growth in the freelancer business for new clients. And you see, likewise, that was starting to flow through a bit into all clients in the business. Obviously, we want to get these numbers substantially higher from where they are. But, you know, we're getting there slowly as we kind of push out these enhancements and continue to improve the site. AI-related jobs really started taking off in the last quarter. It is off a low base. We've got numbers there on the left-hand axis in terms of the GMV contribution. You see it's quite small to start off with, but the growth figures are pretty astronomical. And so in addition to clients posting a whole expanded range of AI-related projects, we also have the freelancers, as I mentioned before, becoming more and more capable and their skills lifting dramatically with the AI tools. So we are seeing liquidity improvements, we're seeing quality improvements, value for money improvements, et cetera. So we'll see where this trend goes. I do think, and I've mentioned this in quarters before, that there are certain categories of work that I think will completely be transformed at a very, very large scale. worldwide for business. One category of work is AI agents answering the phone, taking order, processing a credit card, making a booking. That's starting to creep through. In fact, we've got an EDM campaign going out as we speak. If you're assigned at the freelance, you might get it in your inbox in the next few days. But we'll see whether this trend continues at speed and how far it goes, but we are starting to see a big pickup in AI-related jobs, which is very interesting. And this has a breakdown of the types of work over time by segment. We've also got a new brand team on board in the company, and we're working through in the January of next year, you'll see a whole new fresh look and feel right across the marketing and the product for the business. And we're pretty excited with that team. And we do continue to be the number one platform in the world for customer satisfaction, driven by 24 by 7 by 365, 20 language multilingual support team. We ranked 4.4 excellent on Trustpilot, over 17,000 reviews, which is a very, very difficult thing to do because most people that go to these review sites are angry customers, not happy customers. So it's very, very hard to maintain that. It's also very hard to maintain a high rating because we also get reviews if the end freelancer doesn't do a great job. So not only do we have to do a good job as a platform, but we also have to ensure that the freelancers do a good job. So this is a very hard number to achieve and I think it's props to the whole team. And likewise, we're 4.7 out of five in SiteJava. And you can compare us to any of the major competitors around the world, and they're nowhere near us in terms of customer service. And that's through a determined effort that we put in over many, many years. In our enterprise division, we've got a couple of things happening. It's early days, but we've just started a partnership with a trillion-dollar global cloud compute platform to provide access to 18,000 small and medium business customers with the ability to provide services to integrate the products that this company produces at a cost-effective budget. Not everyone can afford an Ernst & Young or a KPMG or a Deloitte, a level consultant to come in to do major cloud architecture and infrastructure deployment. We have the talent that's able to do that. We've got work underway for a limited set of services. We're doing that in a very cost-effective way with a curated, vetted pool of talent. And we're already starting to provide that work to end customers. So it's just begun, but we're pretty excited. And it's a very, very big company that, obviously, the more that we can provide this sort of functionality, the more they can grow in the small to medium enterprise segment. We've also had concurrent investments in platform automation and some AI capabilities to strengthen and strengthen the infrastructure to support our growing demand. Specifically, we have a whole bunch of work around quickly marshalling freelancers with certain demographic capabilities that we may not naturally keep in the database or on sign-up. curating, qualifying those freelancers and then supplying them credentials. And one area we need to supply them credentials for is a long-standing partnership with a major provider to one of the top AI models out there. And in order to be able to do that at scale, we've got to be able to provide credentials to be able to log into the platforms at scale because there's limited pools of those due to how it's all been set up. And so right now we're being paid to do this work. We're halfway through it. Delivery on that will be before the end, is that correct?

The next batch will be before the end of the year, and the rest are in the first quarter.

