Some other members have put out some interesting content on them recently, well done to @Magneto and @WINGMAN.

I wrote my thoughts on their latest quarterly for a rich life here :https://arichlife.com.au/4-strong-fy24-q3-quarterly-cashflow-reports/

Here's the post

Airtasker Ltd (ASX: ART)

Airtasker is a name likely familiar to anyone who’s ever enlisted help assembling the difficult IKEA wardrobe or other odd jobs around the house. While I’ve yet to cross paths with the elusive “trampoline whisperer” reportedly earning $10,000 a month assembling surprise gifts for kids (Source : Daily Mail), perhaps I’ll encounter them one day.

Operating in the gig economy, Airtasker connects users with skilled individuals for various home and office tasks.

Historically, what has given me pause about the company is the inherent difficulty in successfully navigating online labour marketplaces. A prime example can be found in the locally listed Freelancer, which has struggled with unattractive unit economics despite its longer tenure as a listed business. Its long term share price performance has been disastrous, making me cautious of Airtasker. 

The other challenge is that we’ve got some very big gorillas in the space such as Fiverr and Upwork who could be considered to be potential competitors.

But Airtasker has grown in its niche of odd jobs and what I liked about their quarterly report is that their metrics are improving without a doubt.

The March quarter had also marked their strongest performance last year, indicating positive seasonality likely working in their favour. This year, it translated into a nice outcome of $2.24 million in free cash flow, defined as operational cash flow minus investments in IP, and subtracting lease liabilities as well.

You can see how the free cashflow has improved over the last seven quarterly reporting periods, below: 

As pleasing as it is to see the positive developments on the bottom line, we quickly notice the top-line appearing to flatten out. 

I’m also not expecting cash to start gushing in now, given the company is telling us “Given the strong 3Q24 free cash flow result, and with northern hemisphere seasonality peaking in 4Q24, Airtasker expects to accelerate international growth through investment in a number marketing initiatives during 4Q24.” 

As demanding as this sounds, what I would like to see from Airtasker is the continuation of positive cashflow results, even after funding growth. There is no doubt the company is led by a motivated founder, but the plan seems to be to operate around breakeven while the Australian business funds expansion in the UK and USA. 

While there is therefore every expectation that the company will only hover around breakeven, if it can even modestly grow free cashflow while also boosting revenue from the nascent international operations, then shareholders would be on to a winner.

Posted about them in my weekly newsletter. No comments on them yet from half-yearly so thought I would share here. Link here for those interested.

Airtasker impressed no one with their beautiful slides and 57% revenue growth. 

Because, if we were going to look at growth, then we would want organic growth that factors out the Oneflare acquisition. As you can see on the slide, this came in at 23%. This in itself is pretty good, but the price to achieve this seemed significant at a high-level. 

A loss of A$7.7M is scary in this environment, even for a company with A$23M in the bank. 

The acquisition of Oneflare means AirTasker’s cost base is now inflated given more staff increasing. 

The interesting commentary was on parts of the costs which aren’t expected to scale over the future:

• “The Oneflare staff investment accounted for 47.8% of the movement against pcp. 
• The balance of the increase was due to the lower rate of capitalisation of platform development expenditure which was down 62.7% on pcp. The reduction reflected a change in process and the fact that the engineering and product teams invested more time in non-capitalisable activities during the half-year, including the new Airtasker branding.”

It seems questionable to invest so much in branding in this current environment, but it is true that the new website feels more user friendly and easier to navigate. 

For airtasker, monitoring future growth will be key to understand if there is indeed an added network effect value that came from Oneflare. 

What I like about them is the transparency in the announcements; they didn’t shy away from saying that the growth was in part due to a weaker comparison given last year was impacted by Covid. 

I was also pleased to see the CEO pictured on slides with users. This means the company may well have the mentality of talking to their users and improving the product on the right direction. That’s bonus points for me.

So let’s see what these guys can accomplish in future reporting periods. If growth continues and operating leverage starts to cross the chasm, then this may become a different type of company.