Freelancer shares fall on currency tailwinds, lower website ranking

Freelancer shares fall on currency tailwinds, lower website ranking

Freelancer CEO and founder Matt Barrie.

A global presence and an attempt to weed out spammy bids and target more profitable customers have all worked against online workplace Freelancer (ASX: FLN) in its latest half-year results, as a stronger Australian dollar weighed down statutory sales and revenue.

The Sydney-headquartered group, founded and led by Matt Barrie, rakes in 72 per cent of its revenue in US dollars so a 17.4 per cent strengthening of the Aussie dollar was always going to diminish the final figures on the ASX.

Revenue in the June half was down 5.7 per cent year-on-year at $27.8 million, despite a record in USD terms of US$21.5 million.

Meanwhile the group's loss for the period deepened by a third to $1.68 million, but in the three months to 30 June all its operations were profitable.

Escrow, a separate division to Freelancer.com that facilitates settlement on larger transactions, had an all-time record revenue of $5.1 million was profitable for the six-month period. 

Investors responded with a sense of shock to the announcement as FLN shares fell 20 per cent in early trading, and at the time of writing are down 17.7 per cent at $0.93 each.


Related story: "World's largest online workforce" Freelancer.com sees enterprises in desperate need of talent


The group also noted a decline in its Alexa website ranking and a revenue drag from memberships - both the result of some forward-thinking house cleaning.

"Freelancer.com's Alexa rank eased from a peak of 449th to 710th as of 22th July 2021 as we deployed a new predictive model to our paid advertising targeting to acquire more profitable customers at the expense of more [sic] less profitable customers and global workforce lockdowns rolled off," the company reported.

"Note that this is only for our .com domain and does not encapsulate the traffic to our 52 other country domains. In 2H21, we expect to have a focus on increasing volume within the new profitability boundaries for our paid advertising."

Membership revenue has historically been the main drag on overall revenue, and in the June half it was down 25.3 per cent year-on-year in AUD terms and down 12.2 per cent in USD.

"This revenue drop was a by-product of our effort to clean up spammy bids in the marketplace," the group said.

"Mid and top-tier plans have significantly higher numbers of bids, and penalising bid spam removed some incentive to take up these plans, leading to downgrades.

"We believe that the slide in memberships revenue has turned, and the focus in the second half will be to return our memberships product to revenue growth with three actions: the first is to add benefits to the plans outside of large numbers of bids, the second is to phase out the lowest-tier plan (intro for $1/mo), which is now in progress."

In positive developments, Freelancer Enterprise is working with the governments of Egypt & Saudi Arabia to build skilled pools of freelance talent in their countries, and one of these governments wants to build a national marketplace for freelance talent.

"Both governments are providing financial funding for these initiatives. Saudi Arabia is working to legislate freelance work as a new employment category," the group reported.

"We also received written approval (subject to pending SOW) to proceed to Stage 3 of Deloitte MyGigs, which is to connect the platform to the Freelancer cloud. Kick off meetings have commenced."

 

 

 

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