Yeah, so between the end of the year and the first quarter, which will allow us to not just marshal candidates for things like RLHF training for large foundational models, but get them actually qualified and credentialed so they can actually log in and start doing work quickly. We've been doing this in a very manual way up until now, which we've shown we can marshal 20,000 freelancers qualify them and get them available for work, but the bottlenecks have been coming in with the rest of the workflows. So we're really working on automating the rest of the workflows so that we can not just marshal and curate them and get them all ready, but we can actually provision credentials so they can get on the platforms and start working. And then after that, we'll be doing a number of things to monitor the progress and do remediation training or kick people out of the training, out of the working pool and so forth. But this will be useful, not just for generative AI work, but also a range of other customers. Field services is a bit of a standout. In fact, just coming in here this morning, I signed the first contract that came through in field services from a new Indian division. There's a flurry of activity there across a whole wide range of field services activities, whether it's, you know, your conventional repair maintenance installation of equipment and infrastructure or computer equipment, et cetera, or, you know, Now we're looking at things like seller installations and other networking as well as in the field sales at scale with thousands and thousands of freelancers selling products and services. So I'm pretty excited to see where this goes. We've got a small but a very, very effective team there in our Bangalore office and it seems to be the most limitless opportunity there. We've done a couple of tours, multi-city tours. Earlier in the year reported we did six cities. We did two cities just recently, and that yielded a pretty good opportunity with the FinTech platform, which will supply over 5,000 field professionals for vendor product distribution across the market. And that office will basically continue to house regional business development operational teams doing outbound sales initiatives. Very, very effective team. And I'm pretty excited to kind of see where that goes. With NASA, continue to go ahead with the obviously the expanded program. It's now a $475 million US dollar program that was just upsized before the government shutdown. We have quite a number of initiatives that we did payouts on over the quarter. It's about $700,000 US dollars worth of money that was distributed across the targeted challenge, which is gene editing on the central nervous system of humans, which is now moving into the field in large animal trials. So it's pretty amazing that we do work as simple as, you know, $10, you know, fix up jobs for coding right up to $10 million Australian jobs, you know, involving gene editing in the central nervous system of ultimately humans. We also did some prize release for sustainable business model challenge, a data science challenge. And then we had a very broad mass market, one for kids, getting them interested in space. And we got some great video footage with the astronauts promoting basically the challenge and by virtue of that, freelancers. So we're pretty excited about that. There's a flurry of proposals that we have applied for that went in before the government shut down. And our understanding is there's quite a number that have backed up. So as soon as the Democrats agree to let the funding continue in the US government, this is going to spike quite dramatically. We also are running a program to help with a problem that all governments have, both at the state and federal levels around, or national levels, around getting people off unemployment benefits and into the workforce. The only way to do that is through micro work in the cloud. We've continued to work with the Bahrain TAMKIN initiatives. That actually has received very, very high satisfaction and scoring levels from the participants. And that continues into a new phase. And we'll hopefully expand it over next year as well as go to other countries. In terms of Astro, the GPV always go about 25%, but as it's before, that's due to a $50 million transaction spike. As you can see here, the GMV for Astro is very lumpy over time as these big transactions come in and so forth. We're working pretty hard to build a great checkout solution for more generic shopping cart and platform and marketplace infrastructure. We have that deployed in a number of customers. We have a pretty solid pipeline. Very happy with Elliot and the team that they're really driving that. We also have the Shopify engagement, which is just going slowly, but surely we have a live golden transaction through that now. And we've been incorporating all the feedback to basically make it as a slick experience as possible, because obviously there's very high potential there in terms of transaction volume. We continue to onboard merchants and get them into the program. We really did spend a lot of the quarter on infrastructure. So working on improving our underlying payments infrastructure, we've expanded our support to 24 by 7 now, which was a very, very big step forward, which was necessary before we could really roll out heavily with the checkout infrastructure because you need to provide 24 by 7 support if you're going into merchants and platforms that do 24 by 7 support. operations and activities and support as well. So that is now live and we've managed to transition all of that to new leadership and we're pretty excited by the team and kind of how they're performing. We also have been building in real-time payments. So there's new banking infrastructure in the US that will allow payments to be instant. I know that to those who are in Australia, that may seem quite strange that it's only coming out now. But this is pretty revolutionary for us across all of our businesses. One of the reasons why credit cards are so popular, for example, with freelancer and other parts of businesses, because with a credit card, the payment is instant. Now, the problem with a credit card is you have chargebacks and reversals, which are Sometimes it interferes with the integrity of the milestone payment system. If you're holding a milestone payment for the delivery of a website, for example, and someone issues a chargeback, they can sometimes circumvent the dispute resolution process that we have in place and the arbitration and so forth. With real-time payments from wire transfers, the money will be received instantly. And so you get that instant gratification. You get moving with your project or your purchase, but you don't have the issues of reversible payments, which you have not only with credit cards, you have it with ACH, which is the US traditional banking infrastructure payment system. So we did a lot of infrastructure work in the quarter. We expanded our banking relationships and we've designed the system to be more modular so that as we integrate new payments capabilities in the future, it'd be quicker to do so. So a lot of fundamental work there. The other thing we're doing actually is we're, um there's a lot of synergies that that we can actually take advantage of between the freelancer and the and the escrow platforms just as we did with freelancer and load shift and so we are uh on an architectural level bringing the platforms just started to bring the platforms closer together which will uh not only increase the velocity at which we could deliver product for escrow it will also mean that um we build something once and it's usable everywhere. So for example, if you KYC with Freelancer or with escrow, you will be KYC across the entire ecosystem that we have. So you won't have to do that more than once. So, so there's, there's, you know, it's gonna be cost savings there. This is going to be velocity improvements here and also overall product quality improvements, because we do have some fairly advanced infrastructure running on the Freelancer stack. And escrow has great infrastructure on the payment side, but not so good on the rest of the consumer side of the stack. So there's been some good improvements there. We also have effectively tripled the size of the engineering team over the quarter, or at least we're at double the engineering team now. we're going to triple. So they're working on the hiring for that last leg. So we'll get a lot more velocity in terms of the product development for that. So we're pretty excited about that. And again, as I said before, in previous quarters, we've got our fifth year of profitability for escrow. So we're going to be starting to pay tax in this business, which is a first world problem to have, but it's also a good problem to have. It shows how mature we are in terms of our ability to share our profit in this business. In the new verticals, We've got a whole bunch of integrations going on across a wide range of different customer types. It ranges from physical goods, luxury goods, services marketplaces. We have regulatory credits work happening. We have integration in a large registrar for domains and so forth. Maybe August later on, you can mention a couple of the businesses, but I think we've got a pretty good pipeline We did a bunch of co-marketing in the quarter. There's a global luxury program we did some co-marketing work with. It operates in 59 countries and has 5,000 real estate agents and 90 offices. As I said before, we can do real estate in many of the jurisdictions we operate. So we're starting to slowly inch into that. And another one of note, which is a bit different, was Pitch Capital, which is what they call themselves an AI-powered capital raising platform. And we did a co-marketing with them. And so forth. Domain name transactions were up a little bit on PCP. And AI ventures have continued to capture a large share of transaction activity in the quarter, while many other digital asset categories tempered by the mixed sentiment. So we continue to dominate domain names. As I said before, we've gone to 24 by 7 customer support, which was a lot of work across voice, email and chat. And we moved this across jurisdictions as well. So we have that now headquartered in our office, which is a spectacularly well-run support centre. But it did take a lot of work to move that across. And we also have a global now management structure under Tony Yang now. And that's headquartered in Vancouver, offering all the white glove and account management support for our customers. In terms of load shift, the platform actually did pretty well in the quarter. We had our strongest operational periods to date. September 2025, we achieved record monthly revenue. The quarter was up at 15% on PCP in terms of the revenue. In September, it was up 25% year on year. It was also profitable in the third quarter, small profit, but it's great to get the business in that position now and to build on it. Job postings were up about 7%. Award rate was up about 28%. There's a little bit of an uptick there from the deployment, the calling that we put into the platform. Total jobs awarded were up 11%. Delivered loads are up 8%. And the carrier engagement remains strong with that two quotes in the first hour at about eight overall, nine overall. The 11.3% increase in jobs awarded combined with high delivery completion rates demonstrates better matching between shippers and carriers, driven by recent platform enhancements and operational improvements. The big thing was really deploying a much more robust audio-video calling system across the platform. And from here, we are continuing to roll that out. We are continuing to write upgrades, particularly to the app. We've deployed a new phone system which allows us to transfer calls very easily around between all the operational people. across different countries which will be integrated in the app and we also are now in the process of integrating in much better real-time tracking of things as a freight as it moves around the place which I think will be very very interesting. We also built a dashboard for enterprise which we put in front of a couple of our enterprise customers they're quite excited about And so our big three next areas for focus will be really that widespread adoption of calling, enhancing the streamline and the carry-on boarding experience, and really on the tracking on the freight to improve visibility. You see there's big proofs of the product. So overall, at the group level, we continue to deliver operating profit in the third quarter, reflecting improved gross margins and disciplined cost management. Operating cash flow remains positive at $1.6 million. Cash-in-cash equivalents increased to $25.6 million, which were up 18% year-on-year slightly down in the last quarter because we did some stock buyback of load shift, which I said before, we got to 73.4%. The financing cash outlays total $1.8 million, consisting primarily of lease payments for office premises according to the new accounting rules. And there's a little bit of an outflow in relation to acquisition of load shift shares. And we have a commitment to each quarter for the next couple of quarters to do a similar outflow just to pay for that increase in ownership of load shift, which I think is a prudent investment given the business is doing very, very well and we have a very bright future for it. So there's about 1.2 million to be paid over the next nine months for that. As of the 30th of September, the company held $25.6 million in cash and cash equivalents. Looking forward in the fourth quarter, the key focus for Freelance will be to continue to enhance the marketplace engagement. So we really want to lift the acquisition numbers up to the 20% plus year-on-year. As I said before, there's about five enhancements that are going out between now and the end of the year in order to drive that. Two of them are already in A-B tests live on the site right now. And there's another three that are in the pipeline. I think we will see some very, very significant bumps from these. The two that are in AB test are looking quite positive. I don't know if anyone wants to ask any questions about that, but they're looking quite good on awarding and cash coming in, et cetera. And we also have... some very, very neat things around retention that Hadley and the team are working on that I think are going to be pretty groundbreaking and no one else has done yet in terms of this really bumping up the sophistication and the complexity of the jobs you can get done on the site. We continue to really deploy AI everywhere. We've got AI agents on the site now doing support, doing sales, doing operational work. We will continue to double down on that in a big way. Francis and the team are doing a great job there. We're expanding our financial infrastructure and our payments infrastructure, as I mentioned previously, with things like real-time payments, which is, I think, a groundbreaking new technology available in the US. We're right now overhauling our PayPal infrastructure, for example. in the payments team on Freelancer, which I think will take it to the next level. And we're also integrating local credit card processing in a major country, which I think will both drive a much bigger lift in conversion as well as revenue, as well as custom costs. So there's quite a lot happening on the financial side of things. And then really on the operational excellence, we just, you know, reliability, quality and performance. We, We did make very, very big strides this year in the systems engineering. We have a new leadership under Tom Ellis there. In fact, on that leadership front, I will say that in the quarter, we did spend a lot of time onboarding new leadership across quite a number of different areas and bringing them to speed. So as I mentioned, Tom Ellis is the new guy in charge of systems engineering. We have Ed Wong, who came from HeroX, who's in charge of sales out of the Vancouver office. We have Tony Yen, who came in new and he's in charge of account management out of the Vancouver office for escrow. We have Jason Chin, who is the product manager for LoadShift. Michael Saraba, who's in enterprise on product. We've got the whole India office, which was new. We've got the whole 24 by 7 company. By 365 support team and payments team under Dean in escrow in Manila and Owen Smith has come in to lead compliance. There was a lot of onboarding and bring up to speed, a lot of senior management. And as I said before, we're expanding quite a number of teams, not just the escrow support team, but also the escrow engineering teams, the account management for escrow teams. et cetera, so forth. So, you know, there's quite a lot of leadership building that happened over the summer quarter. And, you know, as I said before, my goal was to achieve at least 500K per month operating profit consistently as an ongoing basis. You know, kind of when they're on the operating side, now I want to get it across to the actual profit and EBIT. So we will continue to work on that. So I will now open it up for questions. And as I said previously, you may direct your questions to myself or anyone else in the room. We have the chief financial officer. We have the two VPs of product for freelancer. We've got the head product for escrow, as well as on the freelancer side and the low shift side, we have Mass here representing field services, as well as low shift. So I'll open up to the floor for questions and maybe Liam, you can relay to me any questions that come through in the chat. You should take a minute or two for people to come through. Andrew, anything to say in the quarter while we're waiting for questions to come in?

Yeah, I think you kind of highlighted the partnership with the platform provider I think is a key one for us going forward to this quarter. As you said, we just started seeing the first inflow of clients from that and I think it's something we can really build upon that particular relationship but also expand that into other providers in a similar industry but also across different industries as well. I think the model that we're running can work for both very large customers and also kind of uh you know new startups in the marketplace as well looking to build out a special ad pool and freelancers to help uh drive usage of the products that they're building okay and adam um any comments at all about the the quarter or quarter to come in terms of particularly uh client acquisition uh or attention yeah and again you sort of covered the basics but i have a number of key key really

flow um i think that'll be very impactful i've personally played with some of the demos for it i think it's uh the big step step step forward um outside of that i'm also pretty excited about some of the stuff we're doing on the retention front um particularly a um a marketing campaign that we'll be launching soon uh probably probably the first quarter of next next year as part every single year trying to ride the seasonal high, I guess.

Yeah, and that usually starts in the first month after New Year's. Yeah. And I was very pleased, Mass, to sign the first contract coming out of the India office. Maybe some comments about that and the greater field services work that you're doing?

Yeah, I think we've got quite a large number of clients in that field space. The one that we signed today, just as a pilot initially, is 1,500 freelancers doing 10,000 volumes around artwork. That's just the pilot period. So definitely the grub in the back of that. I think the Indian team are doing really well. There's a lot of opportunity in India. We found a few strategies internally with Neil around how we'll capitalize and commercially get these contracts up and running, which I think we're quite confident with. So I think, yeah, there's a lot of potential here. Some of the roadblocks we've kind of opened up. So we're looking forward to the next few months on really getting this back up. We've got our first field engineers out in the field now as we speak. This week's a little bit rough with Diwali, but next week they'll be back out in the field. But yeah, looking forward to getting that engagement back up and running. And load shift? Load shift's doing very well in our record profit months. The team's doing really well. Currently, they're in Darling Harbour at the iMark exhibition doing a stall and getting some leads from the enterprise area. I think the team are really running really well at the moment and hit their stride. We're making some operational changes and tweaks internally to try and drive performance even better. Norbert's on the escrow.

We've always got a very healthy pool of large domain name and marquee domain name sales. The account management team is constantly facing some very exciting large deals. Outside of that, in the marketplace space, we've got a lot of integration in play and a lot of them with high volumes. We're talking B2B marketplaces, inventory goods, luxury items. Some of the integrations have very high potential. We're looking forward to next quarter, acting on that revenue. The account management team and the sales team have done a brilliant job of getting that to the door. So I think we will see some uplift as those integrations complete, as well as the hardening of our payments infrastructure. There's a lot of work going on there beneath the surface just to make that seamless and the automation required to continue to have the business just operate.

Okay, I hope by now, Liam, there's some questions. No questions? Everyone's quiet. Okay, well, if everyone's too shy for questions, you may, as usual, follow up with one on one. Here we go. This one from Doug.

Do you want me to read it? Yeah. So Doug says, we had GMV uplift in the freelancer marketplace, but this didn't translate into revenue growth. Can you elaborate on the reasons behind this lack of correlation and leverage?

I think it would be because of enterprise and going through the summer quarter. Would that be correct?

Yeah, that's most likely the case. I mean, the monetization percentage does vary slightly quarter to quarter as well and is enough to sweep. I'm happy to confirm that for you if you'd like. Okay. Any other questions?

Okay. Well, you may always follow up as I said before at investor or at freelance.com to arrange a one-on-one at any time and we'll be happy to take your call and or do a face-to-face. Thank you again and I'll see you at the four-year results next year. Thank you.